V M RAO Vs. PARAMESWARI AMMAL

JUDGEMENT

(1.) The plaintiff is the sole executor of one A.V.M. Caesar as per the will dated 14-12-1977. A mortgage deed was executed in favour of Caesar by late Balasubramaniam and his wife, first defendant herein, the latter acting on her behalf and also on behalf of the then minor children, defendants 2 to 4, and present minor, 5th defendant. The amount borrowed was Rs. 2,00,000/- with interest at 12% per annum. The properties which had been mortgaged consist of four items. Item 1 belongs to the defendants, the first defendant having a life estate and the remaining entitled to a bare ownership. Items 2, 3 and 4 are properties claimed by Balasubramaniam as his own. In respect of item I, since minor's interest was involved, an application was filed before the principal Judge, City Civil Court, Madras by Balasubramaniam and his wife on their behalf and on behalf of their minor children on 7-7-1967 for mortgaging the property. Permission was granted on 19-7-1967. The Mortgage was executed on 17-7-1967 and duly registered on 19-7-1967. As per the recital of the mortgage deed, Ex. P.4, the amounts were paid at the time of the mortgage by way of cheques except the amount of Rs. 65,000/- which was withheld by the mortgagee. The money was borrowed by Balasubramaniam for purchase of some properties and to resell them after dividing them into plots. Permission was granted by the Court on condition that the mortgagors deposit into court an amount of Rs. 5,000/- as and when a plot was sold.

(2.) The case of the plaintiff is as follows :- The mortgagee, A.V.M. Caeser, pressed Balasubramaniam and the defendants for the payment of the above said loan, but no payment was made. The mortgagee brought the first plaint Schedule property for sale. Defendants 2 to 5 through their maternal uncle as next 7 on the file of the City Civil Court, Madras, for an injunction to stop the sale raising false, frivolous and unsustainable contentions impleading their father, Balasubramaniam as first defendant, their mother as second defendant and A.V.M. Caesar as third defendant. The suit was ultimately dismissed on 11-4-1975. The property could not be sold on account of the pendency of the suit. Balasubramaniam died in 1975. The defendants did not make any payment towards the principal and interest under the mortgage except a meagre amount of Rs. 7,000/- during the lifetime of Balasubramaniam itself. The plaintiff issued a lawyer's notice dated 21-61979 to the defendants demanding repayment of the amounts due under the mortgage which notice was acknowledged by the first defendant on 21-6-1979. But there was no compliance. The plaintiff, therefore, instituted the suit with the following prayers :

(3.) A written statement was filed on behalf of defendants 2 to 5 by the guardian appointed by the Court. The main contentions raised are as follows :- It was not true that Balasubramaniam required money for his business which was beneficial for the entire family including the minors. The Property under Schedule 1 was settled in favour of the minor children at the instance of the grandfather in view of the father's antecedents and propensity to embark on speculative ventures. Balasubramaniam and the first defendant sought the permission of the Court to have the settlement rescinded in order to fulfil their wishes. But the Court declined to grant such a permission which fact forced them to file a petition seeking permission to create mortgage in order to satisfy the requirement of third parties, in their endeavour for obtaining money. The Court granted permission only on condition that they execute an indemnity bond through which Balasubramaniam and his wife undertake to pay the entire debt from and out of their own resources and income. So the Court was persuaded to accord sanction to deal with the property of defendants 2 to 5 on the representation that the proposal of Balasubramaniam was likely to yield sizable profits and that the loan to the tune of Rs. 2 lakhs would facilitate the carrying out the scheme of plotting out and selling the plaint schedule 2 properties. It was agreed between Balasubramaniam and the first defendant on the one side and A.V.M. Caesar on the other that the loan was to be repaid at the rate of Rs. 5,000/- for each ground sold. Notwithstanding the recitals in the deed of mortgage that large sums of money have been paid by A.V.M. Caesar by way cheques, Balasuramaniam was not allowed to have those monies in his hands, since they were taken back by the mortgagee and his father Raghava Rao on the assurance that Balasubramaniam would be paid back those amounts upon his getting a deed of sale of the plaint schedule 2 property. Balasubramaniam reposed full faith on them as the scheme of acquisition of lands in the Urur village and plotting them out for sale was in his opinion a good venture and that all the monies could be easily recovered by him. Unfortunately, Raghava Rao, father of A.V.M. Caesar, died on 27-6-1973 and after his demise A.V.M. Caesar was only insisting in getting the sale deed of plaint schedule II property in his favour. The defendants 2 to 5 also submitted that the first defendant knew nothing of the transaction that she signed papers on the compulsion of her husband including the execution of the mortgage deed which was admitted in registration. The essential condition of the sanction accorded by the Court is that the minor's property should not in any way be interfered with for satisfying the mortgage created in favour of the mortgagee. As regards the suit filed by defendants, it was dismissed for default. There is no cause of action for the plaintiff, since it was not shown that the sanction of the Court permitting the first defendant and Balasubramaniam to mortgage the minor's interest in the property was for a necessity and evidenced advancing to the interests of the minors. The sanction is not in conformity with the requirements of Sections 27 and 31 of the Guardians and Wards Act, VIII of 1890.