MUNUSWAMY NAYAKAR Vs. ABDUL AZEEZ SAHIB

JUDGEMENT

(1.) THIS appeal is by the 1 defendant. He purchased certain property belonging to a mosque in St. Thomas Mount from the muttwalli, the 3 defendant in the suit for Rs. 1,000. After the purchase some persons interested in the mosque, bright the present suit for setting aside the sale on the ground that the sale was not binding on the trust. The District Munsif dismissed the suit but on appeal the Subordinate Judge, of Chingleput decreed the suit in plaintiffs favour. Mr. Anantakrishna Iyer, who, appears, for the 1 defendant does not object to the judgment of the Appellate Court so far as it sets aside the sale in favour of the plaintiffs. But his contention is that inasmuch as the trust was benefited by the sale to him, the trust is bound to pay back to him the amount which it received from him by sale of the property. The property was sold to the 1 defendant, and out of the sale-proceeds another property was purchased in St. Thomas Mount. The mutwalli and the persons who attended the meeting of the committee which advised him to sell the property evidently thought that the property was not yielding any appreciable income whereas a shop in St. Thomas Mount would be yielding a very fair income. The sale was, on 5 October 1917 under Ex. V and the purchase of the shop, in St. Thomas Mount was under Ex. 1 on 12 February 1918. From both the documents it is quite clear that the sale to the 1 defendant was for the purpose of buying property in St. Thomas Mount and the whole of the consideration for the sale to the 1 defendant was utilised for the purpose of buying the shop. That being so, the question is whether the trust, that is, the mosque should be allowed to get back, the property on the ground that the sale did not bind the trust and should also keep the property which it purchased by utilising the sale proceeds obtained from the defendant. I think in a case like this where it is quite clear that the trust has had the benefit of the sale which is set aside, the Court should make the trust pay back what is gained by the sale which is afterwards held not to be binding on the trust. In the case of minors it was held that if the guardian sells property belonging to the minor or borrows money for the purpose of buying property and if afterwards the minor seeks to set aside the transaction, the Court would be justified in making the minor pay back what was got by the sale or by borrowing on his account. Vide, Jeladi Burrayya V/s. Ponduri Ramayya 78 Ind. Cas. 90 : 47 M. 449 : 19 L.W. 67 : 46 M.L.J. 49 : (1924) M.W.N. 42 : (1924) A.I.R. (M) 472, Rabia Bi V/s. Angappan 28 Ind. Cas. 714 : 2 L.W. 369, and Dewijendra Mohan Sarma V/s. Monarama Dasi 70 Ind. Cas. 990 : 36 C.L.J. 326 : (1922) A.I.R. (C) 150 : 911 : 28 C.W.N. 57. I think the same principle should be made applicable to a trust. It is a well known principle of equity that if a person seeks equity he ought to do equity. The sale is set aside merely on the ground that the vendor who acted on behalf of the trust could not bind the trust by his act, but where with the proceeds of the sale some other property is purchased it is but proper that when the sale is set aside the vendee should be allowed to proceed for the money paid by him to the trust against the property which was purchased with the consideration given by him for the sale in his favour. THIS principle was applied by the Calcutta High Court in a case reported as Badal Mirza V/s. Tinkori Koley 41 Ind. Cas. 736 : 26 C.L.J. 26. In that case a mutwalli granted a lease and received Rs. 400 by way of selami. His successor sued to set aside the lease. The Court held that he could, do so on his paying back Rs. 400 which was received as selami for the lease. In this case, the sale was for a definite purpose, namely, for the purchase of a shop and the proceeds were utilised in purchasing the shop. It is but proper that when the sale to the 1st defendant is set aside he should be allowed to proceed not against the general assets of the trust but against the shop which was purchased with the sale proceeds. I, therefore, modify the decree of the lower Appellate Court by directing the mutwalli of the mosque to pay to the 1 defendant Rs. 1,000 before be recovers possession of the property sold to the 1 defendant, and this amount will be a charge on the shop which was purchased in St. Thomas Mount. If the mutwalli does not pay the amount the 1 defendant will be entitled to proceed in execution of the decree against the shop purchased under Ex. I in St. Thomas Mount. The transaction so far as the defendant is concerned was a fair and bona fide one. I think in the circumstances the 1 defendant is entitled to his costs incurred in the three Courts. The direction as regards mesne profits will stand. But the 1 defendant is entitled to get interest at 6 per cent on the amount from the date of Ex. I to the day on which the money is paid to him; The 1 defendant will have a charge for the total amount of Rs. 1000 interest and costs in the shop in St. Thomas Mount. The decree of the lower Appellate Court will be farther varied by directing possession to be given not to the 1 plaintiff in the suit but to the 3rd defendant the mutwalli of the mosque. The plaintiff's costs in the three Courts will come out of the trust funds belonging to the mosque.