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Madras High Court
V.G. Shanmuga Mudaliar vs Kaveri Ammal And Anr. on 9 February, 1928
Equivalent citations: AIR 1928 Mad 708
Author: V Rao


Venkatasubba Rao, J.

1. The plaintiff, a minor, impeaches and seeks to set aside a consent decree passed in O.S. No. 571 of 1922, a suit filed in this Court, by his mother Murugammal against her mother-in-law. Thayarammal. The following pedigree may serve to explain some facts:

   V.R. Sabapathi Mudaliar = m. Thayarammal, 
 d. September 1917       | d. February 1926
 Gangadhara Mudaliar         = m. Murugaramal 
 d. without issue 22-3-1922  d. 6th June 1926
              Plaintiff (adopted by Murugammal 
                      on 14-4-1926).


2. I have given some material dates in the above table. Sabapathi is said to have left some considerable property worth between Rs. 50,000 and a lakh. The family lived in harmony till the death of Gangadhara. On his death, disputes arose between Murugammal and Thayarammal, the former claiming that the entire property in the possession of the family belonged to her husband at his death; the latter asserting that it was her stridhanam property over which she had absolute control. Thereupon, Murugammal filed the suit above mentioned, C.S. 571 of 1922, which, after a partial trial by Mr. Justice Kumaraswami Sastriar, ended in the consent decree now impeached. Shortly after the consent decree, Murugammal adopted the plaintiff and died. About the same time Thayarammal also died, having previously made a will appointing defendant 1 executrix.

3. It may be convenient to mention at the very outset the undisputed facts (disclosed by the minutes book of the Court) which are connected with and led up to the compromise. The hearing of the previous case commenced on 24th February 1925. Messrs Grant and Greatorex appeared for Murugammal, the plaintiff, and Mr. V. C. Gopalaratnam for the defendant Thayarammal. The case was passed over as the parties represented that they were trying to settle it. No settlement was made and the hearing was resumed. Messrs K.S. Krishnaswami Ayyangar and Narayana Ayyangar were the counsel instructed by Messrs. Grant and Greatorex. Several documents were filed for Murugammal including title-deeds, account books and cancelled promissory notes, and, on her behalf, her brother, Subramania Mudaliar, was examined as a witness. The case stood part heard at the end of the day and was posted to the 26th February. On that date, when the case was taken up, the parties again requested that it might be passed over, so that they might settle it. This was done and the case was called later in the day. At the joint request of the parties, the case was once again adjourned to enable them to bring in a compromise and there was a direction that it should be posted before the same learned Judge. The case next came on about two months later, that is, on 24th April 1925. On that day, the parties were represented as before and terms of the consent decree were dictated in Court by Mr. K.S. Krishnaswami Ayyangar to the shorthand clerk. The property was to be taken in two equal halves by Murugammal and Thayarammal and a clause was inserted as to what was to happen if there was disagreement in regard to the actual division. The amount to be paid as costs and from what fund the sum was to be paid-these matters-also were settled. After a period of about eight months the case was again posted for orders. Certain details were then settled as regards specific items to be taken by each of the claimants. On 12th February 1926, the case was finally disposed of, the learned Judge directing that a decree was to issue in the terms settled. It will thus be seen that the parties took about a full year to consider and discuss the terms of the compromise and to finally arrive at a settlement. It may be interesting to note that the very man that advised Murugammal in the previous suit, her brother Subramania Mudaliar, is now actively busy in assisting the plaintiff in the present suit. I may also mention another fact which is not devoid of interest, that the legal gentlemen that appeared in the previous case have been engaged also in the present and continue to represent the same interests.

4. The main question to decide is: In entering into the compromise that the property was to be taken equally, did Murugammal act reasonably, prudently and in the interests of her husband’s estate? The course of the previous litigation shows prima facie that there was no fraud or collusion. Nothing was done in haste, there was due deliberation and the terms were carefully considered and discussed. Murugammal had competent legal advice. The case was tried partially with the result that each side realized the strength and weakness of its opponent. I may further remark that during the long interval when the case stood adjourned, there was a good deal of correspondence between the lawyers and it is common ground-and I am asked particularly to state this in my judgment-that the learned trial Judge observed from the Bench that, in the circumstances, the parties would do well to enter into a compromise.

5. I do not, however, propose to base my judgment on these facts alone. Whether the compromise was reasonable or prudent must ultimately depend upon the question: On the evidence available to each of the contending parties, did they act wisely or unwisely in arriving at the settlement? Looking at the question from the point of view of Murugammal, was it at that time more advantageous to the estate she represented that she should fight out the case or to compromise it in the manner she did?. What were her chances of success? What would have been her forecast as regards the result of the case on the evidence then within the reach of the parties? This is primarily the test for deciding whether the compromise was reasonable, or not. In deciding a question of this sort, the Court, in the second suit, must, in some degree, examine the very evidence which the parties would have adduced in the former suit but for the compromise, and the Court must consider the facts and probabilities which the Judge on the previous occasion would have considered, had the case proceeded to judgment. The extent of such enquiry must depend upon the circumstances and it is impossible to lay down an inflexible rule in regard to it. I am, however, saved in this particular case from laying down with precision the rule as regards the extent of the enquiry, for the very simple reason that I have now heard the entire evidence that is available for trying the question which was at issue in the previous suit. The evidence is entirely documentary and both sides have placed before me the whole of the evidence on which they rely. Though I am thus in a position to decide the very question at issue at the former trial, I am not called on in the present action to give a finding on that issue, but my task is of an entirely different kind, to consider that evidence with a view to determine whether, on the material available, Murugammal acted wisely in entering into the compromise; but I nevertheless proceed to decide also the question first stated as the entire evidence is now before me.

6. In C.S. No. 571 of 1922, Murugammal claimed as belonging to her husband’s estate eleven items of immovable property, certain outstandings, jewels and’ other moveables. Thayarammal asserted that the entire property was her stridhanam and she particularly laid claim to certain houses and moneys which were purchased, and lent out, respectively, in her name. These alone comprised more than a moiety of the estate and I shall now examine how the evidence stood in regard to them. (The judgment then discussed the evidence and concluded as follows.) I have said enough to show that Thayarammal was treated in the accounts maintained by her husband, as owning moneys in her own right. Many of the entries are in the handwriting of Sabapathi himself and both sides have in fact relied on these books. It is scarcely to be expected that better evidence than this can be adduced on a point of this kind, having regard specially to the fact that the husband, the wife and the son are now dead.

7. When examining the evidence relating to purchase of houses, one cannot lose sight of the fact that Thayarammal had moneys belonging to herself. The sale-deeds stand in her name and there is nothing to suggest that it was with her husband’s moneys that the houses were purchased. On the other hand, when she had moneys belonging to herself and purchases were made in her name, it would be a fair inference that the price on each occasion was paid out of her funds. As I have observed in my judgment in Official Assignee v. Natesa Gramani A.I.R. 1927 Mad. 194:

There is clearly no warrant for the proposition that there is a presumption that a female in whose name the property stands is not the owner of it. The correct rule, however, is that if it is found that the purchase money came from a certain source, it is assumed, until the contrary is shown, that the person who supplied the purchase money is the owner of the property.

8. In this case, granting for a moment that the money at one time belonged to the husband, the ownership passed to the wife long before the houses were purchased. The inference that the price was paid out of her funds is strengthened by every document relating to the purchase of these houses. (The judgment then described the transactions with respect to several housed and proceeded.) The evidence thus shows that in regard to these various houses, not only were the purchases made in the name of Thayarmmal, but that every transaction connected with each house was carried out in her name, the documents showing that it was her moneys that were used. This is, of course, subject to the exception ‘that the last of the aforesaid houses was purchased jointly in the name of Thayarammal and her son.

9. In regard to the outstandings claimed by Murugammal in the previous suit, Thayarammal asserted that she was the owner of the bulk of them. (The judgment then dealt with evidence regarding the several amounts and proceeded.) I have now dealt with the items set forth in the schedule to the plaint in C.S. No. 571 of 1922, to which Thayarammal made a specific claim. These constitute in value at least a moiety of the subject-matter then in dispute. My finding is that her claim to these items was well founded and, if the case had been fought out, her right to them would have been established in the previous suit. I must mention that she claimed other items as well, but it is unnecessary to enquire whether that claim was valid or not. As I have said, for the purpose of this case, the defendant may be content with a finding less favourable than this. If the evidence then available warranted this finding in favour of Thayarammal, it follows a fortiori that her opponent was justified in believing that she had a good fighting title, although the result might be doubtful. If that were so, it was a prudent and reasonable act on the part of Murugammal to have entered into this compromise. I am prepared to go further and say that not only was the settlement not unwise or imprudent, but, if she had proceeded with the case, her act would have been distinctly foolish. The plaintiff is not, therefore, entitled to have the compromise set aside.

10. Then remains the question. Was it within the power of Murugammal to enter into the compromise upon which the decree was founded, so that it is binding upon the reversion and can be allowed to stand? The point is fully dealt with in the latest decision of the Privy Council in Ramsumran Prasad v. Shyam Kumari A.I.R. 1922 P.C. 356. Their lordships held that a compromise not vitiated by fraud or collusion, but made bona fide for the benefit of the estate and not for the personal advantage of the limited owner is binding on the heirs in reversion, and that in this respect a compromise stands on the same footing as a decree on contest. But for a certain contention raised for the plaintiff, I should think it scarcely worth my while to refer to any further oases. It has been argued that on a true construction of the consent decree, Thayarammal took only a life estate in the properties allowed to her. The argument has been put in this way. It was Murugammal that bestowed these properties on Thayarammal, who, being a female, cannot take the properties with full rights of ownership, in the absence of ” words of sufficient amplitude.”: see Ramachandra Rao v. Ramachandra Rao A.I.R. 1922 P.C. 80. It is needless to decide whether this rule so stated, without qualification regarding gifts to females, is sound or not. The argument rests upon a fallacy, namely, that Thayarammal obtained title as a result of the giving by Murugammal, to whom, it is assumed, the properties then belonged. That this contention is utterly unsound is shown by the judgment of the Judicial Committee in Khunni Lal v. Govinda Krishna Narain [1911] 33 All. 356. The true character of a transaction of this kind is not that it confers a new distinct title on the parties to the arrangement, but that it merely has the effect of curing the imperfection of existing title asserted by the parties. In forcible language, the same idea is expressed in the following words by the Judicial Committee in Ramasumran Prasad v. Shyam Kumari A.I.R. 1922 P.C. 356, to which I have already referred.

It is obvious that to put it, as the respondents in that case did, that the purchasers derived title from the daughters was bagging the question. The property belonged to one or other, or possibly both, of the parties to the dispute, and the compromise proceeded upon the footing that it was uncertain in which of them the title was. As their Lordships put it, it was based on the assumption that there was an antecedent title of some kind in the parties, and the agreement acknowledged and defined what that title was.

11. On the assumption that Murugammal gave, and Thayarammal took, these properties (which assumption is, as I have shown, wrong), I have been asked to look at certain preliminary negotiations which led up to the compromise of 24th April 1925. For this purpose, three letters that passed between the lawyers of the parties have been filed. I have also been asked to look at certain alterations made in the draft decree of 12th February 1926 by a lawyer then acting for Murugammal. It is very doubtful whether these preliminary negotiations and drafts can be properly received in evidence to explain or assist in the interpretation of the terms as finally taken down in Court: see Abdullah Khan v. Basharat Hussain [1913] 35 All. 48, Durga Prasad v. Rajendra Narayanan [1914] 41 Cal. 493, National Bank of Australia v. Falkingham [1902] A.C. 585, Inglis v. Buttery [1878] 3 A.C. 552, Lee v. Alexander [1883] 8 A.C. 853 and Millbourn v. Lyons [1914] 2 Ch. 231. But I do not propose to enter into this question as in the view I have taken it does not arise at all. Thayarammal claimed all the properties as belonging to her absolutely and the compromise did no more than perfect her title to a moiety of the same. It is wrong to conceive Murugammal as having bestowed these properties upon Thayarammal and the question, therefore, whether it was intended that the alienee should take a life estate or an absolute estate, does not arise. However, in view of the contingency that this case may be taken in appeal, I have allowed the three letters and the draft of the decree to be filed in evidence.

12. In the final decree in C.S. No. 571 of 1922, as drawn up, the properties are described in the preamble as “comprising the estate of Gangadhara Mudaliar.” There was no warrant for this statement in the decree and there is nothing corresponding to it in the terms of the compromise, or in the judgment pissed by the Court. If there were an application before me to amend the decree to bring it into conformity with the judgment, I should have had no hesitation in scoring out these words from the decree. I am to be guided by the terms of the compromise and the judgment of the Court and not by the decree which is obviously wrong. There are several issues raised in the suit, one of them relating to the status of the plaintiff as the adopted son of Murugammal. In view of my finding on the main question, it is unnecessary to decide any further issue. The suit fails and stands dismissed with costs of defendant 1.

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