Munuswami Nayakar vs Abdul Azeez Sahib and Another

Devadoss, J.—This appeal is by the 1st defendant. He purchased some property belonging to a mosque in St. Thomas Mount from the

Mutwali, the 3rd defendant in the suit, for Rs. 1,000. After the purchase some persons interested in the mosque brought 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 plaintiff''s favour. Mr. Anantakrishna Aiyar, who appears for the 1st 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 1st

defendant, and out of the sale proceeds another property was purchased in St. Thomas Mount. The Mutwali 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 5th October, 1917, under Ex. V, and the purchase of

the shop in St. Thomas Mount was under Ex. I on 12th February, 1918. From both the documents it is quite clear that the sale to the 1st

defendant was for the purpose of buying property in St. Thomas Mount and the whole of the consideration for the sale to the 1st 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 it 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

Burrayya v. Ramayya ILR (1923) M 449, Rabia Bi v. Angappan (1915) 28 IC 714 and Dijendra v. Manorama Dasi (1922) 36 C LJ 326. 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 in Badal v. Tinkari (1917) 26 CLJ 263. In that case a Mutwali 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 Mutwali of the mosque to pay to the 1st defendant Rs. 1,000 before he recovers possession of the property sold

to the 1st defendant, and this amount will be a charge on the shop which was purchased in St. Thomas Mount. If the Mutwali does not pay the

amount the 1st 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 1st defendant is entitled to his costs

incurred in the three Courts. The direction as regards mesne profits will stand. But the 1st 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 1st defendant will have a charge for the total amount of Rs.

1,000, interest and costs in the shop in St. Thomas Mount. The decree of the Lower Appellate Court will be further varied by directing possession

to be given not to the 1st plaintiff in the suit but to the 3rd defendant, the Mutwali of the mosque. The plaintiff'' costs in the three Courts will come

out of the trust funds belonging to the mosque.