Sri Vedaraneeswararswamy Devasthanam Vs.
The Dominion of India & ANR  INSC 49 (15 February 1961)
Hindu Temple-Manager agreeing to transfer
temple property on fixed annual compensation-Transaction, if a permanent leaseConstruction-Rule.
The appellant Devasthanam had certain
properties, granted to it in inam by the Rajas of Tanjore centuries ago, which
comprised salt pans. After the passingof Regulation 1 of 1805 which prohibited
manufacture of salt except on account of the Government or with their express
sanction, the East India Company in 1806 took over possession of those
properties and the agreement between the parties as recorded in the order
passed on behalf of the Board of Revenue, was as follows, "As the Government
have taken charge of the pagoda salt pans and Sea Customs of Thopputhurai,
belonging to the above temple, the sum of 1848 Pagodas shall be given to the
temple annually in cash from the treasury being calculated on the average
amount of 10 years' revenue besides which every possible assistance will be
given to the temple." The previous correspondence between the Collector
and the Board of Revenue showed that the properties were intended to be
acquired permanently for the purpose of manufacturing salt and compensation was
determined on that basis. From 1886 till 1941 the appellant allowed the company
and its successors, the respondents 1 and 2, to be in quiet possession of the
properties in dispute on receipt of the said annual compensation. Its case, negatived
both by the trial Court as well as the High Court in appeal, was that the
agreement represented a lease from year to year and it was contended on its
behalf in this Court that in construing the document regard must be had to the
limited powers of a manager of a Hindu Temple to alienate trust property and he
must be held to have intended to act within his powers and not beyond them.
Held, that the transaction in question was a
permanent lease and the appeal must fail.
Although it is indisputable that in
construing a document executed by the manager of a Hindu temple the fair and
reasonable rule would be to treat it as executed in pursuance of his legitimate
authority and not in breach of it, that rule could have no application in the
instant case, for the facts that more than a century had admittedly elapsed
since the document in question had been executed and, further, that the then
manager, 88 faced by the prohibition of the manufacture of salt by Regulation 1
of 1805, had no option, in the interest of the Devasthanam itself, but to enter
into the agreement in order that he could provide for a recurring income to the
temple, could not be ignored.
Bawa Magniram Sitaram v. Kasturbai Manibhai,
(1921) L.R.49 I.A. 54, applied.
Maharanee Shibessouree Debta v. Mothoranath
Acharjo, (1809) L.R. 13 Moo. I.A. 270, Nainapillai Marakayar v. Ramanathan
Chettiar, (1923) L.R. 51. I.A. 83 and Palaniappa Chetty v.
Deivasikamony Pandara, (1917) L.R. 44 I.A.
147, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No.371 of 1956.
Appeal from the Judgment and decree dated August 28, 1953, of the Madras High Court in A.S. No. 262 of 1949.
A. V. Viswanatha Sastri, R. Sundaralingam and
B. K. B. Naidu, for the appellant.
Ganapathy Iyer, V. A. Seyid Muhamad and T. M.
Sen, for the respondent No. 1.
1961. February 15. The Judgment of the Court
was delivered by GAJENDRAGADKAR, J.-This appeal has been brought with a
certificate issued by the Madras High Court and it arises out of a suit filed
by the Managing Trustee of the appellant Sri Vedaraneeswararswamy Devasthanam
against respondents 1 and 2 the Dominion of India and the Province of Madras
respectively. In this suit the appellant claimed a declaration that the
properties in suit belong to the appellant and asked for a direction against
respondent 1 to put the appellant in possession of the same. A further
direction was claimed against the said respondent calling upon it to account
for and pay to the appellant mesne profits past and future and an alternative
plea was also made by which the court was requested to determine the proper
rent payable by the said respondent to the appellant.
This claim has been rejected by the learned
Subordinate Judge of Mayuram who tried the case and an appeal preferred by the
appellant against the 89 trial court's decision has likewise failed. That is
why the appellant has come to this Court.
According to the appellant the suit
properties which admeasure about 2,400 acres are situated in the village of
Agastiyampalli and the said village was granted in inam absolutely to the
appellant by the Tanjore Rajas several centuries ago. From the time of the said
grant the appellant was in exclusive possession and enjoyment of the said
properties, and its trustees and managers used to look after them and collect
their profits for the use and benefit of the appellant. In 1806 an agreement
was reached between the East India Company and the appellant, under which the
Company took possession of the appellant's properties in suit and in return
promised to pay a sum of 1848 Pagodas annually. Out of this amount 1200 Pagodas
represented the rent of the property. Pursuant to this agreement the Company
took possession of the said property and was paying the agreed rent until 1858.
In that year respondent 2 which succeeded the Company entered into possession
of the property on the same terms and was making the annual payment of the said
sum until 1937. Thereafter respondent 1 took over the salt revenue
administration and as such the properties came into its possession. Respondent
1 has been paying the appellant the agreed amount from year to year.
The appellant's case was that the true legal
relationship between the parties was that of a lessor and lessee and that the
lease itself was not of a permanent character but was one in the nature of
annual or yearly lease which was continued from year to year. It is on this
basis that the appellant made the two alternative claims specified above.
Respondent 1 disputed this claim., It denied
that it held the properties under an annual or yearly lease. Its case was that
when the suit lands, were taken over by the Company compensation was fixed once
for all, the average income of the appellant from the manufacture of salt
carried on by the appellant during the previous ten years having been taken as
the basis for the purpose of calculating the said compensation.
90 The properties came under the possession
and control of the Company as a result of the proceedings taken under
Regulation 1 of 1805 and the amount of Rs. 4,200/corresponding to 1848 Pagodas
represents the compensation annually payable to the appellant. Respondent 1
made certain other pleas on the merits Of and urged a bar of limitation.
On these pleadings the trial court framed ten
issues. On the principal point of dispute between the parties it held that a
reading of the relevant documents clearly showed that "at the time when
the Company took possession whatever the idea may then have been it must have
been only to take over the properties permanently from the plaintiff
Devasthanam and not to place themselves at the mercy of the trustees who might
evict them at any time". According to the trial court the arrangement
evidenced by the said documents was a permanent arrangement and that being so,
the appellant was not entitled to claim possession. The trial court also held
that even if the relationship between the parties could be said to be that of a
lessor and lessee the lease in question was a permanent lease subject only to
the payment of a fixed rent of Rs. 4,200/per annum. On these findings the trial
court dismissed the appellant's suit.
The appellant then took its case before the
Madras High Court. The High Court in substance agreed with the conclusions of
the trial court. It considered the whole of the documentary evidence and came
to the conclusion that the trial judge was right in holding that the
documentary evidence showed that the arrangement by which the Company took
possession of the appellant's properties was a permanent arrangement and that
if it was held to be a lease it must be regarded as a permanent lease.
According to the High Court the appellant's claim was also barred by limitation
under Art. 134(B) of the Limitation Act. The High Court therefore confirmed the
trial court's decree and dismissed the appeal preferred by the appellant.
In the present appeal the principal question
which has been raised before us by Mr. Viswanatha Sastri 91 for the appellant
is about the true nature of the relationship between the parties in respect of
the properties in suit. He contends that the principal document Ex. A. 1 on
which reliance is placed by respondent 1 should be construed not as a permanent
but as an annual lease; and according to him the contrary view taken by the
High Court is not supported by the tenor of the document, and he also argues
that in construing the said document the High Court has( not borne in mind
relevant principles of law governing the powers of the manager of a Hindu
Let us then briefly consider the relevant
documents bearing on the point. The principal document is Ex. A. 1. It purports
to be a copy of the order passed by Mr. Wallace on December 31, 1806. It is
addressed to the manager of the temple and it reads thus: "As the
Government have taken charge of the pagoda salt pans and Sea Customs of
Thopputhurai, belonging to the above temple, the sum of 1848 Pagodas shall be
given to the temple annually in cash from the treasury being calculated on the
average amount of 10 years' revenue besides which every possible assistance
will be given to the temple." It would be noticed that there is no
duration specified in the document, and prima facie it reads as if the
Government had taken charge of the salt pans and Sea Customs permanently
promising in return to pay to the temple the amount specified annually from
year to year.
In construing this document reference may be
made to the previous correspondence that passed between the Collector and the
Members of the Board of Revenue. It is not disputed that this correspondence
can be considered for the purpose of construing the effect of the terms of Ex.
A. 1. On July 17, 1806, a letter was addressed to the President and Members of
the Board of Revenue in which the idea of acquiring this property was fully
explained. In this letter in was stated that "it would be better to grant
to the temple commutation in land because that would be more certain and
permanent than ready money payment". In computing the compensation which
may be paid to 92 the temple the accounts of the pagoda were examined. ,It was
found that the pagoda enjoyed revenue from the duties levied at ports at
Thopputhurai and Kodikarai. Ten years' account showed that the average annual
income in that behalf was.
283 Pagodas. To this amount was added the
amount of magama or charitable and litigious fees and the total worked out at
an average of 532 Pagodas. From this was deducted 46 Pagodas which was the
average of charges and expenses incurred in collecting the port duties. Thus
the net annual average revenue was 486 Pagodas. Then an account was made of the
income received by the temple from salt manufacture in the salt pans and it was
ascertained that an average income in that behalf would be Star Pagodas 1362.
That is how the whole annual income was found to be 1848 Pagodas. It would thus
be seen that elaborate calculations were made to determine the amount of
compensation which should be legitimately paid to the temple for depriving the
temple of the possession of its properties in question. It was then considered
whether the commutation for the amount-:.should be in land or in money, and, as
we have already pointed out, a recommendation was made that payment of
commutation in the form of land would be more certain and permanent. Thus the
perusal of this document leaves no doubt that the property was intended to be
acquired permanently for the purpose of manufacturing salt. It is on that basis
that calculations were made and the amount of compensation determined.
It appears that this proposal made by the
Collector was not approved by the Government at Fort St. George. In the letter
written by the Secretary to the Government on October 28, 1806, it was
recommended that a payment should be made from the public treasury of a
compensation for the loss which the pagoda had sustained by the introduction of
salt monopoly in the Province of Tanjore not exceeding Star Pagodas 1848 per
annum. The proposal thus made by the Government was accepted by the Board and
its decision was communicated by the letter of November 17, 1806. It is in the
background of this correspondence 93 that we have to decide the effect of the
terms contained in Ex. A. 1. Thus considered there can be little doubt that
though 'the property was not purchased outright it was taken charge of on a
permanent basis for the purpose of manufacturing salt and compensation was
determined on the same basis but made payable annually at the rate of 1848
There are, however, some other documents on
which Mr. Sastri relies. An extract from the inam register prepared on November
27, 1862 (Ex. A. 18) has been pressed into service by the appellant. The main
argument is that the relevant columns 16 to 20 which give particulars regarding
the owners do not refer to the Company's right under this permanent arrangement.
If the transaction was a permanent lease, it is urged, the lessee's rights
would have been specified in the relevant columns. We are satisfied that this
argument is not well-founded. The main column deals with particulars regarding
the owners. It also provides that if the inam was sub-divided the name etc. of
each sharer shall be entered in its columns. We are, therefore, not satisfied
that the name of the permanent lessee was expected to be shown in this column.
It is true that in determining the additional assessment on excess area payable
by the temple the whole of the property is assumed to belong to the temple; but
that is not inconsistent with the temple continuing to be the lessor of the
suit property at all. There is no doubt that if the Company had become the
lessee of the said suit property by a document duly executed in that behalf
entries made in the inam register cannot change or affect the character of the
said right. Therefore, in our opinion, there is nothing in Ex. A. 18 which
militates against the case set up by respondent 1.
Then Mr. Sastri has relied on Ex. A. 2 which
is a title deed issued by the Inam Commissioner is favour of the temple. In
this document the temple's title to the Devadayam or pagoda inam village of
Agastiyampalli is recognised and specific mention has been made of the
porambokes in the said village. It is stated that the whole of the property is
held for the support 94 of the pagoda in the village of Vedaranyam. What we
have said about the extract from the Inam Register applies with equal force to
It appears that from 1806 when the Company
took possession of the property until 1941 the appellant has allowed the
Company and its successors to be in quiet enjoyment of the property on receipt
of an annual compensation paid from year to year. In 1941 the factory officer
wrote to the trustee of the appellant to let him know the name or the names of
the revenue villages to which the area covered by the. salt factory was
originally attached prior to the acquisition, and he enquired whether any
compensation amount had been paid to the temple for the said acquisition. It is
this letter which presumably started the appellant's present claim. Soon after
receiving this letter the appellant wrote to the factory officer on April 8,
1941 alleging that the property had been leased out to Government for the
manufacture of salt for a monthly lease of Rs' 350 or annually Rs. 4,200. The
appellant thus set up a relationship of lessor and lessee between itself and
respondent 1. Then the appellant moved the relevant authorities for appropriate
relief on one ground or another.
All its efforts to obtain possession of the
property or even to have the amount of compensation enhanced failed and that
led to the present dispute.
The main argument which has been urged before
us by Mr. Sastri is that in construing Ex. A. 1 we ought to bear in mind the
limitations on the powers of the manager of the temple at the relevant time.
Mr. Sastri has relied on the fact that the manager of a temple could not have
entered into a transaction of permanent lease unless there was a compelling
necessity so to do. A permanent lease amounts to an alienation of the property
and would have to be justified as such. An annual lease, on the order hand, can
be executed by the manager in his capacity as the manager and the same is
treated as an act of prudent management. That, however, is not true about a
permanent lease, and so in construing the document we should attribute to the
manager the desire and intention to act within 95 his powers and not without
them. In support of this argument Mr. Sastri has referred us to the decisions
of the Privy Council in Maharanee Shibessouree Debia v. Mothooranath Acharjo
(1), Nainapillai Marakayar v. Ramanathan Chettiar (2), and Palaniappa Chetty v.
Deivasikamony Pandara (3). The argument is that a fair and reasonable rule of
construction would be to treat the document as executed in pursuance of the
legitimate authority available to the manager of the temple and not as one which
is executed in breach of the said authority. This position cannot be and is not
In the application of this rule to the
present case, however, two relevant facts cannot be ignored. The first
important fact is that after the execution of the document more than a century
has elapsed; and so, as observed by the Privy Council in Bawa Magniram Sitaram
v. Kasturbai Manibhai (4), "where the validity of a permanent lease
granted by a shebait comes in question a long time (in the present case nearly
100 years) after the grant, so that it is not possible to ascertain what were
the circumstances in which it was made, the Court should assume that the grant
was made for necessity so as to be valid beyond the life of the grantor".
In the present case more than a century has elapsed after the grant A as made,
and so the principle laid down by the Privy Council in that case can well be
invoked by respondent 1.
Besides, it is common ground that under the
relevant provisions of Regulation 1 of 1805 the manufacture and sale of salt
was made subject to the immediate direction and control of the general agent
appointed by the Government, and the said manufacture and sale as well as
transit, export and import of salt, whether by Bear or by land, in the
territory subject to the Presidency of Fort 'St.George was prohibited except on
account of Government or with their express sanction. It was also provided that
all salt manufactured, sold, conveyed, exported or imported, directly (1)
(1869) 13 Moo. I.A. 270, 273, 275 (2) (1923) L. R. 51 I.A. 83, 97, 98.
(3) (1917) L.R. 44 I.A. 147,155, 156.
(4) (1921) L.R. 49 I.A. 54.
96 or indirectly, otherwise than is provided
for in the said Regulation, shall be liable to seizure and confiscation. In
other words, part of this property belonging to the temple on which salt was
being manufactured became absolutely useless for that purpose as the temple
could no longer manufacture, or permit the manufacture of, salt. Faced with
this situation it is not at all unlikely that the manager of the temple was
compelled to enter into an arrangement with the Company and secure for the
benefit of the temple a substantial permanent income accruing from year to
year. It is common ground that the whole of the property was marshy and the
only use to which it could be profitably put was for the manufacture of salt,
and that could no longer be done after Regulation 1 of 1805 was passed. That is
why we think that even the test of the rule of construction on which Mr. Sastri
relies can be said to be satisfied in the present case. Circumstanced as he was
the then manager or trustee had no option but to enter into an agreement like
the one which was evidenced by Ex. A. 1; thereby the manager provided for a
recurring income to the temple and thus arranged for the upkeep of the temple,
the worship of the idol and discharge his duties as trustee.
We have already seen how the previous
correspondence which preceded the execution of the document unambiguously shows
that the intention of the Company was to take possession of the property on a
permanent footing, and realising the limitations imposed by the Regulation the
manager of the temple would also have wanted to give the property to the
Company permanently and thereby create a permanent source of income for the
temple. The subsequent conduct of the temple for over a century is consistent
with the view that the temple knew that the property has been permanently given
to the Company and is inconsistent with the present case that the lease is an
annual lease. The payment and acceptance of the same uniform rent for over a
century when so many political and other changes took place also support the
same conclusion. The pleas set up by the appellant from stage 97 to stage in
respect of its relationship with respondent in regard to the possession of this
land have changed from time to time and that shows that the appellant was at
paying to put forward a basis on which it could claim either possession or
enhanced rent. The fact that respondent 1 is making large profits out of this
property may explain the appellant's desire to get some more share in the said
income but that cannot assist the appellant if it has parted with the property
permanently as early as 1805 oil the terms and conditions specified in Ex. A.
1. In our opinion, the High Court was right in coming to the conclusion that
the transaction evidenced by Ex. A. 1 is a permanent lease and that respondent
1 is entitled to retain possession of the whole of the property on the terms
and conditions specified in the said document. We must accordingly hold that
the appellant's claim either for possession or for enhancement of rent has been
properly rejected by the courts below.
In the result the appeal fails but there will
be no order as to costs.