CHIDAMBARAIYER AND OTHERS versus P. S. RENGA IYER AND OTHERS

Citation: [1966] 1 S.C.R. 168 · Decided: 06-05-1965 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

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Judgment (excerpt)

168 
CllIDAMBARAIYER AND OTHERS 
v. 
P. S. RENGA IYER AND OTHERS 
May 6, 1965 
[K. SliBBA R\O, RAGHUBAR DAYAL AND R. S. BKHAWAT, JJ.] 
Madra.< Agriculturists Reliej Acr (Mad. Act IV of 1938), as amPnded 
by Act XV of 1943 and Act XXXll of 1943. s. 9·A(l0l (ii) (bl-Mort-
gage debt not to be scaled down if mortgagee's right.'i transferred bona (ulc 
for ''a/uable considcrarion-Transfer of 
/l.fort;:agee's rights 
to family 
charity in lieu of sum earlier tfedicatl•d 10 the charity-Such transfer 'Whe-
ther for valuable cunsi<leration- wi1hin the meaning of proviso. 
TI1c predecc'iwrs-in-intcrc<;t of the appellants executed in 1930 n regis-
tered mortgage deed (Ex.A-I) in favour of the respondent family for 
Rs. 31,000. It v.·as a usufruc~uo.ry n1ortgagc 
rcdccm~1ble aflcr 60 years. 
The mortgagors filed a petition 
under s. 9A and <. l 9A of the Madras 
Agricultu1ists Relief Act for scaling do°""n the mort~age debt thereunder. 
The moitgagccs raised a plea, inter alia, that the 1nortgage interest had 
been transfcrr~ to a charity for valuable 
con::<1idcration 
and 
therefore 
a. 9A(IO)(ii)(b) of the Act was Ml attracted and hence the mortgage 
debt wns oot liable to he scalc-0 down under the Act. 
The pica was based 
on document• Ex.II.[, Ex.B·2 and 
Ex.B-3. 
The learocd Subordinate 
Judge, held that the transferee-the charity-not being a transferee for 
valuable consideration s. 9A( lO)(i1) (b) did not arply. and on this fiod-
iog he r.caled down the mortga~e debt. 
An appeal was filed by the mort-
gagees wherein the High Court held that the 
transfer \Vas for valuahlc 
consideration and therefore the debt 
could 
not be scaled down. 
The 
mortgagors ap~Jlcd to the Supreme Court with ccrtific;.;te. 
HELD: (i) The agreement E"t;.R-1 executed bctv.ccn mcn1hcrs of the 
mortgagee family sh~l'Ncd -that on August 22. 1934. the f~rnily created a 
tn1st in respect of a sum of Rs. 36,988-9-8 for a charitable purposes. On 
September 3, 1939, hy Ex.B-2. the usulructuary mo·tgagce right of the 
family in Ex.A-I \VJS given to the charity in discharge of the obligation 
under fa.B-1. 
The dedication of the said property was affirmed by the 
regular partition deed Ex.B-3. 
In short under the said documenlo; the 
family transferred to the charity their in!crest in the 
usufructuary mort-
gage Ex.A-1 in d:scharge of the obligation to pay the trust a sum of 
Rb. 36.988-9-8. 1174 E-GJ 
(ii) It is implied in the dcfinit:on of th~ \vord 'consideration' in s. 2(d} 
of the Contract .A.ct th:.it the consideration should 
be 'something \\·hich 
not only parti~s regard but the 1:1\\' can rc,c.~rd as having some value·. It 
is apparent fror.1 tht' definition th;!t con..,id\!ration 
m·1y he negative or 
positive. [ 177 A-BJ 
(iii) In th:: present case the family w:~s unJcr an obl;r,Jtion to pay to 
the charity the amount scr ~part to it under Ex.B-1. l'he mortgage in-
terest \Va.s transferred in dis;;::hargc of th:1t o1;i:gJtion. 
That i-.; to say the 
churHy agreed a·; 
~1. consider.ttion f.:>r the lrailsfer of i.hc mortgage intere:;t 
not to c::iforcr it:; right :o recover that amount from the family. 
·rhc 
charity gave up :h::t 
ri~ht ~n consideration of 
the 
mortgage 
interest 
acquired by it. 
Therefore it is clcao-
th~t the family 
transferred 
the 
mortgage interest in trust to the charity for valuable consideration \vith 
lhc meaning of •· 9A(IO)(ii)(b) of the Act. [177 B-DJ 
A 
• 
B 
c 
D 
E 
F 
G 
H 
t 
• 
• 
A 
CHIDAMBARAIYAR v. RENGA IYER (Subba Rao, J.) 
169 
It followed that the mortgage, Ex.A-I, was rightly held by the High 
Com! not liable to be scalell down under the proviruons of the Act. 
[1770] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 200 of 
1963. 
Appeal from the judgment and order dated November 8, 1955, 
B 
of the Madras High Court in A.AO. No. 577 of 1952. 
c 
R. Ganapaihy l~er, S. N. Prasad, and J. B. Dadachanii, for 
the appellants. 
[(. N. Ra;agopala Sastri, M. R. Krishna Pillai and M. S. K. 
Aiyangar, for respondent no. 1. 
The Judgment of the Court was delivered by 
Sobba Rao, J. 
This appeal by certificate raises the question 
of the applicability of s. 9-A(lO)(ii)(b) of the Madras Agricul-
turists Relief Act (Madras Act IV of 1938), hereinafter called 
the Act, as amended by Act XV of 1943 and Act XXIII of 
D 
1943, to a mortgage in respect whereof a petition for scaling 
down the said mortgage debt under the provisions of the Act was 
filed. 
On August 18, 1930, the predecessors-in-interest of the appel

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