010-NLR-NLR-V-57-MUTHTHAL-ACHY-Widow-of-Letchuman-Chettiar-et-al-Appellant-and-MURUGAPPA-CHE.pdf
Present: Gratiaen, J., and Fernando, A.J.
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MUTHTHAL ACHY (Widow of. Letchuman Chettiar) et al.,Appellants, and MURUGAPPA CHETTIAR, Respondent
S. C. 153—D. C. Colombo, 20,429-
Kviilencc—Claim against a dead man's estate—Standard of proof required.
In a claim against the estate of a (lead man tlio plaintiff based his claim on• a witness’s version of a conversation which allegedly took place between thowitness and the deceased over 20 years before the trial commenced..
Held, that in a claim against a dead man’s estate, though thero is no rtda oflaw that judgment cannot bo obtained on the uncorroborated evidence of theclaimant, it is the duty of the Court to scrutinise the plaintiff’s caso with “ greatjealousy ”,
j^LPPEAL from a judgment of the District Court, Colombo.
Thiagalingam Q.C., with N. Nadarasa, for the defendants appellant?.
S. J. V. Chelvanayakam, Q.C., with P. Navarafnarajah and C. Mauohara,'for the plaintiff respondent.
Cur. adv. vult.
July 9, 1954. Gjiatiaes, J.—A wealthy RatucottaiChotty named Muttiah was the head of a jointHindu, family domiciled in South India. By liis first marriage he hadtwo daughters, one of whom was married to K. R. K N. L. Letchuman
Chettiar (hereinafter called “ tho deceased ”). " By his second marriageho had two grown-up sons (Nadara jali and Thiagarajali) and a minorson (Manickam). He filially married a woman named Sigappi, and bythat union ho had a daughter and a minor son (tho plaintiff).
On ISth May, 1029, Muttiah decided to partition his estate amonghis four sons who wore co-parcenary members with him of the joint family.An award P9 made by certain of his trusted neighbours made elaborateprovision for this proposed separation. Clause 11 of the award providedthat, as far as the plaintiff was concerned, “ tho properties and cashwhich tho fourth share-holder minor Murugappah Chettiar is to yet areto . bo held to the order of his father Mvtliah Chcttiar, which sumis to be enhanced profitably and paid to him after his attainment ofmajority ”…
The plaintiff was at this time only 17 months old. In accordance withthe award P9, he became (although he was too young to appreciate thoalteration in his status) the head of a new joint Hindu family consistingof himself, his mother and his sister. Tho legality of such a partitionduring the minority of one or more of tho co-parcenary members is wellrecognised by the Mitakshara law, and clause 11, which I have previouslyquoted, uas no doubt intended to meet the recommendation in theBaudhayana that “ the shares of sons who are minors, together with theinterest, should bo placed under good protection until the majority ofthe owners ”—Mayne's Hindu Jxiw (8th Ed.) sec. 476.
Muttiah took early steps to implement the award P9. With regardto the plaintiff’s share, he had himself registered in Colombo on 22ndMay, 1929, as the proprietor of a new business under tho vilasam MR.
M.M. MR.”, and it is perfectly clear that he did so not for his personaladvantage but in order to discharge the trust imposed on him for thebenefit of tho plaintiff and of the new family unit of which t he plaintiffhad become the solo co parcenary' member. Tho initial amount creditedto tho plaintiff in the firm’s books was Rs. 1S1.902, i.o., his proportionateshare of the proceeds of the partition.
Very shortly after the business of MR. M. M. MR. had commenced,Muttiah died in Colombo on 2Sth May, 1929, when the plaintiff, hismother and his sister were still in India- In consequence of this event,the plaintiff’s mother became his natural guardian. Unfortunately,no express provision had been made in P9 as to who should succeed tothe management of the plaintiff’s affairs upon Muttiah’s death untilthe plaintiff attained majority.
As to what took place immediately after the death of Muttiah is, oncertain important matters, controversial. It has been • sufficiently'established, however, that out of tho liquid assets of MR. 31. M. MR.,Vellasamy, a trusted servant of Muttiah who had been employed inMuttiah’rt own business for several years and had also becomo the seniorkanakapulle of tho now business, caused various sums amounting inthe aggregate to Rs. IS,700 to bo dopositod in Colombo between 2SthSeptember, 1929 and 27th November, 1929 with Letehuman’s firm
(K. R. KN. Li.). Tho main dispute in this case relates to the circums-tances in •which those sums were deposited with K. R. KN. !L., and, moreparticularly, the preeiso obligations undertaken' by tho deceased, asthe sole owner of IC. R. KN". L., in regard to tho payment of intereston the amount so deposited. Beforo considering this vital issue, however,I shall refer to certain subsequent events the details of which are no longercontroversial.
On 9th January, 1930, Vellasamy loft Ceylon for India after severinghis connection with tho firm of MR. M. M. MR_. and handing over allaccounts-books and relevant documents to tho plaintiff’s eldest step-brother Nadarajah. In these books, tho plaintiff was shown ns acreditor ” of the firm in a sum of Rs. 1S1,962 (i.o., tho original capitalbrought into tho business) ; the firm of If. R. KN. I#., on tho other hand,was shown as a debtor ” in the sum of Rs. IS,700. After this date,Ycllasamy ceased to have any business relationship with any member ofMluttiah’s family until 1947.
– An incident of somo importance took place ten years later. In1’ebruary, 1940, the plaintiff’s mother Sigappi drew a bill of exchangeor “ undial ” in India for Rs. 5,000 on the deceased's firm IC. R. ICN. L,in Colombo in favour of a firm named V. R. K. R., with a direction that,when this sum was paid byK. R. ICN. B., it should bo debited to the firmof JIR. JI. JI. JIR.Tho explanation of this transaction, which was
accepted by the learned judge, was that Sigappi had previously borrowedRs. 5,000 from V. R. Jv. R. in India in order to meet the household expen-ses of the joint family consisting of herself, tho plaintiff and her daughter.She according^' arranged with tho deceased (also in India) that liis firmin Colombo should honour tho “ undial ” and debit the payment againsthis outstanding account with MR. M. M. MR. The undial was in factmet on presentation as arranged, and Rs. 5,010. IS was debited asarranged in IC. R. KN. B’s books. The person who actually received thisjmyment in Colombo on behalf of V. R. K. R. was no other than Jf ultiah’sformer kanakapulle Vellasamy who had since joined V. R. K. R. in a similarcapacity.
On 19th February, 1942, tho plaintiff (still a minor) was living inIndia under the care and protection of in's mother Sigappi. Anotherdebtor of MR. MI. M. MR. was anxious to repay his debt in view of repeateddemands by Sigappi. On legal advice, ho obtained an order that thoSecretary of tho District Court of Colombo bo appointed curator of thoplaintiff’s estate, so that someone would be in a position to give validreceipts for payments of this kind.
On Sth April, 1943, the deceased Letchuman also deposited Rs. 20,4SO-1Sto the credit of the curatorship case. This amount represented, accordingto the deceased’s books of accounts, tho total sum duo at that date (lessRs. 5*32) from tho firm of IC. R. ICN. B. to the firm of MR. M. M. MR.in connection with tho original deposits aggiegating Rs. 18,700 madebetween September, 1929 and November, 1929. Tho small outstandingsum of Rs. 5-32 was shortly afterwards caught up in a payment of incometax by K. R. KN. B. oh behalf of MIR. MI. MI. MIR., and the accdunt ofthe transactions between theso two firms was then closed.
All moneys credited to the curatorsliip case wore withdrawn in duecourse by the plaintiff with his mother’s formal consent during hisminority. '-'
Letclunnan himself died on ISth March, 1945. According to hisown books of account, he had long since completoly settlod his debt tothe firm of MR. M. M. MR. Over three years later, howover, J.c., on1st December, 194S, the plaintiff (wlio was still a minor) sued the appel-lants (the heirs of tho deceased) in the present action for the recoveryof afurthor sum of Rs. 22,455‘52 alleged to be still duo to him in connec-tion with the original deposit of Rs. IS,700 in 1929 (i.c., 19 years beforethe action commenced). The action was instituted through the plain-tiff’s next friend Vcllasamy who had joined him as his attorney andkanahapullc in 1947.
The validity of the plaintiff’s claim depends very largclr, if not entirely,on the Irutli of Vcllasamy’s version of the terms on which sums aggre-gating Its. IS,700 had been deposited with the defendants’ firm K. R.KlSi. L. in 1929. According to Vcllasamy, he decided, on his own initia-tive, to invest the assets of MR. M. M. MIR. after the death of iiis employerMuttiah with various Che tty firms owned (except in tu o cases) by closerelatives of Mluttiah’s family. He regarded these assets as the exclusiveproperty of the plaintiff, and considered it his duty to promote the.interests of the minor (who was powerless to protect himself) by onteringinto those transactions on the minor’s behalf as a negotiornm geslor.
Vellasamy’s veision is that ho directly (and on his own responsibilityas the self-constituted agent of a 21-month old infant-) contracted withtho deceased Letchuman in connection with tho deposits or loans whichform the subject matter of this action ; and that the deceasedunequivocally agreed to repay tho principal in due course to the plaintifftogether with accrued compound interest calculated at “ nadappuvattai ” rates—that is to say, at “ rates prevailing from time to timeamong the chettiar community, the interest being added to the principalfrom time to time according to tho custom prevailing and calculated inthe manner customary among chettiars in their dealings with oneanother ”.
The schedule annexed to the plaint sets out in detail the manner inwhich the plaintiff's claim was computed. It credits the deceased’saccount with tho sum of Rs. 20,4SS'1S deposited on Sth April, 1943,in tho curatorship case, but makes no allowance for the earlier paymentin 1940, against Sigappi’s undial.
The learned judge accepted Vcllasamy’s evidence as to tho terms ofhis alleged agreement with the deceased in 1929, but directed (in favourof tho appellant-) that credit be given for the payment of Rs. 5,010 ISin 1940, as “ this woidd bo a reasonable charge which could bo madeagainst tho joint family assets of tho firm of MR. M. M. MR ”. Inaccordance with a reconstructed statement of account filed in Court,a dccrco was entered against the defendants jointly and severally forRs. 1G,G5S-17 together with legal intorcst from date of the decree untilpayment in full.
Tlio main ground of appeal which was pressed before us relates to tlioissues of fact. It was also argued, as a matter of law, that the moneydeposited with deceased in 1929 was the money of Muttiah Chetty—so that, although it was no doubt invested for the ultimate benefit of thejoint Hindu family of which the jdaintiff was tho solo co parcenarymember, the only person entitled to recover it from the deceased or hisheirs was a duly appointed representative of Mut tiah’s cstato.
In any view of the matter, it was an extremely difficult case to decide.The trial commenced on 13th December, 1919, before the (then) DistrictJudge Mr. S. J. C. Schokman. • After Vcllasamy’s cross-examinationhad been nearly completed, Mr. H. A. do Silva was appointed DistrictJudge of Colombo, and the trial commenced afresh before him on 25thOctober, 1950, subject to an agreement that Vellasamy’s previouscvidcnco be incorporated in the new proceedings. After some furtherevidence of Yellasamy had been recorded, tho trial was put off fer 21stDecember, 1950. In the meantime, Mr. do Silva had ceased to functionas District Judge, and the trial was resumed tie novo before the learnedJudge whoso judgment is now under appeal. Yellasamy’s ovidencowas once again recorded (subject to a similar agreement regarding thoearlier proceedings). He was examined and cross-examined on 21stDecember, 1950. His cross-examination was resumed on 25th April,1951, and concluded on 5th September, 1951. The case for tho appel-lant was closed on 6th September, 1951. Eventually, judgment wasdelivered on 12th October, 1951. In the result, the learned judgo wasfaced with the task of assessing the evidenco of tho chief witness who hadtestified before him on three dates covering a period of nearly 9 months,and of testing it in the light of his earlier evidence recorded before twoother judges in December, 1949, and October, 1950. Having regardto theso long delays, the advantage which a trial judge normally enjoysof forming his personal impression of a witness’ credibility (based ondemeanour) was considerably reduced.
Apart from these special considerations, the inherent difficulty indeciding the issues of fact in this litigation was more fundamental. Thoplaintiff based his claim on Vellasamy’s version of a conversation whichallegedly took place between him and the deceased man Lictchumanover 20 years before the trial commenced. Xo independent witness waspresent at tliat conversation, and the suggested agreement was notcontemporaneously or even subsequently reduced to writing. In addition,the Court was necessarily deprived of the advantage of hearing Letcliu-man’s explanation of tho circumstances in which his firm received thomoney, and the precise nature of his obligations in regard to the paymentof interest. The situation therefore necessarily called for a very cautiousjudicial approach.•.
Jessell M. It. remarked, with reference to eases of this kind, “ it isa rulo of prudence that, sitting as a jury, wo do not give credence to thounsupported testimony, of the claimant, with a view, no doubt, of pre-venting perjury, and with a view of protecting a dead man’s cstato fromunfounded claims ”—In re Finch, Finch v. Finch1. ..These observationswero at one time regarded as laying down a rule (equivalent to a rulo of
1 (ISS3) 23 Ch. D. 2C7 at 200.
law) that claims against a dead man’s estate could never bo maintainedunless they were corroborated by independent evidence. But it is nowrecognised that the true principle is not so rigid. The Court’s dutyis to approach the case “ with great jealousy, because the claim is broughtforward against the estato of a deceased person when that person, whowas a chief actor in the transaction impugned, was dead ”—per Fry L. J.in Re Gannett ; Gandy v. Macaulay1. “ The statement of a living manis not to bo disbelieved because there is no corroboration, although inthe necessary absence through death of one of the parties to the trans-action, it is natural that in considering the statement of the survivorwe should look for corroboration in support of it ; but if the evidencegiven by the living man brings conviction to the tribunal which has to trythe question, then tliero is no rule of law which prevents that convictionbeing acted upon ”—per Sir John Hanncn in Re Hodgson ; Rcckc.lt v.Ransdcde These views were adopted with approval in Rawlinson v.Scholes3, and have also been acknowledged in Ceylon as prescribingthe correct judicial approach to claims against the estate of a deceasedperson—Velupillai v. Sidambaram4.
I find no indication in the judgment under appeal that the learnedjudge specially directed his mind to the standard of proof laid down bythese authorities. Besides, his main reason for believing Vcllasamy’sevidonce was that ho considered it to be “ corroborated ” by certainentries.in the deceased’s books of accounts—whereas they arc equallyconsistent with the view that Letchuman had in fact undertaken (anddischarged) obligations less onerous than those imputed to him by •Vcllasamy.
As I read tho judgment under appeal, tho learned Judge’s acceptanceof the plaintiff’s case was largely based on his objective assessment ofVellasamy’s testimony, and not on his personal impression of the do-meanour of the witness. In these circumstances, and in view of thenon-dircction to which I have previously referred, it is our duty to decidefor ourselves whether Yellasamy’s version can safely be acted upon inregard to two crucial issues—
Was the money deposited with Iv. It. KN. L. in pursuance of a
contract directly entered into between Vellasamy and thedeceased ?
If so, had the deceased bound himself unconditionally —i.c. even
after the year 1933—to let the sum deposited accumulate atnadappu vattai ” rates of compound interest until repayment ?
As to the first question, one should, in my opinion, examine with con-siderable caution (and perhaps with strong suspicion) ellasamy sassertion that he acted entirely on his own initiative in entering intoii number of money-lending contracts for a minor’s benefit without thoprior authority of senior members of the child's family—particularlyas, according to his version, the plaintiff’s mother and eldest step-brotherhad themselves made conflicting claims to be entrusted with tho funds
11SS5) 31 Ch. 1). 1 at 10.3 (/SOS) 1-1 T. L. It. S.
(/S-S-i) 31 Ch. D. IT7 at 1S3.4 11019) 31 -Y. /- ft- 07 at 09.
available. Vcllasanvy was not bound to the plaintiff by ties of kinshipor even of race. His authority as the kanakapullc of 3IR. 31. 3r. 3fR.had terminated on his master’s death, and it seems inherently improbablethat, if he had virtually defied the instructions of Sigappi and Nadarajah(who was still his employer in regard to other business affairs) he wouldhave undertaken the functions of a gratuitous intcnncddler. It is morenatural to suppose that lie would have left these important decisions topersons who were more closely concerned with tho future managementof the minor’s affairs. There is no independent oral evidence to provethat the contemporaneous loans to other Chctty firms had also boondirectly negotiated by Vellasamy entirely on his own initiative. Tire .fact that Rs. IS,700 was in fact handed over to Iv. R. KM. L. by Vellasamyin 1920 (or at least in pursuance of his instructions to the junior kanaka-pullc) has no doubt been sufficiently established, but that docs notcompletely solve the issues which are more vitally controversial.
In regard to the defendant’s claim to be credited at least with theamount paid on the undial in 1940 on Sigappi’s directions, Vcllasamy’spartisanship and palpable lack of candour in the witness box also justifytho criticism that his evidence on other important issues called for specialvigilance—having regard particularly to the circumstance that thedeceased was not available to give the Court his own explanation ofthese disputed matters.
It has not been suggested that Lctehuman was a dishonourable manwho could normally be disposed to fabricate his books of accounts inorder to avoid liability to an infant to whom he was very closely connectedby marriage. According to his books, he credited the firm of 3IF'.. 3C. 3C.31R. with “ nadappu vattai ” rates of interest until 1933, and thereafteronly at the ruling Bank rates of interest. Tho learned judge regardedthese earlier entries as strong corroboration of Vcllasamy’s version.
To my mind, they aro equally consistent with the theory that Lctehumanhad bound himself bv contract (either with Vellasamy or with someoneelse) to pay compound interest in accordance with Chctty custom so longas lie had tire money invested with outsiders in the ordinary course ofhis money-lending transactions, but not during periods when the. moneywas merely lying idle in the Bank, owing to altered conditions, without■profit to himself. The learned judge was satisfied that during the latterperiod (i.c-., after the year 1933) ,s Lctehuman Chettiar had depositedlarge sums of money in the Bank, and was therefore paying interest atthe rate at which he received it from the Bank ”. I find it very difficultto believe that, in these circumstanc-cs, Lctehuman would have chosen -to retain the money after 1933 on such unprofitable terms if he was stillobliged to pay “ nadappu vattai ” rates of interest without anycorresponding commercial advantage to himself..
Lctehuman was in close touch with Sigappi in India throughout therelevant period, and it is significant that tho undial transaction tookplace in consequence of an arrangement directly arrived at between themin India. If, therefore, the plaintiff’s case is scrutinised with “ greatjealousy ”, wo cannot reasonably rulo out the jjossibility that the moneywas taken over by Lctehuman in 1929 as tho result of some agreement
arrived at after a family conference in India, and not (as Vellasamyalleges) in pursuance of a contract entered into in Colombo with a mcrointormcddlcr. Again, although the original obligation (according to thedebtor’s own books) was to pay compound interest on the amountdeposited, is it unreasonable to suppose that the terms were subsequentlyaltered by mutual agreement within the family circle when conditionsin the money market had so fundament .ally changed in 1933 ? Lctchumandid not lack the funds to return the money in 1933 ; nor was he underany proved necessity to retain it for his personal benefit-. Sigappi whois still alive was not called by the plaintiff to state what she knewconcerning the terms of the transaction.
It is a matter of common knowledge that it was customary for Chettiarmoneylenders to pay each other “ nadappu vattai ” rates of interest onshort-term accommodation loans received for the purpose of profitableinvestments by the borrower. It seems very unlikely, on the other hand,that a prudent chetty with business instincts characteristic of his racewould bind himself to pay such onerous rates merely for the doubtfulprivilege of keeping the money in fixed deposit in a Bank.
The learned judge was not- prepared to accept the 4th defendant’sversion of the transaction. It would therefore be improper for us, sittingin appeal, to take a contrary view. Let it then be assumed that thisparticular appellant had succumbed to the temptation to give falseevidence in resisting what lie perhaps believed to be an unfounded claim.^Nevertheless, the real issue for decision was whether, in the circumstancesof this case, the testimony of Vellasamy (the only'surviving party tot-lio alleged oral contract) was sufficiently convincing to justify a decreeagainst the heirs of a man who had died some years before the actionlias instituted.
I am very conscious of the limits which necessarily circumscribe tireright of an appellate tribunal to disturb the conclusions arrived at bya judge of first instance on questions of fact-. In the present case, however,
I am satisfied that it is our duty to set aside the judgment under appeal.The learned judge had not reminded himself of the special vigilancewhich ought to be exercised whenever a Court of law adjudicates uponbelated claims against a dead man’s estate. In addition, he paid insuffi-cient attention to certain improbabilities inherent in Vellasam3-’s version.Finally, he has treated items of evidence as corroboration which werein truth corroborative only of matters which were not in controversy.Indeed, I take leave to doubt if Vellasainy’s evidence woidd have broughtconviction to the learned judge’s mind if he had himself approached thecase with “ great jealousy ” as ho should have dono. I would allow theappeal and make order dismissing the plaintiff’s action with costs inboth Courts. In the view which I have taken it is unnecessary to decidethe question of law raised by Hr. Thiagalingam.
Fkrxando, A.J., agreed, adding certain additional reasons in supportof the conclusion.
.4ppcal allowed.