Charitable trust transfer for consideration fell within the statutory exception, preventing scaling down of the mortgage.

A transfer of a mortgagee's interest to a charity was treated as a transfer in trust for valuable consideration where it was made in discharge of an existing obligation to set apart funds for charitable purposes. The earlier valid charitable trust and the family's commitment to provide a specified sum meant the charity gave up its right to recover that amount in exchange for the mortgage interest, satisfying the element of consideration. On that basis, the transaction fell within the statutory exception under Section 9-A(10)(ii)(b) of the Madras Agriculturists Relief Act, 1938, and the mortgage was not liable to be scaled down.

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Issues: Whether the mortgagee's interest in the usufructuary mortgage was transferred in trust to a charity for valuable consideration so as to attract the exemption under Section 9-A(10)(ii)(b) of the Madras Agriculturists Relief Act, 1938.

Analysis: The family had previously created a valid charitable trust and undertaken an obligation to set apart a specified sum for charitable purposes. The later arrangement and partition documents showed that the mortgagee's interest in the property was given to the charity in discharge of that earlier obligation. A transfer made in satisfaction of an existing liability was held to involve consideration, because the charity surrendered its right to recover the amount due in exchange for the mortgage interest. The transfer was therefore treated as a transfer in trust for valuable consideration within the meaning of the statutory exception.

Conclusion: The transfer fell within Section 9-A(10)(ii)(b), and the mortgage was not liable to be scaled down under the Act.

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