Mild/juvenile Canavan disease (M/JCD) is less frequently reported in literature and little is known about its pathogenetic mechanisms. We report a comprehensive investigation into the pathogenetic mechanism of a novel ASPA(NM_000049.4):c.526G > A(p.Gly176Ser) variant in two families. The families belong to Telugu Devanga Chettiar community (TDC) from southern India. TDC has a complex history of migration from their historical origin centuries ago with high endogamy. TDC probably has the highest clustering M/JCD recorded historically (around 24 cases). The pathogenic variant was shown to cause non-classical splicing defect resulting in two different transcripts. The splicing aberration, a loss of function mechanism coupled with a milder missense effect can explain the milder phenotype compared to the infantile onset CD. The high clustering of an extremely rare form of neurodegenerative disorder with reduced fitness, indicated to a possibility of founder event. Genotyping array of TDC and multiple distinct populations of Indian origin for several population genetic parameters was performed. It yielded robust signatures of a founder event, such as a high fixation index, increased runs of homozygosity and identity-by-descent estimation in TDC in the absence of consanguinity; large haplotype with high linkage disequilibrium comprising the pathogenic variant; presence of a robust population structure; mutation dating, estimating the age of the potential founder of TDC at around 375 years; possibly a high carrier rate in TDC. This study has not only focused its attention on natural history and pathogenetics but also paves way for carrier screening programs in TDC and future therapeutic studies.