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Govind Gurunath Naik Vs. Deekappa Mallappa Hubball - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtMumbai
Decided On
Case NumberFirst Appeal No. 98 of 1935
Judge
Reported inAIR1938Bom388; (1938)40BOMLR539
AppellantGovind Gurunath Naik
RespondentDeekappa Mallappa Hubball
DispositionAppeal dismissed
Excerpt:
hindu law-alienation-family property-mortgage by father-legal necessity- benefit to family-inquiry by alienee as to necessity or benefit-whether alienee bound to see to actual application of money-alienation to be questioned by son alone-estoppel against alienee.;under hindu law, to support an alienation of joint family property by the manager of the family, it must be shown that there was a need or the transaction was entered into for the benefit of the estate. even if in fact there was no need or benefit to the estate, and the creditor, who is bound to inquire into the necessities for the loan and to satisfy himself as a reasonable person that the manager in the particular instance is acting for the benefit of the estate or the family, makes such inquiry and acts honestly, the real..........of the consideration for it by the second mortgagee of the father on the ground that there was no legal necessity so as to justify the prior mortgage. the suit was brought by the first mortgagee under a mortgage effected by one kenchangouda on april 20, 1921, the consideration being rs. 9,000. that consideration was made up of the balance of rs. 3,500 then found due at the foot of a previous account in respect of money dealings existing between kenchangouda and the plaintiff-mortgagee and a fresh advance of rs. 5,500 in cash. the suit was directed against the son of kenchangouda and the latter's widow (defendants nos. 1 and 2) as heirs and legal representatives of kenchangouda, and the present appellant (defendant no. 3) who claimed to hold a second mortgage from the father under a.....
Judgment:

Rangnekar, J.

1. This is a curious case in which a mortgage of what is alleged to be a joint family property effected by a Hindu father having a manor son is challenged as to part of the consideration for it by the second mortgagee of the father on the ground that there was no legal necessity so as to justify the prior mortgage. The suit was brought by the first mortgagee under a mortgage effected by one Kenchangouda on April 20, 1921, the consideration being Rs. 9,000. That consideration was made up of the balance of Rs. 3,500 then found due at the foot of a previous account in respect of money dealings existing between Kenchangouda and the plaintiff-mortgagee and a fresh advance of Rs. 5,500 in cash. The suit was directed against the son of Kenchangouda and the latter's widow (defendants Nos. 1 and 2) as heirs and legal representatives of Kenchangouda, and the present appellant (defendant No. 3) who claimed to hold a second mortgage from the father under a document dated April 17, 1926. Defendants Nos. 1 and 2 put in no written statement and did not defend the suit. The third defendant raised various pleas. Most of them were given up by him at the trial. But he persisted in contending that; the mortgage did not affect the interest of the minor son of Kenchangouda as there was no justifying necessity for the same. The learned First Class Subordinate Judge on the evidence held that the mortgage effected by Kenchangouda in favour of the plaintiff was a valid mortgage and the moneys were required for legal necessity and were for the benefit of the family including the minor son, and in the result he decreed the plaintiffs claim. It is from that judgment that the present appeal is taken.

2. The appellant now disputes part of the consideration for the plaintiff's mortgage relating to the cash advance of Rs. 5,500, and his case is that to that extent there was no legal necessity and the minor son is not bound by the mortgage. It was contended on behalf of the plaintiff in the lower Court that it was not open to the second mortgagee to raise that contention as defendants Nos. 1 and 2 had admitted, or at any rate not disputed, the existence of a justifying necessity, but the learned Judge overruled that contention, though on the merits he found in the plaintiff's favour. The evidence in the case shows that Kenchangouda was carrying on business and he had dealings with the plaintiff in respect of which Kenchangouda had passed from time to time at least three promissory notes in favour of the plaintiff. It appears that Kenchangouda gave the minor son in adoption to a richer family possessed of large estate. The adoption was disputed by the adoptive family and the disputes resulted in a litigation which ultimately came to this Court, and this Court held that the adoption was invalid. Kenchangouda then applied for leave to appeal to the Privy Council and that application was granted. The plaintiff's case is that it was for the purpose of defraying the cost of prosecuting the appeal in the Privy Council that the mortgage in suit was executed. The mortgage is exhibit 46 and on the face of it shows that an account of the previous dealings was made and Rs. 3,500 had become due to the plaintiff by Kenchangouda. Then it proceeds to state that he had been granted leave to appeal to the Privy Council and that he was unable to find the money for the purpose of prosecuting the Privy Council appeal and required a loan of Rs. 5,500 in cash. So that the recital in the mortgage-deed, which of course is some evidence of the purpose for which the loan was contracted, is entirely in favour of the plaintiff. Then there is the evidence of the plaintiff himself which shows that this amount of Rs. 5,500 was taken in connection with the litigation relating to the adoption of the minor son of Kenchangouda. The evidence of the plaintiff's clerk, who seems to be more familiar with the matter and has given full details, also supports his case. On the other hand, defendant No. 3 who was the only contesting party did not venture to go into the witness-box, nor was any evidence led on his behalf to rebut the case made on behalf of the plaintiff. After the mortgage, it appears that there was a compromise between Kenchangouda, as representing his minor son, and the adoptive family, as a result of which land measuring six kurgis which equals about twenty-four acres was conveyed to defendant No. 1, The learned Judge on these facts observed as follows :

Thus the money was required for the benefit of defendant No. 1, because if the appeal to the Privy Council had succeeded, the defendant No. 1 would have got a large property. It was also to the benefit of the estate of Kenchangouda because if this adoption had been upheld a sharer in the family property would go out of the family and Kenchangouda would have become the sole owner.

3. After hearing all that has been said by Mr. Thakor on the point we are in entire agreement with the view taken by the learned Judge. The law on the subject is to be found in the well known case of Hunoomanpersaud Panday v. Mussumat Babooee Munraj Koonweree (1856) 6 M.I.A. 393, where their Lordships of the Privy Council observed as follows (pp. 423-4) :-

The power of the Manager for an infant heir to charge an estate not his own, is, under the Hindu law, a limited and qualified power. It can only be exercised rightly in a case of need, or for the benefit of the estate. But where, in the particular instance, the charge is one that a prudent owner would make, in order to benefit the estate, the bona fide lender is not affected by the precedent mismanagement of the estate. The actual pressure on the estate, the danger to be averted, or the benefit to be conferred upon it, in the particular instance, is the thing to be regarded... Their Lordships think that the lender is bound to inquire into the necessities for the loan, and to satisfy himself as well as he can, with reference to the parties with whom he is dealing, that the Manager is acting in the particular instance for the benefit of the estate. But they think that if he does so inquire, and acts honestly, the real existence of an alleged sufficient and reasonably-credited necessity is not a condition precedent to the validity of his charge, and they do not think that, under such circumstances, he is bound to see to the application of the money.

It is clear from this therefore that there must be a need, or the transaction must be entered into for the benefit of the estate. But even if in fact there was no need or in fact there was no benefit to the estate, and the creditor, who is bound to inquire into the necessities for the loan and to satisfy himself as a reasonable person that the manager in the particular instance is acting for the benefit of the estate or the family, makes such an inquiry and acts honestly, the real existence of an alleged sufficient and reasonably-credited necessity is not a condition precedent to the validity of the charge. We think that in this case it is quite clear that the plaintiff made inquiries. He was told that the money was required for carrying on a litigation entirely for the benefit of the minor son. Until the adoption of the minor was established he did not cease to be a member of the family. If therefore for the purpose of advancing the interest of his only son the father alienates the family property, it is difficult to see why such an alienation cannot be said to have been made for a legal necessity or in any case for the benefit of the family as a whole and in particular for the benefit of the minor son. The principles laid down in Hunoomanpersaud's case were, it is clear, influenced by the texts cited before their Lordships, and amongst these texts there were verses 27, 28 and 29 of chapter I of the Mitakshara. Verse 27 deals both with ancestral moveable and ancestral immoveable property and as to ancestral immoveable property it says that the father has no power to alienate it without the consent of his sons. But reference is made to an exception which is mentioned by Brihaspati which is set out in verse 28. That verse is as follows : ' Even a single individual may conclude a donation, mortgage, or sale of immoveable property, during a season of distress, for the sake of the family, and especially for pious purposes.' The text of Brihaspati is itself explained in verse 29 as follows : ' While the sons and grandsons are minors, and incapable of giving their consent to a gift and the like; or while brothers are so and continue unseparated ; even one person who is capable may conclude a gift, hypothecation, or sale of immoveable property, if a calamity affecting the whole family require it, or the support of the family render it necessary, or indispensable duties, such as the obsequies of the father or the like, make it unavoidable.' It is clear from the decided cases that the dictum of their Lordships in Hunoomanpersaud's case, as well as the text of Mitakshara which is illustrative of what is a legal necessity or what is for the benefit of the family, is by no means exhaustive. What is a legal necessity or what is for the benefit of the family cannot admit of one single and uniform answer. The answer to the question must depend upon the circumstances of each case. It is permissible to refer to the Privy Council case as also to the text of Mitakshara to find out whether in a particular case a charge was justified by a legal necessity or for the benefit of the family. If therefore as the Mitakshara says ' for the sake of the family ' a transaction is entered into by the father, it is difficult in my opinion to hold that the transaction will not bind those, who, as in this case, have clearly benefited from it. To say the least, itwould not lie in the mouth of the son himself to contest the mortgage particularly as it has clearly resulted in his benefit.

4. As against this, all that is pointed out by the learned Counsel on behalf of the appellant is this that although the money was taken for the purpose of carrying on litigation in the Privy Council, there was a compromise and the money was not then required for that purpose. But the evidence in the case is that the money was utilized for the purpose of the father's business as well as for agricultural purpose and for household expenses. There was no duty cast upon the plaintiff to inquire as to what happened to the money after once he had satisfied himself that the money was required ' for the sake of the family ' and for the benefit of the minor boy. Still the evidence shows that he did make inquiries as to what happened to that money and we think that he acted entirely honestly in the case, and it is difficult to accept the contention that the present claim should not be allowed. We think, therefore, that the view taken by the learned Judge is correct and on this ground alone the appeal must fail.

5. In this view of the case, it is not necessary to consider a somewhat more serious objection raised at the trial on behalf of the plaintiff and supported here by Dr. Ambedkar, and that is whether it is at all open to the third defendant, who as I have already pointed out was the second mortgagee of the same property from the same mortgagor, to raise the contention that the mortgage subject to which he took his own mortgage is not binding on him because part of the consideration was not required for purposes binding on the minor son. There is no decided case which actually bears on the point. The argument on behalf of the appellant is that the second mortgage included also the interest of the first defendant. There is no clear evidence on the record to show that the second mortgage was effected by the father both for himself and on behalf of his minor son. The learned Judge seems to have understood the defendant's case to be that the second mortgage was effected by the fattier himself. Reference is made to the written statement which in my opinion does not clearly show that the mortgage was effected by the father for himself and as guardian of his minor son. But assuming that it is so, I am unable to see that it would make the slightest difference to the principles which govern the question. It is conceded by Mr. Thakor that the second mortgagee is not claiming under defendant No. 1 and indeed he could not be said to be claiming under him. Defendant No. 1 has not disputed the mortgage and according to all rules of pleadings must be deemed to have admitted it. That is to say he must be deemed to have ratified the mortgage, and if he has done so, it is difficult to hold that a stranger can question a transaction which is recognised by the principal person whose interests were affected by it. I think it is too late in the day to contest the proposition that an alienation by a Hindu father is ab initio void. All the authorities show that such an alienation of ancestral property by a Hindu father without a legal necessity or a justifying cause is not void, but voidable and can only be avoided by his son. It is also clear on general principles, and authorities on the point are not wanting, that such a sale by a father can be ratified by the son. I may refer on this point to the observations of the Privy Council in Hanuman Kamut v. Hanuman Mandar . Their Lordships observed that an alienation by a manager is not necessarily void, but is only voidable if objection were taken to it by the other members of the joint family. If that is the view of the nature of an alienation made by a father without legal necessity, in my opinion, it is difficult to hold that the second mortgagee, who had clear notice of the fact that the first mortgage, subject to which he took his own mortgage, was entered into for a legal necessity, can raise the question that in fact there was no legal necessity. The principle is that if a person purchases an estate subject to a mortgage, whether under a voluntary conveyance or a sale in invitum, the purchaser cannot be heard to deny the validity of the mortgage subject to which he made his purchase. The purchaser cannot therefore set up any personal disability on the part of the mortgagor to make the mortgage. If that is the position in the case of a purchaser from a mortgagor, it is difficult to hold that a second mortgagee from the mortgagor can contest the validity of the prior mortgage. The view which we have taken seems to derive support from the observations of the learned authority, Mulla's Hindu Law, at page 272, paragraph (4), which are to the following effect:

An alienation by the manager of a joint family made without legal necessity is not void, but voidable at the 'option of the other coparceners. They may affirm it or they may repudiate it, but a creditor cannot repudiate it, there being no suggestion that it was in fraud of creditors.

6. If the case is brought under Section 53 of the Transfer of Property Act, then of course the position would be quite different.

7. The appeal, therefore, fails and must be dismissed with costs.

N.J. Wadia, J.

8. I agree.


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