(1) This is an appeal against the judgment of the Subordinate Judge, Vijayawada, in O. S. No. 69 of 1956 by which he dismissed the suit on a mortgage executed by the 1st defendant in favour of the plaintiff, Ex. A-5, dated 27-1-1955, for Rs. 7,500. The plaintiff is the appellant.
(2) The plaintiff filed the suit claiming interest at 12 per cent per annum simple, though it was provided under the mortgage-deed that the amount was payable with compound interest at 1 per cent per mensem with annual rests. The plaintiff impleaded the prior mortgagee as the 5th defendant. The said mortgagee had obtained a preliminary decree on 30-1-1956 on his mortgage, dated 14-3-1952. The plaintiff also impleaded the 3rd defendant in the suit as a purchaser in execution of the money decree obtained against the 1st defendant-mortgagor in S. C. 417 of 1953 on the file of the District Munisif's Court, Vijayawada. He had purchased the property subject to the first mortgage in favour of the 5th defendant and the plaintiff's mortgage, Ex. A-5. The 2nd defendant in the suit is the married daughter of the 1st defendant. The tenants of the mortgage property were also impleaded. It may at once be stated that Ex. A-5 was executed for the money advanced by the plaintiff under an earlier mortgage Ex. A-1, dated 12-7-1953 under which he advanced a sum of Rs. 6,000. The earlier mortgage was cancelled by Ex. A-5 and it was stated so expressly. It was recited in Ex. A-5 that a sum of Rs. 7,162-13-0 was received by the executant from the mortgagee adjusting the same towards the amount of principal and interest accrued under the mortgage-deed, dated 12-7-1953 and a sum of Rs. 337-3-0 received in cash on the day of the execution of Ex. A-5 for stamp duty and other expenses relating to the mortgage.
(3) The suit was resisted mainly on two plea: firstly that no consideration passed under Ex. A-1 (the earlier mortgage) as the amount was taken away by the plaintiff-mortgagee after the registration of the mortgage-deed before the Sub-Registrar and that the executant received only Rs. 3,000 from the mortgagee some time after 10-3-1955, and secondly that the mortgage could not be enforced, as the lending was for the purpose of marrying away the 2nd defendant (daughter of the 1st defendant) who was below 15 years of age against the provisions of the Child Marriage Restraint Act, 1929(XIXI of 1929). It may be appropriately noticed here that the purpose of the enactment was to restrain the solemnisation of child marriages, 'child' having been defined to be a person who, if a female, was under 15 years of age.
(4) The learned Subordinate Judge accepted both these pleas and dismissed the suit.
(5) It is now contended before me that the learned Subordinate Judge went wrong in accepting both these pleas.
(6) The learned counsel for the appellant-plaintiff has confined his pleas to the enforcement of Ex. A-5 mortgage only, though in the suit the plaintiff sought to proceed against the A Schedule property also which was hypothecated under Ex. A-1, dated 12-7-1953.
(7) The two points which arise in this appeal are those raised by the said pleas, viz,, firstly, whether Ex. A-5 is supported by consideration that it recited and secondly whether Ex. A-5 is not enforceable as held by the learned Subordinate Judge.
(8) On the first question as to consideration the plea of the 1st defendant is set out in Para. 4 of the written statement as follows:
'Hanumantha Rao told her that Koteswara Rao cannot pay for another one year and so he will arrange a loan on mortgage from his friend, the plaintiff in this suit. Accordingly this defendant was made to execute the mortgage, dated 12-7-1953 in favour of the plaintiff for Rs. 6,000 giving the A Schedule house as security thereunder. The plaintiff and the said Hanumantha Rao told her that the amount of Rs. 6,000 will be paid after the marriage is actually fixed as otherwise the money may be frittered away be her. On account of her implicit faith in Hanumantha Rao, this defendant believed the representations and returned the amount paid to her before Sub-Registrar to the plaintiff as agreed upon'
'Finally the 1st defendant approached the plaintiff to cancel the mortgage of 1953 and lend her the promised Rs. 6,000 on mortgage of the B schedule house. He agreed and took a mortgage of the B schedule house for Rs. 7,500 in January 1955 and returned the mortgage-deed of 1953 after endorsing cancellation thereon. After this defendant gave telegraphic notice to the plaintiff to pay mortgage consideration the plaintiff later paid the 1st defendant only Rs. 3,000 which she paid to the Hyderabad people as demanded by them'.
It was stated in the earlier para of the written statement that the said Hanumantha Rao was friendly with the 1st defendant and was giving her advice and dealing with the 1st defendant and was giving her advice and dealing with her property.
(9-14) [After narrating the evidence. His Lordship proceeded]. As the reasons for not examining Uppaluri Hanumantha Rao are uncovicing an adverse inference has necessarily to be drawn that if produced he would not support the case of the 1st defendant-executant. So, on an appreciation of the relevant evidence bearing on this questionn, I feel compeeled to disagree with the learned Subordinate Judge and find that the story is improbable, artificial and untrue and is only bolstered up to defeat the plaintiff's claim by unacceptable evidence.
(15) I must also reject the case of te payment of Rs. 3,000 after the 1st defendant gave the alleged wire, Ex. B-2. The plaintiff denied that he has received any such wire. Ex. B-2 purports to be a true copy of the wire sent by the 1st defendant on 10-3-1955 stating thus:
Payment Not yet Received in Bank for 27-1-1955 Mortgage Bond Treat It Cancelled Kalopalli Kalikamba'
About this wire D.W. 3 stated that she issued a telegraphic notice to the plaintiff a certified copy of which is Ex. B-2. Questioned in cross-examination about Ex. B-2, she stated thus:
'I myself sent the same telegram Ex. B-2 from the office concerned. I cannot say when I obtained the Ex. B-2. I had two or three clerks. One of them went and obtained the copy. I do not remember whether I obtained the same copy on my own accord or I deputed any one to obtain the same. Nobody advised any one to obtain the same. Nobody advised me to obtain the copy of the said telegram. I do not know whether the said telegram was received by the plaintiff or not. I do not remember what the bank is mentioned in Ex. B-2. Since the plaintiff used to come to my house frequently I gave that telegram notice to him. I was not inclined to address any letter in the matter to him.'
Earlier she had stated that she did not maintain any bank account. In the light of hger evidence in Court, the reference to a payment in the bank is meaningless. It does not appear to me that Ex. B-2 is admissible as secondary evidence. Section 88 of the Indian Evidence Act provides thus :
'The Court may presume that a message, frowarded from a telegraph office to the person to whom such message purports to be addressed, corresponds with a message delivered for transmission at the office from which the message purports to be sent; but the Court shall not make any presumption as to the person by whom such message was delivered for transmission'.
The presumption is, therefore, limited to what is expressly8 provided in the section. The form handed over to the Post Office by the sender (and not the form delivered by the Post Office) is the original of a telegram and either this must be produced by an official from the Post Office or proof of its destruction given before a copy can be admitted.
(16) The alleged telegraphic notice seems to be one improvised to support the case that only Rs. 3,000 was paid under Ex. A-5. The learned Subordinate Judge does not appear to have addressed himself to the admissibility of Ex. B-2. I have no hesitation in rejection Ex. B-2 as spurious, even if it is admissible and that the case set up by the 1st defendant that only Rs. 3,000 was paid after the said telegram is unacceptable. On the evidence, therefore, I find that the plea that no consideration passed under Ex. A-1 is unacceptable.
(17) I might recall the material recitals in Ex. A-5 referred to by me in the earlier part of this judgment. Ex. A-5 is supported by the consideration payable under Ex. A-1 plus a sum of Rs. 337 paid for stamps. That has been spoken to by the plaintiff. I would, therefore, find, differing from the learned Subordinate Judge that Ex. A-5 is supported by consideration that it recited.
(18) The next point is whether the mortgage bond is unenforceable as it was recited therein that part of the consideration was intended to be spent for the marriage of the executant's daughter who was under the age of 15 years when she was married in November 1955. In this regard the plaintiff has adduced evidence to show that it was represented to him at the time of borrowing under Ex. A-1 that her daughter to be married was 15 or 16 years old. It is so stated by the plaintiff as P.W. 1 and the attestors of Ex. A-1, P.Ws. 2 and 4. As against their evidence the 1st defendant as D.W. 3 stated that the plaintiff saw the 2nd defendant, her daugther, at the time of the 1st mortgage and that the plaintiff was in the know that the 2nd defendant was 11 years old at the time of the execution of Ex. A-1. It was argued that the plaintiff had in the suit described the 2nd defendant as aged about 17 years, that the plaint was, dated 25-7-1956 and that this would be contrary to the present evidence that he has led that he was told that the 2nd defendant was 15 or 165 years at the time of the execution of Ex. A-1. Even if the plaintiff had described the 2nd defendatn as of the age of 17 years in the plaint, it does not necessarily follow that a representation as deposed to was not made. So far as the 2nd defendant is concerned, there can be no doubt that she was less than 15 years when she was married. Her date of birth is shown as 12-9-1941. Vide Birth Register Extract, Ex. B-29. It is unquestionable that it was recited in ex. A-1 that the 2nd defendant attained the age of marriage. It is stated in Ex. A-5 that the amount was borrowed for her daughter's marriage and for discharging sundry debts. I am inclined to accept the evidence that a representation was made that the 2nd defedant was 15 or 16 years old at the time of Ex. A-1 as it was recited therein expressly that she attained the age of marriage and that the 1st defendant felt her responsibility and necessity to perform her marriage. If so, the plaintiff must be taken to have lent on that representation.
(19) The question, therefore, arises in this form : whetehr the 1st defendant having borrowed on such representation could now successfully plead in answer to te suit claim that her daughter was less than 15 years when she was married in November 1955 and 11 years of age at the time of borrowing under Ex. A-1. Sri Venkatrama Sastry contended that her plea to non-suit the plaintiff in his action on the mortgage could not be accepted as he had acted on the said representation of the 1st defendant and as he had no knowledge that her daughter was going to be married at an age which offended the provisions of Child Marriage Restraint Act, 1929.
For his contention he relied on Dyggirala Sadasiva Vittal v. B. Rattalu, 1957-2 Andh WR 16 : (AIR 1958 Andh Pra 145). In that suit a contention was advanced that Sitharamamma, for whose marriage the debt was contracted, was a minor aged 12 years and that the borrowing contravened the provisiions of the Child Marriage Restraint Act. The contention did not find favour withthe Bench which observed that there was no evidence that the mortgagee was ever aware that Sitaramamma was a minor, and that it could not, therefore, be said that his object in lending the amount was unlawful or that the provisions of the Act were intended to be said that his object in lending the amount was unlawful or that the provisions of the Act were intended to be contrabvened, and that further the 1st defendant had not also deposed that eigher the lender or the plaintiff was aware of the illegal or unlawful object.
(20) Sri Sastry submits that this decision is clear authority for the point that it has to be made out that the lender was aware of the illegal or unlawful object before he could be non-suited. He contends that in this case it has not been allleged or shown that the plaintiff was aware that the 1st defendant's daughter was going to be married against the provisions of the Child Marriage Restriant Act.
(21) Lakkimsetti Ranganayakulu v. B. Narayana Swami, 1958 Andh LT 14 is a case in point decided by this Court. That case is authority for the legal position that knowledge or its absence is an important ingredient in reaching a finding whether the transaction is one which is opposed to the provisions of S. 23 of the Contract Act. The facts are brief and are stated in the judgment. The plaintiff was a banker. The 1st and 2nd defendants executed a promissory note in favour of the plaintiff for Rs. 300 which recited that the amount was being borrowed for meeting the expenses of the marriage of Achayyamma, the daughter of the 2nd defendant. The plaintiff sued on the note. Defendants 1 and 2 admitted the borrowing but pleaded that it was for the purpose of celebrating the marriage of the second daughter of the 2nd defendant, that the marriage of the girl, who was then a minor, was performed contrary to the provisons of the Child Marriage Restrint Act and that, therefore, the purpose of the borrowing was unlawful within the menaing of S. 23 of the Indian Contract Act. The first Court held that the suit promissory note was supported by consideration, that the plaintiff had no knowledge of the fact that the second daughter of the second defendant was below the age of fifteen on the date on which the amount was borrowed and that her marriage was celebrated contrary to the provisions of the Child Marriage Restriant Act. On these findings, the learned District Munsif held that though the promissory note was supported by consideration, the purpose of the borrowing was unlawful within the meaning of S.23 of the Contract Act and in that view he dismissed the suit. On appeal the learned Judge set out S.23 oif the Contract Act and observed that unlawful intention was not to be presumed by the law, nor was nay man expected to presume it without evidence. Therefore, the learned Judge observed that if a contract could on the fact of it, be lawfully performed, the existence of an undisclosed intention by one party to perform it unlawfully or use it as part of an unlawful scheme, would not disable the other party from enforcing it.
The learned Judge went on to observe that the question as to whether the pklaintiff had knowledge of the intention on the part of the defendants to perform the marriage contrary to the provisions of the Child Marriage Restraint Act, was a material fact which had to be ascertained. Having regard to the finding on the evidence that the plaintiff had no knowledge that the loan which he was advancing was for the purpose of celebrating the marriage in contravention of the provisions of the Act, the learned Judge decreed the suit. The learned Judge also referred to the view taken by the Bench in the case cited.
(22) This decision is, therefore, clear on the question that before a lender could be non-suited, he must be attributed the knowledge that he had advanced for the purpose of celebrating the marriage in contravention of the provisions of the Act. Having regard to the representations made at the time of borrowing undoubtedly this knowledge could not be attributed to the plaintiff-lender.
(23) The position is lucidly explained by Cheshire and Fifoot in his book on the Law of Contract. At p. 289 of the third edition under the heading 'The consequence of illegality' the following occurs :
'The effect in law of an illegal contract may depend on whether the illegality is known to both, or to one only, of the parties. This distinction does not arise where the contract is per se illegal, as for instance when A and B agree to do something which will necessarily constitute a fraud on the revenue. In such a case A may well be ignorant of the illegal nature of the contract, but he will be precluded by the rule ignorantia juris haud excusat from relying upon his ignorance. The disctinction between knowledge and no knowledge is material only when one party intends to exploit for an unlawful purpose a contrct that is ex facie lawful.
The question of constructive knowledge presents the difficulty. What has to be decided is whether the one party ought to have known of the unlawful design of the other. If so, he is taken to have known it. Everything depends upon the circumstances and upon the impact that they would make upon that favourite of the law the reasonable man. Would this hypothetical person. If placed in the shoes of the person alleging ignorance, have inferred the existence of the illegal intention? The answer to this will turn to an indefinable extent upon the individual Judge.....
'.........Again, mere suspicion that an unlawful design may be contemplated is not sufficient, As Martin, B. said in the leading case :-
If money is lent, the lender merely handing it over into the absolute control of the borrower, although he may have reason to suppose that it will be employed illegally, he will not be disentitled from recovering.
The leading case is Pearce v. Broioks, (1866) LR I Ex 213 at p. 219).
* * * * * * *
Even where both parties are aware of the illegality the rule on this matter is that, if one of them is not in pari delicto with the other, he can recover what he has parted with. A fortiori, therefore, it would seem that one who is entirely innocent cannot be in a worse position.'
(24) The said statement of the law has been referred to by the learned Judge in 1958 Andh LT 14. It would, therefore, appear that unless the lender coyuld be found to have the knowledge that the loan which he was advancing was for the purpose of celebrating thed marriage in contravention of the provisions of the Act, he could not be non-suited.
(25) The learned Subordinate Judge has not recorded any such finding. The assertion of the 1st defendant that the plaintiff-lender knew that her daughter was only 11 years old at the time of the execution of Ex. A-1 is only a self-serving assertion and is displaced by the evidence that she had made a representation that her daughter was 15 or 16 years old at the time of Ex. A-1, and was of marriageable age.
(26) From this it follows that the plaintiff cannot be non-suited. The mortgage must be held to be enforceable.
(27) The learned counsel for the respondents have raised the question of interest. Sri Sastry on behalf of his parties has agreed to a direction that only 9 per cent interest simple shall be payable on the mortgage money under Ex. A-5.
(28) In view of these findings, the suit has to be decreed with this modification that interest shall be paid only at 9 percent per annum simple.
(29) No other points are urged before me.
(30) The 1st defendant is the mortgagor and the decree has to be passed against her. The 2nd defendant was not a party to the document ans she has no interest in the B Scheule property which is the hypotheca. She will not, therefore, be liable under the mortgae. The 3rd defendant is a purchaser subject to the first mortgage in favour of the 5th defendant and Ex. A-5, vide the sale certicate Ex. B-20. He will, therefore, be bound by the decree in this suit. It is the plaintiff's case that a decree was obtained by the 5th defendant in O.S. No. 125 of 1955 on the file of the Subordinate Judge, Vijayawada. This decree will, therefore, b subject to the decree passed in that suit. The 4th defendant is the Official Receiver and stepped in on the insolvency of the 1st defendant. The other defendants were impleaded as tenants. The tenants of B Schedule property have been impleaded as defendants 9 and 10 in the suit. They are also bound by the decree as they are in actual possession f the property. No relief was prayed for against the tenants of A Schedule property, viz., defendants 6 to 8.
(31) In the result, the decree of the sub-ordinate Judge is set aside and the appeal is allowed and there will be the usual preliminary decree against defendants 1, 3 and 4 (representing the estate of the insolvent, Ist defendant) and 9 and 10 with proportionate costs here and in the Court below payable by defendant 1, 3 and 4. This decree is subject to the decree obtained by the 5th defendant in O.S. No. 125 of 1955 on the file of the Subordinate Judge, Vijayawada. Time for redemption six months.
(32) Appeal allowed.