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Jado Singh and ors. Vs. Natthu Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1926All511
AppellantJado Singh and ors.
RespondentNatthu Singh and ors.
Excerpt:
.....upon litigation in the hope of acquiring property on the success of uncertain litigation cannot amount to justification. mahadeo prasad pal air 1923 all 298, was a party, goes further than even the present case, for there the disposal of ancestral property by a hindu father which was inconveniently situated and was not sufficiently profitable, was upheld, though the sale consideration was applied not for the purchase of fresh property but for the extension of the family business which though not of a speculative nature subsequently failed. these people were in the best position to judge whether the transaction was prudent and beneficial or not. we have already remarked that a good portion of the amount was utilized for payment of antecedent debts which cannot possibly be avoided by the..........were not put into the witness-box to state either that they had not received any part of the sale consideration or to depose that they had raised this money for any unlawful purpose. both oral and documentary evidence was led on both sides.3. the learned subordinate judge came to the conclusion that the transaction was for necessity and for the benefit of the family and has resulted in considerable benefit to it. he further found that the whole of the consideration had been paid. on these findings he has dismissed the suit. the plaintiffs challenge some of the findings in appeal.4. it appears that the property sold to the principal defendants had itself been acquired by the family under la sale-deed dated the 8th of april 1897 for a sum of rs. 4,000. out of this sum, rupees 700.....
Judgment:

Sulaiman, J.

1. This is an appeal by the plaintiffs arising out of a suit brought by three minor sons to challenge an alienation made by their fathers. The eldest plaintiff was about six months old at the time of the alienation, which was on the 16th of October 1912, and the other minors were not born at all.

2. The allegations in the plaint were that the fathers of the plaintiffs, who were impleaded in the suit as pro forma Defendants Nos. 1 and 2, fell into the hands of avaricious parsons and became fond of speculation and gambling and were addicted to vicious habits, and in consequence they transferred ancestral property under a sale-deed of the date mentioned above in favour of the ancestors of the principal defendants without any legal necessity. There was no clear and categorical statement in the plaint that consideration had not passed, but the main allegations were that the transfer was without legal necessity and that it was tainted with immorality and illegality, and had further been brought about by the fraud of the vendees. These allegations in the plaint were denied by the principal defendants. The plaintiffs' fathers who are still alive and who have special means of knowledge, were not put into the witness-box to state either that they had not received any part of the sale consideration or to depose that they had raised this money for any unlawful purpose. Both oral and documentary evidence was led on both sides.

3. The learned Subordinate Judge came to the conclusion that the transaction was for necessity and for the benefit of the family and has resulted in considerable benefit to it. He further found that the whole of the consideration had been paid. On these findings he has dismissed the suit. The plaintiffs challenge some of the findings in appeal.

4. It appears that the property sold to the principal defendants had itself been acquired by the family under la sale-deed dated the 8th of April 1897 for a sum of Rs. 4,000. Out of this sum, Rupees 700 remained unpaid, and in lieu of it a bond was executed by the plaintiffs' grandfather, Phul Singh, on the same date in favour of Lala Hardian Singh. This bond carried interest at the rate of ten annas per cent, per mensem, compounded every year. In spite of the lapse of over ten years, Phul Singh was not able to pay off this amount. On the 9th of July 1908, Phul Singh executed a mortgage bond in lieu of this document for a sum of Rs. 2,450 at the same rate of interest compounded every year-the amount representing the principal and interest due on the previous bond of 1897. Later on, after Phul Singh's death his sons Natthu Singh anal Arjun Singh the fathers of the plaintiffs, executed a hypothecation bond, dated the 15th of June 1912 in order to raise Rs. 500 to pay off interest due on the previous bond, and some cash. This document carried interest at the same rate. On the 16th of October 1922 the sale-deed in dispute in this case was executed by Natthu Singh and Arjun Singh for themselves and Natthu Singh, acting also as the guardian of his minor son, Jado Singh plaintiff No. 1. The sale consideration was Rs. 6,650 and was stated to be paid as follows:

Rs. 2,600 were left with the vendees forpayment, of the two previous,bonds in favour of Lala HardianSingh;Rs. 400 had been taken in advance beforethe execution of the document;Rs. 120 had been taken as earnestmoney in order to meat theexpenses of the execution; anda sum of:Rs. 3,530 was stated to be required forthe maintenance of the minorand for other expenses.

5. Just a month intervened before the execution of the document and its presentation for registration. Before the Sub-Registrar the adult executants admitted the execution and completion of the document and the receipt of the consideration mentioned therein. Rupees. 2,750 were actually paid in cash before the Sub-Registrar. It is in evidence that at the time when this sale took place Natthu Singh and Arjun Singh were actually negotiating for the purchase of zamindari property in their residential village in which they were then mere tenants. Within seven month of the registration of the sale-deed Natthu Singh and Arjun Singh actually purchased property in their residential village for a sum of Rs. 3,000.

6. For nearly nine years before the suit was instituted by the minor sons under the guardianship of their maternal grandfather, neither Natthu Singh nor Arjun Singh made any demand of any outstanding balance of the sale consideration, nor instituted any suit to recover any unpaid portion of it.

7. As regards the question of consideration, the learned vakil for the plaintiffs has to concede that the sum of Rs. 2,600 left for payment to prior mortgagees, amounted to an antecedent debt within the meaning of the pronouncements of their Lordships of the Privy Council in the case of Brij Narain v. Mangal Prasad AIR 1924 PC 50. It is therefore not possible to question the validity of this item of the sale consideration. The payment of Rs. 520, received beforehand, has not been challenged in appeal before us. Out of Rs. 3,530, the payment of Rs. 2,750 in cash before the Sub-Registrar is also accepted on behalf of the appellants.

8. The whole argument has turned on the question whether the remaining sum of Rs. 780 was in reality paid to the fathers of the plaintiffs or not. We have already remarked that the question of non-payment of any part of the consideration was not put forward by the plaintiffs in the forefront. It is discussed by the learned Subordinate Judge under Issue No. 2, which related to the question of legal necessity and benefit of the family and the defendants being purchasers in good faith for consideration after bona fide enquiry. The learned Judge, on the evidence and the circumstances, was satisfied that the whole of this consideration was in fact paid. It is needless for us to discuss the evidence in detail, but we may note that the circumstance which has impressed us very strongly is that the plaintiffs' fathers did not, after the sale, ever assert or make any demand for the return of any balance. Had any amount been left outstanding, it is most unlikely that they would not have demanded it when the property itself had passed out of their family. The four vendees in whose name the sale-deed was executed were all dead at the time when the suit was instituted. The defendants therefore were not in a position to produce any of those four men who actually paid the sale consideration. They have led some oral evidence. On the other hand, the plaintiffs' fathers, who had special means of knowledge and who must know all about the payment of the consideration, have been clearly kept out of the witness-box. Their acknowledgment before the Sub-Registrar, that they had received the entire consideration remains unrebutted. We therefore think that it is impossible to interfere with the finding of the learned Subordinate Judge that the whole consideration had in fact been paid and that no part of it remained outstanding.

9. In spite of wild allegations as regards the immorality and vicious habits of their fathers, the plaintiffs led no satisfactory and reliable evidence to substantiate their allegations. The learned Subordinate Judge has rejected this story and that story has not been pressed before us.

10. The main argument before us is that even assuming that Rs. 2,600 were for a valid consideration for the alienation, there was no justification to raise further sum in order to purchase fresh property, as is alleged by the defendants. That about Rs. 3,000 out of the sale consideration received were utilized towards purchasing this fresh property, is fully established by the oral evidence and the circumstances of this case. The learned Subordinate Judge has believed this story and we have no hesitation in agreeing with his view. In fact this point has not been pressed before us very seriously.

11. What has been strongly urged is that there was under the Hindu law no justification for the fathers of the present plaintiffs to raise money by transferring joint property in order to purchase fresh property. The contention is that such a course amounted to a mere speculation, which was wholly unauthorized. Before we go into the question of law it is necessary to state the circumstances under which the fresh property was acquired.

12. The plaintiffs' fathers were mere tenants in village Asanwali, and it is only natural to suppose that they must have been very anxious to become zamindars in that village. They had acquired property in 1897 in village Salempur, some two miles from their village, where they had some cultivation. On this property there were mortgage debts carrying interest at 7 1/2 per cant, compounded every year, the amount having accumulated to about Rs. 2,600, For a long number of years they had been unable to pay off this amount and discharge the debt, and there seemed to be no prospect of there being able to do so in any way other than by transferring a part of it. The learned Subordinate Judge had found that the creditors were pressing for the payment of this money. In fact the last hypothecation bond was executed in order to pay off some interest on the previous one.

13. A demand for further payment of interest was therefore not at all improbable. The Government revenue shown against this property in the sale-deed of 1912 was less than that shown in 1897; this suggests that the property might have deteriorated in quality. The learned Subordinate Judge has found that although the plaintiffs' fathers were good managers, and it might be assumed that they were doing their best, they found it difficult to cultivate lands situated not in their residential village but in a village some two miles off. He has further found that it was foresight and prudence on their part to sell the property distantly situated and purchase property in lieu of it near home where cultivation could be managed by them at a smaller cost. This was doubly so when the result would be to free themselves from the anxiety of the old debt bearing compound interest which would otherwise go on swelling.

14. He was further satisfied on the oral evidence that the property in Asanwali was the better of the two, both in respect of the quantity of the yield and its price. He has therefore come to the conclusion that the transaction was prudent and beneficial from every point of view. We agree with this view fully. He has further pointed out that as a matter of fact this transaction has proved very beneficial and has resulted in considerable advantage to the family. The property which they purchased for Rs. 3,000 on 5th July 1913 is now worth about Rs. 6,000 and has thus appreciated considerably in value. The plaintiffs along with their fathers are admittedly in possession and in enjoyment of it and they wish to retain it. At the same time they desire that sale-deed, by means of which money was raised to acquire the property now in their enjoyment, should be set aside so that they may get back the other property also, As we are agreeing with the view of the learned Subordinate Judge on the facts, we do not think it necessary to discuss all the oral evidence in detail and we content ourselves with stating that we accept these findings as fully justified by the evidence.

15. It has however been very strongly contended on behalf of the plaintiffs that even assuming all these findings, the whole transaction cannot be upheld because the plaintiffs' fathers had no authority to transfer joint property in order to raise money to purchase fresh property, and it is urged that under no circumstances can a sale of a joint property, in order to acquire fresh property, be justified, as it can never be a case of legal necessity. As to the question whether it might not be a transaction for the benefit of the family, the argument that has been pressed before us is that in view of the pronouncements of their Lordships of the Privy Council in the case of Palaniappa Chetty v. Devasikamony Pandara AIR 1917 PC 33, there can be no benefit to the family unless it amounts to a preservation or protection of the family property.

16. As early as 1856 their Lordships of the Privy Council in the case of Hanooman Persaud Panday v. Mt. Babooee Munraj Koonwaree (1854-57) 6 MIA 393 laid down the law as follows:

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.

17. It is quite clear that the benefit to be conferred upon the estate was something distinct from mere need or the pressure upon it. At least this was the view which was accepted by this Court in several oases. We may only to refer to the case of Indar Kuar v. Lalta Prasad [1882] 4 All 632. Mahmood, J., pointed out that there was a distinction between litigation undertaken to protect the property and litigation the object of which was to obtain a possible benefit for the estate, and then remarked:

As a general rule, the former class of litigation would no doubt amount to legal necessity; and in regard to the latter class of litigation it may be laid down that, if such litigation ends in actual benefit to the estate, any alienation which may have been necessary for prosecuting the litigation would be valid and binding upon the reversioner, on the analogy of the maxim, he who enjoys the benefit ought to bear the burden also.

18. Since then this Court has accepted the view that a transfer of joint property by the manager can be justified if it is not a mere speculation but results in actual benefit to the estate. The other members of the family cannot retain the benefit and at the same time repudiate the transaction by means of which the benefit has been acquired.

19. We do not think that their Lordships of the Privy Council in the case of Palaniappa Chetty v. Devasikamony Pandara AIR 1917 PC 33 meant to depart from the view expressed in Hanooman Prasad's case (1854-57) 6 MIA 393. All that their Lordships remarked was that in the reported cases no indication was found as to what is the precise nature of the things to be included under the description 'benefit to the estate.' Their Lordships then observed;

It is impossible, their Lordships think, to give a precise definition of it applicable to all cases and they do not attempt to do so. The preservation however of the estate from extinction, the defence against hostile litigation affecting it, the protection of it or portions from injury or deterioration by inundation, these and such like things, would obviously be benefits. The difficulty is to draw the line as to what are, in this connexion, to be taken as benefits and what not.

20. The case before their Lordships was one in which a 'shebait' of temple property had granted a lease in perpetuity 'solely for the purpose of getting capital to embark on the money-lending business.' Their Lordships held that could not be considered a benefit to the estate. Their Lordships, however, further proceeded to consider whether on facts the transaction was in reality beneficial and came to the conclusion that it was not.

21. When their Lordships themselves remarked that it was impossible to give a precise definition of 'benefit to the estate' applicable to all cases and that they did not attempt to do so, it is difficult to accept the contention of the learned vakil for the plaintiffs that by implication their Lordships meant to confine the scope of the word 'benefit' to the cases mentioned by their Lordships as coming obviously under that head. Every case has to depend on its particular circumstances and facts. It is impossible to hold that in view of the remark of their Lordships the view of this Court has been altered so to make it impossible for the manager of the joint Hindu family to transfer property in order to acquire another property in lieu of it. If such were the view exchanges would be absolutely prohibited and managers would find it impossible to get rid of properties small in extent, distantly situated and difficult to manage, in order to acquire property more beneficial and useful. The case decided by their Lordships of the Privy Council has been a subject of consideration by the Patna High Court in at least three cases which have been brought to our notice, and the view of the Patna Judges certainly is that this case does not overrule the previous decision. We may here refer to Sadhu Saran Prasad v. Brahmdeo Prasad AIR 1921 Pat 99; kalika Nand Singh v. Shiva Nandan Singh AIR 1922 Pat 122 and Gainda Mal v. Roda [1921] 63 IC 766.

22. In the case of Tula Ram v. Tulshi Ram AIR 1920 All 11 it was held that where a joint family property had been mortgaged to obtain a loan on the representation that the money was required for the purpose of purchasing certain zamindari property and the purchase was not in fact an unprofitable or improvident transaction but proved beneficial to the family, the debt was incurred for the benefit of the family and was binding on the members thereof. This was in accordance with the previous view held by this Court. Later on came the case of Bhagwan Das Naik v. Mahadeo Prasad Pal AIR 1923 All 298. At page 274 the learned Judges referred to the case decided by Mahmood. J., already quoted by us, and remarked that the mere borrowing of money to pursue litigation, the object of which was to obtain a possible benefit for the estate was held cot to be justified under the doctrine of 'legal necessity' as known to the Hindu law, though possibly if the litigation resulted in benefit to the estate, the debt would be binding in accordance with the principle of equity embodied in the maxim quoted. The learned Judges then referred to the case of their Lordships of the Privy Council and stated that there was nothing in the remarks in that case to encourage the notion that an adventure in the shape of a speculative suit which might possibly bring profit to the estate could possibly be regarded as a 'benefit to the estate' or a 'legal necessity.' We agree with this view. It was further remarked that 'the observations of their Lordships rather import that any act for which the character of 'legal necessity' or 'benefit to the estate' can be claimed, must necessarily be a defensive act, something undertaken for the protection of the estate already in possession, not as act done with the purpose of bringing fresh property into possession, and which may or may not be successful under the chances attending upon litigation.'

23. It is obvious that the transfer of family property in order to enable the members to embark upon litigation in the hope of acquiring property on the success of uncertain litigation cannot amount to justification. The learned Judges had before them the case of a manager who had made four mortgages and spent sums borrowed in support of a futile claim for mutation, which ultimately fell, the mortgagee knowing that these sums had been borrowed for the purpose of that litigation. That case therefore has no resemblance to the case before us

24. In the same way the case of Shanker Shai v. Baichu Ram : AIR1925All333 , which was a case where family property was transferred in order to acquire necessary funds to pre-empt other property, is not directly applicable. On the other hand, the case of Jagmohan Agrahri v. Prag Ahir AIR 1925 All 618, decided by a Bench to which Lindsay, J., who had decided the case in Bhagwan Das Naik v. Mahadeo Prasad Pal AIR 1923 All 298, was a party, goes further than even the present case, for there the disposal of ancestral property by a Hindu father which was inconveniently situated and was not sufficiently profitable, was upheld, though the sale consideration was applied not for the purchase of fresh property but for the extension of the family business which though not of a speculative nature subsequently failed.

25. On the strength of these authorities we are therefore unable to hold that in no case can a transfer of joint property made in order to acquire another property in its place be justified. In this particular case we have already referred to various circumstances showing the foresight and prudence of the managers. We might here point out one more important circumstance. At the time of the sale deed the only members of the family were Natthu Singh and Arjun Singh and Natthu Singh's minor child Jado Singh. The adult members were the only persons who could judge of the prudence and prospective benefits of the transaction that they were entering into. Natthu Singh not only acted as the manager of the family but also as the guardian of the minor son. These people were in the best position to judge whether the transaction was prudent and beneficial or not. That their judgment was not wrong has been demonstrated by the enormous increase in the value of the property and the actual benefit which has accrued. The plaintiffs have derived full benefit from it and are determined to retain the property.

26. Under these circumstance it seems to us impossible to allow them to get rid of the sale-deed by means of which they were provided with the means by which the unencumbered property which they are retaining was acquired. We have already remarked that a good portion of the amount was utilized for payment of antecedent debts which cannot possibly be avoided by the plaintiffs. Even it any small sum of money out of the large sale consideration had not been required for any legal necessity, and was not unutilized towards the acquisition of this other property, the sale could not be avoided unless it were shown that the money was not at all paid to the plaintiffs' fathers and that the consideration which was actually paid was not equal to the real value of the property. We might in this connexion quote the recent Full Bench case of Bahadur Lal v. Kamleshar Nath : AIR1925All624 .

27. Having regard to all these circumstances we are of opinion that this appeal must be dismissed. We accordingly dismiss it with costs.


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