Ryves and Lyle, JJ.
1. Karya Pande and Musammat Aureha Parain, his sister-in-law, executed an usufructuary mortgage of the zamindari share entered in their names, on the 13th of May, 1905, in favour of the plaintiff, for Rs. 1,799. It was agreed that the mortgagee should take the usufruct in lieu of interest and that the mortgage should be redeemed on payment of the mortgage money after a period of four years in any Baisakh. It is unnecessary to recapitulate the further covenants in the bond. In 1907, the mortgagors brought a suit against the mortgagee to cancel this mortgage on the ground that it was merely a paper transaction and no consideration passed. Karya Pande expressly brought this suit in his capacity of manager of a joint Hindu family. It is unnecessary to consider whether such a suit could have been maintained. The parties, however, arrived at a compromise the terms of which ware that the amount then due on the mortgage, which was about Rs. 2,500, should he reduced to Rs. l,200 and that the mortgage be redeemable in two years. A decree was passed in terms of the compromise, dated the 23rd of May, 1907. The plaintiff now sues to recover Rs. 1,200 due on the mortgage, as modified by the decree and for damages as stipulated in the mortgage and decree, on the ground that she had been wrongly dispossessed by the defendants. Karya Pande is dead and the defendants are his grandsons and great grandsons and Musammat Aureha Parain. The main defence to the suit was that the mortgage of 1905 was a fraudulent transaction entered into to defeat creditors, and in particular, one Harpal Pande. Harpal Pande held a mortgage on some other property of Karya Pande, and in execution of a decree on his mortgage he sold the mortgaged property. As the proceeds of the sale were insufficient to satisfy the decree, he applied on the 28th of March, 1900, for a decree under Section 90 of the Transfer of Property Act, to recover the balance of the decretal money. This mortgage in suit, it is alleged, was executed on the 13th of May, 1905, to defeat his claims. It was also pleaded that the suit and compromise of the 23rd of May, 1907, were collusive and therefore ineffectual, and, in any event, could not bind the defendants other than Musammat Aureha Parain, because they were not parties to it. The first court dismissed the suit on the ground that the mortgage of 1905 was entirely fictitious and was a mere paper transaction fraudulently entered into to defeat the creditors of the estate. On appeal the lower appellate court upheld this finding, but came to the conclusion that the compromise in 1907 was perfectly genuine and was entered into because Karya Pande was afraid that his suit would be dismissed. As the suit was instituted by him in a representative capacity as head of. the family, the whole family, including minors, were bound by his act. It further found that the compromise was for the benefit of the family, and decreed the suit. In second appeal it has been argued on behalf of the defendants appellants that on the finding that the original mortgage was made without consideration, no money passed and consequently there was no debt due from Karya Pande, and that, therefore, there was no pious duty on the part of the sons and grandsons involved in the matter, and, secondly, a compromise which purported to modify a mere paper transaction, could create no liability.
2. In our opinion, this ingenious argument has no force, and we think that on the finding that the compromise was not collusive, but was genuine and made to benefit the family, the courts were not entitled to go into the question as to whether the original mortgage was or was not fictitious.
3. According to the Full Bench ruling in Madan Lal v. Kishan Singh (1912) I.L.R., 34 All., 572 the whole family, including the minors, were bound by the decree. But even assuming that it was open to the defendants appellants to re-open the question as to the validity of the original mortgage, and even assuming that the finding of the lower courts as to its nature is correct, the original mortgagors sued in 1907 to get rid of the danger to the family which their own fraudulent conduct had created. It is true that the mortgagee was equally fraudulent, but she was nevertheless entitled to maintain her possession. In pari delicto melior est positio defendentis. If the court had decided the case on this principle, the suit would have been dismissed and it would have been res judicata between the parties that there was a mortgage legally enforcible against the defendants appellants for an amount, then approximately, Rs. 2,500. In order to minimize the liability of the family, the mortgagors were probably well advised to make the best terms they could and compromise the case. Even if there was no loan nor debt in the beginning, this decree created a debt for which there was good consideration, which the sons and grandsons are bound to discharge. We, therefore, dismiss the appeal with costs.