Pramada Banerji and Gokul Prasad, JJ.
1. This appeal arises out of a suit for possession of a house in the City of Cawnpore which belonged at one time to one Janki Prasad. The plaintiffs claim as reversionary heirs to Janki Prasad and in this suit they have impleaded the heirs of one Mathu, sister's son of Janki Prasad, who entered into possession of the house on the death of Janki Prasad in 1909 and who made a mortgage in favour of Ram Kishan, respondent. Certain persons who laid claim to this house as heirs of Mathu have also been made parties. The contesting defendant, who is the only person who has appeared in this appeal, is Ram Kishan, the mortgagee. A large number of questions were raised in defence, but for the purposes of this appeal it is not necessary to discuss them in detail. All of them have been found against the defendant respondent except a plea raised by him under Section 41 of the Transfer of Property Act, namely, that he is a bond, fide transferee for value and his mortgage cannot, therefore, be overridden by the plaintiffs' suit.
2. The sole point which we have to decide in this appeal is whether the plaintiffs' suit is barred by the operation of Section 41 of the Transfer of Property Act. In order to obtain the protection afforded by the said section it is necessary for the transferee to prove-
(1) that he has given valuable consideration;
(2) that he acted in good faith, and
(3) that he had made reasonable inquiries to ascertain that the transferor had power to make the transfer.
3. The learned Subordinate Judge has found that all these three elements have been proved in this case. For the purposes of deciding this appeal we may assume that the transferee respondent has given valuable consideration. As regards the other points the facts which have been proved from the evidence on the record are these:
Mathu, who, as we have stated above, was the son of a sister of Janki Prasad; lived with Janki Prasad. After the death of Janki Prasad he put in an application in the Municipal office asking for the entry of his name in place of his deceased maternal uncle Janki Prasad; his name was so entered, and he continued to be in possession of this house so long as he was alive. He made a mortgage of this house to Ram Kishan on the 19th of June, 1916, and died the following year. This suit was brought a few weeks after his death. It it in evidence, and we think clearly established, that at the time when Ram Kishan advanced the loan to Mathu he knew that Mathu was the son of a sister of Janki Prasad. The only inquiry which he seems to have made is that he had the Municipal register inspected and was told that the name of Mathu had been mutated in place of that of Janki Prasad in the year 1909. He also says that he made inquiries from the neighbours and was told that Mathu was the owner of the house. He makes a somewhat vague statement about having seen the title deeds of the house in possession of Mathu but he has not been able to give the particulars of, or even the nature of, the title deeds which he says he saw. We do not think any reliance can be placed on this statement of his. He is the next door neighbour, his house being adjacent to the house in dispute. Knowing that Mathu was after all a sister's son, who would not under the ordinary Hindu law be an heir to his maternal uncle Janki Prasad, being excluded by collaterals up to fourteen degrees, he should as a reasonable man, have made some inquiries at least as to who, if any, the collaterals were. There is absolutely no evidence on the record to show that his made any such inquiries. It is somewhat strange that even the witnesses whom he has produced have not been able to say where Janki Prasad came from, or if he had any other relations. Of course, if the statement of the plaintiff Ballu Mal is to be believed, he attended the obsequies of Janki Prasad and it is not easy to believe that Ram Kishan did not know the existence of these collateral relations who were only three degrees removed from the common ancestor. There is this direct evidence of the presence of these collateral relations which in any event ought to have put Ram Kishan on his guard. We would go further and say that the very fact that Ram Kishan knew that Janki Prasad was the maternal uncle of Mathu ought to have put him upon inquiries as to whether there were any collaterals of Janki Prasad. This he never attempted to do, and we think that one of the most essential elements which would bring Section 41 of the Transfer of Property Act into operation does not exist in this case. We think that the learned Subordinate Judge was wrong in giving the protection of Section 41 of the Transfer of Properly Act to the defendant respondent, inasmuch as there were circumstances in this case which ought to have put him on inquiry if he had acted as a reasonable man. As we have stated above, the other issues of fact have been decided against the defendant respondent. This was the only point on which the case was decided in his favour and as we have disagreed with the Subordinate Judge on this point we modify the decree of the court below and decree the plaintiffs' claim in full with costs in all courts.