1. This is a defendant's appeal from a decree of the Civil Judge of Jhansi declaring that an ex parte decree obtained by him against the plaintiff Govind Singh, then a minor, is void, and reviving the suit No. 22 of 1935, in which the decree was passed.
2. There were four defendants in the suit brought to obtain this declaration. The first is the present appellant, Hakim Bahauddin, a money-lender, the other three are members of Govind Singh's family, one of them, defendant 3, Dillipat Singh, being his father, defendant &, Aman Singh, being the husband of his aunt; and defendant 2, Hanumant Singh, being the son of Aman Singh. The relationship appears more clearly from the following pedigree:
| | |
Mangal Singh Mt. subhajao = Mt. Raj Kuer =
| Dilipat Singh Anan singh
Jang Bahadur Singh | |
(died 1919) Gobind Singh Hanumant Singh
3. In the previous suit of 1935 Aman Singh was appointed guardian of the minor Govind Singh. The letter brought the suit now under consideration, No. 1 of 1939, on attaining majority. The Civil Judge has held that he was not represented, that is, properly represented in the earlier suit.
4. The facts of the earlier suit are not in dispute. It was instituted by the present appellant, Bahauddin, on foot of a promissory note for Rs. 15,000, executed on 2lst June 1932, by Hanumant Singh and Dillipat Singh in his favour, and a decree was passed in terms of a compromise between Bahauddin, Hanumant Singh and Dillipat Singh. Govind Singh was also a defendant in that suit and a written statement alleging that the promissory note was fictitious and without consideration was filed on his behalf by his guardian Aman Singh, but no further action was taken by the latter and he did not attend the Court when the compromise was presented. It was alleged by Govind Singh in the suit under consideration that he had colluded with Bahauddin.
5. There were only two issues in this present suit:
1. Was the decree in question obtained through fraud and collusion of Aman Singh? 2. Was Aman Singh, a guardian, guilty of gross negligence in not protecting the interest of Govind Singh plaintiff? If so with what effect? There being little evidence of fraud the Civil Judge found on Issue 1 against the plaintiff. On Issue 2, for reasons which will be considered later, he found that the guardian had been guilty of gross negligence.
6. The circumstances in which the promissory note for Rs. 15,000 was executed require some consideration. On the death in 1919 of Jang Bahadur, who had succeeded to the ancestral property, litigation ensued between certain re-versioners, mutation was effcted in the names of Manohar Singh and others, but their title was disputed by two other reversioners, Daulat Singh and Pahlwan Singh, who brought a suit against them.
7. Manohar Singh etc. were financed in this litigation (Suit No. 669 of 1920) by Bahauddin. The suit against them was dismissed and to liquidate the liability incurred they executed a mortgage deed on 16th August 1923, whereby Bahauddin became entitled to possession over certain lands for a period of 20 years. But they ejected him under the Bundelkhand Land Alienation Act when he had been in possession for only about 5 years.
8. Aggrieved by what, he considered an act of bad faith on the part of Manohar Singh etc. Bahauddin now proceeded to finance Govind Singh and Hanumant Singh in a suit for possession of the property of Jang Bahadur Singh as sons of his father's sisters. This suit No. 15 of 1928 was dismissed by the trial Court but decreed by the High Court on appeal.
9. For the purpose of this litigation Hanumant Singh and Dillipat Singh first borrowed a 1 sum of Rs. 1060 from Bahauddin on 28th July, 1928. The amount was increased to Rs. 5000 on 1 15th August 1928, when a fresh promissory note 1 was executed for this amount. Another promissory note for a further sum of Rs. 5000 was executed by them in favour of Bahauddin's father, Hakim Hafizuddin, on 1st September 1928.
10. That Bahauddin was the actual lender, I however, appears from an agreement executed in his favour by Hanumant Singh and Dillipat Singh on 14th September 1928. In this agreement they undertook to execute within four months a mortgage with possession for 20 years of their zamindari share in mauza Chandra. No action was taken on this agreement but a consolidated promissory note for Rs. 10,000 was executed and further agreements - one by each party were executed on 2-5-1929. These agreements made it clear that only in the event of the suit being successful and on Hanumant Singh and Govind Singh obtaining possession of the property would they mortgage their share in mauza Chandra with possession for 20 years to Bahauddin, should the suit be unsuccessful the promissory note for Rs. 10,000 would be considered cancelled.
11. More money was required for the appeal in the High Court on the dismissal of the suit by the trial. Court and on 23-6-1929, a promissory note for Rs. 15,000 and also an agreement were executed in favour of one Ahsanuddin, cousin of Bahauddin.
12. On 21-6-1932, two documents were executed by the same persons Hanumant Singh and Dillipat Singh, the latter acting as guardian of his minor son Govind Singh, who appears in the body of the document as one of the executants. By the first a promissory note for Rs. 15,000 in favour of Bahauddin was substituted for that executed three years previously in favour of Ahsanuddin, by the second another agreement was executed in favour of Bahauddin. This made it clear that the name of Ahsanuddin had been entered benami (from what motive does not appear) in the documents of 23-6-1929. The earlier suit, we understand, was brought on foot of this promissory note for Rs. 15,000, but from the written statement filed in that suit (the plaint has not been made available to us) the plaintiff appears to have relied also on the agreement.
13. The agreement of the same date provided, as before, that in the event of success, Hanumant Singh and Dillipat Singh would mortgage the Chandra property to Bahauddin. They would also pay him the coats awarded to and realised by them. In the event of failure, however, they would remain liable on the promissory note for Rs. 15,000, but Bahauddin would assume liability for payment of the decee passed against them, that is for costs.
14. Govind Singh and Hanumant Singh were, as stated, successful in their appeal to the High Court, but failed to honour the agreement, and it was in these circumstances that Bahauddin instituted the suit of 1935. Why he sued on the promissory note and not on the agreement is not clear, but it is suggested that if he had taken the latter course the Land Alienation Act might have been pleaded in bar.
15. The compromise was filed by Hanumant Singh, Dillipat Singh and Bahauddin on 27-2-1936, and a decree was passed by the Subordinate Judge of Jhansi in terms of the compromise on the same date. It provided for the execution of a lease for 20 years in Bahauddin's favour, should he fail to obtain possession, however, his suit for the money would be decreed with costs.
16. The Subordinate Judge considered the position of the minor in the order passed by him, observing that the minor had been benefited by the loan and was liable to pay, and that 'the terms arrived at in the compromise are beneficial to the minor inasmuch as the property would be saved for the minor if the terms are complied with.' He accordingly decreed the suit in terms of the compromise against him as against the other defendants, Hanumant Singh and Dillipat Singh.
17. Some other facts should be mentioned before we come to the judgment under appeal.
18. On 29-10-1936, Dillipat Singh, for himself and his minor son Govind Singh, and Hanumant Singh, filed an application under the Encumbered Estates Act, admitting liability to pay a joint debt of Bahauddin (the sole creditor named by them) under the decree. This is not very material, except that it suggests that Dillipat Singh and Hanumant Singh were evading execution of the lease and preferred to assume such pecuniary liability as might be enforced against them under the Encumbered Estates Act.
19. Then we have an application by Govind Singh to set aside the ex parte decree under Order 9, Rule 18, Civil P.C., It was dismissed on 19-11-1938, by the Civil Judge who decreed the present suit. The ground given for dismissal was that the application was time - barred, being made more than 30 days from the date of the decree.
20. Finally reference may be made to the written statement filed by Aman Singh as guardian of Govind Singh in the suit of 1935. Although it was alleged that the promissory note was fictitious and ignorance of the agreement was pleaded it was also said that if the plaintiff, Bahauddin, had invested any money in the suit against Manoher etc. Govind Singh was ready to pay to the extent of his share in the amount.
21. According to Bahauddin Aman Singh was present at the compromise negotiations and concurred in the settlement and only absented himself when the compromise was filed in Court. The Civil Judge thought Bahauddin's evidence about this doubtful, as there were indications that the compromise was drawn up the day before it was filed in Court. We do not think this question is very material.
22. The Civil Judge then considered
how far the absence of Aman Singh on the date of hearing when the ex parte decree was passed had prejudiced the interest of the minor, as it is the degree of prejudice to the minor which will determine the question of gross negligence on the part of the guardian.
Reviewing the various transactions between Bahauddin (or his relatives) on the one side and Govind Singh's relatives on the other the Civil Judge concluded that the promissory notes came into existence merely as securities. It was the property Bahauddin was after. When the promissory note for Rs. 10,000 was executed the legal costs of the case had come to only Rs 863 odd and the total expenditure came to only Rs. 2743 odd. It was a gamble on the part of Bahauddin. On the other hand it did appear that the family had no resources of their own to prosecute the litigation. Hanumant Singh had in the first instance filed a pauper suit (on 24-5-1924) against Manohar Singh. He and Dillipat Singh had very little property. But that Bahauddin was driving a hard bargain is shown by the stipulation that in the event of success Hanumant Singh etc. would pay him the costs which they would realise. He would also get mesne profits on the property.
23. For these reasons the Civil Judge concluded that the appellant's suit was
worth every contest and the interest of the minor had been highly prejudiced by the absence of Aman Singh on the date of hearing.
The principle by which he was guided was that
the negligence of the guardian should be of a character to justify the inference that the minor's interests were not protected and which had prejudiced' them and which as a prudent person he would have avoided by the exercise of reasonable care.
24. Against this it may be said that on the facts found by the Civil Judge there was little force in the defence disclosed in the written statement filed by Aman Singh as guardian of Govind Singh. There is no reason to doubt the genuineness either of the promissory note or of the agreement, and there was certainly some consideration for both. As to its adequacy and as to the reasonableness of the terms of the compromise. we have the fact that Hanumant Singh was as much interested in the property as Govind Singh and there is no reason to doubt his good faith. As regards the consideration, inasmuch as the transaction was admittedly speculative on the part of Bahauddin, particularly so after the suit had failed in the lower Court, the amount actually expended by him is beside the point. He would not have advanced the money required without a chance of recovering several times the amount, and there is no indication, that better terms could have been obtained from any one else. It would have been of little avail to dispute liability on the promissory note in view of the terms of, the agreement, because, so far as can be seen, Bahauddin could have enforced either one or the other, and there was no object in accepting a money decree on foot of the promissory note when the only means of satisfying it was by sale or mortgage of the property. Moreover the Judge who passed the decree in terms of the compromise was of opinion that it was for the benefit of the minor as the property would be saved.
25. On the legal aspects of the case we were referred first of all to the provisions, of Order 9, Rule 11, Civil P.C., whereby:
Where there are more defendants than one and one or more of them appear and the others do not appear, the suit shall proceed, and the Court shall at the time of pronouncing judgment, make such order as it thinks fit with respect to the defendants who do not appear.
The Court had therefore full power to pass the same decree against Govind Singh as against Hanumant Singh. Moreover the same counsel was representing all the defendants in the suit.
26. The mere failure of Aman Singh to attend the final hearing did not, it was argued, necessarily amount to negligence. A number of authorities were cited on this point. It was said in Nawab Singh v. Gurbaksh Singh ('25) 12 A.I.R. 1925 Lah. 116 that there might be a good case against the minor, and, if so, the guardian might think fit not to incur additional expense in defending the suit. This was not the position here, but it is said that as there was a good case against the minor the guardian was justified in leaving' the matter in the hands of his counsel and the other defendant who was equally interested. In Nookal Peda Satyam v. Krishnamurthy ('36) 22 A.I.R. 1935 Mad. 435 it was said that where the minor defendant has no case to put forward and his guardian realises this and, exercising his judgment honestly and deliberately and in the interests of the minor, decides that no good purpose can be served by putting in an appearance, his non-appearance is not a sufficient cause within the meaning of Order 9, Rule 13, (i.e. for setting aside an ex parte decree on the ground that the defendant was prevented from appearing). The same view was taken in another, Madras case, Nookal Peda Satyam v. Krishnamurthy ('36) 22 A.I.R. 1935 Mad. 435, in Raghuraj Gir v. Rudra Pratab Singh ('16) 3 A.I.R. 1916 Oudh 289 andMadho Saran Singh v. Manna Lal ('33) 20 A.I.R. 1933 Pat 473. It is also argued from the law laid down in these cases that no presumption can be raised from non-attendance, that it was necessary for Govind Singh to show that the case should have been defended. This he made no attempt to do. He alleged fraud and collusion but the finding on this issue was against him and it has not been argued that the finding is wrong. He implied in his plaint, that the failure] of Aman Singh to defend the suit on his behalf of itself constituted gross negligence and this' view cannot be upheld.
27. It was also contended that the matter is res judicata. It is the policy of the law to uphold compromise decrees against minors where all the adult members of the family interested join in it, and by Expln. 6 of Section 11 of the Code:
Where persons litigate bona fide in respect of....a private fight claimed in common for themselves and others, all persons interested'in such right shall, for the purpose of this section, be deemed to claim under the persons so litigating,
28. On this aspect of the matter two Privy Council eases were particularly relied on, Rameshwar Pershad Singh v. Ram Bahadur Singh ('07) 34 Cal. 70 andLingangowda v. Basangowda . In the first case a minor sued to set aside a compromise and decree in accordance therewith, made on his behalf by the adult members of a joint family of which ho was an infant member. Their Lordships refused to set aside the compromise as the minor had no separate interest, the adult members of the family, who were presumably competent to judge of their own interests, had taken part in the compromise and assented to it and the Court had pronounced that it was for the benefit of the minor who had been made a party for the purpose of binding his interest. In the second case their Lordships observed:
In the case of a Hindu family where all have rights, it is impossible to allow each member of the family to litigate the same point over and over again, and each infant to wait till he becomes of age and then bring an action, or bring an action by his guardian before, and in each of these cases, therefore, the Court looks to Expln. 6 of Section 11, Civil P.C., to see whether or not the leading member of the family has been acting on behalf of minors in their interest, or if they are majors, with the assent of the majors.
29. These rulings are not directly applicable since in the present case we are considering the position of a minor who was not represented as a member of a joint Hindu family by the leading member of that family, but by a member of the family expressly appointed his guardian to represent his separate interests.
30. Two Allahabad cases were also cited on the same point, Raja Babu v. Balmukand : AIR1925All214 and Har Govind v. Gitam : AIR1929All346 . In the first case the earlier suit had been brought on the basis of hund is executed by a Hindu father, the father was appointed, guardian of the minor, and a decree was passed against them. It was held on a suit being subsequently brought by the son to set aside the decree that it could not be set aside as there was no defence open to the minor in the earlier suit which the father could not have taken. In the second case it was said that the minority of defendants at the time of the prior decision does not preclude the operation of res judicata against them, provided that some of the defendants had identical interests, with theirs, reference being made to the same Explanation of Section 11.
31. The Civil Judge relied on the Full Bench case in Mt. Siraj Fatima v. Mahmood Ali : AIR1932All293 , but the facts in that case were very different, the guardian neglecting to enforce the rights of certain minors in partition proceedings by the institution of a suit as directed by the partition Court. It was said that if the guardian ceases to take any interest in the case or is grossly negligent so as to sacrifice the interests of the minor, it cannot be said that the minor is still properly represented in the litigation. But this ruling has no application unless it is first found on the facts of the case that the minor's interests have been sacrificed by the guardian's inactivity. It appears to us difficult, for the reasons already given to hold that they were so sacrificed in the case now under consideration.
32. Learned Counsel for the plaintiff respondent cited Brij Raj v. Ram Sarup : AIR1926All36 , but it does not appear to us that any different principle was enunciated in this case.' On the contrary it follows the view taken in other cases, for the Bench observed (at p. 41):
It is not sufficient to show that the guardian ad litem absented himself; it must also be proved that there was an available good ground of defence which was not put forward owing to the default of the guardian ad litem to appear at the trial. Or, to put the matter differently, the nature of the duty demanded from the guardian ad litem may vary according to the nature of the case in which he is called upon to act. An omission to defend or to raise a particular plea, or to call certain evidence, might in the circumstances of a particular case amount to negligence or to a breach of the duty -which was owing by the guardian ad litem to the infant in that case. In different circumstances such an omission might not amount to negligence. The thing to be regarded in each set of circumstances is the interest of the minor.
33. We have heard very lengthy arguments from the plaintiff respondent's learned counsel, but it seems to, us that he has for the most part evaded the crucial question in the case, this being whether the transactions entered into by Hanumant Singh and Dillipat Singh (acting as the plaintiff's natural guardian) on 21st June 1932, were such as might have been entered into by a prudent person. He has argued that the minor cannot be bound by his father's act, but there is clearly no force in this argument, if the father has acted in the minor's interest. The litigation was successful and the minor has established (with Hanumant Singh) his title to valuable property. It is true that there is no immediate benefit, but after 20 years they may enjoy the property to the fullest extent and from this point of view the younger man stands to gain more personally than the older. Learned Counsel concedes that money had to be borrowed, and if the terms may seem rather hard, there is nothing whatever to indicate that easier terms might have been obtained else-sphere. It is said that as the property is worth only about Rs. 25,000, Rs. 15,000 was a high price to pay for it. But this would not be a valid reason for holding that the guardian could have successfully defended the suit. The terms were not so hard that substantial benefit did not accrue to the minor.
34. To the compromise no objection can be taken, if we hold that in the circumstances the liability assumed by the father was not unreasonable. We observe that the application to compromise was made not only by Hanumant Singh but also by Dillipat Singh, and though his concurrence was unnecessary and has no legal effect, it shows at least that he did not consider the compromise objectionable.
35. The defence in the earlier suit, as disclosed in the written statement filed by Aman Singh holds out no prospect at all of success, the plea of ignorance being of no avail if the minor can be held bound by his father's act, and the acceptance of liability to the extent of the amount expended by the appellant being no answer to the claim for the larger amount for which liability was assumed.
36. We accordingly allow this appeal, set aside the decree of the Civil Judge and dismiss the suit with costs to the appellant throughout.