1. This is a defendant's second appeal and arises out of a suit for sale of a mortgage dated 1st December 1917, executed by Melhu Singh in favour of the plaintiff respondent for a sum of Rs. 140. The interest provided by the mortgage deed was Rs. 1-8-0 per cent. per month compoundable with yearly rests. The property mortgaged was the property belonging to the joint Hindu family consisting of Melhu Singh and his brothers Ram Daur. It is admitted that on the date of the mortgage the joint family consisted of Melhu Singh and Ram Daur, and neither of them had any sons. Ram Daur died in the lifetime of Melhu Singh, and thus Melhu Singh became solely entitled to the entire family property including the property mortgaged under the deed in suit. Melhu Singh died leaving certain daughters and daughters' sons. The defendants to the present suit were the daughters and the daughters' sons of Melhu Singh and certain transferees from the daughters. The suit was contested by one of the daughters, one of the daughters' sons and by one of the transferees. The contesting defendants denied the execution of the mortgage and receipt of the consideration by Melhu Singh. They also pleaded that the debt evidenced by the mortgage deed was not raised for legal necessity and as such, the property mortgaged could not be made liable for the same. The defendants further alleged that the execution of the mortgage deed was brought about by the exercise of undue influence. Lastly, they pleaded that the stipulated rate of interest was excessive and penal. Both the Courts below overruled the pleas urged in defence and passed a decree in the plaintiff's favour for the principal amount together with interest at the rate stipulated in the mortgage deed. The Courts below held that it was not open to the daughters or to the daughters' sons or to transferees torn them to raise the question of legal necessity. The lower appellate Court however proceeded to consider whether or not the debt secured by the mortgage was for legal necessity and answered the question in the affirmative.
2. The learned Counsel for the appellant contends that the Courts below were wrong in holding that the plea of want of legal necessity could not be raised by the contesting defendants. In view of the finding recorded by the lower appellate Court that the entire sum of Rs. 140 borrowed by Melhu Singh was required for family necessity, the question of law argued by the learned Counsel does not arise. But as the matter has been argued before us, we consider it desirable to express our opinion on the point. It is well-settled that in the case of an alienation of joint family property by the manager of that family or by one of the co-parceners, it is open to other co-parceners to challenge the alienation if the same is not supported or occasioned by family necessity. It is equally well-settled that, it is not open to a co-parcener who was not in existence on the date of the alienation and is born subsequently, to challenge the validity of the alienation that was made before he was born or begotten. This proposition is based on the principle of Hindu Law that it is only by birth that a son obtains an interest in the family property. On the other hand, it is also well, settled that if a co-parcener is in existence on the date of an alienation of the joint family property, and as such has the right to challenge the validity of that alienation, his right surivives to co-pareeners born subsequent to the dates of the alienation. But we are mot aware of any rule of law that entitles a mortgagor who has mortgaged joint family property to call into question the validity of his own mortgage and thus derogate from his own grant.
3. In the case before us on the death of Ram Daur, Melhu became entitled to the entire family property including the property mortgaged under deed in suit by right of survivorship. But as Melhu had executed the mortgage deed, he cannot be allowed to put the mortgagee to proof of legal necessity and thus challenge the validity of his own mortgage. The proposition that a grantor cannot derogate from his own grant is a proposition of universal application and there is nothing in Hindu Law that makes it inapplicable to cases of transfers of joint family property. It is contended by the learned Counsel for the appellant that as Ram Daur was entitled to call into question the validity of the mortgage in suit, and as on his death Melhu became entitled to his interest in the family property by right of survivorship, Melhu, so to say, a successor-in-interest of Ram Daur became entitled to question the validity of the mortgage in suit on the ground that it was not supported by legal necessity. We are unable to agree with this contention. It may be, as has been pointed out above, that the right of a co-parcener, who is in existence on the date of the alienation, to challenge the validity of the same on the ground that the transfer was not made for family necessity, survives to subsequently born sons who from the date of their birth become co-parceners in the family property. But that principle of law has, in our judgment no application to a case where by right of survivorship the mortgagor himself becomes solely entitled to the entire family property and there is no other person left who has any interest in that property. The reason for this is not far to seek. When the mortgagor becomes solely entitled to the family property including the property mortgaged by him, the principle of law that a mortgagor is estopped from denying the validity of the mortgage executed by him comes into play, and as such, the mortgagor cannot avail himself of the right of the other co-parceners, who may have been in existence on the date of the mortgage, to challenge the validity of the same.
4. The next point raised by the learned Counsel for the appellant was as regards the rate of interest. He contended that the interest was excessive, penal and unconscionable and as such ought to be reduced. In support of this contention he relied on a decision of this Court in Gajraj Singh v. Muhammad Mushtaq Ali 1933 All. 913, in which it was held that prima facie and in the absence of special circumstances to the contrary, the rate of 12 per cent per annum simple, may be taken as a fair, proper and reasonable rate in a mortgage transaction. The case cited by the learned Counsel for the appellant has no application to the facts of the present case. The reported case was governed by the provisions of the Usurious Loans Act (Act 10 of 1918). It is conceded that that Act does not apply to the case before us. The learned Counsel however argues that the observation in that case that the fair and proper rate of interest in a mortgage transaction is 13 per cent ought to be taken as a safe guide in settling the rate at which interest ought to be awarded to the plaintiff-respondent on the mortgage debt. The argument of the learned Counsel is not tenable as in the absence of a finding to the effect that the contract evidenced by the mortgage deed in suit was brought about by the exercise of undue influence, the Court has no jurisdiction to interfere with that contract and substitute a new one in lieu thereof. The matter is set at rest by a decision of their Lordships of the Privy Council in Raghuuath Prasad v. Sarju Prasaa 1924 P.C. 60, Their Lordships held in that case that although a mortgage for ample security provides for excessive and usurious interest, no presumption arises that it was induced by undue influence in the absence of proof by the mortgagor that the mortgagee was in a position to dominate his will. In the case before us, there is no evidence to lead to the conclusion that the plaintiff-respondent was in a position to dominate the will of Melhu. That being so, the Courts below were right in awarding interest to the plaintiff-respondent at the contractual rate.
5. For the reasons given above, we affirm the decision of the Courts below and dismiss this appeal with costs.