1. This is an appeal by the plaintiffs arising out of a suit brought by them for the cancellation of a sale deed executed by their father on the ground that the transfer was not binding on the family.
2. The Court of first instance decreed the claim but on appeal the learned District Judge has dismissed it. The findings of the lower appellate Court are that the father is still alive and is really running this case. It has further found that the defendant acted in a bona fide manner when he purchased the property. It has found that the sale consideration was fully paid and was binding on the family in its entirety. It has however pointed out that out of the sale consideration Rs. 1,600 had been left in deposit with the vendee for payment to a named creditor Hira Lal on account of an antecedent mortgage debt of 9th January 1917. The learned Judge has held that subsequent to the execution of the sale-deed, the plaintiff's father served a notice on the vendee informing him that only Rs. 358 remained due to Hira Lal on his bond and requesting that the balance should be paid to the vendor direct. The vendee however did not do so but under a subsequent arrangement, which took place on 1st May 1919, the balance was utilized in payment of certain other previous debts of the vendor, though these had not been mentioned in the sale-deed. The main contention on behalf of the appellants is that if the vendee had made due inquiry he would have come to know that the entire sum of Rs. 1,600 was not due to Hira Lal and that therefore the transfer in lieu of it was not justified.
3. It is further urged that inasmuch as the payment of the other debts of the father was not in contemplation at the time when the sale-deed was executed they should be altogether ignored for the purpose of considering whether the transfer was or was not valid. I am unable to accede to the contention of the appellants. It is true that apparently the vendee did not make enquiries from Hira Lal before making the purchase, but when the entire sum of money was left in his hands for payment to Hira Lal, the vendee might very well accept its accuracy provisionally intending to ascertain the exact amount due, at the time of actual payment to the said creditor. When subsequently he discovered that the whole of that amount was not due to Hira Lal, he did not pay if over to the plaintiffs' father, but made him agree to utilize the balance in payment of other antecedent debts of his.
4. Antecedent debts of the father unless tainted with immorality or illegality are binding on the sons and a transfer in lieu of them is perfectly valid. Does it make any difference in principle if a portion of the sale consideration, though originally intended to pay off one antecedent debt, is as a matter of fact, when it is discovered that debt does not exist, honestly utilized to payoff another antecedent debt? After all when both the debts are binding on the sons they cannot complain if one is paid off rather than the other. The payment of debts due from the father is considered to be one of the recognized legal necessities. When therefore an antecedent debt has in fact been discharged, though not the one actually mentioned in the deed, the transfer should not be vitiated unless there be circumstances showing an at-tempted fraud. In cases where false recitals were dishonestly and fraudulently entered in deeds of transfer in order to deceive persons entitled to challenge the alienation, a Court may prevent the transferee from shifting his ground and setting up his own fraud. That however cannot be said to be the case here, when the lower appellate Court has found that the transferee acted in perfect good faith. I am conscious that in this view the principle of transfers in lieu of antecedent debts, which has so far been laid down in reported cases, is being slightly extended, but I think it is being extended legitimately. There is at least the authority of a Bench of this Court in the case of Jagdishwar Prasad v. Sheo Bakhsh Rai AIR 1910 All 248 that the fact that the money advanced for one legal necessity is used or diverted to some other purpose is not sufficient in itself to invalidate the transaction.
5. Had this been a case where the plaintiffs have been taken by surprise on the defendant leading evidence contrary to the recitals in the sale-deed, I would have made the defendant pay the costs of the plaintiffs. But this cannot be the case where the father is actually behind the scene. I would accordingly dismiss the appeal with costs.
6. This was a plaintiffs' appeal. The suit was brought by two minor Hindu song to sat aside a sale-deed dated the 28th of October 1918 for Rs. 2,000, the sale-deed having been executed by their father and it being alleged that it was neither for an antecedent debt nor for legal necessity.
7. The first Court decreed the suit, but the lower appellate Court allowed the appeal and dismissed the suit. The consideration set out in the deed was as follows: Rs. 1,600 left in deposit with the vendee for payment to one Hira Lal in reference to a mortgage in favour of Hira Lal, dated the 1st of January 1917. (2) Rs. 100 left with the vendee for payment to Vishnu Ram in regard to an oral debt. (3) Rs. 180 left with the vendee for payment to certain creditors. (4) Rs. 120 for cash and stamps, etc.
8. It appears that the money was in effect not applied to the purpose set out in the sale-deed but was, as the lower appellate Court expresses it, eventually used largely for other purposes.' For the purposes of the appeal before us it may be taken that it has been found that there was in fact no mortgage in favour of Hira Lal for Rs. 1,600. How the original entry of this item came to be made we have no information. But on the 8th of December 1918 Babu Lal, the father of the plaintiffs, who executed the document, sent a notice to Mahabir, who was the trustee of the defendant temple Sri Thakurjee the vendee, informing him that only Rs. 358-5-3 was actually due to Hira Lal and asking Mahabir to pay the balance of Rs. 1,600 to him (Babu Lal). Mahabir was apparently too cautious to do this, but an arrangement was entered into between him and Babu Lal as to the disposal of the Rs. 1,600. It was agreed that it should be disbursed as follows:
(1) Rs. 358-5-3 to pay off the mortgage in favour of Hira Lal. (2) Rs. 125 to pay off a decree in favour of one Munna Lal. (3) Rs. 654 to pay off a hundi in favour of Jhinku. (4) Rs. 424 to pay off a hundi in favour of Mahadeo and Sukhdeo. (5) Rs. 38-10-9 cash. Rs. 1,600 total. Before considering whether which, if any, of these debts as finally declared could be regarded as antecedent debts or for legal necessity so as to support the validity of the transfer a preliminary question has to be decided. That question is: Is it, in order to support a transfer by a father essential to show that the various reasons for the sale set out in the deed constituted legal necessity or antecedent debts; or, on the other hand, is it sufficient to show that the money though not disbursed as shown in the deed, was is fact, disbursed for other debts and purposes which by their nature would support a transfer? I will first refer to some general considerations before discussing the only judicial authority which' has bean 'brought to my notice.
9. For the plaintiff it might be urged that if a sale by a Hindu father can be supported by purposes other than those stated in the deed, a situation might in particular cases arise which it would be impolitic to permit.. If an invalid purpose be entered in the sale-deed (as in this case) the sons, in ignorance of the real application of the money and deceived by the incorrect entry in the dead, may be compelled in their own just and proper interests to file an unnecessary suits to set aside the deed, only to find it defended by the setting up of a good antecedent debt as having bean discharged in fact by the purchase money, a defence which would come as an entire surprise to the plaintiff. The whole purpose, from the sons' point of view, of setting out the destination of the consideration in the sale-deed, would be defeated, and in fact a false document would be registered and nobody would know whether they were legally entitled to challenge the transaction or legally bound to accept it. On the other hand, for the defendant it may be urged that the net result of the transaction is exactly the same as if the vendor had arranged with the vendee to tear up the original sale-deed and to execute a fresh one setting out the real eventual manner of disbursement. To this plea there would seem to be a two-fold answer. In the first place there is the undesirability to which we have just referred of leaving those who may be entitled to challenge the deed under a misapprehension; and in the second place, even where a second deed is executed before any suit is brought, there might well be cases in which the position of strangers to the first dead had become affected in the interval between the two deeds in a manner in which it would not have been affected if the first deed had contained a true statement of the position. Again it may be contended for the defendant vendee that he is not obliged to enter at all in the deed the intended application of the money that he only enters it for his own protection. That is so, but if he does enter it, it is obvious that it is expedient that he should be required to enter it correctly. Having stated these general considerations I will come to the judicial authority.
10. Counsel on either side were unable to refer us to any authority, but my learned brother, Mr. Justice Sulaiman, has since drawn my attention to the decision of this Court by Mr. Justice Walsh and Mr. Justice Ryves reported as Jagdishwar Prasad v. Sheo Bakhsh Rai AIR 1910 All 248. In that case the document set forth a purpose to which the money was to be devoted which, if established in fact, would be sufficient to establish legal necessity, but before the money was disbursed for that purpose, the vendor changed her mind and devoted the money to another purpose which would have been equally effective as regards legal necessity if that purpose had been originally stated in the deed. The transaction was upheld. This case is only distinguishable from the present in that in that case both the declared purpose and the eventual application of the money were capable of supporting legal necessity, where as in the present the greater part of the declared purpose did not exist and could not constitute legal necessity. This distinction does not, however, alter the fact that the case is authority for the proposition that alteration of the destination of the consideration is not by itself sufficient to invalidate the transaction where the actual disbursement would support an allegation of legal necessity. Even accepting that proposition, the question here is whether misdescription of the reason for the transaction coupled with the further element that the reason had little or no existence in fact, and that the money could not have been devoted to the payment of a non-existence debt, is sufficient to render the transaction impeachable not with standing that the money was actually disbursed for a purpose which would have supported the deed if it had been originally executed with that purpose in view.
11. In view of the general considerations which I have already stated I am not prepared to accept as a broad proposition of general application that it is quite immaterial what purpose is set out in the deed if only the vendee or mortgagee can subsequently show that the money was in fact disbursed for a proper purpose; but he who seeks equity must do equity; and in the peculiar circumstances of this case equity is wholly on the side of the vendee. He was clearly very careless in not making proper enquiry at the outset, but on discovery of his mistake it has been found that he exercised proper caution in securing that the money which he was to advance, and which he still held, was only devoted to objects which could, as it has been found, have supported his sale deed if they had been the original objects set out in the deed. I agree, therefore, that the appeal should be dismissed. Further, in view of the fact that it has been found that the father is himself behind this suit and that, therefore, the plaintiff cannot really have suffered any such surprise as that to which I have alluded above, I would allow the respondent his costs in this Court including counsel's fees on the higher scale.
12. This appeal is dismissed with costs including fees on the higher scale.