1. One Akber Singh owned a 2 bis was & 10 biswansis' share in Patti Rohan Singh, in village Bhawanipur, district Hardoi, & 4 biswas, 3 biswansis & odd share in Patti Akber Singh in the same village. On 29-5 1905, Akber Singh mortgaged 2 biswas & 10 biswansis of Patti Rohan Singh to Pancham Singh. He delivered possession over 15 plots measuring 22 Bighas 2 biawansis in order to satisfy the interest on the principal sum, namely, Rs. 1700.
2. On 25-8-1908, he mortgaged 2 biswas & 10 biswansis out of his share in Patti Akber Singh to the same person for a sum of Bs. 1800, Interest was to run at the rate of 6 per cent per annum & the property was not to be redeemed within ten years. It was further provided that if there was a default in payment of interest the mortgagee would be entitled to obtain possession, & it is agreed, that he did obtain possession in 1915. Other debts also were incurred & then Akber Singh died leaving a widow Mt. Sheo Rani & two sons, Bhudhar Singh & Bhola Singh. On 25-7-1911, Bhudhar Singh, Bhola Singh & their mother Mt. Sheo Rani jointly executed a mortgage deed in favour of Awadh Behari Lal A Chandika Prasad, who were predecessors-in-interest of the respondents, to secure a debt of Rs. 5609. The property mortgaged was the 2 biswas & 10 biswansis' share of Patti Rohan Singh & a 2 biswas' share out of Patti Akbar Singh. Most of the mortgage money was left with the mortgagees for payment to Pancham & others. It has been held--& this point has not been challenged in appeal--that the sums made payable under the two mortgages to Pancham Singh were not paid & the heirs of Pancham consequently continued in possession of those shares.
3. When the mortgage of 25-7-1911, was executed possession was delivered of 42 plots measuring altogether 52 Bighas 8 biswas since those were the only plots out of the mortgaged share in Mohal Akber Singh which were free from mortgage at that time.
4. On 80-7-1931, Bhudhar having died his widow & Bhola made a gift of their entire property, subject to certain exceptions, in favour of Baiju Singh, Jagat Singh & Mausam Singh appellants.
5. On 2-6-1944, the donees made an application under Section 12, Agriculturists' Relief Act, & claimed the benefit of the U. P. Debt Redemption Act. They alleged that the entire mortgage money had been paid off & that there had been a surplus of the profits. They therefore, prayed for redemption without payment.
6. The suit was opposed on a large number of grounds among which was one to the effect that the applicants were not entitled to the benefit of the Debt Redemption Act. The trial Court framed issue No. 5 to try this question. On this issue, it was held that the donees had impliedly undertaken to discharge the encumbrances & therefore, the liability for payment of the debt had been transferred to them. It also held that, by the deed of gift, the donees had been enjoined to pay the encumbrances existing thereon. It was, therefore, held that the case came within the exception contained in Section 2, Sub-section (9), Debt Redemption Act, & that that Act did not apply to the present proceedings. The Court also adopted certain principles of accounting which were not in accordance with the case of the applicants.
7. As a result of the decision of the learned civil Judge that the applicants were not entitled to the benefits of the U. P. Debt Redemption Act, accounts were taken under the Agriculturists' Relief Act from 1-1-1930, in accordance with the principles laid down by the Court & it was found that a sum of Rs. 1008-10-0 was due from the applicants. The learned civil Judge, therefore, passed a decree for redemption on payment of this sum on or before 15 6-1945.
8. The applicants, not being satisfied with this decree, have come up in appeal. Their learned counsel has contended that the law has now been settled that a transfer by gift of the property, which is the subject-matter of the mortgage, does not amount to a transfer of liability by a contract & that, therefore, in such a case, the mortgage-money remains a loan within the meaning of Section 2(9), U. P. Debt Redemption Act. He relies upon Kr. Aittar Singh v. Mahabir Pal : AIR1944All213 ; 'Mt. Shyam Dei v. Mt. Mahmoodunnisa Bibi : AIR1946All382 & Lalji Singh v. Lakshmi Narain A.I.R. (33) 1946 Oudh 47. Besides these, there are many other cases which have also laid down the proposition that, if a property is transferred by gift, the liability for payment of debts charged upon it is transferred by operation of law, & not by contract & that consequently the exception contained in Section 2 (9) does not apply.
9. This proposition is well established, but each case is to be considered with a view to deter, mine what has been done by the deed creating the title in the transferee. As has been laid down in Mahomed Hasan v. Narayan 1949 A.L.J. 171, what has to be considered in order to determine whether the exception contained in Section 2 (9), Debt Redemption Act, applies or not is whether the liability has been transferred & not whether the property has been transferred. If, therefore, a gift contains a condition which is accepted transferring the liability for the payment of the debt from the donor to the donee & that condition is accepted by the donee & further there is a consideration of some kind or other given to the donor, there would be a contract transferring the liability & the exception would come into play.
10. In the present case under the deed of gift, Ex. 2, certain plots were excepted from the gift. These plots were also encumbered and two of them, namely, plots Nos. 9 and 233, were in possession of the respondents as being covered by the mortgage in their favour. Paragraph 4 of the gift deed stipulates that 'the donees should get the debts thereon liquidated and after getting the lands redeemed should deliver the possession of the lands to us, the declarants.' It was further provided in paragraph 5 that 'the Government revenue of the exempted property shall be paid by the donees.' Paragraph 6 stated that 'the donees have agreed to this gift.' Thus, in the present case there was a contract between the donors and the donees that the latter would redeem the property which was mortgaged and deliver some portion of it, however, small that portion might be, unencumbered to the donors. Since the whole of the property is covered by the mortgage, redemption of only two small portions of it was not possible without redeeming the whole mortgage. Consequently, when this stipulation was entered in the deed of gift and was accepted by the donees, they agreed by a contract, and not merely by reason of the operation of law, to take upon themselves the entire liability for the payment of the loan which is the subject-matter of the present proceeding.
11. The fact that they agreed to redeem not only the property of which they themselves would get possession but would also redeem the property which was excepted from the gift and would place the donors in possession of that property free from all encumbrances and further would pay the land revenue due on the exempted property formed a consideration for the gift. Thus the contract entered into between the donors and the donees was for consideration also.
12. In these circumstances the decisions upon which reliance has been placed by the appellants' learned counsel do not apply and it must be held that the liability for the repayment of the debt due to the respondents has been transferred to the appellants by a contract with the borrowers or their successors.
13. In this view of the matter the other points which were taken in the grounds of appeal were not pressed by Mr. Das, who appears for the appellants. We accordingly dismiss this appeal with costs.