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Niaz Ahmad Khan and anr. Vs. Parsottam Chandra and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Judge
Reported inAIR1931All154; 129Ind.Cas.545
AppellantNiaz Ahmad Khan and anr.
RespondentParsottam Chandra and anr.
Excerpt:
.....think that there was no intention to depart from the well-established rule of english..........in the names of his minor grandsons under the guardianship of munshi lal who is the clerk of babu duli chand, the father of the minors.5. the learned advocate for the respondents has urged before us that the suit did not abate after the preliminary decree had been passed. the lower court however has held the contrary. so far as this sigh court is concerned this point is, at least for the present, concluded by recent authorities. after the passing of the new civil procedure code it was held by this high court in moti lal v. ram narain [1917] 39 all. 551 and jagarnath umar v. ram karan singh a.i.r. 1922 all. 396 that the death of the sole plaintiff in a mortgage suit and the omission to bring his heirs on the record within the period of limitation resulted in an abatement of the suit. it.....
Judgment:

Sulaiman, J.

1. This is a defendants' appeal arising out of a suit for sale on the basis of a mortgage deed dated 21st September 1923, for Rs. 20,000 carrying interest at 9 per cent per annum with annual rests. This document was executed probably in lieu of the amount due under an earlier bond of 13th December 1916, on the basis of which a preliminary decree had been passed. There was additional consideration of Rs. 1,200 which was paid in cash before the Sub-Registrar. The first document stood in favour of Jai Kishen Das, but the second document was taken in the name of his grandsons who were minors.

2. The main defence to the suit was that the mortgage in question was without consideration and had been obtained fraudulently and it was also pleaded that it had not been properly attested. There was a. further plea that the integrity of the mortgage was broken. The learned Subordinate Judge has overruled all these contentions and decreed the claim. The defendants have appealed from the decree and raised these points afresh.

3. The suit on the basis of the earlier bond resulted in a preliminary decree for sale dated 8th March 1923. It had been instituted by Jai Kishen Das as the sole plaintiff. It is now an admitted fact that the sole plaintiff died on 2nd May 1923 and no application for the substitution of the names of his heirs was ever made within the three months allowed by law. On 12th September 1923 that is to say more than three months after the death but within 60 days of the expiry of the period of three months an application was made on behalf of the heirs of Jai Kishen Das for the preparation of the final decree. The fact of the death was mentioned in this application but there was no formal prayer for the substitution of the names or for the setting aside of the abatement. The prayer was for the passing of a final decree. An order for the issue of notice was passed on the same day. It is a controversial point whether notices were actually served on the mortgagors or not. File D of that suit has now been weeded out and it is not possible definitely to ascertain whether services were duly effected. The plaintiffs have however produced the original summons issued to Dr. Vaish who was arrayed on the opposite side of that proceeding as showing that the notices must have been issued.

4. Before the parties appeared in Court as a result of the notice issued the mortgage deed in question was executed on 21st September 1923. It does not expressly recite the fact of the death of Jai Kishen Das but it stands in the names of his minor grandsons under the guardianship of Munshi Lal who is the clerk of Babu Duli Chand, the father of the minors.

5. The learned advocate for the respondents has urged before us that the suit did not abate after the preliminary decree had been passed. The lower Court however has held the contrary. So far as this Sigh Court is concerned this point is, at least for the present, concluded by recent authorities. After the passing of the new Civil Procedure Code it was held by this High Court in Moti Lal v. Ram Narain [1917] 39 All. 551 and Jagarnath Umar v. Ram Karan Singh A.I.R. 1922 All. 396 that the death of the sole plaintiff in a mortgage suit and the omission to bring his heirs on the record within the period of limitation resulted in an abatement of the suit. It was also held by a Full Bench of this Court in Churya v. Baneswar : AIR1926All217 that the abatement was automatic and did not require any formal order by the Court. Since then some doubts arose in consequence of the pronouncement by their Lordships of the Privy Council in the case of Lachmi Narain Marwari v. Balmakund Marwari A.I.R. 1924 P.C. 198.

6. The High Courts of Madras and Calcutta and the Chief Court of Lucknow came to the conclusion that in consequence of this pronouncement the previous ruling's of their High Courts should) be overruled and it must be held that there could be no abatement after a preliminary decree. The opinion formerly expressed by these High Courts was to the contrary. Our High Court has dissented from that view. The reasons are set forth in the case of Naubahar Singh v. Qadir Bux : AIR1930All753 which has been followed at least by one Judge in Gya Prasad v. Jaswant Rai : AIR1930All550 . In view of these pronouncements we must hold that the suit did abate automatically.

7. The learned Counsel for the appellants first contended that the document was entirely without consideration. His contention is that the previous suit having; abated there was in existence no enforceable decree under which the mortgagee could realize his amount. He therefore argues that there was no consideration for the mortgage deed in question at least to the extent of Rs. 17,800. The reply on behalf of the respondents is that the case would be covered by Section 25 (3), Contract Act, under which a promise made in writing and signed by the person to be charged therewith to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation for suits, is excepted. The first suggestion made by Mt. Pearey Lal Banerji, is that the expression limitation of suits' merely means a bar on suits and not necessarily a bar of limitation of time for suits. This suggestion does not appeal to us. We think that the word 'limitation' means the limitation of time as prescribed by the law of limitation in force. There can be no question that the abatement of the previous suit was dug to the rule of limitation under which an application for substitution of names had to be made within the prescribed period of three months. The learned advocate for the appellants contends that the expression is confined to the law for the limitation of suits and not to the law for the limitation of application, and argues that,, inasmuch as the abatement was due to the rule of limitation applicable to application, only, the exception is of no avail to the respondents. We think that a liberal interpretation ought to be put on Section 25 (3), and there is no doubt in our minds that the decree became unenforceable in consequence of the law of limitation applicable to suits. It is therefore obvious that the mortgage dead cannot fall to the ground owing to a total absence of consideration, nor even for any part of the amount as a written promise to pay a time barred debt is equally good and binding.

8. Although the mortgages deed could not toe without consideration, nevertheless, if the contract was vitiated by fraud or misrepresentation to the mortgagors, it would become voidable at the option of the mortgagors. 'Fraud' is defined in Section 17, Contract Act, and a suggestion as to a fact made by a person who does not believe it to be true is fraud, and so is an active concealment of a fact by one having knowledge or belief of the fact. On the other hand under Section 18 'misrepresentation' is a positive assertion in a manner not warranted by the information of the person making it, of that which is not 'true, though he believes it to be true. There are other cases of misrepresentation also with which we are not concerned in the present case. The principal difference between fraud and misrepresentation therefore is that in the one case the person making the suggestion does not believe it to be true and in the other he believes it to be true, though in both cases it is a misstatement of fact which misleads the promisor.

9. Under Section 19 consent to an agreement caused by fraud or misrepresentation makes the contract voidable. But there is an exception to the ' section which is in the following words:

if such consent was caused by misrepresentation or by silence, fraudulent within the meaning of Section 17, the contract nevertheless, is not voidable, if the party whose consent was so caused had a means of discovering the truth with ordinary diligence.

10. Mr. Pearey Lal Banerji for the respondents argues that the exception means that any misrepresentation which is fraudulent within the meaning of Section 17, or any silence which is fraudulent in the same way, does not make the contract voidable if the other party had the means of discovering the truth with ordinary diligence. He strongly relies on the opinion of Messrs. Pollock and Mulla in their Commentary on this section that there is in India a departure from the rule which prevails in England. The learned authors also observe that

If, as seams not altogether improbable, they were not intended to alter the English rule, they were chosen with singular infelicity.

11. No direct authority on this point has been cited before us by the learned Counsel for either party. We however think that unless on account of the clear language of the section we are driven to hold that there had been a departure from the long established rule of English law we would be reluctant to interpret the section in that way. If the statute were clear it would be our bounden duty to give effect to its meaning quite irrespective of any consideration as to what the law is in England. But on the face of it the exception is ambiguously worded. The difficulty is caused mainly by the punctuation, viz. a comma after the word 'silence' which seams to indicate that the words ' fraudulent within the meaning of Section 1,' apply both to 'misrepresentation' and to 'silence.' But, as observed by their Lordships of the Privy Council in the case of Maharani of Burdwan v. Krishnakamini Dan [1887] 14 Cal. 365 and Lewis Pugh v. Ashutosh Sen A.I.R. 1929 P.C. 69 at p. 71 punctuation is no part of the statute, and a Court of law is bound to interpret the section without the commas inserted in the print. If the comma after the word 'silence' is to be ignored the expression 'fraudulent within the meaning of Section 17' might well apply to 'silence' exclusively and not to 'misrepresentation.' This interpretation is strengthened by the circumstance that the legislature has used the preposition 'by' twice, i.e., both before 'misrepresentation' and also before 'silence.' If the expression 'fraudulent within the meaning of Section 17' qualifies 'misrepresentation,' the result would be that due diligence would be required in the case where misrepresentation became fraudulent, but would not be required when the. misrepresentation fell within Section 18 and was just short of fraud, for the exception would be confined to the former kind only. This would be a startling result.

12. We are therefore inclined to think that there was no intention to depart from the well-established rule of English law. It also seems to us that if we are to hold that a fraud does not vitiate a contract unless the party defrauded had no means of discovering the truth, it would have very serious consequences. For instance, in most cases advantage is taken of simple-minded people who are careless enough not to take the trouble to find out the truth which an ordinary man with sense would do with ordinary diligence. We are therefore inclined to hold that in the case of an active misrepresentation knowing the fact to be false, as distinct from mere silence or concealment, it is not incumbent upon the party defrauded to establish that be had no means of discovering the truth with ordinary diligence.

13. We must now therefore come to examine the allegation of fraud. The Court below has recorded a finding against the appellants and the burden lies on them to satisfy us that the Court below was wrong. There are no doubt a number of suspicious circumstances in this case. We may take it for granted that if the mortgagors had fully known all the facts and the legal consequences they would not have been so ready to execute a fresh document in lieu of the amount due under the preliminary decree at a higher rate of interest. In all probability they would have contested the application for the preparation of the final decree. One might suspect that Mr. Duli Chand, who is a legal practitioner of some standing and who took the mortgage in favour of his minor sons under the guardianship of his clerk, was aware of the legal flaw which had come in owing to the omission to apply within the time required by law and that he would have been anxious to procure a fresh document in order to get over that difficulty. On the other band, as has been pointed out by Mr. Pearey Lal Banerji, some confusion in the minds of the members of the legal profession might have been caused in consequence of a ruling of this High Court in Gujrati v. Sital Misir A.I.R. 1922 All. 209, which was in force in 1923 and was subsequently overruled by a Full Bench in Churiya v. Baneshwar : AIR1926All217 . There might at that time have been some-doubt as to whether an application for setting aside the abatement could have been made when no formal order for abatement had been passed. Under Order 6, Rule 4, the particulars of fraud and misrepresentation which are pleaded must be specifically supplied in the pleadings. There were four mortgagors, viz. Niaz Ahmad Khan, Faiyaz Ahmad Khan, Azirn Dad Khan and Inamullah Khan, on whom it is alleged that a fraud was practised. Niaz Ahmad Khan . filed a written statement on 14th September 1927 in which there was no suggestion even of a previous abatement of the suit. On 17th May 1928 the written statement was amended and the fact of the abatement was added, but even on that occasion there was no suggestion made that Babu Duli Chand had misled Niaz Ahmad Khan, by falsely telling him that his uncle had died within a month of the date of the execution of the mortgage deed.

14. On 17th May 1928 Azim Dad Khan filed a written statement in which he vaguely alleged fraud without specifying it. On the same day the Official Receiver representing Inamullah Khan, filed a written statement vaguely alleging fraud and deceit without specifying any particulars. Faiyaz Ahmad Khan filed no written statement.

15. It was not till 12th July 1928 that a statement was made on behalf of the defendants that the fraud alleged in the written statement was the fact that the abatement of the suit had been kept a secret from them and that the time of the death of Jai Kishen Das was stated wrongly, that is two or four days before the execution of the mortgage deed, they were told that Jai Kishen Das had died a month before. Even at that time it was not specifically mentioned that Mr. Duli Chand gave them the wrong date of the death of Jai Kishen Das.

16. In view of the fact that there was some doubt as to the exact procedure which had to be adopted for the setting aside of the abatement when no order for abatement had been passed, we are not disposed to consider that any concealment of the fact of abatement or mere silence on the part of the mortgage be sufficient to establish fraud. The fact whether any application had or had not been made in time could very easily have been ascertained on an inspection of the record of the case and any person who had acted with diligence would have discovered it. We are therefore not disposed to hold that any fraud or misrepresentation sufficient to vitiate the contract was established by the mere silence of the mortgagee to disclose the fact that no application had been made within the time allowed by law.

17. The mortgagors have gone further. Niaz Ahmad Khan has stated that Baba Duli Chand went to him in September 1923, asking him to pay the amount of the decree or else he would take out execution. On which he told him that he could not pay the money but that he was prepared to execute a fresh document. He says that Babu Duli Chand agreed to a fresh bond being executed and nine annas was settled as interest. Some three or four days afterwards Babu Duli Chand sent a document through Abdul Wahid, and it was said by him that as Jai Kishen Das was dead about a month before, he would take a fresh bond in the name of his sons. The statement of Niaz Ahmad Khan does not make it clear that the statement as to the time of the death of Jai Kishen Das was made before the agreement to execute a fresh bond and to pay interest at nine annas per cent per annnm. All that he says is that such statement was made before the bond was executed.

18. Similarly Fiyaz Ahmad Khan says that Babu Duli Chand told him that he was going to execute the decree unless payment was made, to which Faiyaz Ahmad Khan replied that the payment could not be made for want of money; and then the fresh bond was suggested to which Niyaz Ahmad Khan agreed. He then adds that Babu Duli Chand said that the bond would stand in the name of the plaintiffs as Lala Jai Kishen Das had died a month before. The statement of 'Faiyaz Ahmad Khan, as it stands also does not make it clear that the agreement to execute a fresh bond was come to after the statement as to the time of the death of Jai Kishen Das was made. For persons who wish to establish fraud it is incumbent upon them to show that it was the alleged fraud which induced the agreement and persuaded them to enter into it. The statements of these two mortgagors however fall short of establishing such fraud.

19. Azim Dad Khan states that he merely signed the bond at his place and was not present when the conversation between Babu Duli Chand and Niaz Ahmad Khan took place He does not allege' any particular fraud having been practised upon him by the mortgagee. He signed the document on trust because his other relations had already signed it.

20. Inamullah Khan, the fourth mortgagor has not gone into the witness-box at all.

21. Two witnesses, Hasan Raza and Ibrahim Khan, have been produced in support of the defendants' case, but their evidence is not worthy of any great reliance. Hasan Raza Beg was a casual witness who came to Court without having been summoned. Obviously he is not one of the attesting witnesses to the deed. He deposed as to the purport of the conversation between Duli Chand and Niaz Ahmad Khan some five years after it took place and it is extremely doubtful that he would remember it. Ibrahim Khan's evidence is really inadmissible. Without naming the man he says that he overheard a clerk of Duli Chand saying to a karinda of Dasna Estate that Babu Duli Chand had very cleverly concealed the flaw and obtained a bond for the whole amount In the first place it is unlikely that Babu Duli Chand's clerk would state anything of this kind to a karinda of another estate. In the second place, Ibrahim Khan admits that Babu Duli Chand had another clerk who, he says, was present at that time. Thus the evidence leaves it uncertain whether it was Munshi Lal himself or another clerk who made the statement. It is difficult to say how such a statement can be at all admitted in evidence against the mortgagee. As against this we have the denial of Mr. Duli Chand and also the evidence of his clerk Munshi Lal. There are some statements in the deposition of Mr. Duli Chand, which we find very difficult to accept in their entirety. He stated that when he applied for the final decree he did not know whether it was time barred, nor did he know at the time of the execution of the bond that the suit had abated. He also said that once he was the leading practitioner in Ghaziabad and had made a lot of applications for substitution of heirs, but none since 1920, and that he did not know of the amendment of the law reducing the period for applications for substitution for names from six months to three months. But at another place in his deposition he said that in the whole of his practice he did not remember having ever Applied for substitution of heirs. This is not reconcilable with the previous statement. He stated that he did not consult any lawyer, and if he had known of the three months' rule he would have put in that very application.

22. But as a matter of fact, even when he applied within six months he did not ask for any substitution of the names of the heirs. His clerk Munshi Lal stated that on the evening of the day of the death of Lala Jai Kishen Das, Babu Duli Chand left for Allahabad and on the next day Niaz Ahmad went to his house on a condolence visit. No such question was put to Niaz Ahmad Khan when he was in the witness box and he was not given an opportunity to deny this suggestion. Munshi Lal, who was put in three days after Niaz Ahmad Khan, was examined, is the only witness who has deposed to this condolence visit. We are therefore not prepared to accept his uncorroborated testimony.

23. It therefore seems to us that the evidence is far short of showing that any false statement as to the date of the death of Jai Kishen Das was made by B. Duli Chand or on his behalf by the mortgagor which induced them to enter into the agreement, but that there was merely an omission, or at the most a concealment, of the fact of the abatement of the suit from them. Although the evidence to show that Niaz Ahmad Khan was made aware of the exact date of the death of Jai Kishen Das is too meagre, there can be no doubt that the mortgagors were not diligent enough to make enquiries and ascertain the exact time of the death and the abatement in consequence. We must therefore hold that the mortgage deed cannot be avoided on the ground of fraud or misrepresentation. The plea as to absence of proof of execution cannot be seriously pressed. The evidence shows that the execution was made in the presence of witnesses, Apart from that an acknowledgment of execution would now be sufficient.

24. There is also no force in the contention that the integrity of the mortgage has been broken. The mortgage is executed by four persons whose properties were jointly and severally liable. Subsequently the mortgagee has acquired the interest of one of the mortgagors, Inam-ullah Khan, by means of purchase. As the interests are not co-extensive, the integrity cannot be broken. We must therefore overrule this plea The result therefore is that the appeal is dismissed with costs.


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