Skip to content


Sheo Prasad Vs. Balwant Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1927All150
AppellantSheo Prasad
RespondentBalwant Singh and ors.
Cases ReferredGundi Lal v. Basdeo
Excerpt:
.....19th november 1907 were either good antecedent debts of balwant singh or the debts had been incurred for legal necessity or the benefit of the family and the lower court should have found both of them to be wholly valid and proper. 50 made it clear that mere antecedency in time is not sufficient to constitute a debt 'an antecedent debt' and the debt must be antecedent in fact as well as in time; 22. two propositions clearly seem to follow: was that earlier debt antecedent in fact as well as in time, was that earlier debt truly independent of the later? to hold that an earlier mortgage cannot in any case be a debt antecedent in fact as well as in time to a later mortgage, if the earlier and later mortgagees are the same and the earlier debt is wiped out by the later, would in effect..........of the three former bonds and in favour of the same mortgagee, the three bonds did not constitute 'debt antecedent in time and fact' within the meaning of that expression as used by their lordships of the privy council.17. this contention was raised before two learned judges of this court and accepted by them in babu ram v. madho ram : air1927all127 , in which it was held that, where a mortgage bond executed in 1910 wasa mere renewal of a previous mortgage bond executed in 1892, the earlier bond could not be regarded is an antecedent debt.18. the same two judges again held to the same effect in gundi lal v. basdeo : air1926all690 . the judgments being of recent date have not yet been reported, but we have had them laid before us. at the outset, ft would note that the present bond in suit.....
Judgment:

Sulaiman, J.

1. This is a plaintiff's appeal arising out of a suit for sale on the basis of a mortgage, dated the 9th of April 1918, executed by Balwant Singh, Defendant No. 1, in favour of the plaintiff Sheo Prasad and his father Tota Ram, since deceased. Among the defendants are the mortgagor's grandson Malhan Singh and a number of subsequent transferees. The mortgage-deed in question was executed for a sum of Rs. 7,000. The bulk of the consideration was set off against the amounts due on three previous mortgage-deeds, dated the 6th of February 1901, the 17th January 1906, and the 19th of November 1907, in favour of the plaintiff's family. Rs. 60 were taken for purchasing stamp paper and meeting the expenses of the execution and registration, and Rs. 125 were taken professedly for payment of Government revenue. The defendants denied the validity of this mortgage-deed. It is not now disputed that the property covered by this mortgage was joint ancestral property and that the mortgage debt cannot be enforced against the other members of the family and subsequent transferees unless the deed was executed in lieu of antecedent debts or was for legal necessity.

2. At the time when the learned Subordinate Judge delivered his judgment the interpretation put by this Court on the expression 'incurred wholly apart from the ownership of the joint estate or the security afforded or supposed to be available by such joint estate' occurring in the judgment of their Lordships of the Privy Council in Sahu Ram Chandra v. Bhup Singh [1917] 39 All. 437 I.C. 280 was that amounts borrowed under previous mortgages secured on joint family property could not amount to antecedent debts; vide Mangal Prasad v. Brij Narayan [1919] 41 All. 235. The learned Subordinate Judge accordingly brushed aside the question of antecedency of the debts and proceeded only to consider whether there was legal necessity to support the debt. He ought to have kept the question of the existence of the consideration of the previous mortgages quite separate and distinct from the question of their being for legal necessity. He examined every item with a view to ascertain whether legal necessity had or had not been established. But on the question whether consideration had in reality passed, he left many items unconsidered. His finding that legal necessity for some of those items has been proved cannot be seriously challenged in appeal. The position taken up by the learned advocate for the appellant is that the learned judge has wrongly called upon the plaintiff to establish legal necessity For These previous debts.

3. Had it not been for two recent decisions of a Bench of this Court, to be referred to presently, I would have had no hesitation in saying at once that the amounts actually due on the previous mortgages of 1901, 1906 and 1907 were good antecedent debts, in lieu of which the mortgage in suit could have been validly made. In the Full Bench case of Chandra Deo Singh v. Mata Prasad [1909] 31 All. 176, Stanley, C.J., remarked:

Now by the expression 'antecedent debt.' I understand a debt which is not for the first time incurred at the time of a sale or mortgage that is presently incurred, but a debt which existed prior to and independently of such sale or mortgage. It must be a bona fide debt not colourably incurred for the purpose of forming a basis for a subsequent mortgage or sale or other similar object.

4. Several passages from the judgment of the learned Chief Justice were quoted with approval by their Lordships of the Privy Council in the case of Sahu Ram Chandra v. Bhup Singh [1917] 39 All. 437 I.C. 280. In this last-mentioned case the contention advanced before their Lordships was that the transaction on a mortgage for Rs. 200 should be treated substantially as if the mortgagor got Rs. 200 into his hands first, and that then granting the mortgage he became an 'antecedent debtor.' This contention was naturally repelled. But certain passages in the judgment led to a difference of opinion between the Allahabad and the Madras High Courts. Sir John Wallis, C.J., in delivering his judgment in the Full Bench case, answered in the affirmative the question whether an independent debt, not immoral or illegal, contracted by the father on the security of the joint estate, antecedent to the mortgage sued on, can be treated as an antecedent debt so as to support the charge on the son's share also to the extent of the sum secured on the prior mortgage. When the case decided by the Allahabad High Court went up in appeal before their Lordships of the Privy Council, it was referred to a Full Board, and is reported as Brij Narain v. Mangal Prasad A.I.R. 1924 P.C. 50. At page 102 their Lordships entirely agreed with the views of the learned Chief Justice in the Full Bench Madras case. Their Lordships laid down five propositions as the result of the previous authorities, the fourth one being as follows:

Antecedent debt means antecedent in fact as well as in time; that is to say, that the debt must be truly independent and not part of the transaction impeached.

5. This is an authoritative pronouncement on the scope of the definition of an antecedent debt. It undoubtedly indicates that in order to be an antecedent debt it must not only be antecedent in point of time, that is to say, a prior debt, but must also be antecedent in fact, that is antecedent in reality, and must be separate and independent and no part of the transaction which is being impeached. If there are two mortgages, which, though of different dates, are really part and parcel of one and the same transaction, it is obvious that the first cannot be treated as antecedent in fact. On the other hand, if two debts are quite distinct and separate and do not form one continuous transaction, the mere fact that the former debt has been discharged or paid off by the second debt or even incorporated in it, would not prevent the previous debt from being an antecedent debt within the meaning of the definition.

6. I do not consider that the word 'independent' used by their Lordships implies that there should be no connexion of any kind whatsoever between the two debts. It merely means that they should not be part of the same transaction, or the means of some device. Of course, when one debt is paid off by a subsequent debt, there must be in one sense a connexion between the two. I cannot, however, imagine that it was the absence of such connexion that was contemplated when the word 'independent' was used. If such were the case, then almost the whole effect of the ruling would be destroyed, for no question of the discharge of an antecedent debt can arise unless that debt is connected with the subsequent debt in the sense of having been paid off by it. Of course, where at the time when the first mortgage transaction is entered into, it is in contemplation that it will hereafter be converted into a second mortgage transaction, in order that it may operate as an antecedent debt, the position would be quite different. But when the second mortgage transaction is not thought of at all at the time when the first mortgage transaction is entered into, the first must be considered to be independent of the second; even though at the time when the second mortgage is taken the amount due on the first mortgage is set off. We have to see whether the first debt was independent of the second, and not whether the second is independent of the first. That is the only interpretation the first. The is the only interpretation which I think the language employed by their Lordships can bear.

7. In the case of Bhim Singh v. Ram Singh A.I.R. 1924 All. 309 the learned Chief Justice and Mr. Justice Piggott held that older mortgages of 1904 and 1910, which had formed the consideration for the sale in question, constituted antecedent debts inasmuch as they were antecedent in fact as well as in time, being wholly independent of the transaction of the sale which was being impeached, and were in no sense parts of that transaction. Similarly another Bench of this Court in the case of Gauri Shankar Singh v. Sheonandan Misra A.I.R. 1924 All. 543 held that a second mortgage executed to satisfy the debt due under an earlier mortgage was good as the debt discharged was an antecedent debt for which the other members of the family were liable. This view has been impliedly accepted by the learned Judges who decided the Full Bench case of Gajadhar v. Jagarnath A.I.R. 1924 All. 551.

8. Strong reliance has, however, been placed on behalf of the respondents on two unreported cases recently decided by a Bench of this Court. In Babu Ram v. Mahadeo Ram : AIR1927All127 it was held that where a previous mortgage of 1882 had been renewed by a mortgage bond of 1910, there was no antecedent debt to support the alienation. In Gundi Lal v. Basdeo : AIR1926All690 it was decided that a mortgage of 1920, which was in lien of the amount duo on a previous mortgage of 1917 as well as on some bahikhata account and some cash paid at registration, could not be treated as being in lieu of an antecedent debt. It was remarked that there can be no more apt example of a subsequent transaction embracing a former transaction so that the two became inseparable, than the case of a mortgage which includes in its consideration the whole of the sum advanced previously on the same security by the same mortgagee. It may be that the terms of the mortgage-deeds in the two unreported cases had some peculiarity in them which is not expressly referred to in the judgments and which influenced the learned Judges, but if it was intended to lay down the general proposition that whenever a subsequent mortgage includes in its consideration the amount advanced previously on the same security by the same mortgagee, even though the two transactions are separated in point of time and do not really form one and the same transaction, there is no antecedent debt. I would, with great respect, not be prepared to accept it in its generality. I do not think that the fact that it is the same mortgagee necessarily makes any difference. The very plea of the discharge of an antecedent debt implies the inclusion of that debt either by payment or set-off in a subsequent debt. The question of antecedency would not at all arise unless that previous debt formed part of the second transaction.

9. In the present case the mortgage-deeds of 1901 and 1906 were executed long before the mortgage-deed of 1918, which is in dispute. There cannot be any possible suggestion that the mortgage of 1918 was in contemplation in 1901 or 1906. Nor is it possible to contend that all these three formed one and the same transaction. They are obviously absolutely separate, distinct and independent transactions. The mere fact that instead of bringing a suit to enforce has claim on the previous documents, when time was about to expire, the mortgagee thought fit to take a fresh mortgage in lieu of the amounts due on the previous deeds as well as some further consideration and also agreed to reduce the rate of interest, cannot destroy the character of the previous mortgages as antecedent debts, the inclusion of the previous amounts notwithstanding.

10. I would, therefore, hold that the previous debts, if proved, constituted antecedent debts and there was no necessity to prove legal necessity for them. I would accordingly proceed to consider whether consideration passed on these previous mortgage-deeds. As regards the document of 1901 the learned Subordinate Judge has himself found that this was supported by consideration. That finding is not challenged before us.

11. As regards the mortgage-deeds of 1906 and 1907 his findings are that portions of the amounts said to have been borrowed under these documents have not been really paid. These findings are really based on the supposition that the plaintiff has failed to prove his case because he has not produced the originals of the documents mentioned in these mortgage-deeds the amounts of which are said to have been set off. The learned Subordinate Judge has not considered the circumstances of this case nor has he attached any weight to the fact that these documents are very old and that there was an acknowledgment by Balwant Singh of the receipt of the consideration. The main contesting defendants are subsequent transferees, and Balwant Singh the mortgagor has not chosen to file a written statement denying the receipt of the consideration, nor has he been examined as a witness to explain away his own acknowledgments before the Sub-Registrar. In addition to the mortgage-deeds and the acknowledgments of Balwant Singh the plaintiff produced oral evidence to show that these deeds were supported by consideration. It is not quite clear why the evidence of Kallu Mal who was an attesting witness to the document of 1906 has not been believed in to. There seems nothing to discredit his evidence. He has deposed that the original bonds were returned after the execution of the document of 1906, and that full consideration had been paid for it. Similarly there is the evidence of Shyam Lal and Ram Dayal as regards the second mortgage-deed of 1907. All this is one-sided evidence. I am, therefore, not prepared to accept the finding of the Subordinate Judge that part of the consideration of these documents has not been proved.

12. The result, therefore, is that the amounts due on the three mortgage-deeds of, 1901, 1906 and 1907 must be deemed to have been valid antecedent debts which could form a valid basis for the transfer in question.

Boys, J.

13. The facts of this case are set out in the judgment of my learned brother, Mr. Justice Sulaiman, with which I agree. But in view of the importance of the question raised, I will shortly state my own views. The plaintiff mortgagee brought a suit against the executant of the mortgage, Balwant Singh, and certain other members of the joint Hiudu family and their transferees on a mortgage, dated 9th April 1918. The consideration for that mortgage consisted of three bonds, certain expenses relating to the execution and registration of the deed and some money which was for the payment of Government revenue. The only point which I propose to consider is the question whether the three bonds found to have been for consideration constituted antecedent debts. The judgment of the learned Additional Subordinate Judge was passed before the recent decision of their Lordships of the Privy Council in Brij Narain v. Mangala Prasad A.I.R. 1924 P.C. 50 and he held that

inasmuch as all the bonds set off in suit are mortgage bonds, they cannot be held binding as antecedent debts on the family.

14. He therefore went into the question of whether these bonds were justified by legal necessity, and decreed only part of the claim. The three bonds are dated 5th February 1901, 16th January 1906 and 19th November 1907, and they constitute the great bulk of the consideration of the bond in suit. On behalf of the mortgagee-appellant the first ground of appeal is that

because the mortgage in suit was wholly valid and the various items of consideration were proper, it was fully binding on the mortgagor.

15. The third ground taken is that

because it has been proved that the various items making up the consideration of the mortgage bonds dated 16th January 1906 and 19th November 1907 were either good antecedent debts of Balwant Singh or the debts had been incurred for legal necessity or the benefit of the family and the lower Court should have found both of them to be wholly valid and proper.

16. These grounds were drafted on the 28th March 1923, that is to say, before the judgment of their Lordships of the Privy Council to which I have adverted above. For the appellant it Has been urged before us that, in view of that judgment, all these three bonds must, apart from any question of legal necessity, be regarded as antecedent debts. On behalf of the respondent it has been urged that all the bonds were in favour of the mortgagee of the latter bond in suit, and that as it has been contended the later bond being merely a renewal in the form of one bond of the three former bonds and in favour of the same mortgagee, the three bonds did not constitute 'debt antecedent in time and fact' within the meaning of that expression as used by their Lordships of the Privy Council.

17. This contention was raised before two learned Judges of this Court and accepted by them in Babu Ram v. Madho Ram : AIR1927All127 , in which it was held that, where a mortgage bond executed in 1910 was

a mere renewal of a previous mortgage bond executed in 1892, the earlier bond could not be regarded is an antecedent debt.

18. The same two Judges again held to the same effect in Gundi Lal v. Basdeo : AIR1926All690 . The judgments being of recent date have not yet been reported, but we have had them laid before us. At the outset, ft would note that the present bond in suit is not in fact merely a renewal of the earlier bonds. There is in addition an item of Rs. 125 which was taken for the payment of Government revenue. Further, it contains the expression:

Now I have, by means of entreaties, obtained the consent of the said creditors to obtain document after reducing the interest.

19. I will, however, consider the argument for the respondent on the supposition that the later bond in suit was merely a renewal of the three earlier bonds, as the facts of the additional item taken for payment of revenue and that the interest was to some extent reduced, do not appear to me to affect the principle which must govern our decision.

20. In Gauri Shankar v. Sheonandan A.I.R. 1924 All. 543, the second mortgage was executed to pay off the first and the mortgagee was the same in both. Lindsay, J., dealt quite separately with the two questions that arose. First, did the earlier mortgage on the face of it constitute an antecedent debt? The reply of Lindsay, J., was definitely in the affirmative. The second question, did the fact that the earlier mortgage was executed to discharge a debt barred by limitation, prevent its being an antecedent debt, he answered in the negative. Sulaiman, J. did not in terms answer the first question, but the fact that he gave the same reply in the negative to the second question inevitably implies that his answer to the first was in the affirmative. The fact that the mortgage was the same in both the mortgages was not specifically weighed and the most that can be said is that it was one of the salient features of the case Speaking of this case the learned Judges in Gundi Lal v. Basdeo : AIR1926All690 said:

If it is to be taken as a general finding that all previous mortgages must be held to be antecedent debts we are not-prepared to agree with that decision.

21. With that expression of opinion all must agree, but I do not think Gauri Shankar v. Sheonandan A.I.R. 1924 All. 543 can be taken to suggest any such general proposition; it merely decided that on the facts before the Court the earlier mortgage evidenced a debt truly independent of and not part of the transaction impeached. Their Lordships of the Privy Council in Brij Narain v. Mangala Prasad A.I.R. 1924 P.C. 50 made it clear that mere antecedency in time is not sufficient to constitute a debt 'an antecedent debt' and the debt must be

antecedent in fact as well as in time; that is to say, that the debt must be truly independent and not part of the transaction impeached.

22. Two propositions clearly seem to follow: (a) that their Lordships contemplated the possibility of circumstances in which a debt though prior in time would not be 'an antecedent debt' and; (b) that they intentionally left it open for determination in the circumstances of each case whether the debt came within the limits of their definition. The case is analogous to that where the Courts have to determine whether two occurrences are events in the 'same transaction.' Many possible elements may have to be considered, the interval of time, continuity of purpose, community of purpose, identity or difference of parties, partial or complete identity of subject-matter, etc.

23. One class of case which would be shut out from coming within the definition in Brij Narain v. Mangal A.I.R. 1924 P.C. 50 is where the circumstances establish to the satisfaction of the Court that when the first mortgage was executed it was contemplated that a second should follow and it did follow, the two together being merely a device to bring the debt within the definition of 'antecedent debt.' The greater the interval, the less the cause for suspicion, the less the interval, the greater the cause, but all the surrounding circumstances would have to be weighed exactly as in any other case of determination of the question whether two events constituted the same transaction.

24. It is clear, as the learned Judges in Gundi Lal v. Basdeo : AIR1926All690 say, that the judgment of their Lordships of the Privy Council is a pronouncement 'in which every word must receive its value.' But as I appreciate the language of their Lordships of the Privy Council, it is the earlier debt to which attention has to be directed; was that earlier debt antecedent in fact as well as in time, was that earlier debt truly independent of the later? It is to that earlier debt that their Lordships applied the words 'truly independent.' That is, in my view, a wholly different question from: 'Was the later debt truly independent of the earlier.' Whether the mortgagee be the same in both transactions or different, it would be impossible ever to describe the later mortgage as truly independent of the earlier since the earlier is wholly or in part the fons et origo of the later.

25. As I read the words of their Lordships of the Privy Council it is the character of the earlier transaction that must be examined, though of course extraneous facts may throw light on that character. It is clear that if a creditor lent Rs. 5,000 one day, and a day or two later got a mortgage executed to secure his money, there would be no difficulty in holding that the loan was not truly independent of the mortgage, that it was part of the transaction impeached. But I am unable to hold that, where a mortgage is executed to discharge three other mortgages made 11, 12 and 17 years previously, the single additional fact that the mortgagee is the same throughout renders the mortgages made 17, 12 and 11 years previously 'not truly independent' of the later mortgage.

26. There is one further aspect of this question to which I would advert though it is a question of expediency only and cannot affect the decision of the question of the applicability of the definition laid down by the Privy Council. To hold that an earlier mortgage cannot in any case be a debt antecedent in fact as well as in time to a later mortgage, if the earlier and later mortgagees are the same and the earlier debt is wiped out by the later, would in effect compel the borrower to give each successive mortgage to a different mortgagee. He could not say to the man with whom he has always dealt and who has treated him well,

I owe you on a mortgage Rs. 1,000 principal and Rs. 1,000 interest. I had hoped to be able to pay you off but I can't. I want you to give me a fresh mortgage for Rs. 2,000 to discharge the earlier mortgage.

27. The mortgagee might well reply:

I cannot give you anything further without getting security. You had better go to somebody else who will give you the Rs. 2,000 you need and who will discharge your debt to me. He will do it because he will be able to claim that your debt to me is an antecedent debt. He may make harder terms than I would, but I cannot help that.

28. We accordingly allow this appeal, and, modifying the decree of the Court below, decree the plaintiff's claim in full. A preliminary decree under Order 34, Rule 4 of the Code of Civil Procedure shall be prepared. We fix six months from to-day as the time for payment.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //