1. The facts, as found by the lower Court and not contested, are as follows: One Braj Kishore, who was related to the plaintiffs-respondents, as will be explained later on, inherited a very valuable banking business and Zemindari estate from his mother's family, which he carried on under the style of Jugal Kishore-Chunna Mal, and afterwards of Jugal Kishore-Braj Kishore. He himself became Government Treasurer of Shahjahanpur. He died in 1878 leaving surviving him a widow, Musammat Durga Dei. This lady carried on her late husband's business for something like 25 years till her death on the 8th June 1905. It is admitted that she was careful in her management, and was not a spendthrift. The evidence on the point as to how far she was successful is perhaps vague, but one of the plaintiffs, Kishan Chand, admitted that the value of the property left by Braj Kishore was believed to be about 21 or 22 lakhs, and that at Durga Dei's death, the property left by bar was of about the same value. At any rate, there is nothing to show that she wasted the property.
2. She adopted, or is said to have adopted, Murari Lal, one of the plaintiffs.
3. After her death, a number of suits were instituted, by some or other of the plaintiffs, against Murari Lal, and as against other plaintiffs, all of which were settled by compromise. The details of these litigations are fully given in the judgment of the Court below, and need not be repeated. By these suits it was mutually established that Lala Jiwan Das Ramji Das, Narain Das, Kishan Chand and Murari Lal, the adopted son, were entitled to succeed as reversioners to the estate of Braj Kishore, and the share in which each was entitled (the lion's share going to Murari Lal) was also settled inter se.
4. Rai Din Dayal and Govind Prasad, who had acquired some of Kishan Chand's interest, and who were parties to some of the previous litigations, were also recognised as entitled to a particular share. Having settled their disputes among themselves to their satisfaction, they combined in bringing this suit against a large number of persons, forty-three to be accurate, who were transferees from Musammat Durga Dei to recover the properties which were in their possession and which they had acquired from her, on the ground that all the transfers were made by her without 'legal necessity' and became void on her death. The details of the properties claimed in the suit are given in the schedules attached to the plaint.
5. The broad defence to the suit was a denial that the plaintiffs were the reversioners of Braj Kishore, and, secondly, that the transfers were made either for legal necessity, or in the ordinary course of business of Braj Kishore's firm of Jugal Kishore Chunna Mal, which Durga Dei carried on after his death, and were, therefore, valid.
6. The lower Court gave a decree against the bulk of the defendants, holding that the transfers were without legal necessity, and were, therefore, void on Durga Dei's death at the instance of the plaintiffs, who were, it held, entitled to sue as reversioners. In some cases, the plaintiffs were ordered to re-pay the sale consideration, as a condition precedent to their obtaining their decree, in other cases, no such condition was imposed, Some of the claims were compromised.
7. In this appeal we are only concerned with three sets of property.
8. (1) No. 2, Lalpur, (2) No. 6 Manorathpur, and (3) Items Nos. 10 to 19 of Schedule 1. The appellants are the transferees of these properties, or their representatives in-interest.
9. Two main grounds are pressed in appeal:
(1) that the plaintiffs have not proved themselves to be reversioners of Braj Kishore.
(2) That the transfers made by Durga Dei, were justified under the Hindu Law.
10. It was also, however, argued on the 6th ground of the memorandum of appeal that some of the properties affected by the appeal were not part of Braj Kishore's estate.
11. The first argument, (based on the first five grounds of appeal), may be disposed of very shortly.
12. The plaintiffs, in proof of their title to sue, put in a pedigree, which they sought to prove by oral evidence, and by a number of letters written by members of the family to Braj Kishore, or written by Braj Kishore to members of the family. They also put in evidence the various decrees obtained by them in their litigation amongst themselves which has already been mentioned.
13. The defendants denied the genuineness of the pedigree, and argued that the letters, which they said had never been produced before, had probably been manufactured for the purpose of this case, and that in any event they were too suspicious to afford corroboration of any value to the oral evidence. They did not assert that any other particular person or persons were the real reversioners, but simply put the plaintiffs to the proof of their title.
14. The learned Subordinate Judge accepted the plaintiff's evidence on this point, and, in my opinion, rightly.
15. AS I have said, before, Braj Kishore himself and his family do not seem originally to have been wealthy; it was owing to his inheritance from his mother's family that he acquired the bulk at any rate of his property, and thereby became very wealthy. It is only natural, under such circumstances, that the members of his own father's family would take a very keen interest in ascertaining their own relationship to him as possible successors and in keeping closely in touch with him. It is not correct to say that the letters were all produced for the first time in this case, for we find that some of them at least were exhibited in the previous litigations, and they seem to have been produced from proper custody.
16. They fully bear out the relationship set up by the plaintiffs.
17. The second argument raises a very important point of Hindu Law, which, as far as we can ascertain, is not directly covered by any reported authority.
18. Were the transfers made by Durga Dei justified by Hindu Law? One aspect of this question is well raised in paragraph 16 of some of the defendant's written statement: 'Lala Braj Kishore was a banker. He used to advance money as loans. He also used to purchase property and sell it at a profit. This was the business which was carried on by him. This business was carried on in the names of Jugal Kishore Chunna Mal. After the death of Braj Kishore the same business and practice were carried on by Musammat Durga Dei. All the transfers which have been made were made for the benefit of the business or for procuring loans. She did not make the transfers as a Hindu widow. Consequently, all the transfers made are valid.'
19. The other aspect is, were the transfers made for 'legal necessity,' as that term is understood in Hindu Law? The issue on this point, keeping in view both aspects of the question, was clearly raised in Issue No. 4: 'Whether Musammat Durga Dei executed the various sale deeds in suit for legal necessity, for urgent necessity or for sufficient cause, and whether the legal heirs of Musammat Durga Dei are bound by them?'
20. The first aspect of the question is disposed of by the learned Subordinate Judge somewhat summarily, and not entirely by itself. He says: 'It is contended that Durga Dei, to realise debts, purchased the property at auction-sales, and then sold the property; that if she had realized the debts in cash she could have spent that cash in any way she liked, why should the not be able to Bell away property and turn it into cash and use that cash; that purchasing property for her and not husband's debts, and then selling it were incidents of money-lending, which she carried on; and if, under those circumstances, she sold the property she transferred it for valid necessity. But this argument cannot avail. At page 458 of Trevelyan's Hindu Law we find that 'where additions are made to an estate by a restricted female owner with the intention that they should form part of the estate, such additions pas with the estate and not to the heirs of such owner.' As to accumulations it is ordained that if she invest the income with the intention that it should be an accretion to her husband's estate, she cannot thereafter deal with it, except under circumstances which would justify her dealing with the original estate. But if she invest the income in such a way as to indicate her intention that is not to form part of her husband's estate, but to remain at her disposal, she can deal with it during her lifetime, at any rate. '
Now, in this instance there is no indication that she intended that the purchased property should not form part of her husband's estate. She remained in possession for a few months, and then sold the property she had purchased for her husband's debts. I find that she had no power to do so; that no legal necessity is proved, and the sale is not binding on the reversioners.
21. Before discussing the question of law I will state the facts of each of the transfers with which this appeal is concerned.
1. Lalpur. This property belonged to Braj Kishore; that is to say, he bought it in 1874. Durga Dei sold it in 1904 for Rs. 9,000 to Gauri Bibi. The sale consideration was made up as follows: Rs. 7,200, which had been deposited by the vendee's deceased husband in the banking business, while Durga Dei was managing the business after Braj Kishore's death, was set off Rs. 300 was paid in cash, and Durga Dei accepted a rukka for the balance, Rs. 1,500.
2. Manorathpur. This property and other property had been mortgaged to Braj Kishore, and he obtained a decree for sale of the mortgaged property shortly before his death in 1878. In execution or the decree, Durga. Dei purchased it for Rs. 25 (it is fractional share) in 1882, and got possession in 1884; in the next year she sold it for twice what she gave for it.
3. Items Nos. 10 to 19. These were mortgaged to Braj Kishore in 1876. Durga Dei sued on the mortgage in 1879, and got a decree, in execution of which she purchased the same property for Rs. 5,920 in 1882 and 1884, and sold it to Ishri Singh in 1890 for Rs. 5,000 whose heirs and representatives are now in possession. The defence, in this instance, was that Musammat Durga Dei's purchase was benami for Ishri Singh, and that Ishri Singh had all along been in possession, and that Musammat Durga Dei had never had possession. On this point we agree with the finding of the lower Court that this allegation of a benami purchase wag false, Musammat Durga Dei bought it herself, and enjoyed its profits until 1890, when she told it to Ishri Singh.
22. The lower Court found that all these transfers had been made without legal necessity, and decreed the plaintiff's claim, though in the case of the first, Lalpur, it made its decree conditional on the plaintiffs repaying Rs. 7,200. The cross appeal is against this portion of the decree.
23. It seems to me that three propositions of Hindu Law are now settled beyond controversy.
1. The general rule--that a widow in possession of a widow's estate cannot alienate immoveable property which she inherited from her husband, beyond her own life, except for 'legal necessity. '
2. The same rule applies to both immoveable and moveable property in the hands of the widow inherited from her husband.
3. That a trade or business belonging to the husband is heritable by the widow and she is entitled to carry it on. I do not think that there is any real inconsistency in these rules. In every case the widow is entitled to alienate only for 'necessity' but it seems to me that there may be a great difference between what amounts in law to 'necessity' between the sale of the family dwelling-house or home farm, and the sale of a bale of cloth or other article of merchandise.
23. If the business of the husband was, let us say, that of a cloth merchant, the widow would be entitled to carry it on and she could only do so by selling, buying again and again selling. The very existence of the business creates the necessity, it is inherent in its proper conduct.
24. Now, if the husband's business was that of a banker in the rural parts of India, as in this case, his chief business is lending money on mortgage, and if not repaid recovering it by a suit for sale of the property mortgaged. In execution he buys it, not in most cases, with the intention of permanently retaining it, but in order to sell it if a favourable opportunity offers. The property will often consist of an undivided share in some villages situated far away from the banker's premises, and it would often be practically impossible, or, at any rate, very inconvenient to look after it for his own profit.
25. The banker dies and leaves a widow. It is admitted that, if she so chooses, instead of going on with the business, she is entitled to realise outstandings, and invest them, and then enjoy the income in any way she pleases for her own profit. So long as the corpus of the estate remains whole, the reversioners have no ground for complaint. But that is not carrying on the business as she is entitled to do. If she elects to carry on the business, as she is entitled to do, she must surely be entitled to do so in the same way as her deceased husband. The learned Counsel for the respondents admits this, but with a reservation. He says if she invests any of the income in the purchase of land, that piece of land becomes at once alienable and can only be legally sold by her if forced to, by the same dire necessity as would justify her in selling the family dwelling-house. But the same argument should apply to the purchase of a bale of sloth out of the income of the widow of a cloth merchant.
26. I agree that in both cases the re-sale can only be justified by 'necessity' and that the widow is not entitled to give it away or sell it) at a nominal and wholly inadequate price to, say, her brother or her own friends and relations. But I think she can sell in the course of business, the 'necessity' being the prudent conduct of the business.
27. Nor do I think the test can be 'was there a profit or a loss?' It is often prudent to out one's loss. It is, I think, enough if it can be shown that the business was carried on with reasonable care. To press the argument a little further, suppose Durga Dei invested some of the income of the estate in the purchase of shares in one of the large limited liability coal companies, which own extensive purely Zemindari property beside their collieries. It is not suggested that she could not re-sell the shares. But by her purchase she has become the owner or partner in the ownership of an undivided fraction of land. Nevertheless, she can sell freely, and if the market has appreciated the gain goes to the estate, and if it has depreciated, the estate bears the loss. But, what in essential, is the difference, if instead of purchasing shares in a company owning land, she buys a biswa of an undivided village? All she acquires by her sale is an undivided fraction. Of course, the analogy is not perfect and cannot be pressed too far, because in the latter case by her purchase she also acquires the right to have her undivided share partitioned off from the rest and so get possession of a definite area delimited by metes and bounds. But, unless and until she exercises this right, her position is the same. Yet, in the latter case, she cannot re-sell in the ordinary course of business but only for 'legal necessity' in its strictest sense if the argument is sound. If so, the widow of a rural banker can only carry on the business in a limited and greatly curtailed manner, This seems to me to offend against the third rule set out above. Both sides admit that there is no direct authority which covers this case. By the respondents great reliance is placed on the case of Sham Sundar Lal v. Achhan Kunwar 21 A. 71 (P.C.) : 2 C.W.N. 729 : 25 I.A. 183 : 7 Sar. P.C.J. 417 : 9 Ind. Dec. (N.S.) 755, and especially on the observations reported at the bottom of page 83. The facts of that case, however, are totally different, and the actual decision turns on quite another point. The passage referred to, has been considered by the Full Bench of the Bombay High Court, in Sakrabhai Nathubhai v. Maganlal Mulchand 26 B. 206 : 3 Bom. L.R. 738, and that decision has been approved of by this Court in Radha Kishan v. Janki A.W.N. (1907) 155, by Sir John Stanley, C.J., and Burkitt, J.
28. In any case, I do not consider that I am in any way deciding contrary to what was laid down by the Privy Council for, as was quoted in that case, the touchstone is necessity.' I base my decision mainly on the Bombay case and Sir Lawrence Jenkins' judgment which fully deals with the point.
29. I now propose to examine each of the transfers impugned, to see if I can find it possible to justify them, on any view of what constitutes 'necessity,' and I cannot forget that two of these transfers were made more than a quarter of a century ago, and only one as recently as ten years before suit.
(1) A deposit had been made in the family bank, and the depositor asked it to be refunded. It is in evidence that, at that moment, the bank was unable to re-pay in cash; this may mean that it had not got sufficient funds or that it was inconvenient then to pay in cash. Let it be, that the cash was not available. The widow agreed to liquidate the debt in the manner already described. The refund was due and had to be paid. She must pay or go bankrupt. Surely, here was 'necessity' which legalised the widow transferring in part payment a portion of property which, although acquired by the husband, and, therefore, in a legal sense, part of the corpus of his estate, was in no sense a part of the ancestral property belonging to the family. If she had sold the ancestral dwelling-house, or home farm which the reversioners might reasonably hope some day to inherit it would perhaps be otherwise. The property transferred can only technically be called ancestral, it never belonged to the reversioner's family, and was only bought in and sold again in the course of the business. In any case, if I am wrong in my view that the widow was entitled to sell it I agree with the Court below, that the reversioners must in equity pay back at least the Rs. 7,200, which had been paid into the family business; they cannot get both, the benefit of the Rs. 7,200, paid to the firm and the property and I would, therefore, dismiss the cross objection.
(2) This is an insignificant item. The widow bought a small undivided fraction of a village and re-sold it at a profit of 100 per cent, which was credited to the firm. What possible complaint have the reversioners? It is true that if she had not sold, in the course of years, the property may have become much more Valuable. Landed property over many parts of India has appreciated, in some it had not. Here was a banking firm who acquired a very small fractional share in a village. The widow thought fit to get rid of it at a profit of Rs. 100 per cent. The money was paid into the firm. 1 think this is, on the face of it, a prudent and sound transaction, and hold that, in the absence of anything to the contrary, it must be held that there was 'necessity' to sell the village.
(3) In this case the decree obtained by Musammat Durga Dei was for Rs. 7,266-11-8 including costs. In execution she bought the property for Rs. 5,920, and some years afterwards sold it for Rs. 5,000. It may be fairly presumed that when she bought it the property was not worth much if anything, more than about what she gave for it, end, on paper, there would seem to be a loss of at least Rs. 920. The original mortgage was for Rs. 5,000. But this included a sum of Rs. 3,371 due under an earlier deed, Rs. 1,612-2-8-0 were taken for purchasing another property, and only Rs. 16-8-0 was paid in cash. The earlier mortgage of 1872 is not on the record but it is clear that the actual amount of cash originally lent was a good deal less than Rs. 5,000 and was probably not more than about half, or, say, Rs. 3,000. It is true that the decree obtained in 1879 on the mortgage was for something over Rs. 7,200 but that included interest and costs, and apparently this was more than the property was worth. When Durga Dei purchased it in execution of her decree it must be remembered, she paid nothing in cash, she merely got the property in satisfaction of the decree. She enjoyed the profits for some years; it all went into the business, and when she sold it again for Rs. 5,000, which money was also paid into the firm, there is nothing to show that her sale was not justifiable or one that a prudent man would not have made, nor is it shown that there was any actual loss to the estate. Under these circumstances, in my opinion, the sale was valid and was made for necessity.
30. For these reasons, I decree the appeal in favour of the appellants concerned against respondents Nos. 1 to 5 and 7 as indicated above in respect of these three items with proportionate costs on the higher scale, and dismiss the cross-objections with costs on the higher scale.
31. I concur in the order proposed. I find that in all three instances there was an inherent necessity arising from the circumstances of the transactions.