1. This is a defendant's appeal arising out of a suit for recovery of possession of a half share in a property acquired at an auction-sale by the defendant Lal Singh. The mortgagee lights under a deed of mortgage devolved on Lal Singh and Bhikam Singh in equal shaies. Lal Singh brought a suit for sale on the basis of the deed against the mortgagors and impleaded Bhikam as a pro forma defendant. He obtained a decree for sale for the whole amount and in execution of that decree purchased the mortgaged property in his own name in lieu of the decretal amount, without paying any extra money out of his own pocket. Bhikam Singh died and it was on his death that his widow Mt. Chhotey Bibi brought the suit.
2. The defendant admitted that Bhikam had a share in the mortgage money and in the decretal amount, but did not admit that he acquired a share in the property purchased at auction by the defendant He pleaded that the claim was barred by limitation and also by S 66 Civil P.C., and further pleaded that the plaintiff, Mt. Chhotey Bibi, had under an arrangement, reliquished her claim to the half share in the decretal amount in consideration of the defendant making a gift of some other property of his to her nominee Pahlad Singh. The trial Court, without taking any evidence, dismissed the suit summarily holding that it was barred by S 66, Civil P.C. This finding has been over-ruled by the lower appellate Court. The lower appellate Court has further found that on the authority of Dwarka Prasad v. Mahadeo Prasad : AIR1930All631 , the defendant purchased the property for the benefit of the plaintiff's husband, and having got the land in lieu of that decree he must now let the benefit of the decree be converted into the land which should go to the plaintiff. The learned Judge went on to hold that there was no registered deed of renunciation or even a written document and therefore the plaintiff was entitled to possession of the land in suit. As no evidence was taken by the trial Court, we cannot regard the finding of the lower appellate Court as a finding that no renunciation in point of fact had been proved. He appears to have thought that in the absence of a registered document it is not open to the defendant to set up an arrangement under which the plaintiff's claim to the property could be abandoned or even her claim to a share in the decretal amount renounced.
3. When the case came up before the High Court in second appeal it was referred to a Division Bench as the question of law raised was of some importance.
4. No doubt there is plenty of authority for the proposition that where there is a fund belonging jointly to several persons and one of such persons makes a purchase of land with that fund the purchase ensures for the benefit of the persons entitled to share in the fund. Several authorities are quoted in the judgment of this Court in Dwarka Prasad v. Mahadeo Prasad : AIR1930All631 relied upon by the lower appellate Court. We may, in particular, refer to the case of Ganga Sahai v. Kesri AIR 1915 PC 81 where one of three joint decree-holders of a mortgage decree had alone taken out execution and, having obtained leave to bid at the sale, purchased the property in his own name and obtained a sale certificate in his own name and got exclusive possession of the property. In a suit by the hairs, their Lordships of the Privy Council held that they were entitled to the shares and that S 317 of the old Code, corresponding to S 66 of the present Code, was not applicable as a defence to the suit. In the course of the judgment their Lordships observed that the provisions of that section are designed to create some check on the practice of making, what are called, benami transactions, in execution sales for the benefit of judgment-debtors and in no way affect the title of persons otherwise beneficially interested in the purchase. It was further observed that had the decree-holder not even embodied a reservation that the execution would be subject to the rights of the other decree-holders, the Court executing the decree, would have of it own motion, protected the interests of the other decree-holders and accordingly the representatives of the other decree-holders were entitled to recover from, the purchaser their shares of the properties purchased by him in execution of the joint mortgage decree.
5. It seems to us that the question whether a purchase is made exclusively for the benefit of the certified purchaser or for all the persons interested in the joint decree is one of intention to be gathered from all the circumstances of the case. If there were anything definite to show that the defendant's co-mortgagees did not want to acquire any share in the mortgaged property by purchase and did not intend that the purchase should be on their behalf as well, their remedy would be confined to a share in the decretal amount. But in the absence of anything definite to show the contrary, the purchase made by a joint decree-holder, though in his own name, would undoubtedly ensure for the benefit of all the persons interested in the joint fund which has been utilised in the acquisition of the property. In the words of their Lord-ships the other persons 'would be beneficially interested in the purchase,' and would be 'entitled to recover a share of the properties purchased at auction'. But as was pointed out in Dwarka Prasad's case : AIR1930All631 , the right to recover the share would be conditional on the payment of a proportionate share of the costs incurred in the litigation.
6. It follows that the ownership in the property does not become vested automatically in the other beneficiaries from the very outset. They merely acquire a right to claim a share in the property on the ground that joint fund has been used for its purchase. A beneficial interest no doubt exists and a. claim can be founded upon it for recovery of a share in the property. But the ownership of the property does not become vested in the other beneficiaries from the date of the auction purchase. Their right is like that of a beneficiary who may claim a share of the property from one who holds it for their benefit.
7. In this view it is clear that it was not necessary for the relinquishment of the right to recover a share in this property that the transaction should be evidenced by a written instrument and that such instrument should be registered. Had an instrument been executed it would have been compulsorily registrable under Section 17, Registration Act. But when the right of Bhikam was short of ownership there is no provision in the Transfer of Property Act which requires that such a right could not be given up without a written instrument. Even assuming that the transaction set up by the defendant was in the nature of an exchange, the consideration passing from Mt. Chhotey Bibi was a relinquishment of her right to claim a share in the property and not a transfer of ownership in such property. She could therefore have validly relinquished her claim without a written instrument.
8. The positive case put forward by the defendant was that she had relinquished her claim to a share in the decretal amount. No written instrument is necessary for such relinquishment The lower appellate Court should accordingly have allowed the defendant an opportunity to prove her case. The lower appellate Court has remanded the case for trial of one issue relating to the expenses of litigation The trial Court should try the further question raised in issue No. 5 as to whether there had boon any arrangement between the parties as set up by the defendant The parties will be at liberty to produce evidence. We accordingly allow this appeal in part and modifying the order of remand direct that the trial Court should also try the fifth issue The costs of this appeal will abide the event.