1. The suit out of which this appeal has arisen was instituted by the plaintiffs who are the appellants in this Court. It is based on a mortgage, dated the 21st of February 1910. It was executed by one Musammat Sohan Dei as the certificated guardian of her minor son Naunit Lal. Naunit Lal, at the date of the mortgage, was about 19 years old. Subsequently, on attaining majority, he repudiated the mortgage and transferred a portion of the property mortgaged to the plaintiffs-appellants, to several persons including the respondent Duley Earn. The present plaintiffs then brought a suit in 1914 against Naunit Lal, his mother and her agent to obtain a declaration that the mortgage of the 21st of February 1910 was binding on Naunit Lal. The suit sucoeeded. The mortgage in question was executed on an alleged sanction given by the District Judge for the transfer. On the suit, out of which this appeal has arisen, being instituted, 16 persons were imp leaded as defendants. They were Naunit Lal, his son, Duley Earn, and some subsequent transferees. Six written statements were filed and the question was raised' whether the mortgage in suit was binding on Naunit Lal and his transferees. It was urged that the mortgage was not executed in accordance with the sanction of the District Judge and hence was not binding on anybody. The Court of first instance held, inter alia, that the decree passed in the suit of 1914 operated as res judicata against all the transferees of Naunit Lal. The suit was decreed in toto by the Court of first instance. Duley Earn alone appealed and the point was taken before the lower Appellate Court that the mortgage was not executed in accordance with the sanction of the District Judge. The lower Appellate Court found that the contention was right and it held that the mortgage was not binding on the appellant (Duley Earn). The lower Appellate Court thought that it could proceed on a point which was common to all the defendants, and it accordingly dismissed the whole suit.
2. The plaintiffs have accordingly appealed. The points raised for our determination are, (1) whether the mortgage in suit substantially complies with the terms of the sanction granted' by the District Judge? (2) what is the effect of the decree made in the suit of 1914?, and (3) whether it is open to Duley Earn to raise an objection as to the validity of the mortgage?
3. The third point might be taken first. It is clear that the decree made in the suit of 1914 is not binding on Duley Earn. He had taken his mortgages prior to the institution of the suit of 1914. He had, therefore, acquired an interest in the property prior to the litigation and it cannot be said that Naunit Lal or his mother represented the interest which had been created in favour of Duley Ram. But the question is whether Duley Earn can repudiate the mortgage by taking advantage of the provisions of Section 30 of the Guardians and Wards Act. We have already stated that Naunit Lal repudiated the 'mortgage in suit after granted certain mortgages in favour of Duley Earn. As Naunit Lal was certainly entitled to repudiate the mortgage of 1910, the mortgagee who claims under him is entitled to assert, in accordance with the assertion of Naunit Lal, that the mortgage of 1910 is not binding on him. This question, therefore, must be decided in favour of Duley ram.
4. As to the first point it appears to us that the sanction granted by the District Judge has not been substantially complied with. The finding of the Court below, which is a finding of fact, is that at least a substantial portion of the mortgage-money did not find its way to the hand of the guardian or to the creditors of the minor. Apart from that finding, which is binding on us, it seems clear that the District Judge laid down as a condition precedent to the validity of the mortgage certain terms. They were that the satisfaction of the decrees were to be filed before him. An account of the expenditure of the sum sanctioned by him for the marriage of the minor should be submitted to him. He ordered that 40 acres out of the minor's property should be mortgaged. He fixed a date for the compliance of the conditions. That date expired and subsequently further time was (granted for the compliance of the terms imposed by him. Finally, as the terms were not complied with, the District Judge revoked the sanction. Without entering into the question whether in all cases revocation of the sanction will affect or not a transfer made previously to the revocation, it seems to us to be clear on the facts of the present case that, the person who intended to take the transfer was bound to see that the terms imposed upon him were complied with. The District Judge was the guardian of the minor. The certificated guardian could not transfer the property of the minor without the sanction of the District Judge. If the District Judge laid down certain terms which could not be complied with by the intending transferee, his remedy was to go to the District Judge and to say that under the conditions imposed he could not take the transfer. The District Judge may or may not have varied the terms. But it is not open to the transferee to say that the conditions laid down were impossible for compliance and, therefore, he would take the minor's property without complying with the restrictive terms imposed. In this particular case, instead of 40 acres of the minor's property, the whole property which belonged to him, namely, 169 acres, was mortgaged. The transfer, therefore, made in favour of the appellants was not the transfer sanctioned by the District Judge. The result is that the mortgage is not binding on Naunit Lal and his transferees.
5. The second question is, what is the effect of the decree in the suit of 1914? It appears to us that the result of the decree, was a declaration that the mortgage created in favour of the plaintiffs was binding on Naunit Lal or any person claiming under him after the said decree cannot now go behind it. The judgment operates as res judicata. Thus, any person who took transfer from Naunit Lal, after the suit of 1914 was instituted, could not contend that the mortgage of 1910 was not binding on Naunit Lal or themselves.
6. The result of all these findings seems to be this. The appellants are entitled to sell the property mortgaged to Duley Earn subject to the mortgages created in his favour. In other words, the property mortgaged to Duley Earn is liable to sale but the mortgage rights of Duley Earn will remain unaffected. The rest of the property in the hand of Naunit Lal and the remaining defendants, none of whom appealed against the decree of the Subordinate Judge, is also liable to be sold. We allow the appeal and modify the decree of the lower Appellate Court accordingly. The respondent Duley Earn will have his costs in this Court including fees on the higher scale. The appellants will have their costs of this appeal as against the remaining defendants but these costs will come out of the property. The costs allowed to the appellants will include fees in this Court on the higher scale. The decree of this Court will be drawn up in the terms of Order XXXIV, Rule 4, Schedule I of the Code of Civil Procedure.