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Govind Dass and ors. Vs. Ram Charan Lonia and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1923All235; 68Ind.Cas.307
AppellantGovind Dass and ors.
RespondentRam Charan Lonia and ors.
Cases ReferredPadam Singh v. Bam Rup
Excerpt:
hindu law - joint family property--legal necessity--improvident transaction presumption--jurisdiction--relief for possession not claimed in plaint--appellate court, if can decree formal possession. - - the trial court very properly, in my opinion, held that, whether a suit so framed were maintainable or not, it certainly could not be effectively tried without making the sons of gopal das parties as defendants. this procedure was virtually sanctioned and endorsed by a bench of this court before which the matter came in appeal but an examination of the record shows beyond doubt that this was only done upon the understanding that the suit was limited to the question whether gopal das should or should not be compelled to execute a formal (conveyance in accordance with the agreement of.....piggott, j.1. in this case, govind das and five others, being 6 out of the 7 sons of gopal das, sued to avoid an alienation of joint family property made by their father, gopal das. the defendants were the vendees under a sale-deed of the 1st of november 1917 together with gopal das himself and another son of his by name debi das who had refused to join in the suit. three of the plaintiffs ware miners on the date of the institution of the suit. the plain issue in the case was, of coarse, the question of legal necessity for the sales bat it arises in a peculiar form and complicated by the result of a previous litigation. the sale dead above referred to was not voluntarily executed by gopal das. it was imposed upon him by a decree of court in a suit for specific performance of an agreement.....
Judgment:

Piggott, J.

1. In this case, Govind Das and five others, being 6 out of the 7 sons of Gopal Das, sued to avoid an alienation of joint family property made by their father, Gopal Das. The defendants were the vendees under a sale-deed of the 1st of November 1917 together with Gopal Das himself and another son of his by name Debi Das who had refused to join in the suit. Three of the plaintiffs ware miners on the date of the institution of the suit. The plain issue in the case was, of coarse, the question of legal necessity for the sales bat it arises in a peculiar form and complicated by the result of a previous litigation. The sale dead above referred to was not voluntarily executed by Gopal Das. It was imposed upon him by a decree of Court in a suit for specific performance of an agreement dated 3rd September, 1912. The position, therefore, is that Gopal Das, as the father and manager of a joint undivided Hindu family, entered into an agreement to sell joint family property in his hands (it may be noted further that the agreement covered the whole, or practically the whole, of the immoveable property belonging to the family) and repented of this agreement, bat was compelled to execute the deed of transfer by decree of Court. This decree was obtained in a suit which came up to this Court as First Appeal No. 177 of 1917, decided on the 6th of March 1919. The suit as brought was a peculiar one. The plaintiffs not merely claimed specific performance of the agreement of September the 3rd 1912, but they joined with this claim one for consequential relief by delivery of actual possession over the property in respect of which a conveyance was to be executed by decree of Court. There has been some argument before us as to whether such a suit would be maintainable at all, but I do not propose to discuss this question as it has no real bearing on the result of the present appeal. The point which requires to be noticed is the consequences which followed from the frame of that suit, especially in the execution department. The Trial Court very properly, in my opinion, held that, whether a suit so framed were maintainable or not, it certainly could not be effectively tried without making the sons of Gopal Das parties as defendants. The then plaintiffs were offered an opportunity of impleading the sons of Gopal Das and deliberately declined to avail themselves of the same. It has been pointed out that the reason for their action probably was that the suit, regarded purely as one for specific performance, would have been barred by limitation as against the sons of Gopal Das before the Court's order, which virtually directed them to be impleaded, could be complied with, However, the Court eventually determined to proceed with the trial of the suit as against Gopal Das alone. This procedure was virtually sanctioned and endorsed by a Bench of this Court before which the matter came in appeal but an examination of the record shows beyond doubt that this was only done upon the understanding that the suit was limited to the question whether Gopal Das should or should not be compelled to execute a formal (Conveyance in accordance with the agreement of September the 3rd 1912. No doubt, issues had been framed by the Trial Court covering the whole matter in controversy, but, from the moment that the plaintiffs declined to implead the sons of Gopal Das, the only questions which remained for determination were whether Gopal Das had, in fact, entered into the alleged agreement and whether he should, in that suit, be compelled to execute a formal conveyance in accordance with the agreement without prejudice to any right which his sons might have of challenging either the conveyance or agreement out of which it arose. The view taken by the Trial Court is sufficiently expressed in the decree actually framed, which was a mere declaration that the plaintiffs were entitled to specific performance of the contract to sell. The appeal preferred against this decree wad filed in this Court on the 14th of May 1917. In the meantime, however, the plaintiffs had gone to the Trial Court with an application for amendment of the decree. This application, unfortunately, came before the successor of the Subordinate Judge who had delivered the judgment in the suit and signed the decree as originally framed. His successor was apparently impressed with the fact that the decree, as framed, did not carry out the operative portion of the judgment, according to which the suit (as brought) was decreed. He accordingly amended the decree under an order of the 12th of May 1917 by the addition of words which allowed the plaintiff's claim for delivery of possession over the property specified at the foot of the plaint. The appeal to this Court was filed in apparent ignorance of this amendment two days after the amendment had been made, It was, in fact, filed upon a copy of the decree as unamended and was dealt with by this Court upon that basis. The learned Judges who decided the appeal were clearly of opinion that they were determining nothing which could, in any way, affect or prejudice the rights of the sons of Gopal Das. They same to the conclusion that, under the circumstances, the decree which they had before them, that is to say, the decree directing specific performance of the contrast of the 3rd September 1912, had rightly been passed as against Gopal Das. They expressly reserved the right of the sons of Gopal Das to challenge the effect of this alienation upon their interests. The latter had already done so by means of the present suit, instituted on the 6th of September, 1912. The fact that one of the sons declined to join in the suit is of no legal importance So far as we can gather from the record, the truth seems to be that Gopal Das had, while the dispute between him and his transferees was pending, granted a lease of a substantial portion of the property covered by the agreement of the 3rd of September 1912 on favourable terms to his son, Debi Das. The transferees have virtually bought off Debi Das by agreeing not to contest this lease.

2. The plaint, in the present suit, was amended after the decree of the Trial Court in the suit for specific performance had been passed, but, in the meantime, and, thereafter, proceedings in execution of that decree continued. A formal sale-deed was executed under orders of the Court on the 1st of November 1917. One of the points in issue had been the price for which the property was to be conveyed. This was fixed by the Trial Court at Rs. 22,508-10-10 and this finding was affirmed on appeal. The decree did not, however, direct that the whole of this money should be paid over to Gopal Das. On the contrary, there was a direction that the vendees, upon execution of the conveyance, were permitted to retain in their own hands so much money as might suffice to pay off a mortgage on the property in suit, dated the 10th of July, 1909, executed by Gopal Das and those of his sobs who had, on that date, attained majority, in favour of one Manik Chand. The vendees waited until the 4th of September 1919 when they deposited in Court the amount of money sufficient to pay off this mortgage. We have been informed in argument that they were subsequently compelled to increase the amount of their deposit, that the total sum deposited by them amounted eventually to more than Rs 23,700 and that they have actually paid off Manik Chand. In saying this, we are, to some extent, travelling beyond the record before us, but what we do know is that the vendees did proceed to take out execution of their decree as amended and obtained from the Execution Court, on the 24th of January 1918 formal delivery of possession over all the property covered by the decree. It seems to me very much open to question whether, under the circumstances, the sons of Gopal Das would not have been well advised in treating that delivery of possession as one which could not affect their rights in any way. As a matter of fact, they submitted to the process of the Court and accepted the position that they had been actually ejected, along with their father, on the 24th of January 1918. They elected to come before the Execution Court with a petition purporting to be tinder Order XXI, Rule 100 of the Civil Procedure Code. That is to say, they represented themselves as persons other than the judgment-debtor who had been dispossessed of immoveable property by the holder of a decree for the possession of such property and they asked the Court to restore them to possession at least to the extent of the shares in the property in question which would have fallen to them on a partition between themselves and their father. This application had a very curious history. It was pending in the Execution Court when one of the decree-holders, by name Sital, died. The Court thereupon held that there existed no machinery under the Code of Civil Procedure by which the legal representatives of Sital could be brought upon the record, that the application under Order XXT, Rule 100, could not be farther proceeded with and it was accordingly rejected. We bays before us connected with the present appeal, an application in revision against that order of the Execution Court. I have gone into this matter in such detail because I think one of the points before us for consideration is whether the decree in the present suit can, or ought to be, framed in such a manner as to rectify the error which the Execution Court undoubtedly committed when it rejected the application under Order XXI, Rule 100, on the grounds on which it did so reject it. It is obvious, moreover, that in any decree, which we may now pass on this appeal, we must take account of the fast that the vendees under the sale-deed of November the 1st 1917, bad rightly or wrongly, and as I think wrongly) been plated in actual possession of the disputed property under their decree as amended.

3. In tie light of the fasts already stated, it is now necessary to come back to the one essential question in if sue in this appeal, namely, whether there was legal necessity either for the sale deed of November the 1st 191(sic)7, or for the agreement of September tie 3rd, 1912, so as to make either or both of these transactions binding upon the sons of Gopal Das.

4. Before, however, I tan consider this question in its simplicity, it seems necessary to refer to one other point about which there has been considerable controversy. The agreement of September the 3rd 1912 was of a peculiar nature in that it did cot provide for the sale of the property concerned at a fixed and ascertained prices, but at a price to be ascertained thereafter with reference to the profits of the property concerned. I have already stated that this price was eventually fixed at Rs. 22,503-10-10. The appellants before us have contended that one of the questions left open to them in the present suit was to claim a fresh finding upon this matter of price and there has been a good deal of argument before us on the point. When the question was dealt with by the Bench of this Court in First Appeal No. 177 of 1917, the learned Judge held that the price must be fixed with reference to the profits as they stood on the date of the agreement for sale. They brushed aside, on this ground, the contention of the sons of Gopal Das that there had ken a substantial increase in the value of the property lines the date of the contract. On a review of the evidence adduced in the present suit. I do not think it can be said that the plaintiffs, the cons of Gopal Das, have made but any case against the finding arrived at in the former suit which noted the price payable under the agreement of September the 3rd 1912 calculated upon the profits as they then stood, at the sum already mentioned. A more difficult question is whether there has, in fact, been substantial increase in the profits since that date, and whether any account can be taken of this increase in the present suit. The Court below has some to the conclusion that the increase, apparent upon an inspection of the village papers, is purely fictitious, created by means of dishonest machinations on the part of Gopal Das, or of his son, Gobind Das, for the purpose of the present litigation. The question really turns on the value to be attached to the evidence given by the Patwari Bahadur Lal. This remarkable witness had made a deposition in one sense on the 8th of December 1916 in the former litigation, and he made a deposition in a very different sense in the present suit on the 17th of February 1919. The learned Subordinate Judge says that the man is a shameless liar and that no reliance can he placed either Upon his evidence or upon the papers prepared by him. I entirely agree that Bahadur Lai is an untrustworthy witness, but it does not follow that he was spanking the truth in 1919 and swearing falsely in 1916. Where he has chosen to contradict himself. I am disposed to believe the evidence of his own papers against himself. According to those papers, the rent roll of the principal village in suit bad arisen between 1318 (or 1320) Fasli from Rs. 1,324 to Rs. 1,646 in 1323 Fasli. On the whole and after arguments making due allowance for the arguments to the contrary set forth in the judgment under appeal, I think there had been a real increase in the annual income of the property in suit between the date of the agreement for sate and that of the conveyance executed on the 1st of November 1917. The precise extent of that increase is difficult to estimate and I do not think a precise estimate is necessary for the determination of this appeal. Toe price fixed according to the agreement of September the 3rd 1912 works, oat at a little over 22 years' purchase on the net annual profits. I should be prepared to hold on the evidence that the increase in the annual profits after the date of the agreement amounted to approximately that shown in the Patwari's papers, that is to say, to about Rs. 322 annually, This would mean an increase of something over Rs. 7,000 in the sale price, according to the terms of the agreement.

5. This consideration, however, does not seam to me to affect the result of the present appeal, except in so far as it baa a bearing on the question of the binding effect upon the sons of Gopal Das, of a sale-dead executed by their father under compulsion in pursuance of an improvident agreement of which he had himself repeated. The mere facts that be himself repented of it, and that his sons bagged to be allowed to contest the suit brought with the object of enforcing it, serve in my opinion, to raise a considerable presumption that the agreement was an improvident one. The main object of the transaction was to pay off a mortgage-deed in favour of Manik Chand, a document the terms of which I shall have to consider further. For the present, it is sufficient to say that a sum of something less than Rs. 14,000 would have been sufficient to pay off Manik Chand in the month of September 1912 and that the existence of the antecedent debt cannot of itself be regarded as justifying Gopal Das, the father and manager of joint undivided Hindu family, in parting with practically the whole of the immoveable property belonging to himself and his sons for a sum of Rs. 22,500 and odd. In the Court below, a great deal was said about other purposes for which the family may possibly have required money in the month of September 1912. One suggestion is that, according to the evidence of the plaintiff, Govind Das himself, the family was living beyond its means or, at any rate, was spending more than the income derivable from its immoveable property, so that, presumably, money was required to meet the mere ordinary expenses of the family. I do not think this point is at all made out but, even if it were, an obvious rejoinder would be that, under the circumstances, the first duty of the family, and of the father as manager of the family, would be to see whether the difficulty could not be met by some curtailment of expenditure. It was suggested further that Gopal Das required money for the purposes of a joint family business. If he did, he certainly never got any. In the events which have occurred, the consideration which has actually passed to Gopal Das and his family has been the extinguishing of the mortgage in favour of Manik Chand, assuming, of course, that this mortgage has beep extinguished, and that the transactions which have taken place have not merely operated to transfer the mortgagee right from Manik Chand to the defendants respondents. The only other payments made to Gopal Das have been a Bum of Rs. 500 paid as earnest money and a small payment of. Rs. 189-12-6 eventually made by the vandess in the course of their proceedings in execution of their decree. With regard to these small soma, there seams to me literally no evidence that the money was taken by Gopal Das for any purpose which would be binding on his sons, or that his sons have benefited by the money.

6. The question of legal necessity, therefore, resolves itself into a consideration of the terms of the mortgage in favour of Manik Chand, the consideration for that alienation of joint family properly and the benefit derived by the sons, on the assumption that this mortgage will be finally extinguished as a result of the transactions culminating in and including the final decree to be passed in the present suit. Here the respondents are, up to a certain point, in a strong position, The mortgage in favour of Manik Chand was executed on the 10th of July 1919 not only by Gopal Das himself bat by four of his sons, the plaintiffs, Govind Das, Bhagwan Das and Kishun Das and the defendant Debi Das. We have, therefore, an alienation of joint family property effected by the concerted action of all those members of the joint family who had attained majority at the time. There is a very considerable presumotion in favour of such an alienation having been made for real family necessity. The terms of the document itself specially when read in connection with the evidence given by the plaintiff, Govind Das, in the present suit, tend strongly in the same direction. I think we are bound to hold that, as regards the principal money at any rate, amounting to Rs. 10,500 due to or obtained from Manik Chand under this mortgage, there was legal necessity sufficient to make the transaction binding, not only upon the executants, but upon those Bona of Gopal Das who were minors at that time and have not yet attained majority. The only question which can be seriously argued is whether there wag legal necessity for raising money at the rate of interest specified in the deed. That rate was 8 1/4 per gent, per annum, compoundable with six monthly rests; but there was a penalty clause under which the rate could be increased to 9 per cent, per annum, similarly compoundable in the event of default in the regular payment of interest. Manik Chand's security was excellent, for there can be no doubt that, at the time of the mortgage, the value of the property involved was at least double the sum secured by the mortgage. As regards the stipulated rates of interest, therefore, the transaction looks, upon the face of it, an, improvident one. I very much doubt whether the penalty clause by which the rate of interest could be raised to 9 per cent, would, in any event, be enforced by they Courts. The concurrence of the adult sons of Gopal Das in the transaction is, no doubt, an important consideration, but, as regards this particular question of the rate of interest, it is a good deal discounted by the fact that their ages in the year 1909 varied from 25 to (sic) years. The tram action must, in the main, have been arranged by Gopal Das, and the concurrence of these youngmen being obtained in order to strengthen the position of the mortgagee. We have to consider the rights of the minor plaintiffs, and, looking at the matter from their point of view, it seems to me that it is clearly open to the Court to consider this question, whether, admitting that there was legal necessity for raising a loan of Rs. 10,500, it was really necessary for Gopal Das and his adult sons to have borrowed the money on such onerous terms as to interest. If this were a suit by which Manik Oh and was seeking to enforce the terms of the mortgage as against Gopal Das and all his sons. I am confident that it would be the duty of the Court to re consider this question of interest. The proper finding in such a suit would, in my opinion, be that the minor sons were bound to the extent of the principal of the loan and the rate of interest of 8 1/4 percent, per annum, which is not a particularly unreasonable rata under the circumstances if it be treated as simple interest. I am clearly of opinion that the minor sons could not be bound by the penalty clause in the penalty clause in the dead, and I do not think that they ought to be bound by the clause providing that the interest, even at its original rate, should be compoundable with six monthly rests. I do not see why the issue in the present suit should be dealt with on any different basis than would have been the case if this were a suit by Manik Chand to enforce his mortgage. My finding, therefore, is that legal necessity for the alienation in suit is proved to the extent of the principal sum of Rs. 10,500 with simple interest at the rate of 8 1/4 percent per annum.

7. The next question is how long should this interest continue to run and, in my opinion, this admits of a vary clear and positive answer. On the 1st of November 1917 when the respondents obtained the formal conveyance of the property in suit under the orders of the Court, they become liable then and there to pay off Manik Chand. They had no right in equity to continue to allow Manik Chand's mortgage to run and to pile up compound interest, or any interest at all, against the property in suit. I hold, therefore, that this interest at 8 1/4 per cent, per annum, should run from the date of Manik Chand's mortgage, the 10th of July 190(sic) to the 1st of November 1917 and no further.

8. There remains only the question of the form of decree to be drawn no to give effect to these findings, if the respondents had never obtained possession of the mortgaged property, the position would be simple, A declaration would require to be drawn up to the effect that the plaintiffs are bound by the alienation sought to be impugned in this suit to the extent of a consideration of Rs. 10,500 plus interest at an ascertained rate and for the period specified. The question is complicated by the fact that the respondents are in possession of the mortgages property and, by the further question whether this possession can be interferred with, either by any decree passed in the present suit, or by any orders passed on the petition of revision which is also before us. I am satisfied that, on the frame of the present sail, in which no relief for possession baa ever been asked, a formal decree directing the plaintiffs to be restored to possession, whether conditional or otherwise, cannot and ought not to be passed. I am also of opinion that we ought not, under the circumstances, to interfere in revision with the proceedings taken by the Execution Court. What the equities of the case really demand is that the respondents, the vendee under the sale-deed of November the 1st 1919, should continue to enjoy the possession which they have obtained (no matter how), until they have been paid off the sum now ascertained to be equitably due to them from the plaintiffs, either out of the usufruct of the property, or by payment of the ascertained sum into Court, or by combination of the two methods. They are, undoubtedly, liable to account to the plaintiffs for the annual profits of the property in suit from the date on which they obtained possession in execution of their decree which date appears, from the record of the execution case, to be the 20th of January 1918 and, as there is no interest running; in their favour, after the 1st of November 1917, the whole of the net profits enjoyed by them must be applied in reduction of the debt found to be equitably due in favour of the plaintiffs, I think it is clearly impossible for us, on the materials on the record, to ascertain what profits the respondents have been enjoying from the month of January 1918 onwards, still less what profits they may enjoy hereafter before the plaintiffs can make good the balance of the sum equitably due from them. It is even possible that the plaintiffs may elect to allow the respondents to continue in possession until the whole of the ascertained liability is paid out of the usufruct. The object in view would, in my opinion, be effected by granting the plaintiffs a declaratory decree in the following terms: That the plaintiffs are not bound by the agreement entered into by Gopal Das on the 3rd of September 1912 or by the sale-deed of November, the 1st 1917, executed in pursuance of that agreement under, the orders of the Court or by any of the proceedings in Suit No. 85 of 1915 in the Court of the Subordinate Judge of Jaunpur between Sital and Ram Charan plaintiffs and Gopal Das defendant, terminating in the decree of this Court in First Appeal No. 177 of 1917, except in so far that the plaintiffs are liable to make good to the respondent Ram Charan and the legal representatives of the deceased respondents Sital, a sum of Rs. 10,500 with simple interest at 8 1/4 per cent, per annum calculated from the 10th of July 1909 to the 1st of November 1917 bat no further. That the said Ram Charan and the legal representatives of Sital are liable to account to the plaintiffs for the net profits of the property in suit from the 24th of January, 1918, or such other date as they obtained possession over that property in execution of the decree passed in Suit No. 85 of 1916, and that the plaintiffs appellants are entitled to recover possession of the said property on any date on which the sum declared to be due from them has been satisfied either out of the usufruct of the property, or by deposit in Court for the benefit of the above mentioned respondents of the entire balance due to them after deducting the profits enjoyed by them up to the date. I think the plaintiffs should be regarded as having succeeded in this suit roughly to the extent of the difference between the sum of Rs. 22,500 for which specific performance of the contract of sale was ordered, and the sum of about Rs. 17,500 which will be due from them on account of principal and interest on Manik Chand's mortgage under the terms of the decree proposed. For purposes of calculating costs, it is not necessary to work out these figures with greater accuracy; the plaintiffs may be regarded as having succeeded in the proportion of Rs. 5,000 (success) to Rs. 17,500 (failure), and the parties should be directed to pay and receive costs in both Courts in proportion to failure and success, costs in this Court to include fees on the higher scale. I would, therefore, setting aside the decree of the Court below, grant the plaintiffs a decree for a declaration in the terms set forth above with the above order as to costs.

Walsh, J.

9. I agree. To the extent to which legal necessity can be established for the original mortgage of 1909, which was indeed disputed in so far as the principal is concerned, and for the debt arising therefrom, the plaintiffs who are entitled to have this agreement for sale set aside, ought to do equity by discharging the debt. I regard it as unfortunate that this Court, when the matter was open for decision in the suit for specific performance, did not insist upon the sons being made parties, instead of affirming a barren decree which it seamed to recognize would be worthless, and thereby postponing the real controversy to a later date with the inevitable result of producing the present litigation in which the suit has only just been instituted, with all the complications which have necessarily ensued from the lapse of time and supervening events. As regards the rate and the compound nature of the interest, it is clear that, having regard to the nature of the security, no legal necessity existed for these. The father did what many men in difficulties do, namely, entered into an improvident transaction to rid himself of his immediate embarasment without due regard to the necessities of the case and the interests of the minor members of the family, and the purchaser must be held, on principle, to have taken such risk as was involved in the transaction into which he entered. I adhere to the view expressed in Padam Singh v. Bam Rup 36 Ina. Cas. 217 : 14 A. L. J. 772 to which decision I was a party, as to the effect of an improvident rate of interest in such a case. I do not, see why when an Appellate Court is seised of the whole matter, as in this case, it should hold itself prevented from making such orders as are necessary to terminate the controversy and to do justice between the parties, and why it is not competent to us now to decree that possession to the sons of which they have wrongfully been deprived, subject to their doing equity by discharging the antecedent debt which alone could support the transaction It seems to me that much of the delay, complication and superabundance of litigation in India is due to the timidity of the Courts in not making final orders which will have the effect of putting an end to the questions between the parties when they are seised of the whole matter, but I do not dissent from the order proposed.


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