1. This was a suit by the three minor sons of Lala Biri Mal seeking declaration that a sale made by their father should be set aside as being without legal necessity. The trial Court has dismissed the suit and the plaintiffs have new come in appeal.
2. The property in dispute is a three-storeyed house with shops situate in Pahari Dhiraj, Delhi City. On 18-10-1913 the property was purchased by Mutsaddi Lal, the grandfather of the plaintiffs. for a consideration of Rs. 12,000/-. At that time the area sold according to the sale deed amounted to 250 sq. yards which is roughly in accordance with the evidence that the present measurements of an area of 245 sq. yards (sic). The structures on the site at the time of the 1913 sale deed are described in the sale deed as being
'two shops having two apartments, covered with corrugated iron sheets and one entire shop i. e., an 'ihata' for selling fuel.....the foundations being of rubble stone and pucca brick, roofed with wooden rafters, planks and corrugated iron sheets'.
According to the plaintiffs, in the year 1915 their grandfather made the present constructions on the site and it may be accepted that the property now bears little relation to what it was at the time of its purchase in 1913. On 23-12-1938 the father of the plaintiffs mortgaged the property for Rs. 15,090/- to one Sayed Hayat AH Shah. In that mortgage deed the property is described as
'a house and three shops with 'balakhanas' and staircases, adjoining each other, entirely built of pucca masonry, ...... the foundations being of granite stone and pucca bricks, roofed with wooden rafters and planks and furnished with pairs of shutters'.
The mortgage was with possession but Biri Mal executed a lease agreeing to pay monthly rent of Rs. 150/- in lieu of interest, the rate of which was 12 per cent, per annum. On 1-5-1939 Biri Mal executed a further mortgage again for Rs. 15,000/-in favour of the same mortgagee.
These two mortgages were challenged by the present plaintiffs by Suit No. 47 of 1940 (also described as No. 107 of 1941) to which, as in the present suit, their father Biri Mal was a party. It was held in that suit that while the property was ancestral 'qua' the plaintiffs, the mortgages were for legal necessity and the, suit of the plaintiffs was dismissed on 24-10-1941. The matter was not taken in appeal, and on 17-12-1941, two months after the decision, Biri Mal executed the sale deed challenged by the present suit in favour of respondent 1 Ma-dan Gopal for a consideration of Rs. 23,000/-. The sale deed recites the two mortgages in favour of Hayat Ali Shah to the extent of Rs. 30,000. It states that a settlement has been arrived at bet-ween Birl Mal and Hayat Ali Shah whereby Rs. 22,000/- Is due on these mortgages, the sale to Madan Gopal is effected for the purpose of paying this Rs. 22,000/- and a further Rs. 1000/- expenses of the sale deed including registration expenses.
3. There is no dispute that the mortgagee Hayat Ali Shah was paid off in the manner set out in the sale deed. The sale deed in favour of Madan Gopal in terms is an ordinary sale deed. It was registered on 5-1-1942. On 10-1-1942 two more documents were executed between Biri Mal and Ma-dan Gopal. One of these was an agreement made by Madan Gopal to re-convey the property to Biri Mal at any time within five years on payment of the consideration of the sale deed, namely Rs. 23,000/- and other dues. Registration of this document was not effected. The second document was a lease for five years by Madan Gopal in favour of Biri Mal of the suit property at a monthly rent of Rs. 143/12/- which, it is pointed out, would be equivalent to interest on the Rs. 23,000/- at 74 per cent, per annum. Registration of this lease was effected. The present suit was filed on 28-8-1947 and Biri Mal again is a party to this suit. He entered no pleading and did not appear as a witness. In the earlier suit challenging the mortgages he had appeared as a witness.
4. The trial Court has held again that the property is to be taken to be ancestral 'qua' the plaintiffs. The learned Judge has, however, held that the alienation is for consideration and legal necessity and is binding on the plaintiffs, and he dismissed the suit with costs.
5. There is no dispute before us on the first question. On the second question, as admittedly the consideration of the sale deed was devoted to payment of a pre-existing debt it cannot be disputed that the sale was for legal necessity. The only question which is open to the plaintiffs is that the sale was made for a totally inadequate consideration, was not a provident act& therefore should oe set aside upon payment by the plaintiffs to the vendee of the consideration paid by him together with such interest, if any, which should be allowed to him:
6. Before us there has been considerable argument as to the true nature of the transaction between Biri Mal and Madan Gopal. It seems to me that this is hardly material to the present suit, but there is no difficulty in deciding the point. The transfer of property from Biri Mal to Madan Go-pal was by registered deed which in terms was an absolute sale deed. Under Section 58 T. P. Act as it stood at the time of the suit sale it would not be possible to maintain that a transaction evidenced by a registered sale deed in terms of an absolute sale deed and by an unregistered agreement to re-convey is a mortgage by conditional sale. It is true that the Transfer of Property Act does not apply in terms to Delhi or at least to the area in which the suit property is situate, but the principles of that Act are generally applied. Further, the sale deed undoubtedly required registration under Section 17, Registration Act, and if it was sought to modify the terms of the sale deed by later agreement the document embodying those terms would also require registration; of course it was possible for Biri Mal or his sons to rely upon the unregistered agreement of 10-1-1942 as what it purported to be an agreement to sell which of itself did not require registration but they are not attempting to do this, and the five-year period in which they could see for its enforcement expired before the present suit was filed. The transaction therefore in my opinion must be taken to be an absolute sale by Biri Mal to Madan Gopal.
7. The question then remains as to whether this sale was an improvident act on the part of Biri Mal. It was for the plaintiffs to establish this, and it is not out of place to remark that this sale was made only two months after the decision in the suit in which the present plaintiffs had sought to avoid the mortgages in favour of Hayat Ali Shah. Although, of course, Biri Mal did not figure as the next friend of his sons there can be little doubt that he was responsible for the earlier suit and also for the present suit. Prima facie, there is not the slightest reason to suppose that he was not aware of the true value of his property or that he was a simpleton and incapable of securing the best bargain for the property which could be obtained. It is true that by the sale all he was able to get was enough to pay off his mortgagee, but although he had recently failed in a contested litigation with that mortgagee the payment made was considerably less than the principal amount of the mortgages, and Biri Mal has not appeared as a witness in the present case either to lend support to the case of improvidence or to place before the Court material upon which the true nature of the transaction of 1941 could be judged. Further, it must be remembered that in addition to clearing off the mortgages and avoiding the personal liability imposed by those mortgages Biri Mal obtained at least an undertaking from his vendee that the property would be reconveyed on payment made within a period of five years. '
8. The plaintiffs' case rests on positive evidence being brought by them that the price of Rs. 23,000/-was so inadequate that the transaction is liable to be set aside as an Improvident act. The evidence produced by them is in my opinion not satisfactory. (After discussion of some evidence with regard to valuation of the property His Lordship proceeded.) In view of the obvious criticism to which Mr. Mathur's evidence is open, the learned counsel for the plaintiff has urged that there is sufficient material on the record apart from it to justify the inference that at the end of the year 1941 the value of the property substantially exceeded Rs. 23,000/-. I do not think that inference will be justified from the original price paid by Mutsaddi Lal for the property. This price may have been a proper price but again it may not. While it is probable that the property in the year 1941 was substantially better than the property as it was in the year 1913, it is impossible from the general description made in the two sale deeds to attempt a quantitative comparison. Mr. Bishan Narain has laid considerable stress on the fact that the principal of the mortgages was no less than Rs. 30,000/-and he urges that the value of the property must be taken to have been not less than Rs. 30,000/-. It may well be more usual that mortgagees do not advance money in excess of the value of the property which they take as security, but no presumption as to value can be raised from the amount of the loan advanced. Loans are advanced quite frequently without any security at all. I think therefore there is not sufficient material on the record to 'justify a conclusion that at the time the sale now challenged was made, the value of the property exceeded so substantially the consideration obtained that the sale must be held not binding upon the minors as a totally improvident act on the part of their father Birt Mal. I think therefore the plaintiffs must fail and I would dismiss the present appeal with costs.
Harnam Singh, J.
9. I agree.