Horace Owen Compton Beasley, Kt., C.J.
1. Appeal No. 409 of 1925.--The plaintiff's suit was for a mortgage decree for Rs. 1,88,487-15-6 representing principal and interest alleged to be due under a mortgage deed, Ex. A. This deed arose out of the compromise already dealt with in Appeal No. 446 of 1925. It will be remembered that under that compromise, dated the 29th of November, 1920, one of the properties purchased in the ' Court sale, viz., Polavaram village with its hamlets was agreed to be retained by the Rajah of Polavaram in consideration of the payment of the sum of Rs. 1,39,986-1-0 to the plaintiff. The compromise was entered into by the Rajah's adoptive mother. This amount had been deposited in Court by the plaintiff being the balance remaining after the Court sale of the defendant's properties by the plaintiff. Being unable to pay this sum in cash the 1st defendant's adoptive mother as his guardian executed in favour of the plaintiff on the 14th of December, 1920, a bond for that amount repayable with interest at 9 per cent, per annum on the security of the Polavaram village and its hamlets. This bond is Ex. A, Alternatively, the plaintiff claims that he is entitled to a vendor's lien over these properties for the unpaid purchase money and that there is a statutory charge in his favour.
2. The Judge in the Court below allowed the suit finding that the suit bond, Ex. A, was a valid one. The 1st defendant, however, contended that Ex. A was not validly attested, because the attestors did not see the executant sign, nor did the executant acknowledge to them in their presence that she had signed it and that she was not present at the attestation. If (1) the attestors did not see the executant sign Ex. A, (2) the executant did not acknowledge to them that she had signed it, and (3) the attestors did not sign the instrument in the presence of the executant, then the instrument has not been properly attested within the meaning of Section 2 of the Transfer of Property (Amendment) Act (XXVII of 1926). Ex. A on the face of it bears the signature of the adoptive mother and guardian of the 1st defendant. The witnesses are B. Venkata Rao and Chengalva Kondayya. Then execution is admitted by Prakka Subramaniam, the agent of the 1st defendant's adoptive mother and guardian. This is witnessed by Kandukuri Subbayya and the before mentioned B. Venkata Rao. There is nothing on the face of the document to show that even the acknowledgment of the execution of the document by Venkata Buchayamraa, the adoptive mother and guardian of the 1st defendant, was made in the presence of these witnesses; but there is a still greater defect because the signature of Venkata Buchayamma upon the evidence clearly was not affixed in the presence of the two attesting witnesses. It must be remembered that this lady was a gosha lady. The evidence of the attesting witnesses is as follows:--P.W. 1, Appayya, the clerk of the 1st defendant and the writer of Ex. A, says that Buchayamma observed gosha, that the attesting witnesses were at her house when the deed was sent inside for her signature and that after its return with her signature they attested. The next witness, Chengalva Kondayya, says that he saw Buchayamma sign it, that Venkata Rao, the other attesting witness, also saw and that after they had seen her sign they attested it. He further states:
I do not remember seeing her sign any other document. The documents are sent in by Dasis. We should stand outside the wall so that we should not sec her. The Dasi brings back the papers after signature. I do not know the name of the Dasi who took in Ex. A. She brought it back signed...I attested in the verandah near the window of the Rani's room...I saw Rani sign through the window. It is about breast high from the ground. She was sitting, I stood...Rani sat on the floor when she signed. The window was jhilmil. Two planks were broken. I saw through the broken plank . We both saw through that hole. I suppose Venkata saw.
3. The other attesting witness was not called. The evidence of Chengalva Kondayya seems to me to be palpably false. It is obvious that at the trial the necessity for strict compliance with the Transfer of Property (Amendment) Act (XXVII of 1926) had become apparent and so Kondayya's duty in the witness box was to show that both he and the other attesting, witness had actually seen the Rani sign the document, and thus we have the. evidence that both the attesting witnesses looked through the window two planks of which were conveniently broken to enable them to see the Rani who was sitting also most conveniently in a direct line with the broken window planks. This evidence is so improbable and is obviously for the purpose of getting within the provisions of the Transfer of Property (Amendment) Act that it must be rejected. Ex. A, therefore, must be held to be invalid for want of proper attestation.
4. Then the learned Advocate-General argues that the plaintiff has a vendor's lien on the property for the unpaid purchase price. In order to substantiate this claim Ex. A must be a sale by the plaintiff to the defendant. Two objections are taken to this claim: (1) that the Polavaram village never passed to the plaintiff at the Court sale and he, therefore, had no ownership in the property to pass by conveyance to the 1st defendant, and (2) that, even if he had, Ex. A does not amount to a sale of that property at all. A sale is defined by Section 54 of the Transfer of Property Act as 'a transfer of ownership in exchange for a price paid or promised or part paid and part promised,' and it is contended by Mr. Rangachari on behalf of the 1st defendant that 'price' means money only and that if the consideration for the transfer of immoveable property is partly money and partly something else, then the transaction ceases to be a sale. In 'this connection he relies upon Madam Pillai v. Badrakali Ammal I.L.R. (1922) M. 612 : 42 M.L.J. 410, a Full Bench decision. In that case a husband orally transferred lands to his wife to be enjoyed by her during her life-time in discharge of future maintenance and it was held that this not being a gift or a sale might be made without writing. Dealing with Section 54 of the Transfer of Property Act, Sir Walter Schwabe, C.J., on page 617 states:
In this case one has to consider whether there was a price paid or promised by the transferee. Now 'price' has a well defined meaning. It means money, but not necessarily money handed over in current coin at the time but includes money which might be already due, or might be payable in future.
5. With this opinion Courts Trotter, J. (as he then was) agreed. Another case referred to was The Queen-Empress v. Appavu I.L.R. (1885) M. 141. That was a case, under the Abkari Act and it was held that the payment of wages in liquor does not amount to a sale of liquor within the meaning of Section 2 of the Abkari Act. Hutchins, J., in dealing with this question states at page 142:
The question still remains whether a payment of wages by liquor is included in the general term 'selling'. It seems to us that it is not. Both in the Contract Act and the Transfer of Property Act a sale is defined to be an exchange of property for a price. Section 118 of the latter Art deals with exchanges for other considerations than a money payment, and thereby indicates that a price included money only, and that is the ordinary meaning of the word 'price'.
6. In Samaratmal Uttamchand v. Govind I.L.R. (1901) B. 696 the question for determination was whether agreements or memoranda of agreements to deliver goods in exchange for goods are not agreements of Sale under Article 5, Schedule I of the Indian Stamp Act (II of 1899) and are liable to stamp duty of eight annas each as agreements 'not otherwise provided for' and it was held that they were so liable. Chandavarkar, J., in delivering the' judgment of the Full Bench quotes from Benjamin on Sale, 4th Edition, pages 2 and 89 as follows:
The difference between a sale and an exchange is this, that in the former the price is paid in money, whilst in the latter it is paid in goods by way of barter.
7. He then proceeds:
This distinction has been observed by the Legislature in this country, as will appear on a reference to Section 118 relating to exchange and the sections relating to sale in the Transfer of Property Act.
8. Section 118 of the Transfer of Property Act is as follows:
When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing nor both things being money only the . transaction is called an 'exchange'.
9. From Ex. B, the compromise petition; it is obvious that the payment by the Rajah of Polavaram of Rs. 1,39,986-1-0 was. only part, of the consideration for the transfer to him of the property in question, because it is there stated that it is out of regard for 6th defendant's family and in consideration of his not taking any proceedings to set aside the sale, that the transfer is made. It is conceded that the value of the property is more than three lakhs of rupees and therefore the price agreed to be paid for it is less than half of its real value. This circumstance alone would not be sufficient to deprive the transaction of its nature of a sale because a vendor is perfectly entitled to sell his property if he so desires to another for less than its real value and it still remains a sale. But the facts are quite different here because it is clear that one consideration for the transfer was something in addition to half of the value of the property. There! was to be a forbearance on the side of the Polavaram family to take proceedings to set aside the sale and if 'price' means money only as clearly it does, then this transaction cannot be described as a sale. It was not, in my opinion, even an exchange, because Section 118 of the Transfer of Property Act deals with mutual transfer of the ownership of one thing for the ownership of another. No doubt the ownership of the Rs. 1,39,000 and odd was agreed to be exchanged for the ownership of the property. That, by itself, would be a sale; but it is coupled with the other consideration, namely, the forbearance to take proceedings. In my view, there can be no such ownership as that. A right to sue or to take proceedings cannot, in my view, be the subject of ownership. In the view I have taken upon this point it is not necessary to consider whether or not the plaintiff ever got such an ownership in the property as would enable him to transfer it to any one. The sale to him of this property was never confirmed by the Court and it is extremely doubtful whether under such circumstances he could claim to dispose of the property as its owner, although he might transfer such incomplete right to the property as he then had and I do not propose under the circumstances to say anything more than to observe that it is a point about which I have considerable doubt.
10. Then the learned Advocate-General claims that he is at least entitled to a decree against the general assets of the Rajah of Polavaram ranking of course with the other claimants for a rateable distribution. His claim, therefore;, is to fall back upon the personal covenant to pay contained in the mortgage on his failure to succeed on the footing of the mortgage. In this connection he relies upon Pidaka Veetil Muthalakulangara Kunhu Moidu v. Thyruthipalli Madhava Menon I.L.R. (1909) M. 410 : 19 M.L.T. 584, where it was held by a Full Bench that a document which purports to be a mortgage but is not a mortgage owing to non-compliance with the provisions of Section 59 of the Transfer of Property Act regarding attestation is not a document which is required by law to be attested within the meaning of Section 68 of the Evidence Act and is admissible to prove the personal covenant to pay therein which is not required by law to be attested. This case, of course, does not deal with the position of a personal covenant by a minor or on a minor's behalf and the plaintiff has to go a step further. So another case relied upon by the Advocate-General and more directly in point is Ramajogayya v. Jagannadhan I.L.R. (1918) M. 185 : 36 M.L.J. 29, a Full Bench case. There it was held by Ayling and Seshagiri Aiyar, JJ., that on a contract entered into on behalf of a minor by his guardian under which the guardian borrowed money but no charge was created on the minor's estate, no decree can be passed against the minor on his attaining his majority or his estate, except in cases in which the minor's estate would have been liable for the obligation incurred by the guardian under the personal law to which he is subject, and that a decree can be passed against the estate of a Hindu minor for a debt contracted by his guardian for he marriage of his sister. Sir John Wallis, C.J., however, held that a decree cannot be passed against a minor on his attaining his majority or his, estate on a covenant entered into on his behalf by a guardian for his benefit. In the view of the latter the only cases where a minor's estate can be made liable are those under Section 68 of the Indian Contract Act, namely, a liability to persons who have supplied him during his minority with necessaries suited to his condition in life. The only exceptions according to Sir John Wallis are those cases where a creditor may have his rights of subrogation but not a right to direct recourse. Seshagiri Aiyar, J., with whose opinion Ayling, J., agreed, was of opinion that a. guardian can, on behalf of a minor, incur a liability which is under the Hindu Law binding upon him. This is not limited to a liability for necessaries only. But the true test is not whether the transaction is for the benefit of the minor. The question whether or not this obligation was one which was binding on the minor seems to me to be answered by the attitude adopted by him in the suit. It is quite true that in his written statement he pleads that he was a minor when the mortgage was executed and that it is not binding upon him and an issue was taken upon this plea, and it is quite clear that at the trial the 1st defendant did not adduce any argument or evidence in support of that plea. He was there attacking the mortgage but it is quite clear to me that if he was unable to attack the mortgage upon that ground, he is unable to attack the covenant on that ground. The defence open to him upon the mortgage was equally open to him as regards the covenant and he did not attempt at the trial to substantiate his plea. If he had done so, he would have been met with the answer that he could not, whilst retaining the property set up the plea that his guardian had no authority to enter into an obligation under which he came into possession of the property. He would have been met, therefore, with the answer that if his guardian had no authority to acquire the property on his behalf, he would be bound to restore the property to the plaintiff. As before mentioned, he did out put forward any such plea; and he must be taken to have waived the question as to whether or not the covenant entered into on his behalf by his guardian was binding upon him. The answer must be that it was and, being so, he is liable to have a decree passed against his personal assets. I do not think that it makes any difference upon this point whether the plaintiff actually got complete ownership of the property in question irrespective of the confirmation by the Court of sale or not. He obviously got something and if it were necessary to complete the transaction and get the confirmation of the sale by the Court, obviously that confirmation could be got at any time by a request being made for it. Put at its highest against the plaintiff, he had a conditional ownership of the property in question and that he was entitled to transfer to the 1st defendant for a consideration. That he did.; In return for that transfer, the guardian of the minor entered into a personal obligation on his part to pay for it and it is clear to me that the property of the minor may be proceeded' against by the plaintiff in satisfaction of the debt owing under that personal covenant. A point was taken by Mr. Rangachari that the plaintiff did not claim in his plaint a personal decree against the: 1st defendant. That is quite true. He did not do so in terms. He was in that suit claiming on the mortgage and it seems to me unreasonable to hold that claiming on what he considered to be a valid mortgage, he ought nevertheless to have based his claim in the alternative on the covenant and asked on it for a personal decree against the 1st defendant. In this connection mention may be made of a decision of the Privy Council, viz., Bismanath Prasad v. Chandra Narayan Chowdhry . In that case a suit was instituted to enforce a mortgage bond. In the Trial Court the learned District Judge made a decree in favour of the plaintiff. This decree was reversed upon appeal by the High Court of Calcutta on the ground that the mortgage was invalid for want of registration. On appeal to the Privy Council this judgment was affirmed. On page 517 their Lordships made the following observations:
As regards the alternative claim for a personal judgment for the mortgage debt, it is to be observed that no such claim was made in the Courts in India. There is nothing in the evidence or in the judgments which would enable their Lordships to deal with such a claim. At the same time their Lordships think it desirable in this case that the plaintiffs should have an opportunity of bringing this matter before the High Court. If any such application is made, it will be for the High Court to consider whether any such claim is open upon the present pleadings and, if not, whether any amendment raising it should be made; and further, whether under all the circumstances the claim should be entertained at this stage of the proceedings. If the High Court should think it right to enter upon the consideration of this claim, all defences on the merits or arising out of the lapse of time must be open to the defendants, and the High Court should have power to impose any terms which it thinks just and to deal with the costs.
11. In that case no argument was presented to the High Court in support of the alternative claim. Here we have had that claim fully argued. It is obvious from the decision above referred to that the High Court can entertain such an application even if has not been in terms put forward in the plaint. There is discretion in the Court to amend the pleadings if such an amendment should appear to be necessary. In my view, no such amendment is necessary, because I am of opinion that the greater claim, namely, that on the footing of the mortgage, includes the lesser claim, namely, that on the corresponding covenant, and I am satisfied that we have had before us all the materials necessary to decide this point. If it were a question of an amendment of the pleadings, I should most certainly have acceded to any request for such an amendment, but I do not think any question of the amendment of the pleadings now arises. Nothing prejudicial to the case of the 1st defendant is caused by this action, because, as I have already stated, no defences other than those which were open to the 1st defendant in the mortgage suit are open to him on a claim under the covenant. He had full opportunity for putting forward his defences to the mortgage, namely, that it was not binding on him. For good reasons he did not choose to do so and, as before stated, that plea has been waived. I cannot imagine that any other plea can possibly be open to him here. Under these circumstances, therefore, the appeal must be dismissed and there must be a decree for the amount claimed payable out of the; property in the hands of the 1st defendant. The 1st defendant is directed to pay the plaintiff's costs of this appeal and in the Court below.
12. The evidence that the mortgage bond was duly attested is almost beneath criticism. According to the amended definition of 'attested' inserted in the Transfer of Property Act (XXVII of 1926) it has to be shown in the circumstances of the present case; (a) that each of the two witnesses saw the executant sign, or received from her a personal acknowledgment of her signature, and (b) that each witness signed the instrument in the presence of the executant.
13. The evidence shows that the document was taken to the Rani, who was gosha, by a Dasi. She signed it inside a room. Neither the writer nor the attestors entered the room. The writer (P.W. 1) says that neither the attestors nor himself saw her sign. Only one attestor is examined. He says that he did see the executant sign, because two slats of the Venetian shutter to the window were broken and he was able to look through. His co-attestor did the same thing. Evidently it was purely by chance that they did this, and not by arrangement and in order to fulfil some legal requirement. It can hardly be doubted that the evidence has been got up to afford formal proof that the bond was duly executed. The second condition, too, that the executant should be present when the witnesses sign does not seem to have: been complied with. The only, conclusion is that the suit, as a mortgage suit, must fail.
14. It is urged that, nevertheless, the plaintiff is entitled to a charge upon the property mortgaged or, what is the same thing, upon the property conveyed to the 1st defendant under the compromise of 29th November. It is agreed that the plaintiff may have a charge (1) in the form of a vendor's lien for the unpaid purchase money, if the conveyance was a sale; or, if not, (2) if it appears to have been the intention of the parties to create a charge for that money.
15. It appears to me impossible to sustain the latter alternative. Paragraph 7 of the compromise petition seems to show that when it was entered into, the intention was that a cash consideration should be paid for the Polavaram village and its appurtenances, and no question of a charge, if the money remained unpaid, seems to have arisen. It was found impossible to raise the; money, so on the 14th December the plaintiff took the mortgage bond from 1st defendant's guardian. Since that bond, had it been validly executed, would in itself have created a security superior to a charge, it is not to be supposed that any separate charge could have been in contemplation. Thus at no stage does any such intention appear to have existed. I think that in each of the cases cited to us where a charge has been deemed to have existed circumstances from which such an intention may be inferred have been found. They are cases in which allowance has been payable by the; holder of an estate to some person, such as a relative, with a claim to be maintained out of estate funds. An example is the Privy Council case Narayana Ananga v. Madhawa Deo followed by Seshagiri Aiyar, J. (from whom Wallis, Offg.C.J., differed on the question of charge) in Rajah of Ramnad v. Sundara Pandiaswami Thevar : AIR1915Mad664 . The latter case went up to the Privy Council as Rajah of Ramnad v. Sundara Pandiaswami Thevar and their Lordships agreed with the former learned Judge that upon a proper construction of the transaction a charge was established. Cases of this type bear no resemblance! to the present one, where nothing has been proved to suggest an implied intention to create a charge.
16. The plaintiff must then fall back to the position that the conveyance embodied in paragraph 7 of the compromise was a. 'sale' as defined in Section 54 of the Transfer of Property Act; that is to say, a transfer of property for a price. The expression 'price' refers to money and money alone, as has been held by a Full Bench of this Court in Madam Pillai v. Badrakali Ammal I.L.R. (1922) M. 612 : 42 M.L.J. 410; if any part of the consideration consists in something other than money it may be an exchange, as defined in Section 118 of the Act, or it may be: a transfer not within the terms of the Act, but it cannot be a sale.
17. Now it is clear that, under the terms of paragraph 7 of the compromise, the 1st defendant undertook to do something else besides paying money; the consequence was to be 'in consideration of his not taking any proceedings to set aside the sale' of the whole property, i.e., the Polavaram Zamindari. If this formed part of the consideration for the transfer, then the consideration was something not wholly money, and the transaction was not a sale. The learned Advocate-General argues that it was a sale with a collateral contract, and would compare it to a sale with an option to repurchase. . The comparison, I think, is not very close, because in the latter case the accompanying contract relates only to the subject-matter of the sale, whereas here the vendee's undertaking applies to the whole of the property included in the Court sale.
18. I think it is clear that the plaintiff must very substantially have reduced the price of the property in view of obtaining this undertaking, indeed it is said that for 1.40 lakh was conveyed property worth 3 .25 lakhs. If so, the money value to the plaintiff of the undertaking was not less than the sum in cash which he asked for. It seems impossible to hold accordingly that the undertaking itself was not part of the valuable consideration for the transfer, and if that be so it was not a sale, and the vendor has no statutory lien upon the property. This disposes of the claim to a charge.
19. There remains a further contention, that a decree may be given against the 1st defendant's assets. Although the mortgage bond may as such be invalid, it includes an agreement signed by the guardian of the then minor to pay the purchase money to the vendor, and this will be enforceable, it is said, in the same way, as in the case of an adult, such an agreement may be enforced personally against him. The first objection raised to the grant of this remedy is that it was not asked for in the plaint. But the plaintiff, I think, can scarcely be expected to have contemplated the rejection of his mortgage bond as invalid, and so to have made an alternative request of this nature. The suit was upon a mortgage, and the plaint concluded with the prayer that if the proceeds of the sale were insufficient to meet the debt, the plaintiff should be at liberty to apply for a decree for the balance against the other properties of the 1st defendant. It appears to me that,, if in other respects, the claim is admissible, it should not be rejected merely because the liability of the assets for the debt was not asserted in the circumstances which have actually arisen. In so far at least as the property which the 1st defendant's guardian purported to mortgage is concerned, it is surely a case of the less being included in the greater. Can then a claim of this kind be enforced? The undertaking to pay being embodied in a registered bond, admittedly the plaintiff's suit was within the six years allowed. The further question is whether the guardian's promise to 'pay binds the minor's estate. It has been decided by a Full Bench in Pulaka Veetil Muthalakulangara Kunhu Moidu v. Thiruthipalli Madhava Menon I.L.R. (1909) M. 410 : 19 M.L.J. 584 that a mortgage deed not duly attested may be used as evidence of a personal covenant to pay. How the matter stands when the person on whose behalf the covenant has been made is a minor has been considered by another Full Bench in Ramajogayya v. Jagannadhan I.L.R. (1918) M. 185 : 36 M.L.J. 29. That too was a case of a mortgage, which was found to be invalid for want of Government sanction. The debt was contracted by the mother as guardian to discharge minor debts incurred for maintenance and for the marriage expenses of a sister of the minor. It had to be decided how far the Privy Council decision in Waghela Rajsanji v. Shekh Masludin , which was, (to quote the head note) that 'a guardian cannot contract in the name of a ward, so as to impose on him a personal liability' must be construed as an absolute bar to the enforcement of such contracts. Sir John Wallis, C.J., while recognising that the ruling does not affect the liability of a minor's estate under Section 68 of the Contract Act--which indeed does not require the intervention of a guardian--thought that 'a decree cannot be passed against a minor or his estate on a covenant entered into on his behalf by a guardian for his benefit'. Of the other two learned Judges, Ayling, J., agreed with Seshagiri Aiyar, J., and the latter put his opinion into these words:
No decree should be passed against the minor or his estate on a contract entered into on his behalf by his guardian, under which covenant no charge is created on the estate, except in cases in which the minor's estate would have been liable for the obligation incurred by the guardian under the personal law to which he is subject.
20. The learned. Judge goes on to say that the answer given by the learned Chief Justice 'read with his opinion' would cover the above opinion also, an observation which does not make it very easy to understand what precisely he means. One thing seems clear, that the mere test of a benefit secured for the minor by means of the debt will not suffice. . If that were all that was meant, the view of the two learned Judges who formed the majority would have been not in virtual agreement with but in direct opposition to the view of the learned Chief Justice. The opinion seems rather to have been that while benefit is not the test, any liability to which the minor would be subject under the Hindu Law is not the less a liability because it was incurred by his guardian on his behalf. This is an intelligible and indeed almost an indisputable proposition, and it probably sufficed to dispose of the particular case out of which it arose.
21. It seems to me that, if the circumstances of the present case are considered, a solution of the question is almost self-evident. In his written statement the 1st defendant pleads that he was a minor when the mortgage bond was executed, and that it is not binding upon him. The second issue inquired whether the bond was not binding upon him but the judgment shows that at the trial this issue was not disputed. If he waived this plea in the case of the mortgage, a fortiori he waived the plea that the debt, as an unsecured debt, was not binding upon him. The explanation of this attitude is clear enough. The 1st defendant cannot at once approbate the bargain by retaining the property, which he obviously desires to do, and reprobate it by the plea that his guardian had no authority to acquire it on his behalf. I do not think that we can now allow him to say that the promise made by his guardian on his behalf to pay the cash consideration is not binding upon him. In other words, his property may be proceeded against by the plaintiff in satisfaction of the debt. I agree, therefore, that the main appeal (A.S. No. 409) must be allowed in part, by substituting a decree of this kind for the mortgage decree, and in other respects dismissed, with the order as to costs proposed by my Lord.
22. Appeal No. 452 of 1925.--In view of our judgment in Appeal No. 409 of 1925 no orders are necessary on this appeal. No order as to costs.