1. This reference raises the question whether the rule as to the validity of a father's alienation for an antecedent debt is inapplicable where the antecedent debt itself has been contracted on the security of the family property, as held in Badagala Jogi Naidu v. Bendalam. Papiah Naidu : (1918)35MLJ382 on the authority of certain observations of the Privy Council in Sahu Ram Chandra v. Bhup Singh I.L.R. (1917) All. 437 : 33 M.L.J. 14 : 44 I.A. 126. The question is of great importance owing to the far reaching consequences of our decision, and has received our anxious consideration.
2. The Appeal to the Privy Council was filed to challenge the decision of the majority of the Allahabad High Court in Chandradeo Singh v. Mata Prasad I.L.R. (1909) All. 176 dissenting from the view taken in Khalil-ul-Rahman v. Govind Pershad I.L.R. (1892) Cal. 328 and in Chidam-bara Mudaliar v. Koothaperumal I.L.R. (1903) Mad. 326 and agreeing with the later Madras decision in Venataramanaya Pantulu v. Venataramana Doss Pantulu I.L.R. (1805) Mad. 200 that there must be an antecedent debt to support the father's alienation. In their judgment disposing of this most controverted question their Lordships frequently referred with approval to the exhaustive judgment of Sir John Stanley, C.J., in the case first mentioned, and, even as will be shown, adopted his enunciation of the true rule as to antecedency in terms which, it is to be noted, do not contain the further restriction now contended for.
3. We have next to consider the observations relied in the judgment and the context in which they occur. Their Lordships in the course of their judgment had pointed out that the rule validating an alienation by the father for an antecedent debt of his own which was neither illegal nor immoral was an exception to the general rule of the Mitakshara which should not be extended, and, after referring to their earlier decisions and setting out the well-known passage in Mussamut Nanomi Babuasin v. Modun Mohun in which it is laid down that the sons cannot set up their rights against the father's alienation for an antecedent debt, they proceeded to observe : ' In their Lordships' opinion these expressions, which have been the subject of much difference of legal opinion, do not give any countenance to. the idea that the joint family estate can be effectively sold or charged in such a manner as to bind the issue of the father, except where the sale or charge has been made in order to discharge an obligation not only antecedently incurred, but incurred wholly apart from the ownership of the joint estate or the security afforded or supposed to be available by such joint estate. The exception being allowed, as in the state of the authorities it must be, it appears to their Lordships to apply, and to apply only, to the case where the father's debts have been incurred irrespective of the credit obtainable from immoveable assets which do not personally belong to him but are joint family property. In their view of the rights of a father and his creditors, if the principle were extended further, then the exception would be made so wide as in effect to extinguish the sound and wholesome principle itself, namely, that no manager, guardian, or trustee can be entitled for his own purposes to dispose of the estate which is under his charge. In short, it may be said that the rule of this part of the Mitakshara Law is that the joint family estate is in this position: under his management he can neither obtain money for his own purposes for it nor can he obtain money for his own purposes upon it. To permit him to do so would enable him to sacrifice those rights which he was bound to conserve. This would be equivalent to sanctioning a plain and, it might be, deliberate breach of trust. The Mitakshara Law does not warrant or legalise any such transaction.'
The limits of the principle of the exception have been thus set forth because in their Lordships opinion they form a guide to the settlement of the conflict of authority in India on the subject of antecedent debt.
4. It is very important to observe that their Lordships expressly say that they are only laying down the true principle for their guidance in the decision of the point before them, and this, I think, goes to show that they did not intend to decide anything else, as for instance, the application of that principle to cases which were not before them. If they intended to go further their observations were made obiter and are not binding on us as authority. In the rest of their judgment they strictly confined themselves to the decision of the question before them the necessity that the debt should be antecedent, and in answering this question they adopted the language of Sir John Stanley in Chandradeo Singh v. Mala Prasad I.L.R. (1909) All. 176. 'The true rule is that a son cannot impeach an alienation of ancestral joint family property made by the father, for which the consideration is an antecedent debt of the father not tainted with immorality or the object of which is to pay such a debt...the doctrine has no application to a case in which no antecedent debt of the father, that is, a debt antecedent to the alienation in question, is concerned as the consideration or object of the alienation'. As already observed, there is no mention in this rule of the further restriction now contended for. Their Lordships went on to deal with the argument that the antecedency might be only of an hour or day or a year, and observed that there must, to give true effect to the doctrine of antecedency in time, be also real dissociation in fact, and that the Courts would not be slow to deny effect to the mortgage where the antecedency was found to be unreal and to be merely a cover for what was essentially a breach of trust. These observations were strictly germane to the question as to the necessity of a real antecedency in fact, but they do not cover the further proposition that the antecedent debt must be one which was not incurred on the security of the joint family property.
5. In the passage already cited their Lordships did, in my opinion, lay down that in principle there should be such a further restriction, and they proceeded to decide the only question before them in accordance with the principle so laid down. They do not refer to any earlier case in which this further restriction had been laid down or even suggested, and possibly they were led to state the principle in these terms for the purpose in hand with reference to the considerations urged by Sir John Stanley in contesting the opinion expressed by Boddam and Bhashyam Ayyangar, JJ., in Chidambara Mudaliar v. Koothaperumal I.L.R. (1909) All. 176 that to insist on the debt being antecedent would not really afford any protection to the son.
6. Those learned Judges observed in Chidambara Mudaliar v. Koothaperumal I.L.R. (1903) M. 326 'On principle it is difficult to make any distinction between a mortgage given for an antecedent debt and a mortgage given for a debt then incurred, for in either case the debt is binding upon the son, and the enforcement of the security exonerates the son from the burden of the father's debt. Such a distinction does not really afford any protection to the son, for his share in the mortgage property can, as a general rule, be seized and brought to sale, even in the latter case, for the recovery of the debt as a personal debt due by the father (though also secured by a mortgage), unless such share has been validly alienated in favour of a third party, since the date of the mortgage but prior to its attachment.'
7. The learned Judges who overruled this decision in Venkataramanaya Pantulu v. Venkataramana Doss Pantulu I.L.R. (1905) Mad. 300 did not apparently differ in principle from this statement but considered themselves bound by authority to hold that the debt must in fact be antecedent. It was however contested by Sir John Stanlely in Chandradeo Singh v. Mata Prasad I.L.R. (1909) A. 176 in the Judgment already mentioned, at page 202-'This observation is plausible but it is capable, I think, of ready refutation. The remedy of the creditor on the basis of the son's pious duty is not coextensive with his remedy on foot of a binding security. In principle the statement is opposed to the rule of the Mitakshara. In practice it would not be correct inasmuch as the observance of the rule of the Mitakshara does afford some protection to the interests of sons. The greed which exists for the acquisition of landed property in this province is well-known Money lenders are ever ready to advance money to thriftless or extravagant land-owners on the security of their landed property with a view 1o the ultimate acquisition of the property. Interest is allowed to accumulate until the mortgags debt has reached such dimensions that it is unlikely that the owner can redeem. Then a suit for sale is instituted on foot of the security, the mortgagee gets leave to bid and buys and the family loses its ancestral property. Money lenders are chary of making large advances to land owners on personal security. Now if in negotiations for a loan on a mortgage, lenders are obliged to make enquiry and satisfy themselves that the loan is required to meet a legal necessity this will afford some protection to the other members of the co-parcenery body. If a father in a joint Mitakshara family can borrow money on the security of the joint ancestral estate to satisfy any extravagant whim or fancy he may form, it is obvious that the rule of the Mitakshara is a dead letter and that the other members of the family are robbed of all protection.' Their Lordships I cannot help thinking were influenced by these forcible observations in laying down the principle in the way they did. It is however clear, I think, that Sir John Stanley did not intend to lay clown that there was any necessity to show that the debt was not only antecedent but also not incurred on the security of the family property, because he does not lay down any such restriction in formulating the rule, and because he refers with approval to the decision of the Full Court in Badri Prasad v. Madan Lal I.L.R. (1893) All. 75. In that case the mortgage in question was executed in satisfaction of a prior mortgage debt incurred by the father to the same mortgagee. It was contended the alienation was bad because the mortgage was effected in discharge of the mortgagee's own prior debt and was therefore not an antecedent debt within the meaning of the rule. Sir John Edge C.J., with whom the other Judges concurred, rejected this contention, and, after citing a Calcutta ruling that the purchase money itself which was the consideration for a conveyance could not be said to be an antecedent debt-the point now decided by their Lordships-added 'I know of no other restriction of the term antecedent debt.' This statement is equally true of the other Courts and of the legal profession and the public in India. The doctrine of the father's power of alienation for his own debt having been repeatedly enunciated for over sixty years, ever since its recognition by the Privy Council in Hanuman Prasad's case (1856) 6 M.I.A. 393 without any such restriction having been suggested, it has been assumed not to exist. The only question was whether it was necessaiy that there should be any antecedent debt at all, and numberless transactions have taken place on that footing which, as has been represented to us, it would involve great hardship to disturb. Observations in judgments must be read with reference to the context and to the pre-existing law, and the very recent decision in Nachiyappa Goundan v. Rangasami Goundan (1919) 36 M.L.J. 493 P.C. contains an express warning against deducing from particular expressions in their Lordships' judgments novel propositions unsupported either by principle or authority, and against construing decisions putting an end to a conflict of authority on a particular question as unsettling what till then had been treated as settled. However sound in principle, and however applicable to this Presidency with reference to the son's shares, if not to the father's, the suggested restriction might be if the matter were res-integra, it would certainly be a novel proposition unsupported by any previous authority to lay down at the present time that an alienation for an antecedent debt not otherwise open to objection was invalid because the antecedent debt was incurred on the security of the joint family property. Having regard to their Lordships' express statement that the enunciation of the principle in these terms was intended as a guide to the decision of the controverted question before them, I do not think we should be warranted in extending its application to a case which was not before them and involves considerations which are not referred to in their judgment, especially when such an application of the principle would have the effect of disturbing what has long been regarded as settled law, and would give rise to great uncertainty as to existing titles.
8. I would answer the first question in the affirmative. It is unnecessary to answer the second question.
9. I entirely agree.
Sadasiva Aiyar. J.
10. In the reference to the Full Bench I said that their Lordships of the Privy Council in some passages of their judgment in Sahu Ram Chandra v. Bhup Singh I.L.R. (1917) A. 437 used language which, if widely interpreted, would make a mortgage debt which was genuinely antecedent to the alienation in suit not an antecedent debt capable of supporting such an alienation by the father as against the son's share. Having regard (a) to the context (b) to the particular question which their Lordships had and intended to decide and (c) the language used by them in several passages both before and after the widely-worded passages, I was inclined to hold tint their Lordships were considering even in these passages only the case where the so-called antecedent debt was really and substantially the mortgage debt sued on. For instance, in the passage ' the exception appears to their Lordships to apply only to the case where the father's debts have been incurred irrespective of the credit obtainable from immoveable assets which are joint family property,' their Lordships were approving of the exception which allows a decree for sale to be passed in the suit brought for a mortgage debt of the father if incurred for discharging the father's antecedent debts and Ihey disapproved its extension to a case where the mortgage-deed sued on was executed for a so-called antecedent personal debt which was really incurred on the ' credit obtainable'' from the family-lands and which antecedent debt was therefore at once or soon afterwards merged in the mortgage-alienation sued upon. The question whether genuinely antecedent debts might be or might not be themselves mortgage debts and whether they ought to be only simple debts was not in my opinion decided or intended to be decided by their Lordships. I did not and do not think that their Lordships intended to adopt all the reasoning given in Chief Justice Sir John Stanley's judgment in Chandradeo Singh v. Mala Prasad I.L.R. (1909) All. 176. They, no doubt, fully approved of the dicta of the learned Chief Justice quoted at pages 446 and 449 but those dicta do not deal with the question whether a really antecedent mortgage debt was one which could support a later alienation against the sons.
11. Having heard full arguments again sitting in the Full Bench and having had the advantage of studying the judgment of my Lord the Chief justice just now pronounced and concurred in by Oldfield, J., 1 must frankly admit that I have felt much diffidence as to the soundness of my view as to the real meaning of their Lordships' language in the disputed passages. While I had to respectfully differ in my referring order from the opinions of two learned Judges of this Court Spencer and Krishnan, JJ., in Badagala Jogi Naidu v. Bendalam Papiah Naidu : (1918)35MLJ382 as to the interpretation of those passages, I now find that my opinion is also opposed to the opinions of my Lord and Oldfield J., besides the opinions of two learned Judges of the Allahabad High Court (Tudball and Rafiq, JJ.) in Brij Narain Rai v. Mangla Prasad (1918) 17 A.L.J. 246. However, after the best consideration I have been able to give to the question, I shall adhere to the view I have already expressed. 1 have fortified my mind to arrive at this conclusion by the following further considerations : (a) The opinion of Sir John Edge, C.J., who took part in the Privy Council decision in Sahu Ram Chandra v. Bhup Singh I.L.R. (1917) All. 439 as found in the judgment in Badri Prasad v. Madan Lal I.L.R. (1893) All. 75 referred to in my Lord's judgment supports my view of the law : (b) since Hanuman Persaud's case (1866) 6 M.I.A. 393 the uniform course of decisions, so far as I know in all the High Courts, has been to treat a really antecedent mortgage debt on the same level with a really antecedent simple debt for the purpose of supporting a subsequent alienation against the son's share : (c) their Lordships have omitted in Sahu Ram. Chandra v. Bhup Singh I.L.R. (1917) All. 439 to expressly refer to and overrule this settled law : (d) the un-settlement of numerous titles to large estates and the great uncertainty in the law would result if we decide the question (1) referred to the Full Bench in the negative is also a matter for serious thought: (e) the old Hindu Law enacted (see Yagnavalkya II, 50 and Colebrooke's Digest Volume I page 190 which quotes Catyayana's text) that it was the pious duty of the sons to pay their father's debt (e-1) even with interest (but the interest amount should not exceed the principal amount) (e-2) even if it was barred by limitation according to modern statutes (e-3) and even if no ancestral assets were inherited by the sons provided the sons were capable of bearing the burden : (This obligation was restricted afterwards as regards (e-2) and (e-3) by statutory enactment and judicial decisions, but judicial decisions have explained and expanded the nature and legal results of the obligation as regards (e-1) (1) by not restricting the amount of interest allowable to the creditor to the amount of the principal,(2) by making the future pious duty a present legal liability and (3) by making a voluntary alienation by the father for such antecedent debt binding on the sons' shares under the Mitakshara Law, (under the older Hindu Law of Manu the sons had no interests or shares at all during their father's life-time) and (4) by making involuntary alienations by court sales in execution for a decree against the father alone to affect the son's shares also); and (f) in the old Hindu Law Texts relating to the son's pious obligation which form the foundation on which the present law has been broadened from precedent to precedent, there is no distinction made between a mortgage debt and a personal debt of the father.
12. In the result I concur in answering the first question referred to this Full Bench in the affirmative.
Coutts Trotter, J.
13. I have had the advantage of perusing the opinion just pronounced by my Lord, and I entirely concur in it.
Seshagiri Aiyar, J.
14. My answer to the first question is in the affirmative. No cases have been quoted before us in which it has been directly held that a debt secured by a mortgage could not constitute an antecedent debt. Mr. Sitarama Rao naturally relied upon the observation of Lord Shaw at page 447 in Sahu Ram Chandra v. Bhup Singh I.L.R. (1917) All. 137 which is as follows : ' Except where the sale or charge has been made in order to discharge an obligation not only antecedently incurred, but incurred wholly apart from the ownership of the joint estate or the security afforded or supposed to be available by such joint estate.' With reference to this sentence, it was contended that there was a distinct pronouncement that if a debt was advanced on the security of the property in the possession or control of the manager of a Hindu family, such a debt would have been incurred in breach of trust and that consequently it cannot constitute an antecedent debt. It was further argued that there was an essential difference between a simple loan and a loan charging the family property. The sentence in the judgment ' under, his management he can neither obtain money for his own purposes for it, nor can he obtain money for his own purposes upon it,' was relied on for this argument. I cannot say that these contentions are entirely unfounded.
15. Before dealing with these sentences, I think it expedient to consider the judgment as a whole. The case before the Board was one in which a suit was brought upon a mortgage document. This deed was not a renewal of an old document. The question for consideration before the Board was whether the loan advanced was contemporaneous with or was antecedent to the mortgage sued on. In considering this question their Lordships of the Judicial Committee had before them the rulings of the various High Courts in which they point out ' there was a conflict which occurs, not merely between the Courts of one district in India and another, but also between decisions pronounced in Calcutta itself, in Allahabad itself, and in Madras itself.' This conflict they wanted to put an end to. If we examine the cases which were cited before them as typical of the conflict, it would be seen that in not one of them was the question whether a subsequent mortgage superseding an earlier mortgage could constitute an antecedent debt, was ever raised or decided. The point at issue in them was whether there should not be a debt really antecedent to the one on which the suit was brought, or whether it was enough if a short time had elapsed between the execution of the document and the granting of the loan. Nor do I find any reference in the argument of the learned Counsel before the Judicial Committee to this point. Under these circumstances I do not think that the language relied on should be regarded as a considered pronouncement upon the matter we have to decide.
16. Further if we analyse the judgment of Lord Shaw it is clear that the proposition contended for by the learned Vakil would be to some extent inconsistent with the general principles enunciated by the noble Lord. The judgment first traces the rights of interdiction of the subordinate members of a Hindu family to the well known text of Mitakshara (Chapter I Section I, Pl. 27.) Then it proceeds to point out that the Mitakshara has enunciated a rule in favour of the managing co-parceners. The reason of the rule is stated to be that wherever there is a family necessity it is ' one binding upon the co-parceners as a whole and that consequently the consent of all of them can be implied even though they may not be consulted individually.' The judgment then considers the exception to the general rule which is stated to have ' arisen from the necessity of protecting the right of third persons, say, the purchasers of the property who have taken their title for onerous consideration and in good faith.' Although in the previous sentence it was stated that ' the exception should be very carefully guarded and should not be extended,' it is clear that the aim of the exception in the opinion of the Board, was to safeguard the rights of bonafide lenders, and not of the subordinate members of the Hindu family. Then we have a discussion as to how this exception should be worked. The observations of Lord Justice Knight Bruce in Hanooman Persaud Ponday v. Munraj Koonwaree (1866) 6 M.I.A. 398 quoted as showing that if ' the fact of the advance is proved, the presumption of law is prima facie to support the charge and the onus of disproving it rests on the heir.' Up to this point there is no discussion as to whether the debt should be a simple debt or a debt secured by the charge on property. After this, the particular facts of the case are examined, and the rule deduced by Sir James Colvile in Suraj Bunsi Koer v. Sheo Pershad Singh I.L.R. (1879) Cal. 148 and in Girdhari Lall v. Kantoo Lall (1874) L.R.1 IndAp 821 are stated. Then follows an approval of the comment by Sir John Stanley in Ghandradeo Singh v. Mata Prasad I.L.R. (1909) All. 176 on the above two decisions. If we turn to the judgment of the learned Chief Justice of the Allahabad High Court which has secured the approval of the Judicial Committee, it would be clear that there was no intention in that case to differentiate between simple debts and mortgage debts. On the other hand the sentence at the bottom of page 207 is in favour of holding that a mortgage is as much within the competency of the manager as a simple debt. Then the judgment of the Judicial Commitee proceeds to define what an antecedent debt is. It is in this part of the judgment that the observation relied on by Mr. Sitarama Rao occurs. But the quotation from Lord Hobhouse's judgment in Nanomi Babuasin v. Modhun Mohun I.L.R. (1885) Cal. 21 on which the rule is based, does not make any distinction between mortgage debls and money debts; and the final deduction of the Board does not warrant any such distinction being drawn between the two classes of debts. The sentences relied on, namely ' In short, it may be said that the rule of this part of the Mitakshara Law is that the joint family estate is in this position : under his management he can neither obtain money for his own purposes for it nor can he obtain money for his own purposes upon it. To permit him to do so would enable him to sacrifice those rights which he was bound to conserve,' should be read as referring to the creation of the first obligation and not to the merger of the first debt in a subsequent mortgage debt. That was the only matter which was directly discussed and this and the other observations must be taken to have been made with reference to the enforceability of a debt which starts with a mortgage and is not subsequently absorbed in any other transaction of a similar or a different kind. The rule finally laid down namely that 'there must be antecedency in time' and 'real dissociation in fact' would equally apply to a simple and to a mortgage debt. I have very closely read the judgment of the Board, and in my opinion the particular passage on which so much stress was laid should not be construed in the way in which the learned Vakil asked us to construe. In this connection I may be permitted to draw attention to what Lord Haldane said in Cornelius v. Phillips (1918) A.C. 199 : ' dicta by Judges, however eminent, ought not to be cited as establishing authoritatively propositions of law unless these dicta really form integral parts of the train of reasoning directed to the real question decided. They may, if they occur merely at large, be valuable for edification, but they are not binding.' Mr. Sitarama Rao contended that the Judicial Committee have set to themselves the task of laying down the law and it is not open to us to minimise its effect by saying that the sentences relied on are mere obiter dicta. The answer is that their Lordships had not before them this aspect of the case at all. Ever since Hanumcon Pershad Panday v. Munraj Koonwaree (1856) 6 M.I.A. 893 in which the rule as to antecedent debt was outlined, numerous cases have been decided in this Presidency and elsewhere where it was assumed as unquestionable that there is no distinction between a simple and a mortgage debt. It would unsettle vested rights and throw open the flood gate of litigation, if their Lordships are to be understood as laying down the law as contended for by the learned Vakil. There must be some semblance of discussion in the judgment appealed against, in the argument of Counsel or in the cases quoted at the Bar to warrant us in imputing such an unexpected departure from accepted notions on the subject to their Lordships. The Judicial Committee are in the habit of cautioning Courts in India to apply the old decisions to transactions founded on an exploded view of law and to suggesting that as and from a particular date the new pronouncement should be accepted as regulating similar transactions. In Pattabiramier's case (1871) 13 M.I.A.560 and thn Thambuswami Pillai's case (1875) I.L.R. 1 Mad. 1. (P.C.) relating to the construction of mortgages by conditional sale, this hint was given. Again in dealing with rights of alienation which a co-parcener has in respect of his own share, the Board while saying that the Madras view was not right refused to interfere with it on the principle of stare demises. There is no indication of such an attitude in the present case. The truth is that their Lordships did not intend to overrule the principle which had gained un-contested currency all these years. I cannot therefore but regard the view taken in Brij Narain Rai v. Mangala Prasad (1918) 17 A.L.J. 249 and by Spencer and Krishnan, JJ., in this Court as attempts to be meticulously literal at the expense of the spirit of the pronouncement.
17. I may draw attention to the fact that the Judicial Committee have held in Gridharee Lall v. Kantoo Lall (1871) L.R.1 IndAp 321 that where family property has been sold away under a mortgage decree, the son can recover it back only on showing that the debt was illegal or immoral. The same conclusion has been stated in cases where the property passed out of the family by sale under a money decree. No distinction is drawn regarding the rights of the sons in these two classes of cases. If it was breach of trust on the part of the manager to have mortgaged the property, why should the suing co-parcener show that there was immorality or illegality If the property passed out of the family in violation of a trust, the son should on pleading without more that the decree under which the sale was held was founded on a mortgage, be decreed possession of at least his share. There is a consideration which is specially applicable to Madras and which would also lead to the same result. In the judgment under consideration, the Board had to consider the rule of Mitakshara as administered in Allahabad. They had not before them the doctrine which has been uniformly accepted in this Presidency that for a debt of the father which is neither illegal nor immoral, his share in the family property would be liable. This view has obtained the sanction of the Judicial Committee on the principle of stare decisis. It would follow from this that if a father mortgages property for a debt which is not tainted with illegality or immorality, although not binding on the sons as not being for family benefit or necessity, it would be on forcible against the sons on the doctrine of their pious obligation to discharge their father's debt. This would furnish an additional ground for holding that a mortgage debt instead of being in a worse position than a simple debt is in some respects in a more favourable position.
18. There is one observation in the judgment which I have so largely quoted from, which lends support to my view. Almost the last sentence in the judgment is : 'wherever such antecedency is found to be unreal and is merely a cover for what is essentially a breach of trust the Courts will not be slow to deny effect to a mortgage so brought into existence.'1 There is no qualification here that the illusory character would only affect a simple debt. What the Courts in India are asked to do is to find out whether the previous loan was real or illusory and not whether it is a simple debt or a mortgage debt. For all these reasons I am of opinion that Badagala Jogi Naidu v. Bendalam Papiah Naidu : (1918)35MLJ382 was wrongly decided. It is not necessary to express any opinion upon the second question referred to us.