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Anil Kumar Das and anr., Minors Represented by Smt. Binodini Dassi Vs. Smt. Probhabati Mitra W/O Birinchi Lal Mitra - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1940Cal532
AppellantAnil Kumar Das and anr., Minors Represented by Smt. Binodini Dassi
RespondentSmt. Probhabati Mitra W/O Birinchi Lal Mitra
Cases ReferredDalibai v. Gopibai
Excerpt:
- .....guardianship, and on a subsequent statement filed by the guardian when submitting accounts. the learned judge omitted to notice that the second of these statements referred to the value of the assets at beginning of magh 1339, i.e. a date earlier than the date on which consideration for the mortgage passed. if there was in fact any increase in the assets between the dates referred to in the two statements, that increase could not have been the result of this particular loan. as there was no other evidence on which to base the finding, we agree with the learned advocate for the appellants in holding that there is no evidence whatever to prove that the money was actually spent for the benefit of the minors. in remanding the appeal for rehearing, the learned judges of this court.....
Judgment:

Lodge, J.

1. This second appeal arises out of a suit on a mortgage bond. The material facts are as follows : One Akshoy Kumar Das died in the year 1925, leaving him surviving a widow and three sons. The eldest son Satish Chandra Das was the son of a predeceased wife, the other two sons Anil Kumar Das and Sudhir Kumar Das were the children of the widow Binodini Dassi. The property left by Akshoy Kumar Das consisted of a dwelling house in the town of Khulna and a stationery business which was being carried on under the name of 'Das Brothers' and was being managed by the eldest son Satish. On 4th January 1933 the widow Binodini Dassi applied to the District Judge of Khulna to be appointed guardian of the persons and properties of her two minor sons, Anil Kumar and Sudhir Kumar, and on 26th January 1933 an order was passed allowing her application and directing her to furnish security. Security was duly furnished. The security bond was tested by the Nazir and on 11th February 1933 an order was passed by the District Judge accepting the security and directing the drawing up of a formal order of appointment. Three days later, on 14th February 1933, Binodini Dassi applied to the District Judge for sanction to the raising of a loan of Rs. 2000 by mortgaging the undivided 2/3rd share of the minors in the dwelling house, the purpose of the loan being to increase the capital of the stationery business. The learned District Judge directed that the application be put up in the presence of the pleader on 16th February and on the latter date, after hearing the pleader of the guardian passed an order that the application would be considered on further security being furnished.

2. While this matter was still pending, on 21st February 1933, Binodini Dassi executed a mortgage bond in favour of the plaintiffs in respect of the undivided 2/3rd share of the minors in the dwelling house and purporting to be in consideration of a loan of Rs. 1,500. In the recitals in the bond, it was stated that the money was needed for the education of the minors and for payment of debts incurred by their father'. After this transaction was completed, Binodini Dassi seems to have taken no further steps in the matter of furnishing fresh security as directed by the District Judge on 16th February 1933, with the result that on 18th March 1933, or nearly a month after the mortgage executed in favour of the plaintiff, her application for permission to mortgage the minors property was refused by the learned District Judge on the sole ground that the guardian had failed to furnish additional security. Plaintiff instituted a suit on the mortgage bond against the minors. Binodini Dassi had already been discharged from guardianship at her own request, and the minors were represented in the suit by a pleader guardian appointed by the Court. The defendants contested the suit, alleging (1) that the mortgage bond had not been executed by their mother Binodini Dassi; (2) that there was no passing of consideration; (3) that there was no legal necessity for the loan; (4) that if it were found that there was passing of consideration, the money received was not expended for the benefit of the minors; and (5) that the mortgage was voidable at the instance of the minors, inasmuch as no sanction of the same had been obtained from the District Judge.

3. The trial Court dismissed the suit holding that though the bond was duly executed and registered by Binodini Dassi, there was no proof of the passing of consideration. The decision of the trial Court was reversed in appeal but on second appeal to this Court, the decision of the lower Appellate Court was set aside and the appeal remanded for further hearing, with a direction as to the manner in which the evidence should be considered. On a re-hearing of the appeal, the lower Appellate Court came to the following conclusions, namely (1) that the sum of Rs. 1500 was paid to Binodini at Khulna as consideration; (2) that the plaintiff had made proper enquiries and had satisfied herself that there was legal necessity for the loan; (3) that the money had actually been spent for the benefit of the minors; but (4) that as no sanction for the mortgage had been obtained from the District Judge, plaintiff was entitled only to a simple money decree. The defendants have again appealed to this Court.

4. The learned advocate for the appellants has contended that the learned lower Appellate Court ignored material discrepancies in the evidence as to the passing of consideration and that consequently the finding on that issue cannot be accepted; that the learned lower Appellate Court was wrong in holding that the plaintiff made adequate enquiries as to the necessity for the loan; that the learned lower Appellate Court was wrong in holding that there was any legal necessity for the loan; that the learned lower Appellate Court misunderstood the evidence on which reliance was placed to prove that money was actually spent for the benefit of the minors and that there was no evidence whatever to show that the money was so spent and lastly that the law on the subject of a guardian's powers to contract loans without the sanction of the Court had been misunderstood and misapplied by the learned lower Appellate Court. These contentions will be considered seriatim. The learned lower Appellate Court has found as a fact that the money was actually paid to the defendant at her house in Khulna. The husband of the plaintiff and one other witness deposed to this effect. It appears that in a previous suit, the plaintiff at one stage had stated that the money was paid not to defendant but to Satish Chandra Das at Howrah Station. Further, at one place in his evidence in this Court, the husband of the plaintiff also stated that the money was paid at Howrah. The learned lower Appellate Court discussed the previous evidence of the plaintiff and gave his reasons for not attaching any value to this discrepancy, but he did not refer directly to the contradictory evidence given by the husband of the plaintiff. We have been asked to hold that in the circumstances the learned lower Appellate Court's finding of fact should not be accepted. We are unable to take such a view. There was positive evidence on record which, if believed, was sufficient to justify the finding. The mere fact that the learned lower Appellate Court did not refer in his judgment to a particular contradiction does not justify us in rejecting his finding, more especially as a similar contradiction was in fact considered and explained. The evidence on record shows that plaintiff had enquiries made in Khulna as to the necessity for the loan and learned of the application for sanction to the District Judge. She also learned that the stationery business had declined and that the guardian Binodini was going from door to door begging for a loan.

5. The order passed by the learned District Judge on the application for sanction was such as to justify any one in thinking that sanction was being withheld merely until additional security was furnished; in other words, that the District Judge was satisfied as to the necessity for the loan. In our opinion, in the circumstances of the case, the learned lower Appellate Court had materials on which to come to the conclusion that adequate enquiries were made. The learned Advocate for the appellants has pointed out that the necessity for the loan as set out in the application to the District Judge was different from the necessity as set out in the recitals in the mortgage bond, and he has further pointed out that the necessity as set out in the recitals in the bond has not been found established by the learned lower Appellate Court. He argued that the plaintiff ought not to be allowed to prove any necessity other than that recited in the bond, and that consequently the Court should have held that no legal necessity had been proved. We are unable to accept this view, and we consider that if it is proved that the plaintiff did in fact make enquiries and satisfy herself as to the existence of legal necessity, the fact that the true necessity was not mentioned in the recitals is of little importance. The recitals in the bond are merely a piece of evidence as to the nature of the alleged necessity : they are not conclusive on the point. The learned advocate has further contended that augmenting the capital of the stationery shop could not be regarded as a legal necessity for a loan, and has referred in this connexion to the case in Hemraj Dattubuva v. Nathu Ramu (1935) 22 A.I.R. Bom. 295.

6. In that case the meaning of the phrase 'benefit of the estate' which was the test applied in Hunooman Persaud Panday v. Mt. Babooee Munraj Koonweree (1854-57) 6 M.I.A. 393 was considered. The decision was that the phrase cannot be closely defined and that though it may include transactions which are not of a character to protect or preserve property of a minor, it would, in general, be difficult to justify transactions which are not of such a character. The actual decision in that case was merely that a guardian of a Hindu minor was not entitled to alienate immovable property belonging to the minor simply on the ground that a very good price could be obtained for it. In the present case, the findings of fact are that the stationery business was inherited from the father of the minors, and that the income from it was the principal source of maintenance of the minors. The further finding is that more money was needed for the efficient conduct of that business. In the circumstances, we are unable to hold that money borrowed to improve the finances of the business was not money borrowed for the benefit of the minors' estate.

7. In considering whether the money borrowed was actually spent for the benefit of the minors, the learned lower Appellate Court relied on the statement of the assets of the minors furnished by their mother in her application for guardianship, and on a subsequent statement filed by the guardian when submitting accounts. The learned Judge omitted to notice that the second of these statements referred to the value of the assets at beginning of Magh 1339, i.e. a date earlier than the date on which consideration for the mortgage passed. If there was in fact any increase in the assets between the dates referred to in the two statements, that increase could not have been the result of this particular loan. As there was no other evidence on which to base the finding, we agree with the learned advocate for the appellants in holding that there is no evidence whatever to prove that the money was actually spent for the benefit of the minors. In remanding the appeal for rehearing, the learned Judges of this Court observed:

It is necessary to determine after carefully considering the evidence, in the first place, whether the plaintiff made proper enquiries as mentioned above (i.e. as to the existence of necessity justifying the mortgage) and in the second place, if she fails on this point, whether the money was applied for the benefit of the minors.

8. This observation clearly indicates that the view then taken was that plaintiff was entitled to succeed if it was proved that she had made proper enquiries and had satisfied herself as to the legal necessity for the mortgage, whether the money was actually applied for the benefit of the minors or not. The learned advocate for the appellants has argued that this is not a correct view of the law and he has contended that when a guardian has been appointed under the Guardians and Wards Act, a lender must prove not merely that due enquiry was made but that the money was in fact applied for the benefit of the minor. In support of his view the learned advocate referred to a number of reported cases, in all of which the facts were essentially different from those of the present case. The only case referred to by the learned advocate, in which a loan as distinct from an alienation of immovable property, was considered was the case in Upendra Nath v. Shib Kumari (1919) 6 A.I.R. Cal. 398. It should be noted that under Section 27, Guardians and Wards Act, a guardian may, subject to the provisions of the Act, do all acts which are reasonable and proper for the realization, protection or benefit of the property. Other sections in the Act place restrictions on the guardian's power to alienate or charge the immovable property of the minor. It follows that the restrictions contained in Section 29 of the Act and the provisions of Section 30 do not apply to a mere borrowing of money by a guardian. In Upendra Nath v. Shib Kumari (1919) 6 A.I.R. Cal. 398, this Court was asked to consider the effect of the transaction treated as a simple loan and not as a mortgage, but the Court declined to do so on the ground that there was no case made out of any enquiry as to the legal necessity for incurring a debt. The leading case on this question is still that in Hunooman Persaud Panday v. Mt. Babooee Munraj Koonweree (1854-57) 6 M.I.A. 393. In the headnote of that report occurs the following passage:

A lender....is bound to enquire into the necessities of the loan, and to satisfy himself as well as he can, with reference to the parties with whom he is dealing, that the manager is acting in the particular instance for the benefit of the estate. If he does enquire and acts honestly the real existence of an alleged and reasonably credited necessity is not a condition precedent to the validity of his charge which renders him bound to see to the application of the money.

9. This view has been consistently followed by the Courts in India, for an example : see Dalibai v. Gopibai (1902) 26 Bom. 433. We have no hesitation therefore in holding that the view indicated in the order of remand was the correct view, and that if a plaintiff succeeds in proving that he made adequate enquiries and satisfied himself as to the necessity for a loan, he need not prove that the money was actually expended for the benefit of the minor's property. In the result we are of opinion that the findings of fact properly arrived at by the learned lower Appellate Court are sufficient to justify the order passed by him. The appeal accordingly fails and is dismissed with costs.

Khundkar, J.

10. I agree.


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