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Janki Singh and ors. Vs. Debi Nandan Prasad and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported in7Ind.Cas.772
AppellantJanki Singh and ors.
RespondentDebi Nandan Prasad and ors.
Cases ReferredKadim v. Sheomoney S.D.N.W.P. of
'laches,' meaning of - revenue sale--issue of certificate, effect of--mortgagee in possession--trustee of mortgagor--co-sharers in joint estate--relation of mutual confidence--non-payment of revenue by co-sharer--purchase by himself--transfer of property act (iv of 1882), section 76. - .....each to get what was his at the time of the sale or what he subsequently acquired by a valid title. the plaintiffs must pay the costs of the reconveyance. the defendant no. 1 must account for the profits enjoyed by him in respect of the 9 annas share of plaintiffs nos. 7 to 16 : the amount of such profits may be determined in execution. the plaintiffs are entitled to their costs in both courts against defendant no. 1.

1. Mouza Tikarampur one anna Pattee Touzi No. 5298 was assessed with a Government revenue of Rs. 256. The four annas co-sharer of this opened a separate account and 12 annas remained as the ijmali or the residuary share paying an annual Government Revenue of Rs. 192: 3 annas out of this 12 annas belonged to plaintiffs Nos. 17 to 20. Plaintiffs Nos. 1 to 6 claim to bo assignees of parts of this 3 annas and plaintiffs Nos. 7 to 16 are the owners of the other 9 annas. Plaintiffs Nos. 17 to 20 mortgaged their 3 annas in sudbharna, to defendant No. 1 on the 23rd December 1904, the said defendant agreeing to pay Rs. 51-8 per annum for the Government Revenue for the said three annas with cesses. The defendant No. 1 commenced paying the Government Revenue from the January kist of 1905 and in the June kist of 1905 paid Rs. 3-6 in excess of the required amount of Rs. 9 which was entered as on account of Ram Padarat Mahton plaintiff No. 17. There is no evidence to show whether this excess was paid by mistake or intentionally but probably it was by mistake. This amount remained to the creditor of the ijmali share and, defendant No. 1 went on regularly paying kist after kist in full, until the September kist of 1906, when he paid Rs. 9 in place of Rs. 12, that is, three rupees less than he ought to have paid. The excess amount of Rs. 3-6 standing to the credit of the ijmali share had been in the meantime utilized by the plaintiffs or some of them as an amount lying to the credit of the ijmali share, and the ijmali share was held to be in default in the September kist for Rs. 2-10 as there was an excess of 6 annas to the credit of the share in the Collector's books.

2. The contract to pay the Government Revenue and to the extent of Rs 51-8 is both admitted and proved. The default in the September kist of 1906 is proved but it is contended that the excess payment of 1905 should have been taken to make up the required amount. The payments, however, that are shown on the record do not make up a payment of Rs. 51-8 per annum as stipulated in the contract even if the excess of Rs. 3-6 in 1905 be taken into account. On the other hand the excess standing to the creditor of the ijmali share had been utilized by some one or other of the plaintiffs, the owners of the ijmali share. The learned Subordinate Judge says the plaintiffs were guilty of laches in not seeing whether there was a deficit and in taking credit for the excess of 1905. But laches signify knowledge or at least such abstinence from legitimate enquiry as to amount to constructive notice of the risk incurred. There is no evidence that the plaintiffs or any of them knew of the default before the sunset day. The defendant No. 1 had been paying regularly and there was no reason to suspect that he would not pay. The defendant No. 1 was a resident of the District Town, and a rich banker and his amlas are constantly present about the Collectorate especially in the time of sale ; there was no reason to fear that there should be even a mistake by defendant No. 1. It is said that the attachment and the notice under Section 5 of the Sale Law should be taken as duly served and should have warned them. It is true that the sale having been confirmed and a certificate of sale issued to the purchaser, the notices under the Sale Law must be taken as duly served, but that is only so far as the setting aside of the sale on the ground of irregularity in the service of the notices is concerned. So far as the actual notice on the parties is concerned, however, for the purpose of ascertaining whether they knew of these proceedings and could have averted the sale, we think we are entitled to see whether the notices were in fact so served as to fix knowledge of them upon the plaintiffs, or so as to keep them from all knowledge of the same. Now the plaintiffs are residents of a distant place and the notices are not shown to have been brought home to them. The manner of service attempted to be proved is of the most suspicious character: they were, it is said, served at a distance of a mile from the bustee. We cannot for a moment believe that the plaintiffs had any notice of these proceedings. The other plaintiffs paid their shares of the kist on the 4th of October under Challans Nos. 364, 365 and 366 and had no reason to suspect any foul play. When the plaintiffs took advantage of the Rs. 3-6 lying to their credit, there is nothing to shew they were taking anything paid by defendant No. 1 : the amount may have accumulated by their own over-payments in the past. On the other hand, the defendant No- 1 when making the payment of Rs. 9 instead of 12 did not ask for getting credit for the excess payment. This short payment was made on behalf of Ranjote and the excess, if any, would be in the name of Ram Padarath so that defendant No. 1 could not plausibly make the prayer. He was, therefore, clearly making a default. It is admitted that defendant No. 1 has made the purchase himself at the sale brought about by the default. As regards the share of the mortgagees, that is, the 3 annas belonging to plaintiffs Nos. 17 to 20 and their assignees, therefore, the defendant has no case. He is a trustee for them in the matter of the purchase and is bound to re-convey on receipt of a fourth of the purchase money with interest at 6 per cent. per annum from the date of the purchase. This would be so whether there was any fraud or chicane on his part, or not : for in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. This position of the mortgagee in possession was recognized in the case of Nawab Sidi Nazar Ah Khan v. Ojoodhya Bam 10 M.I.A. 540 : 5 W.R. 83 (P.C). and is also supported by Section 76 of the Transfer of Property Act.

3. The shares of the other plaintiffs, however, stand upon a somewhat different footing. The defendant No. 1 was not their mortgagee and it is contended that he was not, therefore, in the same relation of confidence and trust as regards their shares and ought to be allowed to retain these at least. So far as the non-mortgage or plaintiffs are concerned, the position of defendant No. 1 was, it has been contended, not worse than that of a co-sharer and reliance has been placed upon the case of Durga Singh v. Sheo Prasad Singh 16 C. 194, where, Banerjee, J. is said to have laid down that a co-sharer has no duty to pay up his quota of the Government Revenue for the purpose of saving the share of his co-sharers and may purchase for himself at the Revenue Sale. This opinion, however, has been qualified by a subsequent decision of Brett and Mookerjee, JJ., in appeal from original decree No. 545 of 1904 decided on the 28th of August 1907. The learned Judges say: 'We think that if the term fiduciary character be used in its broadest sense, this (case) goes too far, for we consider that it is not possible to hold that between co-sharers in a joint estate all being liable to pay their quota of the Government Revenue according to their respective shares, no relation of mutual confidence exists. Otherwise the position of co-sharers in a Revenue paying estate, if they were always open to be over-reached and deceived by their co-sharers, would be intolerable'. We entirely agree with this view of the position of a co-sharer of a Revenue paying estate in relation to his co-sharers and the importance of this qualification is apparent when a co-sharer by suffering a default intentionally allows the property to be sold and makes the purchase for himself to the exclusion of his co-sharers. It has been held in England that if one of two joint purchasers of an estate acquires an encumbrance upon the property on profitable terms the acquisition must enure to the benefit of both. See Carter v. Home 1 Eq. Cas. Abr. 7. and Lewin on Trust p. 303, 11th Ed.

4. In the case of Kadim v. Sheomoney S.D.N.W.P. of 1854 p. 164, it was held that a mortgagee in possession of a portion of joint undivided estate is bound to pay up an arrear of revenue due on another portion and if he does not do so and the entire estate is farmed by the Collector to him, he must account as mortgagee in possession for the profits of the farm.

5. Even, therefore, if the defendant No. 1 be considered in the light of a co-sharer, he must share the acquisition with his other co-sharers. But he is not a co-sharer, he is a trustee for a co-sharer and can derive no benefit for himself by committing a breach of trust. The property comes to him through a polluted channel and a Court of equity will not allow him to soil his hands by retaining any portion of the ill-gotten profits.

6. But there is a stronger ground in this case. We think the purchase was fraudulent. The defendant No. 1 is himself the owner of a 3 annas puttee of the Mouzah and his puttee is contiguous to the disputed puttee of one anna. It would be very convenient for him if he could acquire the disputed property. So his shrewd agents began to lay their trap. There was, it is true, simple breach of a contractual duty to plaintiffs Nos. 17 to 20 in the making of the short payment : but the defendant was bound to give notice to his mortgagors that he was making the short payment and warn them of the risk to which he was exposing them. If he had done so, the mortgagors, who subsequently paid larger amounts, would have easily paid the small amouut of arrear and averted the sale. He did not apply to the Collector to give him credit for the excess, if any. If he had done so, he might have had the credit or been told that he could not get it. He knowingly made the payment in a wrong name through an unknown person : what was the object of this falsehood There is no explanation why this subterfuge was adopted--no evidence who Raghu Nath Sshai was and why the payment was made in the name of a person who had no account with defendant No. 1. Then the attachment for a Small Cause Court decree against the plaintiffs or some of them is not shown to have been duly served and the notice under Section 5 so served, if served at all, as to be effectually concealed from the plaintiffs. Then the property was to be sold on the 25th of March, if the arrears were not paid on the 12th January. The defendant did not pay the January kist but on the 15th of January caused the property to be sold to Chaman Singh plaintiff in execution of the Small Cause Court decree for Rs. 582 and pocketted the money and then on the 25th of March, purchased the property in the name of his servant who, however, disclosed his name after the bid had been accepted. The purchase was made for Rs. 425 only and the value of the property is not less than Rs. 8,000. The mortgage of 3 annas was for Rs. 603, the0refore, the 12 annas could be mortgaged for Rs. 2,400 at least : then 2 annas was sold for Rs. 1,266 so the 12 annas ould be sold for Rs. 7,596 at least. The evidence as to the value is entirely one-sided and no serious attempt was made to gainsay it. There was breach of duty to begin with : there was concealment and there was consequent profit. We have no hesitation in holding that the sale and purchase was fraudulent and the defendant No. 1 cannot be allowed to retain his ill-gotten bargain. We, therefore, order that on the plaintiffs paying into Court the sum of Rs. 425 with interest at 6 per cent, per annum from the date of sale within 3 months from this date, the defendant No. 1 through his certificated guardian shall convey the disputed property to the plaintiffs under one deed of sale without stating what the share of each particular- plaintiff is but entitling each to get what was his at the time of the sale or what he subsequently acquired by a valid title. The plaintiffs must pay the costs of the reconveyance. The defendant No. 1 must account for the profits enjoyed by him in respect of the 9 annas share of plaintiffs Nos. 7 to 16 : the amount of such profits may be determined in execution. The plaintiffs are entitled to their costs in both Courts against defendant No. 1.

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