Bahuria Ram Sahhi Kuer vs Bindeswari Saran and Others

Mohammad Noor, J.—The facts leading to these two appeals are these: One Trigunanand Upadhya died on 26th July 1915, leaving a will of the same date. His two granddaughters, Babui Rajeshwary Kuer and Babui Bhagwati Kuer (daughter''s daughters) obtained, on 4th June 1921, an order for grant to them of letters of administration of the estate of the deceased. It appears that at that time under some previous order of the District Judge the properties were in the possession of the Court of Wards who was asked to pay the court-fee payable on the letters of administration. On 26th November 1921, the Collector of the District representing the Court of Wards replied that he was not prepared to pay the court-fee. It seems that the two ladies then executed, a mortgage-deed in favour of Bindeshwari Saran and Harihar Saran, the principal respondents in these two appeals for a sum of Rs. 10,000 mortgaging, the properties of the estate. The object of the loan as mentioned in the mortgage-deed was the payment of the court-fee which amounted to Rs. 9,636 the balance was stated to have been taken for costs of the execution of the document and its registration and for some sundry expenses. This deed is dated 19th December 1921, and the court-fee was paid in Court on 21st December 1921, and letters of administration were issued on 3rd January 1922. The mortgage was not redeemed and the mortgagees, viz. Bindeshwari Saran and Harihar Saran, had to institute a suit for enforcement of that mortgage (mortgage suit No. 119 of 1928), which was decreed on 25th July 1930, and the decree was made absolute on 25th July 1931. Thereafter Bahuria Ramsakhi Kuar, widow of the testator, brought a suit for a declaration that the mortgage created by the two ladies, Rajeshwari Kuar and Bhagwati Kuer, was not binding upon the estate of her husband and that the mortgagees were not entitled to sell the mortgaged properties of the estate in execution of their decree and for a permanent injunction against them not to do so. Her case was that the court-fee was paid by the two ladies after pledging their ornaments. The learned Subordinate Judge who heard the suit, though he practically dismissed it, has in form passed a decree that the plaintiff. Bahuria Ram Sakhi Kuar was entitled to redeem the mortgage. The term of the decree runs thus:

The suit is decreed. The plaintiff will be entitled to pay to defendants 1 and 2 (the mortgagees) the money due to them, under the decree, passed by the Court in Suit No. 119 of 1928, within six months from this date.

I am unable to appreciate this order, nor can I appreciate his observation that the plaintiff (Ramsakhi Kuar) was entitled to avoid the mortgage only by paying the mortgage decree money on the amount which has already been realized by the mortgagees. Everybody affected by a simple mortgage decree can avoid its effect by paying up the decree. For this no decree of a Court is needed. The only effect of this decree was that the period of grace was extended but it was of no practical advantage to the plaintiff Bahuria Ramsakhi Kuer and she has preferred an appeal against this decree and it is First Appeal No. 4 of 1934. The only point to be determined in this appeal is whether the mortgage decree obtained by the principal respondents, viz., Bindeshwari Saran and Harihar Saran is binding upon the estate of the testator Babu Trigunanand Upadhaya.

Coming to Miscellaneous Appeal No. 149 of 1934, it seems that the two ladies, Rajeswari Kuar and Bhagwati Kuar to whom letters of administration were granted did not perhaps carry on the administration properly. Therefore, the letters of administration were revoked and fresh letters of administration have been granted to Babu Sukhdeo Prasad, an Advocate of the Court. Babu Sukhdeo Prasad was added in the execution proceedings of the mortgage decree as a judgment-debtor. He objected u/s 47, Civil P.C., to the execution being taken out against the estate on the ground that the two ladies had no power to mortgage the property of the testator''s estate they not being then the administrators appointed by the Court, and that even had they been properly appointed administrators, they had no power to mortgage the properties without the sanction of the Court and further that the two ladies were not sued in their capacity as administrators of the estate and therefore the decree was not executable against the estate and the new administrator ought not to have boon added as judgment-debtor. The learned Subordinate Judge has overruled these objections and the administrator has come up in appeal (Miscellaneous Appeal No. 149 of 1934). We are informed that since then the bulk of the decretal money has been realized and a very small portion, something like about Rs. 1,400 only, is still to be realized. The question to be decided in this miscellaneous appeal is also practically the same as in the first appeal, viz., whether the mortgage decree obtained by the two respondents, Bindeshwari Saran and Harihar Saran, is binding on the estate, and if so, to what extent the execution could legitimately be taken against that estate.

It is clear that at the time of the execution of the mortgage the two ladies, Rajeshwari Kuar and Bhagwati Kuar, were not administrators of the estate the letters of administration not having been granted to them till then. The law in this respect as it then stood was contained in Section 90, Probate and Administration Act of 1881 (corresponding to Section 307, Succession Act of 1925). An administrator is not empowered to alienate the property under his charge without the sanction of the Court. Here, however, we have a case in which the act complained of was the mortgage created prior even to the issue of the letters of administration to the ladies. u/s 14 of the Act of 1881 (corresponding to Section 220, Succession Act, 1925) letters of administration entitled the administrator of rights belonging to the intestate as effectually as if the administration had been granted at the moment after his death. The principle of this section and of Section 15 (now Section 221, Succession Act, 1925) applies also to administration grants with the will annexed. But this section has no reference whatsoever to the administrator''s power of making a transfer prior to the grant of administration. It only says that all the rights which were vested in the intestate will vest in the administrator as if the administration has been granted to him immediately on his death. The next section says that letters of administration do not render valid any intermediate acts of the administrator tending to the diminution or damage of the intestate. No doubt an alienation of property obviously causes diminution of the estate. It is settled law that the power of the executor is derived from the will whilst the power of an administrator is derived from the Court and nothing can be done by him until the administration is granted. A person to whom letters of administration are subsequently granted is an absolute stranger to the estate till the grant, and therefore, the two ladies, in my opinion, had absolutely no power to mortgage the properties of the estate, and we hold that the mortgage as such was not binding upon the estate. But the matter does not end here. The money was borrowed, according to the recital in the mortgage deed for paying the court-fee which was payable by the estate of the deceased. The decree has to a very large extent been realised and the question whether the money was realizable as a mortgage debt or as a simple debt has now become of a purely academic interest. The only question now to be decided is whether the money has been rightly realised under the execution of the decree and whether the decree-holders were to refund any amount to the estate of the deceased, and, if so how much.

In Part 2, Book 1, Ch. 1, of Williams on Executors, the law on this point is thus stated: "An administrator derives his title wholly from Court; he has none until the letters of administration are granted, and the property of the deceased vests in him only from the time of the grant; but if during the time when there is no personal representative of the estate of a deceased person, services have been rendered which not only were for the benefit of the estate, but also were rendered under a contract with some one who subsequently by becoming administrator became authorized to bind the estate and who ratified the contract, the estate of such deceased person is liable for such services." Therefore the mortgagees Bindeshwari Saran and Harihar Saran having advanced money for the payment of the court-fee payable by the estate of the deceased are entitled to get back the money not only the principal but also interest at a reasonable rate and the cost of realisation. No doubt in her suit Bahuria Ramsakhi Kuar denied the genuineness of the mortgage and characterised it as fraudulent, but her learned advocate Mr. Gajendra Prasad Das with his usual fairness has not thought it fit to press that point before us. In fact there is no substance in this part of her case as has been held by the learned Subordinate Judge. The learned advocate has, however, contended that as one of the mortgagees, Mr. Bindeswari Prasad was a lawyer for her in some stage of the probate proceeding and the father of another mortgagee (Babu Jagarnath Saran) was also a lawyer for her in that case, they were not entitled to any interest whatsoever as they took advantage of their position. I am unable to accept this contention. First of all this point was not raised before the lower Court nor is there any material to show that the two gentlemen were the plaintiff''s lawyers in the proceeding in question. But apart from this there is no question of any undue advantage being taken by these two gentlemen. The position was that letters of administration were ordered to be given to the two ladies but they had no money to pay the court-fee, and if these two gentlemen came up to advance the money, there was nothing in this which can be characterised as unfair. Now, the interest under the bond is 18 per cent. per annum, simple. In my opinion however the mortgagees are not entitled to get interest on the basis of contract as at the time when the money was advanced the two ladies were not in a position to enter into a contract on behalf of the estate. They are entitled to interest on the general ground that a man who advances money to another is entitled to get a reasonable amount of interest. In my opinion interest at 15 per cent, per annum simple is a reasonable amount which they are entitled to get.

In First Appeal No. 4 of 1934 the order will be that the plaintiff''s suit be decreed and it be declared that the mortgage decree was not binding upon the estate, but that the estate was bound to pay defendants 1 and 2 of that suit the principal sum of Rs. 10,000 together with interest at the rate of 15 per cent, per annum, simple interest, from the date of the loan till the date of realisation together with the costs of the suit awarded in the mortgage decree and that the parties will bear their own costs throughout.

Misc. Appeal No. 149 of 1934.

The decision given above governs this appeal also. The only additional point urged in this appeal was that the two ladies Rajeshwari Kuar and Bhagwati Kuer, were sued not as administrators but in their own individual capacity. I am, however, of opinion that the learned Subordinate Judge has rightly held that the plaint clearly showed that the suit was intended to be against the estate as represented by the administrators. The order therefore will be that the appeal be partly allowed. Though the decree-holders were not entitled to execute, their decree as a mortgage decree against the estate of the deceased, they were entitled in execution of their decree to realise the principal sum of Rs. 10,000 together with 15 per cent, per annum simple interest, from the date of the loan till the date of realisation together with the costs of the mortgage suit. I would direct that an account be prepared on these lines; interest on the sum of Rs. 10,000 should be calculated from the date of the loan till the date on which any money was paid towards the satisfaction of that debt; if the amount paid was not more than the interest due on that date, the entire amount paid will be credited towards the interest and the principal will continue to carry interest at the rate specified above. To the sum found due on the date of the last payment will be added the amount of cost allowed in the mortgage suit; if the respondents have realised anything in excess according to the above calculation they will have to refund it to the administrator with interest at the rate of 12 per cent, per annum from the date of such excess payment till the date of refund. Parties will bear their own costs of this appeal also.

Saunders, J.

I agree.