Baijnath Thakur and Another vs Sarwan Chaudhury and Others

Agarwala, J.—This is a second appeal by the defendants from a decision of the District Judge of Muzaffarpur confirming a decision of the Munsif. The facts were that in January 1923, defendant 1, who was the karta of a joint family consisting of himself and his son, defendant 2, took a mukarrari patta of 3 bighas of paddy land for a consideration of Rs. 812-8-0. In December of the same year, he borrowed on mortgage Rs. 900 to pay for the mukarrari patta and for the joint family expenses to the extent of Rs. 87-8-0. The property given in security for this mortgage was the property of the joint family and the 3 bighas of land covered by the mukarrari patta.

In 1927, Rs. 850 of the mortgage debt was paid. This appeal arises out of a suit to enforce the balance of the mortgage debt. The first Court accepted the plaintiffs'' evidence that the produce from the 3 bighas covered by the patta is about 20 maunds per bigha besides other catch crops and held that the transaction was one by which the family had benefited. This finding was endorsed by the Court below which was also satisfied that the family benefited by the mukarrari patta. In second appeal it is contended on behalf of the defendants that the karta of a joint family is not entitled to hypothecate ancestral lands for the purpose of acquiring other lands.

A number of cases of this and other Courts have been cited to us but it is clear that in this Court the decisions are almost unanimous. In Sheotahal Singh v. Arjun Das AIR (1920) Pat 70 a Division Bench held that the manager of a joint Hindu family always has the power to alienate joint family property in the ordinary course of management and for the benefit of the joint family, and that the test in each case is whether the transaction was such as a prudent owner would enter into in order to benefit the estate. In that case a mortgage bond executed to pay the premium in respect of a lease taken for the benefit of a joint family was held to be binding upon all the members of the family. In Lalji Singh v. Muchkund Singh AIR (1934) Pat 699 a Division Bench held that augmenting the means of livelihood of the family, unless speculative or risky, must be taken to be beneficial to the family. In the recent case in Sital Prasad v. Ajablal Mander AIR (1939) Pat 370, it was held that where all the adult members of a joint family had mortgaged the ancestral property and applied the money raised by the mortgage towards part payment of the purchase price of a property purchased for the family, the transaction was one for the benefit of the family, and the mortgage was for legal necessity and therefore that it could not be challenged by minor members of the family.

Reliance was placed for the appellants on the decision of the Privy Council in 54 All 5644 where the question before the Board was with respect to a sum of Rs. 4000 which had been borrowed for the purpose of financing a contracting business and the question arose whether an alienation of joint family property to raise money for this purpose was binding on the joint family. That decision has been explained by a Pull Bench of the Allahabad High Court in Ram Nath and Another Vs. Chiranji Lal and Another, where the present Chief Justice of Allahabad said: In my judgment in AIR 1932 182 (Privy Council) the Privy Council never intended to lay down the general proposition that a loan taken by the manager of a joint Hindu family for the purpose of starting a new business could never be binding upon the minor members of the family.

The decision of their Lordships of the Privy Council in that case was also referred to by a Division Bench of this Court in Chhptey Lal v. Dalip Narain Singh, AIR (1938) Pat 562. The facts of the Privy Council case are quite distinct from the facts of this case where the object of the loan was not for the purpose of entering into a speculative transaction but purely for the purpose of adding to the lands of the family some paddy lands in which they were deficient. Reference was also made to the Full Bench case of the Bombay High Court in Hemraj Dattubuva v. Nathu AIR (1935) Bom 295 in which it was held that the manager of a minor under Hindu law is not entitled to sell the minor''s property merely for the purpose of enhancing the value of the property or for increasing the minor''s income. But the learned Chief Justice in that case was careful to point out that it would be inaccurate to say that no transaction could be for the benefit of the minor which was not of a protective or preservative character.

In my view, the decisions of this Court are clear that a transaction of the kind with which we are dealing in this appeal is one which binds a member of a joint family, provided that it is for the benefit of the family. The concurrent findings of the Courts below are that the transaction was for the benefit of the family. I see no reason why that finding should not be accepted and acted upon.

The only other point in the case relates to interest. The bond provided for interest) at the rate of 1 per cent, per mensem. It is contended that the mortgagor is entitled to have the amount reduced to 9 per cent, per annum u/s 8, Bihar Money Lenders Act, 1938. That Section provides that the Court may re-open a transaction, and, in a proper case, reduce the interest in the case of a secured loan to 9 per cent, per annum, and in the case of an unsecured loan, to 1% per cent, per annum.

There is nothing in the Section to indicate that the Court is bound to exercise this discretion in favour of the debtor in every case. What appears to be contemplated is that the Court shall reduce the interest to 9 per cent, per an-num as indicated in the Section in cases where the Court considers that the circumstances justify taking such a course. But where the original rate of interest is not exorbitant, and there is nothing to indicate that the debtor has not been fairly treated by the creditor, I see no reason why in second appeal this Court should exercise this discretion. The result therefore is that I would dismiss this appeal with costs.

Rowland, J.

I entirely agree.