Gunduchi Sahu vs Balaram Balabantra and Others

Harries, C.J.—This is a plaintiff''s appeal from decree of the lower Appellate Court dismissing his claim for a mortgage decree as against defendant 2. On 26th November 1924, the guardian of defendant 1, who was then a minor, mortgaged certain property in favour of the assignor of the plaintiff. On 28th January 1927 the guardian of defendant 1 sold a portion of the property mortgaged to defendant 2. On 20th November 1931 defendant 1, who had then attained majority, made a payment of Rs. 140 towards the dues under the mortgage. No further payments were made and the plaintiff as assignee of the original mortgagee brought this suit to enforce the mortgage against defendants 1 and 2. Defendant 1 did not contest the suit but defendant 2 contended that the sale to him was free of encumbrance and that the plaintiff could not enforce his mortgage against the property which he held.

Both the lower Courts upheld the contention of defendant 2 and dismissed the claim against him. The plaintiff being dissatisfied with these decisions has preferred this second appeal.

Both the Courts below have held that the mortgage of 26th November 1924 executed by the mother of defendant 1, was not executed for the benefit of the minor. It is true that the Courts hold that there was consideration for the mortgage but the consideration was not applied for the minor''s benefit.

In short, the finding appears to be that the minor''s guardian mortgaged the minor''s property for her own purposes rather than for the purposes of the minor. Both the Courts below have held that the sale by the guardian of the minor on 28th January 1927 in favour of defendant 2 was a transaction for the benefit of the minor and it is therefore binding upon him. The consideration of that sale was applied for the minor''s benefit unlike the consideration of the mortgage of 26th November 1924.

There can be no doubt that on 20th November 1931 defendant 1, who had then attained majority, made a payment of Rs. 140 towards the mortgage and it is contended on behalf of the appellant that this was a ratification of the mortgage. It was argued on his behalf that at most the mortgage of 1924 was only a voidable transaction and that by paying Rs. 140 towards the dues under the mortgage the minor after attaining majority had expressly ratified the transaction. In any event the appellant contended that the mortgage transaction being voidable only would be good until the minor after attaining majority chose to repudiate it. The minor had never repudiated the transaction and indeed did not appear in this suit. Accordingly it was argued that the mortgage is a good mortgage and the sale to defendant 2 was subject to the mortgage.

I am not satisfied that the mortgage in favour of the plaintiff''s predecessor was merely a voidable transaction. The Courts below have held that it was not a mortgage for the benefit of the minor and it must be treated as a mortgage of the minor''s property for. the benefit of the guardian. In fact the guardian mortgaged property which was not her own for her own purposes. Can such a transaction be described as voidable only or is it a void transaction? Considerable authority has been cited that a transaction by the guardian of a minor is merely voidable but in those cases the transaction has been one in which the guardian has exceeded his authority. For example, a number of cases deal with mortgages or transfers made by a guardian appointed under the Guardians and Wards Act without the consent of the Court.

These are cases in which a transaction has been entered into for the benefit of the minor but in excess of the guardian''s authority. In these cases it has always been held that the transaction is not void but only voidable and therefore remains good until repudiated by the minor on whose behalf the transactions were entered into. The present case is not a case of that kind. It is a Case where the act was not an act done on behalf of the minor at all. The minor derived no benefit whatsoever from it and it may well be that a transaction of that kind is void and not voidable.

It would be strange that the law should require a minor to requdiate a transaction which was never entered into on his behalf and which may well be entered into in fraud of the minor. If this transaction be a void transaction then the minor could never ratify it. If it was a void transaction it had no legal effect whatsoever when the sale took place on 28th January 1927 to defendant 2 and therefore the latter would take free of the mortgage.

Even assuming that this is a voidable transaction, in the events that happened, defendant 2 has in my view a good title to this property free of encumbrance. As I have stated there was an out and out sale to him and that sale was for the benefit of the minor.

It is a sale binding upon the minor. It was a sale by the minor''s guardian and in my view the act of the minor''s guardian in selling this property free of encumbrance amounted to a repudiation on behalf of the minor of the earlier mortgage. It has been strenuously argued on behalf of the appellant that a guardian cannot repudiate a voidable transaction on behalf of the minor. It is said that repudiation is a matter personally for the minor on attaining majority and reliance has been placed on certain observations made in Muthukumara Chetty v. Anthony Udayar AIR 1915 Mad 296. There is no doubt that this Case does support the appellant''s contention but there are cases of the Calcutta High Court in which it has been held that a subsequent sale by a guardian may amount to a repudiation of a voidable transaction previously entered into by the guardian on behalf the minor.

In Rajani Kanta v. Manmatha Nath, AIR 1918 Cal 166 the plaintiff obtained a mortgage of a minor''s property from a certificated guardian without the sanction of the Court. The money lent by the mortgagee was spent by the guardian for the minor''s benefit. The property was subsequently sold by the guardian to the defendant with the sanction of the Court. It was held that the second sale was a good sale free from the previous mortgage. In that case the earlier sale without the consent of the Court amounted to a voidable transaction. The second sale with the consent of the Court, it was held, passed the whole interest in the property free of the mortgage. If the first transaction was a voidable transaction it was good until the minor repudiated it.

There was no repudiation by the minor other than the act of the guardian in selling the property with the consent of the Court. It appears to me that the Court came to the conclusion that the second sale amounted to a repudiation of the earlier transaction and accordingly the earlier transaction could not; be enforced. The matter was again considered by the Calcutta High Court in Nagendra Nath Ghose Vs. Mohini Mohan Bose and Others, . The earlier Calcutta case was followed and Ghose J. on p. 132 observes:

It has been held that when a guardian sella the second time that is enough for a repudiation of the prior sale.

There is a conflict on this point between the Madras High Court and the Calcutta High Court and as there is no express decision of this Court we should, I think, follow the decisions of the Calcutta High Court. It has been argued that the point now before the Court has been decided in Jagdamba Prasad Lalla and Another Vs. Anadi Nath Roy and Others, . In that case Manohar Lall J. appears to have been of the opinion that any transaction entered into on behalf of the minor required to be repudiated by some means or other but it would appear that Wort J. took the opposite view. He held that the transaction was not a transaction of the minor at all and accordingly no repudiation was necessary.

There is, in my judgment, no express authority of the Patna High Court upon this point. Even assuming therefore that this is a voidable transaction the transaction was repudiated by the subsequent sale. However, I am not satisfied on the facts of this case that this was a voidable transaction and I leave it open for consideration in some other case as to whether a transaction, such as this mortgage was, cannot be regarded as an entirely void transaction. For the reasons which I have given I hold that this appeal fails and would accordingly dismiss it with costs.

Mohamad Noor, J.

I agree.