Hakoo and Others vs Bipan Chand

M.H. Beg, C.J.—This is a Defendants'' second appeal arising out of a suit for a declaration that three sale-deeds, one, dated 9-9-1960, in favour of Bhagat Ram Defendant No. 1, for Rs. 630.90, in respect of some land measuring 2 kanals and 18 marlas, another, dated 21-4-1964, in favour of Hakoo Ram, Defendant-Appellant, for Rs. 5,000, in respect of some more land measuing 2 kanals and 13 marlas with six shops standing thereon, and, the third, dated 8-12-1964, in favour of Rania Ram and Bhola Ram Defendants-Appellants, Nos. 3 and 4, for Rs. 2,000 in respect of some land measuring 7 kanals and 14 marlas, were not binding upon the Plaintiff. The Plaintiff-Respondent, Bipan Chand, is a minor son of Mukhtar Chand Defendant-vendor. The grounds upon which the three sale-deeds were challenged were common so that the Plaintiff brought a single suit for setting aside the three alienations. The Plaintiff alleged that the land as well as the houses comprised in the three sale-deeds were part of ancestral properties which the Defendant-vendor had no right to sell. It was alleged by the Plaintiff that Mukhtar Chand, the vendor, had sold these properties without either consideration or legal necessity to support the sales which were, therefore, void and ineffectual as they contravened the custom governing ownership and the alienation of the properties involved. The Defendants-Appellants had denied the ancestral character of the properties sold, and had also pleaded that, in any case, the sales were valid inasmuch as they were supported by legal necessity. The necessities set out in the written statement were: the purchase of bullocks and repairs to houses and the marriage of a daughter, and also the need to construct a house, mentioned in the last two sale-deeds.

The trial court had dismissed the suit with regad to all the three sale-deeds. The lower appellate Court had, however, after recording general findings about the existence of legal necessities to support the sales, dismissed the suit with regard to the first sale-deed of 1960, but, it decreed the suit with regard to the sale-deeds of 21-4-1964 and 8-12-1964 with specific findings that the consideration shown for the second sale-deed appeared to be fictitious and that the alleged legal necessity to support the last two sale-deeds did not seem to be genuine. The general findings about the legal necessity which occasioned the sales of land were three-fold:

firstly, to defray the domestic expenses; secondly, to purchase bullocks; and, thirdly, to construct a house, as the previous house was quite inadequate for his accommodation.

The inference about the existence of these necessities is described as "clear" from the evidence of the Defendants. The lower appellate Court has also discussed the reasons why three alleged necessities could be inferred. It is, therefore, evident that the lower appellate Court thought that these three grounds of legal necessity existed at the time of the last two sale-deeds. After that, however, the lower appellate Court had proceeded to record separate findings about the spurious character of the necessities shown in the last mentioned two sale-deeds by dwelling upon a number of features to be presently considered so as to determine the extent of their relevancy. I may, however, point out that the general findings about the existence of the legal necessities mentioned above conflict with specific findings given about the two sale-deeds of 1964. On this ground alone, the findings of fact arrived at by the learned District Judge could be reopened.

The leaned District Judge had given a resume of the evidence of both sides and had also recorded a finding that the allegation that Mukhtar Chand was addicted to extravagance and drunkenness was not proved. The learned District Judge held, with regard to the expenditure incurred by Mukhtar Chand on the construction of a house: --

It is no doubt true, that he had only one house in the old abadi and that he constructed one house near the road, but it is not proved as to what was the value or the expenditure incurred on the construction of the same.

The learned Judge then examined the position of Mukhtar Chand as an owner of property, out of which 53 kanals were cultivable land, and found that there were shops fetching an income of about Rs. 100/-per month only, and that a sawing machine had also been set up by him. The learned Judge mentioned the fact that the new house constructed was said to consist of only one room and a verandah so that the old house in the abadi with similar accommodation, could be said to be equally good. From these facts, the learned Judge surmised that Mukhtar Chand vendor must have possessed sufficient income to be able to meet his needs without selling the properties covered by the sale-deeds of 1964. The learned Judge has also observed that Mukhtar Chand was "a progressive farmer".

There seems to be considerable force in the contention of the learned Counsel for the Appellants that the finding of the learned District Judge that the sale-deeds of 1964 did not appear to be genuine was based largely on highly conjectural matters. A person''s income and his efficiency as a farmer as well as possession of the other property by him may not negative the existence of a legal necessity. The needs and expenses of an individual, both domestic and those connected with his business or profession, have to be counter-balanced against the estimated income. Even the precise income of Mukhtar Chand was not determined, and, in any case, it did not appear to be enormous.

The learned District Judge relied upon the following cases to support his decision:

Lajja Ram and Ors. v. Abdul Rahim Khan and Anr. (A.I.R. 1928 Lah 437), where it was held;

A Hindu father is not entitled to sell joint ancestral property in order to get a better one for himself in addition to the one already possessed unless necessity for getting a new house is established.

(2) Bhageran Rai and Others Vs. Bhagwan Singh and Others, where it was held that: --

Where the document evidencing the contract of sale contains recital of three items of urgent necessities viz., household expenses, cultivation of potato and repair of house, a similar recital contained in an unregistered document of sale executed one year thereafter in pursuance of that contract cannot be evidence of legal necessity for the contract of sale and no inference as to the existence of necessity for the contract can be drawn from the recital in the sale-deed. If such imperative necessities could wait for their satisfaction for nearly a year, the conclusion is irresistible that they did not exist in fact and were purely imaginary, arbitrarily mentioned in the contract of sale to impart to it legal validity.

The learned District Judge surmised that a similar imaginary reason lay behind the two sale-deeds of 1964. I may observe that it is not safe to use facts of one case, which must differ from those of another, to arrive at a finding of fact. As has been often observed, there can be no binding authority on questions of fact because facts of each case differ generally from those of other cases. This is a caution which has to be observed in using a decision given on the particular facts of a case.

I may point out that, in Lajja Ram''s case (supra) there was the observation that, if the necessity for getting the new house is established the mere fact that the vendor had made an alienation to acquire two houses would not negative the legal necessity. In other words, the necessity for one or more houses by the vendor must depend upon the requirements of the members of his family and their habits. It, as the learned Judge found, there were five members of Mukhtar Chand''s family, it was not unreasonable to believe that they needed at least two houses, each consisting of not more than a single room for living accommodation.

It is true that the legal necessities mentioned in both the sale-deeds of 1964 are identical. Nevertheless, more than one sale may be required to serve the same need. The money required to meet the need depends upon the extent of the need. Again, the mere fact that the satisfaction of a need has been postponed does not make it less pressing. Such facts must be viewed in the light of the whole set of relevant facts. Moreover, even if the recital of the same need in two documents raises some suspicion, it is argued, with considerable-fence, that it did not follow that both the documents recited a spurious legal necessity. If the first definite finding given by the learned District Judge was correct, together with the findings given about the accommodation available in the newly constructed house and the size of the family of Mukhtar Chand, the legal necessity existed. It is difficult to see how the definite finding of such necessity as existed could be repelled by the subsequent findings based on isolated conjectural matters not considered as a connected whole. Certain other authorities are cited by the learned Counsel for the Respondent in addition to those relied upon by the learned District Judge. There are also certain additional matters in evidence to which my attention was attempted to be drawn by the learned Counsel for the Plaintiff-Respondent. I, however, do not propose to enter into these because I think that this is a fit case in which the whole evidence should be reappraised by the lower appellate Court in the light of the law as indicated below.

This case is governed, according to learned Counsel for both sides, by customary law which permits a sale of ancestral property to be set aside for want of legal necessity. The correct legal position is indicated in Mulla''s Hindu (Thirteenth Edition at page 209):

If the sale or mortgage is impeached, the burden lies on him (i.e. buyer or mortgagee) to prove:

(a) either that there was legal necessity in fact; or (b) that he made proper and bona fide inquiry as to the existence of the necessity and did all that was reasonable to satisfy himself as to the existence of the necessity.

It appears to me that, after finding that a legal necessity in fact existed, the learned District Judge had erred in giving other findings relating to the two sale-deeds of 1964 based on matters which were more germane to the second question as to whether the purchaser had made a bona fide inquiry about the existence of the necessity or had done all that was reasonable to satisfy himself that the necessity existed. If the seller puts forward a necessity, it may not be possible to conduct a fool proof inquiry that the representation is true. The purchaser must, however, proceed further and satisfy himself that the representation is based on some estensibly good and acceptable ground about which he had made some inquiry. But, in those cases in which the existence of a legal necessity is, in fact, established, the second part of the investigation is not needed. Moreover, in the instant case, the Defendants had not set up any case of a proper or bona fide inquiry as to the existence of the necessity. They had relied upon the existence of legal necessity which had been actually found by both the Courts below. I do not think, therefore, that facts which are relevant for deciding the question whether the purchaser had made a proper and bona fide inquiry should be gone into unless he sets up such a case or is permitted to set up such a case by amending his pleadings.

In this case, the decision, on pleadings, unless allowed to be amended, should be confined to the question of existence or otherwise of legal necessity in fact at the time of each sale. If that necessity is found to have existed at the time of the sale, the purchaser is not to be expected to make further inquiries or to satisfy himself that the seller actually utilised the money to meet it. The reason for this rule is that the purchaser cannot be expected to have any control over the application of funds by the vendor. In the instant case, to some extent at least, the findings of the learned District Judge have been affected by an examination of the manner in which money may have been utilised. Although, here also, a finding is that a new house was built and that the vendor was not a drunkard.

Before parting with this case, I may mention an authority cited by learned Counsel for both sides: Arjan Singh v. Jagiri and Anr. (A.I.R. 1935 Lah 160), where it was laid down:

All that the law requires of a purchaser or mortgagee of land belonging to persons governed by the general rule of custom is that he should take steps to satisfy himself that the money is required for expenditure on a legitimate purpose, and he cannot be held responsible for its application afterwards. The degree of caution required will vary with the known character of the alienor; but, when the alienor is known to be a prudent man of good character, his own statement as to his requirements will ordinarily be accepted, and it is unnecessary for the alienee to make the very difficult inquiries which would be required to make sure that there was no chance of the money being misapplied.

I am unable to see how this authority would help the Respondent. It has to be borne in mind that, in view of Section 52 of the Evidence Act, evidence of the character of a person cannot be used as evidence of any probable or improbable course of conduct imputed to that person. In Arjan Singh''s case (supra), however, it was mentioned as a matter which could put a purchaser on guard. In other words, the known character of the seller is only a test of the degree of caution or prudence of the purchaser in dealing with him. For such a purpose, the reputation or known character of the vendor may be quite admissible evidence. In the instant case, as already pointed out, the purchaser had not himself taken up the plea that he had made inquiries about likely or actually required expenses, although he averred that the representations made by the vendor were accepted by him as correct. If, however, the question of inquiries made by the purchaser is to be gone into, this can only be done after the amendment of the pleadings. The question whether pleadings should be allowed to be amended at this stage or not is left open for determination to the lower appellate Court to which Court I propose to remand this case for retrial in accordance with the observations made above.

In the result, I allow this appeal and set aside the judgment and decree of the lower appellate Court. I remand this case for retrial or reassessment of evidence by the lower appellate Court in the light of the observations made above so that only relevant matters, logically connected with or germane to the issue under consideration, may be taken into account in deciding each issue and conflicting decisions on the same issue are not given. The costs will follow the results.