K.S. Natesa Aiyar vs Sahasranama Aiyar and Others

Ramesam, J.—I would state the facts of this case fully as I am not satisfied with the treatment of the case by the Lower Courts. Defendant

was the stakeholder of a chit fund, and, for the due performance of his obligations in connection with the chit transactions, he executed a kootchit

deed, dated 23rd March, 1914, mortgaging two items of his property. In item 2 he had originally an ancestral property only 47 cents, but the other

47 cents, which at first belonged to his brother Kuppuswami Aiyar, were purchased in 1910 by a sale-deed, Ex. I (a) and the sale-deed stands in

the name of defendant 2, son of defendant 1, being minor by his mother as guardian. Thus in 1914 he was in possession of 94 cents of this item

and this was mortgaged by Ex. A. The plaintiff is one of the subscribers to the chit and he bid at one of the auctions in 1918, by which he became

entitled to the suit amount. He, therefore, brings the suit to recover the amount by sale of the property mortgaged under Ex. A. Defendants 3, 4

and 5 are the purchasers of item 2 subsequent to execution of Ex. A, that is under Ex. 1, dated 20th April, 1915. The District Munsif''s judgment is

somewhat perfunctory, because it does not state what the defences of the defendants are in this case. As a matter of fact defendants 1, 2, 3 and 4,

all have filed written statements, and reference is made to these written statements. However, I had them all read out before me. Defendant 1 did

not appear at the time of the trial. The District Munsif framed two issues ""(1) To what amount is plaintiff entitled? (2) What are the properties

subject to the charge?

Issue 1 was framed with reference to some questions raised by defendant 1 as to the exact amount due to the plaintiff. Issue 2 was raised with

reference to the plea of defendants. 3 and 4, namely (1) that Ex. A will not be binding on the half-share of Kuppuswami Aiyar which was

purchased in the name of defendant 2 in 1910 and which was afterwards sold to defendant 4 in 1915; (2) that the mortgage was also not binding

upon the son''s half-share of the original ancestral property of 47 cents on the ground that it is not made for necessary purposes. The issue might

have been made clearer so as to state these points expressly, but however, I find that both the District Munsif and the District Judge discuss these

points and these are the points that are argued by the parties throughout. I, therefore, think that nobody has been prejudiced by the frame of the

issues.

The issue 1 is not before me. As to issue 2 the District Munsif found that in 1910 defendant 2 had no property of his own. It is admitted he was

a minor. He also observed that there was no evidence to rebut the presumption of Hindu Law that a purchase in favour of the junior members of

the family was really a purchase of the family. He also referred to the fact that the father joined in the further sale and he found that the purchase of

47 cents in 1910 was also a joint family property and could not be regarded as deft. 2''s self-acquisition.

Then as to the other point raised by the defendants, namely, whether the transactions were for necessity : he found that the chit was for family

benefit, referring to the evidence of P.W. 1, and, therefore, he thought that Ex. A was binding on the whole of items 1 and 2. He, therefore, gave a

decree to the plaintiff as prayed for. Only defendants 4 and 5 appealed, defendant .3 having died. On appeal the learned District Judge held that

the purchase in 1910, in the name of defendant 2, must be regarded as a separate transaction. He says : ""It may be that the purchase money came

from his mother."" This is merely a possibility. It is true that the purchase money may have come from the mother. But defendants 3 to 5 adduced

no evidence in the case and there is no evidence to show that the mother advanced any money. In Bammu Shetti v. Dharnu Shetti (1916) 5 LW

259, the case referred to by the District Munsif, but not by the District Judge, it was held following Parbati Dasi v. Baikunthanath Deo (1913) 26

M.L.J. 248, that where there is property standing in the name of a junior member, the presumption is that it is joint family property. This

presumption is of course liable to be rebutted. It may be a very weak presumption in some cases and it may be, easily rebutted. It may be stronger

in other cases in which case stronger evidence would be required to rebut it. But in the present case there is no evidence and one has to start with

the presumption that the purchased property was joint family property seeing that defendant 2 was a minor at the time of the purchase and that the

family had ancestral property. The District Judge makes no reference to such a presumption. He does not start the discussion of the case with such

a presumption. He merely refers to the possibility of the purchase money coming from the mother and comes to the conclusion that the property

must be regarded as defendant 2''s property. I, therefore, reverse this finding of the District Judge and hold that, in the absence of evidence on the

side of the defendants, the purchase of the 47 cents in 1910 must be regarded as ancestral property. But this does not dispose of the case. The

next question still arises whether even as regards the whole of the 94 cents, the mortgage is binding upon the whole of the item, or only on the

father''s share of item 2, i.e., 47 cents. This depends upon the consideration whether Ex. A falls within the power of a Hindu father seeking to

mortgage his son''s property. There was no antecedent debt in 1914. Because Ex. A was not executed for antecedent debt, the District Judge held

that it is not binding on defendant 2. But I do not think that is enough to dispose of this suit. The father may mortgage his son''s share for necessity

or for a benefit to be conferred on the joint family . Here Ex. A was executed in connection with the chit fund transaction and the father is

immediately benefited to the extent of Rs. 500, when he insured obligations in connection with the future performance of the chit. If he honestly

performs these obligations the family need not come to any trouble; but, if he is irregular in his dealings with the subscribers to the chit, the family

will get into trouble. In the case of prudent management the prudent manager or father might benefit the family, but this is a case where the family

might get into trouble and lose properties. After all it is a speculative transaction. A chit fund is not like the ordinary transactions of a Hindu family.

It bears no resemblance to money borrowed for maintaining the family, for performing the marriages or upanayanam, or paying the Government

revenue, or educating boys in the family, or paying off antecedent debts. There is the possibility that a chit fund transaction may end in profit, but it

is not a transaction for which the father can mortgage his son''s share. I therefore hold that Ex. A is not binding on the son''s half-share of the whole

of item 2. The plaintiff is therefore entitled to a decree against the father''s half-share but not against the son''s half-share. To this extent I modify the

decree of the District Judge.

Mr. Sivaramakrishna Aiyar who appears for the respondent argued before me on other points and wished to support the decree of the District

Judge on such points. First, he argued that Ex. A is not properly proved; and secondly, that Ex. A amounts to a charge only and not a mortgage,

and if it is a charge, he is a bona fide purchaser without notice and that his purchase in 1915 takes priority over the plaintiff''s mortgage right. The

first two points were not made the subject of issues; and, so far as the first point is concerned, I am not going to allow it to be raised here. As to

the second point : it was not even raised in the grounds of the Lower Appellate Court. What was raised in the grounds is merely that Ex. A does

not give any kind of charge at all. That is because the plaintiff''s chit was in 1910, whereas his sale was in 1918, and the defendant''s sale takes

priority over the plaintiff''s mortgage right. But beyond this, the question, whether this would not amount to a mortgage, was not raised in the

grounds, nor was it argued before the District Judge.

It seems to me to fall within the definition of Section 58 of the Transfer of Property Act, because it effects security of the property for the due

performance of an engagement which may result in a pecuniary liability like simple mortgage bonds, which are usually executed in this presidency.

If it is a mortgage bond, no question of defendants 3 to 5 being bona fide purchasers without notice would arise in the case. But, if such a question

arises, I do not see how these defendants 3 to 5 can be regarded as bona fide purchasers without notice. There is, no doubt, a recital in the sale-

deed Ex. I, that there were no prior encumbrances. No purchaser is satisfied with such representations by the vendors. It is his duty to enquire. In

this case there is no evidence as to what enquiry he made. The burden of proving that he was a bona fide purchaser without notice was on him,

and he has not gone into the box to prove that he made further enquiries and he had no notice of an earlier registered document. But, as I have

already said, I do not think any such question arises. The result is that in modification of the decrees of the Courts below the plaintiff will have a

decree for the sale of item 1 and defendant l''s half-share in item 2, that is 47 cents.

Another point raised by Mr. Sivaramakrishna Aiyar is that the other subscribers to the chit fund ought to be made parties. This again was not the

subject of issue, and, after all, I do not see how the joinder of the parties is fatal to the suit. The particular amount sued for belongs to the plaintiff,

and, though Ex. A was executed for the due performance of the obligations to all the subscribers, it is really for the performance of the respective

obligations when the amount of each subscriber accrues. The present amount is due only to the plaintiff. I do not think there is any substance in the

point; but, even if there is any, I cannot allow it to be raised now. The plaintiff will get his costs of the first Court from defendants 1 and 2, and in

the Lower Appellate Court and here he will bear his own costs. Respondents 3 to 5 will bear their own costs throughout.