L.A. Nilkanta Sarma vs Ganesa Iyer and Others

Wallace, J.—The point for decision in this appeal is whether the sale deed Exhibit XI dated 27-8-1907 by the father and guardian of the

then minors plaintiffs in favour of 3rd defendant is binding on the plaintiffs.

The property sold under Exhibit XI is item 5 of the plaint property. At a partition, Exhibit I dated 1895, between plaintiffs'' grandfather and his

sons it fell to the share of the former. On 4-8-1902, he gifted it to plaintiffs. Even at the time of partition it was subject to a mortgage Exhibit XVII

dated 22-8-1893 in favour of one Appadurai Aiyer of the family of 1st defendant. On the date of Exhibit XI about Rs. 110 was due on that

mortgage. The consideration recited in Exhibit XI is this Rs. 110 and another sum of Rs. 90 to discharge othi Exhibit XIV by plaintiffs'' father in

favour of 3rd defendant. This othi purported to have been executed in order to get money for the minors'' ex-penses, but both lower courts have

found that there was no necessity for the loan. This is a concurrent finding of, fact involving no question of law. Exhibit XI is therefore not binding

so far as this sum of Rs. 90 is concerned.

But the other sum of Rs. 110 to discharge Exhibit XVII comes in a different category. The lower courts have held that because Exhibit I directs

that plaintiffs'' father shall himself discharge Exhibit XVII, he had no right to sell the minors'' property to discharge it and therefore such sale cannot

bind the plaintiffs. They have not noticed the fact that the plaint does not set out any such case and have further overlooked altogether the question

whether 3rd defendant was a bona fide purchaser for value without notice of this family arrangement for the discharge of Exhibit XVII. Now there

is no plea and no finding that 3rd defendant was not a bona fide, purchaser for value. It was suggesfcad before me that he was the agent of 1st

defendant who probably colluded with plaintiffs'' father to soil the property. Such a contention was never raised in the lower courts and I can see

no reason why I should suspect collusion in a sale taken to discharge a mortgage over the same property. There is no suggestion that either first or

third defendant was aware of the family arrangement in Exhibit I or that Rule 110 was not due on the mortgage. We have then a purchaser ignorant

of Exhibit I and knowing only that there is a binding mortgage over the property paying over good money to buy the property and thus discharge

the mortgage. There was nothing to put him on notice of Exhibit I. The property sold was liable for the whole mortgage as much as any of the other

property mortgaged under Exhibit XVII. I do not appreciate the argument that because the mortgage might have proceeded against other property

therefore this sale was not for necessity or for the benefit of the minors. It was to discharge a genuine debt charged upon the property prior to the

gift of it to the minors. The property came to them saddled with this onerous obligation. It is not suggested that the minors had any ready cash out

of which the debt might have been paid. If their father broke his undertaking in Exhibit I to discharge the mortgage from his own funds, the be la

fide, alienee cannot be held responsible for that.

I am quite clear that the lower courts have erred in law in finding that the family arrangement under Exhibit I is sufficient ground for holding that

the sale under Exhibit XI to discharge the mortgage Exhibit XVII is not binding on the plaintiff. I reverse the finding of the lower appellate court and

find that Exhibit XI is binding on the plaintiffs to the extent of Rs. 110.

I consider that, since the major portion of the consideration is found valid, and since the alienation was left unchallenged for 9 years, this is a

case in which the alienee should be permitted to retain the property on payment of the amount disallowed with interest. The decree will accordingly

be that 4th defendant do pay to plaintiffs Rs. 90 with interest at 6 per cent, from 27-8-1907 till date of payment and that until payment of that

amount plaintiffs will have a charge over item 5 of the plaint property for that amount until date of payment. Plaintiffs and 45h defendant will pay

and receive proportionate costs throughout in all courts.

Note : - The 4th defendant''s rights to recover the amount from his vendor, 3rd defendant, are not affected by this judgment.