L.A. Niqlakanta Sarma vs Ganesha Iyer and Others

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

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

The property sold, under Ex. XI, is Item No. 5 of the plaint properties. At a partition Ex. I dated 1895,between plaintiffs grandfather and his

sons, it fell to the share of the former. On 4th August 1902, he gifted it to plaintiffs. Even at the time of partition, it was subject to a mortgage, Ex.

XVII dated 22nd August 1893 in favour of one Appadurai Iyer of the family of 1st defendant. On the date of Ex XI about Rs. 110 was due on

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

favour of 3rd defendant. This othi purported to have been executed in order to get money for the minors expenses; but both the 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 Ex. XVII, comes in a different category. The lower Courts have held that because Ex. 1 directs that

plaintiffs father shall himself discharge Ex. XVII he had 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 Ex. XVII. Now, there is no plea

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

probably colluded with plaintiffs'' father to sell 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 3rd defendant

was aware of the family arrangement in Ex. I, or that Rs. 110 was not due on the mortgage. We have then a purchaser, ignorant of Ex. 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 Ex. I. The property sold was liable for the whole mortgage, as much as any of the other property

mortgaged under Ex. XVII. I do not appreciate the argument that, because the mortgagee 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 the 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 Ex. I to discharge the mortgage, from his own funds, the bona 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 Ex. I is sufficient ground for holding that the

sale under Ex. XI to discharge the mortgage Ex. XVII, is not binding on the plaintiffs. I reverse, the finding of the lower Appellate Court and find

that Ex. 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 ford 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 27th August 1907, till date of payment and that until payment of

that amount, plaintiffs will have a charge over Item No. 5 of the plaint properties for that amount, until date of payment. Plaintiffs and 4th

defendant, will pay and receive proportionate costs throughout in all Courts.