Lalji Singh and others vs Muchkund Singh and others

Mohamad Noor, J.—This is an appeal by the plaintiffs whose suit to enforce a mortgage has been dismissed by both the Courts below. The mortgage was executed by one Gulo Singh in favour of three persons, Issur Rai, Achhtanand Rai and Bhagwat Rai for a sum of Rs. 600. It is conceded that the interest of each one of the mortgagees in the mortgage was equal, and it is also admitted that the mortgage interest of one of the mortgagees, namely Bhagwat Rai has been redeemed by defendant 1. The other two mortgagees transferred their interest in the mortgage to the plaintiffs who sued for enforcing it against the defendants first party, the son and grandson of Gulo Rai. The suit was contested mainly on the ground that there was no legal necessity for the mortgage a plea which prevailed before the two Courts below.

In our opinion both the Courts below have gone wrong in applying the Hindu Law of necessity and benefit to the facts of this case. They have ignored the most important point in the case, that the mortgage though on behalf of Gulo Rai, was executed by defendant 1 as the agent of his father, and it was he who admitted the execution of the deed before the registrar and it was he who redeemed a third of the mortgage being the share of Bhagwat Rai.

Coming to the question of legal necessity, the mortgage bond recites that the money was raised for two purposes: Rs. 400 was for payment of a previous debt of one Bankey Singh due under a simple registered bond, and Rs. 200 for purchasing about four and half bighas of land situated at a distance of one and a half miles from the residence of the defendants, whose family profession is admittedly cultivation. The land was admittedly purchased by this Rs. 200. The Courts below have held that Bankey Singh''s bond had become barred, and in fact no money was paid to him. These arc no doubt findings of fact which arc binding upon us, but the matter does not end here. It is not the duty of the creditor to see that money raised, for legal necessity of the family is actually spent on the objects for which it was taken. His duty ends when he after making an honest and reasonable enquiry satisfies himself that the necessity exists. In this case the existence of Bankey Singh''s debt is not disputed. It has been held in Jagdambika Prasad Vs. Kali Singh, following a Full Bench decision of the Allahabad High Court in Gajadhar Vs. Jagannath, that a time barred debt constitutes a valid antecedent debt for the purpose of supporting an alienation by the father of the ancestral joint property of the family. A barred debt is a good consideration under S. 25, Contract Act. It was open to the father to revive the debt. Instead of reviving it he mortgaged the property to pay up that debt. Accepting the finding of fact arrived at by the Courts below, the position is that there was a time-barred debt which the family was anxious to pay, and this mortgage was created to pay that debt. The son, defendant 1, took an active part in the transaction. The Hindu Law docs not recognise limitation. The statute law does not extinguish the debt, simply the remedy becomes barred. Therefore there was an antecedent debt within the meaning of Hindu Law to support the mortgage.

The next necessity for which the money was taken and admittedly used was the purchase of four and a half bighas of land at a distance of a mile and a half from the residential village of the defendants. The evidence is that about Rs. 185 were spent over the price and Rs. 15 over stamp and cost of registration. Long argument has been addressed to us to the effect that this does not constitute a legal necessity or an object beneficial to the family. Here also what was required to be done by the mortgagees was a reasonable and honest enquiry that the purchase was being made for the benefit of the family. I have said that the usual livelihood of the family was cultivation. Augmenting the means of livelihood of the family, unless speculative or risky, must be taken to be beneficial to the family. No doubt the plaintiff in this case alleged that the land purchased was in usufructuary mortgage or sudbharna of the defendant''s father and therefore he was anxious to purchase it. The Courts below have found that this sudbharna has not been proved. Cases have been cited before us to show that the purchase of the property on sentimental grounds or for the purpose of enforcing preemption or by way of speculation cannot be said to be objects for the benefit of the family. But the case must be decided on its own facts. What may be speculative business in the circumstances of one case may not be so in another case. In this case one has to bear in mind that the transaction was carried on not only by the father but also by the son, defendant 1 himself. These two were the only adult members of the family. There is nothing to show that defendant 2, son of defendant 1, who is still a minor was born at that time. What reason had the mortgagees to doubt that the purchase was not for the benefit of the family when they saw that both father and son, the only adult members of the family, were anxious to purchase the land situated at very short distance from their home? The trial Court has said that the land was bad. Good and bad are comparative terms. Purchasing a bad land may be be a good bargain if it is bought cheap. The purchase of this piece of land cannot in the circumstances of the case be said to be imprudent management or embarking on speculation. Taking into consideration the fact that the family was of cultivators, that they purchased a small piece of land in the neighborhood of their home and that the purchase was made both by the father and the son, the purchase must be held for the benefit of the family. Neither of the Courts below have taken into consideration this fact and they misapplied the law of legal necessity on the facts of the case. In my opinion this appeal must succeed and the plaintiffs are entitled to a decree.

I have said that one-third of the mortgage was redeemed by paying up the share of one of the mortgagees Bhagwat Rai and the plaintiffs having purchased two-thirds of the mortgage can only enforce it against two-thirds of the mortgaged property. Mr. S.N. Rai has informed us that the plaintiffs taking into consideration the straitened circumstances of the family are willing to take interest to the extent of Rs. 400 only and thereby to give effect to the principles of Damdupat. The plaintiffs will therefore get the usual preliminary mortgage decree for Rs. 400 principal, Rs. 400 interest in all up to the period of grace and the cost of the three Courts calculated on Rs. 800. If the decretal amount be not paid within six months from today, the plaintiffs will be entitled to get a final decree for sale of two-thirds share of the property mortgagee, for the realisation of the decretal amount.

Luby, J.

I agree.