Nawal Kishore Prasad Singh and Others vs Ganga Prasad Sinha, and Others

Rowland, J.—This appeal arises out of a suit brought to enforce a mortgage bond dated 5th February 1912 executed by Palat Singh, now deceased, for himself and as guardian of his brother''s minor son, defendant 1. The consideration of the mortgage is stated to be Rs. 1,171 and the bond provides for interest at Re. 1-4-0 per cent per month with six-monthly rests. The plaint alleges that the money was taken

to pay off an ancestral debt due to the mahajans and also to meet the necessary expenses of the members of his joint family.

The consideration was repayment of the simple bond for Rs. 300 executed by Bijuli Singh, grandfather of Palat Singh and great-grandfather of defendant 1., dated 9th March 1905, with interest. At the time of execution of the mortgage bond in suit the amount due under this bond after deducting realizations made in the meantime amounted including, principal and interest to Rs. 696-14-6. It bears an endorsement of repayment of this amount and the Subordinate "Judge has held that necessity is proved for borrowing to the extent of Rs. 700. He held that it was not proved that there was any necessity for borrowing the remaining Rs. 471 for family purposes and that it was not proved that there was necessity to borrow at so high a rate of interest with compound interest which has swelled the total claim to Rupees 10,887-4 0.

He allowed interest at the same rate as the interest on the old bond, that is to say Re. 1-9-0 per cent per month simple, and passed a decree for Rs. 700 principal with simple interest at that rate; total Rs. 2 925 with costs Rs. 531-7-0.

In appeal it is contended that the lower Court should have held that there was necessity for "the transaction as a whole" and a reference is made to AIR 1927 37 (Privy Council) which however does not seem to be directly in point, being a suit to set aside an out and out sale. In Hunoomanpersaud Pandey v. Mt. Babooee Munraj Koonwaree (1854) 6 MIA 398 it was said

the validity, force and effect of the bond, as to all and each of the sums, of which the sum thereby purporting to be secured is composed, depend on the circumstances under which the sums were respectively so advanced regard being, had also, in so far as may be just, to the circumstances under which the same were respectively borrowed.

Their Lordships remanded the case for inquiry on these points. The Subordinate Judge was therefore right in dealing separately with the several parts of which the consideration for the \\mortgage bond was composed. He considered that there was no satisfactory evidence at all on the point of justifying necessities for the sum of Rs. 471. Indeed it was difficult for the plaintiffs to prove the actual necessities, the parties being dead and the witnesses dead. The plaintiffs are holders of the mortgage bond as a result of a partition in their family and had no personal knowledge in the matter.

It is argued that we ought to presume necessity from chronic indebtedness of the family; but there is no evidence of any habitual borrowing, that is to say, borrowing of successive sums at short intervals, at any later date than that of Bijuli''s bond of 1905. Mr. S.M. Mullick for the appellant then fell back on the plea that the evidence discloses a case of representation and of proper inquiry from which a presumption of necessity should arise. Whether such a presumption should be made in any particular case is, I think, a matter be be decided with reference to its particular facts. Inquiry is deposed to by Ramautar Rai, P.W. 3, who says that he was in service of the mahajan and was present at the execution of the bond; but it does not explain why in that case he did not sign it as a witness, He says that he and Basudeo Narain made the inquires at the instance of Jang Bahadur. Basudeo is dead. The necessities alleged are family debt and house repair.

This kind of evidence can be easily procured and I do not feel disposed to differ from the Subordinate Judge''s estimate of its value. The plaint as well as the recitals in the bond itself are as vague as possible with regard to the nature of the necessities which are supposed to have existed; and it is remarkable that in the bond the executant declares that there is "no means of paying the ancestral debts" except by a mortgage bond; but does not state that there is no means of meeting family expenses except by executing the bond. In the circumstances I am of opinion that this is not a case in which presumption ought to be drawn in favour of the creditor and against the defendant as to the existence of necessity. I would confirm the decision of the Subordinate Judge and dismiss the appeal with costs.

Fazl Ali, J.

I agree.