Rai Satyadeva Narayan Sinha and Others vs Tirbeni Prasad

Wort, J.—This appeal by defendants fourth party consists of defendants 5, 6 and 7 who are puisne mortgagees in an action by the plaintiff who is the assignee of the original mortgagee who was defendant third party in the suit for a mortgage decree. The appellate Court setting aside the trial Court''s judgment under which a personal decree against the mortgagee was given, gave a mortgage decree for sale of the property binding upon all parties to the suit. Two points arise in the appeal but referring to the same matter. The appellants contend that they should be dismissed from the suit and the decree for money pronounced by the trial Court restored, first, by reason of the contention that they were not bound by the decree of the lower Court inasmuch as one of their members who was a minor defendant 7, was not properly represented in the appeal by a guardian ad-litem, they all being parties to the mortgage and necessary parties to the suit; and, secondly, it being the fact that at the time the original mortgage was entered into and at all other material times the mortgagee was a minor, the mortgage transaction was void.

As to the first point the facts are these. Defendant 7 of the fourth party was properly represented at the trial of the suit by a guardian-ad-litem, but in the notice of appeal to the lower Court he was described as being represented by his father who was then dead. This was corrected before the hearing of the appeal on 27th July 1931 and the guardian-ad-litem who represented the minor during the trial, was duly named in the notice of appeal. It was then found that that guardian being a pleader who had given up practice could not be served. Then on 24th August 1931, a date which was out of time for the purposes of the appeal, the Court appointed a new guardian-ad-litem on petition without making any formal order discharging the old guardian. The respondents, in the Court below objected by a petition on the same day, i.e., on 24th August 1931, but this matter was ordered to be heard at the time of the hearing of the appeal.

The Judge in the Court below, dealing with the argument which appears to have been directed against the order of 27th July 1931 held that he had power to extend the time u/s 5, Lim. Act, and therefore the notice was in order. The mention of the deceased father in the first notice of appeal was clearly a mistake and there is equally no doubt that the appeal was properly constituted in the sense that the minor defendant was properly represented by a guardian-ad-litem. Assuming that he was not, it was contended that being proper parties to the suit and actually not being parties, the decree was a nullity as against defendants fourth party. It is now the unanimous opinion that failure to make a person interested in the equity of redemption a party to the mortgage suit is not fatal, as the Court may exercise its powers of joining parties under Order 1. In so far as the appellants rest their case on the contention that there was no formal discharge of the old guardian, I am of the opinion that it fails. The petition for the appointment of a new guardian claimed the discharge of the old, and I should hesitate to hold that the mere absence of a formal order discharging the old guardian while appointing a new one was fatal. For two reasons, first, by reason of the powers of joinder of parties given to the Court under the CPC and secondly as regards the other part of the argument for the reason which I have just stated, it seems to me that this part of the argument fails.

The second point as to the validity of the bond, the mortgagee being the minor, depends, upon the present state of authorities, on the question whether there was in the bond any obligation on the part of the mortgagee. In this case the consideration stated in the bond was Rs. 600, Rs. 438 paid in cash and Rs. 162 to be kept by the mortgagee and to be paid over to one of the creditors of the mortgagor. The trial Judge held in spite of the evidence to the effect that the whole of the Rs. 600 had been paid by the mortgagee at the time of the execution of the bond, that there was an obligation upon the mortgagee to pay this creditor Rs. 162, and therefore this obligation existing, the learned Judge came to the conclusion that the mortgage transaction was void and, as I have already stated, gave a personal decree against the original mortgagor. The appellate Court has held that in spite of the terms of the bond the evidence disclosed the fact (as is so often the case in matters of this kind) that the mortgagee had paid over the whole of Rs. 600 and thus discharged his obligation under the bond. In this connexion the contention of the appellants is shortly this: that the learned Judge was not entitled to go behind the terms of the bond itself. Now before dealing with that question I propose to deal with what, in my judgment, is one of the main points in the case. But in the view that I take the determination of the case depends upon the contention to which I have just referred, namely whether the learned Judge in the Court below was entitled to accept the evidence of the plaintiff and thus vary the terms of the bond, or, to use the expression of the learned Advocate appearing on behalf of the appellants, go behind the bond itself. It is contended that if there remained an obligation on the part of the mortgagee to pay the creditor (mortgagor) the mortgage was void. In Mohori Bibee v. Dharmodas Ghose (1903) 30 Cal 539 their Lordships of the Privy Council, after stating that there was some difference of opinion in the Indian High Courts in the sense that certain decisions on the point had been arrived at only after vigorous protest by certain learned Judges, held that a minor could not enter into a contract, and that therefore by reason of Section 7, T.P. Act, a mortgage by a minor was invalid. The minor in that case executed the instrument himself; but that no distinction can be drawn in the case where the contract is entered into by a guardian or manager on behalf of the minor is seen from the decision of their Lordships of the Privy Council in Mir Sarwarjan v. Fakhruddin Mahomed (1912) 39 Cal 232, where their Lordships held that it was not within the competence of the manager or guardian to bind the minor or the minor''s estate by a contract for the purchase of Immovable property.

Apart from authority I should have been inclined to the opinion that it was incompetent for a minor or his guardian on his behalf either to transfer a property or become a transferee of property, as apart from gift such a transfer must be preceded by a contract, that is to say, an agreement which, being enforceable, being a contract under the Contract Act.

In the alternative, if a minor was competent to be a transferee of property, the fact that consideration moving from him in the case of purchase or mortgage had not been wholly paid was a matter of indifference and his title to and ownership or interest in such property passed nonetheless: see the case of Baijnath Singh v. Paltu (1908) 30 All 125 and also the case of Narain Das v. Mt. Dhania 1916 All 366. But there is authority in my judgment binding us to the contrary and that is the decision in Madhab Koeri v. Baikuntha Karmaker 1919 Pat 561. In that case this Court held that a mortgage in favour of a minor who had advanced the whole of the loan was not void and that it could be enforced against the mortgagor. Reliance was placed on the decision in Raghava Chariar v. Srinivasa Raghava Chariar 1917 Mad 630. But this Court had held in Pramila Bali Das v. Jogesher Mandal 1918 Pat 626 that a lease executed in favour of a minor was void inasmuch as it created liabilities in the shape of payment of rent, etc., upon the minor. But, as I have said, the authority of Madhab Koeri''s case 1919 Pat 561 binds this Court. I make that observation because it seems to me that it was upon the fact that the consideration had wholly passed or, to use the words of Sir Dawson Miller, the whole of the loan had been advanced,'' that the decision in that case rested. In other words, when the document was executed, there remained no obligation on the part of the mortgagee. That is the only view that I can take of that authority and the view that the learned Chief Justice and the other Judge sitting with him in that case took is, in my opinion, explained by reason of the decision in the previous case to which I have referred and which is reported in Pramila Bali Das v. Jogesher Mandal 1918 Pat 626.

That decision, which was the earlier one, was with regard to a lease, and Sir Jwala Prasad delivering the judgment of the Court there held that as there were obligations on the minor in the way of payment of rent and other liabilities, the lease was void. It seems to me that Sir Dawson Miller was pressed with that decision and came to the conclusion that only in the circumstances where no obligation remained on the mortgagee that the mortgage was valid. Therefore in the view that I take of the authorities the question comes back to the point which I stated was argued that the learned Judge in the Court below was not entitled to go behind the terms of the deed. Now, shortly the point is, did the learned Judge, in accepting the evidence that the whole of the Rs. 600 had been paid at the time the mortgage was executed, go behind the terms of the deed? Although the recital in the deed or the obligation imposed upon the mortgagee to pay one of the creditors of the mortgagor was clearly evidence of the obligation, yet in my judgment the matter was not conclusive. An authority for this purpose is found in Rajah Sahib Parhlad Sein v. Baboo Budhoo Singh (1867) 12 MIA 275.

In other words, the evidence which was adduced by the plaintiff in the Courts below was to the effect that although there was an obligation imposed upon the mortgagee, that obligation had been complied with by the payment over to the mortgagee of the whole of the amount of consideration, the comment of the learned Judge in the Court below being that in cases of this description that arrangement is often found to exist. If the learned Judge was, in the view that I take, entitled to accept this evidence, whatever we may think with regard to the conclusion as regards the fact at which he has arrived, it seems quite clear that there was no obligation on the part of the mortgagee at the time of the execution of the mortgage deed; and consistent with the authorities of this Court to which I have made repeated reference, it seems to me that the mortgage transaction was a valid one. In those circumstances the learned Judge in the Court below was right and his judgment should be affirmed. As the defendants fourth party have alone contested the appeal the costs which they will have to pay of the appeal should not be a part of the mortgage debt. "With that modification the appeal is dismissed with costs.

Rowland, J.

I agree that the appeal should be dismissed subject to a slight modification. On the question of representation of the minor defendant 7, this defendant was sued in the first Court through his brother as natural guardian. There was no defect in the proceedings of the first Court where the brother, not choosing to act, a pleader guardian was appointed who acted. In the appeal to the District Judge this defendant 7 was made a respondent, but by mistake his father, who was dead, was named as his guardian. The mistake was detected after the appeal had been pending for about a year. The Court allowed the memorandum of appeal to be amended and notice issued to the pleader guardian-ad-litem who had worked in the Court below. This notice could not be served, as the pleader had ceased to practise. Thereupon a fresh guardian-ad-litem was appointed who appeared in the appeal. The objection to the order appointing this fresh guardian on the ground that it was not stated by the District Judge in so many words that he discharged the former guardian-ad-litem is, I think lacking in substance, as the order of appointing a fresh guardian may be read as involving, by implication, the discharge of the former guardian. Then it is said that the appeal, as originally presented, was not properly constituted, and by the time the mistake was rectified, the period for presentation of an appeal had elapsed and so the appeal should be considered as out of time; that is to say, as not having been presented before the date on which it was put in proper form. No authority was cited in support of this contention which I do not think is sustainable. The person against whom an appeal is to be presented is the respondent. The appointment of a proper guardian is not a necessary preliminary to the filing of an appeal, although it is necessary before the appeal can be properly heard and disposed of. The appeal therefore must be deemed to have been presented in time by calculation of the date when it was actually presented.

Another objection was taken to the order directing costs to be recoverable from the defendants fourth party only. This order does not appear to be in conformity with the provisions of Order 34, Civil P.C., under which costs of the suit are made a part of the mortgage debt and realizable as such. Therefore they are recoverable from the mortgaged property and not by a personal decree against any party other than the mortgagor. Then there is the contention that the mortgage bond is void because the mortgagee was a minor, and it is said a minor cannot enter into a contract. I do not wish to repeat the reasoning of my learned brother with whose conclusion I am in agreement but I may point out that the same result follows from an examination of some of the provisions of the Indian Contract Act. In Mohori Bibee v. Dharmodas Ghose (1903) 30 Cal 539, their Lordships examined a part of the definitions in Section 2 of the Act, so far no doubt as was necessary for the purposes of determining the validity of a mortgage bond executed by a minor. In the case before us which is in a way a converse position, that of a mortgage in favour of and not against a minor, a further examination may assist. The definition of ''contract'' in Section 2 of the Act appears to be built upon a succession of definitions of the elements which go to make a contract, that is to say, proposal, acceptance, promise, promisor, promisee, consideration and agreement. The expression ''reciprocal promises'' is explained and finally a contract is defined as an agreement enforceable by law. On the other hand an agreement not enforceable by law is said to be void; that is to say it is not a contract at all. In Mohori Bibee''s case (10.) the agreement which the plaintiff sought to enforce was a promise by a minor; this was held to be void. In Mir Sarwarjan v. Fakhruddin Mahomed (1912) 39 Cal 232, the agreement which was under consideration consisted of two promises each forming the consideration for the other: that is to say reciprocal promise within the definition of Section 2. One of these reciprocal promises was a promise by a minor. That promise was void and therefore made the whole of the agreement void. Again in Pramila Bali Das v. Jogesher Mandal 1918 Pat 626, the decision that the lease in favour of a minor was void was based on the presence as an element in the agreement of a promise by a minor. This promise being void, the whole agreement fell to the ground. On these authorities and on the language of the definitions it seems to me that it is the promise by a minor which is unenforceable, and an agreement embodying such a promise cannot be contract. But an agreement as defined in Section 2(e) of the Act does not necessarily consist of a set of promises forming the consideration for each other. Every promise is an agreement; that is to say a promise made by an adult in favour of a minor is an agreement by the adult. We have seen that if the consideration for such a promise or such an agreement is a reciprocal promise by the minor, the whole thing is void; but if the consideration for it is not a promise, but is something actually done, there seems no bar in the statute and no reason in principle why the result should not be a valid contract. I am referring to Clause (d), Section 2 which defines consideration for a promise and deals with two cases, the first being where the promisee has done or does something, and the second being where the promisee promises to do something. The decisions examined dealing with cases where a minor has promised to do something have no application to the case of a minor who has done or does something which is the consideration for the promise made by other party. These principles, I think, are in no way inconsistent with the decisions above cited and are the principles underlying the decisions in the Madras High Court in Raghava Chariar v. Srinivasa Raghava Chariar 1917 Mad 630, in the Allahabad High Court in Narain Das v. Mt. Dhania 1916 All 366, and in this High Court in Madhab Koeri v. Baikuntha Karmaker 1919 Pat 561. In the result where the consideration has been received for an agreement consisting of a promise in favour of the minor such promise can be enforced by the minor or on his behalf.

In applying the aforesaid principles to the case before us we find that Rs. 438 had been advanced by the mortgagee to the mortgagor according to the recital in the document itself and according to the finding of both the Courts below. There seems to be no room for hesitation in passing a mortgage decree for this sum at least. As regards the balance of Rs. 162 making up the total consideration of Rs. 600, it has been argued that on a reading of the document it appears that this sum was to be paid later. Therefore it is said that the consideration for the mortgagor''s agreement to repay was not something that had been done by the mortgagee, but a promise to do something. I would answer this in two ways, first by a reference to Section 2(d), Contract Act, which refers to the case where the promisee "has done or does" something. In either case the consideration is the thing done and not the promise to do it. So I think if the money was actually paid, even if this had been done after the date of the bond, the payment of it, and not any promise to pay it, was the consideration for the mortgagee''s promise to repay. It may be observed that in Section 58, Transfer of Property Act, which defines a mortgage, it is "the transfer of an interest in specific Immovable property for the purposes of securing the payment of money advanced or to be advanced;" that is to say, it takes effect as a transfer whether a part or all of the consideration money had passed, and is operative to the extent of the actual sum advanced. In case part of the consideration is paid at the time and a part later, it is the actual advance, and not merely any promise of an advance, which is the real consideration for the mortgage. That I think is in conformity with the decision in Makhan Lal v. Hanuman Bux 1917 Pat 514. Secondly, the finding of the lower appellate Court is that the entire consideration money was paid at the time of the execution of the mortgage. On that finding no question of a "promise to pay" arises. My learned brother has dealt with the argument that the evidence on which this finding rests was not admissible and I have nothing further to say on this point.

I conclude in agreement with my learned brother that the appeal should be dismissed subject to the very slight modification indicated and that the appellant should bear the costs of this Court.