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Judgment
The plaintiffs are the appellants. They sued for a declaration that a mortgage (Ex. 1) executed by defendant 3, a Hindu widow, of her husband''s
lands in favour of defendant 1 was void as against the n, the husband''s reversionary heirs. The husband died in 1896. In 1897 the widow executed
a mortgage Ex. 6-f in favour of one Rangasami who was the father-in-law of defendant 2. This was for securing a loan of Rs. 2,000 and the
instrument recites that the money was required to discharge debts due by her deceased husband. It appears that the widow later sold some plots
of land from time to time and that the sale proceeds were used to reduce the amount of the mortgage debt due to Rangasami. Subsequently, the
mortgagee''s rights became vested in defendant 2, who brought a suit upon the mortgage against the widow. On 17th January 1913 defendant 2
obtained ex parte a preliminary decree for the recovery of Rs. 2,373-12-0 then due, together with interest at 9% per annum on Rs. 1,300, the
balance of principal due from date of plaint to 17th July 1913, the date fixed for payment, and with further interest at 6% on the whole amount
from 17th July 1913 until payment. It was for the purpose of discharging the decree amount, which by that time had swollen to Rs. 2,845, that on
9th September 1914 the widow executed Ex. 1, the suit mortgage in favour of defendent 3
The plaintiffs impeach this mortgage upon two grounds. First, they say it is a fictitious transaction, part of a scheme of the widow and her
mother-in-law to transfer the husband''s lands to the family of defendant 2 in fraud of the reversionary heirs. We do not think that the evidence
sustains this allegation. The plaint avers nothing more in support of it than that defendant 1 is a cousin of defendant 2''s husband and was under
obligations to Rangasami, defendant 2''s father-in-law, who had looked after defendant 1 during his minority. The defendant 1 gave evidence at the
trial and he has deposed that, in pursuance of his contract under Ex. 1 he did pay off the decree debt due to defendant 2; that he did not do this by
a cash payment, but by adjusting this debt against a debt due by defendant 2 to him and his family. His story is corroborated by documentary
evidence. Ex. 2 is a pro-note dated 8th April 1916 given by defendant 1 to defendant 2 for a loan of Rs. 8,600. Ex. 3 is a receipt, given on the
same date by defendant 2 to defendant 1 for payment of Rs. 3,263-13-0, which is stated to be the principal and interest up to date in respect of
the amount due by defendant 3 under the mortgage decree. Defendant 2 has accepted the genuineness of her signature to this document, but she
has no recollection of the circumstances in which she signed it, as she says her husband managed all business and money transactions. Ex. 2 bears
an endorsement (Ex. 2-a) dated 11th February 1918 that the note had been discharged. A number of other documents Exs. 4, 5 and 8 support
defendant 1''s story that the mutual debts of defendant 1''s and defendant 2''s family were adjusted. The learned Subordinate Judge has discovered
no reason for doubting the genuineness of these documents or of the transactions which they evidence. None is apparent to us. In fact, the
evidence with regard to them is all one way.
The plaintiffs'' second ground is that the mortgage Ex. 1 stands in no better position than the mortgage Ex. 6-f and that if it can be shown that the
earlier mortgage and the decree upon it were attributable to the widow''s improvidence in alienating property to pay debts which could and ought
to have been discharged, from income in her hands, at least with regard to the interest, the reversioners would not be bound thereby. Two issues
were framed in the lower Court, viz.:
(1) Was the mortgage, Ex. 6-f binding upon the husband''s estate and (2) were the plaintiffs entitled to question the validity of the decree in respect
of that mortgage.
It is indisputable that the plaintiff''s right to sue for a declaration that the mortgage (Ex. 6-f) is not binding or that the decree is not binding would
be barred by limitation. But the argument is that lapse of time will not make that binding on the estate which was not binding before. We think
however that the learned Sub-Judge was right in striking out these issues. To allow the plaintiffs now to open the question of the binding character
of the previous alienation and the decree upon it would, in effect, remove the bar which the Limitation Act has placed in their way. In other words,
the plaintiffs cannot be allowed to do indirectly what they cannot do directly. That was the view expressed by a Full Bench of the Punjab Chief
Court in Khiali Ram v. Gulab Khan [1911] 33 P.R. 1911, and we agree with it. In thai case, plaintiffs, reversioners of the husband sought to avoid
the bar of limitation to a suit to declare the widow''s alienation void, by showing that the mortgage executed by her husband (in discharge of which
his widow had sold the property to the mortgagee) was a fictitious transaction; and it was ruled that they could not do this. The case reported in
Jaggi v. Prithi Pal [1894] A.W.N. 134, proceeds on the same principle, and so too Karri Adeyya v. Tammulamoddi Govindu AIR 1931 Mad.
274, decided by one of us.
The plaintiffs therefore have to fall back on their case that defendant 1 cannot be regarded as a bona fide lender. Their allegation is that
connected as he was with the families of defendants 2 and 3 he must have been aware of the circumstance that led to the mortgage Ex. 1 and that
the widow was allowing interest to accumulate without any effort to keep it down out of her income. The principle has been laid down that a
widow is not bound to discharge her husband''s debts out of the income of his estate; but that she is bound to keep down the interest on her
husband''s debts and is only entitled to enjoy the net income from her husband''s property. But an exception is recognized in favour of the alienee.
If there was actual pressure at the time of the alienation and the widow had then no funds available for the discharge of the debt, or the alienee,
after reasonable inquiry, bona fide believed that the alienation was necessary, he will be protected: see Boddu Jaggayya v. Goli Appala Baju
[1913] 18 I.C. 953 and S. Appalaswamy v. S. Venkanna [1914] 24 I.C. 534. In the present case it has been proved that the net income available
to the widow from her husband''s lands was about Rs. 200 per annum, and that the income had only become available from the date of the
compromise of the widow''s suit in January 1912. By this compromise she recovered the control and enjoyment of her husband''s lands which
since his death had hitherto been in the management of her mother-in-law. So that at the date when she executed the mortgage (Ex. 1) there was
not more than between Rs. 600 to Rs. 700 at the widow''s disposal to meet a debt of Rs. 2,845 due under the decree. There is evidence, which
has been accepted by the lower Court, that the widow was being pressed to discharge the debt, and it is apparent that if she did not, the property
was liable to be brought to sale in execution of the decree. We think therefore that defendant 1''s mortgage is justified.
Defendant 1 has filed cross objections to the reduction made by the learned Sub-Judge in the rate of interest fixed by the mortgage instrument.
He has held that the provision for payment of compound interest at 12% per annum from 9th September 1916, with annual rests, is onerous and
penal, and he has awarded interest at 3/4% per mensem on the arrears of interest till 9th September 1916 and compound interest at the same rate
with annual rests afterwards. The question of the reasonableness of a particular rate of interest was discussed by their Lordships of the Judicial
Committee in Sunder Mull v. Satya Kinder Sahana AIR 1928 P.C. 64. There it was stated that the whole conditions and terms of the lending must
be considered together The learned Sub-Judge has heard evidence as to the ordinary rate of interest in the locality, and he has taken into
consideration the value of the security offered by the widow, which was ample, as well as the widow''s need for money, which was pressing. In
these circumstances we are not prepared to interfere in a matter to which the Sub-Judge has obviously given much care and which he was well
fitted to decide.
We think however that the proper course is to declare in the decree that that portion of the debt comprising the disallowed interest is not binding
on the estate and in other respects that the suit is dismissed.
With this modification the appeal and the cross-objections will be dismissed with costs.