Patna High Court
Madhab Koeri vs Baikuntha Karmaker And Ors. on 7 July, 1919
Equivalent citations: 52IND. CAS.338, AIR 1919 PATNA 561
JUDGMENT Dawson Miller, C.J.
1. This is an appeal under Clause 10 of the Latters Patent from a decision of a single Judge of this Court, dated the 9th April 1918, affirming a decision of the Subordinate Judge,
2. On the 7th April 1908 the defendant executed a mortgage bond in favour of Baikuntha Karmaker and Ghasi Ram Karmaker, the plaintiffs Nos. 1 and 3 who were minors, to secure payment of a loan of Rs. 200. The plaintiff No. 2, Bhuban Karmaker, is the father of the plaintiff No. 1 and claims that the latter was merely his Benamidar in the mortgage transaction. On the 28th July 1915 the plaintiffs instituted the present suit claiming a sum of Rs. 339 principal and interest due under the said bond. The defense to the suit was, first, that it was barred by res judicata, and secondly, that the mortgage being in favour of minors was void and could not be enforced.
3. The Munsif before whom the case originally same decided both points in favour of the defendant and dismissed the suit. He further found that the mortgaged property, being an ordinary raiyati holding situate within a district governed by the Chota Nagpur Tenancy Act, was not liable to sale under the provisions of that Act.
4. The Subordinate Judge overruled the Munsif on both points but having regard to the provisions of the Act referred to, considered that he could not pass a mortgage decree granting a sale of the property but decreed the suit as a money decree for the amount claimed. The claim of the plaintiff No. 2 was not established.
5. On appeal to this Court the learned Judge dismissed the appeal with costs. Hence the present appeal.
6. So far as the question of res judicata is concerned, the judgment relied upon in support of this plea has not been placed before us by the appellant but the material facts relating to it may be gathered from the judgment of the lower Courts. It appears that the mortgage bond in question was in the custody of one Dwarika Lohar, the plaintiffs' agent, who had received interest amounting to Rs. 63 from the defendant for the year 1911. He refused to deliver up the bond or to pay the interest received to the plaintiffs, who on the 28th February 1911 instituted a suit against Dwarika Lohar and the present defendant claiming the sum of Rs. 63 received as interest from Dwarika Lohar and delivery up of the mortgage bond by him to the plaintiffs, with an alternative prayer that if it should be found that Dwarika Lohar and the present defendant were in collusion, then the whole amount of the money covered by the mortgage should be adjudged to the plaintiffs. The Subordinate Judge passed a money decree against both the defendants. From this decision Dwarika appealed to the High Court in Calcutta. The High Court only dealt with the first part of the plaintiffs' claim and made a decree for the delivery up of the mortgage bond by Dwarika Lohar and payment by him of the interest received. With reference to the ' alternative part of the plaintiffs' claim, the Court observed that after obtaining possession of the bond it would be open to the plaintiffs to take proceedings against the present defendant for enforcing their security, but in the course of the judgment there is a dictum. to the effect that as the plaintiffs were miners the mortgage would be void. The defendants now contend that this decision operates as res judicata and bars the plaintiffs' claim in the present suit. It will be observed that the present defendant was not actively a party to that appeal and was apparently content to rest satisfied with the decision of the Subordinate Judge, secondly, the liability of the present defendant under the bond was not a matter which was determined in that appeal but was expressly left undecided and any expression of opinion in that judgment as to the validity of the mortgage would not, in my opinion, be binding as between the present plaintiffs and defendant.
7. With regard to the second point the appellant relied upon the case of Mohori Bibee v. Dharmodas Ghose 30 C. 589 (P.C.) : 30 I.A. 114 : 7 C.W.N. 441 : 5 Bom. L.R. 421 : 8 Sar. P.C.J. 374, where their Lordships of the Privy Council decided that a mortgage granted by an infant in favour of a money-lender to secure money advanced to the minor was void and that notwithstanding Sections 64 and 65 of the Contract Act the mortgagee was not entitled to recover back from the minor any portion of the money advanced. The actual decision in that case was that an infant was not a person competent to bind himself by a contract of the description then under consideration. In dealing with the effect of Sections 38 and 41 of the Specific Relief Act their Lordships held that those sections no doubt gave a discretion to the Court, but the Court of first instance and subsequently the Appellate Court in the exercise of such discretion came to the conclusion that under the circumstances of the case justice did not require them to order the return by the respondent of money advanced to him with full knowledge of his infancy and they saw no reason for interfering with the discretion so exercised. It appears from the report of that case that the mortgagee's attorney, whilst the negotiations for the mortgage by the minor were proceeding, received definite instructions from the minor's mother that he was an infant and that any one lending him money would do so at his own risk and peril. Nevertheless, the respondent proceeded with the transaction, obtained the mortgage and induced the infant to sign a declaration stating that he was then of age. It is obvious that, in such circumstances, the respondent, who entered into the transaction with full knowledge that he was dealing with a minor, was not entitled to any consideration at the hands of the Court in their discretion under the sections of the Specific Relief Act referred to.
8. This judgment was the subject of consideration by a Fall Bench of the Madras High Court in the case of Raghava Chariar v. Srinivasa Raghava Chariar 36 Ind. Cas. 921 : 40 M. 308 : 31 M.L.J. 575 : 20 M.L.T. 407 : (1916) 2 M.W.N. 363 (F.B.), where the question for consideration was whether a mortgage executed in favour of a minor who had advanced the whole of the mortgage money was enforceable by him or by any other person on his behalf. The learned Judges of the Madras High Court came to the conclusion that the decision of their Lordships of the Privy Council referred to did not affect the question, whether a transfer by way of mortgage in favour of the minor was enforceable. They pointed out that there was nothing to prevent a minor from acquiring full ownership of property or of a mortgage interest in immoveable property by way of gift or inheritance, and that although under their Lordships' decision a minor could not bind himself by contract to pay the price or advance the mortgage money, there was no reason why, when once the consideration for a sale had been paid by the minor or a loan advanced by him, a transfer or a mortgage executed in his favour in consideration of the price paid or the loan advanced should not take effect. They accordingly overruled the previous decision of the same Court in Navakoti Narayana Chetty v. Loyalinga Chetty 4 Ind. Cas. 383 : 33 M. 312 : 19 M.L.J. 762 : 7 M.L.T. 233, to the effect that a sale made in favour of a minor was void and not merely voidable at his option. It may be pointed out in passing that Benson, J., one of the Judges who decided Navakoti Narayana Chetty v. Loyalinga Chetty 4 Ind. Cas. 383 : 33 M. 312 : 19 M.L.J. 762 : 7 M.L.T. 233, was also a member of the Bench which decided the later case of Rungarazu Sathrurazu v. Maddura Basappa 18 Ind. Cas. 968 : 24 M.L.J. 363 : 13 M.L.T. 325 : (1913) M.W.N. 415, where it was held that a promissory note executed in favour of a minor who sued upon it was not void but only voidable, provided that the minor had not subjected himself to a detriment by accepting the note and so incurring liability upon it. In the course of his judgment in Raghava Chariar v. Srinivasa Raghava Chariar 36 Ind. Cas. 921 : 40 M. 308 : 31 M.L.J. 575 : 20 M.L.T. 407 : (1916) 2 M.W.N. 363 (F.B.) the learned Chief Justice Sir John Wallis points out: "The provision of law which renders minors incompetent to bind themselves by contract was enacted in their favour and for their protection, and it would be a strange consequence of this legislation if they are to take nothing under transfers in consideration of which they have parted with their money. This precise question cannot arise in England where a purchase by a minor of immoveable property is voidable by him on attaining majority but not void ab initio, as it is only the contracts specified in the Infants Belief Act which are void. However even in the case of a contract which was void under the Infants Relief Act, Lord Coleridge, C.J., and Bowen, L.J., held that a reasonable construction must be put upon the Statute and that when an infant had paid for something under a void contract and had used or consumed it, it would be contrary to natural justice that he should recover back the money which he had paid on the ground that the contract was void, Valentini v. Canali (1889) 24 Q.B.D. 166 : 59 L.J.Q.B. 74 : 61 L.T. 731 : 38 W.R. 331 : 54 J.P. 295. I do not think this decision is inconsistent with Nottingham Permanant Benefit Building Society v. Thurston (1903) A.C. 6 : 72 L.J. Ch. 134 : 87 L.T. 529 : 51 W.R. 273 : 67 J.P. 129 : 19 T.L.R. 54, which decided, as I understand it, that the mortgage given by the minor as security for a void contract entered into by him was also void, Applying the same reasoning to the present case it would be even more opposed to natural justice to allow the transferor to a minor by way of sale or mortgage to question the transfer for which full consideration has been paid to him." The present case is not one of an executory contract where the minor has bound himself by any contractual obligation. He has advanced the whole of the mortgage money and in return, therefore, the mortgage has been executed in his favour. He is subject to no further obligation and merely claims to exercise the rights incidental to the transfer to him by that mortgage. There is no contract by the minor which still remains to be performed as in the case of Mohori Bibee v. Dharmodas Ghose 30 C. 589 (P.C.) : 30 I.A. 114 : 7 C.W.N. 441 : 5 Bom. L.R. 421 : 8 Sar. P.C.J. 374 (ubi sup.), and the reasoning which is at the root of all the cases relating to the contractual obligations of minors appears to me to have no application to the present case.
9. It was held by the Allahabad High Court in the case of Munni Koer v. Madan Gopal 34 Ind. Cas. 792 : 33 A. 62 : 13 A.L.J. 1081. that there was nothing in law to prevent a minor from becoming a transferee of immoveable property and hence a minor in whose favour a valid deed of sale had been executed was competent to sue for possession of the property conveyed. It was contended on the authority of Mohori Bibee v. Dharmodas Ghose 30 C. 589 (P.C.) : 30 I.A. 114 : 7 C.W.N. 441 : 5 Bom. L.R. 421 : 8 Sar. P.C.J. 374 that the contract for the sale of the house was absolutely null and void, but the Court found that where the purchase money had been paid and the conveyance executed, the minor became entitled to possession of the property and could successfully sue for possession. It was pointed out in that judgment that different considerations would arise if after having agreed to sell the property, the defendant before receiving the price had refused to execute a conveyance and the minor plaintiff had been driven to a suit for specific performance. The case of Narain Das v. Dhanaia 35 Ind. Cas. 23 : 38 A. 154 : 14 A.L.J. 65, where a minor in whose favour a registered sale deed had been executed was permitted to sue to recover possession of the purchased property upon tender of the balance of the purchase money, is another instance where the Allahabad High Court held that a contract entered into in favour of a minor whereby he acquired an interest in immoveable property was not void. Again in Hari Mohan (Bhaggabhor) Mondal v. Mohini Mohan Banerjee 33 Ind. Cas. 991 : 22 C.W.N. 120 the High Court at Calcutta decided that where a mortgage had been executed in favour of minors who sued on the bond and themselves purchased the property in execution of the decree, the sale could not be set aside on the ground that the mortgage was void as being a contract with minors It was held that the case was not concluded by the decision of the Privy Council in Mohori Bibee v. Dharmodas Ghose 30 C. 589 (P.C.) : 30 I.A. 114 : 7 C.W.N. 441 : 5 Bom. L.R. 421 : 8 Sar. P.C.J. 374, inasmuch as there was no covenant which it was for the minors to perform. The cases of Mir Sarwarjan v. Fakhruddin Mahomed 13 Ind. Cas. 331 : 39 I.A. 1 : 39 C. 232 : 21 M.L.J. 1156 : 16 C.W.N. 74 : (1912) M.W.N. 22 : 9 A.L.J. 33 : 15 C.L.J. 69 : 14 Bom. L.R. 5 : 11 M.L.T. 8 (P.C.) and Pramila Bali Dass v. Jogeswher Mandal 46 Ind. Cas. 670 : 3 P.L.J. 518 : (1913) Pat. 241 : 5 P.L.W. 147 were also relied upon by the appellant. Those oases, however, are clearly distinguishable. The first was a suit for specific performance by a minor of a contract for the purchase and sale of immoveable property entered into by his guardian and the manager of his estate on his behalf as purchaser. Their Lordships held that it was not within the competence either of the manager of the minor's estate or of the guardian of the minor to bind him or his estate by an executory contract for the purchase of immoveable property, and as he was not bound there was no mutuality, and consequently the minor could not enforce specific performance after attaining his majority. That was clearly a case where the contract was one imposing obligations upon the minor which could not be enforced by the defendant, and consequently a lack of mutuality put it out of the minor's power to enforce the contract. In the case now under consideration no questions arise or can arise as to any obligation to be performed by the minor arising out of the contract. The second case was the case of a lease executed in favour of a minor imposing upon him a liability to pay rent and perform certain covenants. It was held that the lease. was, null and void and that a person who entered into possession of the land under a lease which was void was a mere trespasser and could not claim protection from ejectment under Section 41 of the Chota Nagpur Tenancy Act, 1908. Here, again, the lease in question imposed a continuing liability upon the lessee to pay the rent and perform the other covenants of the lease and on that account was not enforceable as against the minor. These oases do not apply to a completed contract where the minor's obligation has been wholly performed resulting in the transfer to him under the contract of an interest in property.
10. It is contended, however, that the principle laid down in Raghava Chariar v. Srinivasa Raghava Chariar 36 Ind. Cas. 921 : 40 M. 308 : 31 M.L.J. 575 : 20 M.L.T. 407 : (1916) 2 M.W.N. 363 (F.B.) (ubi sup.) only applies to transfers of an interest in immoveable property and that as the decree in the present case is a money decree only imposing a personal obligation on the defendant and not a mortgage decree affecting the property hypothecated, the principle governing that case has no application. It appears, however, that the mortgage bond in the present case was executed on the 7th April 1908 and the Chota Nagpur Tenancy Act which has no retrospective application was not passed until the 11th November 1908 and was not extended to Manbhum in which district the property in suit is situate until the following year, so that it would appear that the learned Munsif as well as the Subordinate Judge were wrong in holding that only a money decree and not a mortgage decree could be passed in the present suit. There was no appeal by the plaintiffs from this part of the Subordinate Judge's decision and so far as the relief claimed is concerned, they must be content to accept the lesser relief granted by the decree. This, however, does not prevent them from contending that as a matter of law they would have been entitled to a mortgage decree had they chosen to insist upon it in second appeal, and it seems difficult to see why their failure to insist upon a mortgage decree which would have directed the defendant to pay the decretal amount under penalty of the sale of the mortgaged property should deprive them of the right of insisting upon the lesser remedy only. Moreover the case of Rungarazu Sathrurazu v. Maddura Basappa 18 Ind. Cas. 968 : 24 M.L.J. 363 : 13 M.L.T. 325 : (1913) M.W.N. 415, which decided that a promissory note executed in favour of a minor and not involving any promise on his part or any contractual obligation by him can be enforced, appears to me to be based on a principle which would govern the present case. Further, even if it should be held that the instrument in question in this suit ought to be cancelled on the ground that it is void, it must be remembered that the defendant has had the benefit of the sum advanced by the plaintiffs under it and in such circumstances it would be within the competence of the Court under Section 41 of the Specific Relief Act in granting relief to the defendant to make him pay such compensation as justice may require. Their Lordships of the Judicial Committee in the case of Mohori Bibee v. Dharmodas Ghose 30 C. 589 (P.C.) : 30 I.A. 114 : 7 C.W.N. 441 : 5 Bom. L.R. 421 : 8 Sar. P.C.J. 374 (ubi sup.) appear to have considered that the said section would have been applicable to the case then under consideration, had justice required that they should exercise their discretion in favour of the appellant. If the contention of the appellant in the present case should be upheld, it would follow that the law relating to the contracts of minors which is meant for their protection would in numerous cases have an exactly opposite effect and result in manifest injustice. To take a simple instance, if a minor agreed to sell a horse and in pursuance of the agreement delivered it to the purchaser before payment of the price, the purchaser would be entitled to keep the horse and refuse to pay the purchase money on the ground that the contract was void and unenforceable; or again if a minor sent a money order to a shopkeeper in payment of certain selected goods to be forwarded, the shopkeeper could keep the money and refuse to deliver the goods. In the oases supposed the purchaser and the shopkeeper might be within their rights in refusing to complete the contract entered into with a minor, but justice demands that they should at least restore the horse in the one case and the money in the other. Here the appellant has had the benefit of the loan and even if the contract should be declared void, justice demands that he should make compensation to the minor which would include the principal and interest claimed. In my opinion the appeal should be dismissed with costs.
Jwala Prasad, J.
11. I agree.