Patna High Court
Rai Bahadur Radha Kishan Rai And Ors. vs Babu Nauratan Lal on 21 June, 1918
Equivalent citations: 46IND. CAS.627, AIR 1918 PATNA 548
JUDGMENT Dawson Miller, C.J.
1. In this case the plaintiff, who succeeded to the estate of his maternal grandfather on the death of his mother in the year 1902, seeks to set aside a mortgage bond executed on behalf of his mother in favour of the defendants and to get possession of part of the mortgaged property which was purchased by the defendants at an auction-sale in execution of a decree obtained on the bond. The plaintiff succeeded before the Subordinate Judge of Patna and the defendants have instituted this appeal. The plaintiff's grandfather Babu Rai Radha Kishan died on the 7th November 1879 leaving no male issue. His daughter Sheo Koer, his next legal heir, succeeded to her father's estate taking a life interest. She had then two sons living, Sheo Ratan Lal, a young man of 22, and the plaintiff Nau Ratan Lal, a child of 2 years of age. When Radha Kishan died he left considerable property said to be worth many lakhs of rupees, the net income from which was at that time about Rs. 30,000 per annum. It was also alleged that in addition to his immoveable property he left a considerable sum of money amounting to about Rs. 50,000 which passed into the hands of his heir, the plaintiff's mother. About four months after the death of her father, viz., on the 26th February 1880 Sheo Koer, having a few days earlier obtained a certificate of succession, executed a muktearnama or general power-of-attorney in favour of her elder son Sheo Ratan and an old servant of the family named Isri Prasad to act as her agents in her business affairs and to sign documents on her behalf. The exact nature of the powers conferred by this document will be considered later. In March 1882 Isri Prasad died leaving Sheo Ratan, who is alleged by the plaintiff to have been a young man of profligate habits and a spendthrift, the sole agent under the muktearnama. It was also alleged that for some time before his death Isri Prasad was ill and under the influence of Sheo Ratan. However this may be, it is certain that between the years 1880 and 1885 considerable sums of money were borrowed from the present defendants and others on the security of the property comprised in the family estate, although if the allegations of the plaintiff as to the resources available from the estate left by his grandfather be true, there seems to have been no pressing reason to justify such transactions. During this period loans were taken by Sheo Ratan purporting to act on behalf of his mother from the present defendant No. 1 and others amounting to something like Rs. 40,000. In addition other large sums of equal or greater amount were borrowed from other persons during the same period, and practically the whole estate was mortgaged to secure these loans which carried a high rate of interest. Between 1885 and 1890 there is no evidence that any further loans were contracted, but on the 1st August 1890 what appears to have been the sole remaining property of the estate upon which no charge had been created was mortgaged by Sheo Ratan in his mother's name to secure a loan of Rs. 5,000 advanced by Rai Radha Kishan, Rai Bahadur, defendant No. 1, in the name of a benamidar, one Kurjee Dicshit. It is in respect of this last transaction that the present suit is brought by the plaintiff as reversioner claiming a declaration of his title and possession of part of the mortgaged property. The properties hypothecated under the bond of the 1st August 1890 comprised a share in Mauzi Badalpura Faridpur, two bungalows in Badalpura and one bungalow at Muradpur. Sheo Ratan the plaintiff's elder brother died in 1894. No interest appears to have been paid either in Sheo Ratan's lifetime or after his death on the sum advanced and secured by this mortgage, and in the year 1900 the defendants instituted a suit to enforce the bond and in June of the following year obtained a decree against Sheo Koer for the sum of Rs. 23,897-10 6 principal and interest due on the bond. The properties were then sold at auction, the bungalows being purchased by the defendants themselves. Sheo Koer died about a year later on the 10th June 1902, leaving her son, the plaintiff Nauratan, a barren heritage. He was then a young man of 24 or 25 years of age and obtained employment in the Indian Police. From enquiries he made and from what he already knew he came to the conclusion that this and other previous loans had been contracted and the property mortgaged daring the lifetime of his mother and brother without legal necessity justifying such transactions and instituted suits against the defendant No. 1 and other money lenders who had taken mortgages by way of security to recover possession of those portions of the property which still remained in their hands. In some of these suits he was successful; in others a compromise was arrived at. In the present suit he claims possession of the Muradpur bungalow together with mesne profits and interest thereon for the three years preceding the institution of the suit. With regard to the two bungalows at Badalpura it appears that these were taken over from the defendant No. 1 in a somewhat dilapidated condition in the year 1903 by the East Indian Railway Co., under the provisions of the Land Acquisition Act for a sum of Rs. 924-9-7 which was paid to the defendant No. 1, and the plaintiff claims the value of these two bungalows which he places at Rs. 6,799-9-7 together with interest, alleging that they were allowed to get into a dilapidated condition by the defendant and were dismantled by him, the material having been removed before the sale to the East Indian Railway Co. The plaintiff's case is that by the muktearnama of the 26th February 1880 his brother Sheo Ratan was not authorised to incur debts or mortgage the estate on his mother's behalf, and farther the document, in question was not validly executed as it was not explained to his mother, nor did she understand it. He further says that the mortgage-bond of the 1st August 1890 was not executed with the knowledge and consent of Sheo Koer, nor was it ever read over and explained to her. He farther says that his mother did not in fact at that time receive the Rs. 5,000 or any portion of it; and that in any case there was not at, the time when this transaction took place any legal necessity or pressure upon the estate such as would justify Sheo Koer in hypothecating the family property and that the defendants made no enquiries as to the existence of the alleged necessity. He further contends that the decree obtained by the defendant No. 1 on the said bond was fraudulent and collusive and that process was never served upon Sheo Koer and judgment was allowed to go by default.
2. The defendants contended on the contrary that the muktearnama and the bond or rather a draft of it were both read over and explained to Sheo Koer and that she understood and consented to them, that the money was borrowed for the purpose of defending a law suit brought by one Badri Narain against Sheo Koer disputing her title to the estate and that it was urgently necessary to raise this money for that purpose; further that the money was only advanced after due and proper enquiries and after defendant No. 1 had by such enquiries formed a bona fide opinion that the loan was necessary and for the benefit of the estate. They further traversed the allegations of the plaintiff that the summons in the mortgage suit against Sheo Koer was not properly served, lastly they contended that the claim for the value of the two bungalows sold to the Railway Company was not a claim for possession of immovable property within Article 141 or Article 144 of the Limitation Act but was a claim for movable property and was governed by Article 120 of the Act and, therefore, barred, the suit not having been brought either within six years of Sheo Koer's death when the plaintiff's interest in the estate became vested, or within six years of the purchase by the Railway Company. Other issues were raised at the trial by the defendants but are not now material and were abandoned by them in this appeal.
3. The Subordinate Judge found (1) that the plaintiff's claim to recover the price of the two bungalows sold to the Railway Company was not barred by limitation as, in his opinion, the money recovered by the defendants as the price of that property must be taken as representing the property and did not cease to be immoveable property; (2) that the muktearnama of the 26th February 1880 was properly executed by Sheo Koer but that it gave no power to Sheo Ratan to raise loans on her behalf without her knowledge and consent but merely to sign documents executed by her and that she could not delegate to any other person power to take loans substituting his discretion for hers; (3) that the mortgage bond of the 1st August 1890 was not executed with the knowledge and consent of Sheo Koer; (4) that there was no legal necessity to warrant the transaction; (5) that there was no bona fide enquiry by the defendants as to the legal necessity; and (6) that the mortgage decree was fraudulently obtained by suppressing service of process and was not binding upon the reversioner.
4. In accordance with these findings he entered a decree for the plaintiff granting him possession of the Muradpur bungalow together with mesne profits to be ascertained and for the price paid by the Railway Company to the defendants for the two Badalpura bungalows, together with proportionate costs.
5. The first point taken by the appellants relates to the claim for the price of the two Badalpura bungalows, which they contend is clearly a claim for movable and not immoveable property within the meaning of Article 141 or Article 144 of the Schedule to the Limitation Act. So far as this part of the appeal is concerned I think the appellants must succeed. The plaintiff contends that the purchase-price, which now represents what formerly was immoveable property, should be treated as a benefit arising out of immoveable property and claims that it is covered by the words "or any interest therein" in Article 144, and by the definition in Section 3(25) of the General Clauses Act (X of 1897), which includes benefits to arise out of land. In support of this contention he relies upon the case of Barhamdeo Pershad v. Tara Chand 33 C. 92 : 9 C.W.X. 989, in which it was held that where property was sold under a decree obtained on a first mortgage, the right of a puisne encumbrancer to follow the surplus proceeds after the decree-holder's claim had been satisfied was an equitable right and that the right of the puisne encumbrancer is not extinguished or discharged by the sale but is transferred to the surplus sale proceeds. It should be pointed out, however, that that was a suit to enforce payment of money charged upon immoveable property, for which Article 132 of the Second Schedule of the Act expressly provides and in my opinion this case affords no authority for the plaintiff's proposition that a claim for the proceeds of what was once immoveable property but has been substituted by movable property can be regarded as a claim for immoveable property or any interest therein or any benefit arising out of land. If the plaintiff wished to protect himself from the operation of the Limitation Act, I think in a claim of this sort, where the property has lost the impress of its original nature and been converted into money, he was bound to institute a suit within 6 years of the time when his cause of action accrued and so far as this part of the claim is concerned, I think the judgment of the Subordinate Judge must be set aside. [See Ganpatrao Moroji v. Vamanrao Shamrao 10 Bom. L.R. 210.]
6. It is convenient here to consider the question which arises in regard to the execution and effect of the muktearnama or power-of-attorney executed by Sheo Koer on the 26th February 1880. It was found by the learned Judge that the power-of-attorney was read over and explained to Sheo Koer and that she understood its legal consequences. The only witness on this point was Darbari Lal, and his evidence certainly falls far short of proving these facts. After saying that the draft of this document was read over and explained to Sheo Koer, he admitted that in his evidence in a previous suit brought by the plaintiff he stated that be could not recollect whether it was read over to her or not, and added that that was true and that he could not now swear that the draft was actually read over and explained to the lady. If this were the only evidence on the point I think the proof would fail. Nor does the evidence of this witness, who was at one time a tout, appear to me on reading it through to be worthy of much credit. It does appear however from the evidence of Sheo Koer herself who was examined in some other proceedings in 1894 and whose evidence was put in and referred to by both parties in this suit that she executed the power-of-attorney and understood the object of it. I think, therefore, that the finding on this question is supported by the admission of Sheo Koer herself and may safely be accepted. The document recites that many cases are pending by and against Sheo Koer and various sums of money due on bonds and decrees and otherwise have to be collected as well as rents from her villages and that being a pardanashin lady she is unable to look after these affairs. She, therefore, appoints Sheo Ratan and Isri Prasad as her agents to appoint Vakils, Counsel and Muktears on her behalf and to collect her rents and other moneys due to her and grant receipts in her name and to deposit money in Court and pay Government revenue on her behalf as required. Then follows a special power given to Sheo Ratan alone which is relied on by the appellants. It is in these words:
Babu Sheo Ratan Lal, my son, one of the mukhtears, shall put down my signature in his pen on whatever deeds of sale and conditional sale and ekrarnamah, shorakatnamah, hiba, thicca, kabuliyat, zarpeshgi ijara, mukarrari, mortgage and simple bonds and patta and other documents of all sorts which might be written and executed on my behalf, and shall get them attested by witnesses on his admission and shall on his admission get them registered.
7. It seems clear that the power here granted to Sheo Ratan does not enable him to substitute his, own discretion for that of Sheo Koer or to alienate or create any charge on her property without first, obtaining her sanction to transactions of such a nature. The powder granted is, in my opinion, merely that of signing her name on her behalf to such transactions as she might authorise and direct. The hand shall be the hand of Sheo Ratan but the voice must be the voice of Sheo Koer. Even if it be taken that Sheo Ratan was held out as his mother's agent for the purpose of executing such documents in her name, that would not, in my opinion, relieve the defendant No. 1 from the obligation of proving that there was legal necessity for the loan as understood in this connection or that he had made due enquiries from which he formed a bona fide opinion that such was the case. Moreover it is part of the defendants' case that the transactions were carried out with the full knowledge and consent of Sheo Koer. I shall, therefore, proceed to consider this question. For this purpose it is necessary to state briefly the circumstances leading up to the present transaction. Shortly after the plaintiff's grandfather died in 1879, there can be no doubt that the estate was producing a large income of at least Rs. 30,000 per annum and a considerable cash balance had been accumulated, but notwithstanding this it appears that 5 years, later practically the whole estate had been mortgaged to secure the earlier loans already referred to. The ostensible reason assigned by the defendants and others in previous suits as the necessity compelling the loans was that the estate was involved in litigation and money was required for that purpose. It is not necessary to review at length the circumstances under which these earlier loans were contracted. The facts relating to them are fully set out in the judgment of Mookerjee, J., in Roy Radha Kissen v. Nauratan Lall 6 C.L.J. 400 at pp. 517, 519, in which the present plaintiff successfully sued the present defendant in a suit brought to recover possession of certain of the properties mortgaged to the defendant to secure some of the earlier loans. The defence in that case was practically the same as in this. I think I ought, however, to state shortly the main facts leading up to the present transaction, as it by no means follows that there was no necessity in 1900 to do that which it has been decided there was no necessity to do some 5 or 6 years earlier. When Radha Kishan died and Sheo Koer obtained the certificate above referred to, her attempt to obtain registration was opposed by one Gobind Prasad, who contended that his son Badri Narain was the adopted son of Radha Kishan the plaintiff's grandfather. He also endeavoured and to some extent succeeded in stopping collection of rents by Sheo Koer. On the 30th April 1881 Sheo Koer finally got her name registered, and after that there appears to have been little or no trouble in collecting her rents. It is admitted by one or more of the defendants' witnesses that the difficulty in collecting rents did not last for more than 18 months or 2 years at the outset. There were also some criminal cases during this period connected with the collection of rents. In August 1881 a regular suit was instituted by Badri Narain claiming the estate as the adopted son of Radha Kishan. Much evidence was called and the suit was dismissed in October 1882. In March 1883 an appeal was preferred to the High Court. In June 1885 See Budri Narain v. Sheo Koer, 11 C. 746 : 5 Ind. Deo. (N.S.) 1286--Ed. it was dismissed for the default of the appellant in providing security for costs. Subsequently it was remanded by the Privy Council See Badri Narain v. Sheo Koer, 17 C. 512 : 17 I. 5 Sar. P.C.J. 493 : 8 IND. Dec. (N. s.) 881,--Ed., to the High Court to be heard on the merits. In January 1901 the appeal was heard by the High Court at Calcutta and dismissed on the merits. I have already said that between 1885 and 1900 no money appears to have been borrowed, but in August 1900 when the suit was about to come again before the High Court the loan which forms the subject of the present suit was taken from the defendants and the properties in question were mortgaged to secure that loan. It is not disputed that the onus of proving that there was legal necessity for this loan and that the bond was executed with the knowledge and consent of Sheo Koer is on the defendants. Apart from the recital in the bond itself and a suggestion which was not supported by the evidence that the bulk of Sheo Koer's properties had passed out of her hands into those of the mortgagees, there is little or no evidence to show that she was in straitened circumstances in August 1900. Her properties, it is true, were mortgaged but at that time she was still in possession of the greater part. of the villages and collecting the rents, and this is admitted by the defendant himself.. The account books kept on behalf of Sheo Koer by her Dewan have been disclosed. They were used in the previous suits and relied upon and although some of them have become in course of time torn and partly destroyed and others worm-eaten, some are still legible and extracts and certified copies of others taken in the previous suits have been preserved and from these it appears that during the years 1886 to 1890 there remained a considerable balance at the end of each year after paying all expenses. The following sums show the excess of income over expenditure for these five years respectively ending on August 8th 1890.
Rs.
1886 ... ... ... 2,138 1887 ... ... ... 3,513 1888 ... ... ... 4,959 1889 ... ... ... 5,258 1890 ... ... ... 5,389
8. During the year 1890 the collections made by Sheo Koer were Rs. 18,199 and a further sum of Rs. 4,929 was collected and handed, in to this account by Sheo Ratan himself. It is perhaps worthy of remark that of this latter sum Rs. 4,822 were for the first 6 months and Rs. 97 only for the last 6 months of that year. Prom these accounts it appears, that money was being saved each year and there was no pressure upon the estate. There is no reason for supposing, therefore, that the estate was in such an embarrassed financial condition that it was necessary to mortgage any part of the property in order to raise a loan of Rs. 5,000 at a somewhat high rate of interest. There was at that time a credit balance in hand in the year's accounts of well over Rs. 5,000 and there is nothing to show that the accumulations of previous years were not still available. It is well established that the onus of proving the necessity for the loan in such cases is on the lender, and to discharge this burden he must show not merely that the object for which the money was required was a legitimate one but also that the funds available to the limited owner were insufficient to meet the necessary requirements. [Sen Dharam Chand Lal v. Bhawani Misrain 24 I.A. 183 25 C. 189 : 1 C.W.N. 697 : 7 Sar. P.C.J. 249 : 13 Ind. Dec. (N.S.) 128 and Bhimaraddi v. Bhaskar 6 Bom. L.R. 628.]
9. In my opinion the defendants have failed to make out any necessity for the loan. The question then arises, how it was that Sheo Koer authorised her son Sheo Ratan to borrow this money if there was no apparent necessity for doing so. On reading the evidence given on behalf of the defendants as well as that given by Sheo Koer herself in the proceedings above referred to, the conclusion I have arrived at is that the Subordinate Judge was amply justified in finding that the bond was not executed with Sheo Koer's knowledge and consent, and I think it is more than likely that she was kept entirely in the dark about this transaction, as was found to be the case in the earlier transactions which were the subject of the suit in the Calcutta High Court in 1907 [Roy Radha Kissan v. Nauraten Lall 6 C.L.J. 400 at pp. 517, 519], Sheo Koer deposed that she knew nothing about this or any of the previous loans, that she had no necessity to borrow money and that she never authorised Sheo Ratan to do so. There is evidence to show that Sheo Ratan was addicted to drink and other vicious habits, and this is corroborated to some extent by Darbari Lal one of the defendants' witnesses, and, there is nothing improbable in the supposition that he kept his mother ignorant of the manner in which he was raising money by mortgaging the estate. There is also evidence to be gathered from Exhibit E (page 31 of the paper-book), upon which the defendants rely for another purpose, that Rs. 3,500 only and not Rs. 5,000 of the loan in question were advanced to Sheo Ratan and as Mookerjee, J. observed in the earlier case, where something of the same sort appears to have taken place, this is not at all an unlikely thing to happen if Sheo Ratan was a profligate and a spendthrift, and I may add that if there was a bona fide need of the money for purposes of litigation to defend the estate it is highly improbable that a bond for Rs. 5,000 would have been given and Rs. 1,500 less accepted. The evidence that the bond was executed with Sheo Koer's knowledge and consent depends on two witnesses for the defendants, Debi Prasad Singh and Munshi Lal. The former who was the defendants' Gomashta says he together with one Mewa Lal and Matuk Prasad, the scribe who prepared the bond, both of whom have since died, went to Sheo Koer's house with the draft. They enquired if Sheo Koer was in and were told by Bhartan Lal a servant of Sheo Koer and Munshi Lal his' son that the Musammat was present inside a room behind the door. Matuk read the draft. Sheo Ratan was present. The Musammat then told Sheo Ratan to have it fared and executed. Next morning the bond was written out according to the draft at the defendants' garden house in Patna by Matuk Lal. Sheo Ratan then signed it and the witnesses attested it. This witness did not know Sheo Koer and had never seen her, nor did she ever appear before him. He then says that 8 or 10 days later he and others took the money (Rs. 5,000) to Sheo Koer's house and Sheo Ratan, Bhartan and Munshi Lal took the money inside to the Musammat after counting it. In cross-examination he says the money was counted in the Mokan, i, e., the zenana and not in the dewan khanah. Munshi Lal says he was not a servant of Sheo Koer but his father was and he used to go to the house although he was not employed there. He says he was present when the draft was read over to Sheo Koer and that it was explained to her. On the occasion in question he had no business, in the house and was not asked to go; he merely happened to be present. He improves on Debi Prasad's story by saying that the fair copy of the bond was taken back from Patna to Sheo Koer's house at Badalpura and read over to her next morning and that Sheo Ratan signed it there and the witnesses did not sign it on that day. This story entirely differs from that of Debi Prasad, who says the bond was executed by Sheo Ratan at Patna and attested there on the same occasion. It also contradicts the evidence of defendants' witness Bansi Lal, who says the bond was executed by Sheo Ratan at Patna. There are many other discrepancies in the evidence of the defendants' witnesses as to what took place when the money is alleged to have been handed over to Sheo Koer and, in my opinion, the Subordinate Judge was amply justified in rejecting the whole of this story. The learned Vakil for the appellants admitted that he could not ask the Court to accept Munshi Lal's story and if the evidence is expunged there is nothing whatever to show that the effect of the bond was explained, to Musammat Sheo Koer, much less that she understood it. It is contended, however, that there is documentary evidence (Exhibit B) which strongly corroborates the fact that Sheo Koer was aware of the bond and its contents. This is a deed dated the 10th May 1892, which purports to sell the mortgaged property to Babu Ram Anugraha Narain Singh, a relation of Sheo Koer and a gentleman of standing and repute in Patna. He died sometime ago and could not be called as a witness. This deed is executed by Sheo Ratan on behalf of his mother and recites that the property had been mortgaged to the defendants to secure the loan of Rs. 5,000 borrowed for defraying legal expenses for the benefit of the family and the benefit of the estate. It provides that the mortgage shall be paid off out of the sale proceeds. It is suggested that a gentleman of Ram Anugraha's reputation would never have entered into this transaction unless he had been satisfied that his relation Sheo Koer, an illiterate pardanashin lady, was aware of the terms of the deed. I am quite prepared to admit the apparent force of such an argument, but there are two circumstances which seem to me to destroy any inference that may be drawn from it in favour of the defendants' contention. First, the deed although registered never in fact became operative and the sale was not completed. Secondly, it recites that Rs. 3,500 only were realised from the defendants and that the balance of Rs. 1,500 had never been realised, but that never the less as the band in the hands of the mahajans was for Rs. 5,000, which with interest then amounted to Rs. 6,157-2-8, this sum was rightly payable and as an action was threatened it was expedient to pay this amount in the, interests of the estate. It is not explained in the evidence why the sale fell through, but it is suggested that there was a dispute as to the amount properly recoverable by the mortgagee and the parties could not come to terms and, therefore, the sale was allowed to lapse. As the sale-deed provided for payment to the mortgagee of the full amount on grounds of expediency, it seems clear that as between seller and purchaser this matter was settled and the suggestion that the matter was reopened after the parties had agreed between themselves and executed the deed is not one which impresses me very forcibly. The real explanation may equally well be that Babu Ram Anugraha Narain on making enquiries ascertained that Sheo Koer's part in the transaction was not so dearly established as he would wish and that at the last moment he withdrew as any honest man in the circumstances would have done. I can, therefore, place no reliance on this deed as corroborative evidence of the defendants' story. There is hardly any evidence to show that this deed of sale was executed with the knowledge of Sheo Koer. The fact that it was read over to her is spoken to by one Jhumak Bhagat, a cultivator and a tenant of Dawarka Babu who was on bad terms with the plaintiff. He says Sheo Koer requested him to witness the deed, but he did not see that lady nor did anyone tell him that the person inside the house was Sheo Koer, and he attested it on the maidan outside. The Subordinate Judge rejected his evidence and Sheo Koer denied all knowledge, of the transaction, and I see no reason for rejecting the conclusions of fact arrived at by the learned Judge. It is next said that the mortgage decree obtained by the defendants against Sheo Koer is res judicata and conclusive of the fact that the bond was duly executed by Sheo Koer. However this may be, that suit did not determine the important question of legal necessity and in the view I take of the facts it is unnecessary to consider this point further.
10. It remains to consider whether the defendant, although he has failed to discharge the burden of proving any legal necessity for the loan, has nevertheless established that he made proper enquiries and was honestly satisfied that such necessity existed. This depends upon the evidence of the defendant himself. The Subordinate Judge was not satisfied on that evidence that the defendant made any bona fide enquiries. In considering this question it must be remembered that in the previous suit between the same parties it was found that no proper enquiries had been made by the defendant as to the necessity for the loans advanced at an earlier date and one cannot, therefore, infer from the defendants' previous conduct that enquiries in this connection were part of his habitual practice. There is also another matter which to my mind is of some importance in this connection. It is sworn by the plaintiff that in or about 1894 he and his mother were turned out of the Badalpura house where they lived by the defendant, who attached and sold it to satisfy the balance due under a mortgage decree on another property and that in 1900 and 1901 his mother was living with him at Sassaram in the Shahabad District. This is corroborated to some extent by Sheo Koer's evidence, from which it appears that in December 1894 when her evidence was given she was then living in a hired house at Badalpura and not in her own house. The summons in the mortgage suit on the present bond was served at Sheo Koer's Badalpura house in 1900. The peon who served it was dead. The witness Nathuni Singh a peada of defendant speaks to the service. According to his evidence he went, with the Court peon to identify the house. He had never been there before but knew where it was. He says they remained outside the gate and the amlas of Sheo Koer took the summons and said Sheo Koer would not grant a receipt and they could serve it as they pleased. The summons was then attached to the door. He did not remember whether the summons was served before or after the house was sold in execution of the mortgage decree. If Sheo Koer had ceased to live there and had been turned out some years previously; this service was clearly irregular and the Subordinate Judge found that the decree in that suit was obtained by suppression of summons and fraudulently and, therefore, was not binding on the estate. Although there is no direct evidence to connect the defendant with a deliberate attempt to effect service in this manner and findings of fraud ought not to be lightly arrived at, it is remarkable that the defendant, who must have known when the Badalpura house was sold in execution of his own decree, made no attempt to rebut the plaintiff's evidence, that Sheo Koer ceased to live in the Badalpura house in or about the year 1894 and that in 1800 when the summons was served she was living with the plaintiff at Sassaram many miles away. If the defendant had been deliberately trying to obtain a decree unknown to Sheo Kuer, service of process in this manner is just the sort of action on his part that might have been expected and it is quite consistent with the case of the plaintiff that from first to last Sheo Koer was kept in ignorance of the mortgage transaction. Much may be said in support of the inference of fraud which the learned Subordinate Judge drew from these circumstances. I am not prepared to find, however, in the absence of more direct evidence connecting him with the service of summons, that the defendant fraudulently attempted to obtain a decree without proper service, but I cannot help feeling that before the decree was obtained this matter must have been brought to his notice but he was content to let things stand as they were and take the risk of any question being raised in the future. I have drawn attention to this matter, because in my view the conduct of the defendant throughout this case has a bearing upon the matter now under consideration. I have carefully considered the evidence given by the defendant concerning the enquiries he says he made as to the necessity for the loan. He says in his evidence in chief: "I enquired from Munshi Shyam Narain, Babu Gajadhar Prasad and Khoda Bux, Khan Bahadur, and they said that the money(sic) urgently necessary for the expenses of the High Court case and that the previous loans advanced by me would not be realised if this Rs. 5,000 was not advanced" It is particularly unfortunate that of the only persons from whom the enquiries are alleged to have been made two were dead and the third Gajadhar Prasad was suffering from a nervous breakdown and unable to give evidence at the trial. This gentleman was a Vakil who acted on behalf of Sheo Koer. Shyam Narain was a Pleader who had acted both for and against Sheo Koer in different suits and was engaged on her behalf at that time. Khoda Bux, Khan Bahadur, was also a Pleader employed by the defendant himself. In cross-examination the defendant says: "Sheo Ratan was about 25 or 26 years old when he used to come to us. I did not make any enquiries about his mode of life or about his character. I did not personally enquire from Sheo Koer if she required the Rs. 5,000 for the expenses of the suit, I made enquiries through my servants. I did not personally enquire from Sheo Koer whether she had any money by her or not." It is not suggested that the servants through whom the defendant made enquiries were dead or otherwise incapacitated and although several servants of the defendant have been examined, none of them has been asked about this matter. The evidence, therefore, so far as it goes, rests upon the uncorroborated testimony of the defendant, Now having regard to the fact that the defendant had failed in the previous suit to establish that he had made any proper enquiry as to the necessity for the loan, it must have been present to his mind that this was an important issue upon which the burden of proof rested with him. Nevertheless the only evidence he gives is of a vague and amorphous character entirely uncorroborated and he does not even say that he was satisfied that the necessity existed. Indeed it is difficult to see how he could honestly believe that Sheo Koer was in need of Rs. 5,000, when no enquiries were made from that lady herself and he was aware as he admits that she was still in receipt of the rents of her property. No doubt in one sense money is always urgently necessary to conduct litigation and it did not require Vakils and Pleaders to inform him of this, but the question he had to consider was whether Sheo Koer's resources were so depleted that she could not herself provide the money. That the defendant honestly believed that Sheo Koer was in need of the money has not, in my opinion, been proved. The defendant does not say so, and I am not inclined to draw from his evidence any such inference in his favour when I find that although he had been in the habit of lending large sums of money to Sheo Ratan, a young man of proved extravagant habits, he nevertheless says he made no enquiries about his mode of life or about his character. It is part of a money lender's business to find out all about the character and habits of life of his clients and it is almost incredible that living as he was within a few miles of Sheo Ratan, be should not only have been ignorant of his habits but should also have made no attempt to inform himself on the subject. Taking all the circumstances into consideration, I have come to the conclusion that the learned Subordinate Judge was right in finding that no bona fide enquiries were made and I am certainly not satisfied that the defendant honestly believed that Sheo Koer was in need of the money at the time when the loan was advanced. I find, therefore, that the defendant has failed to discharge the burden of proof in this as in other respects.
11. In the result 1 think this appeal should be allowed in so far as it seeks to set aside that part of the decree of the lower Court which awards to the plaintiff the price of the two bungalows received by the defendants from the East Indian Railway Company and in other respects the appeal should be dismissed.
12. As the appellants have succeeded on one issue but failed on the others, I think each party should bear his own costs of this appeal.
Ali Imam, J.
13. This is an appeal from a judgment of the 2nd Subordinate Judge of Patna partly decreeing the plaintiff's suit. As reversionary heir of one Babu Radha Kishen of Badalpura who died on the 7th of November 1879, the plaintiff seeks a declaration of title to and delivery of possession of the properties in suit. These are a bungalow situated in a quarter of this town called Moradpur and certain sums of money detailed in paragraph 35 of the plaint. On the death of Radha Kishen, Musammat Sheo Koer, the mother of the plaintiff, succeed to the estate as the daughter and heir of the deceased. The plaintiff is the younger son of Sheo Koer, who died on the 10th of June 1902. Sheo Ratan Lal, her elder son, pre-deceased her in 1893. Radha Kishen left properties yielding a large income, but on his death the family was involved in very heavy litigation which occasioned the execution of a power-of-attorney by Sheo Koer in favour of the old Dewan of the family Isri Prasad and her elder son Sheo Ratan. This was done on the 26th of February 1880. It is not necessary to allude to a, large number of mortgages that were executed under the authority of this power-of-attorney by Sheo Ratan. But among these was a mortgage bond for Rs. 5,000 (Exhibit B), dated the 1st of August 1890 executed in favour of one Quir Dechit who was, it is admitted, only a benami for defendant No. 1, Rai Bahadur Rai Radha Kishen. Among the properties mortgaged under this bond were three bungalows, two of them situated in Mouza Badalpura and the third at Moradpur. The defendant Rai Radha Kishen Bahadur instituted a suit to enforce this mortgage and obtained a decree on the 17th of June 1901 against Musammat Sheo Koer, and in execution of the said decree purchased the said bungalows on the 18th of March 1901 for Rs. 4,000. A part of the two bungalows at Badalpura was acquired under the Land Acquisition Act by the East Indian Railway Company for Rs. 924-9-6, which was withdrawn by the defendants from the Government Treasury in 1908. The plaintiff, as reversioner of his maternal grandfather, lays claim to the properties in suit by challenging the entire transaction from the execution of the mortgage bond, Exhibit F, to the delivery of possession of the bungalows to the defendants in execution of their decree on the basis of the aforesaid bond. The principal grounds on which he rests his contention are as follows:
(1) That the power-of-attorney, Exhibit C, was executed by Musammat Sheo Koer, a pardanashin and illiterate lady, without understanding what the document was and without legal advice.
(2) That she did not give any authority to Sheo Ratan to contract debts and execute mortgage bonds. Nor could such authority be legally delegated.
(3) That the bond itself was executed without the knowledge and consent of Musammat Sheo Koer and without full consideration, (4) That the bond was executed without any legal necessity, (5) That the summons and notices in the suit brought on the basis of the bond were not served on Musammat Sheo Koer, and (6) That the decrees and sales obtained under the bond were not binding against the estate of plaintiff's, maternal grandfather, Radha Kishen.
14. The defendants contest the suit by a denial of these allegations and the plea of limitation.
15. I will deal with the question of limitation first. The learned Subordinate Judge relies on Article 141 of the Limitation Act and as the suit has been instituted within 12 years of the death of Musammat Sheo Koer, he holds that the plaintiff's claim is not barred by limitation.
16. Article 141 provides 12 years as the period of limitation for a suit by a Hindu entitled to the possession of immoveable property on the death of a Hindu female, the period to run from her death. The present suit is of the same class as is provided for under Article 140 of the Act. Under both these Articles the suit is to be for possession of immoveable property. What is immoveable property is not defined by the Act itself. It has, however, been defined in the General Clauses Act X of 1897, Section 3, Sub-section 25, as a term that includes lands, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth. So far as the bungalow at Moradpur goes, there can be no question that the suit is for possession of immoveable property and in so far as this property is concerned, the learned Subordinate Judge was right in applying Article 141 of the Limitation Act.
17. The learned Vakil on behalf of the appellants, however, contends that the rest of the properties in suit being money which is movable property, the Article in question is inapplicable. He relies on Article 120 of the Act, which provides for six years limitation in all cases for which no period of limitation is provided for in the First Schedule to the Act. The plaintiff claims the sum of Rs. 9,248-10 as the price of the two bungalows at Badalpura, of which the materials are alleged to have been removed and a portion of which was acquired under the Land Acquisition Act. The point for decision is whether this sum of money can be regarded as immoveable property.
18. Considerable argument has been advanced by both sides on the meaning of the words "Benefits to arise out of land" in Section 3, Sub-section 25, of the General Clauses Act. The learned Vakil on behalf of the appellants argues that the sums mentioned above are not covered by these words. The words "to arise" in Clause 25 clearly show that future benefits are contemplated.
19. It has been held in a number of cases that rents and profits that have already accrued due are not immoveable property [vide, Damodar Das v. Girdhari Lal 27 A. 564; A.W.N. (1905) 100 : 2 A.L.J. 692, Rathna Mudaliar v. Tiruvenkata Chariar 22 M. 351 : 8 Ind. Dec. (N.S.) 250, Raoji v. Bala 15 B. 135 : 8 Ind. Dec. (N.S.) 91]. Certain classes of rights have been held to be immoveable property, for instance a right of redemption [Kanti Ram v. Kutubuddin Mahomed 22 C. 33 : 11 Ind. Dec. (N.S.) 24], a right of ferry [ Ram Gopal Bysack v. Nurumuddin 20 C. 446 : 10 Ind. Dec. (N. s.) 302], a right of easement [Mohunt Deo Surun Poory v. Moonshee Mahomed Ismail 24 W.R. 300], a right of possession and management of endowed property and land [Narayan Jagannath Dikshit v. Vasudeo Vishnu Dikshit 15 B. 247 : 8 Ind. Dec. (N.S.) 167.], a right to the superstructure of a house exclusive of the land beneath [Narayan Pillay v. Ramasawmy Thavutharan 8 M.H.C.R. 100, and a decree for sale of mortgaged land [Gous Mahomed v. Khawas Ali Khan 23 C. 450 : 12 Ind. Dec. (N.S.) 300, Ahmad Khan v. Abdul Rahman Khan 26 A. 603; A.W.N. (1904) 148]. A hat has been held to be benefit arising from land [Golam, Mohiuddin Hossein v. Parbati 1 Ind. Cas. 520 : 36 C. 665 : 13 C.W.N. 596]. So also a right to collect market dues on a piece of land [Sikandar v. Bahadur 27 A. 462; A.W.N. (1905) 48 : 2 A.L.J. 208] a molikana allowance [Mahomed Karamatoollah v. Abdool Majeed 1 N.W.P.H.C.R. 288], a right to recover the assessment levied on any land [Anandrao v. Joti 24 B. 615 : 2 Bom. L.R.427 : 12 Ind. Dec. (N.S.) 940], the life-interest of a widow in the income arising from her husband's landed estate [Beema Shunkur v. Jamanjee Shaporjee 5 W.R.P.C. 121 : 2 M.I.A. 23 : 1 Suth. P.C.J. 84 : 1 Sar. P.C.J. 149 : 18 E.R. 211], an annuity charged on the revenue granted by the sovereign [Collector of Thana v. Hari Sitaram 6 B. 546 : 6 Ind. Jur. 648 : 3 Ind. Dec. (N.S.) 819 (F.B.)], and various other rights, but there seems to be no authority in support of the view that rent already fallen due or the proceeds of the sale of a house or land are immoveable properties. I am, therefore, unable to agree with the learned Subordinate Judge in the, view that the sum of money claimed in Clause (iii) of paragraph 35 of the plaint is immoveable property. In the circumstances I have no hesitation in holding that Article 141 of the Limitation Act is inapplicable to the suit so far as this claim is concerned.
20. It was also contended on behalf of the respondent that Article 144 of the Act providing 12 years' limitation was applicable.
21. I have already held that this sum of money, representing the price of the two bungalows at Badalpura, is not in my view immoveable property. Article 144, which deals with the possession of immoveable property or any interest therein not otherwise specially provided for in the Schedule, has, therefore, no application. There being no special provision in the First Schedule to the Limitation Act applicable to this part of the claim. Article 120 of that Schedule, which provides only six years' limitation from the time the right to sue accrues, must necessarily apply. It appears from paragraph 25 of the plaint that the defendants withdrew from the Government Treasury the price paid under the Land Acquisition Act in 1903, And even prior to that they are alleged to have removed most of the materials of the two bungalows situated in Mauza Badalpura. I am, therefore, of opinion that the claim in respect of the money mentioned in Clause (iii), paragraph 35, of the plaint having been preferred long after the statutory period of limitation is barred. As regards the Moradpur bungalow the claim is clearly covered by Article 141 of the First Schedule to the Act and the suit in respect of the same is within time.
22. I have now to consider whether the plaintiff can succeed with regard to such part of his claim as is not barred by limitation. This leads to the consideration of the various issues raised in the case.
23. As regards the power-of attorney dated the 25th of February 1880 (Exhibit C), on a consideration of the evidence and the circumstances in which the family of Radha Kishen found itself on his death, the execution of this document by Musammat Sheo Kuer appears to have been a matter of urgent necessity. On her father's death a pretender claiming to be the adopted son of Radha Kishen was set up and the family found itself plunged in litigation. In the circumstances it was not only natural but necessary for a pardanashin lady to grant a general power-of-attorney for carrying on work on her behalf connected with her affairs pending in various Courts. Then again the power itself was granted to an old servant of the family Isri Prasad and to her son Sheo Ratan. Of the two Sheo Ratan alone was vested with the larger power of patting down her signature in his pen on deeds written and executed on her behalf. He was also authorised to get the deeds attested by witnesses and also have them registered on his admission.
24. I agree with the Subordinate Judge that this document was executed by Musammat Sheo Koer with knowldge and consent and that she fully understood its legal effect.
25. The next question in connection with this power-of-attorney is one of construction with reference to that part of the document which relates to the special powers conferred on Sheo Ratan. The correct view with regard to this passage seems to be that Sheo Ratan was not authorised to execute any mortgage or other deeds without the knowledge and consent of his mother. The power to execute a document in the sense of an independent action on his part was not conferred upon him. The execution in its essence was to come from Sheo Koer, but as she was illiterate and pardanashin she authorised him to sign the document by putting down her signature in his pen. The matter of the admission, whether with reference to attestation by witnesses or registration, was evidently subject to the condition precedent that the execution proceeded from the lady herself. It would, therefore, seem to be quite clear that it was not competent for Sheo Ratan to execute a mortgage deed in the name of his mother without having previously obtained her consent to what he was doing. I am, therefore, of opinion that unless Exhibit F, the mortgage deed dated the 1st of August 1890, is shown to have been executed with the consent of Musammat Sheo Koer, the execution was invalid and the document was in no way binding on Musammat Sheo Koer and much less the estate of Radha Kishen that she represented as his daughter and limited proprietor.
26. It is not denied in this case that Exhibit F purports to be a document executed by Musammat Sheo Koer and bears her signature in the pen of her son Sheo Ratan Lal as her mukhtaram. The question then is whether this document was executed with her knowledge and consent. Munshi Lal is the only witness who swears that the bond, Exhibit F, was executed at Badalpura in Musammat Sheo Koer's house and that Sheo Ratan signed it under her instruction. This is nobody's case. The defendants admit that Exhibit F was signed by Sheo Ratan and the attesting witnesses in the garden house of defendant No. 1 at Patna. Munshi Lal is an unreliable witness in the extreme and the learned Vakil on behalf of the appellants was right in asking us to discard his evidence altogether. It would seem, therefore, that there is no evidence that the bond itself was ever read out and explained to the lady, but there is evidence to the effect that the draft from which Exhibit F was fair-copied was taken to Badalpura from Patna and read out to Musammat Sheo Koer, The only evidence on this point is of Debi Prasad Singh, an old servant of defendant No. 1. He says that he, with two other servants of the defendant No. 1, who are dead, proceeded to Badalpura with the draft and on arrival having satisfied themselves that Musammat Sheo Koer was inside the zenana, the draft was read out to her in presence of Sheo Ratan, on which she told him to have it faired and executed. The witness says that Munshi Lal was also present there
27. I have already said why Munshi Lal's evidence must be rejected. The result is that there is no evidence on the record that the person present inside the zenana to whom the draft, Debi Prasad Singh says was read, was Musammat Sheo Koer. Then again there is no evidence that the person inside the zenana understood the contents of the draft and that it was at all explained. In the circumstances even if it be conceded that Exhibit F is a true and faithful copy of the draft that was taken to Badalpura, there is a complete failure of the defendant's case on the oral evidence as regards the point that the document was executed and signed by Sheo Ratan in the name of Musammat Sheo Koer with her knowledge and consent. In the case of a pardanashin lady it has been ruled that a document like this should be explained to her and there should be evidence to show that she understood it, vide, Sudisht Lal v. Musammat Sheobarat Koer 7 C. 245 : 8 I.A. 39 : 4 Sar. P.C.J. 222 : 5 Ind. Jur. 270 : 3 Ind. Dec. (N.S.) 707 (P.C.), Shambati Koeri v. Jago Bibi 29 C. 749 : 29 I.A. 127 : 6 C.W.N. 682 : 4 Bom. L.R. 444 : 8 Sar. P.C.J. 304 (P.C.).
28. The defendants, however, rely on Exhibit E, which purports to be a sale-deed executed by Musammat Sheo Koer on the 10th of May 1892, for the contention that she had knowledge and given her consent to the execution of the mortgage-bond, Exhibit F. The contents of the sale-deed no doubt show what is contended for by the appellants. But to bear out this contention it is necessary in its own turn for Exhibit E, the sale-deed, to be proved to have been executed by Sheo Koer with full knowledge and understanding of its contents.
29. The defendants have called one Jhumak Bhagat, an attesting witness of this deed, to prove the above. This witness is qualified to speak with reference to the document as he attested its execution. If believed, he proves that the deed was read over and explained to Musammat Sheo Koer whose voice he recognized behind the parda. There is nothing in his evidence to show that the lady understood the contents and realised the nature of the transaction she was giving her consent to. I am not disposed to think that this witness is unreliable, but his evidence is insufficient to carry the conviction that Sheo Koer understood the legal consequences resulting from the deed, the execution of which she asked the witness to attest. It is true that' there is an endorsement on this deed by the Registrar of Dinapur to the effect that when he came to the Badalpura house to take the admission of the executant the deed was duly explained to the person in the zenana and identified as the executant by a servant of the family to the satisfaction of this officer. No oral evidence is forthcoming to support this endorsement. The officer in question has died since.
30. On the authority of Kishori Lal v. Chunni Lal 1 Ind. Cas. 128 : 9 C.L.T. 172 : 13 C.W.N. 370 : 11 Bom. L.R. 196 : 31 A. 116 : 19 M.L.J. 186 : 39 I.A. 9 : 5 M.L.T. 58. (P.C.), I am unable to accept this endorsement as in itself sufficient to prove that the contents of Exhibit E were, in fact, explained to Sheo Koer and that she understood their, meaning. In this connection I am also impressed by a passage in Exhibit 9, which is the deposition of Sheo Koer herself given in Case No. 98 of 1894, dated the 19th of December of that year. In her evidence in that case she denied having executed the sale-deed in question (Exhibit E). On a careful consideration of the facts and circumstances relating to Exhibit E, I am not at all satisfied that the evidence produced by the defendants has reached the standard which has been set by judicial decisions to prove the execution of document by an illiterate pardanashin lady. I, therefore hold that the defendants have failed to prove that Musammat Sheo Koer had knowledge of, or gave her consent to, the execution of Exhibit F having fully understood the nature of the transaction covered by that document.
31. The learned Vakil on behalf of the appellants contends that the decree obtained by the defendants against Musammat Sheo Koer on the basis of the mortgage bond, Exhibit F, is a bar to the plaintiff raising any issue regarding the execution of Exhibit F by Musammat Sheo Koer or its validity and that if the decree in question was obtained against the limited owner without fraud or coercion, it should operate as res judicata against the plaintiff, the reversioner, in so for as the validity of the mortgage bond, Exhibit F, is concerned, apart from its being a valid charge on the estate of Radha Kishan. Reliance is placed for this contention on Katama Natchier v. Rajah of Shivagunga 9 M.I.A. 539 : 2 W.R.C.R.P.C. 31 : 1 Suth. P.C.J. 520 : 2 Sar. P.C.J. 25 : 19 E.R. 843 and Mohindra Nath Biswas v. Shamsunneesa Khatun 27 Ind Cas. 951 : 21 C.L.J. 157 : 19 C.W.N. 1280. I accept the contention of the learned Vakil that unless the plaintiff proves fraud or coercion in the obtaining of the decree, it must operate as res judicata against him within its own limits. He admits that the matter of legal necessity and the creditor's inquiry thereto remain unaffected by the decree. The question then is whether this decree was obtained by fraud. Coercion has not been pleaded. Paragraph 23 of the plaint distinctly alleges that this decree, dated the 17th of June 1901, against Musammat Sheo Koer was fraudulently obtained by the defendants in collusion and concert with Babu Ram anugraha Narain Sinha and others, pro forma defendants in the mortgage suit, and without service of summons. There is no evidence on the record to show that there was any collusion or concert on the part of the defendants in the present case with Ramanugraha Narain Singh and others, pro forma defendants in the mortgage suit. Nor is there any evidence of fraud, except the bare statement of the plaintiff that in the years 1900 and 190l his mother was living with him at Sassaram in the district of Shahabad and that during that period she did not receive any Summons in any Suit on a bond of Rs. 5,000 (Exhibit F) brought by Rai Radha Kishan, defendant No. 1. Non-service of summons by itself is not fraud. Its suppression, on the other hand, with intent to deceive and take undue advantage of the opposite party is. This view is supported by the ruling reported as Pran Nath Roy v. Mohesh Chandra Moitra 21 C. 546 : 12 Ind. Dec (N.S.) 1032. The evidence of the plaintiff is insufficient to establish fraud. Exhibit G-l is the order-sheet of the mortgage suit, which shows that the defendants in that suit were served with summing either personally or by house service. This is indicated by an order dated the 14th of February 1900. The evidence of Nathuni Singh (witness No. 13 for the defendant) shows that the service of summons on Musammat Sheo Koer took place by attaching the summons to the door of her house at Badalpura as Sheo Koer had refused to grant any receipt of service.
32. It is contended for the respondent that the evidence of this man is false, for the reason that no less than six years before the mortgage suit Sheo Koer had been dispossessed of the Badalpura house by defendant No. I in execution of another decree that he had obtained against her. In this connection our attention has been drawn to the deposition of Musammat Sheo Koer (Exhibit 9). It appears from her evidence that she was living, at the time she gave her evidence, in a rented house at Khagaul and that she had lived in that house since about February 1394 but that before that she was living in her father's house (Badalpura). The reason why she left her father's house, however, as stated by her does not help the plaintiff, for she said it was due to quarrels with her son Sheo Ratan. There" is no reliable evidence on the record to show that at the time of the service of summons deposed to by Nathuni Singh, Musammat Sheo Koer was not living in the Badalpura house. The burden of proving this rests entirely on the plaintiff and unless that burden is discharged, the evidence furnished by the order-sheet (Exhibit Gl) must be relied upon. In the circumstances I bold that the plaintiff has failed to prove that the decree in the mortgage suit was obtained by fraud. Moreover in the appeal before us unless the decree in the mortgage suit is displaced I have to recognize its existence and its legal effect upon the case. It was open to the plaintiff to bring an action for the setting aside of this decree within the period of limitation provided for by Article 95 of the First Schedule to the Indian Limitation Act, but he did not do so.
33. In my opinion, therefore, the decree under consideration operates as res judicata against the plaintiff and bars his raising any of the issues covered by that decree. The result is that the decision in this case turns upon the evidence relating, first, to the existence or non-existence of legal necessity to borrow the Rs. 5,000 mentioned in Exhibit F and secondly, on the question of the creditor (defendant No. 1) having satisfied himself upon a reasonable inquiry that there was a family necessity for taking the loan by executing the bond.
34. I will now proceed to consider these two questions on the evidence before me.
35. The recital in the bond, Exhibit F, says that the necessity to borrow the Rs. 5,000 from the defendant was for defraying the costs in the suit of Badri Narayan, appellant, versus Sheo Koer, the executant-respondent, filed in the High Court at Calcutta. It is not denied that the suit referred to in the recital was of vital importance to the estate left by Radha Kishan. Badri Narain, as has been mentioned before, was claimant to the estate as the adopted son of the deceased and if the claim succeeded, the entire estate of Radha Kishan would be diverted from the daughter Sheo Koer and her line and vest in the adopted son It has not been denied that resistance to this claim was a matter of paramount importance and necessity for the preservation of the entire estate in the interest of the limited owner Sheo Koer and the reversioners, her two sons, Sheo Ratan and Nau Ratan, the plaintiffs. The object, therefore, on which the money borrowed from the defendant No. 1 was to be spent, clearly falls within the principle enunciated in the leading case of Hunoomanpersaud Panday v. Musammat Babooee Munraj Koonweree 6 M.I.A. 393 : 18 W.R. 81 note, Sevestre 253n; 2 Suth. P.C.J. 29 : 1 Sar. P.C.J. 652 : 19 E.R. 147 decided by their Lordships of the Privy Council. The dictum of the Judicial Committee on this point is in the following words: "The actual pressure on the estate, the danger to be averted or the benefit to be conferred upon it, in the particular instance, is the thing to be regarded". The suit pending in the High Court was a danger that was to be averted and the occasion was one which clearly demanded the expenditure of money for an object that unquestionably fell within the principle laid down in this Privy Council decision. This is not disputed nor denied. Costs of litigation are a recognized head of necessity but the power to borrow for that reason is not unlimited: vide Bhimaraddi v. Bhaskar 6 Bom. L.R. 628. The plaintiff asserts that as a matter of fact at the time when the money was borrowed the estate was financially so placed as to be able to defend the suit in Calcutta without having to borrow at all. The validity of the charge of Rs. 5,000 advanced by defendant No. 1, therefore, as regards legal necessity to borrow depends on the evidence relating to the financial condition of the estate in the hands of Sheo Koer at the time the loan of Rs. 5,000 was advanced. The burden of proof is upon the defendants, the mortgagees, to prove the validity of the transaction on which their title rests. This was ruled by the Judicial Committee in the case of Amarnath Sah v. Achan Kuar 19 I.A. 196 : 14 A. 420 : 6 Sar. P.C.J. 197 : 7 Ind. Dec. (N.S.) 637 (P.C.). The onus of proving as a fact that Musammat Sheo Koer was financially so placed in August 1890 that she could not resist the suit in Calcutta without taking the loan rests heavily on the defendants. They have lamentably failed to prove that she was so disadvantageously placed. There is next to no evidence on the record to prove her impecuniosity. An effort was made in the cross-examination of plaintiff's witness, Nandu Lal, that a considerable portion of the estate left by Radha Kishan had, at the time of this transaction, passed into the bands of strangers. Nanda Lal's evidence on this point cannot be relied upon, for there is documentary evidence on the record to show that in any event till the closing months of the year 1890, when the money was borrowed, Musammat Sheo Koer was in possession of the properties left by her father. This is evident from a perusal of Exhibit 4 (6), which is a a judgment given in the case of Nau Ratan Lal v. Stephen.
36. Then again the account books produced in this case show that since 1885 every year there were large balances on the credit side in favour of the view that in these years considerable savings were effected from the estate in the hands of Musammat Sheo Koer. Exhibit 3(h) is the account book of 1890 up to the 8th of August of that year. This book shows that in that year alone there was a large balance not less than Rs. 5,389 11/2 to the credit of the estate after paying all expenses: There is nothing incredible in this as the estate in the hand of Musammat Sheo Koer was considerable and on the lowest computation sums of money amounting to an average of at least Rs. 25,000 a year were received by Musammat Sheo Koer as rent paid to her from the various villages in her possession. It is true that in her evidence, in Case No. 98 of 1894 (Exhibit 9), she had said that on her father's death whatever money there was had gone into the hands of her son Sheo Ratan and only on occasions when she wanted any money Sheo Ratan used to give it to her "in 200 or 400". It is immaterial to consider whether the actual custody of the savings or the large sum of money left by her father was in Musammat Sheo Koer or Sheo Ratan. The question for consideration is whether taking all the facts and circumstances of the financial condition of the estate and also of the extravagant habits of Sheo Ratan, in the absence of any reliable evidence adduced by the defendants, it can be held that at the time Exhibit F was executed, Musammat Sheo Koer had no money to defend the suit at Calcutta. I cannot say that this has been established. On the authority of the decision of their Lordships of the Privy Council, Dharam Chand Lal v. Bhawani Misrain 24 I.A. 183 25 C. 189 : 1 C.W.N. 697 : 7 Sar. P.C.J. 249 : 13 Ind. Dec. (N.S.) 128, necessity is to be established by proof that there were no funds in the hands of the limited owner sufficient to meet the demand. I must, therefore, hold that the necessity to borrow has not been proved as a fact. In coming to this conclusion I am not regardless of the galaxy of legal talent engaged by Musammat Sheo Koer to defend her suit in Calcutta nor the heavy expense which such a course must have entailed.
37. The next question for consideration is whether defendant No. 1 advanced the Rs. 5,000 after due inquiry. The inquiry must be proved to have been bona fide and that the defendant No. 1 had reasonable grounds to accept the representations made to him showing necessity to borrow. This principle is a well-established one and supported by the authority of the Judicial Committee laid down in Hunoomanpersaud Panday v. Musammat Babooee Munraj Koonweree 6 M.I.A. 393 : 18 W.R. 81 note, Sevestre 253n; 2 Suth. P.C.J. 29 : 1 Sar. P.C.J. 652 : 19 E.R. 147 and Amarnath Sah v. Achan Kuar 19 I.A. 196 : 14 A. 420 : 6 Sar. P.C.J. 197 : 7 Ind. Dec. (N.S.) 637 (P.C.). In this connection, mention may be also made of Nanda Lal (Banga Chandra Dhur) v. Jagat Kishore Acharjya 36 Ind. Cas. 420 : 21 C.W.N. 225 : 20 M.L.T. 335 : 31 M.L.J. 563 : (1916) 2 M.W.N. 336 : 4 L.W. 458 : 18 Bom. L.R. 868 : 14 A.L.J. 1103 : 24 C.L. 3. 487 : 1 P.L.W. 1 : 44 C. 186 : 10 Bur. L.T. 177 : 43 I.A. 249 (P. C) and a Full Bench decision of this Court given in Ram Bahadur v. Jagernath Prasad 45 Ind. Cas. 749 : 3 P.L.J. 199 : 4 P.L.W. 377 (1918) Pat. 181.
38. The recital in Exhibit F, as has already been stated, mentions the necessity to have been the defending of the suit in Calcutta.
39. It is evident, therefore, that this was the representation made to defendant No. 1. His evidence is that at the time negotiations were opened he inquired from Munshi Sham Narayan, Babu Gajadhar Pershad and Khodi Bux Khan Bahadur and that they said to him that the money was urgently needed for the expenses of the High Court case and that the previous loans advanced by him would not be realised if the Rs. 5,000 was not lent. He says in his evidence further that he made some inquiries through his servants also, but what they were there is bo-thing to show. The question then is whether the inquiry made by him from the three gentlemen mentioned above is sufficient to bold that it was bona fide and that he had reason to give credence to the representations made to him by them. The three gentlemen mentioned above were lawyers by profession and the first two of them were the Pleaders of Musammat Sheo Koer in the adoption suit. Munshi Sham Narayan attested Exhibit F as a witness also. It is not unreasonable to suppose that in giving their opinion and advice they were mindful of the legal questions involved in a transaction with a pardanashin lady who was a limited owner and on whose behalf the negotiation to borrow money had been opened. But there is no evidence on the record that these gentlemen had any personal knowledge of the financial condition of Sheo Koer at the time. They no doubt believed what had been represented to them. This is not sufficient to absolve the defendant from the obligation to have made a proper and reasonable inquiry. He has failed to prove his contention.
40. I, therefore, agree with my Lord, the Chief Justice, in the decision arrived at by him in the disposal of this appeal.