Rajasthan High Court - Jaipur
Ramrichpal vs The Bikaner Stores Supply And Trading ... on 3 February, 1966
Author: P.N. Shinghal
Bench: P.N. Shinghal
JUDGMENT P.N. Shinghai, J.
1. This second appeal has been preferred by Ramrichpal, defendant No 2, against the appellate judgment and decree of the learned District Judge of Bikaner, dated July 21, 1959. The dispute is like this.
2. Ramrichpal is the son of the other defendant Bhaironsingh. They owned ancestral immovable properly which was situated in an important locality in the city of Bikaner- The Bikaner Stores Supply and Trading Company, which was a partnership firm and of which Rawatram was one of the partners, advanced a loan of Rs 5,000 to Bhaironsingh on January 10, 1952 under a mortgage. The mortgagee was shown to be Rawatram and it was agreed that the mortgage money would be repayable at the stipulated rate of interest The loan was advanced for completing the construction of the above mentioned property which, It appears, was a 'kacha' structure and for the reconstruction of which Bhaironsingh took loans from time to time, the suit loan being the third loan. Bhaironsingh did not repay the loan and so the present suit was instituted on January 18, 1955, for the recovery of Rs. 5,000 on account of principal and Rs. 1,832 by way of interest, making a total of Rs. 6,832. Both the Bikaner Stores Supply and Trading Company as well as Rawatram were joined as plaintiffs in the suit and it was clarified in paragraph 2 of the plaint that even though Rawatram was a partner of the firm, which carried on the business of money lending in addition to its other business, the real mortgagee was the Company and that the mortgage deed was executed in favour of Rawatram by way of a formality and that he had been impleaded as a plaintiff for the purpose of avoiding unnecessary objections. The suit was initially instituted against the original mortgagor Bhaironsingh, but his son Ramrichpal, the present appellant, was impleaded as the other defendant, at his own request. He was a minor and his mother was therefore appointed to be his guardian ad item. It may also be mentioned that the plaintiffs took the plea that the loan had been advanced for the benefit of the joint family of the defendants.
3. Both the defendants denied the execution of the mortgage deed (Ex. 1) and the taking of the loan from the plaintiffs. Issues wore framed on the question of the execution of mortgage deed Ex. 1, the right of the Bikaner Stores Supply and Trading Company to bring the suit and on the important question whether the loan had been taken by Bhaironsingh for the benefit of the family or for legal necessity. The Civil Judge of Bikaner, who tried the suit held that the plaintiff had succeeded in proving the execution of the mortgage deed as well as the payment of the consideration, but he held that the loan had not been taken for family necessity or for the benefit of the estate. He therefore granted a personal decree in favour of plaintiff Rawatram against defendant Bhaironsingh. Both the parties preferred their appeals to the District Judge of Bikaner. That learned Judge upheld the trial Court's finding regarding the execution of the mortgage deed as well as the payment of the consideration, and these findings are not now assailed before me. He however held that the loan had been taken for family necessity in order to complete the construction which was lying unfinished and that this amounted to a benefit to the family estate. Accordingly the learned District Judge allowed the appeal of the plaintiffs and passed a. preliminary decree for sale against both the defendants and in favour of both the plaintiffs. It is in these circumstances that the present second appeal has been filed by defendant Ramrichpal against the judgment and decree of the learned District Judge dated July 21. 1959.
4. It may be mentioned that Rawatram, plaintiff No. 2 and Bhaironsingh, defendant No. 1, died during the pendency of this appeal, Bhaironsingh's legal representatives have already been brought on the record and there is no dispute on that point. Rawatram, however died on February 18, 1964, and his legal representatives were not brought on the record within the prescribed time limit. When this was brought to the notice of this Court, an order was made on November 1. 1965, striking off Rawatram's name from the memorandum of appeal. The question whether the appeal had abated and deserved to be dismissed as a whole because of the failure to bring Rawatram's legal representatives on the record was loft for consideration at the hearing. This has given rise to two preliminary objections of Mr. Mundhra, learned counsel for the plaintiff-respondent.
5. Firstly, Mr. Mundhra has argued that the impugned decree of the learned District Judge was a joint and indivisible decree in favour of the Bikaner Stores Supply and Trading Company as well as Rawatram and that as Rawatram's legal representatives have not been brought on the record within the prescribed lime limit, the appeal can no longer be said to be properly constituted and it must be dismissed on account of its abatement against Rawatram The argument has been based mainly on the derision of their Lordships of the Supreme Court in State of Punjab v. Nathuram, AIR 1962 SC 89, but it is not tenable in the peculiar facts and circumstances of this case. As I have mentioned already, the plaintiffs made in abundantly clear in paragraph 2 of the plaint that the money had been advanced by the Bikaner Stores Supply and Trading Company and that only the mortgage deed had been obtained in favour of Rawatram. who was a partner of the firm, even though it was the firm which was the real mortgagee. It was further clarified that this had been done as a matter of abundant caution and for the purpose of avoiding unnecessary objections. There can be little doubt therefore that Rawatram was no more than a "benamidar", the real owner of the mortgage money being the Bikaner Stores Supply and Trading Company. It must therefore be held that the real holder of the decree of the learned District Judge was that firm and not Rawatram. It will be recalled in this connection that Rawatram was one of the signatories to the plaint in which an averment was made that he was no more than a "henamidar". As such, it was the beneficial owner of the property, namely, the Bikaner Stores Supply and Trading Company, which was entitled to institute the suit on its own and to secure a decree thereon in its favour. Thus where a transaction is a mortgage, the actual lender of money is entitled to sue upon it, as has been held in a recent decision of their Lordships of the Supreme Court in Harish Chandra Singh Deo v. Bansidhar Mohanty. AIR 1965 SC 1738. It cannot therefore be said that this is a case of a joint and indivisible decree in favour of the Bikaner Stores Supply and Trading Company as well as Rawatram. I have no doubt that it was the firm alone which was the real decree holder, and so the decision in State of Punjab v. Nathuram AIR 1962 SC 69 will not be applicable to the present case.
6. Even otherwise, by the very nature of things, the Bikaner Stores Supply and Trading Company was the legal representative of Rawatram and not Rawatram's personal heirs. This was so because it was that Company which was the real owner. As such the provisions of Order 22, Rule 2 of the Code of Civil Procedure would inure to the benefit of (he Company on the principle that the real owner can apply to ho joined as a party to a suit after the "benamidar's" death. As has been stated. Rawalram was only a "benamidar" and he need not at all have been joined in the suit which could have been maintained by the Bikaner Stores Supply and Trading Company alone. So as the right to sue oxislod in favour of that company and as that right, in any case, survived to it alone on Rawatram's death the case clearly falls within 'he ambit of Rule 2 read with Rule 11 of Order 22 of the Code of C. P. and the appeal can proceed against the surviving respondent. I am fortified in this view by the derision in Thakurdas Gordhandas v. Dagdulal Ranchoddas. AIR 1941 Nag 178 and Bala-suhramaniam Chelly v. Kothan and aramaswami Nayanim Varu. AIR 1942 Mad 688 (FB)
7. Mr. Mundhra has however raised another preliminary objection. He has argued that as Rawatram was admittedly a partner of the Bikaner Stores Supply and Trading Company, the firm stood dissolved on his death and Rawatram's legal representatives should therefore have been brought on the record as a party to the appeal because the benefit of Order 30 of the Code of Civil Procedure ceased to be available as soon as the firm was dissolved. This argument is however also untenable. The reason is that the present suit, for reasons already stated, was substantially raised by the Bikaner Stores Supply and Trading Company and Kawatram's name was impleaded as a mere formality So even though the firm's partner Rawatram died during the pendency of the appeal, it was not necessary, by virtue of Rule 4, Order 30 of the Code of C. P to join his legal representatives as a party to the suit. It may also be mentioned that even after the dissolution of a firm, the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners, continue notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the firm and. to complete transactions begun but unfinished at the time of the dissolution. This is so by virtue of Section 47 of the Partnership Act. A similar question whether two plaintiffs were competent to carry on a suit instituted by them along with Maganlal, another partner, without joining his heirs either as plaintiffs or defendants, arose for consideration in Gajanand v. Sardar Mal, ILR (1961) 11 Raj 354: (AIR 1961 Raj 223) and it was held that the surviving partners could sue for the recovery of the debts due to the firm without making the legal representatives of the deceased partner a party to the suit. The reason for the view was that the remaining partners were sufficient to represent the deceased partner in a suit for the recovery of the money due to me firm. There is thus no force in this other preliminary objection also.
8. Having put aside both the preliminary objections of Mr. Mundhra I shall now proceed to consider the arguments of Mr. Joshi, learned counsel for the defendant-appellant on the merits.
9. The learned counsel has confined his arguments to the finding of the lower appellate Court on issue No 3 which relates to the question whether the loan had been taken by Bhaironsingh for the benefit of the family or for legal necessity. As I have mentioned, the learned District Judge has recorded his finding in favour of the plaintiff, but Mr. Joshi has pointed out that the finding has been vitiated as it is based on the recitals in the mortgage deed which could not be the evidence of such benefit or legal necessity.
10. It is true that the recitals of legal necessity in a mortgage deed executed by the father or manager of the joint Hindu family are not of themselves evidence of such a necessity without corroboration by evidence aliunde, but it is also well settled that such recitals are admissible in evidence. Their Lordships of the Privy Council, it will be recalled, laid this down in Banga Chandra Dhur Biswas v Jagat Kishnre Acharjya Chowdhury AIR 1916 PC 110 that such recitals cannot he disregarded, nor. on the other hand, can any fixed and inflexible rule he laid down as to the proper weight which they arc entitled to receive Their Lordships further held that, as time goes by the recitals may assume greater importance So a recital in a mortgage deed like the present is undoubtedly some evidence of what it states As, however, the recitals in the present case were quite recent." being no more than 3 years old, it was NECESSARY for the learned District Judge to look for their substantiation by evidence aliunde. even if it consisted of a mere representation made by the borrower The learned counsel has therefore taken me through the entire evidence on the record to show whether there was evidence In prove the alleged necessity for the mortgage
11. So far as the recitals in the mortgage deed (Ex 1) are concerned, the learned District Judge has extracted the relevant portion from that document. It contains the recital of mortgagor Bhairon singh that be had not been able to complete the construction of the property, that it still remained to be plastered arid paint ed and that he had to make payments to the persons from whom he had purchased some of the material as well as to the contractors, masons and labourers and that he badly needed the loan for that real necessity, not only for his own benefit but also for the benefit of his collaterals as well as the joint family estate. These have been slated to be the reasons for securing the loan and mortgaging the properly The question is whether the recitals have been substantially corroborated by the other evidence on the record The plaintiff, it may be stated examined five witnesses, while on behalf of the defendants only defendant Bhaironsingh recorded his statement Of the plaintiff's witnesses Moolchand P. W. 3 has stated that the money was taken on loan for the construction of shops as well as flats in the suit property and that the plaintiff held two promissory notes of Rs. 1000/-each from defendant Bhaironsingh and that these promissory notes were returned to him and a sum of Rs. 3000/- was paid to him in cash before the Sub-Registrar at the time of the registration of the mortgage deed. The witness had further stated that Bhaironsingh had himself represented to him that he required the money for the purpose of making the construction. It would therefore appear that Moolchand statement goes to prove the recitals in the mortgage deed regarding the purpose of securing the loan for the benefit of the joint family estate and the repayment of the loans which he had already taken under the two promissory notes. Then there is the statement of Narsinghdas P. W. 4. He was the broker through whose good offices the loan was secured by Bhaironsingh from the plaintiff. He has also stated that the loan was obtained for the purpose of constructing the suit property, which stood near Ratan Behariji's temple. The remaining testimony is that of Shankerlal P. W. 5. He was an employee of the plaintiff and has proved the relevant entries in the plaintiff's books of account in regard to the payment of Rs. 3000/-in cash and the discharge of the two promissory notes of a total value of Rs. 2000/-. All this parol evidence goes to establish two things. Firstly, it proves that Bhaironsingh owned Rs 2000/ to the plaintiff under the two promissory notes just referred and that the loan of Rs. 5000/- was secured to square up that liability. Secondly, two of the witnesses have stated that the loan had been taken for the purpose of completing the construction which was in hand near Ratan Behariji's temple. It must therefore be held that the evidence substantially corroborates the recitals in the mortgage deed
12. It is also worth mentioning that there is practically nothing by way of rebuttal of the plaintiff's evidence. Only Bhaironsingh recorded his own statement in rebuttal and he admitted having spent nearly Rs. 25,000/ in constructing the building which was originally no more than a kucha structure. It is not disputed that the property is situated in an important locality in Bikaner and it is obvious that the investment was quite sound inasmuch as it was going to result in the creation of valuable family estate. What exactly is an investment for the benefit of an estate, is really a question depending on the facts and circumstances of each' case and it has to he decided with due regard to the conditions of modern life. If the father and the manager of the joint Hindu family makes an investment for the. purpose of converting a weak and worthless structure into a sizable building in an important locality in a big city, it does not require much argument to say that the investment was sound. At any rate, it cannot be said to be an investment which an ordinarily prudent owner would not make When therefore it was the intention, to make an investment for the purpose of making the property more productive, it would he a fair conclusion to hold that the loan which had been secured for it was for the benefit of the joint family and its estate. I may here refer to Ratnam v. Govinda Rajulu. (1878-80) ILR 2 Mad 339, in which it was held that where money was laid out for making substantial material alterations, which in-creased the value of the estate, it could be said that the discretion of the manager of the family was prudently exercised. If therefore the discretion is exercised in a bonafide manner, it does not require any close scrutiny. It is also by now fairly well settled that an expenditure on the joint family estate need not be purely defensive of protective for to hold so would be to ignore the significance of the concept of the benefit to the estate which justifies a mortgage of this nature It may also be mentioned that there is not even a re-mole suggestion in the present case that the expenditure was negligently incurred or that the father was prompted by ulterior motives. The upshot therefore is that the plaintiffs evidence appears to be quite satisfactory for the purpose of proving that the loan had been taken for legal necessity and for the benefit of the family estate. I would therefore uphold the finding of the learned District Judge.
13. In the result. I find no force in this appeal and dismiss it with costs.