Indar Singh And Others v. Parmeshwardhari Singh And Another

Dayal, J.:— This is an appeal by the plaintiffs. The suit was a suit for a declaration that the plaintiffs have acquired valid title to the disputed properties by virtue of their purchase under a registered sale-deed dated the 28th April 1944. The disputed properties belonged to late Babu Mangaldhari Singh, father of defendant No. 1.

2. The case of the plaintiffs was that Babu Mangaldhari Singh died a year back, leaving defendant No. 1, his sou, as his heir. Defendant No. 1 contracted to sell the disputed properties for Rs. 7,000 to the plaintiffs by executing a contract of sale dated the 19th April 1944, in their favour and that the plaintiffs paid Rs. 700 as an advance at that time. Subsequently, defendant No. 1 executed a sale-deed in the plaintiffs' favour on the 28th Apiil 1944.

3. Out of the consideration of Rs. 7,000, Rs. 700 had been paid as advance, as stated above; Rs. 1,300, being the decretal dues of the plaintiffs, was set off; Rs. 4,000 was kept in deposit with the plaintiffs to be paid to Sheo Prasad Singh, the Ijaradar of the Milkiat interest of the disputed properties. The balance of Rs. 1,000 was said to have been paid in cash to defendant No. 1 at the time he executed and signed the sale-deed. The further case of the plaintiffs was that, as defendant No. 1 refused to admit the execution of the sale-deed before the Sub-Registrar, the plaintiffs had to take proceeding for compulsory registration of the sale-deed. The District Sub-Registrar ordered compulsory registration. On the date the sale-deed was registered, defendant No. 1 was present in the Sub-registry office. He snatched away the sale-deed, which was lying on the table of the Sub-Registrar, and tore it into pieces. A criminal case was started against defendant No. 1. Defendant No. 1 was ultimately acquitted. The plaintiffs applied for mutation of their names in respect of the disputed properties on the strength of their sale-deed and they came to know that defendant No. 2, the mother of defendant No. I, was mutated for those properties. It is alleged that a cloud had been thrown on the title of the plaintiffs by the mutation of the name of defendant No. 2. The defendants had no right to the properties in suit after the execution of the sale-deed in favour’ of the plaintiffs which was valid, genuine and for consideration. Hence the suit by the plaintiffs.

4. Defendant No. 2, the mother of defendant No. 1, only contested the suit. She pleaded, inter alia, that the suit was barred under Section 42 of the Specific Relief Act. Her case further was that defendant No. 1 was a congenital idiot, incapable of understanding transactions relating to transfer of properties, that he is a man of unsound mind and mostly wanders about here and there and that, on the death of her husband, Babu Mangaldhari Singh, she and not defendant No. 1, came into possession of the entire properties. The contract of sale, as alleged, was denied by her. It was further stated that defendant No. 1 had no necessity to borrow any money. It was further stated that the plaintiffs had full knowledge about the mental condition of defendant No. 1 and, taking advantage of his mental condition, the plaintiffs fraudulently got defendant No. 1 to execute the contract of sale, the sale-deed and the receipt.

5. The whole thing was challenged as fraudulent and without consideration. The properties in dispute were worth Rs. 25,000 which had been purported to have been sold under the sale-deed. She further contended that defendant No. 1 had no title to sell the properties, and, therefore, the plaintiffs did not acquire any title to them and they also never came in possession. As defendant No. 1 is insane and idiot, he was excluded from inheritance and, as such, he had no right, title and interest to the disputed properties, and, therefore, the sale-deed in favour of the plaintiffs did not convey any title to them.

6. The trial Court dismissed the suit, holding that the suit was barred under Section 42 of the Specific Relief Act and that defendant No. 1 was mentally defective and incapable of understanding transactions; that the plaintiffs, knowing full well the mental condition of defendant No. 1, had taken advantage of that position and had got a sale-deed executed and that there was no legal necessity for the loan. Being thus aggrieved, the plaintiffs have preferred the present first appeal.

7. Mr. Ganesh Sharma, appearing for the appellants, has strongly challenged the decision of the trial Court that defendant No. 1 was mentally defective (incapable of understanding transactions). He has submitted that, under Section 12 of the Contract Act, it was necessary for the defendants to establish that at the time the contract was entered into, defendant No. 1 was incapable of understanding the transaction in question forming a rational judgment as to its effect upon his interests.

8. He has relied on U Aung Ya v. Ma E Mai, AIR 1932 Rang 24 (A), Kanhaiyalal Tannalal v. Harsingh, Laxman, AIR 1944 Nag 232 (B) and Mahomed Yakub v. Abdul Quddus, 4 Pat LT 17 : (AIR 1923 Pat 187) (C). The principle of law enunciated in all these cases is the same. Mahomed Yakub's case (C) is a Division Bench case of this Court. It lays down:—

“…….the test of soundness of mind is that he is capable of understanding the business and of forming a rational judgment as to its effect upon his interest. There being a presumption in favour of sanity, the person who relies on the unsoundness of mind must prove it sufficiently to satisfy this test …….. Mere weakness of mind is not sufficient……”

9. Another relevant case-law on the point cited at the Bar is Amina Bibi v. Saiyid Yusuf, AIR 1922 All 449 (D), and the relevant passage is at p. 453:

“Not being in a position to understand or to determine rationally whether it was likely to operate to his benefit by reason of his mental condition, the lease must be held to be void and unenforceable.”

10. Therefore, in this case, defendant No. 2 must establish that defendant No. 1 was incapable of understanding business and forming a rational judgment as to its effect upon his interest.

11. There is overwhelming evidence on the record to show that defendant No. 1 was incapable of understanding business and forming a rational judgment as to its effect upon his interest. On this point, the mother of defendant No. 1 was examined on commission and her statement was fully corroborated by two other respectable witnesses, who were also examined on commission, namely, Rai Sahib Mangal Prasad Sinha and Kuar Kedar Narain Sinha. D.W 1, a brother of defendant No. 2, has also stated that defendant No. 1 is an idiot, ‘incapable of understanding matters from his birth. This unsoundness of his mind is congenital.’ Similar is the evidence of D.W 3. The trial Courts has believed the witnesses of the defendants.

12. (After examining certain evidence the Judgment proceeded further.)

13. The Court below rightly put the onus on the defendants and I have also examined this case from that standpoint, and I have come to the conclusion that defendant No. 1 was incapable of understanding business and forming a rational judgment as to its effect upon his interest at the relevant times and, therefore, the sale-deed executed by him in favour of the plaintiffs did not confer any title on them. It was a void document, as held in AIR 1922 All 449 (D).

14. In view of my finding that the contract of sale (Ex. 1) and the receipt (Ex. 3) are documents on which no reliance can be placed, I would hold that no consideration passed.

15. Mr. Ashwini Kumar Ray, appearing for the respondents, who argued with conspicuous ability also urged that the suit was barred under the proviso to Section 42 of the Specific Relief Act. Mr. Ganesh Sharma, appearing for the appellants, has repelled that argument and has contended that the proviso to Section 42 of the Specific Relief Act has no application to the facts of the present case. In my judgment, a discussion or a decision on these points would be merely academic in view of my decision on the merits of the case.

16. For these reasons, it appears to me that there is no merit in this appeal which must be dismissed with costs.

17. Sinha, J.:— I agree. Section 11 of the Contract Act speaks of incompetency to make a contract. It says that ‘Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.’ For the present purpose, we have to find out, what is the meaning of ‘sound mind’. Section 12 of the Act attempts to define what is the meaning of ‘sound mind’, and it reads thus:—

“A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of ‘forming a rational judgment as to its effect upon his interest’……..”

18. The words important, in my opinion, have been underlined (here in ‘ ’) by me. According to this section, therefore, the person entering into the contract must be a person who understands what he is doing and is able to form a rational judgment as to whether what he is about to do is to his interest or not. The crucial point, therefore, is to and out whether he is entering into the contract after he has understood it and has decided to enter into that contract after forming a rational judgment in regard to his interest; that is to say, whether the contract he is about to enter into is to his benefit and advantage.

“The general theory of the law in regard to acts done, contracts made by parties affecting their rights and interests is that in all cases there must be a free and full consent to bind the parties. Consent is an act of reason accompanied by deliberation, and it is upon the ground that there is a want of rational and deliberate consent that the conveyances and contracts of persons of unsound mind are generally deemed to be invalid; or in other words, (subject to the exceptions mentioned below), there cannot be a contract by a person of unsound mind, (vide para. 484, Halsbury's Laws of England, Second Edn, Vol. 21, pp. 279-80).”

19. In my opinion, therefore, the party contracting must have the capacity to arrive at a reasoned judgment as to the consequences of the contract he is entering into. It does not necessarily mean that a man must be suffering from lunacy to disable him from entering into a contract. A person may to all appearances, behave in a normal fashion, but, at the same time, he may be incapable of forming a judgment of his own, as to whether the act he is about to do is to his interest or not, and to the contracts of such a person the law gives protection.

20. To such a person the considerations which weigh with the Court in dealing with a contract by a pardanashin lady, in my opinion, equally apply; in other words, the Court must consider whether such a person has entered into the contract after fully understanding what he is about to do and was in a position to exercise his judgment as to his interest after considering the effect of the transaction on the scales of reason. A man incapable of looking after his affairs and incapable of judging the consequences of his acts ought not to be held bound by and responsible for his contracts.

21. In my opinion, defendant No. 1 in the present case was a person who was incapable of exercising his own judgment, as has been held by my learned brother, with reference to the evidence on record.

D.S.P

22. Appeal dismissed.