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  • Section 196 of the Indian Contract Act.
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  • Section 196 of the Indian Contract Act.
Smart Summary

Factual and Procedural Background

These consolidated appeals concern three villages — Chiyanki, Ganka and Lalgara — and principally a dispute between the first appellant (Rajah Bhagwat Dayal Singh) and the first respondent. The villages were originally the property of Ram Saran Singh. On his death his infant son Narayan succeeded, but Narayan died unmarried and as an infant on 7 August 1879. He left surviving him his grandmother Jileb Koer, an aunt Aprup Koer (widow of Ram Saran's brother), and a stepmother Etraj Koer (widow of Ram Saran). Under the law applicable to female heirs, the grandmother Jileb Koer held the limited interest in the boy's property. The three women lived together until the grandmother's death on 22 November 1894.

After the grandmother's death the inheritance again opened. Bhan Pertap Singh and Kirpa Narayan Singh (the second and third appellants) were the nearest male heirs and on 29 November 1895 purported to sell the three villages to Rajah Bhagwat Dayal Singh (the first appellant) — the title under which the first appellant claimed.

The first respondent, however, claimed under two sale deeds said to have been executed by or on behalf of the grandmother Jileb Koer: (1) a deed dated 19 January 1887 conveying Chiyanki and Ganka by the three women to the first respondent; and (2) a deed dated 15 May 1891 conveying Lalgara by the same three women to one Hodges, who later conveyed to the first respondent. The respondent contended these sales were justified by necessity and therefore passed the whole inheritance.

The present suits were brought on 29 August 1898 in the Court of the Subordinate Judge at Ranchi. The plaintiffs in the suits were the first appellant and the two persons from whom he purchased (the second and third appellants). The first respondent was the sole defendant in one suit and the principal defendant in the other. One suit concerned Lalgara and the other concerned Chiyanki and Ganka; each sought possession and mesne profits.

The Subordinate Judge held the conveyances were not good but credited the first respondent with certain sums he considered advances for legal necessity and made the decree for possession conditional on payment of those sums. On appeal the High Court held necessity for the sales was established. These appeals followed to the Board (Privy Council).

Legal Issues Presented

  1. Whether the sale by the second and third appellants to the first appellant was void in law on the ground that it was champertous or contrary to public policy.
  2. Whether the respondent had shown a valid title in himself by purchase from Jileb Koer under the two sale deeds, and whether such title was effective against the reversionary heirs (including issues of necessity, ratification and the limited interest of a female heir).
  3. Whether the plaintiffs' claim for mesne profits was maintainable given the contested validity of the sale deeds and the accounting of sums found to have been advanced for necessities.

Arguments of the Parties

Appellants' Arguments

  • The appellants (plaintiffs in the original suits) brought actions for possession and mesne profits, asserting title under the purchase from the second and third appellants.
  • At the hearing before the Board, Mr. Cohen for the appellants accepted the Subordinate Judge's mode of dealing with advances and assented to the sums allowed by that judge to the first respondent as advances for legitimate necessities (see the acceptance of the Subordinate Judge's allowance at paragraph 11).

Respondent's Arguments

  • The respondent argued that although English law of maintenance and champerty may not be expressly applicable, substantially the same law operates in India (i.e., the transaction was void as champertous or against public policy).
  • It was further argued that the transaction was contrary to public policy and void because of the payment arrangement (purchase money of Rs. 52,600 with only Rs. 600 down and the balance payable when the property should be recovered).
  • The respondent also relied on a contention that the transactions were justified by necessity and therefore the sale deeds passed title; the High Court accepted that necessity was established.
  • In pleadings and in evidence the respondent maintained that his title was derived from Etraj Koer (the stepmother) and that she had acquired an absolute right by adverse possession (paragraph 12 describes these averments in the written statement and the respondent's trial evidence attempting to maintain that case).
  • It was argued in the courts below that the transactions amounted to an unfair and unconscionable bargain (inadequate price), although the Board notes that this raised a question of relationship between assignor and assignee which the assignors (sellers) did not repudiate here.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ram Coomar Coondoo v. Chunder Canto Mookerjee, (1876) 4 I.A. 23 One of three Board decisions cited as establishing a doctrine contrary to the respondent's proposition that the English law of maintenance and champerty, or an equivalent, was applicable in India. Used to support the Board's rejection of the respondent's contention that substantially the same law of champerty applies in India.
Kunwar Ram Lal v. Nil Kanth, (1893) 20 I.A. 112 Another prior Board decision cited as laying down a doctrine contrary to the respondents' submission regarding champerty/maintenance. Relied upon by the Board as precedent inconsistent with applying English champerty doctrines in India.
Lal Achal Ram v. Raja Kasin Husain Khan, (1905) 32 I.A. 113 Cited as a Board decision in which, under circumstances closely analogous to the present case, full effect was given to an agreement that would have been void if the doctrine of champerty were applied. Specifically noted as authority supporting the view that agreements of the kind here in question can be effective, and the Board relied on it to reject the respondents' champerty argument.

Court's Reasoning and Analysis

The Board's analysis proceeded in discernible steps, applying legal principles to the facts as pleaded and proved:

  1. On the champerty/public policy argument: The respondents urged that, although English law on maintenance and champerty is not formally applicable, substantially the same law applies in India. The Board rejected this proposition, citing three prior Board decisions (Ram Coomar Coondoo; Kunwar Ram Lal; Lal Achal Ram) in which a contrary doctrine was laid down. The Board noted that in the last-cited case the Board had given full effect to an agreement in circumstances closely analogous to those before them, undermining the respondents' submission.
  2. On the contention that the payment arrangement rendered the transaction contrary to public policy: The Board held that the payment condition (Rs. 52,600 purchase money with Rs. 600 down and the balance payable when the property should be recovered) did not take the case further than the overall champertous character — and since the champerty argument was rejected, this payment-arrangement argument likewise failed.
  3. On the "unfair and unconscionable bargain" argument: The Board observed that allegations of inadequacy of price are primarily a matter between assignor and assignee. Here the assignors (the sellers) did not seek to repudiate the assignment; they maintained and joined as plaintiffs to enforce it. Therefore an attack on the first appellant's title on those grounds could not succeed.
  4. On the respondent's title by purchase from Jileb Koer and the question of necessity: The Board treated as critical the burden on any claimant who seeks to enforce a conveyance by a woman who holds only the usual limited interest a Hindu female inherits from a male. Such a claimant must prove not only the genuineness of the conveyance but also that the limited owner fully appreciated the nature of the alienation and that the alienation was justified by necessity — or that the purchaser had done what was reasonably necessary to satisfy himself of the existence of such necessity. This burden is heavier where the purchaser claims to have derived title from a person alleged to have had an adverse right.
  5. On the pleadings and evidence: The respondent's pleaded case in the written statement asserted title via Etraj Koer (alleging adverse possession and an absolute right). In evidence the respondent attempted to maintain that case. The Board noted there was no satisfactory evidence that Jileb Koer (the real owner with limited interest) had authorised the earlier transactions with Etraj Koer, which affected the credibility and sufficiency of the respondent's claim.
  6. On ratification: The Board explained that ratification in the proper sense (as in agency law) applies only to acts done on behalf of the ratifier (and cited Section 196 of the Indian Contract Act). It would be a serious extension of the law to hold that a woman with a limited interest could, by ex post facto acts, charge the estate she represented with obligations not originally binding. Thus the argument that Jileb Koer ratified earlier transactions by later joining deeds was rejected.
  7. On the two sale deeds individually: As to the first sale deed (dated 19 January 1887), the Board observed the consideration included Rs. 1,500 which the Subordinate Judge had credited to the first respondent and that much of the remainder comprised debts originally incurred by Etraj Koer with interest; the Board considered the Subordinate Judge's estimation of that deed to be correct.
  8. As to the second sale deed (dated 15 May 1891), the Subordinate Judge had credited the respondent for considerable sums advanced for real necessities but found that necessity was not established for the remainder of the consideration. In reaching that conclusion the Subordinate Judge took into account circumstances such as the age of the woman who alone had power to convey, her lack of independent advice, and the respondent's influential position with respect to her affairs. The Board found no sufficient ground to reject the Subordinate Judge's conclusions and thought he was justified in making those assessments.
  9. On mesne profits and set-off: The Subordinate Judge had rejected the plaintiffs' claim for mesne profits. The Board disagreed: because the deeds of sale were not good as such, the plaintiffs' claim for mesne profits was held to be well founded. It was also conceded in argument that interest at 6% per annum should be allowed on the sums credited to the first respondent; the Board directed that the amounts allowable on each side be adjusted in execution proceedings.
  10. On relief and costs: The Board advised allowing the appeals, discharging the High Court decrees, discharging the Subordinate Judge's decrees and substituting an order that upon the first appellant paying to the first respondent the sums found in his favour by the Subordinate Judge with interest at 6% per annum, the first appellant should recover possession together with mesne profits to be ascertained in execution; costs were to be allocated as specified in the judgment.

Holding and Implications

The Board advised that the Appeals should be allowed.

Consequences and direct effects of the decision (as stated in the opinion):

  • The decrees of the High Court were to be discharged with costs (allocated between respondents as specified in the judgment).
  • The decrees of the Court of the Subordinate Judge were to be discharged and replaced by an order that, upon the first appellant paying to the first respondent the sums found in favour of the respondent by the Subordinate Judge with interest at 6% per annum, the first appellant should recover possession of the properties in suit together with mesne profits to be ascertained in execution proceedings.
  • Costs of the appeals were to be paid by the respondents other than Sowton (paragraph 20) and other costs allocations were specified among the parties and suits in the Board's order.

The opinion does not state that it establishes any new legal precedent beyond its application of prior Board decisions; its practical effect is to resolve title and entitlement to possession and mesne profits between the parties as set out above.

    Raja Rai Bhagwat Dayal Singh v. Debi Dayal Sahu

    1. These consolidated appeal relate to three villages, Chiyanki, Ganka and Lalgara, and the substantial conflict is between the first appellant and the first respondent.

    2. The villages with others were formerly the property of Ram Saran Singh, who on his death was succeeded by his infant son Narayan. Narayan died, while still an infant and unmarried, on the 7th August 1879, and left surviving him his grandmother Jileb Koer, an aunt Aprup Koer, widow of Ram Saran's brother, and a stepmother Etraj Koer, widow of Ram Saran. Of these, the grandmother was heir to the boy's property, with the limited interest of a Hindu female inheriting from a male. The three ladies appear to have lived together down to the death of the grandmother, which took place on the 22nd November 1894.

    3. On the death of the grandmother, the inheritance again opened, and the second and third appellants. Bhan Pertap Singh and Kirpa Narayan Singh were then the nearest male heirs of the deceased boy. Those two persons, on the 29th November 1895, purported to sell the three villages in question to Rajah Bhagwat Dayal Singh, the first appellant. And that is the title under which he claims.

    4. The first respondent, on the other hand, as the case is now put on his behalf, claims under two sale deeds executed, as it is now said, by or on behalf of the grandmother, Jileb Koer, the sales being, it is contended, justified by necessity, so as to pass the whole inheritance. The first of these deeds bore date the 19th January 1887. It purported to be a conveyance by way of sale by the three ladies who have been mentioned, of the two villages Chiyanki and Ganka to the first respondent. The second deed was dated the 15th May 1891. It purported to be executed by the same three ladies in favour of one Hodges, and to convey to him by way of sale the village Lalgara. Hodges afterwards conveyed to the first respondent.

    5. The present suits were brought on the 29th August 1898 in the Court of the Subordinate Judge at Ranchi. The plaintiff's were the first appellant and the two persons from whom he purchased. The sole defendant in one suit and the substantial defendant in the other was the first respondent. The first suit related to the village Lalgara, the second suit-to the villages Chiyanki and Ganka. The claim in each case was for possession and mesne profits.

    6. The first question raised in the case and argued on the appeals was whether or not the sale by the second and third appellants to the first appellant was void in law, so as to pass no title, on the ground that it was champertous, or contrary to public policy.

    7. For the respondents it was boldly argued that, although the English law as to maintenance and champerty is not, as such, applicable to India, yet on other grounds what is substantially the same law is there in force. Their lordships are of opinion that that proposition cannot be supported. In three cases Ram Coomar Coondoo v. Chunder Canto Mookerjee, (1876) 4 I. A 23; Kunwar Ram Lal v. Nil Kanth (1893) 20 I.A. 112; Lal Achal Ram v. Raja Kasin Husain Khan, (1905) 32 I.A. 113. before this Board, a contrary doctrine has been laid down. In the last of those cases full effect was given, under circumstances closely analogous to those of the present case, to an agreement which would certainly have been void if champerty avoided transactions in India.

    8. It was further argued that the transaction in question was contrary to public policy and void on that ground, by reason of the provision as to payment of the purchase money by the first appellant to the second and third. The purchase money was fixed at Rs. 52,600, of which Rs. 600 Avas to be paid down, and the balance when the property should be recovered. Their lordships are unable to agree to this argument. In their opinion the condition so introduced does not carry the case any further than does the champertous character of the transaction generally.

    9. It was further said, and this was relied upon in the Courts in India, that the transaction was an unfair and unconscionable bargain for an inadequate price. But that is a question between assignor and assignee. It is unnecessary to consider what the decision ought to have been if this had been a litigation between the assignors, and the assignee in which the former sought to repudiate the assignment. In the present case the assignors do nothing of the kind. They maintain the transaction and ask that effect be given to it, and for that purpose they join as plaintiffs in the present actions. Their lordships are therefore of opinion that the attack upon the title of the first appellant upon any such grounds as those indicated must fail.

    10. The second question that has to be considered is whether the respondent has shown a good title in himself by purchase from Jileb Koer, the grand-mother, under the two sale deeds mentioned, and under such circumstances as to make that title effectual against the reversionary heirs.

    11. The Subordinate Judge, who tried the cases, held that the conveyances were not good, but he allowed, in favour of the first respondent, certain sums which he considered to have been advanced for purposes of legal necessity; and whilst giving a decree to the appellants and plaintiffs for possession of the property, he made that decree conditional upon the payment to that respondent of the sums held to have been advanced for legitimate necessitie's. On the argument of these appeals. Mr. Cohen, for the appellants, accepted the propriety of this mode of dealing with the case, and assented to the allowance so made by the Subordinate Judge. The High Court, on appeal, differed from the first Court, and held that the necessity for the sales in question was established.

    12. Before dealing further with this question, it must be noticed that the case now contended for is not the case raised on the pleadings and relied upon at the trial. The respondent in his written statement alleged a title derived, not from Jileb Koer, but from Etraj Koer. He said, in paragraph 21, that " Etraj Koer was no heir to Narayan Saran Singh, and that she acquired an absolute right by adverse possession;" in paragraph 23 "that it is not true, as the plaintiffs allege...that on the death of Narayan Saran Singh, Jileb Koer succeeded as heir and was in possession up to her death; the fact is...that Etraj Koer alone was in such possession until her death," and in paragraph 25 that " Jileb Koer and Aprup Koer never took the estate of Narayan Saran Singh as heir, and the fact of their joining in the documents as persons executing the deeds of sale and the prior deeds was a matter of form of evidence of members dependent for maintenance on Etraj Koer, and was merely a surplusage"; and it was added in paragraph 26 that "even if Jileb Koer were to have taken the estate ... by inheritance, she would take it in absolute estate...under the provisions of Mitakshara law, and so also if she was made a co-sharer by Etraj Koer in Etraj Koer's right." In his evidence given at the trial the respondent endeavoured to maintain the case that his title was derived from Etraj Koer and was good on that account.

    13. One who claims title under a conveyance from a woman, with the usual limited interest which a woman takes, and who seeks to enforce that title against reversioners, is always subject to the burden of proving not only the genuineness of his conveyance, but the full comprehension by the limited owner of the nature of the alienation she was making, and also that that alienation was justified by necessity, or at least that the alience did all that was reasonable to satisfy himself of the existence of such necessity. And this burden lies the more heavily on one who comes into Court with the case that he did not take from a limited owner, but from one whose title he alleges to have been adverse to that owner.

    14. These considerations apply with special force to the present case. The earlier transactions of the first respondent were with Etraj Koer, and there is no satisfactory evidence to show that Jileb Koer, the real owner, took part in them, or authorised them in any way.

    15. It was argued however that, if Jileb Koer was not shown to have authorised the earlier transactions, she had ratified them by being a party to the later documents and particularly the two sale deeds. Ratification in the proper sense of the term, as used with reference to the law of agency, is applicable only to acts done on behalf of the ratifier. And this rule is recognised in Section 196 of the Indian Contract Act. Looking to the substance of the matter, it would be a serious extension of the law, as hitherto applied, to hold that a woman with a limited interest could, by acts ex post facto, charge upon the estate which she represents obligations not originally binding upon it.

    16. With regard to the first of the sale deeds now in question, when the details which make up the consideration come to be examined, it appears that they include one sum of Rs. 1,500 which the Subordinate Judge credited to the first respondent in the manner already explained. Apart from this sum the great bulk of the consideration for this sale deed consists of debts originally incurred by Etraj Koer with accretions of interest and compound interest. Their lordships are of opinion that this deed was correctly estimated by the Subordinate Judge.

    17. The case as to the second sale deed is not quite so simple. With regard to it the Subordinate Judge gave credit to the first respondent for considerable sums as having been advanced for real necessities. As to the rest of the consideration for that deed he held that necessity had not been established. In coming to this conclusion, he took into account not only the more general considerations already referred to, but also certain circumstances peculiar to the case-that the lady who alone had any power to convey was old, and had no independent advice to guide her, and that the first respondent was in a position to exercise considerable influence over her affairs. Their lordships think the Subordinate Judge was justified in taking all these matters into his consideration; and they see no sufficient ground for rejecting his conclusions.

    18. There remains one other point for consideration. The plaintiffs claimed not only possession but mesne profits. The Subordinate Judge rejected the latter claim. Their Lordships are of opinion that, as the deeds of sale are not good as such, the claim for mesne profits is well founded. In argument it was conceded that on the other side of the account interest at 6 per cent, should be allowed on the sums credited to the first respondent. The amounts thus to be allowed on the one side and on the other can be adjusted in execution proceedings.

    19. Their Lordships will humbly advise His Majesty that the Appeals should be allowed, that the decrees of the High Court should be discharged with costs to be paid as regards the first decree by the present respondents other than Sowton and as regards the second decree by the first respondent, that the decrees of the Court of the Subordinate Judge should be discharged, and that instead thereof it should be ordered that upon the first appellant paying to the first respondent the sums found in favour of the latter by the Subordinate Judge with interest at 6 per cent, per annum the first appellant do recover possession of the property in suit together with mesne profits to be ascertained in execution proceedings and costs to be paid by the First Party defendants in the first Suit and by the sole defendant in the second suit.

    20. The respondents other than Sowton will pay the costs of these appeals.

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    Raja Rai Bhagwat Dayal Singh v. Debi Dayal Sahu
    (Apr 9, 1908)