Rustamalli Goharalli Mirza v. Aftabhuseinkhan Najafallihhan Mirza

1. The facts out of which this appeal arises are these. The two villages Sahijpur-Bogha and Kujad belonged to the ancestor of defendant 1 Najafallikhan and the plaintiff's ancestors had a sixth share in their income. In 1860, by an agreement be-tween defendant l's father and the plaintiff's ancestors, Najafallikhan undertook to pay Rs. 96 a year out of the income of the villages in lieu of their one-sixth share. The agreement further provided that Najaf ali-khan was to pay ss, 96 a year even if no income was realised by him. But in case of any catastrophe or an act of God or King he failed to realise any income, he was to pay such sum as he thought fit. Nothing more was to be paid to the plaintiff's ancestors even if the income realised was more. In pursuance of this agreement the plaintiff's father obtained decrees against defendant 1's father for arrears due at the rate agreed upon. In 1923 defendant 1 sold the village Kujad to Sardar Samsuddin, the father of defendants 3 to 7 and the husband of defendant 8. In 1924 he sold the other village’ Sahijpur-Bogha to Sheth Maneklal Mansukhlal, who sold it to defendant 2 in 1930. In the previous suits it was held that the plaintiff's father's share in the amount of Rupees 96 payable under the agreement was Rs. 21. The plaintiff's father died in 1917 when the plaintiff was only five months old. The plaintiff attained majority on 18th May, 1938, and he filed this suit on 25th April, 1938, seeking to recover Rs. 462 as arrears of his dues at the rate of Rs. 21 per year from 17th January, 1917 to 17th January, 1938, and to recover in future Rupees 21 on 17th January every year from defendants 2 to 8, or whoever may be in possession of the two villages. Defendants 2 to 8 contended that the plaintiff's suit was bad for multifariousness, that it was not in time, that the plaintiff had no right to recover Rs. 21 every year and that in any case, being transferees for valuable consideration without notice, they were not bound to pay any amount to him under the agreement between him and the father of defendant 1.

2. The trial Court held that the suit was in time and was not bad for multifariousness. It further held that defendants 2 to 8 were liable, along with defendant 1, for the plain, tiff's claim. It also held that, after the death of the plaintiff's father, the plaintiff's share in Rs. 21 payable every year was only 7/20. The plaintiff contended that his mother and his three sisters were not entitled to any share, as the income was by custom to go only to male heirs. That contention was disallowed. Defendant 1 was held liable for the period from 1917 to 1923 and defendants 2 to 8 together for the amount payable in subsequent years. Accordingly, defendant 1 was ordered to pay Rs. 51-7-2 to the plaintiff, and defendants 3 to 8 Rs. 51-7-2 and defendant 2 Ba. 58-12-9. It was declared that in future the plaintiff was entitled to recover Rs. 7-5-2 2/5 on 17th January every year from defendant 2 and defendants 3 to 8 or their heirs or assignees. Three appeals were preferred against the decree of the trial Court, one by the plaintiff, one by defendant 2 and one by defendants 3 to 8, and they were disposed of by one judgment. The learned District Judge held that so far as the transferees from defendant 1 were concerned, the case was governed by Section 40 of the Transfer of Property Act, 1882, that the amount payable under the agreement of 1860 was not a charge on the income of the villages, and that as defendants 3 to 8 were transferees without notice of the obligation arising under the agreement, they were not bound to pay the amount which defendant l's father had undertaken to pay under the agreement. Hence the decree against defendant 1 that he should pay Rs. 51-7-2 to the plaintiff was confirmed, but the plaintiff's claim against defendants 2 to 8 was dismissed with costs. In this appeal it is urged on behalf of the plaintiff that on the wording of the agreement of 1860 a charge for the amount payable to the plaintiff's father was created on the income of the two villages. In my opinion this contention has considerable force and must be upheld. It is specifically recited in the agreement that Rs. 96 were settled to be paid annually to the plaintiff's father in lieu of his one-sixth share in the villages “out of the income” of those villages. Under similar circumstances in 7 Mad. 231, where a Hindu executed a document agreeing to pay to his sister Rs. 10 per annum from the produce of an estate inherited by him from his maternal grandmother, it was held that a corrody or a charge on the profits of the estate was created, which bound the estate in the hands of the widow of the grantor. In A.I.R 1929 All. 7372, it was held that where a fund was indicated for payment of a certain allowance, the latter must be deemed to be a charge on the former. In (1889) 23 Q.B.D 2393 it was held:

A document given by way of charge is not one which absolutely transfers the property with a condition for conveyance, but is a document which only gives a right to payment out of a particular fund or particular property, without transferring that fund or property.

3. In A.I.R 1929 Lah. 2744, a stipulation that the amount due under a certain promissory note should come out of the timber of a certain jungle was held to create a charge on the timber in the jungle, although the fund out of which the debt was to be satisfied had not come into existence. The facts of the present case are even stronger, since the plaintiff's father was the owner of a sixth share in the villages, and in lieu of his share in the income he agreed to receive a lump sum of Rs. 96, whether the actual income was more or less, and defendant 1's father agreed to pay that amount out of the income of the villages. This clearly indicates an intention to create a charge on the income of the villages in respect of the amount agreed to be paid to the plaintiff's father.

4. This finding, however, cannot be of any avail to the plaintiff. The transferees purchased the villages for valuable consideration without notice of the charge. It is argued that under Section 100 of the Transfer of Property Act, as it stood before, its amendment in 1929, even a transferee without notice took the property transferred subject to the charge which existed at the date of the transfer. But the charge does not create any interest in the property charged, and, therefore, the charge is not enforceable against a transferee for consideration without notice. There are some cases where a charge created by a decree was held enforceable against a transferee for consideration without notice: 37 Bom. 6215. Assuming that those decisions are correct, the principle laid down by them cannot be extended to a charge which is not created by a decree. Those decisions are now superseded by the express provision made in the amended Section 100 of the Transfer of Property Act. But, as pointed out by Sir Dinshah Mulla at pp. 545 and 550 of his Transfer of Property Act (Edn. 2), the amendment does nob alter the law, but only shows more clearly what the rights and liabilities of a charge holder are, and even before the amendment, a charge, whether created by an agreement, or by a decree or by operation of law, was not enforceable against a transferee for consideration without notice. As held by a Full Bench in 13 Luck 1016, there is no difference in principle between a charge created by a decree and one created by contract. In either case the charge is not a transfer of an interest in the property. Where, therefore, a particular right is charged on specific immovable property, such right cannot be enforced against a subsequent transferee for valuable consideration and without notice of the charge.

5. It follows, therefore, that the plaintiff cannot seek to recover the amount due to him under the agreement entered into with defendant 1's father out of the income of the property which has been taken by defendants 2 to 8 for valuable consideration without notice. His claim against them is, therefore rightly dismissed.

6. It is urged that the plaintiff's share is not merely 7/20, but it has been now augmented by a portion of the shares of his two sisters on their deaths. But it is admitted that both the sisters died recently, so that during the period of 1917 to 1923 his share was only 7/20 and he has been awarded his share only for that period as against defendant 1. The decree against defendant 1 need not, therefore, be altered. The appeal is, therefore, dismissed with costs in separate sets.

7. Appeal dismissed.