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Jado Singh v. Nathu Singh

Allahabad High Court
Apr 27, 1926
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Structured Summary of the Provided Opinion

Factual and Procedural Background

The suit was brought by three minor sons (the plaintiffs) to challenge an alienation (a sale-deed) executed by their fathers. The opinion begins by stating that the eldest plaintiff was about six months old at the time of the alienation and that the other minors had not yet been born. The alienation is reported at one point as occurring on 16 October 1912; a later paragraph in the opinion records a date of 16 October 1922 for the sale-deed (both dates appear in the text).

The plaintiffs impleaded their fathers as pro forma Defendants Nos. 1 and 2. The plaint alleged that the fathers were addicted to speculation, gambling and other vicious habits, and that they transferred ancestral property without legal necessity, tainted by immorality, illegality and fraud by the vendees. There was no clear and categorical allegation that the sale consideration had not been paid, although it was alleged that the transfer was without legal necessity and illegal.

At trial both oral and documentary evidence was led by the parties. The Subordinate Judge found that the transaction was for necessity and for the benefit of the family, that the whole consideration had been paid, and dismissed the suit. The plaintiffs appealed, challenging some of the trial court's findings.

The opinion reconstructs prior financing history: the property originally had been acquired (sale-deed of 8 April 1897 for Rs. 4,000) with Rs. 700 unpaid and secured by a bond in favour of Lala Hardian Singh carrying interest (described in the opinion as "ten annas per cent, per mensem, compounded every year"). In 1908 a mortgage bond for Rs. 2,450 was executed representing principal and accumulated interest. After Phul Singh's death, his sons Natthu Singh and Arjun Singh (the fathers of the plaintiffs) executed a hypothecation bond dated 15 June 1912 to raise Rs. 500 to pay interest and some cash. The later sale-deed (dated in the opinion as 16 October 1912 and once as 16 October 1922) recites a sale consideration of Rs. 6,650, with specified allocations (Rs. 2,600 to prior mortgagees; Rs. 400 taken in advance; Rs. 120 as earnest money to meet expenses; Rs. 3,530 stated to be required for maintenance and other expenses). Of the Rs. 3,530, Rs. 2,750 was paid in cash before the Sub-Registrar; Rs. 520 taken beforehand had not been challenged on appeal.

Within months of the sale the fathers purchased zamindari property in their residential village for about Rs. 3,000. For nearly nine years before the suit was instituted, Natthu Singh and Arjun Singh did not demand any outstanding balance of the sale consideration or sue to recover it. At the registration the adult executants admitted execution and receipt of the consideration before the Sub-Registrar.

Legal Issues Presented

  1. Whether the sale of joint/ancestral property by the fathers (managers) was justified on grounds of legal necessity or because it was for the benefit of the family.
  2. Whether the entire sale consideration was in fact paid to the fathers, and—if not fully paid—whether non-payment vitiates the sale.
  3. Whether, under Hindu law, a manager of joint family property can transfer that property to raise funds to acquire fresh property (i.e., whether such a transfer can ever amount to a "benefit to the estate" or constitute legal necessity).
  4. Whether allegations of immorality, vice, speculation and fraud by the fathers were substantiated so as to invalidate the sale.

Arguments of the Parties

Plaintiffs' Arguments

  • The fathers transferred ancestral/joint property without legal necessity, in consequence of being addicted to speculation, gambling and other vicious habits.
  • The transfer was tainted with immorality, illegality and was brought about by the fraud of the vendees.
  • Under Hindu law, the fathers (as managers) had no authority to transfer joint property in order to raise money to purchase fresh property; such a transfer could not be justified as legal necessity and amounted to unauthorized speculation.

Defendants' / Respondents' Arguments

  • The sale was carried out for legal necessity and resulted in benefit to the family: antecedent debts were paid and property more conveniently situated and more profitable for cultivation was acquired.
  • The sale consideration was in fact paid (admissions before the Sub-Registrar and cash payments on record), and large portions of the consideration were applied to antecedent debts which the plaintiffs cannot avoid contesting.
  • Evidence shows that the property acquired appreciated substantially in value and that the family has enjoyed the benefit; therefore the transaction is binding and cannot be set aside merely because the plaintiffs now seek to retain the new property and recover the old.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Brij Narain v. Mangal Prasad, AIR 1924 PC 50 Defines "antecedent debt" and treats sums left to pay prior mortgagees as antecedent debt. The plaintiffs' counsel conceded that Rs. 2,600 left for payment to prior mortgagees amounted to an antecedent debt under this authority; accordingly that item of the sale consideration could not be questioned.
Hanooman Persaud Panday v. Mt. Babooee Munraj Koonwaree (1854-57) 6 MIA 393 Manager's power to charge estate not his own is limited; can be exercised only in case of need or for benefit of the estate; a charge a prudent owner would make to benefit the estate is valid and protects a bona fide lender. The court relied on this principle to frame the test—whether the transaction was one a prudent owner would make for the benefit or protection of the estate; used to support the view that transfers for the family's benefit can be valid.
Indar Kuar v. Lalta Prasad [1882] 4 All 632 Distinguishes litigation to protect property (legal necessity) from litigation to obtain possible benefit; if litigation results in actual benefit, alienation necessary for it may be valid (equity: he who enjoys benefit bears burden). Quoted as authority for the view that if an act (including alienation) results in actual benefit to the estate it can be justified and binding on reversioners; supports validation where actual benefit is shown.
Palaniappa Chetty v. Devasikamony Pandara, AIR 1917 PC 33 Observations that a precise definition of "benefit to the estate" cannot be given; examples of benefits (preservation, defence, protection) were mentioned and the Privy Council considered a shebait's lease to fund money-lending not a benefit. The court held this authority did not overrule earlier authorities (e.g., Hanooman Persaud) and did not confine "benefit" to the few examples; used to reject the plaintiffs' contention that transfers to acquire fresh property are necessarily prohibited.
Sadhu Saran Prasad v. Brahmdeo Prasad, AIR 1921 Pat 99; Nand Singh v. Shiva Nandan Singh, AIR 1922 Pat 122; Gainda Mal v. Roda [1921] 63 IC 766 Patna High Court decisions taking the view that the Privy Council decision in Palaniappa Chetty does not overrule previous authorities permitting certain transfers for benefit. Cited to demonstrate that subsequent High Court decisions interpreted Palaniappa Chetty as not depriving managers of the power to transfer family property to acquire more beneficial property in lieu of inconvenient holdings.
Tula Ram v. Tulshi Ram, AIR 1920 All 11 Where joint family property was mortgaged to obtain a loan to purchase zamindari property and the purchase proved beneficial, the debt was incurred for benefit of the family and binding. Relied upon to show that transactions which in fact prove beneficial validate the incurring of debt or alienation for that purpose.
Bhagwan Das Naik v. Mahadeo Prasad Pal, AIR 1923 All 298 Held that borrowing to pursue speculative litigation cannot be justified as legal necessity; if litigation results in benefit this may bind the family by equity; stressed defensive nature of acts qualifying as legal necessity. The court accepted the view that speculative adventures (e.g., borrowing for uncertain litigation) are not legal necessity; used this to distinguish purely speculative acts from those undertaken prudently for family benefit.
Shanker Shai v. Baichu Ram, AIR 1925 All 333 Concerned transfer of family property to acquire funds to pre-empt other property (not directly on point for the present facts). The court noted it was not directly applicable to the present case.
Jagmohan Agrahri v. Prag Ahir, AIR 1925 All 618 Upheld disposal of ancestral property inconveniently situated and not profitable where proceeds were used for family business (not speculative), even though that enterprise later failed. Noted as going further than the present case and as supportive of the proposition that transfers for prudent family benefit can be valid even if the subsequent venture fails.
Bahadur Lal v. Kamleshar Nath, AIR 1925 All 624 (Full Bench) Referred to on the point that a sale cannot be set aside unless it is shown that the money was not paid or the consideration paid was not equal to the real value of the property. Quoted by the court to reinforce that the sale could not be avoided unless non-payment or inadequate consideration (relative to real value) was demonstrated.

Court's Reasoning and Analysis

The court proceeded by (a) examining the factual findings of the Subordinate Judge on payment of consideration and benefit to the family, and (b) testing those findings against principles of Hindu law as elaborated in earlier authorities.

On the facts, the Subordinate Judge found the whole consideration had been paid. The appellate court noted several factual circumstances supporting that finding: admissions by the adult executants before the Sub-Registrar that they had executed the document and received the consideration; actual cash payments of Rs. 2,750 before the Sub-Registrar; long delay (nearly nine years) in seeking any balance; and the plaintiffs' fathers (who had special means of knowledge) were not called to rebut payment and had been kept out of the witness-box. Those circumstances "impressed" the court and led it to accept the trial judge's finding that the whole consideration had been paid and that no part remained outstanding.

The court then addressed the legal challenge that the fathers had no authority under Hindu law to sell joint property to raise money to buy fresh property (arguing such conduct was mere speculation). The court reviewed precedent beginning with Hanooman Persaud Panday (manager's power limited to cases of need or for benefit of estate) and subsequent authorities interpreting "benefit to the estate." The Privy Council in Palaniappa Chetty had said "benefit" could not be precisely defined and offered examples of obvious benefits, but it did not purport to overrule prior authorities that permitted transfers if they truly resulted in benefit.

The court accepted the established line of decisions permitting a manager to transfer joint property if the act was not a mere speculation and resulted in actual benefit to the family—citing Indar Kuar, Tula Ram, Bhagwan Das Naik and others—and distinguished cases where the transfers were primarily speculative (e.g., borrowing to finance uncertain litigation) which do not qualify as legal necessity.

Applying those principles to the present facts, the court stressed the following points in support of the sale:

  • The fathers were tenants in the village where they wished to become zamindars and the property sold was inconveniently situated (two miles away) and subject to a heavy antecedent debt bearing compound interest.
  • The Subordinate Judge found pressing creditors and difficulty in cultivating the distant holding; selling it to buy property close to home was prudent foresight and less costly to cultivate.
  • Evidence (oral and circumstantial) established that roughly Rs. 3,000 of the sale proceeds were used to purchase the new zamindari property which later appreciated considerably in value (purchase for Rs. 3,000 on 5 July 1913 then worth about Rs. 6,000).
  • The adult family members (Natthu Singh and Arjun Singh) were the only persons able to judge prudence; Natthu also acted as guardian of the minor—so they were in the best position to decide.
  • The plaintiffs and their fathers enjoy possession and benefit from the acquired property and wish to retain it; equity principles bar them from repudiating the transaction by which they obtained the benefit.

The court therefore held that the sale was not a mere speculation but a prudent transaction conferring real benefit upon the family. It observed further that even if a small portion of the sale proceeds had not been strictly required for legal necessity, the sale could not be avoided unless it was shown that money was not paid at all to the fathers or that the consideration was not equal to the real value of the property (relying upon Bahadur Lal v. Kamleshar Nath).

Holding and Implications

Holding: The appeal is dismissed. The Subordinate Judge's decree dismissing the suit is upheld and the respondents (defendants) are entitled to costs.

Implications:

  • Direct effect on the parties: The sale-deed is upheld; the plaintiffs cannot set aside the sale on the factual and legal grounds advanced in this appeal, and the property purchased with the sale proceeds (now enjoyed by the family and plaintiffs) remains validly held by them.
  • Precedential effect: The court applied and followed existing authorities to reaffirm that a manager of joint Hindu family property may, in suitable circumstances and where the transaction is not speculative but results in actual benefit, transfer property to acquire more suitable property. The opinion does not purport to create a new principle but applies and reconciles prior decisions (including Privy Council and High Court authorities) to the facts of this case.
  • Limit on avoidance: The sale could not be avoided merely because some portion of the consideration was arguably unnecessary; avoidance requires proof of non-payment or that the consideration paid was not equal to the real value of the property.

Note: This summary is confined to the material and reasoning contained in the provided opinion and does not add facts or interpretations beyond what the opinion itself states.

Show all summary ...

1. This is an appeal by the plaintiffs arising out of a suit brought by three minor sons to challenge an alienation made by their fathers. The eldest plaintiff was about six months old at the time of the alienation, which was on the 16th of October 1912, and the other minors were not born at all.

2. The allegations in the plaint were that the fathers of the plaintiffs, who were impleaded in the suit as pro forma Defendants Nos. 1 and 2, fell into the hands of avaricious parsons and became fond of speculation and gambling and were addicted to vicious habits, and in consequence they transferred ancestral property under a sale-deed of the date mentioned above in favour of the ancestors of the principal defendants without any legal necessity. There was no clear and categorical statement in the plaint that consideration had not passed, but the main allegations were that the transfer was without legal necessity and that it was tainted with immorality and illegality, and had further been brought about by the fraud of the vendees. These allegations in the plaint were denied by the principal defendants. The plaintiffs' fathers who are still alive and who have special means of knowledge, were not put into the witness-box to state either that they had not received any part of the sale consideration or to depose that they had raised this money for any unlawful purpose. Both oral and documentary evidence was led on both sides.

3. The learned Subordinate Judge came to the conclusion that the transaction was for necessity and for the benefit of the family and has resulted in considerable benefit to it. He further found that the whole of the consideration had been paid. On these findings he has dismissed the suit. The plaintiffs challenge some of the findings in appeal.

4. It appears that the property sold to the principal defendants had itself been acquired by the family under la sale-deed dated the 8th of April 1897 for a sum of Rs. 4,000. Out of this sum, Rupees 700 remained unpaid, and in lieu of it a bond was executed by the plaintiffs' grandfather, Phul Singh, on the same date in favour of Lala Hardian Singh. This bond carried interest at the rate of ten annas per cent, per mensem, compounded every year. In spite of the lapse of over ten years, Phul Singh was not able to pay off this amount. On the 9th of July 1908, Phul Singh executed a mortgage bond in lieu of this document for a sum of Rs. 2,450 at the same rate of interest compounded every year-the amount representing the principal and interest due on the previous bond of 1897. Later on, after Phul Singh's death his sons Natthu Singh anal Arjun Singh the fathers of the plaintiffs, executed a hypothecation bond, dated the 15th of June 1912 in order to raise Rs. 500 to pay off interest due on the previous bond, and some cash. This document carried interest at the same rate. On the 16th of October 1922 the sale-deed in dispute in this case was executed by Natthu Singh and Arjun Singh for themselves and Natthu Singh, acting also as the guardian of his minor son, Jado Singh plaintiff No. 1. The sale consideration was Rs. 6,650 and was stated to be paid as follows:

Rs. 2,600 were left with the vendees for payment, of the two previous, bonds in favour of Lala Hardian Singh;

Rs. 400 had been taken in advance before the execution of the document;

Rs. 120 had been taken as earnest money in order to meat the expenses of the execution; and a sum of:

Rs. 3,530 was stated to be required for the maintenance of the minor and for other expenses.

5. Just a month intervened before the execution of the document and its presentation for registration. Before the Sub-Registrar the adult executants admitted the execution and completion of the document and the receipt of the consideration mentioned therein. Rupees. 2,750 were actually paid in cash before the Sub-Registrar. It is in evidence that at the time when this sale took place Natthu Singh and Arjun Singh were actually negotiating for the purchase of zamindari property in their residential village in which they were then mere tenants. Within seven month of the registration of the sale-deed Natthu Singh and Arjun Singh actually purchased property in their residential village for a sum of Rs. 3,000.

6. For nearly nine years before the suit was instituted by the minor sons under the guardianship of their maternal grandfather, neither Natthu Singh nor Arjun Singh made any demand of any outstanding balance of the sale consideration, nor instituted any suit to recover any unpaid portion of it.

7. As regards the question of consideration, the learned vakil for the plaintiffs has to concede that the sum of Rs. 2,600 left for payment to prior mortgagees, amounted to an antecedent debt within the meaning of the pronouncements of their Lordships of the Privy Council in the case of Brij Narain v. Mangal Prasad AIR 1924 PC 50. It is therefore not possible to question the validity of this item of the sale consideration. The payment of Rs. 520, received beforehand, has not been challenged in appeal before us. Out of Rs. 3,530, the payment of Rs. 2,750 in cash before the Sub-Registrar is also accepted on behalf of the appellants.

8. The whole argument has turned on the question whether the remaining sum of Rs. 780 was in reality paid to the fathers of the plaintiffs or not. We have already remarked that the question of non-payment of any part of the consideration was not put forward by the plaintiffs in the forefront. It is discussed by the learned Subordinate Judge under Issue No. 2, which related to the question of legal necessity and benefit of the family and the defendants being purchasers in good faith for consideration after bona fide enquiry. The learned Judge, on the evidence and the circumstances, was satisfied that the whole of this consideration was in fact paid. It is needless for us to discuss the evidence in detail, but we may note that the circumstance which has impressed us very strongly is that the plaintiffs' fathers did not, after the sale, ever assert or make any demand for the return of any balance. Had any amount been left outstanding, it is most unlikely that they would not have demanded it when the property itself had passed out of their family. The four vendees in whose name the sale-deed was executed were all dead at the time when the suit was instituted. The defendants therefore were not in a position to produce any of those four men who actually paid the sale consideration. They have led some oral evidence. On the other hand, the plaintiffs' fathers, who had special means of knowledge and who must know all about the payment of the consideration, have been clearly kept out of the witness-box. Their acknowledgment before the Sub-Registrar, that they had received the entire consideration remains unrebutted. We therefore think that it is impossible to interfere with the finding of the learned Subordinate Judge that the whole consideration had in fact been paid and that no part of it remained outstanding.

9. In spite of wild allegations as regards the immorality and vicious habits of their fathers, the plaintiffs led no satisfactory and reliable evidence to substantiate their allegations. The learned Subordinate Judge has rejected this story and that story has not been pressed before us.

10. The main argument before us is that even assuming that Rs. 2,600 were for a valid consideration for the alienation, there was no justification to raise further sum in order to purchase fresh property, as is alleged by the defendants. That about Rs. 3,000 out of the sale consideration received were utilized towards purchasing this fresh property, is fully established by the oral evidence and the circumstances of this case. The learned Subordinate Judge has believed this story and we have no hesitation in agreeing with his view. In fact this point has not been pressed before us very seriously.

11. What has been strongly urged is that there was under the Hindu law no justification for the fathers of the present plaintiffs to raise money by transferring joint property in order to purchase fresh property. The contention is that such a course amounted to a mere speculation, which was wholly unauthorized. Before we go into the question of law it is necessary to state the circumstances under which the fresh property was acquired.

12. The plaintiffs' fathers were mere tenants in village Asanwali, and it is only natural to suppose that they must have been very anxious to become zamindars in that village. They had acquired property in 1897 in village Salempur, some two miles from their village, where they had some cultivation. On this property there were mortgage debts carrying interest at 7 1/2 per cant, compounded every year, the amount having accumulated to about Rs. 2,600, For a long number of years they had been unable to pay off this amount and discharge the debt, and there seemed to be no prospect of there being able to do so in any way other than by transferring a part of it. The learned Subordinate Judge had found that the creditors were pressing for the payment of this money. In fact the last hypothecation bond was executed in order to pay off some interest on the previous one.

13. A demand for further payment of interest was therefore not at all improbable. The Government revenue shown against this property in the sale-deed of 1912 was less than that shown in 1897; this suggests that the property might have deteriorated in quality. The learned Subordinate Judge has found that although the plaintiffs' fathers were good managers, and it might be assumed that they were doing their best, they found it difficult to cultivate lands situated not in their residential village but in a village some two miles off. He has further found that it was foresight and prudence on their part to sell the property distantly situated and purchase property in lieu of it near home where cultivation could be managed by them at a smaller cost. This was doubly so when the result would be to free themselves from the anxiety of the old debt bearing compound interest which would otherwise go on swelling.

14. He was further satisfied on the oral evidence that the property in Asanwali was the better of the two, both in respect of the quantity of the yield and its price. He has therefore come to the conclusion that the transaction was prudent and beneficial from every point of view. We agree with this view fully. He has further pointed out that as a matter of fact this transaction has proved very beneficial and has resulted in considerable advantage to the family. The property which they purchased for Rs. 3,000 on 5th July 1913 is now worth about Rs. 6,000 and has thus appreciated considerably in value. The plaintiffs along with their fathers are admittedly in possession and in enjoyment of it and they wish to retain it. At the same time they desire that sale-deed, by means of which money was raised to acquire the property now in their enjoyment, should be set aside so that they may get back the other property also, As we are agreeing with the view of the learned Subordinate Judge on the facts, we do not think it necessary to discuss all the oral evidence in detail and we content ourselves with stating that we accept these findings as fully justified by the evidence.

15. It has however been very strongly contended on behalf of the plaintiffs that even assuming all these findings, the whole transaction cannot be upheld because the plaintiffs' fathers had no authority to transfer joint property in order to raise money to purchase fresh property, and it is urged that under no circumstances can a sale of a joint property, in order to acquire fresh property, be justified, as it can never be a case of legal necessity. As to the question whether it might not be a transaction for the benefit of the family, the argument that has been pressed before us is that in view of the pronouncements of their Lordships of the Privy Council in the case of Palaniappa Chetty v. Devasikamony Pandara AIR 1917 PC 33, there can be no benefit to the family unless it amounts to a preservation or protection of the family property.

16. As early as 1856 their Lordships of the Privy Council in the case of Hanooman Persaud Panday v. Mt. Babooee Munraj Koonwaree (1854-57) 6 MIA 393 laid down the law as follows:

The power of the manager for an infant heir to charge an estate not his own is, under the Hindu law, a limited and qualified power. It can only be exercised rightly in a case of need, or for the benefit of the estate. But where, in the particular instance, the charge is one that a prudent owner would make, in order to benefit the estate, the bona fide lender is not affected by the precedent mismanagement of the estate. 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.

17. It is quite clear that the benefit to be conferred upon the estate was something distinct from mere need or the pressure upon it. At least this was the view which was accepted by this Court in several oases. We may only to refer to the case of Indar Kuar v. Lalta Prasad [1882] 4 All 632. Mahmood, J., pointed out that there was a distinction between litigation undertaken to protect the property and litigation the object of which was to obtain a possible benefit for the estate, and then remarked:

As a general rule, the former class of litigation would no doubt amount to legal necessity; and in regard to the latter class of litigation it may be laid down that, if such litigation ends in actual benefit to the estate, any alienation which may have been necessary for prosecuting the litigation would be valid and binding upon the reversioner, on the analogy of the maxim, he who enjoys the benefit ought to bear the burden also.

18. Since then this Court has accepted the view that a transfer of joint property by the manager can be justified if it is not a mere speculation but results in actual benefit to the estate. The other members of the family cannot retain the benefit and at the same time repudiate the transaction by means of which the benefit has been acquired.

19. We do not think that their Lordships of the Privy Council in the case of Palaniappa Chetty v. Devasikamony Pandara AIR 1917 PC 33 meant to depart from the view expressed in Hanooman Prasad's case (1854-57) 6 MIA 393. All that their Lordships remarked was that in the reported cases no indication was found as to what is the precise nature of the things to be included under the description "benefit to the estate." Their Lordships then observed;

It is impossible, their Lordships think, to give a precise definition of it applicable to all cases and they do not attempt to do so. The preservation however of the estate from extinction, the defence against hostile litigation affecting it, the protection of it or portions from injury or deterioration by inundation, these and such like things, would obviously be benefits. The difficulty is to draw the line as to what are, in this connexion, to be taken as benefits and what not.

20. The case before their Lordships was one in which a "shebait" of temple property had granted a lease in perpetuity "solely for the purpose of getting capital to embark on the money-lending business." Their Lordships held that could not be considered a benefit to the estate. Their Lordships, however, further proceeded to consider whether on facts the transaction was in reality beneficial and came to the conclusion that it was not.

21. When their Lordships themselves remarked that it was impossible to give a precise definition of "benefit to the estate" applicable to all cases and that they did not attempt to do so, it is difficult to accept the contention of the learned vakil for the plaintiffs that by implication their Lordships meant to confine the scope of the word "benefit" to the cases mentioned by their Lordships as coming obviously under that head. Every case has to depend on its particular circumstances and facts. It is impossible to hold that in view of the remark of their Lordships the view of this Court has been altered so to make it impossible for the manager of the joint Hindu family to transfer property in order to acquire another property in lieu of it. If such were the view exchanges would be absolutely prohibited and managers would find it impossible to get rid of properties small in extent, distantly situated and difficult to manage, in order to acquire property more beneficial and useful. The case decided by their Lordships of the Privy Council has been a subject of consideration by the Patna High Court in at least three cases which have been brought to our notice, and the view of the Patna Judges certainly is that this case does not overrule the previous decision. We may here refer to Sadhu Saran Prasad v. Brahmdeo Prasad AIR 1921 Pat 99; kalika Nand Singh v. Shiva Nandan Singh AIR 1922 Pat 122 and Gainda Mal v. Roda [1921] 63 IC 766.

22. In the case of Tula Ram v. Tulshi Ram AIR 1920 All 11 it was held that where a joint family property had been mortgaged to obtain a loan on the representation that the money was required for the purpose of purchasing certain zamindari property and the purchase was not in fact an unprofitable or improvident transaction but proved beneficial to the family, the debt was incurred for the benefit of the family and was binding on the members thereof. This was in accordance with the previous view held by this Court. Later on came the case of Bhagwan Das Naik v. Mahadeo Prasad Pal AIR 1923 All 298. At page 274 the learned Judges referred to the case decided by Mahmood. J., already quoted by us, and remarked that the mere borrowing of money to pursue litigation, the object of which was to obtain a possible benefit for the estate was held cot to be justified under the doctrine of "legal necessity" as known to the Hindu law, though possibly if the litigation resulted in benefit to the estate, the debt would be binding in accordance with the principle of equity embodied in the maxim quoted. The learned Judges then referred to the case of their Lordships of the Privy Council and stated that there was nothing in the remarks in that case to encourage the notion that an adventure in the shape of a speculative suit which might possibly bring profit to the estate could possibly be regarded as a "benefit to the estate" or a "legal necessity." We agree with this view. It was further remarked that "the observations of their Lordships rather import that any act for which the character of "legal necessity" or "benefit to the estate" can be claimed, must necessarily be a defensive act, something undertaken for the protection of the estate already in possession, not as act done with the purpose of bringing fresh property into possession, and which may or may not be successful under the chances attending upon litigation."

23. It is obvious that the transfer of family property in order to enable the members to embark upon litigation in the hope of acquiring property on the success of uncertain litigation cannot amount to justification. The learned Judges had before them the case of a manager who had made four mortgages and spent sums borrowed in support of a futile claim for mutation, which ultimately fell, the mortgagee knowing that these sums had been borrowed for the purpose of that litigation. That case therefore has no resemblance to the case before us

24. In the same way the case of Shanker Shai v. Baichu Ram AIR 1925 All 333, which was a case where family property was transferred in order to acquire necessary funds to pre-empt other property, is not directly applicable. On the other hand, the case of Jagmohan Agrahri v. Prag Ahir AIR 1925 All 618, decided by a Bench to which Lindsay, J., who had decided the case in Bhagwan Das Naik v. Mahadeo Prasad Pal AIR 1923 All 298, was a party, goes further than even the present case, for there the disposal of ancestral property by a Hindu father which was inconveniently situated and was not sufficiently profitable, was upheld, though the sale consideration was applied not for the purchase of fresh property but for the extension of the family business which though not of a speculative nature subsequently failed.

25. On the strength of these authorities we are therefore unable to hold that in no case can a transfer of joint property made in order to acquire another property in its place be justified. In this particular case we have already referred to various circumstances showing the foresight and prudence of the managers. We might here point out one more important circumstance. At the time of the sale deed the only members of the family were Natthu Singh and Arjun Singh and Natthu Singh's minor child Jado Singh. The adult members were the only persons who could judge of the prudence and prospective benefits of the transaction that they were entering into. Natthu Singh not only acted as the manager of the family but also as the guardian of the minor son. These people were in the best position to judge whether the transaction was prudent and beneficial or not. That their judgment was not wrong has been demonstrated by the enormous increase in the value of the property and the actual benefit which has accrued. The plaintiffs have derived full benefit from it and are determined to retain the property.

26. Under these circumstance it seems to us impossible to allow them to get rid of the sale-deed by means of which they were provided with the means by which the unencumbered property which they are retaining was acquired. We have already remarked that a good portion of the amount was utilized for payment of antecedent debts which cannot possibly be avoided by the plaintiffs. Even it any small sum of money out of the large sale consideration had not been required for any legal necessity, and was not unutilized towards the acquisition of this other property, the sale could not be avoided unless it were shown that the money was not at all paid to the plaintiffs' fathers and that the consideration which was actually paid was not equal to the real value of the property. We might in this connexion quote the recent Full Bench case of Bahadur Lal v. Kamleshar Nath AIR 1925 All 624.

27. Having regard to all these circumstances we are of opinion that this appeal must be dismissed. We accordingly dismiss it with costs.