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Kishen Sahai v. Raghunath Singh
Structured Summary of the Opinion
Factual and Procedural Background
The suit was instituted by Lala Kishan Sahai and two others as mortgagees against Raghunath Singh (defendant 1), his minor brother Khair Singh (defendant 2), and Raghunath's minor son Bhopal Singh (defendant 3). Two other defendants were made parties as subsequent transferees. The mortgage in dispute was executed on 12 July 1916 by Raghunath Singh and his father Sewak Ram (since deceased) for Rs. 4,000. The plaintiffs pleaded that the mortgage was executed for legal necessity and thereby bound the minors. Bhopal Singh alone contested the suit through his guardian, contending that the mortgage was not supported by legal necessity.
The learned Subordinate Judge found that the mortgage money comprised four items: Rs. 1,586; Rs. 1,800; Rs. 64; and Rs. 550. He held that Rs. 1,586 was borrowed to pay antecedent debt and that Rs. 64 met execution costs (both treated as legal necessity), and decreed sale of the mortgaged property to recover these sums. He held Rs. 1,800 (paid to meet purchase money for a pre-emption decree) was not binding on the joint Hindu family. He also found Rs. 550 had been paid by the mortgagees without legal necessity. The Subordinate Judge granted a personal decree for Rs. 1,800 and Rs. 550, but the decree ran against all three first defendants though it was apparently intended only against Raghunath Singh.
Two appeals arose: Appeal No. 380 by the plaintiffs and Appeal No. 437 by defendant 3 (Bhopal Singh). The appellate court considered whether parts of the mortgage were supported by antecedent debt or legal necessity, whether certain sums should be charged on the pre-empted property, and whether the personal decree was barred by limitation.
Legal Issues Presented
- Whether the sums included in the mortgage (in particular Rs. 1,800) constituted an antecedent debt such that the mortgage bound the minor members of the joint Hindu family.
- Whether the mortgage payments (notably Rs. 1,800 paid as purchase money under a pre-emption decree) were supported by legal necessity so as to bind the minors of the joint family.
- Whether the Full Bench decision in Jagat Narain v. Mathura Das altered the rule that a transaction by a single member which can bind others must be defensive in nature, thereby permitting the purchase (and mortgage) to be treated as valid.
- Whether the personal decree granted by the Subordinate Judge (for sums of Rs. 1,800 and Rs. 550) was barred by limitation, given the suit was instituted more than six years after the mortgage and the mortgage money was payable on demand.
Arguments of the Parties
Plaintiffs-Appellants' Arguments
- The entire mortgage money was either for legal necessity or for payment of antecedent debts; consequently the whole mortgage should bind the minors.
- Specifically, reliance was placed on authorities (Nathu v. Kundan Lal and Kapildeo v. Thakur Prasad) for the proposition that where a Hindu father borrows money to pay purchase money under a pre-emption decree, that borrowing is to pay an antecedent debt.
- Invoked the Full Bench decision in Jagat Narain v. Mathura Das to argue that a head of a joint Hindu family may be entitled to make a fresh purchase, suggesting that purchases (and attendant mortgages) may in some circumstances be supported as binding acts.
- Contended alternatively that the sums of Rs. 1,800 and Rs. 550 ought to be made payable out of the pre-empted property, since the minor members repudiated the purchase of the pre-empted property and therefore could not object to a mortgage of that property by Sewak Ram and Raghunath Singh.
- Prayed for a remand to the lower court for further inquiry on merits, necessity, and financial advantages of the transaction, arguing that evidence had not been adduced on these points at the original trial because reliance had been placed on Shankar Sahai v. Baichu Ram.
Defendant 3 (Bhopal Singh) / Contesting Party
- Bhopal Singh (through his guardian) contested the suit on the ground that the mortgage was not supported by legal necessity.
- In the written statement, Bhopal Singh made statements that the appellate court later characterized as false; this influenced the court's costs decision in his appeal.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Nathu v. Kundan Lal [1910] 33 All. 242 | Proposition that where a Hindu father borrows money to pay purchase money under a pre-emption decree, he borrows to pay an antecedent debt. | The plaintiffs relied on this case; the court considered it but concluded that the appellants' reliance on antecedent-debt principle could not be maintained for the pre-emption purchase money. |
| Kapildeo v. Thakur Prasad [1913] 36 All. 17 | Similar proposition to Nathu v. Kundan Lal regarding pre-emption purchase money being an antecedent debt. | Relied upon by plaintiffs; the court rejected the argument that the pre-emption purchase money constituted antecedent debt in the present case. |
| Bhagwan Das Naik v. Mahadeo Prasad Pal A.I.R. 1923 All. 298 | Authority dissenting from the proposition that pre-emption purchase money is antecedent debt. | Noted by the court as a later case dissenting from Nathu/Kapildeo; formed part of the basis for rejecting the antecedent-debt argument. |
| Shankar Sahai v. Baichu Ram A.I.R. 1925 All. 333 | Principle that a transaction by one member of a joint Hindu family which can bind others must be of a defensive (protective) nature to bind the family. | The court regarded this decision as authoritative on the defensive-nature principle and held the present transaction fell within that principle such that the purchase/mortgage could not be upheld as binding on the family. |
| Jagat Narain v. Mathura Das A.I.R. 1923 All. 454 (Full Bench) | Held that a head of a joint Hindu family may be entitled to make a fresh purchase; relied upon by appellants to challenge the defensive-only rule. | The court examined the Full Bench decision, found its facts to be within the purview of Shankar Sahai, and concluded that Jagat Narain did not displace Shankar Sahai for the facts of the present case. |
| Inspector Singh v. Kharak Singh A.I.R. 1923 All. 403 | Principle that the nature of a transaction must be judged by its character at the date of the transaction and not by subsequent events. | The court applied this principle (as enunciated by the Privy Council and in Inspector Singh) to hold that later events (e.g., loss of purchase money due to bank failure) do not transform the original character of the transaction. |
Court's Reasoning and Analysis
The following summarizes the court's step-by-step analysis as stated in the opinion.
- The court accepted the Subordinate Judge's factual breakdown that the mortgage money comprised four items: Rs. 1,586; Rs. 1,800; Rs. 64; and Rs. 550, and accepted the lower court's findings as to the first sum (Rs. 1,586) being for antecedent debt and Rs. 64 being for execution costs (legal necessity), permitting decree for recovery of these sums from the mortgaged property.
- On the key question about the Rs. 1,800 (paid as purchase money under a pre-emption decree), the court analyzed whether a debt existed at the date of the mortgage. It concluded that a pre-emption decree does not create a debt in the proper sense because such a decree only gives the pre-emptor an option to obtain property on payment; it does not carry an order for payment. Therefore, non-payment merely results in dismissal of the suit (and possibly costs), and this conditional character does not convert the transaction into an antecedent debt.
- The court considered the authorities relied upon by the plaintiffs (Nathu and Kapildeo) and noted later decisions dissenting from them (Bhagwan Das Naik and Shankar Sahai). On consideration, the court held that the appellants' antecedent-debt argument could not be maintained in the present facts.
- The court addressed the appellants' reliance on the Full Bench decision in Jagat Narain v. Mathura Das (arguing that a head of a joint family may make a fresh purchase). After reading the Full Bench case, the court concluded that its facts brought it within the principle in Shankar Sahai v. Baichu Ram (i.e., purchases that bind the family must be defensive or protective in nature). The court reiterated the governing principle that the nature of the transaction must be judged at its inception (referring to Inspector Singh and Privy Council guidance) and that subsequent accidental events (e.g., loss of money by bank failure) do not change the original character.
- The court refused the plaintiffs' request to remit the case to the lower court for further enquiry, noting that the memorandum of appeal did not raise the particular ground sought to be investigated and expressing concern that remand might encourage false evidence.
- Regarding the plaintiffs' contention that Rs. 1,800 and Rs. 550 should be recouped from the pre-empted property, the court held that those sums should indeed come out of the pre-empted property because the minor members repudiated the purchase of the pre-empted property and thus could not object to the mortgage of that property by Sewak Ram and Raghunath Singh.
- The court observed that the Subordinate Judge had granted a personal decree against the first three defendants, but that this was barred by limitation because the suit was instituted more than six years after the mortgage and the mortgage money was payable on demand. This mistake required amendment of the decree to remove the personal right against the first three defendants.
- On these bases the court restructured relief: it preserved recovery of Rs. 1,650 (and interest) out of the ancestral property, and directed that Rs. 1,800 and Rs. 550 (total Rs. 2,350), with interest and proportionate costs, be the first charge on the pre-empted property; if the pre-empted property were insufficient the balance was not recoverable by plaintiffs. Interest was to run at the stipulated rate up to payment and thereafter at 6% per annum. The personal decree was set aside, a fresh decree to be prepared in the appellate court, and six months were allowed for payment. Costs were awarded to the plaintiffs and to be added to mortgage money and apportioned proportionately between the sums charged on the pre-empted and ancestral properties.
- On defendant 3's appeal (Bhopal Singh), the appeal succeeded but the court refused to award him costs because of false statements in his written statement; likewise it denied plaintiffs-respondents their costs for that appeal, resulting in each party bearing their own costs in First Appeal No. 437 of 1925.
Holding and Implications
PARTLY ALLOWED
The court's final orders, in substance, were:
- The appeals were partly allowed.
- The decree of the lower court was modified so that recovery of Rs. 1,650 (and interest) from the ancestral property stands.
- The sums of Rs. 1,800 and Rs. 550 (total Rs. 2,350), together with interest at the stipulated rate up to payment and thereafter at 6% per annum, and proportionate costs, are to be recovered as the first charge on the pre-empted property. If the pre-empted property is insufficient to satisfy these sums with interest and costs, the balance will not be recoverable by the plaintiffs.
- The personal decree previously granted by the Subordinate Judge (i.e., a personal right to recover money from the first three defendants) is set aside because it was barred by limitation; a fresh decree in accordance with the appellate court's directions is to be prepared, and six months were allowed for payment.
- The plaintiffs were awarded their costs to be added to the mortgage money and apportioned in proportion to the sums charged on the pre-empted and ancestral properties.
- Defendant 3's (Bhopal Singh) appeal succeeded, but no costs were awarded to him because of false statements in his pleadings; the parties in First Appeal No. 437 of 1925 were directed to bear their own costs.
Implications: The direct effect is a reallocation of recoverable sums between the ancestral property and the pre-empted property, abolition of the personal decree against the defendants as barred by limitation, and specific directions on interest and costs. The opinion does not announce any new legal principle beyond the application of existing authorities (notably Shankar Sahai and the principle that a transaction is judged by its character at the date it is made).
1. This appeal is connected with First Appeal No. 437 of 1925, both of which arise out of the same suit.
2. The suit was instituted by Lala Kishan Sahai and two others as mortgagees against defendant 1, Raghunath Singh, his brother Khair Singh a minor, and Raghunath Singh's son, Bhopal Singh also a minor. There were two other defendants who were made parties as subsequent transferees.
3. The suit arose out of a mortgage executed on 12th July 1916 by Raghunath Singh, defendant 1, and his father Sewak Ram, who has since died. The amount borrowed was a sum of Rs. 4,000. The plaintiffs pleaded that the mortgage was executed for legal necessity and was therefore binding not only on Raghunath Singh, one of the mortgagors, but on his minor brother Khair Singh, and also his minor son Bhopal Singh. Bhopal Singh alone contested the suit through his guardian. His contention was that the mortgage was not supported by legal necessity.
4. The learned Subordinate Judge found that there were four items which went to make up the entire mortgage money. These were the sums of Rs. 1,586, Rs. 1,800, Rs. 64 and Rs. 550.
5. As regards the first sum the learned Judge found that it was borrowed to pay an antecedent debt payable by the mortgagors. Accordingly he found that both defendants 2 and 3 were liable to pay the sum. He found that the sum of Rs. 64 had been obtained to meet the costs of the execution of the mortgage bond. In his opinion this amount was for legal necessity. The learned Judge accordingly made a decree for the sale of the property mortgaged to recover these we sums.
6. As regards the sum of Rs. 1,800, the learned Judge found that it had been borrowed to pay the purchase money for a pre-emption decree, and ho thought that the members of the joint Hindu family could not jeopardize the ancestral family property in order to purchase fresh property. He accordingly held that the mortgage for the sum of Rs. 1,800 was not binding on the family.
7. As regards the sum of Rs. 550, the learned Judge found that it had been paid by the mortgagees, but that there was no legal necessity to support the same. The learned Judge accordingly granted a personal decree for the sums of Rs. 1,800 and Rs. 550 against the defendants. Evidently the learned Judge meant to pass a decree against Raghunath Singh alone, but the decree passed ran against all the first three defendants.
8. Appeal No. 380 is by the plaintiffs, and appeal No. 437 is by defendant 3, Bhopal Singh.
9. In appeal No. 380 of the plaintiffs appellants contend that on the evidence the entire mortgage money was borrowed, either for legal necessity, or for payment of antecedent debts. The first question that therefore arises, with respect to the sum of Rs. 1,800, is this: Was there a debt existing at the date of the mortgage which Sewak Ram and Raghunath Singh were bound to pay? The learned Counsel for the plaintiffs-appellants has relied on two cases, namely the case of Nathu v. Kundan Lal [1910] 33 All. 242, and the case of Kapildeo v. Thakur Prasad [1913] 36 All. 17, as laying down the proposition that where a Hindu father borrows money to pay the purchase money under a pre-emption decree, he borrows money to pay an antecedent debt. This opinion has been dissented from in later cases and they are Bhagwan Das Naik v. Mahadeo Prasad Pal A.I.R. 1923 All. 298, and Shankar Sahai v. Baichu Ram A.I.R. 1925 All. 333.
10. We have considered the point and we are clearly of opinion that no debt, in the proper sense of the word, existed on foot of the pre-emption decree. The preemption decree gave the option to the pre-emptor to obtain property on payment of money. A pre-emption decree does not carry any order for payment. The decree is always conditional, namely, in case of payment, certain property would belong to the plaintiff, and in case of nonpayment the suit would stand dismissed, probably with costs. The mere fact that in the case of nonpayment of the purchase money a decree for costs would be passed against the pre-emptor, cannot invest the whole transaction with the character of a debt. It may be pointed out that the amount of costs is usually very small as compared with the purchase money. The appellants' case therefore, so far as it is based on the principle of antecedent debt cannot be maintained.
11. Next it was argued by the learned Counsel for the appellants that according to the recent Full Bench case of Jagat Narain v. Mathura Das A.I.R. 1923 All. 454 (F.B.), a head of a joint Hindu family is entitled to make a fresh purchase of property. It was argued that this case has shaken the authority of the case of Shankar Sahai v. Baichu Ram A.I.R. 1925 All. 333, and other cases which decided that a transaction by one member of a joint Hindu family which can bind others must be of a defensive nature. We have accordingly read the Full Bench case and we are of opinion that the facts of the case actually bring themselves within the purview of the decision in the case of Shankar Sahai v. Baichu Ram A.I.R. 1925 All. 333.
12. The facts of the Full Bench case were these. A Hindu family possessed property which was situated far away from the place of residence and it was found to be inconvenient to manage the property. The adult male members of the family sold the property with the express purpose of purchasing nearer home so that the purchased property might be better managed. As a matter of accident, it happened that the purchase money was lost because the bank, in which the money had been put for safe custody, had closed its doors. As has been laid down by the Privy Council and in the case of Inspector Singh v. Kharak Singh A.I.R. 1923 All. 403, to find whether a certain transaction is binding on the family or not, its nature must be examined at the date of the transaction and it should not be judged by what happened later. On this principle the fact that the money was lost owing to the bank having collapsed had no bearing. The transaction was found by the learned Judges to have been for the benefit of the family. It was in fact in its inception, an act which was designed to protect or defend the family from an inevitable recurring loss, the property by reason of its situation yielding less than nearer property would do. As we have stated, the facts bring the case within the principle enunciated in the case of Shankar Sahai v. Baichu Ram A.I.R. 1925 All. 333. Indeed it has been put forward by the learned Counsel for the parties before us that a particular purchase which involves the mortgaging of the family property may in very special circumstances amount to a legal necessity. For example, there may be a small patch of land situate inside a larger area owned by the family and the owner of that patch of land may be a constant source of trouble to the family. In the circumstances the purchase may be justified. We need not express any opinion on a hypothetical case. It is sufficient to say that each case will have to be judged on its own merits, and on the law as it stands, we are of opinion that this particular transaction cannot be upheld and that the appeal must fail as regards this point.
13. The learned Counsel for the appellants prayed that we might remit the case for further enquiry to the lower Court. The ground of his prayer was that when the learned Subordinate Judge decided this suit the appellants did not adduce evidence on the merits, necessity, and financial advantages of the transaction, because the case of Shankar Sahai v. Baichu Ram A.I.R. 1925 All. 333, was sufficient for the purpose. It was argued that the plaintiffs might have, in view of the Full Bench case of Jagat Narain A.I.R. 1923 All. 454 (F.B.), Supra led evidence to show that there did exist circumstances which justified the father and the son to make the purchase by the preemption suit, but we find that no such ground was taken in the memorandum of appeal, and we are also of opinion that a remand of an issue is likely to encourage the parties to adduce false evidence. We therefore cannot accede to this request.
14. For the plaintiffs-appellants it was then contended that in any case the amounts of Rs. 1,800 and Rs. 550 ought to come out of the pre-empted property. As to this there can be no doubt. The minor members of the family repudiate the transaction of the purchase of the pre-empted property. In the circumstances they cannot possibly object to a mortgage by Sewak Ram and Raghunath Singh of the property which they had acquired by pre-emption.
15. We now take up the cross-appeal No. 437 of 1925. As already stated the learned Subordinate Judge gave a personal decree against the first three defendants. The suit was instituted more than six years after the making of the mortgage. The mortgage money was payable on demand, and, therefore, the personal decree was barred, at the date of the suit. This was overlooked by the learned Subordinate Judge. The decree therefore will have to be amended so far as it gives a personal right against the first three defendants to recover the money.
16. The result is that we partly allow both the appeals. The decree so far it permits recovery of the sum of Rs. 1,650 and interest out of the ancestral property will stand, and the sums of Rs, 1,800 and Rs. 550, the total of which comes to Rs. 2,350, will be recovered with proportionate costs out of the pre-empted property. This sum will bear interest at the stipulated rate up to the date of payment and thereafter at 6 per cent per annum. This sum of Rs. 2,350 with interest and proportionate costs will be the first charge on the pre-empted property. If any thing is left out of the pre-empted property after satisfying the two sums and the interest and proportionate costs, it will be appropriated towards the balance of the decree. If the pre-empted property be insufficient to pay the two sums of Rs. 1,800 and Rs. 550 and interest and proportionate costs, the balance will not be recoverable by the plaintiffs. The personal decree granted by the Court below is hereby set aside. A fresh decree will be prepared in this Court giving effect to the directions given above. Six months are allowed for payment. The plaintiffs will have their costs which will be added to the mortgage money. The costs will be split up in proportion to the sums which have been declared recoverable from the pre-empted property and the ancestral property.
17. The appeal of Bhopal Singh succeeds, but having regard to the false statement made in the written statement of Bhopal Singh, we do not award him any costs in this appeal, nor do we give to the plaintiffs-respondents any costs of the appeal. The result will be that in first appeal No. 437 of 1925 the parties will bear their own costs.
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