Anant Rai v. Bhagwan Rai

1. This is an appeal by defendant vendees in a pre-emption suit. The plaintiff respondent has also assailed the decree of the Court below by a cross-appeal which has been numbered as First Appeal No. 327 of 1935. The dispute in both the appeals is about the consideration of the sale sought to be pre-empted. The sale sought to be pre-empted was effected on 22nd July 1933 by Kailashpati Rai, defendant 3, in favour of Anant Rai and Trilok Rai, defendants 1 and 2. The property sold was an area of 24 bighas, 1 biswas, 4 dhurs in patti Mukhraj Rai, mohal Debi Rai of village Pipra Kalan in the district of Ballia. Village Pipra Kalan is a bigha daham village. The revenue of the property sold was Rs. 17-6-0 and the consideration entered in the sale deed was Rs. 13,000. This sale consideration was made up of the following items:

2. There was no dispute in the Court below as regards items 2, 3 and 6 of the consideration noted above and the genuineness of the remaining items of consideration was impugned by the plaintiff in that Court. The Court below has held that the sum of Rs. 250 (items 5) was paid to the vendor before registration, and this finding of the Court below has not been assailed before us. The dispute in the two appeals is now confined as to item 1 and item 4 of the sale consideration.

3. The mortgage deed dated 4th January 1929 (item l) was for a sum of Rs. 2300 out of which Rs. 2088 were paid before the Sub-Registrar and Rs. 212 were credited towards two previous sarkhats executed by Kailashpati in favour of the vendees. The sum of Rs. 6000 entered as item 1 was due on account of principal and interest of the said mortgage. The plaintiff's case was that the real consideration of the mortgage was only Rs. 300 and that on the date of the sale sought to be pre-empted the amount due on the basis of that mortgage was only Rs. 400. This case of the plaintiff failed in the Court below and that Court held that the mortgage deed dated 4th January 1929 was for a consideration of Rs. 2300 and that a sum of Rs. 6000 was due to the vendees on the basis of that mortgage on the date of the sale. This finding of the Court below has not been assailed in appeal before us.

4. The Court below however held that out of the sum of Rs. 6000 due on the basis of the mortgage the vendees were not entitled to get a sum of Rs. 5600. It was alleged by the plaintiff that Kailashpati was a minor on 4th January 1929 when the mortgage deed was executed and the mortgage transaction was therefore void and could not be ratified by Kailashpati on attaining majority. The plaintiff therefore maintained that he was not liable to pay to the vendees the sum of Rs. 6000 that was due on the basis of the mortgage. This contention of the plaintiff was accepted by the Court below, but in view of the admission made by the plaintiff that a sum of Rs. 400 was due on the basis of the mortgage the Court below declined to award to the vendee a sum of Rs. 5600 out of item 1 of the sale consideration. The present appeal by the vendees is directed against this decision of the Court below.

5. As regards item 4, viz., the amount alleged to be due on the basis of the sarkhat, the plaintiff's case was that the sarkhat was a fictitious document, was antedated and that no amount was, as a matter of fact, due from Kailashpati vendor to Beni Madho and that item 4 was inserted in the sale deed simply with a view to defeat the plaintiff's right of pre-emption. The Court below overruled this contention of the plaintiff and held that the sarkhat was a genuine document and that item 4 of the sale consideration was correct. First Appeal No. 327 of 1935 has been filed by the plaintiff with regard to item 4 of the consideration. It is common ground that items 2 and 3 of the sale consideration have not yet been paid by the vendees to Ram Autar Rai and Mangal Rai. As a result of its findings the Court below passed a decree in the plaintiff's favour conditional on the payment of a sum of Rs. 2900.

6. We first proceed to deal with the vendees' appeal which relates to item 1 of the sale consideration. The Court below has found that Kailashpati was a minor on the date of the execution of the mortgage deed dated 4th Jaunuary 1929 and this finding is amply borne out by the evidence in the case. The consideration of the case must therefore be approached on the assumption that the mortgage deed having been executed by Kailashpati when he was a minor was void in law. The fact however remains that Kailashpati had attained majority on the date of the sale and elected to discharge the debt due on the mortgage by sale of his property. The question then arises whether it is open to the plaintiff in the present suit to impugn the validity of this item of the sale consideration. The question whether or not an agreement entered into by a minor can be ratified by him after attaining majority formed the subject of consideration by a Full Bench of this Court in Suraj Narain v. Sukhu Ahir (1928) 15 AIR All 440. All the three learned Judges constituting the Bench delivered three separate judgments. Sulaiman Ag. C.J. was inclined to the view that if no further advance is made at the time of ratification, the ratification of a contract entered into by a person during his minority is void and unenforceable. In the course of his judgment he referred to cases in which on receiving a further advance a minor after attaining majority had ratified the contract entered into by him during his minority and it was held that the ratification was valid and binding and he did not adversely criticise those cases. Mukerji J., held that it is always open to a person on attaining majority to ratify an agreement entered into by him during his minority. Boys J., held that consideration received by a minor during his minority cannot be a good consideration for ratification after he has attained majority. In the present appeal it is argued on behalf of the vendees that as some consideration, apart from the amount due on the basis of the mortgage, was paid by the vendees to Kailashpati, it was open to Kailashpati to ratify the mortgage and to pay the amount due to the vendees, and in support of this contention reliance is placed on the judgment of Sulaiman Ag. C.J. On the other hand, it is contended on behalf of the plaintiff that the observations of Sulaiman Ag. C.J., about fresh advances being made at the time of ratification were in the nature of obiter dicta and that, apart from the Full Bench decision, the weight of authority is in favour of the view that contracts entered into during minority cannot be ratified after the minor has attained majority. In the view that we take, it is unnecessary to express an opinion about the merits of the contentions advanced on behalf of the parties.

7. It is manifest from a perusal of Section 17, Agra Pre-emption Act that a decree for pre-emption can be passed in favour of a plaintiff only on payment of either the "actual price" paid by the vendee or on payment of the market value of the property. In the present case there cannot be the slightest doubt that Kailashpati agreed at the time of the sale to pay to the vendees the amount due on the basis of the mortgage of 1929 even though that mortgage was void in law. It is equally clear that the vendees agreed to set off a sum of Rs. 6000 in lieu of the mortgage debt out of the total sale consideration entered in the sale deed. In other words, a consideration of Rs. 6000 passed from the vendees to the vendor notwithstanding the fact that the mortgage of 1929 was enforceable at law. The right of pre-emption is a right of substitution for the buyer and it is not open to a plaintiff in a pre-emption suit, while claiming to enforce this right of substitution, to take exception to the validity of the items of sale consideration when, as a matter of fact, those items of consideration have changed hands. Here we are not concerned with any question of ratification of a contract entered into by a person during his minority. The case before us is one in which a person after attaining majority has elected to pay the debt incurred by him during his minority and this is perfectly permissible at law.

8. To put the matter in another way. If Kailashpati after attaining majority had paid the amount due on the basis of the mortgage of 1929 to the vendees he could not subsequently bring a suit for the refund of that amount for the simple reason that a contract entered into by a minor though void is not unlawful. The set-off of Rupees 6000 out of the entire sale consideration was to all intents and purposes tantamount to payment of the mortgage debt by Kailashpati to the vendees. The legality of the transaction cannot therefore be impugned either by Kailashpati or by the plaintiff. In this view of the matter the Court below was wrong in holding that the plaintiff was not liable to pay the entire amount due on the basis of the mortgage of 4th January 1929, and the appeal of the vendees must succeed.

9. We now come to the plaintiff's appeal. This appeal, as already stated, relates to the amount alleged to be due on the basis of the sarkhat in favour of Beni Madho. We are not satisfied about the genuineness of this item of the sale consideration. In the plaint it was alleged that Beni Madho was a relation of the vendees and that the sarkhat in his favour was fictitious. In the written statement filed by the vendees the allegation that Beni Madho was their relation was denied and so was the allegation about the fictitious nature of the sarkhat. At the trial the suggestion of the plaintiff was that Beni Madho was a relation of the vendees. The vendees on the other hand maintained that Beni Madho was a relation of Bhagwan Rai, plaintiff. The suggestion of neither party was substantiated. There are however other circumstances that irresistibly point to the conclusion that the sarkhat was not a genuine document.

10. In holding the sarkhat to be genuine the Court below was to a great extent influenced by what it considered to be the market value of the property sold. In the course of its judgment, it made reference to certain exemplars on which reliance was placed by the vendees and held that the property in this village was sold or mortgaged at a consideration varying between Rs. 625 to Rs. 775 per bigha. The Court below however took no note of a sale deed dated 17th November 1931, on which reliance was placed by the plaintiff with a view to show that the market value of the property in the village in question did not exceed Rs. 400 per bigha. By this sale deed an area of about 8 bighas in village Pipra Kalan and of about 4 bighas in two other villages was conveyed for a sum of Rupees 3750. Even if we exclude from consideration the 4 bighas of the other two villages the value of the property in Pipra Kalan does not exceed Rs. 450 per bigha. That being so, the Court below was not right in proceeding on the assumption that the market value of zamindari in Pipra Kalan was at the rate of about Rs. 700 per bigha. The fact that according to the exemplars filed by the plaintiff the market value per bigha of land in Pipra Kalan did not exceed Rs. 450 was a circumstance pointing to the conclusion that the ostensible price entered in the sale deed was not the actual price. Further, we have the fact that the vendees had dealings with Kailashpati from a time when the latter was a minor and eventually succeeded in getting a sale deed from him partly in consideration of a debt that was unenforceable at law. This shows that the vendees had some influence over Kailashpati. This was an additional circumstance tending to cast doubt on the genuineness of the amount of consideration as entered in the sale deed. That being so, the burden of proving that the ostensible consideration was the real consideration was on the vendees (vide Dhanukdhari Singh v. Suresh Singh (1980) 17 AIR All 368) and this burden in our judgment was not discharged. The sarkhat in question purports to be for a sum of Rs. 2100 and according to the entries in the same a sum of Rs. 2050 was paid by the vendees to Beni Madho a few days after the execution of the sale deed. To prove the sarkhat and the payment of the sum of Rs. 2050 three witnesses were examined by the vendees. One of those witnesses was Trilok Rai, one of the vendees. He deposed that he paid Rs. 2050 to Beni Madho towards the sarkhat. He stated that he had summoned Beni Madho "but he did not take the summons." He deposed that when he paid the amount to Beni Madho, Kailashpati and Damri were present. Kailashpati was however not called as a witness in the case. His evidence would have been of great importance and no reason has been assigned by the vendees for the omission to examine Kailashpati. Damri Rai stated that the sum of Rs. 2050 was paid to Beni Madho by Trilok Rai in his presence. In cross-examination he stated that he had no connexion with Trilok Rai or Anant Rai. This statement of Damri was undoubtedly untrue as Trilok Rai admitted in his evidence that "Damri is of my family." Damri also admitted that Tirlok Rai had once figured as a witness in a civil suit on his behalf, Damri was therefore not an independent witness. The last witness examined by the vendees on this part of the case was a man named Ram Janam Rai. He was a marginal witness of the sale deed in dispute. He admitted that Damri Rai was his uncle by relationship.

11. The oral evidence adduced by the vendees in proof of the payment of the amount due on the basis of the sarkhat was worthless. Apart from this, no reason was assigned by the vendees for the non-production of Beni Madho as a witness in the case. Even if Beni Madho did not accept the summons once, the vendees could very well have made another attempt to summon him and to produce him as a witness. They however did nothing of the kind. The sarkhat is scribed by a man named Ram Kishun Rai who is a servant of Beni Madho. Even Ram Kishun Rai was not produced as a witness in the case. If Beni Madho does money-lending business, as is alleged on behalf of the vendees, Ram Kishun Rai could have been summoned along with the account books of Beni Madho.

12. The sarkhat shows that the entire amount advanced was taken by Kailashpati for payment to one Parmeshwar Rai. Parmeshwar Rai was also not called as a witness. No reason worth the name has been assigned by the vendees for not producing Beni Madho, Ram Kishun Rai, Parmeshwar Rai and Kailashpati. It cannot be doubted that the evidence of these persons would have been of great importance on the question of the genuineness or otherwise of the sarkhat. The best possible evidence that could easily be produced by the vendees was withheld by them and such evidence as has been produced is worthless. The only point that is in favour of the vendees is that the sarkhat is on a stamp paper. The stamp paper is however of only eight annas. It may very well be that Kailashpati had such a stamp paper in his possession. We have considered the evidence bearing on this part of the case and have come to the conclusion that the burden that lay on the vendees to prove the genuineness of this part of the sale consideration has not been discharged.

13. Before concluding this judgment we may observe that we have some suspicion in our mind that as the learned Judge of the Court below felt compelled on supposed legal ground to disallow the major portion of the amount due on the basis of the mortgage of 1929 he, in order to compensate the vendees for the loss, stretched a point in their favour so far as the sarkhat in question was concerned. For the reasons given above appeal No. 327 of 1935 must also prevail so far as item 4 of the sale consideration is concerned. The result is that both this appeal and first appeal No. 327 of 1935 are allowed and the decree of the Court below is varied to this extent that the plaintiff's suit for pre-emption is decreed on payment of Rs. 6450. We allow three months' time to the plaintiff for payment of this amount. In default of payment the suit shall stand dismissed with costs in both Courts. If the amount is paid within the time allowed the parties will pay and receive costs in proportion to their failure and success in both the Courts. A decree in terms of Order 20, Rule 14, Civil P.C. will be drawn up by the office.