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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The dispute concerns the property of Sardar Khan, who died on 24 September 1907. He left two daughters, Musammat Mubarak-un-nissa and Musammat Bismilla Begam (the plaintiffs), and three grandsons (defendants Nos. 1, 2 and 3) by a pre-deceased son. Sardar Khan also left a brother, Mahmud Khan, and a nephew, Nazar Muhammad Khan. Mahmud Khan had two sons, Usman Khan and Chhidda Khan; Musammat Bismilla Begam had been married to Usman Khan, who predeceased Mahmud Khan.

After Sardar Khan's death the property was entered in the revenue records in the names of defendants Nos. 1, 2 and 3. The plaintiffs did not have their names entered in the revenue papers for the share they claimed. The plaintiffs alleged that, by operation of inheritance under Muhammadan law, they were entitled to two-thirds of the property and that Mahmud Khan had told them he had got their names entered and that they received profits of their share until 1324 Fasli. The plaintiffs alleged that defendants Nos. 1–3 wrongfully mortgaged the property in favour of other defendants and only discovered that their names were not entered when sale decrees were obtained by some mortgagees.

The plaintiffs sued for recovery of possession of their alleged two-thirds share in properties in the villages of Patwari, Nagli Biloch and Basantpur, for mesne profits, and for a declaration that the mortgages made by defendants Nos. 1–3 were not valid and binding on them.

The suit was principally contested by Narain Das and his sons and by Chhadammi Lal. Defences included that the plaintiffs had never been in possession, that the claim was barred by limitation and by Section 115 of the Indian Evidence Act and Section 41 of the Transfer of Property Act, and that the plaintiffs had relinquished their claims when mutation (entry) of names was effected in favour of defendants Nos. 1–3. The Subordinate Judge found (inter alia) that defendants Nos. 1–3 were trespassers, that the plaintiffs had not received profits, that the claim was barred by limitation, that the plaintiffs had relinquished their claim, and that the mortgagees had acted in good faith after reasonable inquiry.

Legal Issues Presented

  1. Whether the plaintiffs' claim was barred by limitation (and by adverse possession) as against the defendants.
  2. Whether the plaintiffs had surrendered or relinquished their claim to a share in their father's property.
  3. Whether the mortgagees (transferees) who had advanced money on the security of the mortgaged property are protected by Section 41 of the Transfer of Property Act (i.e., whether the transfers are not voidable because the transferees acted in good faith after taking reasonable care).

Arguments of the Parties

Plaintiffs' Arguments

  • The plaintiffs asserted that on Sardar Khan's death they were entitled to a two-thirds share of the property under Muhammadan law.
  • They alleged Mahmud Khan had told them he had got their names entered in the revenue papers and that they had received the profits of their share until 1324 Fasli.
  • They contended that mortgages effected by defendants Nos. 1–3 in favour of other defendants were wrongful and not binding on them.

Defendants' and Mortgagees' Arguments

  • Some contesting defendants (including Narain Das and his sons and Chhadammi Lal) argued that the plaintiffs had never been in possession and that the plaintiffs' claim was barred by limitation and by Section 115 of the Indian Evidence Act and Section 41 of the Transfer of Property Act.
  • Certain defendants pleaded that the plaintiffs had relinquished their claim at the time mutation of names was effected in favour of defendants Nos. 1–3.
  • The mortgagees relied on the entries in the revenue papers showing the names of defendants Nos. 1–3 (and other co-sharers) and contended they advanced money for consideration in good faith, having taken the ordinary precautions of examining the revenue entries; they relied on legal protection afforded to transferees who act after taking reasonable care and in good faith (Section 41, Transfer of Property Act).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Corea v. Appuhamy (1912) A.C. 230 Among co-sharers the possession of one co-sharer cannot become adverse to another except where the co-sharer in possession has explicitly denied/repudiated the title of the others and has been in such possession for more than 12 years. The court used this principle to hold that defendants Nos. 1–3 were co‑sharers (not trespassers) and therefore the plaintiffs' claim could not be barred by adverse possession or Article 144 of the Limitation Act absent an express ouster or 12 years' adverse possession.
Bailey v. Barnes (1894) 1 Ch. D. 25 A purchaser (or transferee) is not legally obliged to investigate his vendor's title beyond the usual course of business; a purchaser who willfully avoids ordinary inquiries cannot benefit from that ignorance. The court relied on this authority to support the conclusion that mortgagees were entitled to rely on the revenue entries and that the level of inquiry made (examining revenue entries/khewats) was sufficient and reasonable in the ordinary course of business.
Partap Chand v. Saiyida Bibi (1901) I.L.R. 23 All. 442 Illustrated circumstances where a transferee could not rest on mere inspection of revenue records because other facts made further inquiry necessary. The court distinguished this case on its facts, holding that the special circumstances present in Partap Chand (which required further inquiry) did not exist in the present matter and therefore it did not assist the plaintiffs.
Azima Bibi v. Shamalanand (1912) I.L.R. 40 Calc. 378 Where the transferee's situation (a pleader, or other person from whom greater circumspection would be expected) suggested that more inquiry was required; transferee failed to make due inquiry. The court distinguished the decision holding that its unusual factual circumstances (requiring more circumspection) were not present here, and thus it did not support the plaintiffs' position.
Muhammad Sulaiman v. Sakina Bibi (1922) I.L.R. 44 All. 694 Transferee aware of the original owner's title but failed to make further inquiry as to how the title had passed to the transferor; transferee did not discharge the onus of due inquiry. The court noted that in Muhammad Sulaiman there were special circumstances of omission to inquire; no analogous circumstances were found in the present case, so it was not followed here.
Khwaja Muhammad Khan v. Muhammad Ibrahim (1904) I.L.R. 26 All. 490 Case where reliance on revenue entries was sufficient and transferees were not required to make further inquiry. The court found the present case somewhat similar and relied on it to support the conclusion that mortgagees need not have made further enquiries beyond what appeared from revenue entries.

Court's Reasoning and Analysis

The court considered three principal issues in turn and applied the relevant legal principles strictly as found in the record.

1. Limitation and adverse possession: The court noted that the Subordinate Judge treated defendants Nos. 1–3 as trespassers, but under Muhammadan law the property on Sardar Khan's death devolved two-thirds to the plaintiffs and one-third to defendants Nos. 1–3 as residuaries of the first class. Consequently defendants Nos. 1–3 were co-sharers, not trespassers. Relying on the principle in Corea v. Appuhamy, among co-sharers possession of one co-sharer cannot become adverse to another except where there is an express repudiation and continued adverse possession for more than 12 years. The court found the plaintiffs' evidence of receipt of profits up to 1324 Fasli to be of little value: one plaintiff lived in a different village and the other lived with a relative; Mahmud Khan's role as lambardar and the lack of reliable evidence of payments, together with the absence of Nazar Muhammad from the record, supported the conclusion that there was no reliable proof of continuous receipt of profits by the plaintiffs. Given the co-sharer status of defendants Nos. 1–3, there was no sufficient finding of an express ouster or the kind of adverse possession that would attract Article 144 of the Limitation Act; therefore the plaintiffs' claim was not barred by limitation as against defendants Nos. 1–3.

2. Alleged surrender or relinquishment of claim: The only evidence that the plaintiffs had surrendered their claim was an oral statement attributed to Sardar Khan by Ahmad Bakhsh that Sardar Khan had said his property should be entered in the names of his sons after his death. The court observed that the application for mutation after Ahmad Khan's death did not refer to any such oral devise and that the evidence of Ahmad Bakhsh was not reliable. The Subordinate Judge's reliance on Mahmud Khan's conduct (not applying for his supposed share) was based on a misapprehension of devolution: Mahmud was not entitled to a share in the presence of the plaintiffs and defendants Nos. 1–3, so his conduct did not impair the plaintiffs' title. The court therefore rejected the contention that plaintiffs had relinquished their claim.

3. Protection of mortgagees under Section 41 of the Transfer of Property Act: The court considered the mortgage deeds (dated 1911–1917) which contained detailed descriptions referencing the mahals and entries in the revenue records (khewats). The court inferred that copies or extracts of khewats must have been available to produce those descriptions, and that the mortgagees were justified in relying on the revenue entries. The court quoted Bailey v. Barnes to underscore that a transferee who acts in accordance with the ordinary course of business and takes reasonable care cannot be penalised for not making further enquiry. Section 41 was cited in full: where a person is the ostensible owner with the consent (express or implied) of interested persons and transfers for consideration, the transfer is not voidable provided the transferee, after taking reasonable care to ascertain the transferor's power, has acted in good faith.

Applying Section 41, the court found that the plaintiffs had, by conduct or omission, allowed defendants Nos. 1–3 to get their names entered in the revenue papers from 1908 onward and that the mortgagees advanced money on the strength of those entries. There were no circumstances shown that required the mortgagees to undertake greater inquiry than examining the revenue papers. The mortgagees had acted in good faith and taken reasonable care. The court distinguished several authorities relied on by the plaintiffs (Partap Chand, Azima Bibi, Muhammad Sulaiman) on the ground that each of those decisions turned on particular factual circumstances requiring further inquiry by the transferee — circumstances not present here. On the other hand, the court found the present case similar to Khwaja Muhammad Khan v. Muhammad Ibrahim and applied that reasoning to protect the mortgagees.

The court therefore concluded (based on the application of these legal principles to the facts found) that the plaintiffs' claim was not barred as against defendants Nos. 1–3, that there was no reliable evidence of surrender of the plaintiffs' rights, and that the mortgages executed in favour of mortgagees were binding on the plaintiffs because the mortgagees were protected under Section 41 of the Transfer of Property Act.

Holding and Implications

Holding:
The court ALLOWED the appeal in part. It held that the plaintiffs' claim succeeds against defendants Nos. 1, 2 and 3, but the plaintiffs' claim is barred as against the transferees (the mortgagees).

Specific orders and immediate consequences:

  • The plaintiffs' claim against defendants Nos. 1, 2 and 3 is decreed with costs here and hitherto.
  • The plaintiffs' claim is dismissed as against the remaining defendants (the mortgagees / transferees), and those defendants shall receive their costs here and hitherto from the plaintiffs-appellants.
  • The court directed that certain papers printed by the defendants (translation and tabular matter exhibited from pages 116 to 181 of the printed record) were unnecessary for the appeal and that the costs of translating and printing those items shall be excluded from the defendants' costs.

Broader implications:
The decision applies established principles governing co-sharers and adverse possession under Muhammadan law and the protective scope of Section 41 of the Transfer of Property Act where transferees act in good faith after taking reasonable care by relying on revenue entries. The court distinguished authorities cited by the plaintiffs where special facts required greater inquiry. The opinion does not purport to lay down novel law; it applies existing principles to the facts found.

    Mubarak-Un-Nissa Bibi v. Muhammad Raza Khan

    1. The dispute in this appeal relates to the property of Sardar Khan, who died on the 24th of September, 1907, leaving two daughters, Musammat Mubarak-un-nissa and Musammat Bismilla Begam, who are the plaintiffs, and three grandsons Muhammad Raza Khan, Maqsud Khan and Daud Khan by a pre-deceased son, who are the defendants Nos. 1, 2. and 3. He also left a brother Mahmud Khan and a nephew, Nazar Muhammad Khan, who was the son of one of his pre-deceased brothers. Mahmud Khan had two sons, Usman Khan and Chhidda Khan. The plaintiff Musammat Bismilla Begam was married to Usman Khan, who died in the life time of Mahmud Khan.

    2. On the death of Sardar Khan his property was entered in the names of the defendants Nos. 1, 2 and 3. The plaintiffs took no steps to get their names entered in the revenue papers in regard to the share of the property now claimed by them. Their case was that the property in dispute devolved on the death of Sardar Khan on the plaintiffs to the extent of a two-thirds share and on Mahmud Khan to the extent of the remaining one-third; that Mahmud Khan told them that he had got their names entered in the revenue papers in respect of their two-thirds share, and that they had been in receipt of the profits of their share from Mahmud Khan till 1324 Fasli. Their complaint was that the defendants Nos. 1, 2 and 3 had wrongfully made certain mortgages of the property in question in favour of the other defendants and that it was not until some of the latter defendants had obtained a decree for the sale of the properties mortgaged with them that they came to know that their names were not entered in the revenue papers. The present suit was accordingly filed by them for the recovery of possession of the two-thirds share of the properties in the villages of Patwari, Nagli Biloch and Basantpur, and for mesne profits. A declaration was also claimed that the mortgages effected by the defendants Nos. 1, 2 and 3 in favour of the other defendants were not valid and binding on them.

    3. The suit was principally contested by Narain Das and his sons, and Chhadammi Lal. Their defence was that the plaintiffs had never been in possession of any portion of the property in dispute and that the claim was barred by limitation and by Section 115 of the Indian Evidence Act and Section 41 of the Transfer of Property Act. It was further pleaded by some of the contesting defendants that the plaintiffs had relinquished their claim to a share in the property of their father at the time when mutation of names was effected in favour of the defendants Nos. 1, 2 and 3.

    4. It was admitted that Ibrahim Khan, the father of the defendants Nos. 1, 2 and 3, had died in the life time of Sardar Khan. The court below found that the defendants Nos. 1, 2 and 3 were in possession of the property in dispute as trespassers; that the plaintiffs had never been in receipt of the profits of the property in question and that the claim was barred by limitation. It further found that the plaintiffs had relinquished their claim to a share in the property of their father and that the mortgagees had acted, after reasonable care and inquiry, in taking the mortgages now impeached, from the ostensible owners, whose names were entered in the revenue papers, for consideration, and in good faith.

    5. The first question for consideration in this appeal is whether the claim of the plaintiffs was barred by limitation. The lower appellate court was apparently led to think, by what was stated in the plaint and which does not appear to have been contested by the other side, that the defendants Nos. 1, 2 and 3 were not entitled to any share in the property of their grandfather Sardar Khan ; but that is not, however, so. Under the Muhammadan law, on the death of Sardar Khan, the property devolved on the two plaintiffs t'o the extent of a two-thirds share, and the remaining one-third share devolved on the defendants Nos. 1, 2 and 3 as residuaries of the first class. The defendants Nos. 1, 2 and 3 cannot, therefore, be regarded as trespassers ; and on the principle laid down in Corea v. Appuhamy (1912) A.C., 230, no claim to adverse title can be set up by these defendants because among co-sharers the possession of one co-sharer cannot become adverse to another except where the co-sharer in possession has explicitly denied and repudiate the title of the others and has been in possession since then for more than 12 years. The plaintiffs produced evidence to show that they had been in receipt of the profits up to 1324 Fasli but that evidence is of little value. One of the plaintiffs was living in a village in the Meerut district; the other plaintiff was living in the house of Chhidda Khan, the brother of her deceased husband. The defendants 1, 2 and 3 had applied for the mutation of their names on the 22nd of November, 1907, and they got an order for mutation in their favour without any objection sometime in February, 1908. After the death of Sardar Khan, Mahmud Khan was appointed lambardar of the villages in question, and there is no reliable evidence to show that any profits were paid by Mahmud Khan to any of the plaintiffs. After the death of Mahmud Khan, Nazar Muhammad Khan was appointed lambardar of the village; but Nazar Muhammad Khan has not been produced; and we see no reason for differing from the view taken by the learned Subordinate Judge on this matter. The finding of the learned Subordinate Judge that the possession of the defendants Nos. 1, 2 and 3 was adverse from its inception is, however, vitiated by the fact that according to his view the defendants Nos. 1, 2. and 3 were trespassers, whereas they were really co-sharers; and as co-sharers there is nothing to show that they had ever set' up an express ouster against their aunts or that they had set up an adverse title within their knowledge. The claim of the plaintiffs as against these defendants cannot, therefore, be deemed to be barred by limitation or by adverse possession within the meaning of Article 144 of the Indian Limitation Act.

    6. The next question for consideration is whether the plaintiffs had ever surrendered their claim to a share in the property of their father. The only evidence produced on the point; is that of Ahmad Bakhsh, who states that some time before his, death Sardar Khan had stated that his property should be entered in the names of his sons after his death. In the application made for the mutation of names after the death of Ahmad Khan by the defendants Nos. 1, 2 and 3, no such oral devise was referred to. The claim was then based on inheritance and we do not consider that, the evidence of Ahmad Bakhsh on that point can be accepted as reliable. The learned Subordinate Judge refers to the conduct of Mahmud Khan in not setting up a claim to what was supposed to be his share in the property of his brother; but as we have already pointed out, that reasoning proceeds on a misapprehension of the manner in which the property devolved on the death of Sardar Khan. Mahmud Khan was not entitled to any share in the property of Sardar Khan in the presence of the plaintiffs and the defendants 1, 2 and 3; and his conduct in not applying for the entry of his name is explicable and cannot affect the title of the plaintiffs to a share in the property of their father.

    7. The learned Subordinate Judge, however, proceeded to base his decision against the plaintiffs on a third ground which was stronger, namely, that the claim Was barred by Section 41 of the Transfer of Property Act. It appears from the description of the mortgaged property given in the deeds of mortgage produced by the mortgagees that the property in dispute had been partitioned apparently some time after the death of Sardar Khan between the different co-sharers of the villages in question, and the defendants Nos. 1, 2 and 3 along with some of the other co-sharers had made mortgages for consideration in favour of Narain Das and his son Kishori Lal and some of the other defendants between 1911 and 1917. All these deeds of mortgage give a detailed description of the mortgaged property with the mahals to which they appertained at the time of the mortgage; and we have no doubt that copies or extracts from the khewats must have been available at the time these mortgage-deeds were written in order to supply the parties to the transaction with an accurate description of the entries that existed at that time in the revenue papers in regard to them. These entries must naturally have satisfied the mortgagees that the mortgagors had a good title to the properties which they were mortgaging; and we have no doubt that acting on those entries the mortgagees advanced the considerations mentioned in the deeds of mortgage. As observed by Lindley, L. in Bailey v. Barnes (1894) 1 Ch. D., 25 at 35:--

    "A purchaser of property is under no legal obligation to investigate his vendor's title. But in dealing with real property, as in other matters of business, regard is had to the usual course of business; and a purchaser who wilfully departs from it in order to avoid acquiring a knowledge of his vendor's title is not allowed to derive any advantage from his Iwilful ignorance of defects which would have come to his knowledge if he had transacted his business in the ordinary way."

    8. There was nothing in the course of dealings connected with the property in dispute, which would have required on the part of the mortgagees, who lived in other places, greater circumspection than appears to have been exercised in the present instance by an examination of the entries in the revenue papers. These entries would in the ordinary course have been sufficient to satisfy a mortgagee of the title of the mortgagor to mortgage the properties in question; and we do not consider that there were any circumstances rendering a further enquiry on his part necessary. Section 41 of the Transfer of Property Act lays down that

    "where, with the consent, express or implied, of the persons interested in the immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it: provided the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith."

    9. The plaintiffs had, by their conduct or omission, allowed the defendants Nos. 1, 2 and 3 to get their names entered in the revenue papers to their exclusion. These entries existed from as far back as 1908 and remained unchallenged till the present suit was filed. The mortgagees advanced money on the strength of these entries to the persons whose names were entered in the revenue papers as the owners of these properties. They acted in good faith. There were no circumstances established which rendered it necessary for them to take greater care than what appears to have been taken in the present instance, and we consider that the mortgagees are sufficiently protected in what they did by the above provisions.

    10. On behalf of the plaintiffs reliance has been placed on the decision in Partap Chand v. Saiyida Bibi (1901) I.L.R. 23 All. 442 and Azima Bibi v. Shamalanand (1912) I.L.R. 40 Calc, 378; but the circumstances of each case would naturally vary and the conclusion based on facts found in one case cannot be of any assistance in the determination of a similar issue on the facts found in another case. In the former case it was found that the transferee could have ascertained that the property which the transferors professed to transfer was acquired in their names by their father, who was a Tahsildar, When they were children of tender years, and that there were other circumstances which rendered it incumbent on the transferee not to rest satisfied with merely seeing that the names of the transferors were entered in the revenue records. In the latter case the transferee was a pleader from whom greater circumspection would naturally have been expected; and the main ground on which the transferee sought protection was that he thought that the transferor who would ordinarily have been governed by the Muhammadan law had still retained the Hindu law in the matter of inheritance. The plea set up on behalf of the transferee was of such an unusual nature that their Lordships of the Privy Council felt constrained to think that he had not discharged the onus which lay upon him of making due inquiry in regard to the manner in which the property had descended before taking the mortgage. A reference has also been made to the decision in Muhammad Sulaiman v. Sakina Bibi (1922) I.L.R. 44 All. 694, but in that case it was found that the transferee, though aware of the title of the original owner before he had taken the transfer, had omitted to make further inquiry as to how that title had passed from the original owner to the transferor. No such special circumstances exist in the present case. On the other hand, the circumstances of the present case are somewhat similar to those in Khwaja Muhammad Khan v. Muhammad Ibrahim (1904) I.L.R. 26 All. 490, and we are satisfied that there was nothing in the transaction to require the mortgagees to make a further inquiry as to the real title to the property beyond what appeared from the entries in the revenue papers.

    11. The claim of the plaintiff is, therefore, barred as against the transferees in regard to the property mortgaged with them. Their claim as against the defendants 1, 2 and 3 must, however, succeed. We allow the appeal accordingly and decree the claim of the plaintiffs against the defendants 1, 2 and 3 with costs here and hitherto; but dismiss it as against the remaining defendants who will gel their costs here and hitherto from the plaintiffs appellants.

    12. Among the papers printed by the defendants respondents there are several papers which do not relate to the properties in dispute. There are others which were equally unnecessary to be printed for the purposes of this appeal. In fact, no reference has been made to most of these papers. We direct accordingly that the costs incurred in the translation and printing of the tabular matter exhibited from pages 116 to 181 of the printed record shall be excluded from the defendants' costs.

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    Mubarak-Un-Nissa Bibi v. Muhammad Raza Khan
    (Feb 13, 1924)