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Misri Lal Nayak v. Surji And Others

Privy Council
Nov 22, 1949
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Smart Summary (Beta)

Structured Summary of the Opinion (Sir John Beaumont)

Factual and Procedural Background

The dispute concerns title and possession of a parcel of land originally owned by Bihari Paswan and sold on 24 February 1908 to Mukh Lal by a sale deed (Ex. A). Part of the purchase money was to be applied in discharging a mortgage held by Mangni Ram. By a later deed dated 13 July 1921 (referred to as Ex. A(2) in the opinion), Mukh Lal purported to transfer the property to the wife and two minor sons of Mangni Ram.

In 1928 Santi Nayak (father of the present appellant) obtained a money decree against Mangni Ram and Mukh Lal on a promissory note; in execution the property was sold and purchased by Santi Nayak on 16 November 1928, but he did not take steps to obtain possession. In 1929 Mukh Lal applied to set aside an ex parte decree obtained against him; the application was dismissed and an appeal followed. On 29 March 1930 a compromise petition was presented to record a settlement of that appeal, but the Judge hearing the petition refused to decree the appeal in terms of the compromise and directed further hearing.

The appeal was later dismissed for non-prosecution when the parties did not appear. In 1937 the wife and sons of Mangni Ram purported to sell the property to Ramphal Poddar (now represented by respondents 1–4). In November 1940, just before limitation expired, Santi Nayak filed the suit for possession (and mesne profits) in the Court of the First Munsif at Samastipur. The Munsif decreed possession but refused mesne profits. The defendant appealed; the Additional Subordinate Judge at Darbhanga dismissed that appeal, making several factual findings (including that the transactions of 1908 and 1921 were benami, that the court-sale was valid, that the decretal money had not been paid, and that the 1937 purchasers were not bona fide purchasers for value without notice).

A further appeal to the High Court at Patna (heard by Manohar Lall, J.) reversed substantial findings of fact of the Subordinate Judge, holding inter alia that the 13 July 1921 deed passed title and that the decretal amount had been paid. The present appeal by special leave challenges the High Court's reversal of these factual findings under section 100, Civil P. C.

Legal Issues Presented

  1. Whether, in a second appeal under section 100, Civil P. C., the High Court may question findings of fact reached by the first Appellate Court where there was evidence to support those findings.
  2. Whether the transactions (the 1908 sale to Mukh Lal and the 13 July 1921 transfer) were benami, such that the judgment-debtors lacked an interest in the property at the time of execution-sale.
  3. Whether there was sufficient evidence to find that the decretal money had in fact been paid to Santi Nayak, thereby providing an equitable defence to the plaintiff's claim for possession.
  4. Whether the appeal to the Board (and the substitution of heirs after the death of Santi Nayak) was properly constituted under the relevant rules (O. 41, R. 4).

Arguments of the Parties

Appellant's Arguments

  • The learned Judge of the High Court reversed findings of fact made by the lower Appellate Court and, in doing so, acted contrary to section 100, Civil P. C., which precludes the High Court in second appeal from questioning findings of fact that are supported by evidence.
  • Implicit in the appellant's position is that the findings by the Subordinate Judge (that the 1908 and 1921 transactions were benami and that the decretal money was not paid) were supported by evidence and should not have been disturbed.

Respondents' Arguments

  • Respondents asserted that the decretal amount had been paid — the High Court accepted the evidence of a witness named Moti Singh to this effect.
  • The defendants (respondents 1–4) relied on their 1937 purchase, contending (as reflected in their written statement) that before purchase they had learned the plaintiff had realised the entire purchase money from the wife and sons of Mangni Ram and therefore believed the plaintiff had no residual claim; they did not claim to have purchased without notice.
  • One additional point raised (by Mr. Parikh for respondents 1–4) was that the appeal to the Board was not properly constituted because respondent 1 (Santi Nayak) had died before the hearing and his heirs were brought on record; the contention was that substitution might have been improper.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court proceeded step-by-step, focusing on the limits imposed by section 100, Civil P. C., on a High Court in second appeal and on the sufficiency of evidence supporting the first Appellate Court's findings:

  1. The court accepted the settled legal principle that under section 100 a High Court has no power in second appeal to question findings of fact reached by the first Appellate Court where there was evidence to support them. The appellants' primary contention was grounded in this principle.
  2. The Additional Subordinate Judge's findings were recited: (a) the 1908 sale to Mukh Lal was benami; (b) the 13 July 1921 conveyance was also benami; (c) in 1938 the property belonged to the family of Mangni Ram and was rightly seized in execution; (d) the compromise application of 1930 did not in fact involve payment of the decretal money nor set aside the sale; and (e) the 1937 purchasers were not purchasers for value without notice. The court described these as findings of fact on their face.
  3. The High Court (Manohar Lall, J.) disagreed with most of those findings, concluding that the 13 July 1921 deed passed title (was not benami) and that the decretal amount had been paid. The present court examined the basis for these departures.
  4. With respect to the 1921 deed, the court found that the High Court's stated reason — that the Subordinate Judge had failed to consider the deed — was erroneous, since the deed had been discussed at length by the Subordinate Judge. Their Lordships concluded there was ample evidence supporting the Subordinate Judge's benami findings and that those findings could not be challenged in second appeal.
  5. Concerning the alleged payment of the decretal amount, the court scrutinised the evidence relied on by the High Court: principally the testimony of Moti Singh. The lower Courts had disbelieved Moti Singh and the court found that relying on his evidence to overturn the Subordinate Judge's finding involved an impermissible reappreciation of oral evidence in second appeal, thereby exceeding the High Court's powers under section 100.
  6. The court noted that apart from Moti Singh there was no evidence that the money had been paid; the compromise petition did not serve as a receipt and was itself framed in a manner inconsistent with a simple admission of payment. The character of the proposed compromise suggested the true position had not been disclosed.
  7. The court acknowledged the suspicious circumstances surrounding the plaintiff's delay in taking possession (which had weighed with the High Court), but emphasised that suspicion did not constitute proof of payment. The court observed that there might be other explanations for the delay and that the existence of suspicion did not negate the need for proper evidence of payment.
  8. On the procedural point about the constitution of the appeal after the death of Santi Nayak, the court noted that the heirs had the same interest and that one heir could appeal under O. 41, R. 4; there was no evidence to support a contrary conclusion.
  9. Synthesising these points, the court concluded there was no ground for the High Court to reject the first Appellate Court's findings of fact, and therefore the plaintiff's suit must succeed on the factual findings of the lower Appellate Court.

Holding and Implications

APPEAL ALLOWED.

Holding (direct effect on the parties):

  • The court advised that the High Court at Patna's order and decree dated 15th May (the opinion contains two date references: 15th May 1946 in the opening paragraph and 15th May 1945 in the dispositive paragraph) be set aside; the court specifically ordered that the order and decree of the High Court at Patna dated 15th May 1945 be set aside and that the judgment and decree of the Court of the Additional Subordinate Judge of Darbhanga dated 24th August 1943 and the judgment and decree of the Court of the First Munsif at Samastipur dated 25th January 1943 be restored.
  • Respondents 1 to 4 were ordered to pay the costs of the appeal to the High Court and of this appeal.

Broader implications:

The opinion enforces the established limitation on a High Court's power in second appeal under section 100, Civil P. C., by reversing a High Court decision that reappreciated oral evidence and disturbed factual findings supported by evidence. The opinion does not purport to lay down a new legal principle beyond application of that settled rule; its immediate consequence is the restoration of the lower Courts' judgments and the imposition of costs on respondents 1–4.

Opinion delivered by Sir John Beaumont. Appeal allowed.

Show all summary ...

Sir John Beaumont:-

This is an appeal by special leave from a judgment and decree of the High Court of Judicature at Patna dated 15th May 1946, reversing in second appeal the judgment and decree in first appeal of the Additional Subordinate Judge of Darbhanga dated 24th August 1943, and dismissing the appellant's suit

2. The contention of the appellant is that the learned Judge who heard the second appeal in the High Court reversed decisions of fact arrived at by the lower Appellate Court, and that in so doing he acted contrary to the provisions of S. 100, Civil P. C. It is settled law that in view of that section a High Court has no power in second appeal to question findings of fact reached by the first Appellate Court which there was evidence to support.

3. The property in suit originally belonged to one Bihari Paswan, who, on 24th February 1908, by a sale deed, Ex. A, sold the property to Mukh Lal. The deed provided that part of the purchase money should be applied in remitting a mortgage held by Mangni Ram. By deed dated 13th July 1991, Ex. A (2), Mukh Lal purported to sell the property to the wife and two minor sons of Mangni Ram. In the year 1928 one Santi Nayak, father of the appellant, obtained a money decree against Mangni Ram and Mukh Lal on a promissory note signed by them. In execution of this decree, the property in suit was sold by the Court and was purchased by Santi Nayak on 16th November 1928. The purchaser took no steps to obtain possession of the property which he had purchased.

4. In the year 1929 Mukh Lal applied under R. 13, O. 9, Civil PC, to get the decree obtained against him by Santi Nayak, which had been obtained ex parte, set aside. This application was dismissed by the Judge in execution, and Mukh Lal lodged an appeal against the order for dismissal.

5. On 29th March 1930, Mukh Lal and Santi Nayak presented to the Appellate Judge an application for recording a compromise of the appeal. It was signed by Mukh Lal in person and by Santi Nayak by his attorney, and was in the following terms:

"The appeal has been compromised between the appellant and the respondents. According to the terms of the laid compromise, it has been settled that this appeal may be allowed and the decree dated 7-7-28 may be set aside and the title suit may be restored to its original number and Mukhlal Prasad appellant may be removed from the category of defendants because the petitioner respondents have now come to know on enquiry and investigation that in fact the appellant has no connection with Mangar Ram and recently Magni Ram has had in fall the entire decretal amount with cost to the respondent consequently the auction sale will be set aside. Hence this petition is submitted and it is prayed that the auction sale and the decree may be set aside and the appeal may be decreed. The parties will bear their own costs of the appeal. In attestation hereof the signatures of the respondents and the lawyers of the appellants and the respondents are affixed herein below. The petition of Mukhlal Prasad appellant and Shanti Nayak respondent, dated 29-3-30."

6. The learned Judge who heard the petition was not satisfied with the bona fides of the compromise and made an order in the following terms:

"The pleader B. B. K. Biswas was permitted to sign the vakalatnama to-day and he signed it. I am not inclined to decree this appeal in terms of the compromise. I cannot set aside an ex parte decree in an old suit simply because the parties want me to do so. I must be satisfied as to the correctness and bona fides of the allegations made in the petition for setting aside the ex parte decree. If the parties want to compromise they must settle the whole dispute including the original suit. Put up on 15-5-30 for bearing of the appeal."

7. Thereafter the parties did not appear on the days fixed for hearing the appeal which was consequently dismissed for non-prosecution.

8. On 16th October 1937, the wife and sons of Mangni Ram purported to sell the property in suit to Ramphal Poddar deceased, who is now represented by respondents 1 to 4. The vendors based their title on the deed of 19th July 1921, which was described, not as a kebala or sale-deed, but as a bajinama ladavi or deed of relinquishment

9. On 18th November 1940, which was the last day before the period of limitation expired Santi Nayak filed the suit out of which this appeal arises in the Court of the First Munsif at Samastipur, claiming possession of the property and mesne profits. The learned Munsif who tried the case decreed the plaintiff's suit for possession but refused to give him mesne profits, holding that he had lost such profits by his own laches in not obtaining possession, a view which seems clearly right.

10. The defendant appealed and the appeal was heard by the learned Additional Subordinate Judge at Darbhanga. The learned Judge dismissed the appeal. He arrived at the following findings, which on their face appear to be findings of fact. First that the sale to Mukh Lal in 1903 was a benami transaction, Mukh Lal being benamidar for the joint family comprising himself and Mangni Ram; secondly that the conveyance of 13th July 1921 was also benami, being no more than a transfer from one benamidar to three other benamidars; thirdly that in 1938 when the court sale took place the property in suit belonged to the family of Mangni Ram, who was the karta of the family, from which it followed that the property in suit was rightly seized in execution; fourthly that on the application to record the compromise in 1930, there was an agreement between Mukh Lal and Santi Nayak that Mangni Ram would pay the decree money and the sale would be set aside, but there was actually no payment of the decree money and the sale was not set aside; fifthly that the defendants, respondents 1 to 4, on their purchase of the property in the year 1937 were not purchasers for value without notice. As to this last point, it may be noted that the defendants never claimed to have purchased without notice of the plaintiff's title; their claim, as appearing in para, 15 of their written statement, was that before they purchased they had learned that the plaintiff had realised the entire purchase money from the wife and sons of Mangni Ram and for that reason had taken no steps to recover possession of the property, and had no title left in him. Prudence should have suggested to the respondents to confirm by enquiry from Santi Nayak the fact that he bad no claim to the property.

11. From the appellate decision of the learned Subordinate Judge, an appeal was brought to the High Court at Patna and such appeal was heard by Manohar Lall, J. The learned Judge differed from most of the foregoing findings of the Subordinate Judge. He held that the title to the property in suit passed under the deed of 13th July 1921, which was not benami, and that accordingly at the date of the court order the judgment-debtors had no interest in the property in suit. The reason which the learned Judge gave for differing on this point from the finding of the Subordinate Judge was that the Judge had omitted to consider the deed of 13th July 1931. This is clearly an error since the deed was discussed at length in the judgment of the Subordinate Judge. Their Lordships are satisfied that there was ample evidence to support the findings of the Subordinate Judge that the transactions of 1908 and 1921 were benami, and that these findings cannot be challenged in second appeal.

12. Manohar Lall, J. then held that the, decretal amount had been paid. In reaching that conclusion he accepted the evidence of Moti Singh, whom the lower Courts held to be an unreliable witness. It is plain that in differing from the view taken by the lower Appellate Court upon appreciation of oral evidence Manohar Lall, J. exceeded his powers under S.100, Civil P. C. Having held that the whole decretal amount had been paid to Santi Nayak, Manohar Lall, J. considered that this afforded an equitable defence to the plaintiff's claim for possession. Although the sale had not been set aside, this conclusion might be justified if based on sound premises. Their Lordships, however, are unable to hold that there was no evidence to support the conclusions of the learned Subordinate Judge that the decretal money was not paid. Apart from the evidence of Moti Singh, who, as noted, was disbelieved, there was no evidence that the money bad been paid. No attempt was made to prove the occasion on which, or the manner in which, the money had been paid. The petition for compromise did not profess to be a receipt for the money. It acknowledged payment, but only as part of the compromise, and it is on the face of it improbable that the money would have been paid before the compromise was accepted. The proposed compromise was of a singular character, since it apparently contemplated that the suit would proceed after Mukh Lall's name as defendant had been removed, though clearly if the decretal money had been paid the compromise should have provided for restoring the properties to the judgment-debtors. Their Lordships agree with the views of the High Court and the Judge in first appeal that the real truth at the back of this petition for compromise has not been disclosed.

13. Their Lordships appreciate the strong element of suspicion which attaches to the plaintiff's case from the failure or his father to apply for possession until the very last moment, a matter which naturally weighed heavily with Manohar Lall, J. but such suspicion does not amount to proof that the decretal money was paid. There may have been other grounds for the delay, and it is as difficult to understand, if the money was paid, why the judgment-debtors did not get the sale set aside, as it is to understand why, if the sale was valid, the judgment-creditor did not at once apply for possession.

14. In their Lordships' view, there was no ground upon which the High Court could reject the findings of fact arrived at by the first Appellate Court, and on those findings the plaintiff's suit must succeed.

15. One other point was raised by Mr. Parikh for respondents 1 to 4, namely, that the appeal to the Board was not properly constituted. At the time when the appeal to the High Court was lodged respondent 1 was Santi Nayak, but he died before the hearing of the appeal and his heirs, who seem to have been his grandsons, were brought on record. The present appellant is the eldest of such heirs. Very probably he is the karta of a joint family, but, apart from this point, upon which there is no evidence, all the heirs of Santi Nayak have exactly the same interest and one of them can appeal under O. 41, R. 4. Their Lordships think that there is no force in this contention.

16. Their Lordships will therefore humbly advise His Majesty that this appeal be allowed; that the order and decree of the High Court at Patna dated 15th May 1945, be set aside and that the judgment and decree of the Court of the Additional Subordinate Judge of Darbhanga dated 24th August 1943, and the judgment and decree of the Court of the First Munsif at Samastipur dated 25th January 1943, be restored. Respondents 1 to 4 must pay the costs of the appeal to the High Court and of this appeal.

Appeal allowed.