Atkinson, J.:— (21st February 1919).— The plaintiffs in this suit seek a declaration of their title to the lands set out in Sch. 1 to the plaint; and they claim in respect of the property described therein an eight-annas share.
2. The defendants are eight is number, and the suit has been only contested by defendant 6. Defendants 7 and 8 are puisne mortgagees to defendant 6, who claims to be a first mortgagee of the entire 16-annas share or interest in the property forming the subject-matter of this suit.
3. Defendant 1 is the uncle of plaintiff 1 and defendants 2 to 5 are the sons of defendant 1. The claim of defendant 6, who contests this suit, is founded upon a mortgage which he obtained from defendant 1 on 18th September, 1908 for the sum of Rs. 5,000. The defendant by his written statement alleges that his mortgage hypothecated by way of security for the money he advanced a 16 annas share in the entire properties specified in the schedule to the plaint and that such property was the absolute, exclusive and separate property of defendant 1. Defendant 6 also in para. 14 of his written statement, alleges in loose and very general terms, what might be termed a plea by way of equitable estoppel as against the plaintiff in bar of his claim in this suit, inasmuch as he suggests that plaintiff 1 knowingly allowed the properties in suit to remain recorded in the name of defendant 1, Khubi Sahu, alone and permitted him to deal with such property as the apparent and ostensible owner thereof, and that consequently plaintiff 1 is now estopped by conduct from endeavouring to set up a claim of title to an eight-annas share in the lands in suit which would defeat or limit the extent of the security of defendant 6 under his mortgage, defendant 6 being an unsuspecting purchaser for value without notice.
4. The learned Subordinate Judge who tried this case considered the three main facts which stand out for determination in this suit. So far as the question of alleged estoppelis concerned, the learned Judge was of opinion that on the authorities no case had been made out by defendant 6 to warrant any inference of law or fact that the plaintiff's conduct amounted to an estoppel so as to operate as a bar to his right to the relief he now seeks.
5. With regard to limitation, the learned Judge held that the plaintiff's suit was not barred by lapse of time, inasmuch as this suit was brought within 12 years from the date when the plaintiff and his uncle defendant 2 separated as members of a joint Hindu family, which is the point of time when dispossession is alleged to have occurred.
6. With regard to the issue whether plaintiff and defendant 2 were joint or separate, which was so persistently urged by the written statement of defendant 6, the learned Judge held that the case alleged by defendant 6 was transparently false.
7. It is necessary to consider briefly the history of the plaintiffs' family:
The common ancestor of the family was one Hanuman, who had two sons, one Khubi Lal Sahu defendant 1 and one Khantar Sahu who was the father of plaintiff 1. Plaintiff 2 is the son of Pallu Sahu. It is alleged that Khubi Sahu and Khantar Sahu were members of a joint Hindu fancily, and that as such they were entitled to the joint family property in shares of eight-annas each. The other defendants on the records, viz., defendants 2, 3, 4 and 5, are the sons of Khubi Sahu. Khantar Sahu died many years ago, leaving a widow and a son named Pallu Sahu, viz., plaintiff 1. After Khantar's death, Khubi, then being a widower, married in Sagai form the widow of Khantar, theieupon the plaintiff, who was young, went with his mother and resided in the house of Khubi and continued to live with him joint in mess and property and that they afterwards remained members of a joint Hindu family for a considerable period of years anyhow down to the month of November 1903.
8. The case for the plaintiff is that he and his uncle as joint members of a joint Hindu family governed by Mitakshara law managed the joint landed property and developed out of its proceeds a family business known as Goladari business. It would appear that Pallu, who is more literate than his uncle Khubi, kept and wrote up the Bhai khata books of account of the business from time to time. Khubi Sahu as the elder of the two co-parcenary proprietors acted as the karta or managing member of the joint family.
9. The case for the plaintiff is that eight or nine years before action brought, he separated from his uncle and ceased to reside with him or to take part in the business of Gola, and that thereafter he did not share in the control and management of the property in as full and ample a manner as he had done prior to the time when the family separated. I will first consider the issue raised as to whether the plaintiff and defendant 2 were ever joint members of a Hindu family; and incidentally whethar the property in suit was the exclusively separate property of Khubi Sahu.
10. In 1902 the Record of Rights was finally published; and in the Record of Rights Khubi, defendant 1, was recorded as being the ryot of the lands set out in Sch. 1 of the plaint. Reliance has been placed by defendant 3 on this circumstance; but it seems to me natural enough inasmuch as at that time the family was joint, and Khubi was the karta of the family. Khubi, also as karta of the family, paid the rent due to the zamindar out of what must be regarded as the joint funds of the joint family, and got receipts from the zamindar in respect of such rent as he paid. Within recent time however it appears that the rent has not been paid for now a period of three or four years.
11. The dealings between Khubi and Palla with reference to the joint family property were very large and extensive. From time to time they bought and sold and mortgaged property for the purpose of discharging debts and obligations due by and charged upon the family property. The deeds evidencing such transactions have all been exhibited and adduced in evidence on behalf of the plaintiff, for the purpose of establishing by proof what seems to me to be an incontrovertible fact that the family was originally joint and continued joint up to the time when separation took place, viz., November 1903.
12. Some of the deeds, viz., Ex. 2, dated 11th April, 1899 describe the family as joint. Khubi from time to time dealt with the joint property, on behalf of Pallu as his coparcener, as his guardian. Khubi alleged in the instrument of mortgage, Ex. 8, dated 20th December, 1897, that he was guardian of Pallu as a joint coparcener with him in the joint family property. I will refer to these deeds in detail a little later.
13. The tenor of all these documents which have been given in evidence lead one irresistibly to the conclusion that the property was joint property belonging to Pallu, the plaintiff, and defendant 1 as cosharers in the proportion of eight annas each.
14. In 1908 defendant 1 executed a mortgage in favour of defendant 6 for Rupees 5,000 and the property hypothecated as security for the mortgage debt was the 16 annas raiyati interest in the entire property set out in Sch. 1 of the plaint, as if Khubi, the mortgagor was entitled exclusively in his own right to such interest in such property.
15. Defendant 6 alleges and contends that in making the advance that he did in 1908 to Khubi, defendant 1, he believed he was dealing with Khubi as the sole proprietor of the tenant right to the extent of a 16-annas interest in the property which was hypothecated and pledged as security for the advance, and upon no other basis.
16. The written statement filed on behalf of defendant 6 contains no less that 19 paragraphs, every one of which, with the exception of one is conversant only with allegations of fact relating exclusively to the issue that Khubi was the sole proprietor of the lands in suit which were in 1908 hypothecated as a security for the mortgage-debt. Defendant 6 and the several witnesses which he called to support his defence, have deliberately lent themselves in their evidence to endeavour to establish by their testimony the case put forward on behalf of defendant 6, viz., that at no time was Khubi joint with Pallu and that Khubi had always been separate; and that the property pledged as security for the mortgage debt was the property of Khubi himself, whish he had purchased out of his own moneys; and that it represents his self-acquired property, free from any joint co-parcenary right or interest therein.
17. That case, supported as it is by the evidence of defendant 6 jointly with the evidence of the several witnesses he has examined, I am satisfied beyond a shadow of doubt is false and in my opinion it is false to demonstration by reason of the inference that must necessarily be drawn from the documents and exhibits that have been produced and given in evidence. These documents are all before us and they establish to my satisfaction that 95 per cent of the case put forward by defendant 6, supported as it is by his witnesses, is untrue and devoid of substance and of facts to support it.
18. Therefore when I find that the affirmative case which is made by a party to litigation is false to the extent of 95 per cent, I view the rest of his case with grave suspicion and I analyze it critically with a view of seeing whether the residue of the case relied upon is true or false. This principle has been applied frequently in all Courts of Justice by all tribunals, but more especially by tribunals of fact and I think that in this case in the result there can be no possible room for disagreement, that on the documents exhibits on the record, in evidence there is but one conclusion to be drawn, namely, that Khubi and Pallu were joint; that Pallu's father was joint with Khubi, and that they continued to be a joint Hindu family, joint in mess and property up till the month of November 1903, when separation took place.
19. The learned Judge who tried this case, who saw the witnesses, and had the advantage of testing their evidence and of judging by their demeanour as to the degree of credibility to be attached to the evidence which they gave, also arrived at the conclusion that the case put forward by defendant 6 as to Khubi being separate and the absolute owner of the mortgaged property was unsupportable on the facts. With the finding of fact arrived at by the learned Judge as to whether the property in suit was joint or separate my learned brother and myself entirely agree.
20. This being so, I am now obliged to consider the alternative defence alleged by defendant 6, in paragraph 14 of his written statement, and upon this plea the main argument in this case has been addressed to us; because the learned vakil appearing on behalf of defendant 6 in this Court, was obliged almost to abandon the case that the property in suit was ever the separate property of Khubi alone; and he proceeded to present and argue the case relying upon the legal principle known in English law as equitable estoppel, which has been now embodied in Section 41 of the Transfer of Property Act, and Section 115 of the Evidence Act, 1872.
21. Now let me consider what is the plea of estoppel alleged. I think the principle of pleading a plea of estoppel is very clearly and succinctly laid down by their Lordships of the Privy Council in the case of Rani Mewa Kuwar v. Rani Hulas Kuwar(1), and at p. 161 of the report their Lordships state:
“when estoppel is pleaded against a party, the facts relied upon as leading up to it should be precise and unambiguous, for since the nature of an estoppel is to exclude evidence of an inquiry into the truth, it must be clearly pleaded and proved; it therefore follows that the transferee invoking the aid of this section must allege and prove the precise nature of the inquiries he relied on.”
22. Let me consider the allegations contained in para. 14 of the written statement of defendant 6; and lat me examine them to see if they are precise and unambiguous in their terms and such as the law requires to found the applicability of the doctrine of estoppel in equity. Para. 14 runs as follows:
“Supposing that the plaintiff has got an interest in the disputed properties, which fact this defendant does not admit at all, he (the plaintiff) has, in accordance with the principle of estoppel, got no right to put forth his claim in respect of those properties as against this defendant or any other defendants, 2nd party, when he (the plaintiff) knowingly allowed the said properties to stand in the name of the said Khubi Sahu in consequence of which (fact) this defendant and other defendants, 2nd party, having relied on the interest of Khuti Sahu, advanced a loan to him in good faith on the security of those properties.”
23. I venture to say that I have never seen a more loose and ambiguous plea of estoppel set forth in any pleading as this. The sum and substance of it is that the plaintiff
“knowingly allowed the said properties to stand in the name of the said Khubi Sahu.”
24. When, where, how or in what way the plaintiff allowed the properties in suit to stand in the name of Khubi Sahu is not suggested or even mentioned. Nor are any circumstances fairly stated upon which defendant 6 alleges he relied to support his plea of estoppel, and by which he was misled.
25. The foundation of the equity of estoppel contemplated in Section 115 of the Evidence Act, is that where a person by an act, declaration or omission leads another to believe that if that person deals with some other person that he is dealing with him in good faith, as a person having full power to dispose of the property, and that such other person advances money on the security of the act, declaration or omission of such person who stands by and see the transaction take place, then such person is estopped by his conduct afterwards from asserting his title or claim to the property which such other person has acquired, whether by purchase or by mortgage, and upon the faith of which act, declaration or omission he in good faith advances and pays the money.
26. There is no suggestion in para. 14 of the written statement or in the evidence that plaintiff 1 induced by act or declaration defendant 6 in 1908 to advance to defendant 1 the loan of Rs. 5,000 on the security of the properties mortgaged. Defendant 6 himself does suggest that Pallu was present at the time when the negotiations for the loan of 1908 were being arranged; but if that statement was true in fact, it is most significant that no question was put to the plaintiff in cross-examination as to its accuracy or truth. Personally I disbelieve this statement of fact deposed to by defendant 6; and I go further and say as judge of fact that I disbelieve the whole of the defendant's evidence. In my opinion it is false from its inception to the end.
27. I hold as a fact that Pallu, the plaintiff, was never consulted; nor did he in any way lead defendant 6 to believe that Khubi was the sole 16-annas proprietor of the raiyati interest in the lands set forth in Sch. 1 to the plaint; nor did the plaintiff by act, declaration or omission or by silence or acquiescence on his part in any way mislead defendant 6 as to the nature and extent of the interest of Khubi, defendant 1, in the properties hypothecated as security for the loan. These findings of fact negative, in my opinion, the applicability of the doctrine of estoppel in equity to the facts of this case.
28. The allegation pleaded in para, 14 of the written statement to ground the estoppel is that Pallu allowed the family properties “to stand in the name of Khubi.” Where and in what record? Was it in the Collector's book? Was it in the records of the registration office? Had defendant 6 taken the trouble, or exercised a reasonable and intelligent curiosity and made a search in the registration office, he would have easily acquired abundant evidence to satisfy himself that the property hypothecated as security for his mortgage-debt was not the exclusive property of defendant 1, by the discovery of the deeds and exhibits adduced in evidence in this case and already referred to. There is not a shred of evidence to suggest in what way and manner the plaintiff allowed the mortgaged properties to stand in the name of defendant 1. The only document in which Khubi appears recorded as having the 16-annas proprietary interest in these lands as a raiyat is in the Record of Rights. Nothing could be more natural; because at that time when the Record of Rights were prepared, viz., March 1902, Khubi was the karta of the family which was then joint. The rent receipts afford no help to the case of defendant 6; because the landlord's books and rent roll have not been produced to show in what capacity defendant 1 was recorded therein, though the landlord was called and examined as a witness on behalf of defendant 6. Is this conduct on the plaintiff's part such as would justify any Court fairly considering the facts to arrive at the conclusion that the plaintiff “knowingly allowed the properties to stand in the name of Khubi Sahu,” so as to clothe Khubi with all the interests of proprietorship which might mislead and deceive an innocent purchaser?
29. Khubi, defendant 1, had no documents of title in his possession relative to the mortgage property wherewith to mislead defendant 6. It is sworn by the plaintiff that, prior to the separation in 1903, he and Khubi were on bad terms. I believe the plaintiff. If Khubi and the plaintiff were then on bad terms, how did Pallu get possession of the eight or nine documents of title which have been given in evidence by the plaintiff in this suit conversant with the title of the property hypothecated as security for the mortgage-debt? The fact is to my mind remarkable and seems to me to indicate that the plaintiff had the documents of title which he produced in evidence in his possession, because he was asserting his right and title to a division of the joint property on his separation from his uncle; and it further satisfies me that defendant 6 took no reasonable care to ascertain what was the title of his mortgagor to the property he was pledging as security for the loan advanced.
30. However the argument of estoppel before us is founded not on the express provisions of Section 115 of the Evidence Act, but on the provisions of Section 41 of the Transfer of Property Act. There is, I think, a somewhat marked distinction in the nature and character of estoppel contemplated between the earlier and later enactments referred to. S. 41 reads as follows:
“Where, with the consent, express or implied, of the persons interested in 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 authorized to make it; provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.”
31. The proviso to this section is of vital importance, because it provides the key to the true interpretation of the section, viz., that the transferee or mortgagee, whatever he may be shall take reasonable care to ascertain the title of the transferor, and that he has acted in good faith. This proviso in effect means that a transferee is not deemed to be hoodwinked by the conduct of another, if he has the means at his disposal of making reasonable inquiry and does so act in good faith, even though the conduct of such other may be calculated to mislead, if not, to deceive.
32. Now in my view it is clear that defendant 6, who was a neighbour of the plaintiff and defendant 1, had many and various dealings with them for many years. The defendant dealt with Khubi and with Pallu. Many transactions had taken place between them in the past, while they were admittedly joint; I cannot conceive it possible to believe that defendant 6 did not know that Khubi and Pallu were joint. Plaintiff 1 and defendant 1 never did or said anything to show that they were not joint; and the natural presumption would be according to Indian law that they were joint, if there was a nucleus of joint property from which such presumption could be reasonably inferred.
33. Defendant 6 admits that he had financial dealings with Khubi on the basis of bahi khata accounts. The bahi khata accounts in respect of the Gola business were kept by Pallu because it was a joint business. It is to my mind inconceivable for a moment to think that defendant 6 did not know thoroughly well that Pallu and Khubi were joint, had been joint and that their fathers before them had been joint. If there is nucleus of joint family property, the presumption is that the property is joint until the party asserting the contrary is able to establish the fact of separation. I hold that in this case there was an imperative duty on defendant 6 to inquire as to the nature of title he was getting from defendant 1 by virtue of the mortgage-deed of 1908; because on the evidence I am of opinion that he had notice of the fact that the family of the plaintiffs and defendant 1 was joint and was so until five years prior to the time when he advanced his money on loan; and theft up to that time there was nothing what, soever to suggest any holding out of Khubi as ostensible owner of the property in suit, because the relationship that existed between Khubi and his nephew Pallu, I am satisfied was well known to defendant 6. Therefore if I am satisfied in fixing defendant 6 with express or constructive notice of the fact that Pallu and Khubi were joint, the burden on defendant 6 is enormously increased for the purpose of satisfying a Court that he has taken reasonable care to ascertain the title of the person to whom he was advancing money in respect of the land hypotheoted as security.
34. Defendant 6 admits that he made no inquiry in the registration office for the purpose of ascertaining the measure of Khubi's interest in the mortgaged property. However one significant admission of fact was elicited from him on direct examination, and it was this that while he did not search or inquire in the registration office with regard to the title of all the properties mortgagee, yet that he did search in the Registry with regard to the title of the land originally purchased in the name of Ghena as benamindar of the plaintiff and defendant 1 and which property Ghena transferred to Khubi alone by a kabala dated 17th September, 1908 the day prior to the mortgage executed by Khubi in favour of defendant 6. Why, I ask, did defendant 6, if he did search in the registration office, search only for the purpose of acquiring information as to the property in the name of Ghena and not with respect to the other properties covered by the mortgage? If he had really inquired as to the property in the name of Ghena he would doubtless have found the kirayanama dated 6th January, 1902 and is would have disclosed the fact that this very property, which was purchased farzi in the name of Ghena about the same time, was let by Ghena to Pallu and Khubi while thy ware still joint as joint tenants paying a joint rent. I believe that defendant 6 made no search in the Registry at all even with regard to the Ghana property; but if he did, and his evidence on this point be true, then I say the materials that would have been procured by any such search would have put defendant 6 on notice that even in respect of this property Khubi and Pallu were interested therein jointly, by virtue of the kirayanama, as members of a joint Hindu family.
35. The evidence of defendant 6 as to what inquiry he made is as follows:
“I made no equity about any property in the registration office; I did not consider it necessary to inquire in the registration office.” I enquired about one of the mortgaged properties in the registration office and found that it stood in the name of Ghena.”
36. On the facts of this case to which I have already referred, I am of opinion that defendant 6 must be deemed to have known that the property pledged as security for the mortgage debt was joint and it had been the joint property of these two persons Pallu and Khubi. The onus was upon defendant 6 to satisfy himself by reasonable care and inquiry that the title of Khubi was in fact what he alleged it to be, viz., a 16-annas proprietor of the raiyati interest in the properties covered by the mortgage.
37. The whole policy of the law of registration is founded upon the principle of fixing people with constructive notice of documents of title to property which are readily open to their examination and inspection. The underlying idea is to enable, whether they be purchasers of lands, or mortgagees lending money on the security of land, to enable them to have an easy means of reference to ascertain for themselves the title of the property which they purchase or on the faith of which they lend money. I cannot conceive myself of a stronger case both in law and fact than this one for the purpose of illustrating the nature and character of the obligation which the law requires and the duty it imposes on a mortgagee of making a search in the registration office as to the title of the property offered to him as security.
38. If defendant 6 had made a reasonable search and inquiry, what would he have found? He would have found many documents, all within quite recent times, within at least a period of ten years prior to the date of his mortgage of 18th September, 1908, all conclusively establishing that all the property mentioned in Sch. 1 to the plaint and covered by the mortgage deed had been dealt with and treated as joint property by Khubi and Pallu; Ex. 6, a mortgage deed, dated 13th April, 1899, in respect of property No. 4 referred to in the schedule to the plaint; Ex. 7, a mortgage deed, dated 27th October, 1899, in respect of the properties Nos. 1, 2, 3, 4, and 6; Ex. (1), dated 17th September, 1896, a mortgage in respect of property No. 6; Ex. 8, dated 20th December, 1897, a mortgage deed in respect of properties Nos, 1, 2, 3, 4 and 5; Ex. 2, dated 11th April, 1899, in which the family are asserted to be a joint Hindu family; and Ex. 3, dated 11th April, 1899. Blindly defendant 6 accepts the title offered him by Khubi without making any search or inquiry. The defendant practically admits he did so because he believed that Khabi was the real owner of the property. How did he know? What steps did he take to inquire?
39. Mr. Tahir puts forward a case in argument before us which is not specifically averred in defendant 6's written statement. He seems inclined to treat the case as pleaded as shallow and unsubstantial; and he relies, in support of his argument as to estoppel, upon the fact that Pallu was an attesting witness to the mortgage deed of 1908; and that therefore, being an attesting witness and the document having been read over in the presence of the attesting witnesses prior to execution, he is thereby estopped in law in this suit from asserting his title and right to recover possession of an 8-annas share of the property hypothecated as security for the mortgage debt. All I desire to say is that this argument is unsupported by any of the authorities. I do not believe myself that the mortgage-deed was ever read out by the scribe in the presence of the plaintiff prior to his attestation thereof. The learned Judge had the gravest doubt on this point, and arrived at no clear finding of fact; but he adds that, even if the mortgage-deed was read out in Pallu's presence, that he was satisfied that it was not read out in such a way as would enable Pallu to understand and appreciate its terms and contents. Pallu himself says the mortgage deed was not read out to him or in his presence; but that he was merely asked to attest the document by defendant 6; that he went from his house to the shop of defendant 6; and that he there, in the presence of other attesting witnesses, attested the signature of defendant 1 to the mortgage deed; and that before he signed his name as an attesting witness he asked Khubi what the mortgage was and Khubi replied that it was a mortgage in respect of his 8-annas share in the joint property. Against that, of course, Pallu could have no objection; and being satisfied by the answer which was given to the interrogatory administered by him to defendant 1 in the presence of defendant 6 he acted as an attesting witness to the mortgage deed. I do not find by the evidence that defendant 6 contradicts the plaintiff relative to the testimony he gave as to what he said to Khubi and the answer he received at the time when all parties were assembled in the shop of defendant 6, when the mortgage deed was executed. The deed was prepared by a scribe. The scribe, who is alleged to have read the document aloud in the presence of the attesting witnesses, has not been called to give his evidence; and we are left more or less to conjecture whether the deed was read out or not from the testimony of two other attesting witnesses, viz., D.Ws 4 and 7.
40. I am of opinion that 95 per cent, of D.W 4's evidence is false; because he lends himself to support a case by his evidence which is on the face of it obviously untrue. He is a Mahajan in the same business as defendant 6, and in my opinion he is a partizan witness who probably desires to help his fellow businessman in distress. However I do not disregard or disbelieve his testimoney on this ground alone; but I do so on the ground that his evidence is unworthy of credit because he has lent himself to supporting the main case for the defence actively by evidence which I now hold to be false. The evidence of D.W 7 is more difficult to get over. It creates a doubt in my mind as to whether the deed was read out aloud prior to execution or not.
41. I do not believe however that Pallu had the deed ever read out to him. Why should it have been read out to an attesting witness? What interest has an attesting witness in a case of this kind to have the contents of a document read out to him?
42. Mr. Tahir suggests in argument for the first time before us that the object of inducing Pallu to be an attesting witness was to “bind him.” It is most significant if that was the real object of this manoeuvre; no such case was pleaded nor suggested as a ground of estoppel in para. 14 of the written statement filed on behalf of defendant 6. If the suggestion now made for making Pallu an attesting witness was the motive that actuated defendant 6 it only reveals how false his whole case has been as to the property mortgaged being the separate property of Khubi. Why seek “to bind Pallu” by making him an attesting witness of the deed of mortgage if he had no interest whatsoever in the mortgaged property? If, on the other hand, Pallu had an interest in such property, which defendant 6 was seeking to bind, what fact could be stronger to put him on notice to inquire as to the nature, character and extent of that interest? “To bind Pallu” by making him an attesting witness, at least shows that there was some reservation at the back of the mind of defendant 6 that necessitated the obligation of binding Pallu and I cannot myself see why an admission made by counsel of that character at the Bar and forming the subject-matter of his main argument addressed to us should not be used, and relied on strongly against his client. But even if the deed of mortgage was read over to Pallu, or read out in his presence prior to its execution in defendant 6's shop, I am satisfied that Pallu did not know and fully understand its nature and contents.
43. The law with regard to estoppel, so far as it can he applied to a witness attesting a document which requires attesting has been considered in many cases recently; and the latest authority on this subject is reported as Banga Chandra Dhur Biswas (Nanda Lal) v. Jagat Kishore Aoharjya Chowdhuri(2), decided by their Lordships of the Privy Council. The following cases may also be referred to: One reported as Han Kishen Bhagat v. Kashi Pershad Singh(3) and another as Chunder Dutt Misser v. Bhagwat Narain Thakur(4). In the case reported as Banga Chandra Dhur Bitvas (Nanda Lal) v. Jagat Kishore Aoharjya Chowdhuri their Lordships of the Privy Council have laid down that the mere fact of attesting a document as a witness in itself means nothing more than that the person signing as an attesting witness merely attests the signature of one of the executants to the document which requires attestation to establish its validity. If you want to estop or bind a man by reason of the fact that he is an attesting witness, it must be satisfactorily established that he had a full appreciation and knowledge of the contents and terms of the document which he was attesting; and that in some way or other it was signed to affect his interest in the subject-matter concerned therein. I am satisfied as a fact that plaintiff 1, even if the mortgage deed was read out prior to execution in his presence, did not know or appreciate its terms and contentions.
44. There is just one more matter with which I shall now deal.
45. The plaintiff in his evidence says that he became aware for the first time that his share in the property was subject to the mortgage of 1908 in or about the month of July 1913. He does not fix the actual date or year definitely save by reference to the fact that it was three years before the time he was giving his evidence, corresponding with the month of July 1913. It is a significant fact that early in the year 1914 for which no date is given, Suit No. 318 of that year was instituted by defendant 6 in which he sued on his mortgage bond and obtained a decree as against Khubi. Forthwith the plaintiff Pallu instituted the present suit on 14th September, 1914. I think this is a very significant fact; more especially as it is common knowledge in this country that a mortgagee is reluctant to sue with reasonable alacrity within a reasonable limit of time upon a mortgage bond. But I find that in this case defendant 6 instituted a suit to recover possession on foot of his mortgage bond within five or six years of the date of his mortgage; in fact the moment he knew that there was a likelihood of the property covered by the mortgage of 1908 being in jeopardy by reason of the discovery which plaintiff 1 had made that his interests were affected thereby.
46. I have analyzed this case with the greatest are; and I have given every consideration to the argument adduced on behalf of defendant 6; and I have arrived at the clear conclusion that the learned Judge was right in the result of his decision.
47. As my learned brother and I are unable to agree on the issue of fact out of which the question of estoppel arises, the decision of the lower Court will stand.
48. Das, J.:— I regret that I am unable to agree with my learned brother. It is admitted that Khubi, defendant 1, who is the uncle of plaintiff 1, did on 18th September, 1908 execute a mortgage bond in favour of the appellant purporting to deal with the 16-annas interest in the properties mortgaged. It is not suggested that there was anything unfair in the transaction or that the full consideration money was not paid to defendant 1.
49. In these circumstances I have to consider, first, whether the plaintiff Pallu was aware of the transaction which fee now challenges, and secondly, whether in any event he is now entitled to avoid the transaction on the ground that defendant 1 was not authorized to enter into it.
50. On the first question I have come to the conclusion that Pallu was fully aware of the transaction entered into by his uncle Khubi, and that he stood by and allowed his uncle to deal with the 16-annas interest in the properties mortgaged. It is admitted that Pallu was an attesting witness to the mortgage-bond executed by Khubi. This, of course, is not sufficient to fix Pallu with knowledge of the contents of the bond, but it is the appellant's case that the bond was read to Khubi in Pallu's presence before they put their respective signatures to the bond. Pallu's evidence on this point is as follows:
“I was separate from Khubi when he executed the bond in favour of Kanhulal Marwari. I was not present when the bond was executed. At that time I was not on good terms with Khubr Bahu. I attested the bond in the shop of Kanhu Lal. He had called me. I had inquired from Khubi as to what the document was which I was required to attest. I asked Khubi whether I should attest the document as desired by Kanhu Lal and he said, “Yes,” and that he had mortgaged half the gola. The bond was not read over to me and I did not try to ascertain by the bond being read over to me that what Khubi had said was true or not. Khubi said that he had mortgaged half.”
51. In my opinion these is an initial improbability in the story told by Pallu. It is admitted that all the properties mortgaged stood in the name of Khubi in the finally published Record of Rights and I think the appellant has established that Khubi was in possession of all the properties. Khubi was therefore in a position to deal with the 16-annas interest in the properties, and I think it very improbable that Pallu, who, according to his own evidence was not on good terms with his uncle, should have consented to attest a mortgage bond executed by his uncle without first of all satisfying himself that his interest had not been dealt with by his uncle. It is worthy of note that Khubi was illiterate, whereas Pallu appears to have some amount of education. The transaction was a mortgage transaction, and I find it difficult to believe that Khubi himself would have consented to execute a bond in favour of a Marwari moneylender without having the bond read over to him. It should be noted that there is on the bond itself an endorsement by the writer of the bond to the effect that it was read over to the declarant.
52. The trial Judge has dismissed this important point with the following observation:
“The two witnesses Sukhdeo Lal and Golab Lal are connected persons and the scribe has not been examined. Defendant 6 does not say that the bond was read over.”
53. There is no attempt to discuss the evidence of the two persons Sukhdeo Lal and Golab Lal, who, it may be mentioned, were the attesting witnesses to the bond, and I decline to hold that because some witnesses are in some way connected with a party therefore they are necessarily unreliable witnesses. If the Subordinate Judge had examined their evidence and had refused to accept their testimony on the ground, for instance, that there was something essentially improbable in their testimony or on the ground that their demeanour in the witness-box did not inspire him with confidence, I would hesitate to differ from his estimate of the witnesses who were before him and are not before me. But the reason which he gives for rejecting their evidence does not seem to me to be sufficient, and having read their evidence myself, I am not prepared to hold that they are not witnesses of truth. It is conceded that, if their evidence is believed, it completely establishes the appellant's case.
54. But are these witnesses connected persons? Sukhdeo Lal, who is witness 4, says that Kanhu Lal is his cousin and was his gomashta at one time 18 or 19 years ago. Golab Lal, who is witness 7, does not appear to be in any way connected with the appellant, but is connected with Jakhi Ram who has a claim against Khubi. In my opinion they are not so connected with the appellant as to render them unreliable witnesses on his behalf.
55. It has however been contended before us, a contention which has found favour with my learned brother, that these two witnesses have given such false evidence on the question whether Pallu and his uncle were ever joint that their evidence must be rejected in toto.
56. It may be mentioned here that it is undoubtedly the appellant's case that Pallu was never at any time joint with his uncle. I have come to the conclusion on a perusal of the documentary evidence in the case that they were undoubtedly joint at one period, but I cannot hold that the appellant's case is deliberately false. The appellant and his two witnesses, as strangers to the family, were entitled to assume that a person in possession of the properties was the sole proprietor of the properties, especially when these properties stood recorded in the name of that person in the finally published Record-of-Rights. The title apparently was with Khubi and the appellant and his witnesses were entitled to assume that the apparent title was a perfectly good title. I am therefore clearly of opinion that their evidence is not open to attack on this ground.
57. But do these witnesses support the appellant's case on this point? I have read the evidence of Golab Lal over and over again and I do not find that he says one word in support of the appellant's case that Pallu and Khubi were never at any period of time joint. Nor does Sukhdeo Lal say that Pallu and his uncle were never joint, though he undoubtedly says that plaintiff's father and Khubi lived separately. I think therefore that no reason has been shown to us for rejecting their evidence.
58. The next fact relied upon by the Subordinate Judge is that the writer of the document was not examined. As I have already stated, there is an endorsement in the handwriting of the writer of the document to the effect that the contents of the document were read over to the declarant. It does not appear to me to be of much moment that he was not examined, inasmuch as there is evidence on the record which if believed, would enable me to come to the conclusion that the document was read out to all the persons present at the time of the execution of the document. The last reason given by the Subodinate Judge is based on a misreading of the evidence of the appellant. The appellant says clearly in his evidence:
“Negotiations for the loan had taken place in the presence of Pallu Sahu who attested the mortgage bond and raised no objection.”
59. It has been strenuously contended at the Bar that his evidence should be rejected, inasmuch as he has undoubtedly given false evidence on the question whether Pallu and his uncle were ever joint. I have already stated that, although on a consideration of the documentary evidence which has been placed before us I am bound to come to the conclusion that they were undoubtedly at one time joint. I am unable to hold that the evidence given by the appellant on this point must necessarily be false.
60. It is worthy of note that the plaintiff has not called a single attesting witness to corroborate his evidence that the document was not read out to him, although there are not less than eight attesting witnesses to the bond, including Harak Narain Singh who according to the evidence adduced on behalf of the appellant was present in Court and was actively assisting the plaintiff and Pheku Sahu, who apparenty belongs to the same community to which Pallu belongs. I hold that the mortgage bond was read out to the persons who were present at the time of the execution of the bond including Pallu.
61. If in fact the document was read out to Pallu, the further argument that he did not understand the contents of the document is in my opinion inadmissible because in the first place he does not make that case himself and in the second place he is literate and appears to have some amount of education. In any event I decline respectfully to be drawn into a speculation as to the manner in which the document was read out and whether he did understand the contents of the document. I hold that Pallu knew that Khubi was by the transaction in question dealing with the entire 16 annas of the properties comprised in the mortgage and that he stood by and raised no objection to the transaction and that he cannot now avoid the transaction to the extent of his 8-annas.
62. This finding is sufficient to dispose of the appeal, but I think it is necessary to deal with the other point, that has been discussed at the Bar. Mr. Tahir on behalf of the appellant formulates his proposition thus: Assuming Pallu had no knowledge of the transaction in question, still as Khubi was the ostensible owner of the property with Pallu's consent, the mortgage in favour of the appellant cannot now be avoided on the ground that Khubi was not authorized by Pallu to make it. He relies upon Section 41 of the Transfer of Property Act, and Section 115 of the Evidence Act. Mr. Kulwant Sahay on behalf of the respondent argues that these sections have no application inasmuch as the appellant never took reasonable are to ascertain that Khubi had power to make the transfer. In other words, Mr. Kulwant Sahay relies upon the doctrine of “constructive notice” to defeat the appellant's claim.
63. It is, I think, necessary to ascertain certain facts before it is possible to say whether the appellant ought to be affected with notice of Pallu's title to the properties mortgaged. It is conceded that the properties mortgaged stand recorded in the name of Khubi alone and that the Record of Rights was finally published on 12th March, 1903. But it is argued that at the time of the publication of the Record of Rights, the plaintiffs and Khubi were joint and therefore the properties would in the usual course be recorded in the name of Khubi who was the karta of the joint family. In my opinion this argument is erroneous, because under Section 102 of the Ben. Ten. Act, the names of all the persons interested in the land, either as tenants or as landlords, should be recorded. But I do not think that the, plaintiffs have established that on 12th March, 1903 they were joint with Khubi. It is true that Pallu makes the case that the separation between him and Khubi took place some time in 1907, see para. 4 of the plaint. But this case is completely discredited by Exs. B and O, which establish that Pallu had separate transactions of his as own early as 24th November, 1903 and 10th November, 1905. I am clearly of opinion therefore that on 24th November, 1903 Pallu and Khubi could not have been members of a joint Hindu family and that the plaintiffs' case that they continued to be members of the same joint family up to 1907 cannot be accepted. It was specially within the knowledge of the plaintiffs when the separation between them and Khubi took place. Therefore the onus of proving the date of actual separation was on the plaintiffs: Section 106 of the Evidence Act. They have chosen to make a false case on this point. I am of opinion therefore that the plaintiffs have not established that on the date when the Record of Rights was finally published they were joint with Khubi.
64. It is admitted further that the properties generally stood in Khubi's name: see para. 3 of the plaint. The plaintiffs however have proved that one of the properties mortgaged a small plot of land, 1 bigha, 8 kathas and 3 dhurs in area, being item 1 in the mortgage bond and known as gora jote land, was purchased by the plaintiffs and Khubi jointly for Rs. 90. It has been held that where the purobaser merely omits to investigate the title to a small part of a large property, the doctrine of constructive notice has no application. In the case of Hunter v. Walters(5) Lord Hatherlely, L.C, said:
“There is no such extravagant doctrine as that which has been contended for, that if a man, who is purchasing or taking a mortgage over a large estate as to which the title is furnished to him, chooses, as to a small portion, to be content with a short title, then as to all the rest of the estate he is to be affected with notice of something which he might have found out if he had investigated the earlier title to the small portion. That would be carrying the doctrine of constructive notice to a greater length than it has yet been carried.”
65. This undoubtedly rests on the principle that a reasonable man may having regard to that which men of business usually do under similar circumstances, omit to investigate the title to a small plot of land of small value, when it forms part of a large estate as to which the documents of title stand in the name of the mortgagor; for, if he omits to investigate the title to a small plot of land, it cannot be said that he is guilty of fraud or negligence so gross as to amount to evidence of fraud, on which the whole doctrine of constructive notice is based.
66. I have next to consider whether the plaintiffs were ever in possession of any of the mortgaged properties. The Subordinate Judge says:
“The evidence shows that plaintiff has been out of possession with respect to some of the properties,”
but he has proceeded to give the plaintiffs a decree for possession in respect of all the properties comprised in the mortgage. The form of the decree passed by the Subordinate Judge as well as the concluding portion of his judgment prove that the Subordinate Judge was really of opinion that the plaintiffs were not in possession of any of the properties comprised in the mortgage. The evidence shows that Khubi was in possession of all the properties. The properties mortgaged consist of a gora jote land, being item 1, two residential houses, being items 2 and 3, and three golas, being items 4, 5 and 6. It is true that Pallu starts by saying that the properties in suit are in his possession to the extent of 8 annas, but his evidence, read as a whole, shows that he is not in possession of any of the properties. On his own admission Chowkidari tax receipts and rent receipts in respect of these properties are with Khubi, and he does not suggest that he has any receipts with him which in any way would show that he has been in possession of any of these properties so far as the houses are concerned. He admits that he is not in possession of any of them so far as the golas are concerned. He admits that after separation he had no interest in the gola business. In respect of most of these properties, the only documents of title would be the finally published Record of Rights and the receipts showing that Khubi had all along paid the rents and taxes in respect of these properties.
67. I have next to consider what inquiry the appellant made in order to satisfy himself that Khubi had power to make the transfer. He admits that he made no inquiry in the registration office, but he says that survey papers were shown to him. He further says that
“disputed properties stand in the name of Khubi and he pays rents and chowkidari tax.”
68. Whether this inquiry is “reasonable” within the meaning of Section 41 of the Transfer of Property Act, I shall consider later. As a Judge of facts I come to the conclusion, first, that there was a separation between the plaintiffs and Khubi, certainly before 24th November, 1903, and that the plaintiffs have not established that they were joint when the Record of Rights was finally published, secondly, that all the properties comprised in the mortgage stood recorded in the name of Khubi in the finally published Record of Rights, thirdly, that Khubi was all along in possession of these properties and paid all rents and taxes payable in respect of them, fourthly, that all documents of title save and except the conveyance in respect of the gora jote land stood in the name of Khubi and were in Khubi's possession, and fifthly, that the appellant took care to ascertain that Khubi was in possession of all the properties comprised in the mortgage and that all the properties stood recorded in the name of Khubi in the finally published Record of Rights.
69. On these facts, the question arises whether the appellant ought to be affected with notice of the plaintiffs' title to the properties mortgaged to the extent of 8 annas share therein, Section 41 of the Transfer of Property Act is as follows:
“Where with the consent, express or implied or the parsons interested is immovable property a person is the ostensible owner of such property and transfers the same for consideration, the transfer shill not be voidable on the ground that the transferor was not authorized to make it; provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer has acted in good faith.”
70. In the case before us, Khubi was undoubtedly the ostensible owner of the properties and he was the ostensible owner with the plaintiffs' consent; the mortgage was undoubtedly for consideration. Therefore it follows that the mortgage is not voidable on the ground that Khubi was not authorized to enter into the mortgage transaction, provided that the appellant, after taking reasonable care to ascertain that Khubi had power enter into the transaction has acted in good faith.
71. Very learned arguments have been advanced at the Bar as to the exact meaning of the proviso to Section 41 of the Transfer of Property Act. I have no doubt at all that the proviso intended to, and did it fact, introduce into the section itself the doctrine of what is known in England as constructive notice. It means that a person may obtain relief on his secret title if it can be shown that the purchaser or mortgagee did not make a reasonable inquiry into the title of the transferor, for, if he does not make such reasonable inquiry equity will affect him with notice of the infirmity of the title of the transferor.
72. A review of decided cases shows that the doctrine of constructive notice has been put on fraud or negligence so gross as to amount to evidence of fraud, on the ground, that is to say, that the purchaser or mortgagee purposely avoided inquiry in order to avoid discovery:
“Where a person has not actual notice, he ought not to be treated as if he had notice, unless the circumstances are such as enable the Court to say, not only that he might have acquired, but also, that be ought to have acquired, the notice with which it is sought to affect him—that he would have acquired it but for his gross negligence in the conduct of the business in question. The question when it is sought to affect a purchaser with constructive notice, is not whether he had the means of obtaining, and might, by prudent caution, have obtained, the knowledge in question, but whether the not obtaining it was an act of gross or culpable negligence: Ware v. Egmont(6).”
73. With reference to the passage just quoted from the judgment of Lord Cran-worth, Lindley, M.R, makes the following pertinent observation in the case of Bailey v. Barnes(7):
“Gross or culpable negligence in this passage does not import any breach of a legal duty, for 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 wilful ignorance of defects which would have come to his knowledge if he had transacted his business in the ordinary way. In the celebrated judgment of Vice-Chancellor Wigram in Jones v. Smith(8) the cases of constructive notice are reduced to two classes the first comprises cases in which a purchaser has actual notice of some defect, inquiry into which would disclose others and the second comprises cases in which a purchaser has purposely abstained from making inquiries for fear he should discover something wrong.”
74. The learned Master of the Rolls then proceeding to discuss Section 3 of the Conveyancing Act, 1882, which, it will be observed, is in pari materia with Section 41 of the Transfer of Property Act, says:
“‘ought’ here does not import a duty or obligation; for a purchaser need make no inquiry. The expression “ought reasonably” must mean ought as a matter of prudence, having regard to what is usually done by men of business under similar circumstances.”
75. Can it be suggested in this case that the appellant has purposely abstained from making inquiries for fear he should discover something wrong? He took care to see that Khubi was in possession of the properties comprised in the mortgage, and that the properties stood recorded in Khubi's name in the finally published Record of Rights. All the rents and taxes in respect of these properties had all along been paid by Khubi and the receipts were in Khubi's possession. It was no part of the appellant's legal duty to make a tour of the registration offices to find out whether the plaintiffs had joined with Khubi in transactions affecting the properties mortgaged. The only question is, is this usually dona by men of business under similar circumstances as a matter of prudence?
76. In England and in the Presidency Towns in India very technical rules of conveyancing and investigation of title prevail and there is very little doubt that, the whole doctrine of “constructive notice” is intimately connected with these rules of conveyancing and investigation of title. But I do not know of any investigation of title in the sense in which that term is used by English conveyancers in the villages in Behar. The Record of Rights is prima facie evidence of title under which land is held in the villages and furnishes a convenient basis on which transactions affecting village properties may take place. In my opinion a mortgagee is entitled to assume that the Record of Rights is correct especially when he finds that possession is in accordance with the Record of Rights. In my opinion the appellant in relying upon the Record of Rights and the possession of Khubi did not depart from the usual course of business, and I am unable to say that the appellant in not going further than the Record of Rights was guilty of fraud or negligence so gross as amounts to evidence of fraud. Eminent Judges in England have refused to extend the doctrine of constructive notice based as it is on very technical rules of conveyancing. To not only extend the doctrine but to apply it to the villages in Behar would in my judgment work grievous injustice to honest men. When it is argued that the appellant should have conducted a more searching inquiry into Khubi's title it is well to remember that the plaintiffs have allowed the properties without protest to stand recorded in the name of Khubi and to remain in the possession of Khubi. The plaintiffs have undoubtedly allowed Khubi to hold himself out as the owner of the properties and to deal with the properties as his own. The position was discussed in the leading case of Ramcoomar Koondoo v. MacQueen(9), where the Judicial Committee laid down the following proposition:
“It is a principle of natural equity, which must be universally applicable, that where one man allows another to hold himself out as the owner of an estate and a third person purchases it for value from the apparent owner in the belief that he is the real owner the man who so allows the other to hold himself out shall not be permitted to recover upon his secret title, unless he can overthrow that of the purchaser fey showing, either that he had direct notice, or something which amounts to constructive notice of the real title or that there existed circumstances which ought to have put him upon an inquiry that if prosecuted, would have led to a discovery of it.”
77. It is not alleged in this case that the appellant had direct notice of the plaintiffs' title. The only question is, did circumstances exist which ought to have put the appellant upon an inquiry which if prosecuted would have led to a discovery of the plaintiffs' title?
78. Having given my most anxious consideration to the subject I am unable to say that such circumstances did exist. With reference to this point, the Judicial Committee makes the following pertinent observations:
“In cases of this kind the circumstances which should prompt inquiry may be infinitely varied; but, without laying down any general rule, it may be said that they must be of such a specific character that the Court can place its finger upon them, and say that upon such facts some particular inquiry ought to have been made. It is not enough to assert generally that inquiries should be made, or that a prudent man would make enquiries; some specific circumstances should be pointed out as the starting point of an inquiry, which might be expected to lead to some result.”
79. In the case before us no circumstances to my mind have been pointed out either of a specific character or otherwise upon which the Court can place its finger and say that upon such facts some particular inquiry ought to have been made on the other hand, all the circumstances point to one fact and one fact only namely, that Khubi had absolute title to the properties comprised in the mortgage. There was admittedly a separation in interest between the plaintiffs and Khubi, since which time the plaintiffs and Khubi admittedly have had separate transactions with the appellant. Admittedly the properties stood recorded in the Record of Rights in the name of Khubi, who was undoubtedly in possession of the properties and of such documents as establish his title to the properties.
80. Following the decision of Lindley, M.R, in the case of Bailey v. Barnes I hold that the words “reasonable care” in Section 41 of the Transfer of Property Act, mean reasonable care having regard to what is usually done by men of business under similar circumstances as a matter of prudence and that in ascertaining that Khubi was in possession of the properties mortgaged and that the properties stood recorded in Khubi's name in the finally published Record of Rights, the appellant took reasonable care to ascertain that Khubi had power to make the transfer. See also the case of Khwaja Muhammad Khan v. Muhammad Ibrahim(10). To hold otherwise would in my opinion be to open the door to fraud and to act contrary to that principle of natural equity which the Judicial Committee laid down in the case already cited and which is now embodied in Section 41 of the Transfer of Property Act, read with Section 115 of the Evidence Act.
81. I hold that the plaintiffs are not entitled to any of the reliefs claimed by them in their suit. I would therefore decree this appeal and dismiss the plaintiff's suit with costs here and in the Court below.
82. Jwala Prasad, J.:— This appeal arises out of Suit No. 478 of 1914 brought by the plaintiffs in the Court of the Subordinate Judge of Monghyr for a declaration of their title to 8-annas in the lands set out in Sch. 1 to the plaint. The plaintiffs also prayed for confirmation of their possession over the lands in suit, and in the alternative for recovery of possession of the same in case they were found to be out of possession.
83. Plaintiff 2 is the son of plaintiff 1 Pallu Sahu; Pallu's father Khanter, was brother of Khubi Sahu, defendant 1. Defts. 2 to 5 are sons of Khubi Sahu.
84. Defendant 6 claims to 1 a first mortgagee of the entire 16 annas share or interest in the properties forming the subject-matter of the suit. Defendants 7 and 8 are puisne mortgagees to defendant 6.
85. The plaintiffs being father and son, it will be sufficient, for the purpose of this case, to refer to plaintiff 1 only. His case was that his father Khanter Sahu and Khubi Sahu defendant 1, were members of a joint Mitakshara Hindu family, and after the death of his father 20 years ago (1894) he continued to live jointly with defendant 1, who married the plaintiff's mother in sagai form and had issues from this marriage, defendants 2 and 3. Afterwards Khubi married another wife of whom defendants 4 and 5 are the offspring; that thereafter defendant 1 began to show some indifference towards the plaintiff, and hence the latter separated from him seven years ago (1907) and began to carry on his transactions separately, but he continued to be in joint possession and occupation of the family properties described in Sch. 1 to the plaint; that he recently came to know (July 1914) that defendant 1 had executed several bonds, mentioned in Sch. 2, in favour of defendants 2nd party, mortgaging the entire family properties including the share of the plaintiffs, and he got his name alone entered in respect of the entire 16 annas of the properties-in the survey and settlement operations and lastly, he got a kabala executed in his name alone by one Ghena Sahu in respect of the property No. 5 in Sch. 1 which had been purchased by the plaintiffs and defendant 1 in the farzi name of the said Ghena Sahu, their relative, and which both the parties have been holding in their joint possession.
86. The plaintiffs alleged that these acts of defendant 1 seriously prejudiced their interest in the properties and hence they were compelled to institute this suit claiming the reliefs as already set forth in the beginning.
87. Only defendant 6 contested the suit. His claim is founded upon a mortgage which he obtained from defendant 1 on 18th September, 1908 for the sum of Rs. 5,000. He raised various objections to the plaintiffs' claim. He disputed the title of plaintiff 1 and asserted that of defendant 1 in the entire family properties. He pleaded limitation and raised estoppel against the plaintiff in case he had any interest in the properties, alleging that plaintiff 1 knowingly allowed the properties in suit to remain recorded in the name of defendant 1, Khubi Sahu, and permitted him to deal with such property as a separate and ostensible owner thereof and consequently he is now estopped by his conduct from setting up a claim of title to 8-annas share therein.
88. Upon the pleadings of the parties, the Subordinate Judge framed a number of issues set forth in his judgment. He decided all of them against the defendant and in favour of the plaintiffs, and accordingly he decreed the suit awarding them possession of the properties in suit.
89. Aggrieved by that decision defendant 6 appealed to this Court. The appeal was heard by two learned Judges of this Court (Atkinson and Das, JJ.), who delivered separate judgments. They differed in their opinion. Atkinson, J., agreed with the decision of the Subordinate Judge, whereas Das, J., disagreed with him, with the result that the appeal was dismissed and the decision of the Subordinate Judge was upheld. Defendant 6 has now appealed to us under the Letters Patent.
90. Mr. Tahir on behalf of the appellant repeats the contention put forward by defendant 6 in the written statement that Khubi, defendant 1, had separated from the father of plaintiff 1, that the properties in suit were acquired by Khubi after separation and that he was the absolute owner thereof with which Pallu had no concern. The Subordinate Judge has rejected this contention, and upon careful consideration of the oral and documentary evidence has arrived at the conclusion that the case put forward by the appellant is untenable. The learned Judges who heard this appeal have concurred in this finding. Mr. Tahir, as stated by Atkinson, J., also ultimately abandoned before the Division Bench the case that the properties in suit were the separate properties of Khubi alone. It is therefore not open to him to raise this plea again before us.
91. We have however given our best consideration to the evidence on the record and the arguments advanced by Mr. Tahir and we feel no manner of doubt in our minds that there is no substance in this contention.
92. The properties in suit are six in number, as detailed and described in Soh. 1 to the plaint. Property No. 6 is a gora jote land formerly belonging to one Sangat Lal. It was jointly purchased by both Khubi and Pallu on 17th November, 1896, by a registered deed of sale: Ex. 1. Properties Nos. 1, 2, 3, 4 and 5 were mortgaged per bond, dated 20th December, 1897 (Ex. 8), by Khubi for himself and as guardian of the plaintiff Pallu. This mortgage was paid off and the properties were redeemed by a sale deed (Ex. 2), dated 11th April, 1899, executed by both Khubi and Pallu. In it is stated that the debt under Ex. 8 was incurred for carrying on trade for the benefit of all the members of the joint family.
93. Similarly properties Nos. 1, 2, 3, 4 and 6 are described as joint property of both Khubi and Pallu in the mortgage bond (Ex. 7), dated 27th October, 1899, and were mortgaged as such.
94. Property No. 4 was also mortgaged per bond (Ex. 6), dated 13th April, 1899, by both Khubi and Pallu. It is recited therein that the loan was taken to meet the expenses of the marriage of Khubi's daughter and that Pallu joined in it as he was a member of the joint family and was joint in business. The property is described as a joint property of both of them. Ex. 5 shows that this debt was satisfied and that the bond was returned.
95. The fact that Khubi and Pallu were members of a joint family and that the latter was a minor under the guardianship of the former and they were joint in property, trade and business, is still more clearly stated in the sale deed (Ex. 3), dated 11th April, 1899, executed by both of them. Pallu is stated therein to have then attained majority and was minor before under the guardianship of Khubi and that he ratified all the debts that were incurred by Khubi for carrying on trade and business on behalf of the joint family.
96. Exhibit 4 is a kirayanama (agreement for rent) dated 6th January, 1902, executed by Khubi and Pallu in favour of Ghena Sahu in whose name the house was purchased farzi by them.
97. These documents establish large and extensive dealings between Khubi and Pallu with reference to the joint family properties, which they from time to time bought and sold and mortgaged for the purpose of discharging debts and obligations due by and charged upon the family properties. Pallu was more literate than Khubi. Most of these documents show that the endorsements on them were written by him. The mortgage bonds that were discharged were returned to him and he was in possession of them and has produced them in Court. All the properties in suit have been described in these documents as being the joint family properties of both of them and the title deeds, including Ex. 6, were with Pallu and have been produced by him. There is not a shred of evidence that these properties were acquired by Khubi alone. The witnesses on behalf of the defendant have only stated that Khubi was in possession of them, and Pallu had no concern with them, but they do not state that they were acquired by Khubi. Even the defendant himself does not say so. On the other hand, witness 3 for the defendant in his evidence on 25th August, 1916, says in chief that Pallu and Khubi separated 13 or 14 years ago, i.e, 1902–1903. This falsifies the case of the defendant (para. 9 of the written statement) that Khubi separated from the father of the plaintiff during his lifetime. The statement of the plaintiff that he was joint with Khubi as a member of a joint Hindu family and that the properties were the joint family properties is corroborated by unimpeachable documentary evidence in the case.
98. The defendant has no doubt produced some documents (Exs. B, C and D) to show that Pallu acquired some properties separately between the years 1903 and 1907. They do not necessarily militate against his being still joint with Khubi, for there is nothing to prevent a member of a joint family from acquiring properties in his own name. Even if they show separation they do not go earlier than 24th November, 1903, and upon this Atkinson, J., held that at least up to that time Pallu was joint with Khubi. Das, J., has also come to the conclusion that the properties were the joint family properties of the plaintiff and defendant 1, but he thinks that they separated from each other before 24th November, 1903, for which there is no evidence. As stated above, witness 3 for the defendant also admits jointness nearly up to that time.
99. The survey record relied upon by the appellant for showing that Khubi was alone recorded, does not show that he was the sole owner of the properties, for the record is of 1902 and as a head member of the family it was not unusual that his name alone should appear therein. The same remark applies to the rent receipts filed by the defendant.
100. Mr. Tahir argues that even if the properties were the joint family properties of the plaintiff and defendant. The plaintiff having admitted his separation from his uncle Khubi some time before the institution of the suit, as has also been held to be the case, he is not entitled to the presumption of jointness in the properties which is available to a coparcener under the Mitakshara Hindu law. There is no force in this contention. The plaintiff only admitted in para. 7 of the plaint that on account of indifferent treatment of his uncle he separated from him and began to carry on his transactions separately, but that both of them continued to be in joint possession and occupation of the properties. He does not admit that there was any partition of the family properties, nor is there any evidence of their having been partitioned. There is nothing in the circumstances disclosed to rebut the presumption that the properties were joint and continued to be so. The plaintiff's, right, title and interest in the properties cannot be extinguished except by a partition or adverse possession. But there is no evidence of defendant 1 having ever asserted his title to hold the properties as his own, except in the mortgage deed in question, dated 18th September, 1908, (Ex. E), which is well within 12 years of the suit. The plaintiff no doubt says that he came to know of the fraudulent deeds executed by defendant 1, on 14th July, 1914. Even if this is not proved, the plaintiff's suit instituted on 14th September, 1914 is also within 12 years of 24th November, 1903, up to which time it has been conclusively shown that he was joint with defendant 1, though it is possible that he continued to be so even later on up to 1907 as stated by him.
101. The contention of Mr. Tahir must therefore be rejected. The plaintiffs have thus established their title to the properties in suit and that defendant 6 cannot acquire any right in them under the mortgage bond executed by defendant 1. The plaintiffs are therefore entitled to the reliefs they have sought in this case, unless the second contention of Mr. Tahir prevails.
102. This plea is founded upon the allegations of the defendant in paras. 14 and 15 of the written statement: (1) that plaintiff 1 knowingly allowed the properties in suit to stand in the name of ??? in consequence of which the defendant 2nd party having relied on the interest of ??? advanced the loan to him in good faith of the security of those properties; and (2) that plaintiff 1 was fully aware that defendant 1 was mortgaging the properties alleging them to be his own; that he took part in the negotiations for the loan and was also present at the execution of the same; that the document was read out in his presence when defendant 1 executed and signed the bond and that he himself attested the same as a witness. These allegations have been carefully left vague and indefinite.
103. Khubi, no doubt, was jointly interested to the extent of a moiety and that interest he could very well call his own. It is not clearly stated that the plaintiff knew that Khubi was mortgaging more than his own interest or that he was mortgaging the interest of Pallu also. In order to plead estoppel this must have been precisely and clearly stated, as is required by the rules of pleadings laid down in the Code of Civil Procedure and declared by authorities.
104. The facts sufficient to raise estoppel contained in the second set of allegations have not been clearly stated. Now let us see how far they have been proved.
105. These have been attempted to be proved by the defendant himself (witness 6) and two attesting witnesses to the bond, Nos. 4 and 7. These witnesses 4 and 7, do not say a word about the negotiation for the loan having taken place in the presence of Pallu. The defendant simply says that negotiations for the loan had taken place in the presence of Pallu. “He was present when I had gone to enquire of the value of the properties mortgaged.” He does not say that the negotiations were with respect to the share of plaintiff also, or that he was present at or took part in the negotiations or that he knew that his share was going to be mortgaged. His presence, if any, at the inquiry of the value of the properties does not involve any notice or knowledge that his share was going to be mortgaged. This part of the defendant's case is therefore not proved.
106. Then it is said that the bond was read out by the scribe in the presence of Pallu, and he must have come to know that the entire properties including his share were being mortgaged therein. The defendant himself does not in his evidence say a word about it. Witnesses 4 and 7 have contradicted themselves as to what actually took place. The scribe who is said to have read it out, has not been examined. The document is in high-flown Urdu, Persian and Arabic languages mixed together. Witnesses 4 and 7 do not know those languages and cannot remember the terms thereof and apparently do not understand them, as expressly stated by witness 7. Pallu denies the bond having been read to him or his knowledge of Urdu and Persian languages. The Subordinate Judge, being a Mahomedan officer and having seen Pallu in the box, says that he is sure that Pallu could never have understood the wordings of the bond. We have ourselves had the bond read and we agree with the Subordinate Judge that Pallu could never have understood the terms even if they were read. Witnesses 4 and 7 are not altogether independent; their evidence is unsatisfactory and the learned Subordinate Judge has disbelieved them altogether. We agree with him.
107. Thus the reading of the document to Pallu has not been proved and even if it were read, it has not been proved that he understood that his share case going to be disposed of. On the other hand, there is absolutely no evidence that the schedule was read out and without the schedule nobody would understand from the document itself that the entire 16-annas of the properties was going to be mortgaged. All that it hypothecated were the properties specified in the schedule in the possession of the executant Khubi. That might very well refer to his 8-annas share of which he was in possession.
108. Pallu in his evidence swears that nobody told him that his share was going to be mortgaged when Khubi asked him to attest the bond. He also says that he never led the appellant to believe that the properties in suit belonged to Khubi alone, and not to him. The defendant or his witnesses do not contradict Pallu upon this point. Nowhere have they said that Pallu was told that his share was going to be mortgaged or that he in any way led the appellant to believe that Khubi alone was the owner of the properties, and not the plaintiff also.
109. The contention therefore that the plaintiff stood by and allowed the proper, ties to be mortgaged by Khubi alone claiming to be the owner thereof and competent to dispose of them, falls to the ground, and his merely signing the document as an attesting witness is not sufficient to estop him from claiming his title, unless it is satisfactorily established that he had a full appreciation and knowledge of the contents and terms of the document which he attested and that in some way or other it was signed with a view to affect his interest in the properties in suit: vide Banga Chandra Dhur Biswas (Nanda Lal) v. Jagat Kishore Acharjya Chowdhuri, Hari Kishen Bhagat v. Kashi Pershad Singh, and Chunder Dutt Misser v. Bhagwat Narain Thakur. There was no act, declaration or omission on the part of the plaintiffs on the faith of which the appellant advanced the money to Khubi on the security of the properties in suit believing him to be the full owner thereof. The appellant is therefore not entitled to the benefit of the rules of estoppel contained in Section 115 of the Evidence Act.
110. Mr. Tahir on behalf of the appellant then invokes the aid of Section 41 of the Transfer of Property Act, and claims an equitable estoppel against the plaintiff under that section. That section runs as follows:
“Where with the consent, express or implied, of the person interested in 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 authorized to make it; provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.”
111. In order to show that the mortgagor, Khubi, was the ostensible owner of the properties with the consent of the plaintiff, it was alleged in the written statement that he, the plaintiff, knowingly allowed the properties to stand in the name of Khubi, without stating where the name of Khubi was so recorded. Reliance has been placed upon the Survey Record of Rights in which the name of Khubi was recorded in the year 1902. The plaintiff in his plaint challenged the bona fides of Khubi in having his name recorded in the survey papers, and that is one of the reasons for his instituting the suit. Besides, the plaintiff had only shortly before the final publication of the Record of Rights come of age. The survey proceedings must have therefore started when he was a minor under the guardianship of Khubi. In any case the entry of the name of Khubi alone, being a karta of the family, is not repugnant to the title of the plaintiff.
112. The defendant in his evidence admits having dealing with Khubi for the last 13 or 14 years. He had been lending money to the family on bonds and bahi khatas. He has taken mortgage of the property which was purchased by both the brothers in the farzi name of Ghena Sahu and in respect of which they had executed the joint kirayanama (Ex. 4), on 6th January, 1902. In respect of this property Ghena Sahu has now executed a sale deed in the name of Khubi alone, dated 17th September, 1908, which the plaintiff has challenged in his plaint. The sale deed and the mortgage bond came into existence about the same time, the difference being of one day. The appellant is also a neigbour of Khubi and the plaintiffs, and knows them fully. He cannot therefore plead ignorance of the interest of the plaintiffs in the properties in suit, or of the possession of Khubi as a managing member. He cannot say that Khubi was put forward by the plaintiffs as an ostensible owner of the properties, merely because his name was recorded in the survey papers: sea Partap Chand v. Saiyida Bibi(11). Being a Hindu himself, he must have known that in a joint Hindu family the business is all transacted in the name of the head member and that registers, receipts and papers also often happen to be in the name of the head member. Dealing with a Hindu family governed by the Mitakshara law, a creditor cannot content himself with entries in the Collectorate Registers or in the survey papers. He must inquire as to whether and how far the other members are interested in it, and prima facie the presumption will be that they are so interested. This fact in itself puts a creditor to an inquiry as to the title of the person so recorded with respect to the properties he is dealing with: sea Maung Po Than v. Ma On Bwin(12).
113. In this particular cage, by his previous dealings with the family and his being a neighbour, the defendant is charged not with inquiry only but with notice and knowledge of the title of Pallu in the properties in suit, and by this reason the defendant's title under the mortgage is overthrown by that of the plaintiff under the principle enunciated in Ram coomar Koondoo v. McQueen, which is supposed to be the origin of the rule in S. 41. The first condition of S. 41, that the transfer must be by the ostensible owner with the consent of the person interested in it, does not therefore hold good. The defendant further admits that he did not make any inquiry as to the title of the plaint is in the properties in dispute. As already shown, the properties in question were the subject of various dealings beforehand by Khubi and Pallu and that the appellant knew fully of those dealings and as a matter of fact a subsequent mortgagee will naturally inquire whether the properties were subject to prior encumbrances or not and if they were ever so subjected, whether they were discharged or not. The previous mortgage deeds with respect to the properties in dispute (Exs. 4 to 8) and the title deeds with respect to some of them (Exs. 1, 2 and 3) and particularly Ex. 1 were with the plaintiff. Khubi had no title deeds with him and the possession of the title-deeds is evidence of title. This fact distinguishes Khwaja Muhammad Khan v. Muhammad Ibrahim, from Partab Chand v. Saiyida Bibi. The plaintiff did not make any inquiry, probably because he knew that Khubi had no title-deeds or deads of previous dealings of the properties, with him. Under the proviso to S. 41, a transferee must show that after taking reasonable care to ascertain that the transferor had power to make the transfer, he acted in good faith. The care required to be taken under this proviso is one that is expected of an ordinary prudent man of business. It is a question of fact and depends upon the circumstances of each case and as laid down by Lindley, L.J, in Bailey v. Barnes, dealing with reasonable care:
“regard must be 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 wilful ignorance of dejects which would have come to his knowledge if he had transacted his business in the ordinary way.”
114. In the circumstances of the present case the appellant would have, by simply calling upon his transferor to produce the title-deeds and other documents, coma to know that Pallu had also an interest in it and that Khubi's title to dispose of the entire properties was defective. He had reason to suspect that Pallu had also an interest in it, being a junior member of the joint family. From the circumstances set forth above, namely, that he took from Khubi the mortgage-bond with respect to all the properties at the same time that Knubi got a sale-deed executed in his own name from Ghena Sahu, who was a farzidar of Pallu and Khubi it is evident that the appellant was in collusion with Khubi, who was in the year 1903 attempting to set up his own title to the entire properties of the family and to exclude Pallu from them. The defendant therefore did not act in good faith in the present case and that alone puts him out of the purview of Section 41 of the Transfer of Property Act. The section is an exception to the general rule that a person cannot convey a better title than he himself has in the property. The conditions set forth in that section must therefore be strictly complied with.
115. We cannot dispute the principles laid down in the cases cited by Das, J. They apply to the facts of those particular cases. I have already referred to the case of Bailey v. Barnes and I have shown that the appellant has failed to satisfy the test of reasonable care laid down in that case by Lindley, L.J Within the principle of Ware v. Egmont the defendant, in the circumstances of the present case, is guilty of gross negligence in the conduct of the business in question. The case of Hunter v. Walters has absolutely no application, inasmuch as in that case the title to the estate was furnished to the mortgagee and only with respect to a small insignificant portion he did not make inquiry. It was held that the rest of the property is not to be affected with notice of something which he might have found out if he had investigated the earlier title to the small portion, for that would be carrying the doctrine of constructive notice too far. Here the appellant was not furnished with the title of any of the properties. Das, J., applied the aforesaid authorities on the assumption that the entry in the Record of Bights was a sufficient title of the mortgagor Khubi and the appellant was not bound to make any further investigation into his title. But the Record of Rights is not a document of title at all: vide Brij Behari Singh v. Sheo Sanhar Jha(13), Latafat Hussain v. Kumar Kaliher Nand Singh(14) and Ramgulam Singh v. Bishnu Pargash Narain Singh(15). It was simply founded upon possession and as already shown, the entries in such documents do not prove exclusive title of the person recorded. The law on the subject of equitable estoppel was clearly enunciated by their Lordships of the Judicial Committee in the case of Ram Coomar Koondoo v. McQueen in the following words:
“It is a principle of natural equity … that where one man allows another to hold himself out as the owner of an estate, and a third person purchases it, tr value, from the apparent owner, … the man who so allows the other to hold himself out shall not be permitted to recover upon his secret title, unless he can overthrow that of the purchaser by showing, either that he had direct notice, or something which amounts to constructive notice, of the real title or that there existed circumstances which ought to have put him upon an inquiry that, if prosecuted, would have led to a discovery of it.”
116. This is the foundation of Section 41 of the Transfer of Property Act, the proviso to which has made it clear that the transferee must show that he had taken reasonable care to ascertain the competency of the transferor to make the transfer and that he acted in good faith. The appellant has therefore failed to satisfy all the essential conditions of S. 41 and his claim to equitable estoppel resting upon that section must therefore fail.
117. There is no bar therefore to the plaintiffs' claiming their right in the properties in suit and consequently the reliefs sought by them in the plaint. The view taken by the learned Subordinate Judge and Atkinson, J., must therefore be upheld.
118. The appeal is accordingly dismissed with costs.
119. Dawson Miller, C.J:— I agree.
120. Mullick, J.:— I agree.
V.S/R.K
121. Appeal dismissed.