Ghoiam Siddique Khan v. Jogendra Nath Mitra

The Judgment of the Court was as follows:—

Suhrawardy, J.:— This is an appeal by the Defendant against a decree of the District Judge of Midnapur affirming that of the Subordinate Judge. The suit was for declaration of the Plaintiffs' right to a two-thirds share in the land in suit on which the Defendant has put up a pucca substantial structure and for possession by demolishing the same. The Plaintiffs' case was that the disputed plot is part of a maurashi mokurari jote of 8 bighas standing in the name of their brother Raghunath Mitter. This jote was purchased out of the joint fund of the brothers being the profits of a joint milk business in Bhowanipur at Kharagpur in the District of Midnapur. The defence so far as it is necessary to state here was that the property belonged exclusively to Raghunath and that the Defendant was a bond fide purchaser. The trial Court, in the view that the family was a joint Hindu family, raised the presumption in favour of the property being the joint family property and holding that the Defendant had failed to rebut such presumption decreed the Plaintiffs' suit. The learned District Judge in appeal rightly held that the Hindu law was not applicable to this case and that the family was not a joint Hindu family; and it was conceded before him on behalf of the Plaintiffs that for the purposes of this case the family was not an ordinary joint Hindu family. The facts found are that the father was very poor and so were the brothers, that they came to Bhowanipur in Kharagpur and started a joint milk business and out of the profits they made out of it, it is alleged, they acquired their homestead as well as the land in suit. The Hindu law of joint property is not applicable to a case like this. The Plaintiffs' case rested on the jointness of the fund out of which the property is said to have been acquired by the brothers and the burden of proof will not, by virtue of any presumption in favour of the Plaintiffs, shift on to the Defendant, though curiously the learned Judge, after holding that the presumption arising out of the joint family system does not apply, has cast the onus on the Defendant.

Several questions have been raised before us by the Defendant-Appellant but the most substantial questions that arise for consideration are—(1) Whether the Plaintiffs have succeeded in proving their title, and (2) whether the Defendant is protected by sec. 41, Transfer of Property Act.

On the first point the learned District Judge has found for the Plaintiffs relying mainly on the several documents produced. He refers to three documents as supporting the Plaintiffs' title to the land in suit. The first is the deed of purchase of the homestead (Ex. 4). This document is in the name of all the brothers and probably the learned Judge deduces from this fact the conclusion that because the homestead was in the names of all the brothers, the land in suit, though in the name of one brother, should be taken to be the joint property of all the I fail to see how this conclusion can legitimately be drawn from this fact. If any reasonable conclusion can be drawn from it is that when one property was purchased in the names of the three brothers and another in the name of only one, it is likely that the property purchased in the name of one brother was his self-acquired property. The second document on which the learned Judge relies is the re-cord-of-rights. The sale by Raghunath was in 1903 and the record-of-rights was prepared in 1916 and published in 1917. It nan hardly be any evidence of title. Even if it is, it does not support the Plaintiffs' case. In the record-of-rights this particular plot of 2 bighas 6 cattas in recorded in the name of the Defendant. If the other portion of this plot of 8 bighas is recorded in the names of the Plaintiffs, it does not help their case so far as the plot in suit is concerned. Besides, in 1916, the Plaintiffs were the only heirs of Raghunath. Even if the property did actually belong to Raghunath, in the re-cord-of-rights the names of the Plaintiffs would appear as the persons entitled to it at the time of the preparation of the record. This document also does not help the Plaintiffs. The third document to which the learned Judge refers in this connection is the mortgage deed executed by Raghunath in favour of one Doman Sheikh in 1900. This mortgage was executed by Raghu alone. So far it does not help the Plaintiffs' case. But it was paid off by one Jamiruddi who is found by both the Courts below to be a servant of Plain tiff No. 1. The mere fact that a servant of a brother or the brother himself redeems the mortgage does not necessarily support that brother's title. These are all the documents upon which the learned Judge relied for the view that the Plaintiffs have succeeded in proving their title. It would have been necessary in this view to remit the case to the lower Appellate Court for a consideration of the rest of the evidence relating to Plaintiffs' title. But the Defendant's case rests on a firmer ground on the application of sec. 41, Transfer of Property Act. It is well-known that this section and to a great degree the cognate section in the Indian Evidence Act, sec. 115, are founded on a well-known dictum of their Lordships of the Judicial Committee in Ram Coomar Koondoo v. McQueen . There occurs the oft-quoted dictum of their Lordships:— “It is a principle of natural equity, which must be universally applicable, that where on 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 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.” This pronouncement of their Lordships has been followed in several cases by the Judicial Committee as well as by Indian Courts: Mir Mahommad v. Kishori Mohan (2), Luchman v. Kalli Churn (3), Mubarakunnissa Bibi v. Raza Khan (4) and Khawaja Mahomed Khan v. Md. Ibrahim (5). In the last case an important statement of the law is made by Stanley, C.J: “We think that when a person is found in possession of property, is recorded as owner, and holds the title deeds of the property and deals with a third party in respect of it, there is nothing to suggest a want of good faith in such third party in dealing with him in respect of the property.” This principle has been laid down in several cases in this Court, of which it is only necessary to cite the case of Baidya Nath Dutt v. Alefian Bibi (6). sec. 41, Transfer of Property Act, requires the following conditions for its application:—(1) That it was by consent, express or implied, of the person claiming title that another person is held out as the ostensible owner of such property; (2) that such ostensible owner transfers it for valuable consideration; (3) that the transferee has acted in good faith and has taken reasonable care to ascertain that the transferor had power to make the transfer. The first two conditions are satisfied in this case. It is not disputed that Raghunath was the ostensible owner and that the Defendant and his predecessors paid consideration for the transfer. The expression “reasonable care” in the section has been interpreted as meaning such care as an ordinary man of business or a person of ordinary prudence would take. Kanhulal Marwari v. Pallu Sahu (7). The law on this subject has been thoroughly discussed on the basis of original English authorities and Indian cases in the case of Baidya Nath Dutt v. Alefjan Bibi . In Ram Coomar Koondoo v. McQueen , the Judicial Committee further pointed out that it is not enough to assert generally that enquiries should be made, or that a prudent man should have made further enquiries, but some specific circumstances should be pointed out as the starting-point of an enquiry which might be expected to lead to some result. Now, let us examine the facts of this case in connection with the law as laid down by authorities. The maurashi mokurari patta was granted by the zemindar to Raghunath in July 1893 while the other two brothers were living abroad on business. In the zemindar's sherista he was recorded as the sole tenant. In 1836 two bighas out of the 3 bighas plot was acquired by the Bengal Nagpur Railway Company and a land acquisition case was started in which Raghu alone appeared and contested the award and the compensation money was paid to him alone. On the 8th February 1900 Raghu alone mortgaged the remaining 6 bighas to Doxnan. On the 29th March 1903 Raghu sold the disputed plot (2 bighas and 6 cattas) to Imamuddin. On the 16th February 1908 Imamuddin sold it to two Marwaris Sitani and Mitani. On the 15th June 1908 Sitani and Mitani sold it to the Defendant. Such being the facts which have been disclosed in the evidence, the question that calls for determination is whether there was any specific circumstance which put the Defendant on enquiry. The learned District Judge has committed the initial error in thinking that sec. 41, Transfer of Property Act, applies only to the immediate purchaser from the ostensible owner. He has therefore considered only the purchase by Imamuddin and has not in this connection enquired into the character of the Defendant's purchase. This is an erroneous view. See Baidya Nath v. Alefjan Bibi . Sec. 41 is not limited to the purchaser from the ostensible owner but it extends to subsequent purchasers; and it may safely be maintained that even if one of such purchasers had some sort of constructive notice, the Defendant who is the last purchaser cannot be dislodged from his position as a bonâ fide purchaser for value without notice without proof of circumstances bringing such notice home to him. The learned Judge has not discussed the bond fides of the Defendant's purchase; but in considering the question of acquiescence has casually remarked: “Although the conveyance by Raghu provided that Imamuddin was to pay off a mortgage and obtain the deed, the deed was not made over to the Appellant by his vendors: this alone should have led him to discover the defect in his title.” In the present case the considerations which apply to the case of the Defendant will also apply to the case of Imamuddin, though I think the Defendant's case is much stronger than that of the first purchaser Imamuddin. In the case of Imamuddin the learned Judge cites as a specific circumstance the omission on his part to see the deed of mortgage to Doman. The mortgage deed, as I have said, was executed by Raghu alone in which it was stated that he was the owner, having obtained patta thereof from the zemindar. So a look at the bond would not have been more illuminating. It appears that the mortgage debt was received by the mortgagee in 1903 from a person named Jamiuddin. On the back of the deed is an endorsement to the following effect: “Having received in full, principal together with interest as per this mortgage bond through Shiekh Jamiruddin, I give release.” This bond was paid off a few days before the sale by Raghu to Imamuddin. Now the learned Judge says in the case of Imamuddin that he should have enquired as to what became of the bond and had he made such an enquiry he would have found that the money was paid by Jamiruddin—a servant of Plaintiff No. 1—and that would have given him notice of Plaintiff No. 1's title. In the case of the Defendant it is suggested that he should have enquired as to what became of the mortgage which was executed 8 years before his purchase; and if he had instituted an enquiry he would have discovered that the Plaintiffs had some interest in the property. Now this process of reasoning, if applied, would have led the Defendant to go to Doman and enquire from him as to who paid off the bond, lie would have been informed that Jamiruddin had paid it off and then an enquiry had to be started as to who Jamiruddin was. It was not easy to find out a man of the class to which he belonged. Having found him and discovered that he was Plaintiff No. 1, Jogendra's servant, the next step for the Defendant was to approach Jogendra and ask him whether he had paid the bond. After he had collected all this information, there does not seem to be any reason why he should have any doubt with regard to Raghu's title in his mind. It is not strange for a brother's servant or a brother to pay off a debt due by another brother; and the mere fact that a person chooses to pay somebody else's debt does not necessarily show that he has some title in the property mortgaged. An argument similar to this was suggested in Hunter v. Walters (8). It was therein argued that if the solicitor had examined the deeds, with very great accuracy—if he had minutely examined the maps, if he had minutely examined all the recitals in all the deeds showing the devolution and the deductions from the previous title—he would have been led to the discovery that the person who was professing to convey had not an indisputable title to the share in the property; and that if the solicitor had gone further and made further enquiries he would have been met with some other facts which, if pursued, would have led to the discovery of some other fact and ultimately to the title of the claimant. With reference to this argument James, L.J, observed as follows:—“It appears to me that the proper place for such an argument as that would be in some satirical work ridiculing, by clever exaggerations, the doctrines of the Court of equity with respect to constructive notice. It is not, to my mind, a substantial argument, capable of being addressed with any effect to any Court whatever.” This remark applies with equal force to the facts of the present case. What is the position? The Defendant found that the original settlement was taken by Raghu alone. He found subsequent dealings of the property by Raghu alone. On the face of these facts there was no reason to believe that there was any defect in Eaghu's title; and what would a man of prudence do under these circumstances? It has been suggested in many cases that it is not the duty of every purchaser to doubt his vendor's title when he finds it clear on the documents placed before him. Now what is the specific circumstance which ought to have prompted an enquiry on the part of Imamuddin or the Defendant? If Imamuddin had looked into the mortgage bond he would have found that it was executed by Raghu alone; and admitting that he subsequently discovered that it was paid off by Plaintiff No. 1, that would not have been inconsistent with the title of his vendor. Besides, he was not bound to accept as true the statement made by a person that he was interested in the property merely because he paid off the debt. The Defendant is in a more secure position. There was no mention of the mortgage in his conveyance. He got all the title deeds that were necessary in support of his vendor's title. He got the patta (Ex. A) granted to Raghunath by the zemindar. He got the conveyance in favour of Jamiruddin and that in favour of his vendors the Marwaris. If really the Plaintiffs had any title in this property, they held out Raghunath as the sole proprietor of it. They never asserted any right to this property from 1893 to the date of the institution of the suit in July 1921. They allowed him to deal with the property as his own. They were aware that in 1900 he had mortgaged this property as his own and still they did not see any means to assert their own title. They again held him out as before as the real owner of the property after the so-called redemption of the mortgage. The patta, Ex. A, was presumably handed over to the mortgagee and if the mortgage was really redeemed by the Plaintiff No. 1 as the person who had a share in the property, how could this patta again go into the hands of Raghu or the Defendant? By placing it in the hands of Raghu they again enabled him to deal with this property as his own. In my judgment there is no circumstance which can be called, within the import of the dictum of their Lordships of the Judicial Committee in Ram, Goomar's case , as a specific circumstance which was the starting-point of an enquiry which might be expected to lead to some result. In this view of the matter, in my opinion, the Defendant was a purchaser for value without notice and therefore he is protected by sec. 41, Transfer of Property Act. It is argued on behalf of the Respondent that according to the finding of the first Court this land was under cultivation by the brothers at the time of the Defendant's purchase. The learned District Judge has not endorsed this finding and his finding on the point, though not clearly put, is to the effect that on this particular portion of the land there were cooly huts. This is not one of the grounds on which the learned Judge has charged Imamuddin or the Defendant with knowledge of the Plaintiffs' title.

In this view it is not necessary to consider another important question in this case, namely, the question of acquiescence. But one cannot overlook the conduct of the Plaintiffs. It is found that the Defendant started building operations in 1911 or 1912. For nine years the Plaintiffs did not take any steps to assert their title. It is said that the Plaintiffs verbally remonstrated and then served the Defendant with a registered notice. The learned Judge has not accepted this evidence. The fact therefore remains that the Plaintiffs stood by and allowed the Defendant to raise a huge structure over the land, a part of which is a mosque—generally a source of sanguinary religious and communal conflict. In Baidya Nath Dutt v. Alefjan Bibi , Mookerjee, J., on a consideration of the English cases on the point said: “The Courts have gone so far as to hold that it is the duty on a man who Knows that another is relying on a document bearing a counterfeit of his signature to give notice of the forgery without delay. If the Plaintiffs desired really to assert their title when the Defendant started building upon the land, one would have expected that the proper course for them to adopt was at any rate to have recourse to the Criminal Courts, as the Plaintiffs' case is that they were in peaceful possession of the land until the Defendant forcibly trespassed on it. No such attempt seems to have been made, and in my opinion if in the circumstances of this case it were necessary to go into the question of acquiescence, I would have been disposed to find it in favour of the Appellant.

Great caution should be exercised in approaching cases of this description which afford many facilities for perpetration of fraud. It is possible that a person having a secret title divides with the ostensible owner the proceeds of the transfer by the latter and then shows his hidden hand to recover that for which he has received good consideration. Equity jealously scrutinizes the bonâ fides of a secret title-holder and is notoriously partial to purchasers for value without notice. The result of the above considerations is that this appeal is allowed, the decrees of the Courts below set aside and the Plaintiffs' suit dismissed with costs in all the Courts.

Graham, J.:— The suit, out of which this appeal has arisen, related to a plot of land having an area of 2 bighas 6 cattas, which is in the possession of the Defendants-Appellants and upon which, buildings have been erected, said to be worth Rs. 37,000.

The Plaintiffs-Respondents' case was that the plot of land in question formed part and parcel of a maurashi mokuran jote of 8 bighas belonging to Plaintiff No. 1 and his deceased joint brothers Raghunath Mitra and Kshetra Nath Mitra, the father of Plaintiff No. 2. The Appellant purchased the land from two Marwaris named Sitani and Mitani, who purchased it from one Imamuddin, who in turn purchased it from the afore-mentioned Raghunath. The Plaintiffs alleged that the property belonged to the three brothers jointly as members of a joint Hindu family, that the Appellant was only entitled to a one-third share, and they sued accordingly for possession with mesne profits after demolishing the buildings erected by the Defendant upon their two-thirds share after establishment of their title thereto either jointly with the Defendant, or on partition by metes and bounds. The suit was resisted by the Defendant inter alia upon the following grounds:—

1. That the Plaintiffs had no title to the land, as they were never joint with Raghunath, who transferred the property to Imamuddin for valuable consideration.

2. That Sitani Prosad and Mitani Prosad, as well as the Defendant, who purchased from them, were bonâ fide purchasers for value without any notice of Plaintiffs' title, if any, to the land in suit.

3. That Raghunath alone was the owner of the land by virtue of the patta, dated the 12th Sraban 1300 B.S, which was made over to Defendant by his vendors.

4. That the Plaintiffs never prohibited the Defendant from erecting the buildings and that they cannot in law or equity claim to have those buildings demolished now.

5. That the Defendant purchased the land after due enquiry, that he never became aware of Plaintiffs' title, if any, and that Plaintiffs are estopped by their conduct from bringing the suit.

6. That, even if the Plaintiffs were joint with Raghunath, their conduct amounted to acquiescence and their suit must fail on that ground.

The main points for decision appear to be:—

1. Firstly, whether the property in suit belonged to Raghunath alone, or to the three brothers jointly as members of a joint Hindu family?

2. Secondly, whether even if they were members of a joint Hindu family, the Plaintiffs are estopped by acquiescence from bringing the suit?

3. Thirdly, whether the Defendant is entitled to the benefit of sec. 41 of the Transfer of Property Act?

With regard to the first point it may be observed that before the trial Court the main plank in the Plaintiffs' case appears to have been that the three brothers were members of a joint Hindu family of which Raghunath was the karta or managing member, and there can be no doubt that, if once that position were established, the presumption would arise that the property belonged to them jointly and not to Raghunath alone. But it seems clear that this case was abandoned in the lower Appellate Court. The learned District Judge has made the following observations in this connection:— “At the outset it may be noted that the joint family alleged by the Plaintiffs is not an ordinary Hindu joint family in the enjoyment of ancestral property …. So far as I understand the argument of the learned vakil, who appeared for the Plaintiffs, he did not contend that this family was an ordinary joint family.” Then he goes on to state that the Plaintiffs' case was that the three brothers started a joiat milk business and purchased the property out of the profits, and he observes:— “If the property were purchased out of the profits of a joint business, the presumption would be that it was joint. The Appellant has entirely failed to prove that the property was purchased with money belonging to Raghunath.”

It seems to me that in making these latter observations the learned District Judge has fallen into error, that he has misplaced the onus, and that this error has vitiated his judgment upon this point. If the case of a joint Hindu family goes, and, as I have said, it was abandoned in the Court of Appeal below (the same position being also maintained in this Court), the presumption would be that the apparent state of things was the real state of things and that Raghunath, who was the ostensible owner, was the sole owner. There is no authority, so far as I am aware, and certainly none has been shown to us, for the proposition that property purchased with the profits derived from a joint business must be presumed to be joint, nor does such a view seem to be based on reason or to be consistent with common sense. A partner in a joint business may invest the profits which he derives therefrom in any way that he deems advantageous, and it cannot be said to follow that because such profits have been earned as a result of the joint business they must necessarily be jointly invested. The documentary evidence shows that Raghunath represented himself as the owner of the property, and in the particular circumstances of the case the onus would lie on the Plaintiffs to establish that was not really so, and that the land in dispute was purchased by the three brothers out of the profits of the milk business. It is true the learned District Judge has stated that, apart from the presumption the evidence is in favour of the Plaintiffs, but it is I think obvious that he has been largely influenced by the view he has taken on the question of onus. The trial Court found that the evidence on both sides was somewhat meagre and that the presumption in favour of joint ownership was not therefore displaced. But, as I have said, that case was subsequently abandoned and if the evidence is meagre then the presumption of sole ownership must prevail. As a matter of fact the evidence, so far from supporting the Plaintiffs' case, seems to go very much against them. The lease (Ex. A) relating to the 8 bighas of land, dating so far back as the 26th July 1893, was in the name of Raghunath alone. Out of these 8 bighas, 2 bighas were acquired by the Bengal Nagpur Railway, and the compensation money was paid to Raghunath alone (vide Ex. C). On the 27th Magh 1307 B.S (8th February 1900) Raghunath alone mortgaged the remaining 6 bighas to one Doman. On the 29th March 1903 he sold 2 bighas 6 cattas to Imamuddin and the rest of the land to other persons. There was nothing in those documents to suggest that Raghunath, the ostensible owner, was not the real owner, or that his brothers were in any way interested in the property. Indeed the finding of the Court of Appeal below is to this effect as the following passage in the judgment of the learned District Judge shows:—“It is clear that Raghu was the ostensible owner with the implied consent of his brothers; the lease was taken in his name alone and his name was registered in the landlord's sherista.” As their Lordships of the Privy Council observed in the case of Ram Coomar Koondoo v. McQueen :—“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 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 the discovery of it.”

Applying the principle herein laid down to the facts of the present case it appears to me that the Defendant not only had no direct notice of the real title, if any, of the Plaintiffs, but that there cannot be said to have been any circumstances which would be calculated to put him upon inquiry.

The next point for consideration is whether the Plaintiffs by their long silence must be held to have acquiesced in the sale and are estopped from asserting their rights, or supposed rights. On behalf of the Appellants much reliance has been placed upon this fact. The buildings, and as already stated they are buildings of considerable value, appear to have been erected as far back as 1910 or 1911, and it does not seem reasonable to suppose that the Plaintiffs would have stood aside during all this time, if they had been the real owners of the land, as they now claim to be. On the contrary they would surely have taken prompt steps to defend their rights, and would have lost no time in bringing their suit. Their conduct, in my opinion, amounted to acquiescence.

Lastly, there is the question whether the Defendants-Appellants are protected by sec. 41 of the Transfer of Property Act. The trial Court found that Defendant was a bonâ fide purchaser for value, but with knowledge of Plaintiffs' right, and the learned District Judge has observed as follows in this connection:— “It is obvious that Imamuddin cannot have made any inquiries even of the most perfunctory kind, although he knew that the property was subject to a mortgage ….. If he had made inquiries of the mortgagee, he would have found out that the debt had already been satisfied by Jogendra and that the sum left in his hands by the transferor to liquidate the debt was insufficient for the purpose. If he had made inquiries of the mortgagee he would have found that Jogendra had some interest in the property.”

It appears to me that these conclusions are not warranted by the facts. None of the documents can be said to have conveyed any notice whatever that the transaction was other than it appeared to be. The Defendant purchased in good faith, and obtained delivery of the title deeds. It is in evidence moreover that in the landlord's sherista Raghunath alone was registered as owner of the property. In the particular circumstances of the case it appears to me that the Defendant-Appellant is entitled to the protection afforded by sec. 41 of the Transfer of Property Act.

In my judgment the decision of the Courts below cannot be supported and I agree with my learned brother that the appeal must be allowed with costs.

S.C.M