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  • sec. 68(b) of the Transfer of Property Act
  • sec. 59 of the Transfer of Property Act.
  • sec. 90 of the Transfer of Property Act
  • sec. 82 of the Transfer of Property Act
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Citation Codes
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citation codes
Case Number
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  • sec. 68(b) of the Transfer of Property Act
  • sec. 59 of the Transfer of Property Act.
  • sec. 90 of the Transfer of Property Act
  • sec. 82 of the Transfer of Property Act
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The Appellant is the plaintiff in a mortgage suit; the Respondents are defendants who are the sons of the purchaser of two of the mortgaged properties and have been referred to throughout the appeal as Defendant No. 4. The suit was dismissed in the lower Court on two grounds: (1) that the attestation of the mortgage deed had not been proved, and (2) that the mortgage was not "true and bonâ fide." Both grounds were urged before the appellate Court by the Respondent.

The relevant mortgage bond was executed on 23rd August 1893 by Mussamat Sharbat Koer as guardian of Bal Makund Das. Background facts disclosed in the opinion include that Bal Makund's father, Janki Das, had died before 1883 and had conducted a banking or money-lending business which appears to have failed; the family was likely in financial difficulty by the date of the bond. Defendant No. 4 had earlier sued (on 17th September 1892) for a large mortgage debt and, after obtaining a money-decree in 1894, purchased two of the mortgaged properties in execution.

The appellate Court considered (a) whether the mortgage was fraudulent because no consideration passed, and (b) whether the mortgage deed had been duly attested in accordance with sec. 59 of the Transfer of Property Act. The Court further analysed the practical consequences resulting from its findings in relation to four mortgaged properties and the apportionment of the secured principal.

Legal Issues Presented

  1. Whether the mortgage was void for want of consideration or otherwise “not true and bonâ fide” (i.e., whether no consideration had passed and the deed was fraudulent).
  2. Whether the mortgage deed was properly attested as required by section 59 of the Transfer of Property Act, given that the executant was a purdanashin lady and the attesting witnesses and executant were separated by purda during execution.
  3. Given findings on validity and attestation, what relief and apportionment should follow among the four mortgaged properties (including the effect of prior sales and purchases in execution), and the consequences of the mortgagee's omission to "get in" an assigned debt that became time-barred.

Arguments of the Parties

Respondent's Arguments

  • The Respondent urged that the mortgage was not "true and bonâ fide"—specifically alleging that no consideration had passed and that the deed was therefore fraudulent.
  • The Respondent also contended that the attestation of the mortgage deed had not been proved, relying on the fact that the attesting witnesses did not directly see the executant sign because of purda.

Appellant's Arguments

The opinion does not contain a detailed account of the Appellant's legal arguments in the form of a set of stated contentions opposing the Respondent's points. The Court's reasoning and conclusions indicate the Appellant maintained that some consideration existed and that the deed was duly attested, but specific party submissions are not set out in detail in the provided text.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Harmongal Narain Singh v. Ganaur Singh Authority on attestation where executant is a purdanashin lady; addressed whether attesting witnesses must have seen the executant sign. The Court regarded the facts of the present case as similar to that case and relied on the reasoning to conclude that attestation was due here as the attesting witnesses were satisfied that the deed had been signed despite not directly seeing the signature behind purda.
Muthu Vijia Raghunatha v. Venkatachallam Chetti Principle that a sub-mortgagee is entitled to sue the mortgagor of his mortgagor as well as his own mortgagor. The Court invoked this principle (as stated by Dr. Ghose in his work and relying on that decision) to hold that where rights in a debt are assigned by way of mortgage, the assignee/mortgagee may have the right to sue the original debtor.
Imam Ali v. Baij Nath Ram Proposition that mortgagees cannot compel the entire burden to fall on part of mortgaged premises when, by their own laches, they have lost remedy against the remainder. The Court relied on the decision (per Mookerjee, J.) to justify ordering an apportionment of the mortgage debt among the mortgaged properties when the Plaintiff's default had resulted in loss to the security as a whole.
Kamala Kant Sen v. Abul Barkat; and Upendra Chandra Singh v. Mohri Lal Marwari Authority for the limitation period applicable to suits for surplus sale-proceeds (12 years from date of realization). The Court applied these authorities to determine that the period of limitation for the Plaintiff's claim upon the surplus sale-proceeds was 12 years from the date the surplus was realized, and used this to fix Defendant No. 1's liability for the withdrawn surplus figure.

Court's Reasoning and Analysis

The Court divided its analysis into two principal inquiries: (A) whether the mortgage was fraudulent for want of consideration, and (B) whether the deed was duly attested under section 59 of the Transfer of Property Act. It then analyzed the consequences of its conclusions in respect of four mortgaged properties.

A. Consideration / Alleged Fraud

  • The bond (23 August 1893) was executed by Mussamat Sharbat Koer as guardian of Bal Makund Das. The surrounding factual matrix showed prior business failure and family need; Defendant No. 4 had earlier sued for a large mortgage debt and purchased two mortgaged properties in execution.
  • The Respondent alleged that no consideration had passed; the deed recited two items of consideration: (i) a debt of Rs. 1,239-13-6 due on a hatchitta, and (ii) an advance of Rs. 1,760-2-6 for litigation expenses.
  • On the first item, the Court noted suspicious features (non-production of hatchittas, statute-barred claims, questionable accounting of the debt) and concluded the transactions were not fully disclosed. Nevertheless, the Court found sufficient indicia (deed of gift, deed of sale) to reject the assertion that the debt had absolutely no existence, and—because the guardian acted with leave of Court—the Court would not inquire into the sufficiency of the consideration.
  • On the second item (advance for litigation), evidence suggested the advance was made only after registration and that the subsequent suits either lacked detail or were time-barred when pursued. The Court again inferred nondisclosure of true facts but not non-existence of any consideration.
  • Overall, the Court concluded it was not shown that no consideration passed; therefore the mortgage could not be held void on that ground. Any defective or untrue stated consideration might give remedies to Bal Makund against his guardian (and possibly against the Plaintiff), but it did not confer rights on the Respondent to defeat the mortgage.

B. Attestation under Section 59

  • The attesting witnesses were separated from the executant by purda; Bal Makund reportedly took the deed behind purda and returned with it signed. There was no suggestion that Mussamat Sharbat had not actually signed.
  • The Court held that the mere fact that the witnesses did not directly see the executant sign did not suffice to declare the attestation invalid. The Court found the case analogous to Harmongal Narain Singh v. Ganaur Singh and concluded that the attesting witnesses' satisfaction that the deed was signed was sufficient for attestation.
  • The Court emphasized practical considerations: a contrary view would disrupt common practice regarding execution of deeds by purdanashin ladies and make attestation of such signatures almost impossible.

C. Consequences and Apportionment

  • The mortgage affected four properties. Properties Nos. 1 and 2 were purchased by Defendant No. 4 in execution under section 90 of the Transfer of Property Act (sometime in 1899). Property No. 3 had been sold for arrears of Government revenue on 24th March 1899, and the mortgagor (Defendant No. 1) had withdrawn the surplus sale-proceeds on 9th September 1899. Property No. 4 consisted of a right to profit of Bharna rent and was valued in the mortgage deed at Rs. 5,742-5-3.
  • The Court held that Properties Nos. 1 and 2 were liable to the mortgage debt (as the Court found a debt did exist), though the extent of liability required further consideration. Property No. 3 was not shown to have been sold free of incumbrances; accordingly, on payment of the proceeds the Plaintiff had a charge on Defendant No. 1's share amounting to Rs. 182-1 and a right to sue for that amount both under section 68(b) of the Transfer of Property Act and because the mortgage repayment period had expired.
  • The Court applied authorities to determine the applicable limitation period for a suit on surplus sale-proceeds (12 years from realization) and held Defendant No. 1 liable in respect of Rs. 182 with mortgage-rate interest at 12% until realization.
  • As to Property No. 4, the Court analysed the chain of mortgage assignments and the Plaintiff's obligation to "get in" the assigned debt. Relying on doctrinal statements (Mr. Coote) and the principle that sub-mortgagees/mortgagees may sue the original debtor, the Court concluded the Plaintiff had an obligation to pursue the original debt and protect the security.
  • Because the Plaintiff neglected this obligation and allowed the debt to become time-barred, the Plaintiff was liable for the loss resulting from that neglect. The Plaintiff could not be held liable to Defendant No. 1 (who was more in default), but must be held liable to other holders of mortgagor's rights in the remainder of the mortgaged property, to the extent of the loss of security.
  • Following section 82 of the Transfer of Property Act and the authorities cited, the Court ordered valuation of the four properties at the date of mortgage (taking Property No. 4 at the deed-stated value of Rs. 5,742-5-3) and directed distribution of the principal of Rs. 3,000 among the four properties according to their relative values. Properties Nos. 1 and 2 would remain liable for the principal charged on them with interest at the bond rate until realization; Defendant No. 1 would be liable for his share of the sale-proceeds of Property No. 3 (Rs. 183-1 in the Court's determination) with interest from withdrawal; the portion chargeable on Property No. 4 would be treated as discharged because of the Plaintiff's default in getting in the debt.

Holding and Implications

Core Ruling: APPEAL ALLOWED.

The Court held that:

  • The mortgage could not be declared void for want of consideration on the material before the Court; it was not shown that no consideration had passed.
  • The attestation of the mortgage deed satisfied the requirements of section 59 of the Transfer of Property Act in the circumstances (execution by a purdanashin lady with attesting witnesses satisfied as to signature), and the lower Court's finding to the contrary could not be sustained.
  • Because the Plaintiff (mortgagee) neglected his obligation to get in an assigned debt and allowed it to become time-barred, the Plaintiff is chargeable with the loss arising from that default vis-à-vis other holders of rights in the remaining mortgaged property; apportionment among the four properties must be carried out under section 82 of the Transfer of Property Act.

Direct effects and orders made by the Court (as directed in the opinion):

  • The four mortgaged properties must be valued at the date of the mortgage and the principal of Rs. 3,000 apportioned among them according to their respective values (with Property No. 4 valued as Rs. 5,742-5-3 as per the mortgage deed).
  • Properties Nos. 1 and 2 remain liable for the amounts of principal charged on them with interest at the bond rate until realization.
  • Defendant No. 1 is liable for Rs. 182 (the Court calculated Rs. 182-1) being his share of the surplus proceeds of Property No. 3, with interest at the bond rate from the date of withdrawal until realization.
  • The portion of the debt that would have been chargeable upon Property No. 4 is to be treated as discharged, as a consequence of the Plaintiff's neglect to get in the debt.
  • The appeal was allowed and the case remanded to the lower Court to effect the apportionment and pass decree as directed. Costs in both Courts were to be given in proportion to the result.

The opinion does not discuss or announce any broader legal principle intended as a novel precedent beyond its application of established authorities to the facts; it confines its orders to the remedy and apportionment required by those findings.


Formal outcome recorded in the opinion: "Appeal allowed; Case remanded."

    Isri Prosad v. Rai Gunga Prosad Singh Bahadur

    In this case the Appellant is the Plaintiff in a mortgage suit in which the Respondents are Defendants being the sons of the purchaser of two of the mortgaged properties. They need not be distinguished from their father and have been referred to throughout this appeal as Defendant No. 4.

    The suit was dismissed in the lower Court on the grounds that the attestation of the mortgage deed has not been proved, and that the mortgage was not “true and bonâ fide.” Both points have been urged before us by the Respondent. Whatever we may think of the first the second is that on which the Respondent seeks to establish his claim in the first place. We will therefore deal with it first.

    The bond was executed on the 23rd August 1893 by Mussamat Sharbat Koer as guardian of Bal Makund Das. He was the son of Janki Das, who died before 1883 when Mussamat Sharbat became guardian, and who carried on some kind of banking or money-lending business. This seems to have failed and Bal Makund at all events has now no resources of his own. When it failed does not appear; but at the date of the execution of the bond it seems that the family must have been in some need. The Respondent, i.e, Defendant No. 4 had filed a suit on the 17th September 1892 against Bal Makund and his co-sharers for Rs. 76,000 odd due on a mortgage deed, which shows that his mortgage security was not worth enforcing; and his connection with this suit is that after obtaining a money-decree in 1894 he brought two of the mortgaged properties to sale and purchased them himself. The deed being executed under these circumstances we will first consider whether it has been shown to be fraudulent. The ground for the allegation that it was so, is that no consideration passed, which shows that it was executed merely to protect the property in dispute from the claims of other creditors and particularly we may suppose those of the Respondent. The consideration alleged in the deed is twofold, first, a debt due to the mortgagee at Rs. 1,239-13-6 due on a hatchitta, secondly, an advance of Rs. 1,760-2-6 made by the mortgagee to provide for the expenses of certain litigation. As to the first of these, the debt of Rs. 1,239, it is suggested that it had no existence. We cannot accept this view, though the story told to prove it is by no means free from suspicion. The story of how it arose is told by Mussamat Sharbat in her petition to the Sub-Judge of Durbhanga for leave to execute the mortgage as a guardian. According to this one Asghar Ali had deposited money with the firm of Bal Makund's father, her husband, on the security of a hatchitta. They passed to Ali Khan his adopted son, and in his favour, she executed a hatchitta for of the sum on the separation of Bal Makund from his co-sharers on the 27th March 1883; this Ali Khan transferred to the Plaintiffs and as she could not raise the money when pressed, she executed a new hatchitta to them on the 27th March 1893, and at the time of the mortgage the amount due on this was Rs. 1,215-1-9. This is supported by a deed of gift, dated the 13th September 1887, by Agha Khan to Ali Khan comprising among other things a hatchitta for Rs. 2,500 by Bal Makund's father, and by a deed of sale, dated the 22nd March 1893, whereby Ali Jan transferred a chitta from Mussamat Sharbat for Rs. 1,250-1-9, to the Plaintiffs together with another from the other co-sharers' at only Rs. 14 less than their full value; The existence of the original debt on which Mussamat Sharbat's hatchitta is based seems to be proved by Agha Khan's deed of gift, and there seems to be no reason to doubt the genuineness of Ali Khan's deed of sale to the Plaintiffs: though it is impossible to suppose that the consideration is correctly stated. On the other hand none of the hatchittas have been produced and only the lamest possible excuses have been given for their non-production. Also when Mussamat Sharbat renewed the hatchitta to the Plaintiffs any claim that could be made on it was statute barred. These facts make the transactions leading up to the last hatchitta suspicious and we have no doubt that the true facts of the case have not been disclosed, as after the collapse of the original debtor firm the debt on the original hatchitta must have been worth very little and yet it is throughout treated as being practically undiminished. We cannot however treat the debt as extinguished, and at the time of the mortgage it may have been of advantage to the mortgagors to have it put an end to: and as she was acting as guardian and with the leave of the Court we cannot enquire into the sufficiency of the consideration.

    The advance of Rs. 1,760 odd is said to have been made to Bal Makund a few days after the registration of the mortgage. The litigation in respect of which it was made was partly a suit against his uncle Janki Das of which we have no information at all and partly a suit to be brought against the Andoi Indigo concern for Bharna rent, which was eventually brought by Bal Makund after he had attained his majority in 1898, when it was time-barred.

    These facts lead us again to suppose that the true facts of the case have not been disclosed. But they do not lead us to the conclusion that no consideration passed; but rather to the conclusion that the consideration alleged in the deed was not the true one, but rather one put forward possibly to justify Mussamat Sharbat in executing a mortgage which she ought not to have executed. This might give Bal Makund a right to relief against Mussamat Sharbat and possibly against the Plaintiff, but cannot confer any such right on the Respondent.

    We must accordingly hold that it has not been shown that no consideration passed, and we cannot hold the mortgage void.

    This leads us to the other point relied on by the Respondent, namely, that the mortgage deed was not attested by two witnesses as required by sec. 59 of the Transfer of Property Act. The facts seem to be that the attesting witnesses were on one side of the purda when the deed was executed and the executant on the other. Her son, Bal Makund, seems to have taken the deed behind the purda and to have come back with it signed. It has not been suggested that Mussamat Sharbat did not in fact sign the deed. On these facts we cannot hold that the deed was not attested merely because the witnesses did not see the executant sign. The case seems very similar to that of Harmongal Narain Singh v. Ganaur Singh, so far as the facts are disclosed in the judgment of Brett, J., except indeed that there was there specific evidence of a witness who saw the lady sign. Here there is none, but it is impossible to doubt that the attesting witnesses were satisfied by Bal Makund that the deed was signed by his mother. On appeal the judgment of Brett, J., was upheld on the ground that there was no evidence that the attesting witnesses did not see the executant; but Brett, J.'s judgment seems to have been passed on the assumption that they did not. Whatever may be the correct view to be taken of this decision we must hold that there was due attestation in this case. To hold otherwise would be to upset what we believe is a frequent practice in cases of the execution of deeds by purdanashin ladies and in many cases to make attestation of their signatures almost impossible. On these findings the question arises, what relief is the Plaintiff entitled to. The mortgage affects four properties. Of these Nos. 1 and 2 were purchased by Defendant No. 4 in execution of a money-decree under sec. 90 of the Transfer of Property Act sometime in 1899. Property No. 3 was sold for arrears of Government revenue on the 24th March 1899, and the surplus sale-proceeds were withdrawn by the mortgagor the Defendant No. 1 on the 9th September 1899. Property No. 4 was the “right to the profit of the Bharna rent of Mouzah Malikhpur, Pergunnah Saresa, due by the Shapur Andoi Indigo concern, Pergunnah Saresa, from 1292 to 8 annas kist of 1300 amounting to Rs. 5,742-5 ans. 3 pies under Sudhbharna bonds, dated 28th January 1885 and 25th July 1883, by Babu Bhup Narain Singh and others proprietors of the said mouzah.” It is not denied that Nos. 1 and 2 are liable to the mortgage debt, if any exists, as we have found it does though it remains to be considered how far their liability extends. As to No. 3 it has not been suggested that it was sold free of incumbrances; and it does not appear that the sale was due to the mortgagee's default. It follows, therefore, that on the payment of the proceeds the Plaintiff had a charge on Defendant No. 1's share of them which amounted to Rs. 182-1 and had a right to sue for that amount both under sec. 68(b) of the Transfer of Property Act and because the period for repayment under the mortgage had expired. The general prayer in the plaint covers a claim made in respect of the surplus sale-proceeds, the period of limitation that applies to such a suit is 12 years from the date when the surplus proceeds were realised, Kamala Kant Sen v. Abul Barkat and Upendra Chandra Singh v. Mohri Lal Marwari, and Defendant No. 1 is therefore liable in respect of the sum of Rs. 182 with the mortgage rate of interest at 12 per cent, till the date of realization.

    As regards property No. 4 the Shapur Andoi concern was the debtor of Bhup Narain Singh and others who mortgaged the debt to Defendant No. 1, who again as we have seen, mortgaged his rights as mortgagee to the Plaintiff. The mortgage deed of Defendant No. 1 to the Plaintiff contained provisions safeguarding the mortgagee's right in case the mortgagor in any way realised the debt: but it did not contain any provision for what actually happened, which was that the mortgagor sued for the debt after his claim was time-barred and failed to recover anything; nor did it contain any express provision that the mortgagor should bring a suit at all, though as money was advanced to provide for the expenses of such a suit, an undertaking to this effect may be implied. Under these circumstances both Defendant No. 1 as creditor, and the Plaintiff as mortgagee were entitled to sue the debtor on the original debt. This depends on the principle laid down by Dr. Ghose in his work on Mortgage at p. 324 in reliance on the decision in Muthu Vijia Raghunatha v. Venkatachallam Chetti(4), that a sub-mortgagee is entitled to sue the mortgagor of his mortgagor as well as his mortgagor; for if this is so where a mortgage debt is mortgaged much more must it be so where the mortgage is of a simple debt. The question then arises what result follows from the Plaintiff's omission to get in the debt in question, and allowing it to become time-barred. The obligation on him to get it in is clearly expressed by Mr. Coote in “The Law of Mortgages,” Ch. XIX, sec. (ii), where it is pointed out that a mortgagee taking an assignment of a debt by way of mortgage “should be specially protected against the obligation which whether by analogy to a mortgagee in possession who is bound to account for what he might have received but for his own default, or to a creditor who, by giving time to the principal debtor, discharges the surety, would otherwise attach to him to get in the debt in due course, under penalty of being charged with the loss in case any arise through his default.”

    As the Plaintiff entirely neglected this obligation he is accordingly chargeable with the loss that has occurred in his security. He cannot of course be liable therefore to Defendant No. 1 who is more in default than he is; but must be held liable to other holders of the mortgagor's rights in the remainder of the mortgaged property, so far as the loss of the security is concerned. They can accordingly call on him to make an apportionment; for “the mortgagees cannot claim to throw the entire burden upon a portion of the mortgaged premises, because by reason of their own latches they have lost their remedy as against the remainder,” per Mookerjee, J., in Imam Ali v. Baij Nath Ram. The result is that following the rules laid down in sec. 82 of the Transfer of Property Act the four mortgaged properties must be valued at the date of the mortgage, the value of No. 4 being taken as stated in the mortgage deed, namely, Rs. 5,742-5-3, and the principal of Rs. 3,000 being distributed on the four properties according to their respective values. Properties Nos. 1 and 2 will be liable for the amount of principal charged on them with interest at the bond rate until realization. Defendant No. 1 will be liable for Rs. 183-1 his share of the sale-proceeds of property No. 3, with interest from the date of his withdrawal of the same at the bond rate until realization. The portion of the debt chargeable on property No. 4 will be taken as discharged. The appeal is accordingly allowed, and the case is remanded to the lower Court in order that the apportionment may be made as provided above, and that a decree may be passed as directed. Costs in both Courts in proportion to the result will be given to the parties.

    Appeal allowed;
    Case remanded.

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    Isri Prosad v. Rai Gunga Prosad Singh Bahadur
    (Aug 12, 1909)