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Judgment Summary — Dawson Miller, C.J. (Letters Patent Appeal)

Factual and Procedural Background

The plaintiffs instituted a suit on 7 August 1919 to enforce payment of a mortgage bond executed on 3 July 1911 by Musammat Ruko Chaudhurain on behalf of herself and her two sons (one son being Defendant No. 2 Ajti Chaudhuri; the other, Backkan Chaudhuri, was deceased and his widow is Defendant No. 3). The bond was said to secure a loan taken for the marriage expenses of the daughter Adaya (since deceased).

Musammat Ruko Chaudhurain (the mother/widow) did not appear or give evidence. Defendants Nos. 2 and 3 appeared and by written statements contested the bond's validity, alleging no consideration, absence of necessity for the loan, and that the family lands' produce was sufficient for maintenance.

At trial the Munsif found that consideration had been paid and that the money was used for the daughter's marriage, concluding necessity had been established. On first appeal the District Judge reversed: he found the proof of passing of consideration unsatisfactory (concluding Rs. 200 had not been advanced) and that no legal necessity to borrow had been shown; he allowed the appeal and dismissed the plaintiffs' suit with costs.

The plaintiffs then appealed to this Court (a single Judge). The single Judge set aside the District Judge's decision on the ground that production of the bond and the widow's failure to give evidence shifted the onus and that the Munsif's finding on necessity should stand; he remanded the case for rehearing by the District Judge. Defendant No. 2 (Ajti Chaudhur i) appealed that order under the Letters Patent to a Division Bench (the present appeal).

Legal Issues Presented

  1. Whether the mortgage bond was supported by consideration (i.e., whether the sum said to have been advanced in prior loans, including Rs. 200, had in fact been paid).
  2. Whether there existed a legal necessity to borrow (specifically, whether the mother/widow was actually in need of funds for her daughter's marriage such that charging family property by mortgage was justified).
  3. Whether the single Judge's decision of this Court setting aside the District Judge's decision and remanding the case for rehearing amounted to a judgment from which an appeal lies under the Letters Patent.
  4. Whether findings of fact made by the lower appellate Court (the District Judge) could properly be disturbed by the single Judge in the second appeal.

Arguments of the Parties

Defendants (including Appellant Defendant No. 2)

  • The bond was without consideration — the loan or previous advances (including Rs. 200) had not actually been paid to the widow.
  • There was no necessity for taking the loan because the produce and income of the lands in the mother's possession were sufficient for maintenance and necessary expenses; therefore charging the family property by mortgage was not binding.
  • It was argued (in later stages) that the single Judge's remand order might not be appealable (respondents relied on Raghunandan Singh v. Jadunandan Singh for a related proposition), but the Appellant contended an appeal under the Letters Patent was competent in the present circumstances.

P laintiffs / Respondents

  • The plaintiffs maintained that consideration had been paid and that the money was used for the daughter's marriage expenses; the Munsif had so found at trial.
  • In argument before the Division Bench, the respondents' vakil was unable to point to evidence showing the widow was actually in need of funds for the marriage; he could only point to passages indicating the money was borrowed for that purpose.
  • The respondents relied on the case of Raghunandan Singh v. Jadunandan Singh to argue that an order of remand (as made) did not give rise to an appealable judgment in the present context.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Raghunandan Singh v. Jadunandan Singh That in the circumstances of that case a remand order made by a Subordinate Court did not give rise to an appeal (proposition relied upon to deny appealability). The Court distinguished that case: the remand in Raghunandan Singh was by a Subordinate Court, whereas here the order appealed from was a judgment of a single Judge of this Court. Consequently Raghunandan Singh did not bar the present appeal.
Munshi Lal v. Mahanth Ramasis Puri Where a Judge of this Court sets aside the decision of the lower Appellate Court and orders a retrial by that Court, that decision amounts to a judgment within the meaning of the Letters Patent and is appealable to a Division Bench. The Court applied and followed this principle to hold that the single Judge's order — setting aside the District Judge's decision and ordering a retrial — was a judgment within the Letters Patent, permitting the present appeal.

Court's Reasoning and Analysis

The Court began with the general proposition that, on questions of fact, this Court in second appeal is ordinarily bound by the findings of the lower appellate Court and should not disturb them unless there is an error of law or absence of evidence to support the finding.

On the question of consideration, the single Judge had concluded that production of the bond and the widow's failure to give evidence shifted the onus and that consideration should be taken as proved unless disproved by the contestants. The present Division Bench observed that it was unnecessary in this appeal to decide whether the single Judge was correct on that particular point.

The Court concentrated its analysis on the question of legal necessity. It explained the relevant standard: where a mortgage charges family property for a purpose such as a daughter's marriage, the plaintiffs must prove not only the occasion for borrowing but also that there was a real necessity to borrow money at that time — i.e., some evidence that the borrower lacked sufficient funds to meet the required expenses.

Applying that standard to the evidence, the Court agreed with the District Judge that the plaintiffs failed to prove the widow was without funds for the marriage or that the lenders enquired into necessity. The Division Bench noted that the respondents' counsel could not point to any part of the evidence demonstrating the widow's actual need of funds; he could only show that the loan was taken for a marriage. The Court concluded the District Judge's requirement of proof of lack of funds and his finding of no necessity were justified by the record.

The Court further held that the single Judge had erred by treating the mere purpose (i.e., that the loan was for marriage expenses) as sufficient to establish legal necessity without proof that the borrower lacked funds. Consequently the single Judge's order setting aside the District Judge's decision was not sustainable.

The Court also addressed procedural and consequential points: (a) any personal claim against the widow on the covenant was barred by limitation because the bond's due date was 1 May 1912 and the suit was instituted in 1919; (b) if the family property is not bound by the mortgage, no decree can be granted against the undivided share in that property; (c) the District Judge was competent under Order 41, rule 33 to set aside the whole decree despite the widow not appealing; and (d) the single Judge's remand amounted to a judgment within the Letters Patent (per Munshi Lal), so an appeal to the Division Bench lay.

Holding and Implications

APPEAL ALLOWED.

The Division Bench set aside the single Judge's order and restored the judgment of the District Judge which had allowed the first appeal and dismissed the plaintiffs' suit. The Court concluded that the plaintiffs had not proved the legal necessity required to bind family property by the mortgage.

Consequences and costs ordered by the Court (direct effects):

  • The judgment of the District Judge (allowing the appeal and dismissing the plaintiffs' suit) is restored.
  • Defendants Nos. 2 and 3 are awarded their costs of the suit.
  • Defendant No. 2 (Ajti Chaudhur i) is awarded his costs of the appeal to the Subordinate Judge, the appeal to this Court, and the present appeal under the Letters Patent.

The opinion does not purport to establish a new general precedent beyond applying and distinguishing earlier authorities; it restores the District Judge's factual findings and clarifies the evidential burden required to prove legal necessity in cases of family-property mortgages.

Concurring opinion: Mullick, J. agreed with the judgment.

    Ajti Chaudhuri v. Janak Lal Chaudhury

    Dawson Miller, C.J:— This is an appeal under the Letters Patent on behalf of the Defendant No. 2 in the suit from a decision of Mr. Justice Adami, dated the 7th of December 1922.

    2. The suit out of which the appeal arises was instituted by the Plaintiffs on the 7th August 1919 to enforce payment of a mortgage bond by sale of the security granted under the bond. The bond was executed on the 3rd July 1911 by Musammat Ruko Chaudhurain, widow of Uchit Chaudhuri, on behalf of herself and her two sons Ajti Chaudhuri who is the Defendant No. 2 and Backkan Chaudhuri who is the deceased husband of the Defendant No. 3. It was clear that the Defendant No. 3 as the widow of Backkan Chaudhuri had no interest in the property on his death, the family being joint, and she ought not to have been added as party. This was so decided by the trial Court and no question now arises upon that point. The bond was executed to secure a loan granted to Musammat Ruko Chaudhurain said to have been taken for the purposes of the marriage of her daughter Adaya since deceased. The Musammat did not appear in the suit and filed no written statement. The Defendants Nos. 2 and 3, that is her son and daughter-in-law, did appear and by their written statements contested the validity of the bond, alleged that it was without consideration, and that there was no necessity for taking the lean mentioned therein and that they had not been benefitted by it. They further contended in their written statement that the produce and income of the lands in possession of their mother was quite sufficient for her maintenance and necessary expenses of herself and the other Defendants and such being the case the taking of the loan by their mother was entirely without necessity. The learned Munsif before whom the case came for trial found that the payment of consideration had been proved. He further found that the money was used for the payment of the marriage expenses of the first Defendant's deceased daughter and on these findings he considered that the necessity for the loan had been made out. He did not in terms consider whether the first Defendant had any necessity to borrow, that is to say, whether the state of her finances was such that she was unable to find the sum of Rs. 200 which were necessary for the purposes of the marriage of her daughter.

    3. From that decision there was an appeal by the Defendant No. 2 Ajti Chaudhuri. The learned District Judge who heard the appeal considered that even on the evidence of the Plaintiffs' witnesses it had not been made out to his satisfaction that the consideration for the bond, that is to say, the previous loans, had in fact passed. He considered the surrounding circumstances and the probabilities of the case and arrived at the conclusion based partly upon the probabilities and partly upon the evidence of the Plaintiffs' witnesses themselves that this sum of Rs. 200 had never in fact been advanced to the widow. He considered the evidence as to the passing of consideration most unsatisfactory and unreliable and although the Defendant No. 1 did not herself give evidence which in his opinion raised a presumption in the Plaintiffs' favour he considered that the circumstances which he had already mentioned, namely, the unreliability of the evidence of the Plaintiffs and the probabilities of the case were more than sufficient to outweigh any presumption arising from the failure of the Defendant No. 1 to give evidence. He accordingly held that no consideration for the bond passed. He further proceeded to consider whether in fact there was any necessity for the loan and dealing with this question he arrived at the conclusion that the Defendant No. 1 upon the death of her husband having come into 12 bighas of land and having a very small family to maintain it was very unlikely that she would not have funds in her hands sufficient to pay for the marriage of any daughter supposing that she had any daughter about to be married. It ought to be mentioned that one of the issues in the case was whether in fact there was any daughter of this lady of the name of Adaya who had been married upon the occasion when the loan was taken. The learned District Judge having arrived at the conclusion that no consideration passed and that it had not been shown that this lady was actually in need of money for the marriage, apparently did not consider it necessary to determine the question whether in fact she had this daughter Adaya or not. He dealt with the case upon the supposition that such a daughter did exist and finally he arrived at the conclusion that there was no necessity for any loan. He further points out, which was the fact, that the evidence upon the Plaintiffs' side did not show that the Plaintiffs made any enquiry as to necessity. He accordingly allowed the appeal and dismissed the Plaintiffs' suit with costs.

    4. From that decision a second appeal was preferred to this Court. The learned Judge was not satisfied with the manner in which the District Judge in first appeal had arrived at his conclusions of fact. He considered that on the question of consideration the production of the bond and the failure of the widow to appear and give evidence in the suit was sufficient to prove the passing of consideration and that the onus was thereupon shifted to the contesting Defendants to disprove execution and payment of the money advanced. He considered that the learned District Judge had wrongly planed the onus in this respect. In dealing with the question of legal necessity he referred to the fact that the learned District Judge had not found as a fact whether the widow had a daughter Adaya or not and that he ought to have determined this question, but having failed to do so he considered that the Munsif's findings upon that point must stand. He then says: “There being a daughter I think I must hold that the expenses of the marriage of the daughter would be a legal necessity,” and adds that the lower appellate Court had decided the question of necessity merely on inferences and probabilities and he did not consider that its findings as to necessity could be held to be proper findings of fact. For these reasons he set aside the decision of the District Judge and sent back the case for rehearing by him.

    5. From that decision the Defendant No. 2 has appealed. There can be no doubt that this Court in second appeal is bound by the findings of fact of the lower appellate Court and ought not lightly to disturb those findings of fact unless it is shown either that the learned Judge has gone wrong on some question of law or that there is no evidence to support the finding. It is unnecessary in this appeal to consider whether the decision of the learned Judge of this Court was right in so far as it determined that the Subordinate Judge had not dealt properly with the question of passing of consideration, but I think, with great respect to the learned Judge of this Court, that he failed to appreciate exactly what it is necessary to prove in order to establish what is known as legal necessity. The learned District Judge based has decision partly upon the ground that no necessity for the loan had been made out and therefore that the mortgage of the family property was not binding upon that property. The reason which induced him to arrive at this conclusion was that even if the marriage of a daughter might be regarded as an occasion upon which the manager or other person in charge of family property might be entitled to charge the property for the purpose of raising money to provide for the marriage, still the Plaintiffs in a suit based upon a mortgage charging the family property for such a purpose must prove not only the occasion upon which the money was borrowed but also that there was a real necessity to borrow money at that time and that some evidence at all events ought to be given to shew that the borrower was not in sufficient funds to perform the marriage or other necessary ceremony in the family. It appears from the evidence in this case that there was an entire failure on the part of the Plaintiffs either to prove that the widow was not possessed of sufficient funds to pay for the marriage of her daughter or that the Plaintiffs when the loan was advanced made any enquiries as to that necessity. We have asked the learned Vakil for the Respondents to point out to us from the evidence, if he can, any passage in which it was alleged that the widow was really in need of funds for the purposes for which the money was borrowed. He was unable to do so but could merely point to passages in which it was said that the money was borrowed for the marriage. In my opinion, the decision of the District Judge was based upon a proper appreciation of the evidence which it is necessary in such cases to prove and his decision on this point appears to me clearly to have been justified by a consideration of the evidence before him. With great respect to the learned Judge of this Court he appears not to have dealt with the question of whether or not the widow was in fact in funds for the purpose for which the money was borrowed. He appears to have considered that if the money was borrowed for the expenses of the marriage ceremony, that in itself was quite sufficient to justify the loan without any proof that there was in fact necessity for borrowing money for that purpose. It follows therefore that the decision of the learned Judge of this Court cannot be supported and must be set aside and the decision of the learned District Judge restored.

    6. It was contended that as the Defendant No. 1 did not appear the decree of the Munsif ought to be allowed to stand as against her. No claim for a personal decree against that Defendant upon the covenant to repay the money was made and in fact no such decree could have been granted because the due date of the bond was the 1st May 1912 and when the present suit was instituted in 1919 any personal claim against the executant of the bond for the recovery of the money was barred by limitation. Further it is quite clear that if the family property is not bound by a mortgage of this sort there can be no decree against the undivided share in that property belonging to one or other of the executants of the bond who might be liable thereunder. In the present case, it has not been shown that the widow had any interest in the property at all beyond possibly some right to maintenance. The property is really that of her sons and they being minors she was acting on their behalf. The only question for decision in such circumstances was whether the bond was valid on the ground that there was legal necessity or benefit to the estate by reason of the loan.

    7. I ought to add that although the Defendant No. 1 did not appeal from the decision of the Munsif the Defendant No. 2 did so appeal and in my opinion the District Judge was quite competent under the provisions of Or. 41, r. 33, to set aside the whole decree although the other Defendant No. 1 had not appealed. The decree was a mortgage decree against the property and as such a decree could not stand; the Court had power to set it aside entirely. Moreover, it is not shewn that the Defendant No. 1 had any interest in the property at all and therefore the effect of setting aside this decree will in no way prejudice her interests.

    8. It was also contended during the course of the argument that no appeal lay from the order of Mr. Justice Adami sending back the case for re-hearing to the Court of the District Judge and the case of Raghunandan Singh v. Jadunandan Singh (1) was relied upon for this proposition. That case, however, is clearly distinguishable from the present. In that case the order of remand which was made was an order made by a Subordinate Court. The appeal in the present case is from a judgment of a single Judge of this Court and under the Letters Patent there is an appeal to a Division-Bench from a judgment of a single Judge of this Court. The question had to be considered by a Bench over which I presided in the case of Munshi Lal v. Mahanth Ramasis Puri (2). The decision we arrived at in that case was that where the Judge of this Court without setting aside the decision of the lower Appellate Court merely remands the case for the finding of an issue with directions to return that finding before finally disposing of the appeal, that is not a judgment within the meaning of the Letters Patent; but where the Judge of this Court sets aside the decision of the lower Appellate Court and orders a retrial by that Court that decision amounts to a judgment within the Letters Patent and in such cases an appeal is permissible from the decision. The present case is governed by the case of Munshi Lal v. Mahanth Ramasis Puri and an appeal therefore lies. The result is that this appeal must be allowed and the judgment of the District Judge restored. With regard to the costs of the suit and the subsequent appeals the Defendants Nos. 2 and 3 are entitled to their costs of the suit. The Defendant No. 2 is entitled to his costs of the appeal to the Subordinate Judge and of the appeal to this Court and of the present appeal under the Letters Patent.

    9. Mullick, J.:— I agree.

    10. Appeal allowed.

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    Comments

    Ajti Chaudhuri v. Janak Lal Chaudhury
    (Aug 14, 1923)