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Judgment Summary — Burkitt, J.

Factual and Procedural Background

The plaintiff appealed from a decree of the Subordinate Judge of Aligarh which partly dismissed the plaintiff's suit for sale on a mortgage executed by Garuruddhwaja Prasad Singh on 28 February 1893. The mortgaged properties included landed property and one-half of a fort (kila) at Baswan. Before the suit the fort had been sold in execution of a money decree held by Madhri Saran and purchased by Hub Lal.

The Subordinate Judge gave a decree for the plaintiff against the mortgagor Garuruddhwaja Prasad Singh, but dismissed the suit as against the mortgagor's minor son Matmatangadhwaja Prasad Singh and as against Hub Lal (the purchaser of the fort). As a result of that decree, the plaintiff could proceed in execution only against the father's interest in the mortgaged property other than the fort; the fort could not be touched under the decree. The plaintiff appealed, seeking sale of the whole mortgaged property without exception.

Legal Issues Presented

  1. Whether the minor son, Matmatangadhwaja Prasad Singh, could be held liable and sued jointly with his father to recover the debt secured by the mortgage.
  2. Whether a suit could be maintained against the certified purchaser (Hub Lal) on the ground that the purchase at an execution sale was made benami (on behalf of another), in light of section 317 of the Code of Civil Procedure (i.e., whether s. 317 bars such a suit and whether any exception ought to be read into it, such as permitting a creditor of the alleged beneficial purchaser to sue).

Arguments of the Parties

Lower Court's Reasoning (as reported)

  • The Subordinate Judge dismissed the suit against the minor son on reasoning that the father (Garuruddhwaja) was "an extremely immoral and extravagant man" who had wasted property worth lakhs of rupees, and therefore the sons and grandsons of such a man should not be held liable for his debts. The Judge further stated that the portion of the debt which passed into Garuruddhwaja's hands was spent for his private purposes.

Appellant's Arguments

  • As to Matmatangadhwaja: the appellant contended he was entitled to a decree for sale of the whole mortgaged property, which implies the minor son should not have been relieved from liability.
  • As to Hub Lal: the appellant contended that Hub Lal, the certified purchaser at the execution sale, was a benami purchaser who had bought on behalf of the mortgagor Garuruddhwaja Prasad Singh; therefore the fort should be treated as belonging beneficially to the mortgagor and be liable to sale under the plaintiff's mortgage. The appellant further urged that section 317 should be construed to permit a suit by a creditor of the alleged beneficial purchaser (i.e., read an exception into s. 317 to allow creditors to sue certified purchasers on the ground that the purchase was benami).

Respondent's Arguments (as reported)

  • For Matmatangadhwaja: the Subordinate Judge's view effectively shielded the minor, on the grounds reported, from liability for the father's debts (though no counsel represented that respondent on the appeal hearing).
  • For Hub Lal: it was contended on behalf of the certified purchaser that s. 317 of the Code of Civil Procedure must be given its plain and literal meaning: "No suit shall be maintained against the certified purchaser on the ground that the purchase was made on behalf of any other person," and thus the appellant's suit against Hub Lal on the ground that the purchase was benami is barred by s. 317.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Badri Prasad v. Modan Lal Establishes that a son can be sued jointly with his father to recover a debt contracted by the father unless the debt was contracted for purposes that would exonerate the son from the pious duty of paying his father's debt. The Court relied on this decision to hold that the minor son could be made liable; the appeal was allowed as to Matmatangadhwaja and a decree was given against him in favour of the appellant.
Delhi and London Bank v. Chaudhri Partab Bhaskar Judge Knox refused to import extrinsic matter to limit or qualify the words of s. 317 beyond those in the section itself; limited the section to suits against a certified purchaser based on the ground that the purchase was made on behalf of another. The Court expressed concurrence with Knox's analysis and relied on it in construing s. 317 to bar suits against certified purchasers on the ground of benami purchase.
Mussumat Buhuns Kowur v. Lalla Buhooree Lall On the section corresponding to s. 317: the section is confined to a suit against a certified purchaser and does not imply more than is expressed. The Court cited this observation to support the construction that s. 317's prohibition is to be enforced as written and that suits by certified purchasers (seeking declarations) are not covered by the prohibition.
Uncovenanted Service Bank v. Abdul Bari Example of a suit in which the certified purchaser was the plaintiff seeking a declaration that his purchase was not benami; such suits are not forbidden by s. 317. The Court noted that decisions in which the certified purchaser was the plaintiff do not decide the present question and are not within s. 317's prohibition.
Rama Kurup v. Sri Devi Held by the High Court of Madras that s. 317 must be enforced according to its clear meaning even if that allows a fraud to prevail; the object of the section is to put a stop to benami purchases at execution sales and must be applied without regard to consequences. The Court relied on this authority in supporting the strict literal construction of s. 317 which bars suits against certified purchasers on the ground of benami purchase.
Williamson v. Norris Statement that it is fallacious to deny the plain and obvious meaning of words because an enactment may have an effect not contemplated when passed. The Court quoted this passage to reinforce the principle that the plain meaning of s. 317 should not be qualified because of undesirable consequences.

Court's Reasoning and Analysis

The Court addressed the two central issues in turn.

  1. Liability of the minor son (Matmatangadhwaja Prasad Singh)
    • The Court found the Subordinate Judge's reasons—general allegations that the father was immoral and extravagant and that he spent the debt on private purposes—insufficient to exonerate the son from the "pious duty" of paying his father's debt.
    • The Court noted that had the debt been shown to have been contracted for immoral purposes and the lender aware of that purpose, the son might be exonerated; but there was no evidence of that. The schedule details did not support such a claim.
    • Relying on the settled law in Badri Prasad v. Modan Lal, the Court held that the son could be sued jointly with his father unless the debt was of a nature to exonerate him. Accordingly, the appeal was allowed as to Matmatangadhwaja and a decree was given against him in favour of the appellant.
  2. Whether a suit could be maintained against Hub Lal (certified purchaser) on the ground the purchase was benami
    • Factual context: Hub Lal purchased the mortgagor's interest in the fort for Rs. 2,901 on 10 May 1894 in execution of Madhri Saran's decree. At the time of the mortgage (Feb 1893) the fort was under attachment in execution of that decree; the earlier mortgage to the plaintiff was therefore void to the extent provided for by s. 276 of the Code of Civil Procedure.
    • The appellant asserted the purchase by Hub Lal was benami for Garuruddhwaja and thus the mortgagor was the beneficial owner; the plaint and memorandum, however, did not expressly ask for a declaration to that effect, although the plaint contained a peculiar prayer suggesting a way of obtaining sale if the sale were not held fictitious.
    • The Court focused on the plain language of section 317, which provides that "No suit shall be maintained against the certified purchaser on the ground that the purchase was made on behalf of any other person." The Court interpreted "no suit shall be maintained" to mean no suit shall be instituted and if instituted shall fail.
    • The appellant urged that an exception should be read into s. 317 to allow a suit by a creditor of the alleged beneficial purchaser. The Court rejected this, holding that the plain meaning must be given effect; if the Legislature intended an exception for creditors it would have expressed it. Reading such an exception would mean the opening of the prohibition to many other classes (vendees, mortgagees, subsequent creditors, etc.) and would allow circumvention of s. 317.
    • The Court agreed with the recent exhaustive consideration by Judge Knox in Delhi and London Bank v. Chaudhri Partab Bhaskar and relied on authorities (including Rama Kurup v. Sri Devi and Mussumat Buhuns Kowur v. Lalla Buhooree Lall) to hold that s. 317's prohibition applies as written and bars suits against certified purchasers on the ground of benami purchase.
    • Consequently, the Court concluded the suit could not be maintained against Hub Lal on the ground alleged and dismissed the appeal as regards Hub Lal. Because of that conclusion, the Court declined to decide the factual question whether Hub Lal's purchase was actually benami (observing that Hub Lal's own evidence seemed to settle the question but that decision on the fact was unnecessary).

Holding and Implications

Decree modified.

The Court's dispositive rulings were:

  • The appeal is allowed as regards the respondent Matmatangadhwaja Prasad Singh (the minor). A decree is given against him in favour of the appellant; the appeal is allowed with costs as against this respondent.
  • The appeal is dismissed as regards the respondent Hub Lal (the certified purchaser). The suit against Hub Lal, being a suit on the ground that the purchase was benami, is barred by section 317 of the Code of Civil Procedure; the appeal is dismissed with costs as against Hub Lal.

Direct effect on the parties: the plaintiff can obtain relief against the minor son's interest in the mortgaged property (subject to the decree given), but cannot reach the fort purchased by Hub Lal under the theory advanced in the plaint because s. 317 bars suits of the kind instituted against a certified purchaser. The Court did not set a new rule of law beyond applying existing authorities; it emphasised a literal construction of s. 317 and indicated that any corrective change permitting suits by creditors or others must be effected by legislation rather than judicial construction.

Order: Decree modified. Appeal allowed with costs as against Matmatangadhwaja Prasad Singh; appeal dismissed with costs as against Hub Lal.

    Kishan Lal v. Garuruddhwaja Prasad Singh

    Burkitt, J.:— This is an appeal by the plaintiff from a decree of the Subordinate Judge of Aligarh, partly dismissing the plaintiff's suit. The suit was one for sale on a mortgage of certain property executed by the defendant Garuruddhwaja Prasad Singh on February 28th, 1893. Among the mortgaged properties, in addition to landed property, was one-half of a fort or kila at Baswan, which had belonged to the mortgagor. This fort had, previous to suit, been sold in execution of a money decree held by one Madhri Saran, and had been purchased by the defendant, Hub Lal. The Subordinate Judge has given the plaintiff a decree against the mortgagor, but dismissed the suit as against the mortgagor's minor son, Matmatangadhwaja Prasad Singh, and as against Hub Lal. The result of this decree is that in execution the plaintiff can proceed only against the father's (the mortgagor's) interest (presumably one-half) in the mortgaged property, other than the fort, and that the latter cannot be touched at all.

    The plaintiff now appeals, contending that be is entitled to a decree for sale of the whole property mortgaged to him without any exception. There are thus two matters to be considered in this appeal. The first is concerned with the dismissal of the [240] suit against the respondent, Matmatanga Prasad, the minor son of the mortgagor. We regret that this respondent has not been represented by counsel at the hearing of the appeal. The grounds on which the lower Court dismissed the suit against him are “that Garuruddhwaja is an extremely immoral and extravagant man, and that be has wasted property worth lakhs of rupees in a very short time. Therefore the sons and grandsous of such a man should not be held liable for any debt incurred by him.” Further, the Subordinate Judge says that “whatever portion of the debt passed into Garuruddhwaja's hand was, like other debts, spent by him for his own private purposes.”

    These reasons are not, in our opinion, sufficient to exonerate the son from the pious duty of paying his father's debt. Had it been proved that the debt had been contracted for immoral purposes and that the person who advanced the money was aware of the purpose for which it was being borrowed, the son would not have been liable. There is, however, not a scrap of evidence to show that the debt which formed the consideration for the bond in suit was contracted for any such purpose. Indeed the details in the schedule show that such was not the case. A mere general allegation that the father led an extravagant, immoral, and licentious life would, even if proved, not be sufficient to relieve the son. It is now settled law in this Court since the case of Badri Prasad v. Modan Lal, that a son can be sued jointly with his father to recover a debt contracted by the father if the debt had not been contracted for purposes such as would exonerate the son from the pious duty of paying his father's debt. We are therefore constrained to allow this appeal as far as the respondent Matmatangadhwaja Prasad Singh is concerned, and to give a decree against him in favour of the appellant.

    We have next to deal with the second portion of this appeal, namely, the case of the respondent, Hub Lal, the purchaser of the mortgagor's interest in the fort at Baswan. That interest was purchased by Hub Lal for Rs. 2,901 on May 10th, 1894, in execution [241] of a decree held by one Madhri Saran, and was under attachment by the Court in execution of the latter decree when it was mortgaged to the plaintiff-appellant in February, 1893. That mortgage, therefore was void to the extent provided for by s. 276 of the Cods of Civil Procedure. The contention for the appellant is that at the auction sale the real beneficial purchaser was not the respondent, Hub Lal, who is the certified purchaser, and that the latter purchased benami for the judgment-debtor Garuruddhwaja Prasad Singh, appellant's mortgagor. It was thereupon contended for the appellant that his mortgagor is the real beneficial owner of the fort, and that the latter was liable to be taken in execution to satisfy any decree which appellant might obtain on his mortgage. It is to be noticed that the plaint does not contain any prayer asking for a declaration that the mortgagor, Garuruddhwaja Prasad, was the bedeficial owner, and Hub Lal a fictitious purchaser. But the plaint contained a prayer which is certainly peculiar, bearing in mind the fact that this Court had refused to set aside the sale to Hub Lal. It asked that if the sale to him were found not to be fictitious, the Court should direct him to receive back the purchase-money he had paid, and that on that being done the Court should direct the sale of the fort with the rest of the mortgaged property. This rather extraordinary request does not seem to have been pressed in the Court below, and is not repeated in the memorandum of appeal. The memorandum of appeal, however, contends that it has been established that Hub Lal had purchased benami for Garuruddhwaja Prasad, but like the plaint, it abstains from asking that a declaration to that effect should be made. The appeal, as regards Hub Lal, was, however, fought before us by counsel on both sides as if the object of the suit, as far as the appellant was concerned, was to obtain a declaration that the plaintiff's mortgagor, Garuruddhwaja Prasad was the beneficial purchaser and an order thereupon that the fort should be sold in satisfaction of the mortgage of February, 1893. Such a construction can certainly be put on the plaint, as otherwise the allegation of the benami purchase would be superfluous.

    [242] It being then admitted for the appellant that his suit, as far as Hub Lal, the certified purchaser is concerned, is a suit against Hub Lal, instituted on the ground that his purchase was made on behalf of the appellant's debtor Garuruddhwaja Prasad, the question arises whether such a suit can be maintained, or whether it is forbidden by s. 317 of the Code of Civil Procedure. The words of that section are:—“No suit shall be maintained against the certified purchaser on the ground that the purchase was made on behalf of any other person.” The opening words “no suit shall be maintained” mean, we have no doubt, “no suit shall be instituted, and if such a suit be instituted it shall fail.” That is the only meaning we can attach to the word “maintained.” We have beard very able and learned arguments from counsel on either side as to the construction to be put on this s. 317. For the respondent it was contended that the section means what it says, neither more or less, and that it forbids the institution of any suit by any plaintiff against the certified purchaser if the object of the suit is to have it declared that the purchase was made on behalf of any person other than the certified purchaser. For the appellant, on the other hand, it was argued that we should not put on the section its literal and grammatical meaning, that we should import into it an exception which finds no place in it, and that the section should be construed so as to permit of a suit by a creditor of the alleged beneficial purchaser, by adding after “any other person” the words “except it be a suit by a creditor of such other person.”

    We fail to see why we should put such a restrictive interpretation on the very wide language of the section, and why we should say that the words “no suit” do not really mean “no suit” in their plain grammatical sense, and do mean “no suit excepting a suit by a creditor.” Had the Legislature intended that a certain class of suits should he excepted from the sweeping prohibition laid down in s. 317 it would, we think, certainly have altered the wording accordingly and would [243] not have left it to the ingenuity of Judges to discover that it really did not mean what it purported to say in the plainest language.

    The object of the section was no doubt to prevent judgment-debtors from purchasing their own property at auction in the name of another, and for that purpose the section provided that no suit shall lie against the certified purchaser on the ground that the purchase was benami. The section does not designate any particular person or class of persons as being the person who shall not sue. It confines itself to indicating the person who shall not be impleaded as defendant in a suit institnted on the specific ground mentioned. In that way it prevents judgment-debtors who have purchased in the names of other persons from suing the certified purchasers for possession; that is to say, it permits the benami certified purchaser to reap the benefit of his fraud by barring the real purchaser from suing him, and if it also prevents the creditors of such judgment-debtors from suing the certified purchaser, it may well be that the evil is not unequally balanced. The cases are by no means few in which the benami certified purchaser defies all attempts by the real purchaser to get possession and holds on to the property. According to the construction for which appellant contends, such a certified purchaser could be sued by the creditors of the judgment-debtor, though not by the judgment-debtor, the beneficial purchaser. It appears to us that if one infringement of the hard-and-fast rule laid down by s. 317 be allowed in the case of a creditor of judgment-debtor it will be impossible to prevent others. Why should not the same privilege be allowed to a person who had purchased from the judgment-debtor the property fraudulently withheld benami by the certified purchaser? Similarly, why should not a mortgagee holding a mortgage executed by the alleged beneficiary after the alleged fictitious sale, be allowed to sue such certified purchaser for sale on his mortgage? Other cases might be put, such as cases of gift, devise by will, and the like. It seems to us that if the creditor of a judgment-debtor be not debarred [244] by s. 317 from suing the certified purchaser on the ground mentioned in that section, it will be impossible to exclude many other classes of plaintiffs from the same privilege. It is objected that the classes of persons mentioned above derived title from the judgment-debtor. But surely so does the appellant in the present case. How does his title differ from that held by a vendee or mortgagee to whom the alleged beneficiary had sold or mortgaged the property after the alleged fictitious sale? Ex hypothesi the property really belongs to the judgment-debtor to deal with as he pleases. If then the benami certified purchaser set him at defiance, we fail to see how on the construction of s. 317 for which the appellant contends, a suit by such a vendee or mortgagee could be held to be barred by that section, or even a suit by the holder of a simple money decree for money borrowed subsequent to the date of the alleged fictitious sale, and in this way the alleged real purchaser would be allowed to maintain that suit indirectly through a friendly party which the law forbids him to maintain directly. We cannot see that the fact that these now obligations came into existence subsequently to the alleged fictitious sale has any bearing on the question. On the above considerations we are of opinion that if we accept appellant's contention we must read the opening words of s. 317 as if they ran “no suit by a judgment-debtor shall be maintained” and must hold that with one exception any person may institute a suit against a certified purchaser “on the ground that the purchase was made on behalf of any other person.” We are not prepared to adopt that conclusion. If the construction we put on this section is one which in some cases enables fraudulent judgment-debtors to defraud their creditors the remedy is, we think, to be sought for in legislation, and not by putting a constrained meaning on words which are plain and unmistakeable.

    The question of the construction to put on s. 317 of Code of Civil Procedure has recently been most exhaustively considered by our brother Knox in the case of The Delhi and London Bank [245] v. Chaudhri Partab Bhaskar. The decision at which that learned Judge arrived was that he was “unprepared to import extrinsic matter which will limit or qualify the same words beyond those which are to be found in the section itself, and which limit the suit to a suit (1) brought against a certified purchaser, and (2) based upon the ground that the purchase was made on behalf of a person other than the certified purchaser.” He also examined the long array of decisions which at first sight appear to support the construction of s. 317 for which the appellant here contends, and showed conclusively that nearly all of them were suits in which the ostensible auction-purchaser, the certified purchaser, was the plaintiff, and not suits against such a purchaser. There can be no doubt now that the maintenance of the former class of suits is not forbidden by s. 317, for, to use the words of their Lordships of the Privy Council in the case of Mussumat Buhuns Kowur v. Lalla Buhooree Lall (on the section corresponding to s. 317 of the present Code)— “there is nothing from which it can be inferred that more is meant than is expressed. It is Confined to a suit against a certified purchaser and to a specific direction as to what should be done with it, etc.” In suits in which the certified purchaser is the plaintiff the question which has been discussed in this appeal could not arise, and any decision on it would be obiter and not binding on us. The case of the Uncovenanted Service Bank v. Abdul Bari, to which our brother Knox did not refer, was a suit in which the certified purchaser was plaintiff, and in which he asked for a declaration that his purchase was not benami. Such a suit clearly is not within the prohibition contained in s. 317.

    On the whole, we have come to the conclusion, for the reasons given above, that this suit, so far as it concerns the respondent Hub Lal, being a suit against the certified purchaser on the ground that the purchase was made on behalf of the respondent, [246] Garuruddhwaja Prasad Singh, cannot be maintained. We fully concur in the opinion expressed by our brother Knox in the case cited above, and we are supported in our conclusion by the High Court of Madras in the case of Rama Kurup v. Sri Devi, in which the Chief Justice and Mr. Justice Handly, dissenting from one of the Calcutta decisions cited by our brother Knox in the case mentioned above, say that decision “seems to us to contravene the clear meaning of the section (317). It is not, in our opinion, a sufficient reason for not carrying out the express terms of the section, that to do so would be to allow a fraud to be perpetrated. The person in whose name a purchase has been made for the benefit of, and with the money of another, of course commits a fraud in claiming that property as his own. Nevertheless the law says that a suit shall not be maintained against him on the around that the purchase was benami, and thus provides that this fraud shall prevail. The object of the section was, we consider, to put a stop to benami purchases at execution sales, and this object can only be carried out by enforcing it in all cases without regard to consequences.” The above observations have our fullest concurrence, and to them we would add the following from a judgment of Mr. Justice Wills in Williamson v. Norris:— “To argue that, because an enactment may have an effect which was not thought of when it was passed, it cannot have the plain and obvious meaning of the words used is a fallacy, though a common one.”

    The appeal therefore, as far as Hub Lal is concerned, fails and must be dismissed. It is therefore unnecessary for us to discuss the question of fact as to whether Hub Lal's purchase was or was not benami. We will only remark that the evidence of Hub Lal himself, whom the plaintiff-appellant called as his witness, seems to settle the question.

    We allow this appeal with costs as against the respondent Matmatanga Prasad, and we dismiss the appeal with costs as against the respondent, Hub Lal.

    Decree modified.

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    Kishan Lal v. Garuruddhwaja Prasad Singh
    (Feb 18, 1899)