Dawson-Miller, C.J:— This is an appeal by some of the defendants in a mortgage suit from a decision of the Subordinate Judge of Gaya, dated 29th May, 1917. The plaintiff Ramyad Singh is the mortgagee. The other plaintiffs are members of his family and joint with him in estate. The mortgage bond was dated 23rd December, 1907, corresponding to the 4th Poos 1315 Fasli, and was executed in favour of the mortgagee by Sheodani Singh, defendant 1, and his father Prayag Singh, since deceased. The other three defendants are Ram Bilas Singh and Brij Bilas Singh the two sons of Sheodani Singh and Shamrup Singh, a subsequent mortgagee. The latter, beyond filing a written statement, has taken no active part in the proceedings. The mortgage was executed to secure an advance of Rs. 3,000 with compound interest at the rate of Re. 1-1-0 per cent. per mensem with yearly rests. The suit was instituted on 27th May, 1915, the amount due under the bond for principal and interest being then Rupees 8,269-3-9. The property mortgaged was a. 4-annas share in two mauzas named Doranwan and Adopur which formed part of the joint family property of the mortgagors and their descendants.
2. Sheodani, the surviving mortgagor did not appear or file a written statement. As the due date for repayment of the loan was 11th December, 1908, corresponding to the 4th Poos 1316 Fasli, a personal claim against him on the bond was barred by limitation before the suit was instituted. His sons, defendants 2 and 3, have defended the suit and plead that the mortgage was not justified by legal necessity and conferred no benefit upon them and the it could not be enforced against the family property. They further object to the claim for compound interest on the grounds that it is a penalty and is excessive.
3. The Subordinate Judge before whom the case came for trial found in favour of the plaintiffs and passed a mortgage decree in the usual form for the amount claimed against the property hypothecated. From that decision defendants 2 and 3 have appealed. The main question for determination is whether in the circumstances disclosed, Prayag Singh and his son Sheodani, who owing to the former's age and infirmity was the de facto manager of the family when the mortgage was executed, were authorized to hypothecate the joint family property. It is proved that the money was borrowed for the purpose of purchasing a share in zarpeshgi lease of three villages in which the family already had an interest and of which they are now by a subsequent purchase, the ijaradars of the entire 16 annas share. The purchase price which the mortgagors had to pay for the interest in the ijara was Rupees 2,750, and possibly, although there is no evidence about it, there were incidental expenses connected with the purchase which, if the loan can be justified at all on the ground of legal necessity or benefit to the family, might justify the borrowing of an additional Rs. 250. The evidence given on behalf of the plaintiffs proves little more than that the loan was made to enable the defendant Sheodani and his father to purchase the share of the ijara right in the village mentioned. The plaintiff Ramyad Singh who gave evidence further states that the defendants who are joint are deriving benefit from the purchased property and from the context it is clear that by this he means that not only Sheodani but also his sons are participating in the rents and profits of the property. To what extent if any the family was benefited by the transaction, there is nothing to show. The price paid for their share in the ijara was, as already stated, Rupees 2,750. Their proportion of the zarpeshgi money which they will be entitled to upon redemption is not very clear but it was not more than Rs. 2,341. What the net profits were after paying the outgoings is not in evidence. The gross rental of the 4 annas share in the two villages mortgaged was Rs. 344 and the first year's interest on the loan was Rs. 382 which as no interest was 4 paid rapidly increased at the compound rate. It may be regarded as almost a universal practice amongst landowners of class to which the defendants belong in this province to neglect to pay interest on a bond until compelled by legal process to do so, and in estimating the obligation contracted by the mortgagor it may be taken as almost axiomatic that in five or six years' time the liability at the usual rate of interest charged will be double the amount borrowed. The plaintiffs admittedly did not inquire either as to the benefit which might accrue to the family from the transaction or whether the family resources were such at that time as to enable them to pay for the purchased property without having recourse to borrowing. The defendant Ram Bilas stated that the income of the family was Rs. 4,000 from milkiat and Rs. 1,000 from khas lands per annum and that their expenses were about Rs. 2,000. He further says that there was no necessity to borrow at the time when the bond was executed. No accounts were however produced by anybody and the learned Judge was not prepared to accept his evidence. In this respect I agree with him. I think the defendants' evidence was lacking in candour and not very reliable. But this fact in itself is not sufficient to entitle the plaintiffs to judgment. Even assuming that the mortgagors could not raise the money without recourse to a loan this would not in itself be sufficient to justify the mortgage.
4. The powers of a manager of a joint Mitakshara family are perhaps nowhere more clearly and comprehensively laid down than in the of quoted passage of Knight Bruce, L.J's judgment delivered in 1856 in the case of Hunoomanpersaud Panday v. Mt. Babooee Munraj Koonweree(1):
“The power of the manager for an infant heir to charge an estate not his own is under the Hindu law, a limited and qualified power. It can only be exercised rightly in a case of need, or for the benefit of the estate. But where in the particular instance, the charge is one that a prudent owner would make in order to benefit the estate the bona fide lender is not affected by the precedent mismanagement of the estate. The actual pressure on the estate, the danger to be averted or the benefit to be conferred upon it in the particular instance is the thing to be regarded.”
5. With regard to the obligation cast upon the lender the learned Lord Justice says in a later passage:
“Their Lordships think that the lender is bound to inquire into the necessities for the loan and to satisfy himself as well as he can with reference to the parties with whom he is dealing that the manager is acting in the particular instance for the benefit of the estate.”
6. The passage quoted although it in terms applies only to the powers of the manager of an infant to charge his ward's estate has been regarded as applicable to the karta of a Hindu family to deal with the joint family property.
7. Actual compelling necessity is not the sole test of the validity of a conveyance or mortgage of the family estate by the manager acting without the express consent of the other members. If without proving actual necessity in the ordinary sense of the term, it can be shown that the transaction was one which was clearly beneficial to the interests of the family as a whole, the transaction would be within the manager's authority; and the consent of the other members would be implied, although not expressly given. In either case however the onus is upon the alienee or mortgagee to prove that the transaction was for the interest of the family as being either necessary or beneficial.
8. It is not desirable to lay down any general proposition which would limit and define the various cases which might be classed under the term beneficial, as above used. It is clear however that all transactions of a purely speculative nature would properly be excluded. On the other hand, the sale of unprofitable or waste lands bringing little or no return, in order to invest the proceeds in lands more adapted to the requirements of the family although of smaller area, might in many cases be just as clearly permissible. Each case must be examined in the light of the facts proved and the surrounding circumstances. The difficulty which presents itself in the present case is that there is practically no evidence from which a definite conclusion can be arrived at as to the benefit, if any, which accrued to the joint family from the mortgage transaction in question. The mere fact that money is borrowed to enable the manager to purchase immovable property on behalf of the family does not in itself create any presumption that the transaction was beneficial to the family so as to authorize the manager to hypothecate existing family property by way of security for the loan. Some necessity for the transaction or some benefit resulting to the family therefrom must in all such cases be shown. In Ganesa Aiyar v. Amirthasami Odayar(2) it is laid down by the Madras High Court that the sale or mortgage of ancestral lands for the purpose of purchasing other lands can only be justified if there is a clear benefit to the family. In Chiranji Lal v. Ganga Ram(3), where the manager of the joint Hindu family sold a house belonging to the family and obtained in return a usufructuary mortgage over a shop, the High Court at Allahabad at the instance of the sons of the mortgagor set aside the sale.
“We do not think,” said the learned Judges who decided that case, “that the mere fact of a mortgage having been executed which would enable the vendor, the father of the plaintiffs, to remain in possession of the mortgaged shop and enjoy the usufruct, can necessarily be deemed to be a benefit to the family.”
9. From the evidence on the record in the present case I am unable to find that any benefit to the joint family arising from the mortgage has been proved. With respect to the learned Judge, I think he approached the question for decision from a wrong standpoint. Because the sum borrowed was spent in acquiring the ijara property and because all the defendants enjoyed the produce of that property, he considered that they were benefited thereby and that the mortgage was therefore authorized. He did not consider whether the mortgage could be justified on the ground that the transaction as a whole was beneficial to the interests of the family. I think on the evidence before him he could hardly have decided that it was. It was argued before us, as apparently it had been argued before the learned Judge, that as the sons of Sheodani had been instrumental in collecting the profits or the ijava property and had apparently shared in the enjoyment of those profits, they should be taken as having assented to or ratified the mortgage contract. I am quite unable to accept this view. So to hold would be tantamount to deciding that in all cases like the present every member of the family, who did not expressly repudiate all interest or share in the proceeds of the property purchased with borrowed money, must be taken to have assented to the loan and the mortgage executed to secure it, although they were not parties to the mortgage. It is not suggested how they were to act or in what manner they were to express their dissent from the transaction. Until partition they could not claim any definite share in the proceeds of the ijara, nor does it appear that any such share was allotted to them or to what extent, if any, they derived any benefit from the transaction.
10. It was next contended that whether or not the mortgage was a beneficial one was a matter specially within the knowledge of the defendants and that tbs onus of proof was thereby shifted to them. The case of Murugesam Pillai v. Manickavasaka Desika Gnana Sambanda Pandara Sannadhi(4) was referred to. That case was one in which the question for determination was the validity of a mortgage granted by the head of a religious institution. It was contended that there was no legal necessity for the mortgage. The transaction which had to be inquired into had taken place more than 25 years before the institution of the suit. The lender and the borrower were both dead. The transaction had been recognized by several successors-in-office of the original borrower, and the only satisfactory evidence obtainable on the point at issue was that of the account books of the institution which were not produced, although they were in the defendant's possession. There was some evidence that the loan was made for the purpose of the mutt, but none to the contrary and in the absence of the documentary evidence in the defendant's possession which would have thrown light on the question, their Lordships considered themselves justified in drawing an inference adverse to the defendant. In the present case there is nothing to indicate that the question of the benefit or otherwise of the transaction is a matter specially within the knowledge of the defendants. The two principal parties to the mortgage are alive. It was executed some eight or nine years before the institution of the suit. There would have been no difficulty in producing on behalf of the plaintiffs the evidence of tenants and others to show what the actual income of the property purchased was. The plaintiffs themselves also had an interest in one at least of the villages comprised in the ijara. It is true that the books of the defendants might have given the information required by the plaintiffs in a compendious form, but the plaintiffs cannot on that account, where no attempt has been made to obtain the necessary evidence which was available from other sources and where no application for production of the books has been made, get rid of the onus, which lies upon them. Where it is open to both parties to produce evidence concerning the existence or non-existence of a particular fact, the party upon whom the burden of proving the fact lies, does not discharge that burden by showing that the other side could equally well have proved the contrary.
11. It was next contended that, even if the mortgage was not valid as against the interest of the sons of Sheodani, the plaintiffs were entitled to a decree against Sheodani's share in the mortgaged property. This question was discussed at length in the judgment of this Court in the recent case of Amardayal Singh v. Har Pershad Sahu(5) and decided contrary to the contention of the mortgagee. The principle applied there, which follows the most recent pronouncements of the Judicial Committee, governs the facts of the present case. It is sufficient to refer to the case of Narain Prasad v. Sarnam Singh(6), where it was determined that
“a mortgage of the joint family property of a Mitakshara family by its karta, unless necessity or an antecedent debt is proved, is void, the transaction itself gives to the mortgagee no right against the karta's interest in the joint family property.”
12. This decision of the Privy Council has been referred to in two subsequent cases which came before their Lordships' Board as finally determining the law on this subject: see Anant Ram v. Collector of Etah(7) and Mannu Lal v. Karu Singh(8) decided on 29th July, 1919. It is true that in certain cases, where the property has already passed into the hands of the mortgagee and special circumstances are proved giving rise to an equity in his favour, the Court, whilst setting aside the transfer at the instance of those members of the family who are not bound by the transaction, may do so upon terms that the property be restored in definite shares with a lien upon the mortgagor's share in favour of the mortgagee. It is true also that special considerations arise in cases where the property has been sold or attached in execution of a decree at the instance of the mortgagee. The present case however is not one of such a nature and in my opinion it is governed by the principles laid down by their Lordships in Narain Prasad v. Sarnam Singh.
13. Lastly it was contended that Section 65 of the Contract Act applied, if the Court should consider that the claim could not be enforced on the ground that it was void. In so far as the contract imposed a personal liability upon the mortgagor it was valid and subsisting, but it is no longer enforceable against the mortgagor personally by reason of the operation of the Limitation Act. Such a case does not come within the provisions of S. 65. If the plaintiff has lost his right to sue, it is not because the contract has become void but because through his own laches it has become unenforceable. Moreover as to the claim against the property, the section has no operation in a case where the parties must be deemed to have known that the contract was one which could not bind it. In my opinion this appeal should be allowed, the judgment and decree of the Subordinate Judge should be reversed and the suit should be dismissed with costs here and in the Court below.
14. Mullick, J.:— I agree.
V.S/R.K
15. Appeal allowed.