LORD BUCKMASTER, LORD SALVESEN, SIR JOHN EDGE, SIR LAWRENCE JENKINS
body1922
DigiLaw.ai
Judgement Appeal (No. 98 of 1921) from a judgment and decree of the Court of the Judicial Commissioner (March 20, 1918) affirming a judgment of the Subordinate Judge of Bara Banki. The appellant instituted a suit to recover from the respondent, with mesne profits, a half of an Oudh taluqdari estate, under a deed of sale dated January 2, 1880, by which the respondent purported to sell to the appellants deceased husband; alternatively the appellant claimed by her plaint to recover Rs.25,000, the purchase money, with interest. The circumstances in which the deed of sale was entered into appear from the judgment of the Judicial Committee. The deed stated that the executant, the present respondent, had borrowed a further Rs.5000 from Rachpal Singh, making Rs.25,000 in all, and that in lieu of that entire amount the executant did "thereby absolutely sell" half of all the villages, detailed below, in the taluqa; it concluded as follows " Therefore I do hereby declare and put in writing, that after the death of the said ladies " (i.e., the widows of the last holder) " or whenever I may get possession over the said taluqa, I shall put the vendee immediately in proprietary possession of half the villages of the said taluqa as vendee thereof. I shall also get the name of the said vendee recorded in the decree relating to the said taluqa passed in my favour by the Civil Court, on October 22, 1878, to the extent of a moiety of the entire taluqa, that in case I delay the same the said vendee will be at liberty, on the basis of this deed, to move the Court and take proprietary possession as purchaser of the said villages and to get the mutation of names effected by a competent Court in his favour." The Subordinate Judge held that the respondent at the date of the deed had merely a right of expectancy in the estate, and that no property passed under it. He held that the suit to recover the money was barred by the Indian Limitation Act, 1908, Sch. I,, art. 62 ; in his opinion the limitation period ran from the date of the payment of the purchase money. He accordingly dismissed the suit. An appeal to the Court of the Judicial Commissioners was dismissed.
He held that the suit to recover the money was barred by the Indian Limitation Act, 1908, Sch. I,, art. 62 ; in his opinion the limitation period ran from the date of the payment of the purchase money. He accordingly dismissed the suit. An appeal to the Court of the Judicial Commissioners was dismissed. The learned Judicial Commissioners rejected a contention that having regard to the Oudh Estates Act, 1869, the respondent had a vested interest in the estate at the date of the sale deed; they agreed with the trial judge that he had only an expectancy of inheriting. They pointed out that the Transfer of Property Act, 1882, s. 6, did not apply as the deed was executed in 1880, but that it had frequently been decided, apart from that section, that a reversionary heir under Hindu law cannot sell or mortgage his expectancy. If there was any agreement it was void under s. 23 of the Indian Contract Act, 1872; consequently the principles of equity could not be invoked to give effect to it. They were of opinion that the money claim was barred by limitation, the period running from the execution of the deed at latest, whether under art. 62 or art. 97 of Sch. I. of the Indian Limitation Act. 1922. Oct. 26, 27. Sir George Lawndes K.C. and Dube for the appellant. At the date of the sale the respondent had more than a mere expectancy. The succession was governed by Act I. of 1869, not by ordinary law. By the decree made in 1873 he had been declared "heir," and under that decree he had a vested interest. When that decree was made it had not been decided that succession under Act I. of 1869 opens on the death of-the widow see Sykes Compendium, p.273. It was a reasonable view to take in 1878, that having regard to the definition of " heir " in s. 2 of the Act, and to s. 22, sub-ss. 6, 7, a widow took a life estate while the estate vested in the heir. If the respondent had a vested interest in 1880 the observation in Sham Sunder Lal v. Achhan Kunwar (( 1898) L. R. 25 I. A. 183, 189.), that an expectancy cannot be bound under Hindu law, is not relevant. [Reference was also made to Brahmadeo Narayan v. Harjan Singh.
If the respondent had a vested interest in 1880 the observation in Sham Sunder Lal v. Achhan Kunwar (( 1898) L. R. 25 I. A. 183, 189.), that an expectancy cannot be bound under Hindu law, is not relevant. [Reference was also made to Brahmadeo Narayan v. Harjan Singh. (( 1898) I. L. R. 25 C. 778.)] But even if the sale was ineffectual, there was a valid agreement. Upon the respondent obtaining possession he was bound to carry out his contract, under the principle of feeding the grant by estoppel. In Tilakdhari Lal v. Khedan Lal (( 1920) L. R. 47 I. A. 239, 254.) the Board left open the question whether that principle applies in India; it is however embodied in the Transfer of Property Act, 1882, s. 46, and the Specific Relief Act, 1877, s. 18, and its full application as a principle of law in India therefore cannot be excluded. The Transfer of Property Act does not prohibit an agreement to sell a reversionary right, it merely precludes a transfer. The sale was of property to which the vendor had an "imperfect title"; and he was bound therefore under s. 18 of the Specific Relief Act, 1877. to make good the interest sold. In any event the appellant is entitled, under s. 65 of the Indian Contract Act, to recover the money advanced, on the basis that the agreement was "discovered to be void" Basso Kuar v. Dhuru Singh. (( 1888) L. R. 15 I. A. 211.) As in that case, the suit is governed as to limitation by art. 97 under the Limitation Act; the period runs from not earlier than the commencement of this suit. De Gruyther K.C., Parikh, and C. S. Chaudhuri for the respondent. Apart from s. 6 of the Transfer of Property Act, a sale of a reversionary right is ineffectual in Hindu law Sham Sunder Lal v. Achhan Kunwar (L. R. 25 I. A. 183.); Surusuddin v. Abdul Hosein. (( 1906) I. L. R. 31 B. 165.) The decree of 1873 could not give the appellants husband greater rights than he possessed apart from it.
(( 1906) I. L. R. 31 B. 165.) The decree of 1873 could not give the appellants husband greater rights than he possessed apart from it. There was no erroneous representation as to the vendors interest such as would give rise to rights under s. 43 of the Transfer of Property Act, 1882 ; nor was it a case of a vendor having only an imperfect title so as to render s. 18 of the Specific Relief Act, 1877, applicable. The appellant has no rights under s. 65 of the Indian Contract Act, 1872. That section does not relate to an agreement which was void in law, as this was, when it was made; it relates only to one which is found to be unenforceable owing to the discovery of some fact; for instance under s. 20, by it being discovered that there was a common mistake of fact. In any case art. 62 in the Limitation Act applies, and time ran from the payment of the money Hanuman Kamut v. Hanuman Mandar. (( 1891) L. R. 18 I. A. 158, 164.) Sir George Lowndes K.C. in reply. Sect. 65 of the Indian Contract Act, 1872, applies to an agreement which was void when made but which the parties did not know to be void Gulabchand v. Fulbai (( 1909) I. L.R. 33 B. 411,418.); Jijibhai v. Nagji. (( 1909) 11 Bom. L. R. 693, 697.) The section is not in terms confined to a discovery of fact. The judgment of the Board in Basso Kuar v. Dhum Singh (L. R. 15 L A. 211, 219.) is conclusive that in this case art. 97 apply and time runs only from the discovery that the agreement was void. Nov. 28. The judgment of their Lordships was delivered by SIR LAWRENCE JENKINS. This is an appeal from a decree dated March 20, 1918, of the Court of the Judicial Commissioner of Oudh, which affirmed a decree dated August 3, 1915, of the Subordinate Judge of Bara Banki. The suit is for the possession of the villages specified in the plaint with an alternative prayer for the payment of money. Both the lower Courts have decided adversely, to the plaintiff on each of these claims, and the suit has been dismissed with costs. From this decision the present appeal has been preferred.
The suit is for the possession of the villages specified in the plaint with an alternative prayer for the payment of money. Both the lower Courts have decided adversely, to the plaintiff on each of these claims, and the suit has been dismissed with costs. From this decision the present appeal has been preferred. The plaintiffs claim to the villages rests on an instrument which purports to have been a transfer on sale executed on January 2. 1880, by the defendant Indar Bahadur Singh in favour of Rachpal Singh, the plaintiffs deceased husband. The villages were part of two taluqas in Oudh, known as Paska and Lilar, and owned by Thakur Naipal Singh, whose name was entered in list II. attached to the Oudh Estates, Act I. of 1869, as estates which, according to the custom of the family, ordinarily devolved upon a single heir. Thakur Naipal Singh died childless on October 28, 1873, leaving him surviving his two widows, Thakurain Iklas Kuar and Thakurain Choti. According to Hindu law, the defendant Indar Singh was the next reversioner. The widows set up a will as that of their deceased husband, and claimed that it empowered them to adopt. Indar Singh thereupon instituted a suit against them and the Court of Wards, who had taken over the estates, and, by the decree of the Deputy Commissioner of Bara Banki dated October 22, 1878, the alleged will was declared void and invalid, and Indar Singh was declared "entitled to succeed to Paska and Lilar estates on the death of the last surviving widow of the late Naipal Singh." It is the plaintiffs case that in 1878 her husband, Rachpal Singh, advanced Rs.20,000 for this litigation and other expenses to Indar Singh, who was a poor man, and that in 1880, on a further advance of Rs.5000, Indar Singh executed the instrument of transfer on which this suit is brought. Both Courts have held that the transfer was inoperative, as Indar Singh at its date had no interest capable of transfer but merely expectancy. It cannot be disputed that, according to the ordinary Hindu law, this is the true view, but the plaintiff, to escape from this predicament, contends that the rights of Indar Singh must be determined by reference to the provisions of the Oudh Estates Act and the declaration contained in the Deputy Commissioners decree.
It cannot be disputed that, according to the ordinary Hindu law, this is the true view, but the plaintiff, to escape from this predicament, contends that the rights of Indar Singh must be determined by reference to the provisions of the Oudh Estates Act and the declaration contained in the Deputy Commissioners decree. Whatever the view that may once have prevailed, it is now established that under the Oudh Estates Act the succession to collaterals opens on the death of the widow just as under the ordinary Hindu law, and it necessarily follows that in January, 1880, Indar Singh had no more than an expectancy, and so had no interest in the villages which he was competent to transfer or bind. Nor, in their Lordships opinion, was this position modified by the Deputy Commissioners decree. As the suit was constituted, the Deputy Commissioner could only have made a declaration binding on the widows and the Court of Wards, and it certainly was not within his competence to make a valid declaration that would create in Indar Singhs favour an interest in the villages that did not otherwise sexist. The claim for possession was, therefore, rightly rejected. And so it becomes necessary to consider the claim for payment of money. The amount demanded is Rs. 1,28,033-4-8, and this is made up of Rs.25,000 principal and Rs. 1,03,033-4-8 interest at Rs. 1 per cent, per month from January 2, 1880, to May 5, 1914. The payment of the Rs.25, 000 is established, and the defendant pleas that the instrument of January 2, 1880, was executed under undue influence and was extortionate have failed, but the claim for recovery of the money has been held to be barred by limitation. Before this Board, the claim has been based on s. 65 of the Contract Act. It is there provided that "when an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it." So framed, the plaintiffs claim to compensation rests, not on any principle or formula of English law, but on the words of this section, and it has to be seen whether the facts of this case come within its scope.
The section deals with (a) agreements and (b) contracts. The distinction between them is apparent from s. 2; by clause (e) every promise and every set of promises forming the consideration for each other is an agreement, and by clause (h) an agreement enforceable by law is a contract. Sect. 65, therefore, deals with (a) agreements enforceable by law and (b) with agreements not so enforceable. By clause (g) an agreement not enforceable by law is said to be void. An agreement, therefore, discovered to be void is one discovered to be not enforceable by law, and, on the language of the section, would include an agreement that was void in that sense from its inception as distinct from a contract that becomes void. The agreement here was manifestly void from its inception, and it was void because its subject matter was incapable of being bound in the manner stipulated. Though this aspect of the case has not been satisfactorily presented or developed in the pleadings and the proceedings before the lower Courts, their Lordships think there are materials on the record from which it may be fairly inferred in the peculiar circumstances of this case that there was a misapprehension as to the private rights of Indar Singh in the villages which he purported to sell by the instrument of January 2, 1880, arid that the true nature of those rights was not discovered by the plaintiff or Rachpal Singh earlier than the time at which his demand for possession was resisted, and that was well within the period of limitation. It was thus that the agreement was discovered to be void, and the discovery in their Lordships view was one within the words and the meaning of s. 65 of the Contract Act. The plaintiff, therefore, though not entitled to recover possession of the villages, is entitled to recover compensation, and in assessing that compensation their Lordships consider it should include the sum of Rs.25, 000 found by both Courts to have been paid to Indar Singh, and also, in the circumstances of this case, interest, not at the rate or for the period claimed by the plaintiff, but at 6 per cent, from the date of the institution of this suit.
Their Lordships will, therefore, humbly advise His Majesty that the decree under appeal should be varied in accordance with this opinion, and that the respondent should pay the costs of the plaintiff in both the lower Courts. The costs of this appeal must be paid by the respondent.