Ishwar Devi v. Jagannath. — 1939 DIGILAW 267 (ALL)

JUDGMENT Iqbal Ahmad and Bajpai, JJ. - This is an appeal by Srimati Ishwar Devi and arises out of a suit brought by her and by her sister Mst. Kalawati for a declaration that two sale-deeds executed by Mst. Naraini, one dated the 27th of August, 1934, and the other dated the 9th of January, 1935, were without any valid necessity and were not binding on the Plaintiffs after the death of Mst. Naraini. Mst. Naraini is the widow of one Gur Saran Das, who was the brother of the two Plaintiffs. 2. The sale-deed dated the 27th of August, 1934, was in favour of Sri Ram, Defendant No. 2, and was for a sum of Rs. 500. The property sold under that deed was a compound. The trial Court held that that sale-deed was for legal necessity and the decree of the trial Court in that respect has become final, and there is no controversy about that sale-deed in the present appeal. 3. The controversy in the present appeal is with respect to the sale-deed dated the 9th of January, 1935. The vendee under that deed is Jagannath, the contesting Respondent in the appeal. The sale-deed was with respect to a shop and was for a sum of Rs. 2,100. The Plaintiffs' case was that this sale was without any valid necessity and, as such, it was not binding on them after the death of Mst. Naraini. 4. Both Jagannath and Naraini filed a written statement contesting the Plaintiffs' claim. They maintained that the sale was for justifiable necessity and was, accordingly, binding on the Plaintiffs, who admittedly were the reversioners of Gur Saran Das. 5. The trial Court overruled the pleas raised in defence by Jagannath and Naraini and passed a decree in the Plaintiffs' favour declaring that the sale-deed will not be binding on the Plaintiffs after the death of Naraini. 6. On appeal by Jagannath, the lower appellate Court held that the sale-deed of 1935 was for valid necessity and, accordingly, reversed the decree of the trial Court and dismissed the Plaintiffs' suit. 7. Ishwar Devi. one of the Plaintiffs, has filed the present appeal and Kalawati, the other Plaintiff in the suit, had been impleaded as a pro forma Defendant. 8. 7. Ishwar Devi. one of the Plaintiffs, has filed the present appeal and Kalawati, the other Plaintiff in the suit, had been impleaded as a pro forma Defendant. 8. In order to appreciate the respective contentions of the parties it is necessary at the very outset to specify the properties that were owned by Gur Saran Das. 9. Gur Saran Das was the owner of the following items of properties: (1) A zamindari property (holding No. 307) comprising 12 bighas and 18 biswas bearing a jama of Rs. 33. (2) Zamindari property (holding No. 9) comprising 9 bighas and 2 biswas, bearing a jama of Rs. 29-15-7. (3) One pucca built shop. (4) Two pucca built shops. (5) One compound. (6) One shop. 10. On the 16th of September, 1929, Gur Saran Das executed a simple mortgage for a sum of Rs. 3,000 in favour of one Ghure Mal mortgaging the two shops mentioned above, viz., item No. 4. The stipulated rate of interest in this deed was at the rate of eight annas per cent, per mensem compoundable with six month)' rests. Thereafter on the 12th of October, 1931, Gur Saran Das sold one of the shops owned by him, viz., item No. 6, and out of the sale consideration paid a sum of Rs. 660 in part satisfaction of the debt due to Ghure Mal. Gur Saran Das died in or about the year 1932. 11. It would appear from the facts stated above that the amount due to Ghure Mal on the basis of the mortgage deed of 1929 at the time of the death of Gur Saran Das must, have been about Rs. 2,800 and the properties that devolved on Naraini by right of inheritance were the properties, items Nos. 1 to 5 mentioned above. 12. In January, 1933, Naraini sold the zamindari property, item No. (1), for a sum of Rs. 1,130, and this amount was paid to Ghure Mal in part satisfaction of his mortgage. To the sale deed of 1933 one of the Plaintiffs of the present suit was an identifying witness and the validity of this deed has not been questioned by the Plaintiffs. Even after the payment of this sum of Rs. 1,130 a sum of about Rs. To the sale deed of 1933 one of the Plaintiffs of the present suit was an identifying witness and the validity of this deed has not been questioned by the Plaintiffs. Even after the payment of this sum of Rs. 1,130 a sum of about Rs. 2,000 remained due to Ghure Mal, and it cannot be disputed that the payment of the outstanding debt of Ghure Mal was a matter of importance, both from the point of view of Mst. Naraini and of the Plaintiffs. 13. On the 27th of August, 1934, Naraini sold the compound (item No. 5) set out above for a sum of Rs. 300 and this sum of Rs. 300 was also paid to Ghure Ma] in part satisfaction of his debt. This sale deed was held by the trial Court to be for valid necessity and that finding has become final. 14. Even after the sale of the compound and the payments made to Ghure Mal from time to time a sum of about Rs. 1,590 remained due to Ghure Mai. Naraini then, on the 9th of January, 1933, executed a sale deed in favour of Jagannath, contesting Respondent, with respect to the pucca built shop, item No. 3 detailed above. The consideration of this deed was Rs. 2,100 out of which Rs. 100 were paid to Naraini for the cost of the execution and registration of the document, Rs. 600 were paid in cash at the time of registration to Mst. Naraini and the remaining sum of Rs. 1,400 was left with the vendee for payment to Ghure Mal. It was found by the trial Court that no legal necessity was proved with respect to the sum of Rs. 600 paid to Naraini and this finding was not contested in the lower appellate Court. 15. Jagannath entered the witness-box and stated that before purchasing the property he made enquiries from Ghure Mal and was told that a sum of Rs. 1,400 or Rs. 1,500 was due to Ghure Mal on the basis of the mortgage deed of 1929. It is admitted that no further enquiry was made by Jagannath and Jagannath, acting on the statement of Ghure Mal, purchased the property and retained the sum of Rs. 1,400 in his hands for payment to Ghure Mal. 1,400 or Rs. 1,500 was due to Ghure Mal on the basis of the mortgage deed of 1929. It is admitted that no further enquiry was made by Jagannath and Jagannath, acting on the statement of Ghure Mal, purchased the property and retained the sum of Rs. 1,400 in his hands for payment to Ghure Mal. The trial Court observed that it was the duty of Jagannath to have ascertained the exact amount due to Ghure Mal and, as the amount left with Jagannath, viz., the sum of Rs. 1,400, was not sufficient to satisfy the debt of Ghure Mal in full and, as no legal necessity was proved for the amount of Rs. 600 paid in cash to Naraini, the sale in favour of Jagannath could not be held to be for valid necessity and, accordingly, was not binding on the Plaintiffs after the death of Naraini. 16. The lower appellate Court, on the other hand, held that, as two-thirds of the sale price was for the payment of debt due from Gur Saran Das, the sale was for valid family necessity and accordingly binding on the Plaintiffs. 17. The law applicable to a case of the present description is now well settled. The real question that falls to be decided in cases of the present description is whether the sale itself was one which was justified by legal necessity. If the sale is held to be justified, the mere fact that a portion of the sale consideration was not for any valid necessity would not affect the validity of the sale. It is, however, incumbent in all such cases on the purchaser to prove that he acted in good faith and, after making reasonable enquiry, accepted the transfer of the property in the bona fide belief that there was necessity for the transfer of the property vide AIR 1927 37 (Privy Council) . It follows that in cases of the present description the burden lies on the transferee to show that, having regard to all the circumstances, the transfer of the particular item of property in his favour was a prudent and reasonable act on the part of the transferor. 18. In our judgment, this test was, in all but one respect, satisfied by Jagannath in the present case. 18. In our judgment, this test was, in all but one respect, satisfied by Jagannath in the present case. At the time of the execution of the sale deed in favour of Jagannath only three items of properties were left; in the hands of Naraini. She was possessed of zamindari property (item No. 2), the pucca built shop sold to Jagannath (item No. 3) and the two shops (item No. 4) mortgaged to Ghure Mal. The sale of zamindari (item No. 2) could not fetch even a sum of Rs. 1,000 and that amount would have been insufficient to discharge the debt of Ghure Mal in full. It would not, therefore, have been a reasonafre act on the part of Naraini to sell that item of property. It appears that the shops mortgaged to Ghure Mal are let out on a monthly rental of about Rs. 122 whereas the shop sold to Jagannath fetches a monthly rental of Rs. 5 to Rs. 7. The sale of the two shops mortgaged to Ghure Mal would also have not been a reasonable act as the value of those shops, as disclosed by the evidence, was about Rs. 4,000 to Rs. 4,500. The only property that could in these circumstances be sold was the shop (item No. 3) that was sold to Jagannath. Without the sale of this shop the debt due to Ghure Mal on which interest was accumulating could not be satisfied. The sale of the shop in question was, therefore, justified by legal necessity. 19. It is, however, clear that the consideration paid by Jagannath for the shop in question was much in excess of the amount due to Ghure Mal on the date of the sale. It was the duty of Jagannath as a purchaser to retain sufficient amount in his hands to discharge the debt of Ghure Mal in full, as in the event of a portion of the debt of Ghure Mal being left o utstanding it could not be said that the sale of the step was satisfied by legal necessity. It vas the existence of the debt of Ghure Mal that authorised Naraini to sell the shop and that sale can only be upheld if the debt of Ghure Mal is satisfied in full. It vas the existence of the debt of Ghure Mal that authorised Naraini to sell the shop and that sale can only be upheld if the debt of Ghure Mal is satisfied in full. The discussion of this point is rendered unnecessary by the very reasonable attitude that has been taken at the hearing of this appeal by Mr. Chandra Bhan Agarwala, the learned Counsel for Jagannath. He has stated that the validity of the sale be upheld conditional on the payment in full by Jagannath of the debt due to Ghure Mai. In this view of the matter and in view of the statement made by Mr. Agarwala the decree of the lower appellate Court must be modified. 20. We accordingly allow this appeal to this extent that in lieu of the decree passed by the lower appellate Court, we substitute the following decree: In the event of Jagannath paying the entire debt due to Ghure Mal and redeeming the mortgage dated the 16th of September, 1929, within six months from to-day's date the Plaintiffs' suit shall stand dismissed. If the mortgage of 1929 is not redeemed within six months and Ghure Mal's debt is not discharged in full the Plaintiffs' suit shall stand decreed. 21. The victory in the present appeal has been divided and, accordingly, we direct the parties to bear their own costs of this appeal. As regards the costs of the Courts below we direct that in the event of the Plaintiffs' suit being dismissed the Plaintiffs will pay to Jagannath the costs incurred by him in the Courts below. But if the Plaintiffs' suit, in consequence of the failure of Jagannath to make the payment within the time allowed, is decreed, Jagannath will pay the Plaintiffs' costs in the Courts below.