Judgment :- 1. The validity of a sale deed executed by a Hindu father in respect of ancestral property belonging to him and his sons as co-parceners is challenged by the plaintiffs in this case who are 6 out of his 7 sons and that is the question for decision in this Second Appeal. Admittedly the suit property along with other properties were obtained by the branch of the plaintiffs represented by their father as Manager in a family partition of the year 1951. While be was in possession of those properties he alienated the plaint property in 1955 in favour of the first defendant for a consideration of Rs, 9,000/-. Besides the plaintiffs he had a son the 3rd defendant who was a major on the date. The mother had no share in the property. The father acted as guardian of the parties. This sale deed was attacked by the children on the ground that there was no consideration for the sale deed binding on the family, there was no necessity to sell the family property since the family was affluent and bad surplus income, the sale deed was not binding in regard to the 6/8 shares of the plaintiffs and therefore the plaintiffs are entitled to seek division of the property. The alienee first defendant sought to support the sale deed on the plea that there was pressure on the estate, that it was to meet the debts that the sale was effected, that Rs 100/- was received in cash out of the sale consideration of Rs 9,000/-, that the debts being antecedent debts irrespective of the question of family necessity the sale must be binding on the family and therefore the plaintiffs must be non-suited. The trial court did not raise necessary issues in the case and unfortunately the parties to the suit also did not point out the need for more specific issues. The main issue in the case was "whether document No. 1009/1955 of Cranganore Registry is void and not binding on the plaintiffs for any of the reasons stated in the plaint?".
The trial court did not raise necessary issues in the case and unfortunately the parties to the suit also did not point out the need for more specific issues. The main issue in the case was "whether document No. 1009/1955 of Cranganore Registry is void and not binding on the plaintiffs for any of the reasons stated in the plaint?". The consequence of raising such an omnibus issue in the case was that despite the very elaborate judgment of the learned Subordinate Judge there has not been specific attention to matters relevant in a suit of this nature and consequently there has not been specific finding on matters such as questions of family necessity, extent to which the document was supported by consideration and such other matters as are normally to be dealt with by the court in a suit of this nature. No doubt in the elaborate discussion the court has made various observations and expressed its views. The result of its discussions is that it finds that the document of sale is executed for discharge of antecedent debts to the extent of Rs. 5,750/- and that the document is therefore valid. The appellate court concurred with this, though it would appear that on the question of family necessity it purported to differ from the trial court. I say it purported, for, it is not possible to categorically state that it has entered a finding on this question. I will advert to that in due course. The court, having found that the document was supported by antecedent debts to the extent of Rs. 5,750/-held that the sale was not liable to be ignored or set aside. The plaintiffs were non-suited. Accordingly they are before this Court now. 2. Though several questions were raised in the memorandum of appeal, at the time of admission of the appeal the learned judge who admitted the appeal limited notice on questions I and 2 formulated in the memorandum of appeal. These questions read: "1. Whether the reservation for payment of future kuri subscriptions will constitute an antecedent debt so as to bind the same on the principle of pious obligation particularly in the face of the decision in 1973 KLR. 665? 2.
These questions read: "1. Whether the reservation for payment of future kuri subscriptions will constitute an antecedent debt so as to bind the same on the principle of pious obligation particularly in the face of the decision in 1973 KLR. 665? 2. Whether a sale can be sustained in law, when it is found that there is failure of consideration to the extent of 50 per cent sale price particularly when no enquiry is made by the vendor and the sale deed is created by 2 adults when there are 6 minor members in the family? This question is also stated in para 5 of the appeal memorandum". Before I go into these questions it is necessary to state the background of the controversy. 3. The consideration for the document Ext. P2 is made up of 13 items including a sum of Rs. 100/-received as cash consideration that being the 13th item. In the judgment of the trial court there is an exhaustive consideration of the evidence regarding each of these items of consideration mentioned in the document. I see no reason to take exception to the discussion and the findings reached after elaborate discussion has my acceptance. It if found that two debts totalling to Rs. 600/-have not been proved, that item 7, a debt for Rs. 1,700/-, has also not been satisfactorily proved, that item 9, a debt of Rs 400/-, is not shown to be amount lent as alleged in the document, that item No. 10 a sum of Rs. 200/-also has not been proved, that item 11 for Rs. 250/- is also an item of debt the genuineness of which has not been proved and further that item 13, a sum of Rs. 100/- cannot be antecedent debt. The total amount is a sum of Rs. 3,250/-. With regard to the balance there is a controversy in regard to one item of Rs. 1, 250/- and that controvery is covered by the first question in the appeal. Evidently the attempt of the plaintiffs is to establish that a sum of Rs. 1,250/- shown as item 1 of the consideration in the sale deed is not a debt and consequently not an antecedent debt. If that is not shown to be antecedent debt the balance would be only Rs.
Evidently the attempt of the plaintiffs is to establish that a sum of Rs. 1,250/- shown as item 1 of the consideration in the sale deed is not a debt and consequently not an antecedent debt. If that is not shown to be antecedent debt the balance would be only Rs. 4,500/- and if that alone out of the total consideration of 9,000/- is antecedent debt the document cannot be supported as one executed for the discharge of antecedent debt. That evidently is the purpose of raising the first question in the appeal That is a question which it was not easy to resolve particularly because different views had been taken by this court on the question whether a liability that may arise on account of execution of a chitty security bond for prize money received in a chitty is a debt. Since the correctness of the Full Bench decision of this Court in P. K. Achuthan v. State Bank of Travancore (1974 KLT. 806) was doubted the question was referred to a Bench of five judges and that question has now been answered. The view taken by the Full Bench in Achuthan's case has not been accepted by the Full Bench in answering the question referred. The answer to the question as given by the Larger Bench of this Court reads thus: "We therefore answer the question referred to us in the negative, namely, that no debt due to the foreman arises by reason of the receipt of the prize amount or of the execution of the security bond for securing future subscriptions". A copy of the order of the Larger Bench is appended to this judgment. 4. It therefore follows that the sum of Rs. 1,250/ -represented by the chitty security bond is the amount for which the bond was executed to secure future subscriptions and that cannot represent debt on the date the bond was executed. Naturally it cannot be an antecedent debt. Antecedent debt is only Rs. 4,500/-. 5.
4. It therefore follows that the sum of Rs. 1,250/ -represented by the chitty security bond is the amount for which the bond was executed to secure future subscriptions and that cannot represent debt on the date the bond was executed. Naturally it cannot be an antecedent debt. Antecedent debt is only Rs. 4,500/-. 5. Before I proceed to consider the further question whether if half of the consideration alone represents antecedent debt the document would be supportable on the ground that having been executed to discharge antecedent debts it is binding on the sons, I would notice a contention of learned counsel for respondents that despite the finding of the Full Bench it must be held that the antecedent debt includes Rs.1,250/- also. According to counsel Ext. D15 security bond is a mortgage executed by the subscriber in favour of the chitty foreman and even though it cannot be a debt in respect of any amount borrowed it would be a debt on account of the mortgage having been executed in respect of a liability that may arise and as such it should fall within the scope of the term 'debt'. I fail to appreciate this contention. The definition of mortgage in S.58 of the Transfer of Property Act is a plain answer to the contention raised. A mortgage is a transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. There is necessarily a transfer of interest in specific immovable property by reason of the execution of the mortgage. That would be there irrespective of whether a debt has arisen or not because it is a necessary element of mortgage. But a mortgage is not always executed for securing a debt which has already arisen. A mortgage can be executed for securing payment of money to be advanced. Money which maybe paid later may be secured by a current mortgage. Instances are too many to need citation. Equitable mortgages executed in favour of Banks to secure overdraft accounts would operate as mortgages but the debts thereunder would arise only when liability is incurred by reason of a debit being found in the overdraft account as a result of operating the account.
Instances are too many to need citation. Equitable mortgages executed in favour of Banks to secure overdraft accounts would operate as mortgages but the debts thereunder would arise only when liability is incurred by reason of a debit being found in the overdraft account as a result of operating the account. Execution of mortgage by itself does not give rise to a debt The argument that the execution of the mortgage is sufficient for treating the consideration of Rs. 1,250/- as a debt in addition to Rs. 4,500/- found cannot de sustained. 6. Now T will deal with the larger question concerning the right of a Hindu father to alienate ancestral property in which the sons have interest so as to bind the sons' interest also. A distinction has necessarily to be noticed between the right of the manager of a Hindu joint family to alienate ancestral property and that of a father to alienate ancestral property so as to bind the share of his sons. The law has been succinctly stated in Hunoomanpersaud's cise, (!856)6 M.I. A. 393. The Hindu law envisages an obligation in the son to discharge the debts of his father irrespective of whether such debts were incurred for family necessity or not. That obligation of the sons would not extend to their person but to their interest in ancestral property. The only exception would be an avyavaharika debt incurred by the father for illegal or immoral purposes. Where the father seeks to discharge his debts, not necessarily incurred for the benefit of the family, from out of the interests of the sons in joint family property the sons will have no defence, for, it is their legal obligation to submit to such liability. Therefore, apart from seeking to sustain an alienation on the plea that the alienation is justified by the family necessity or benefit to the estate it is open to an alienee in a case where alienation is by a Hindu father to show that the alienation, though not proved to be for family necessity or for the benefit of the estate, was made to discharge the antecedent debts of the father. The debts must necessarily be antecedent in point of time and must not be tainted. Once that is established the alienee would succeed in his defence. 7.
The debts must necessarily be antecedent in point of time and must not be tainted. Once that is established the alienee would succeed in his defence. 7. It is evident that if an alienee establishes family necessity as justification for the alienation the question whether the alienation was to discharge antecedent debts may not be relevant, for even without consideration of that question the sale could be upheld. If he is unable to establish that the same is for family necessity it is open to him to support the alienation on the alternative ground that it was to discharge antecedent debts that the alienation was effected. 8. I have to consider in this case whether Ext. P2 was executed to discharge antecedent debts. Evidence as now stands shows that by the execution of the sale deed antecedent debts of Rs. 4,250/- were discharged while other debts recited in the document were either not shown to be incurred or not proved to be debts of the family. Can such alienation be sustained? It is well established that when an alienee who after making due enquiry about the existence of antecedent debts, is satisfied of their existence advances funds to the alienor so as to enable him to discharge those debts be cannot be expected to see to the actual application of the funds. Naturally that would be beyond him. When a person after due enquiry is satisfied of family necessity for incurring the debt and advances funds to meet such necessity it is not expected of him to see to the application of the funds. The case here is not that it has been proved that the antecedent debts to the extent of Rs. 8,900/- do exist but the alienee was not able to see to the actual discharge of the antecedent debts. On the other hand as the evidence now stands it has to be found that only half of the consideration is shown to be received for discharge of antecedent debts Could the alienation be sustained on the ground that it was for discharge of antecedent debts in the above circumstances? 9. I may refer in this context to the decision of the Privy Council in Sri Krishna Das v. Nathu Ram (AIR 1927 PC. 37). Referring to the decision in Girdharee Lal v. Kanta Lall (1874) 1 IA.
9. I may refer in this context to the decision of the Privy Council in Sri Krishna Das v. Nathu Ram (AIR 1927 PC. 37). Referring to the decision in Girdharee Lal v. Kanta Lall (1874) 1 IA. 321 the Learned Judges observed thus: "Before a father has sold ancestral property for the discharge of his debts, if the application of the bulk of the proceeds is accounted for the fact that a small part is not accounted for will not invalidate the sale". On this the Privy Council comments thus: "While this is in itself a correct statement of the law so far as it goes, it does not by any means follow, as the learned High Court Judges seem to have thought that it is a complete statement of the law or that the sale will be invalidated wherever the part of the consideration not accounted for cannot be described as small. If this were sound the question would in each case be a matter of arithmetical calculation, and opinions would necessarily vary as to what constituted the "bulk of the proceeds" or "a small part" of the same in each particular case. The learned judges seem to have lost sight of the true question which falls to be answered in such cases, viz., whether the sale itself was one which was justified by legal necessity. This is the point of view from which the matter is approached in the earliest case cited at the Bar of Hunoomanpersaud Panday v. Munraj Koonweree (4). The case related to a charge upon property by way of mortgage, and not of a sale, but the principles to be applied appear to their Lordships to be the same as in the case of a sale of property.
The case related to a charge upon property by way of mortgage, and not of a sale, but the principles to be applied appear to their Lordships to be the same as in the case of a sale of property. The head note states correctly the points actually decided so far as bearing on the present case: The power of a manager for an infant heir to charge ancestral estate by loan or mortgage is by the Hindoo Law a limited and qualified power, which can only be exercised rightly by the manager in a case of need, or for the benefit of the estate the actual pressure on the estate, the danger to be averted, or the benefit to be conferred in the particular instance, are the criteria to be regarded A leader, however, in such circumstances, is bound to inquire into the necessities of 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. If he does inquire, and acts honestly, the real existence of an alleged and reasonably credited necessity is not a condition precedent to the validity of his charge, which renders him bound to see to the application of the money. In delivering the judgment of the Board Lord Justice Knight Bruce, after stating the law substantially as laid down in the head note, said: The purposes for which a loan is wanted are often future as respects the actual application, and a lender can rarely have, unless be enters on the management, the means of controlling and rightly directing the actual application. Their Lordships do not think that a bona fide creditor should suffer when be has acted honestly and with due caution, but is himself deceived. (p 424).
Their Lordships do not think that a bona fide creditor should suffer when be has acted honestly and with due caution, but is himself deceived. (p 424). This decision was followed in the case of a sale by a Hindu widow in the case of Ram Gopal Ghose v. Bullodeb Bose (5), where it was held by the High Court of Calcutta that Where there is no doubt as to the necessity for a sale by a Hindu widow and the vendee pays a fair price for the property sold, and acts throughout bona fide, the mere fact of only two-thirds of the purchase money having been paid to creditors would not invalidate his conveyance, he not being bound to see to the application of his money." It is interesting to notice the case law which the Privy Council considered later in that judgment. The case in Medal Dalavoi v. Nainar Tevan, AIR. 1922 P. C. 307 to which advertence was made was one where a widow alienated a property in which she had widow's estate, fora sum of Rs, 5,300/- to satisfy a mortgage decree for Rs. 4,588.22 appropriating the balance to herself though that was not shown to be for any legal necessity. Reference was also made to the decision in Dwarka Ram v. Jhulad Pande, AIR. 1923 All. 248, in Daulat v. Sankatha Prasad, AIR. 1925 All. 324(2) and Masit Ullah v. Damodar Prasad, AIR. 1926 P C. 105. In Daulat v. Sankatha Prasad, AIR. 1925 AII, 324(2) a sum of Rs. I05/- out of the total consideration of Rs. 2,142-12-6 alone was not shown to be covered by legal necessity. The sale was sustained. In the last of the cases cited, Masit Ullah v. Damodar Prasad, AIR 1926 P.C.105 out of the total consideration of Rs. 18,400/-, a sum of Rs. 2,000/- was not shown to be applied for the discharge of antecedent debts. In that case again the document was upheld. The principle stated by the Privy Council in Sri Krlshn Das v. Nathu Ram, AIR, 1927 P.C. 37 has been followed in Radhakrishnadasv. Kaluram, AIR. 1967 S.C. 574 and Arvind v. Anna, AIR. 1980 S.C. 645. 10. It may not be possible to lay down any strait jacketted rule as to what proportion of the consideration should be shown to have been antecedent debt in order to sustain an alienation by a Hindu father.
Kaluram, AIR. 1967 S.C. 574 and Arvind v. Anna, AIR. 1980 S.C. 645. 10. It may not be possible to lay down any strait jacketted rule as to what proportion of the consideration should be shown to have been antecedent debt in order to sustain an alienation by a Hindu father. As observed by Sulaiman J. in Sri Nath v Jagannath, AIR. 1930 All. 292 at 298, "no hard and fast rule as regards any proportion can be laid down nor can one adopt any rule of thumb based on fractions or any graded scale". 11. A Hindu father's right to expect his sons to discharge bis debt has given rise to the concept of his power to deal with ancestral property over which his sons also have right as co-parceners. That authority would necessarily be limited to cases where the consideration for the sale is an antecedent debt May be the entire consideration is not antecedent debt, If the consideration which does not so represent antecedent debt is a minor unsubstantial part the character of the document would nevertheless remain and the alienation would nevertheless bean alienation, the predominant objective of which is the discharge of his own debt with property belonging to himself and bis sons or to his sons. That would not be the case where a substantial part of the consideration is not antecedent debt. If as in this case half of the consideration is to discharge a debt which is an antecedent debt and half is not it could not be said that the alienation was to discharge antecedent debt. No doubt the discharge of antecedent debt was also involved in such alienation. Therefore it cannot be said that in this case the alienation was effected to pay off antecedent debt of the father and as such the alienation is supportable. 12. Question No. 2 to which I have adverted earlier makes an unjustified assumption. I am particularly referring to the assumption in question No. 2 "When an enquiry is made by the vendor". The finding of the appellate court is that the enquiry has been made by the vendor. The finding of the appellate court appears to be that there was necessity for the sale deed. Not that these findings are supported by any discussion.
The finding of the appellate court is that the enquiry has been made by the vendor. The finding of the appellate court appears to be that there was necessity for the sale deed. Not that these findings are supported by any discussion. The finding that enquiry was made by the vendor is contrary to the finding of the trial court which on elaborate discussion found that no enquiry was made by the vendor. 13. Normally a court hearing a Second Appeal is limited to the consideration of the question formulated at the time of admission of the appeal. That would be the scope of the Second Appeal. But this does not preclude a Court, in the interests of justice, from departing from this and allowing the parties to plead other questions in Second Appeal. In this case the real controversy between the parties cannot be said to be highlighted by the two questions on which notice was issued. It is not as if my finding that the sale deed cannot be supported on the ground that it is for discharge of antecedent debt would conclude the fate of this case. The question whether nevertheless the sale deed should be upheld as one executed for discharge of family necessity must necessarily engage this Court's attention. Perhaps if the question had been viewed in the proper perspective and dealt with by the Court below we would have been governed by the finding of the Court on the facts. But as I have said earlier there was absolutely no categorical finding either by the trial court or by the appellate court though it could perhaps be said, reading between the lines, that the trial court was of the view that there was no necessity while the appellate court might perhaps be understood to have said that there was necessity A case cannot be disposed of particularly one which has been tried for several years and in which parties have chosen to adduce evidence, in an unsatisfactory manner. The question had to be tackled directly. Whether there was necessity for execution of a sale deed must depend upon consideration of various factors such as circumstances attendant upon the execution of the sale deed, the position of the family, availability of funds to meet its obligations, the need for raising funds at that time and whether that could be met by the transaction in question.
Whether there was necessity for execution of a sale deed must depend upon consideration of various factors such as circumstances attendant upon the execution of the sale deed, the position of the family, availability of funds to meet its obligations, the need for raising funds at that time and whether that could be met by the transaction in question. These are matters which would go into a proper assessment of the question of necessity. Ultimately the court must express one way or the other definitely on that question. I can only say that it is unfortunate that in a litigation which has been carried on fora decade and half I am constrained to remit the case back for a fresh disposal though further enquiry is limited in its scope. I believe interests of justice require such a course and that is why I have chosen to hear on a question which is not directly covered by the two questions formulated at the time of admission of the Second Appeal. Consequently while holding that the sale deed Ext. P2 cannot be sustained as one executed to discharge the antecedent debts the question whether it could be said to be supported by family necessity in the light of the evidence on the other issues necessarily calls for consideration by the trial court. That court will go into that question and decide the matter afresh in accordance with law. That shall be done expeditiously. The court fee paid on the memorandum of Second Appeal will be refunded to the appellants. Parties are directed to suffer costs in the appeal. The case will stand posted in the Court below for appearance of parties to 17-2-1983.