Ch. Bhuneshwar Prasad Singh vs Brijmohan Singh and Others

Manohar Lall, J.—This is an appeal by defendant 1 against the decision of the learned Subordinate Judge of Arrah, dated 10th October 1936, decreeing in part the suit instituted by the plaintiff-respondent to recover his dues on the basis of three mortgage bonds, all of the year 1929.

A brief narration of the facts is necessary to understand the points in controversy between the parties. One Tribeni Prasad, the admitted owner of the estate including the properties covered by the mortgages in suit, ''died on 13th January 1916, leaving behind him three widows Mt. Sahodra Kuer, Mt. Jageshra Kuer and Mt. Dhana Kuer. In February 1916, the first two senior widows applied for registration of the name of the appellant in the Land Registration Office on the allegation that he was adopted by Tribeni Prasad just before his death. The application was opposed by Mt. Dhana Kuer who denied the story of adoption set up by the other two widows. In July 1916, the two senior widows put in a petition to the Land Registration Deputy Collector withdrawing their application u/s 42 alleging that in a summary procedure the claim of adoption cannot properly be adjudicated. The Court was struck with the peculiar position adopted by these two ladies but failed in inducing them to give evidence as to the actual adoption. The two ladies stated that they did not wish to give any evidence in support of adoption nor did they deny it in toto. In these circumstances the Court held upon the materials, as were available to him, that there had been no adoption that the plea so set up was false, mischievous and vexatious and in the result ordered the registration of all the three widows as legal heirs of their deceased husband.

No question of actual possession arose because the dispute as to succession had started immediately on the death of the last proprietor. The Court therefore in exercise of his power u/s 55, Land Registration Act, summarily determined the right of possession in favour of the three widows and ordered the entry of their names in the land registration department by his order dated 21st July 1916. The three widows then continued jointly in possession of the estate of their deceased husband, but by the year 1928 the two senior widows had died and Mt. Dhana Kuer was in sole possession. The appellant having come to age, instituted a suit (Title Suit No. 18 of 1929) on 25th February 1929, for a declaration of his status as an adopted son and for recovery of possession of the entire estate including the properties which are the subject of the mortgage bonds in this appeal. In that action he made as defendants Mt. Dhana Kuer and the reversioners of Tribeni Prasad, his alleged adoptive father.

The suit succeeded and the Court declared on 4th June 1932 that the appellant was the duly adopted son of Tribeni Prasad as alleged by the senior widows in February 1916, that the appellant was entitled to recover possession of the properties in suit and that Mt. Dhana Kuer was only entitled to recover maintenance from the appellant. The appellant was also given a decree for possession by dispossessing Mt. Dhana Kuer and future mesne profits from her, the amount to be determined subsequently. Against this decision there was an appeal to this Court on behalf of Mt. Dhana Kuer, but we are informed that as a result of a compromise arrived at between the parties, she withdrew her appeal.

In the meantime, on 12th January 1929, Mt. Dhana Kuer executed a mortgage in favour of the plaintiff-respondent to secure an advance to her of Rs. 800 on the security of certain properties which must now be held to have belonged to the appellant although wrongly in possession of Mt Dhana Kuer. The consideration for this mortgage was made up in this way. On 28th September 1928, Mt. Dhana Kuer had taken Rs. 205 from the plaintiff on the basis of a handnote in order to pay the Government revenue for September kist due from this estate. A further advance of Rs. 580-11-0 was taken on 12th January 1929, to meet the January kist of the Government dues. This along with the interest which was due on the handnote made up the amount of Rs. 800. The plaintiff has been able to show by producing satisfactory dooumentary evidence that with the money borrowed from the plaintiff on this bond Government revenue was paid by Dhana Kuer.

On 21st March 1929, Dhana Kuer borrowed from the plaintiff a farther sum of Rs. 2,000 under the second mortgage bond in the suit on the security of a portion of the estate of the appellant. The learned Subordinate Judge has found that about Rs. 1500 was deposited on 23rd March 1929 by Dhana Kuer out of the loan which she took from the plaintiff on the second bond to pay the Government revenue due from the estate. Exs. 6 to 6 (g) and A (4) and A (5) show the total amount which was deposited on 23rd March 1929 through the plaintiff. The balance of Rs. 500 was said to have been advanced to Dhana Kuer by the plaintiff to meet litigation expenses and other expenses as stated in Ex. 2 (a).

On 5th June 1929 the plaintiff again advanced a sum of Rs. 2,000 to Mt. Dhana Kuer under the last mortgage bond in the suit to pay the Government revenue for June kist of 1929. Here again, the learned Subordinate Judge has found, that more than Rs. 1900 was deposited by Exs. 3z(17) to 3z (40) to meet the Government revenue demand for June 1929 kist. The payment was made through the plaintiff who has produced the chalans. It is therefore dear from reliable evidence adduced by the plaintiff that the Government dues from the appellant''s estate were paid by Dhana Kuer with the moneys borrowed from the plaintiff on the basis of the three bonds in suit, that the name of the plaintiff was inserted as the person who paid the money in the chalans and he appears himself as the actual payer in the list of chalans. The learned Subordinate Judge was satisfied on the evidence adduced by the plaintiff as well as from circumstances elicited from the evidence of the defendants themselves that there existed an undoubted necessity for the loan and also that there was bona fide enquiry by the plaintiff as to the existence of such a necessity.

It was sought to be argued before us that Dhana Kuer had sufficient money in her hands at the time of the loans and that there was no necessity for her to borrow any money from the plaintiff, far less on the exhorbitant rate of interest agreed upon. But I am satisfied from a perusal of the evidence and in particular from the non. production of the jama kharach account books of the defendant that the learned Subordinate Judge arrived at a right conclusion when he held that Mt. Dhana Kuer had undoubted necessity to borrow the money and that she had no funds in her possession on the relevant dates. The situation which then existed can easily be Imagined. The evidence discloses that the appellant had then come to age and had been able to induce the raiyats to stop payment of rent to Mt. Dhana Kuer who in his view (and as determined judicially later) was undoubtedly a trespasser. Mt. Dhana Kuer was involved in fighting litigations with the appellant and money was required for that purpose also. In these circum. stances it is natural to expect that the sources of revenue of Mt. Dhana Kuer from the estate had dried up.

The appellant produced four receipts Exs. B to B(3) purporting to have been granted by Mt. Dhana Kuer for collections remitted to her bearing dates 12th January 1929, 29th March 1929, 10th June 1929 and September 1929, showing that she had received from the Tahsildar Mathura Singh (D.W.3) about Rs. 3700 as the rent collected by him. It was therefore argued by the learned Counsel for the appellant that when Mt. Dhana Kuer was in possession of about Rs. 4000 on the relevant dates in 1929, there was no necessity for her to have taken the loans in question. But no reliance can be placed upon these receipts. These receipts were not filed in the trial Court before D.W.3 came into the wit-ness-box on 19th September 1936. Again, he produced the receipts without these being specifically called for from him. The learned Subordinate Judge has pointed out that he is unable to place reliance upon this witness specially because he did not inform either the defendants or anybody else that he was in possession of these receipts. I agree with the trial Court that no reliance can be placed on the evidence of this witness. It must therefore be held that the bulk of the money taken in loan from the plaintiff on the security of the mortgage bonds in suit was applied for the payment of Government revenue and cess due from the estate, the non-payment of which would have rendered the estate liable to be sold and that the deposit of the Government revenue and cess was for the preservation and benefit of the estate.

The learned Subordinate Judge in these circumstances came to the conclusion that the mortgage bonds in suit could not be binding upon the estate because the mortgagor was a person who had no title to alienate the property of the appellant and therefore he refused to pass a mortgage decree in favour of the plaintiff. The plaintiff has preferred no appeal against this decision. In my opinion, this view of the learned Subordinate Judge is correct. This was not seriously contested on behalf of the respondent.

The learned Subordinate Judge however proceeded to pass a money decree in favour of the plaintiff upon his view of the law that as the money advanced by the plaintiff was advanced by him in good faith to Mt. Dhana Kuer and as the advances were made in the interest of and for the benefit of the estate of the appellant, the plaintiff was entitled to get back the money to be re. covered from the estate in the hands of defendant 1 although his mortgage charges cannot be enforced. The learned Subordinate Judge professed to rely upon the decision of the Privy Council in Dakshina Mohan v. Saroda Mohan (1894) 21 Cal. 142. In that case the plaintiff was in possession of a certain estate regarding which litigation was pending between him and the defendant. Possession was decreed to him by the High Court of Calcutta and during the period of his possession the plaintiff had paid Government revenue to preserve the estate. It was also found that the defendant having actively interfered with the tenants of the estate, the plaintiff, as a result of the obstruction had received only trifling sum on. account of rents and profits. After the decision of the High Court had been reversed by the Privy Council, the defendant obtained possession of his estate, of which he was the rightful owner at all times. The plaintiff then instituted a suit to recover from the defendant the amount of the Government revenue and other charges which he had paid during the period of his possession.

The High Court held that the plaintiff though in possession in the relevant period under a decree of the Court was in wrongful possession and took the view that a person who is in wrongful possession is not entitled to recover sums paid on account of outgoings, although he may be able to use the payment for the purpose of reducing the mesne profits. Against this decision an appeal was taken to the Privy Council and their Lordships held:

Now it seems to their Lordships to be common justice that when a proprietor in good faith pending litigation makes the necessary payment for the preservation of the estate in dispute, and the estate is afterwards adjudged to his opponent, he should be recouped that he has so paid by the person who ultimately benefits by the payment, if he has failed through any fault of his own to reimburse himself out of the rents.... The claim is in the nature of salvage, and it is to be observed that the law relating to sales for arrears of Government revenue recognizes the equity of repayment in the case of a person who not being proprietor pays the Government revenue in good faith to protect a claim which afterwards turns out to be unfounded.

The reference to the law relating to sales for arrears of Government revenue is obviously to Section 9, Revenue Sale Law of 1857. In my opinion, this case does not support the view taken by the learned Subordinate Judge. The respondent is not a person in the position of the plaintiff in the Privy Council case. There is an equity only in favour of a person who is in possession of the estate in good faith under a claim which may afterwards turn out to be unfounded provided he has saved the estate from destruction and has preserved it upon the principle of salvage. The present respondent has never been in possession of the estate under any claim whatsoever. He never paid the money on his own behalf to preserve the estate in order to protect his claim. He was a mere lender who lent the money to Mt. Dhana Kuer. The relation between him and her was that of a mere borrower and lender. He can only look to Dhana Kuer and to her estate to pay him and to nobody else and to nothing else. I do not see what equity there can be in these circumstances in favour of the plaintiff against the estate of another person.

In the course of the judgment, just re-ferred to, their Lordships of the Privy Council made reference to the case in Peruvian Guano Co. Limited v. Dreyfus Brothers and Co. (1892) A.C. 166. Lord Mac naughten has reviewed a number of earlier cases upon the law of salvage which show that in every case the person who, while in possession with apparent bona fide title has preserved the estate, has been allowed either as a set off or as a claim the amount which had to be spent by him necessarily to preserve the thing which he has been-ordered to hand back or has actually handed over to the real owner provided that he could not reimburse himself from the rents and profits of the estate while in possession. In Clarke v. Nicholson (1871) 6 C & P 712, in an action of trover for goods belonging to the assignees of bankrupt, wrongfully seized and wrongfully sold by the Sheriff, the-Sheriff was allowed the expenses of sale, because the goods must have been sold by the assignees if not sold by the Sheriff. The only condition which must be carefully insisted upon is to see that the person in possession, who is later on held to be wrongfully in possession, has accounted for mesne profits, for all rents and profits which he has received or which without wilful default he might have received, and if such a person can show that owing to circumstances beyond his control and still more that in consequence of some wrongful conduct on the part of his opponent he has received less than what he had to pay for the preservation of the estate, it would seem to be in accordance with justice, equity and good conscience that he should recover the amount which he paid on the final adjustment of accounts.

In other words equity works in favour of such a person who is in possession under a bona fide claim which afterwards proves to be unfounded only to the extent to which he has been forced to make payment after accounting for the rents and profits. But as pointed, out above this principle can have no application in favour of a person who has never been in possession of an estate under any claim whatsoever and who is no more than a mere volunteer, a mere lender. The principle underlying Section 9 of the Revenue Sale Law is to the same effect.

The learned advocate for the respondent relied upon the case in Moulvie Mahomed Shumsool Hooda v. Shewukram (1874) 2 I.A. 7 in support of his contention that the plaintiff is entitled to a decree in his favour in the terms as passed by the learned Subordinate Judge, but that case is entirely different. In that case a Hindu widow in possession of the estate of her husband sold a part of the ancestral land to a third person for a sum out of which Rs. 14,000 was devoted to pay up the mortgage validly subsisting upon the estate. The real reversioner instituted a suit against the purchaser and the widow for a declaration that his future right should be preserved unmolested and that his title to the land transferred may be declared and the deed of sale may be cancelled. The Privy Council held that the sale to the purchaser was invalid and therefore the reversioner was entitled to a decree to the effect that on the death of the widow the property belongs to him and that he may be put in possession thereof after the death of the widow on payment to the purchaser the sum of Rs. 14,000. It will be noticed that the purchaser was in possession under a bona fide title. He was entitled to remain in possession till the death of the widow and while in possession he paid the encumbrance validly existing upon the property in his possession. In these circumstances his claim to be recouped to the extent of Rs. 14,000 was upheld by their Lordships in these words:

It is equitable that, when the plaintiff claims the estate, credit should be given to the purchaser for the payment of the mortgage (which was subsisting on the estate at the time of the sale and which has been paid by the purchaser) which otherwise the plaintiff himself would have to meet.

It will also be seen that the person entitled to recoup was not in the position of a creditor, like the plaintiff in the present case, but he was a person actually in possession of the estate under a bona fide title.

I therefore have no hesitation whatsoever in holding that the learned Subordinate Judge was in error in giving a decree to the plaintiff against defendant 1 who is not a party to any of the mortgage bonds in the suit and who never contracted with the plaintiff to pay him back the money which he advanced to Mt. Dhana Kuer, a trespasser in wrongful possession of the appellant''s estate. The equities in favour of Mt. Dhana Kuer, now dead, and her representatives cannot be worked out in this proceeding but can be dealt with properly in the mesne profits proceedings if they are ever started. Mt. Dhana Kuer or her representatives are not made parties to this suit. I therefore do not see my way to grant any relief to the plaintiff against the representatives of Mt. Dhana Kuer in these proceedings.

It was argued by the learned advocate for the appellant that the mortgage bonds in suit are hit by the doctrine of lis pendens contained in Section 52, T.P. Act. The learned Subordinate Judge has held that the second and third mortgage bonds dated 21st March 1929 and 5th June 1929, being subsequent to the institution of the suit by the appellant on 25th February 1929, are hit by the doctrine of lis pendens. The suit of the plaintiff related to a declaration of title to immovable property, and therefore the doctrine of lis pendens would clearly apply, But this would not affect his mortgage bond of 12th January 1929, which was executed before the institution of the title suit.

It was then argued that the claim of the plaintiff was barred by limitation, because the suit has been instituted beyond six years of the date when the cause of action accrued to the plaintiff to recover his dues. It has already been pointed out that the first mortgage bond shows that the money was advanced on 12th January 1929, but the document itself states that the borrower will pay the loan on 30th Jeth 1337, which corresponds to March or April 1930. Similarly, the mortgage bond of 21st March 1929, contains a stipulation that the loan will be paid in March or April 1931. In my opinion the claim to recover the money due on these two bonds is not barred by limitation as the suit has been instituted on 1st May 1935, within six years of the date when the cause of action accrued on both these documents. The third mortgage bond is dated 5th June 1929, and is within six years of the date of the institution of the suit. In these circumstances the plea of limitation advanced on behalf of the appellant must be overruled.

For the reasons given above, the appeal is allowed, but in the circumstances as the estate of the'' appellant has been found to have been benefited by the loans covered by the mortgage bonds in suit each party will bear his own costs of this appeal and in the Court below.

Harries C.J.

I entirely agree.