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Judgment
Das, J.—This appeal arises out of a suit instituted by the appellants for recovery of possession of certain properties on the footing of certain-deeds executed by defendant No. 1 in favour of the plaintiffs, and for delivery of those deeds. The deeds referred to are (1) a ticca patta executed by defendant No. 1 in favour of the plaintiffs on the 20th June, 1920, and (2) a usufructuary mortgage-bond executed by the same defendant in favour of the plaintiffs on the 30th June, 1920. The execution of the documents, was admitted, but the suit was resisted on the ground that there was undue influence and fraud exercised on the defendant by the plaintiffs. The learned Subordinate Judge rejected the case of undue influence and fraud, but he dismissed the plaintiffs'' suit on the ground that defendant No. 1 was in some way misled into entering into the, transactions in question and that he made a bad bargain. The plaintiffs being dissatisfied with the judgment of the learned Subordinate Judge have appealed to this Court.
In order to understand the case it is necessary to deal with certain antecedent transactions. Defendant No. 1 is the Raja of Palganj; defendant No. 2 is his wife; defendant No. 3 is his son and defendant No. 4 is a junior member of the family, in possession of certain khorposh properties which were the subject-matter of certain transactions between him and the plaintiffs. There were two sets of antecedent transactions which it was the object of the transactions in suit to extinguish, first, transactions between the plaintiffs and defendant No. 2, and, secondly, transactions between plaintiffs and defendant No. 4. On the list March, 1910, defendant No. 2 borrowed Rs. 2,000 from the plaintiffs and executed a hand-note in their favour. On the 6th May, 1910, she borrowed another sum of Rs. 200 from them and executed another hand-note in their favour. On the 14th January, 1912, she executed two mortgages in favour of the plaintiffs; one for Rs. 5,000 and the other for Rs. 1,500. The mortgage for Rs. 5,000 was to pay off the principal and interest due to the plaintiffs on the two hand-notes. The mortgage for Rs. 1,500 was for cash advance made that day. Those were all the transactions between the plaintiffs and defendant No. 2. As between the plaintiffs and defendant No. 4 there were the following transactions. On the 1st April 1916, defendant No. 4 borrowed Rs. 11,898 from the plaintiffs and executed a mortgage in their favour in respect of his khorposh properties. On the 30th April, 1917, he borrowed Rs. 4,800 from the plaintiffs and executed another mortgage-bond in their favour. The execution of the documents in respect of these antecedent transactions was admitted in the written statement, but it was contended that the full consideration was not paid by the plaintiffs. It is to be noted that the defendants did not say in their respective written statements, how much was actually received in respect of those transaction, and they did not venture to come to the witness-box to contradict the case of the plaintiffs. The learned Subordinate Judge has found that the full consideration was paid in respect of all those transactions; and the finding of the learned Subordinate Judge on this point has not been challenged before us.
In order to wipe out all the transactions just narrated, a fresh arrangement was come to between the parties. It appears that over Rs. 25,000 was due to the plaintiffs from defendant No. 4 on the mortgage-bonds of the 1st April, 1915, and the 30th April, 1917. The plaintiffs'' assigned these mortgage-bonds to defendant No. 3 for a consideration of Rs. 25,000. The case of the plaintiffs on this point is that defendant No. 1 who, as I have said, is the Raja of Palganj, was anxious to secure the properties covered by the transactions of the 1st April, 1915, and the 30th April, 1917, for his son, and he accordingly took an assignment of these mortgages for the benefit of his son, defendant No. 3. He was, however, unable to pay the sum of Rs. 25,000 to the plaintiffs. There was also a large sum of money due to the plaintiffs from defendant Na. 2 on the two transactions of the 14th January, 1912. To discharge the liability of defendant No. 2 and also to satisfy the claim of the plaintiffs for Rs. 25,000 as the consideration for the deed of assignment in respect of the mortgages by defendant No. 4 in favour of the plaintiffs, the defendant No. 1 executed two documents in favour of the plaintiffs, first, a ticca lease of 10 villages for 30 years, and, secondly a usufructuary mortgage-bond in respect of his right to the rents in regard to 22 villages from 1921�1935. The ticca lesse was executed on the 20th June, 1920. The premium payable by the plaintiffs was Rs. 8,500 and the rent fixed in the lease was Rs. 925-15-0 payable in instalments with, interest at 2 per cent, per month on all arrears. The sum of Rs. 8,500 payable by the plaintiffs was in fact not paid, and was set off against the claim of the plaintiffs as against defendant No. 2 whose liability was assumed by defendant No. 1. The usufructuary mortgage-bond was executed on the 30th June 1920. The consideration for this mortgage-bond was Rs. 25,000 which was not paid by the plaintiffs but was set off against what was due by defendant No. 1 to the plaintiffs on the deed of assignment of the 30th June, 1920. The result of the transactions of the 20th June, 1920, and the 30th June, 1920, respectively was as follows:
(1) defendant No. 4 was no longer liable to the plaintiffs but became liable to defendant No. 3 on the mortgage-bonds executed by him on the 1st April, 1915, and the 30th April, 1917, respectively;
(2) defendant No. 3 was liable to pay Rs. 25,000 to the plaintiffs on the deed of assignment of the 30th June, 1920, but that liability was discharged by defendant No. 1 giving a usufructuary mortgage of certain villages to the plaintiffs;
(3) defendant No. 2 was discharged from her liability to the plaintiffs in respect of her mortgages, the claim of the plaintiffs being satisfied by the execution of the ticca. lease of the 20th June, 1920.
Although the documents were executed on the 20th June, 1920, and the 80th June, 1920, respectively they were not registered till the 14th August, 1920. It appears that pending the registration of the documents, an account was submitted by the plaintiffs to the defendant showing how the matter, stood as between them and the defendants, This account is Ex. 15 and is printed at page 57, part III of the paper-book, It shows that Rs. 39,674-8-0 was due to the plaintiffs on the earlier transactions to which was added the sum of Rs. 1,000 for costs of stamps, etc. making a total of Rs. 40,874-8-0. Rupees 5,000 was wholly given up by the plaintiffs and Rs. 8,500 was shown as realised on account of the premium on the ticca lease of the 20th June, 1920, and Rs. 26,700 was shown as realised on the usufructuary mortgage-bond of the 30th June, 1920, though as a matter of fact Rs. 25,000 and not Rs. 26,700 was payable by the plaintiffs to the defendant as the premium on the. usufructuary mortgage bond. In other words, the plaintiffs gave up another sum of Rs. 1,700. They showed Rs. 40,200 as having been realised by the ticca lease and usufructuary mortgage-bonds as against the sum of Rs. 40,874-8-0 due by the defendant to the plaintiffs. There was still a balance of Rs. 674-8-6 which defendant No. 1 agreed to pay later on. This account sheet was signed by the defendant on the 13th August, 1920, and thereafter on the 14th August, 1920. All these documents, namely, the ticca lease of the 20th June, 1920, the deed of assignment of the 30th June, 1920, and the usufructuary mortgage-bond of the 30th June, 1920, were registered in accordance with law. Defendant No. 1, however, refused to make over these registered documents to the plaintiffs, and declined to make over possession of the properties covered by those documents. The plaintiffs, therefore, brought the suit out of which this appeal arises for possession of the properties on the completed transactions on the 20th June, 1920, and the 30th June, 1920 respectively.
The learned Subordinate Judge entirely misunderstood the scope of the suit. He thought that the suit was one for specific performance of a contract and he took the view that he had a discretion to refuse specific performance, if he considered that the defendant had made a bad bargain. He found that consideration passed in respect of the earlier transactions; he found that no undue influence was proved in respect of the earlier transactions into which defendant No. 2 entered; but he thought "it was not at all a good bargain for the defendant to make provision for his son by encumbering his otherwise encumbered estate. He took the view that defendant No. 1 did not understand the account, Ex. 15, and He, says that "it is not unreasonable to suppose that the defendant No. 1 was misled into executing those documents,". It may be. pointed out that defendant No, 1 did hot. venture to come to the witness-box and in the absence of any explanation by him, it was not open to the learned Subordinate Judge to take this view of the evidence, His final view is that it is impossible to conceive of a better example of one sided affair and very bad bargain for the defend-'' ant No. 1. In this view he thought that it was open to him to refuse specific performance of the contract. As I have already said, the learned Subordinate Judge has misconceived the nature of the plaintiffs suit which is not for specific performance of a contract but for relief on the footing of completed transactions. It is quite true that any misrepresentation whether fraudulent or innocent which is sufficient to avoid a transaction is a good defence to proceedings, against a party misled, for the specific performance of the contract. It is also true that the Court may refuse to enforce specific performance of a contract at suit of a party who has innocently made a representation to the other in cases where the party misled would have no right to rescind the contract. But this is owing to the discretionary nature of the relief of ordering specific performance, and to the fact that, in granting or withholding this remedy, the Court may have regard to considerations of unfairness or hardship, and as to the party''s conduct which would have no weight at law. But the position is entirely different where a party comes to Court and seeks relief on completed transactions. There is no longer any discretion in the Court to refuse to give the plaintiff the appropriate relief unless it be established that at law he is not entitled to the relief. Fraud and undue influence and fraudulent misrepresentations, if established, are good grounds for refusing the plaintiff the appropriate relief even where the matter has passed from the domain of contract to that of conveyance.'', But it is conceded that no-such case has been established by the defendants. Mr. Hasan Imam, however, contends that there is such inadequacy of consideration in this case, that although there is no positive evidence of fraud, the Court will presume that the transactions were the result of an imposition on the defendant. It is well established that the fact that a transaction was at an undervalue is evidence from which it may be inferred that the party thereby benefited was guilty of fraud or undue influence, and that where it is sought to set aside a sale on these grounds the inadequacy of the consideration given may possibly be so gross as to leave room for no other inference than that the bargain was obtained by undue influence or fraud. Mr. Hasan Imam who has argued this cage on behalf of the respondents with conspicuous fairness has put his whole case on this basis. He contends that the consideration is so grossly inadequate that we ought to presume that the transactions were the result of undue influence exerted by the plaintiffs on defendant No. 1.
I now proceed-to consider whether the consideration is so grossly inadequate as to give rise to the inference of fraud or undue influence, la considering this matter we have to distinguish between transactions of defendant No. 2 and those of defendant No. 4.
First, as to the transactions of defendant No. 2. The mortgage bonds of defendant No. 2 were executed, as I have said, on the 14th January, 1912, that is to say, sometime in Magh, 1319. The loans were repayable in January, 1913, that is to say, in Magh, 1320. These debts were satisfied by the ticca patta executed by defendant No. 1 in favour of the plaintiffs on the, 20th June, 1920. The question arises, what did defendant No. 2 have to mortgage? Mr. Hasan Imam draws our attention to Ex. G (page 1, part III, of the paper-book) which is a patta executed by Raja Parasnath Singh, in favour of defendant No. 2 on the 14th April, 1902. Raja Paras Nath was the father-in-law of defendant No. 2, and following the family custom he made a grant of certain villages to defendant No. 2 including the village which was mortgaged by defendant No. 2 to the plaintiffs. It appears, however, that the grant was for a fixed period of 20 years from 1310 to 1329, that is to say, from 1903 to 1922. The ticca patta is dated the 20th June, 1920, and Mr. Hasan Imam contends that at the date of the ticca patta the lease of the properties in favour of defendant No. 2 had only two years to run, and that, therefore, practically there was no consideration for the ticca patta. It is contended that, had they sued upon the mortgages executed by defendant No. 2 in their favour, the plaintiffs could not have got anything from the properties, Any decree which they might obtain against defendant No. 2 could not be personally executed against her nor could they proceed against the properties which would cease to be the properties of defendant No. 2 by the time the mortgage suits were decided. The argument would have great force but for a confirmatory grant executed by defendant No. 1, the present Raja of Palganj, in favour of his wife defendant No. 2 on the 30th November, 1919. By this document which is Ex. 11 (printed at page 39, part III of the paper-book) defendant No. 1 gave a perpetual mokarrari to defendant No. 2 "descendible to children from generation to generation and succession after succession in the male and female lines" of the entire 16 annas in 20 villages including the village which was mortgaged by her to the plaintiffs. The position, therefore, is that on the 20th June, 1920 the date of the ticca patta, defendant No. 2 had a complete title to the property which was the subject-matter of her mortgage. It is quite true, that at the date of her mortgages she had only a lease for a number of years, but she represented to the plaintiffs that she was authorised to transfer the village to them and professed, to, transfer it for consideration. That, beings so, such a transfer would operate on the interest which defendant No. 2 acquired in such property subsequently. It is not necessary to refer to the authorities on the point: it is sufficient to say that Section 43 of the Transfer of Property Act embodies the principle which has been accepted in decisions far too numerous to mention
I now come to the transactions of defendant No. 4 and the decision of the learned Subordinate Judge is wholly based on these transactions. It appears that prior to the 1st of April, 1915, defendant No. 4 was indebted to various persons. Heavy, interests were payable on those debts which amounted to Rs. 6,000. He also required money to perform the marriage ceremonies of his son and daughter. In these circumstances he took a loan of Rs. 11,898 from the plaintiffs on the 1st April, 1915, and executed a mortgage-bond in their favour. In the mortgage-deed lie recited that the debt of Rs. 6,000 due by him was all incurred for necessary house-hold expenses. He also alleged that the balance of, the money was required by him for family necessities. He also asserted that he held the property which he offered as security for the loan to the plaintiffs as his khorposh ''''without interference or co-partnership of any one else." There are similar recitals in the mortgage-bond of the 30th April, 1917. It appears, however, that a suit for partition was instituted by Kodnarain Singh as against defendant No. 4, and that a decree for partition of the khorposh properties has been made and that the decree has been carried into execution. The learned Subordinate Judge says that defendant No. 4 has only 1/5th share, in the villages which were mortgaged by him to the plaintiffs. According to him his 1/5th share is worth about Rs. 12,000 or Rs. 14,000 and, therefore, it was a very bad bargain on the part of defendant No. 1 to take an assignment of the mortgages on which more than Rs. 25,000 was due for Rs. 25,000 when he could not realise more than Rs. 12,000 to Rs. 14,000 on those mortgages from defendant No. 4. Now the Palganj Raj is an impartible Raj and there is no doubt that a, khorposh grant was made in favour of defendant No. 4 in respect of the villages which were mortgaged by him to the plaintiffs. It is the case of the plaintiffs that these khorposh grants are also impartible. They assert, in other words, that the custom which prevails in the main family also prevails in the junior families. The Record of Rights certainly supports the contention of the plaintiffs and it may be pointed out that the loan was granted to defendant No. 4 on the representation that he held the properties in his own right and not jointly with any one else. The entries in the Record of Rights are Exs. 20(a),20(b), 20(c), and 20(d) printed at pages 71�77, part III of the paper-book. These entries show that Pitamber Singh, defendant No. 4, held the villages directly under, the proprietor, the Raja of Palganj, and that various members of the family of Pitamber Singh held small plots of land under Pitamber Singh and by virtue of khorposh grants made by Pitamber Singh in their favour. The entries in the Record of Rights lead to the irresistible inference that Pitamber Singh, defendant No. 4, is the sole proprietor of the villages which he mortgaged to the plaintiffs, and that the various members of his family hold khorposh grants under him by virtue of settlements made by him in their favour. The plaintiffs are not affected by the decree for partition made at the instance of some of the members of the family as against Pitamber Singh. There is strong reason to suspect that the decree is a collusive one and that the suit was part of a design to defeat the claim of the mortgagees. It is, however, not necessary to consider whether the decree was a collusive one or not, it is sufficient to say that defendant No. 1 as the proprietor of Palganj Raj is presumably acquainted with the incidents that obtain in the families of the cadets of the Raj. He saw the mortgage-bonds executed by defendant No. 4 in favour of the, plaintiffs and he was aware of the partition suit instituted against Pitamber Singh. He entered into the transaction with the plaintiffs with his eyes open and he had numerous persons to advise him in the matter. There are recitals of legal necessity in the bonds executed by defendant No. 4 in favour of the plaintiffs and it must be assumed that defendant No. 1 as the head of the family, was aware of all the circumstances in connection with the matter. At any rate he was far better acquainted with these facts than the plaintiffs and it is impossible to say that knowing the facts, as he must be presumed to have known, he could have been imposed upon by the plaintiffs. I entirely agree that a Court will set aside a completed transaction if it is shown that the consideration was so inadequate as to lead to the inference of fraud or undue influence, but the inadequacy of consideration must be apparent and must not be left to be spelled out by dexterous arguments as to value. In other words, in Order to enable the Court to set aside a completed transaction, the thing must speak for itself. I am of opinion that it has not been shown in this case that there is such inadequacy of consideration as to lead to the inference, of fraud or undue influence.
I hold that there is no defence to the suit which should have been decreed by the learned Subordinate Judge. I would allow the appeal, set aside the judgment and the decree passed by the Court below and give the plaintiffs a decree in terms of prayers 1�5. The plaintiffs are, also entitled to their costs both in this Court and in the Court below as against defendant No. 1.
Adami, J.
I agree.