Lachman Lal vs Munshi Mahton and Others

Wort, J.—This is an appeal from the decision of the learned District Judge of Patna in which he reversed the decision of the learned Munsif in an action in which the plaintiff claimed a declaration that defendant 9 had no right to mortgage the property, the subject-matter of the action. The relief which the plaintiff claimed was for a permanent injunction prohibiting and restraining the principal defendants from taking out execution of a decree in a mortgage suit to which I shall presently refer. As I have said, the learned District Judge set aside the judgment of the learned Munsif and dismissed the plaintiff''s action.

The facts are these:

The plaintiff and defendant 9 were members of a joint family. It appears that the plaintiff was in prison and during his incarceration defendant 9 executed a mortgage of a certain property which it appears he alleged was his own. Ultimately an action was brought by the principal defendants against defendant 9 and a mortgage decree was obtained. Out of those facts arose this action in which the plaintiff claimed the relief which I have already stated. The learned District Judge has dismissed the plaintiff''s suit substantially on the ground that there was legal necessity for the mortgage which defendant 9 executed in the circumstances which I have narrated in the earlier part of my judgment.

In the argument which has just concluded and to which I have listened) with great interest, Mr. Manuk raises two or three other questions besides the one to which I have referred. They principally relate to the question of estoppel. It is said that defendants 1 to 8 in this case are now estopped from raising the question of necessity by reason of certain facts to which I must now refer. Before doing so I propose to state shortly the arguments of Mr. Manuk. He first of all contends that the defendants cannot approbate and reprobate.

He contends that in the circumstances he, the defendant 9, made certain representations and is now estopped from alleging anything contrary to those statements, that is to say he is estopped from raising the question of the necessity of the family.

Both Courts have stated that the mortgage bond itself recited that the consideration of the mortgage bond was obtained for the personal expenses of defendant 9. The sentence in the deed in the vernacular is translated by the trial Court and it is that the loan was obtained for his own expenses and not that of the joint family.

Whether the learned Munsif was justified in stating as his judgment appears to state, that there was a recital in the bond itself that the expenses were not of the joint family, I am not certain. From the judgment of the learned District Judge it would appear that he agrees with the translation to the effect that the consideration was for the expenses of defendant 9 alone.

The second fact is that when defendant 1 and other members of his family brought the action on the mortgage bond against defendant 9, the plaintiff, the father of defendant 9, sought to intervene and made an application to the Court accordingly.

There is no doubt, and it is made clear from the judgment of the learned District Judge, that the Court declined to make an order allowing the plaintiff to intervene, in other words it rejected his application. I state that because it was suggested in the course of the argument that it was possible that the plaintiff may have withdrawn his application to intervene. I repeat that the judgment of the learned District Judge makes it quite clear that the Court itself rejected the application. That makes a considerable difference having regard to the argument which Mr. Manuk puts forward on the question of estoppel.

Now I propose to deal with the argument relating to estoppel in connexion with the proceedings in the mortgage action when, as I have stated, the plaintiff sought to intervene. The importance of the fact that the Judge dismissed the application will, I think, sufficiently appear from the reasons which I shall give for coming to my conclusion on this point.

It is stated in argument that the effect of defendants 1 to 8 (the plaintiff''s in the mortgage action) resisting the joinder of the present plaintiff in the mortgage action as a defendant was an implied representation that they, the plaintiff''s, were content with obtaining a decree charging the property of defendant 9 only and not charging the property of the joint family.

I am clear in saying that there is no justification for that argument. It is quite clear however that the plaintiffs in that action resisted the present plaintiff''s application to be joined on the ground that this was the property of defendant 9 only. To that extent the representation was made. That there was no representation as to the kind of decree which was to be obtained in the action is quite clear from the fact that what was in fact obtained in the action was a mortgage decree, and if indeed it was a mortgage decree it bound the property whether it was the property of the joint family or whether it was the property of defendant 9 only; but it does make this difference. If the mortgage decree had been obtained against the joint family property but as against only one member of the joint family who had no authority to mortgage it, then quite clearly in some subsequent proceeding the plaintiff in the mortgage action always was in peril of having his mortgage decree nullified.

That much is clear. But can it be said that in any way the argument, which it appears the plaintiff in that action put forward to the Court in resisting the present plaintiff''s application to be joined as a party interested in the security, can be treated as a representation which now estops defendants 1 to 8 from asserting that the mortgage was obtained for the necessity, of the joint family. In my judgment that argument is quite untenable. The present plaintiff in no way altered his position; he was in no way misled.

But there remains the further necessary consideration of the question of whether the deed itself can act as an estoppel against the defendants. It seems to be reasonably clear that what defendant 9 said in his deed was that the loan was required for his own expenses. In the earlier part of my judgment I have used the words "personal expenses."

This is not so. According to the translation the loan was required for defendant 9''s own expenses. There may be no particular difference between the two forms of expression but it is better to be exact. It is contended, as I have said, that defendants 1 to 8 are estopped now from saying that the consideration for the expenses was for any other than defendant 9. This of course assumes in the first place that when defendant 9 said "his own expenses" he meant expenses of himself in contradistinction to expenses of the joint family. I do not decide that it is so; but as I say the argument assumed so.

For this purpose Mr. Manuk relies upon the case of Banga Chandra Dhur v. Jagat Kishore AIR 1916 PC 110. The Lord Chancellor in delivering the opinion of the Judicial Committee of the Privy Council in the case where the question of estoppel arose on a deed said this:

Under ordinary circumstances and apart from statute, recitals in deeds can only be evidences between the parties to the conveyance and those who claim under them.

Another authority to the same effect is relied upon by Mr. Manuk in this connexion and it is stated that the Lord Chancellor there meant that once it is shown that a person is a party to a deed whether it is his recital or whether it is the recital of both parties it binds both parties.

In this connexion I must refer to an argument which was put forward before me in the earlier part of the case. It was contended that Section 115 Evidence Act, was not exhaustive of the, law relating to estoppel and that there were classes of estoppel other than that which is known as the rule of evidence. And it is further stated that the law of estoppel in this country is the same as the law of estoppel in England. In this connexion the case of Sarat Chunder Dey v. Gopal Chander (1893) 20 Cal 296, at p 310, is relied upon. Lord Shand in delivering the opinion of the Judicial Committee said this:

The learned Counsel who argued the present case on either side wore agreed that the terms of the Evidence Act did not enact as the law in India anything different from the law of England on the subject of estoppel, and their Lordships entirely adopt that view.

If it is suggested that the estoppel arises other than as a rule of evidence, I cannot agree. For the proposition that estoppel is nothing more than a rule of evidence, I quote for instance the case In re. Ottos Kopje Diamond Mines, Ltd. (1893) 1 Ch 618 and Dickson v. Reuter''s Telegram Co. Ltd. 3 CPD 1. The case which was quoted decides that the law of India and England is the same as regards estoppel. I mention this in connexion with the argument that both parties are bound by the recital in the deed which cannot be supported, it being, in my judgment too wide in its statement.

There can be no dispute as to what the law is on this point, and it was settled as far back as 1850 when the case of Stroughill v. Buck (1885) 14 QBD 781 was decided. Pateson, J., in that case stated the law in these terms:

When a recital is intended to be a statement which all the parties to the deed have mutually agreed to admit as true, it is an estoppel upon all. But, when it is intended to be the statement of one party only, the estoppel is confined to that party, and the intention is to be gathered from construing the instrument.

Now there can be no doubt in this case whose statement this was in this deed. Quite clearly the only answer one can give to that question is that it was the statement of defendant 9, and in that sense defendant 1, mortgagee, was a stranger.

In my judgment, therefore, quite clearly no question of estoppel can possibly arise on the statement in this deed, and further as the action is being brought by a person who is not a party to the deed, there can be no estoppel between a party to the deed and a third party; as between the parties only to the deed can the estoppel possibly arise; for these reasons I cannot come to any conclusion other than that no question of estoppel possibly arises in the circumstances of this case. As regards the argument that the defendant cannot approbate and reprobate, the ''principle has no meaning or application to circumstances such as these. Clearly defendants 1 to 8 are not affected. They were not parties to the deed and as to their statement or argument against the plaintiff being joined in the mortgage action, there can be no question of approbating and reprobating; they the defendants simply resisted the intervenor''s application. As to defendant 9, his statement in the deed is that the only person concerned in that is the other party to the deed, viz., defendant 1, and no question of approbating and reprobating arises between these parties.

There remains only the question of necessity. It is contended in the first place by Mr. Manuk that the learned District Judge has placed the onus upon the plaintiff in the action whereas in fact the onus should have been placed on defendants 1 to 8. There are two branches of this argument, one is as regards the question of whether an inquiry was made and the other is as regards the funds which were supposed to have been in the hands of the joint family. So far as the question of inquiry is concerned, it is perfectly clear on a perusal of the judgment of the learned District Judge that if the onus has been placed on either party it has been placed on defendant 9.

The learned Judge says that:

the defendant Munshi has said in his evidence that he made enquiries about necessity from Mt. Phupdei, from Lalkishun Lal, from Biswanath Lal and from Bishuni Lal and was satisfied that there was necessity.

Ag against this evidence the only rebutting evidence adduced is that of the plaintiff himself. It is impossible on that finding to say that the onus was wrongly placed on the plaintiff. There is however the other question of what funds were in the hands of the joint family.

The learned Munsif relied on the fact that a sum of Rs. 1,160 had been placed in the coffers of the family on account of rents. It appears that there was an argument addressed to him to the effect that there had been no proof that the money had actually got into the hands of the family. The learned District Judge seems to have adopted this argument when the case came before him, and as there was no direct evidence that the money had actually got into the hands of the family, the learned District Judge was pleased to hold that there was no proof of the fact. This was a decision on facts and it has been held by the Privy Counsel that however unsatisfactory the reasoning may be, the High Court is bound. In addition I am not persuaded that the reasoning is necessarily unsatisfactory. The learned Munsif has presumed that as the money was shown to have been paid by tenants the ordinary assumption would be that it had got into the hands of the family. The learned District Judge, as I have indicated, has held otherwise. Even so, does this dispose of the question of necessity? The learned Judge in the Court below has come to the conclusion, apart from this question of the Rs. 1,160, that there was family necessity at the time.

Assuming for the moment that the decision of the learned Munsif to be preferable to that of the learned District Judge on this point, namely, the proof that the Rs. 1,160 got into the hands of the family, is this sufficient to dispose of the question of family necessity in favour of the plaintiff? The leading case on this question is undoubtedly the case of Hanooman Prasad Pandey v. Mt. Babooee Munraj Koonweree (1854) 6 MIA 393. Knight Bruce, L.J., in delivering the opinion of the Judicial Committee of the Privy Council said:

Their Lordships think that the lender is bound to inquire into the necessities for 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. But they think that if he does so inquire, and acts honestly, the real existence of an alleged sufficient and reasonably credited necessity is not a condition precedent to the validity of his charge, and they do not think that, under such circumstances, he is bound to see to the application of the money.

Knight Bruce, L.J., points out two things: that it is not necessary for him to see to the application of the money and the real existence of an alleged sufficient and reasonably-credited necessity is not a condition precedent to the validity of the charge. Whether the money had been paid into the coffers of the family or not may depend on the question of whether there was family necessity or not; but it by no means concludes the question. They may have had this Rs. 1,160 and they may have still required more money to meet the necessary family expenses, and further the case to which I have just referred clearly shows that the proof of the actual existence of necessity is obviated in those cases where there is honesty of purpose and due inquiry, but that there was inquiry has been found by the learned Judge.

In the circumstances of the case as I have stated the learned District Judge has come to the conclusion that not only was inquiry made but there was in fact a family necessity. It seems to me that that concludes the matter. But there is one further point which Mr. Manuk raises and that is this: that quite apart from estoppel the defendants cannot possibly contend that it was joint family necessity by reason of the fact that it was stated at the time of the deed that it was the necessity expanses of defendant 9 only. I understand by that argument of Mr. Manuk to mean that when the parties now state that it was otherwise, they are not to be believed.

In second appeal of course it seems hardly possible to hold that question to be open; but assuming it is, the question of whether defendant 9''s own necessity necessarily precludes the necessity of the family seems to me not to be a difficult question to decide. It matters not whether there was any representation at the time; it matters not whether an inquiry was made at the time by the lender if in fact the necessity existed (although proof of inquiry disposes of the question of necessity as I have held) it is clear law that that is sufficient to support the transaction. It seems therefore quite irrelevant to ascertain what was the statement made at the time if necessity at the time is established.

In other words, if a statement had been made at the time and if a proper and bona fide inquiry had been made to the extent that was pointed out in the case to which I have just referred, then to that extent the lender is excused from establishing that there was in fact family necessity. It is not to be forgotten that when once it is accepted that inquiry was made or necessity established no point can be made that the present plaintiff was then believed not to be a member of defendant 9''s family. In other words there was no duty upon the lender to ascertain who was and who was not a member of the family of defendant 9. For these reasons the appeal must be dismissed with costs. Leave to appeal is allowed.