Nrishingha Charan Nandi Choudhry v. Thakur Ashutosh Deo Ghatwal And Others

Nrishingha Charan Nandi Choudhry v. Thakur Ashutosh Deo Ghatwal And Others

(High Court Of Judicature At Patna)

| 19-11-1937

Wort, J.This is the plaintiffs appeal and arises out of an action for possession of the Basouri mahal described as the town portion of the Rohini Taluk being one of the Birbhum Ghatwali estates. The claim was made under a lease of 23rd February 1926. The grant was made by one Ravaneshwar Prasad Singh purporting to act on behalf of himself and on behalf of Lachmi Kueri, his minor daughter-in-law, the consideration being a salami or premium of Rs. 3000, and Rs. 1200 per annum being the rent reserved. The defendants to this action were:

Major Alfred Agabeg now deceased--defendant 1,

Thakur Ashutosh Deo the Ghatwal--defendant 2,

Ravaneshwar Prasad Singh--defendant 3, whom I have already mentioned;

Lachmi Kueri the minor daughter of Thakur Ashutosh Deo--defendant 4, and,

Ramesh Chandra Sinha, Receiver of the Rohini Ghatwali estate--defendant 5.

2. The root of the plaintiffs title for the purpose of this litigation was a deed of gift by the ghatwal (defendant 2) to his minor daughter Lachmi Kueri (defendant-4). This gift was by a deed dated 26th December 1925 registered on 17th March 1926.

3. The learned Subordinate Judge in the Court below has held that the date of execution was not as stated in the deed but was 17th March 1926 the date of registration, the deed having in fact been antedated. It is important to notice a fact which in my judgment concludes this case, and that is that the learned Judge in the. Court below has held that the deed of gift, was not a gift in favour of Ravaneshwar Prasad Singh in the benami name of the ghatwals daughter, but was in fact, as the deed purported to show, a gift in favour of Lachmi Kueri the minor daughter. This finding has been accepted by the appellant. Now, this finding of the learned Subordinate Judge necessitated an alternative case by the plaintiff in this Court and that was that the grant of the lease by Ravaneshwar on behalf of himself and Laohnai Kueri was for the benefit; of the minors estate. The learned Judge in the Court below has held that this has not been proved, and in fact it was not alleged by the plaintift nor was any evidence adduced on behalf of the plaintiff with regard to this matter. The defence to the action was that the gift was invalid as having been made whilst a receiver was in possession and the property was under attachment without the consent of the receiver, because the ghatwali was inalienable as, a held by a decision of their Lordships of the Judicial Committee of the Privy Council to which reference will be presently made. The Judge decided this matter in the plaintiffs favour, holding first of all that the gift was merely of a life-interest; that the property was not in possession of the receiver but in possession of Major Agabeg defendant 1 : and that there had been in fact no attachment.

4. A further defence was that the gift was made during a certain litigation regarding the title, and that the doctrine of lis pendens applied. The Judge has held in favour of the defendant on this last point, coming to the conclusion (as I have already stated) that the actual date of the execution of the deed of gift was 17th March 1925 and not the date set out in the deed itself.

5. It was also contended by the defendants that Ravaneshwar had no authority as a guardian, the Judge holding that even if Ravaneshwar was a de facto guardian he had no right to transfer the property as no benefit to the minors estate had been proved. The next defence was that the action of Ravaneshwar in granting the lease was induced by undue influence, this question being decided by the Judge in the affirmative and his finding has not been controverted in this Court. That finding alone in my judgment is enough to dispose of the appeal against the appellant.

6. In addition the learned Judge has held that there was want of mutuality and that the consideration was inadequate, but those questions do not arise. As regards the necessity of a sanction of the Court this finding was in favour of the plaintiff; I am referring to the contention that it was necessary to get the sanction of the Court for the purpose of bringing this action. In my judgment the learned Judge was in error in coming to this finding as will be seen from the observations which I am about to make, namely that the estate was in possession of the receiver through Major Agabeg, both of whom being officers of the Court, it was necessary to apply to the Court for sanction for the purpose of bringing this action for possession.

7. This is clearly established in the decision in In re Henry Pound Son & Hutchins Ltd. (1889) 42 Ch. D 402 the passage upon which I rely appearing at p. 422 in the judgment of Fry L.J. Now Pry L.J. is reported to have said:

Now, where property is in possession of an officer of the Court, and there are legal or equitable rights in that property not vested in the parties to the action or the persons who are before the Court, which legal or equitable rights are not the subject of the administration then going on, then the Court requires that the person who claims to enforce those rights shall apply for leave to enforce them. The right may be a right to take possession, or a right to bring an action, or a right to do various other things; but the Court requires an application, to be made to it.

8. The action again would fail on that point. Now, in order to deal with the points which have been argued before this Court, a statement of certain facts must be made and I propose to state them as briefly as possible. The ghatwal (defendant 2) succeeded to this property (i.e. the Bohini Taluk) in 1911 and either at that time or soon after (it is quite immaterial when) became indebted to a number of creditors of whom a Major Agabeg was one. Agabeg was put into possession of the estate under a deed of managership on 4th May 1914 in consideration of moneys already owing to him and of further advances then made or about to be made. He was dismissed by the ghatwal on 4th November of the same year but brought two suits one to enforce his rights under the deed of managership and the other a suit for debts which were owing to him by the ghatwal. He sue, ceeded and was reinstated in the managership.

9. On 5th April 1917 he was granted a usufructuary mortgage for ten years of the Basouri mahal that is the portion of the estate with which we are concerned in this case. The annual value was fixed at a sum of Rs. 10,227 odd from which were to be deducted certain recurring annual charges leaving a balance of approximately of Rs. 5000 from which Agabeg was to satisfy his dues. Ultimately he gave up possession, which he had got under the mortgage of 10th April 1928, just before his death, having informed the Court that his dues were satisfied--a fact which is important as I shall presently show. Temporarily Agabegs assistant was appointed a manager of the estate and ultimately in January 1929 the receiver, who had been appointed some years before as receiver of the estate, was put in actual possession of this portion of the estate, being already in actual possession of the other portion. In the meantime, a number of creditors had obtained decrees and in execution on 8th January 1917 the receiver, who is defendant 5 in this action, was appointed at the instance of two of them, Mt. Sundari and Debi Prasad Marwari. This resulted in the litigation, the later stages, of which have been held to attract the doctrine of lis pendens.

10. A rule was granted by this Court calling upon the creditors to show cause why the receiver should not be discharged. There was a compromise by which Agabegs rights were allowed to remain intact, the ghatwal was to get Rs. 350 per mensem as maintenance, and Agabeg was to hand over the surplus rents and profits of the estate to the receiver for the benefit of the creditors. The matter again came before the Subordinate Judge in the following circumstances. Another creditor Sripati Nath Roy had obtained a decree for Rs. 8385 on 8th December 1915.

11. In execution, this receiver (defendant 5) had been appointed a receiver of the estate. There was an objection by Agabeg and a compromise was effected ultimately. The matter having gone to the High Court, the High Court by its judgment of 26th May 1919 propounded a certain scheme the interpretation of which raises one of the questions argued by Sir Sultan Ahmed on behalf of the appellant, the question being whether Agabeg was in possession under the usufructuary mortgage or whether the Court by the receiver and Agabeg as manager was in possession. Again in 1921 one Bansidhar (one of the creditors) started an execution against the estate. This creditor was one of those who had been parties to the order of the High Court but asked for attachment in his execution. On 15th September 1923, the Subordinate Judge dismissed his application holding that the Ghatwali was inalienable. On 9th December 1924 this Court reversed the decision of the Subordinate Judge holding that the Ghatwali was alienable. There was a stay of execution and an appeal to the Judicial Committee of the Privy Council. Their Lordships of the Privy Council set aside the judgment of this Court, holding that the Ghatwali was inalienable. This was on 24th April 1928. It will be seen that it was during this litigation that the gift and the lease were made. Sir Sultan at the outset admitted that if the estate, including of course the Besouri mahal which is the subject-matter of this appeal, was in the hands of the receiver at the time of the gift, his case must fail as the foundation of his title under the lease would be gone.

12. For the purpose of deciding whether his contention is right, the order in the decision of this Court dated 28th May 1919, as I have already stated, must be construed.

13. Although I propose to deal with this matter in the observations which I shall make, the question in my judgment does not arise having regard to the decision with regard to the matter and the lease itself. The deed of gift, as I have already stated, was held not to have been a farzi transaction. The gift was as it purported to be a gift in favour of the minor daughter. The right to grant the lease therefore was with these who in proper circumstances had power to alienate the property of the minor, and as I have already pointed out, there was no case in support of this made in the plaint nor was any evidence adduced with regard to the matter, although in the written statement of defendant 4 it was perhaps not very clearly pleaded.

14. It has been held, as I have said, by the Subordinate Judge that Ravaneshwar had no authority as a de facto guardian to alienate the estate (if such could be described) of the minor. Sir Sultan attempted to meet this finding of the learned Judge in the Court below by contending first that in fact the husband, who ordinarily would be under the law the guardian of his minor wife, was a minor himself at the time, and alternatively that Ravaneshwar was a de facto guardian.

15. As regards the minority of the husband, Sir Sultan Ahmed relies upon various parts of the record of this case from which he would ask us to draw an inference in support of his contention; but as to evidence in the matter there is none on the part of the plaintiff. Now, such evidence as there is which was adduced by the defendants--I refer particularly to the evidence of Earn Narain Singh (witness 1 for defendant 4)--if accepted would show that the husband was major at the time the lease was made. It is not denied that a de facto guardian has certain responsibilities and liabilities to some extent analogous to those of an executor de son tort, but Sir Sultan contends that along side these responsibilities and liabilities are certain rights amongst which is the right to alienate the estate of a minor for the benefit of the estate.

16. On this particular point in the circumstances of this case, we are, in my judgment, not so much concerned with the rights of a de facto guardian to alienate a minors estate, as we are to decide whether in this case Ravaneshwar was a de facto guardian. Ravaneshwar was in the first place a self-appointed guardian and that appointment, in the state of the evidence before us, must be held to have been limited to the transaction in this case. He was in my judgment a guardian ad hoc and no more. There is no evidence that he had acted as guardian of the minors estate nor had intermeddled therein, proof of which alone would justify a finding that he was a guardian de facto. This distinction between a de facto guardian and a guardian ad hoc was drawn by the Chief Justice in Harilal ranchhod v. Gordhan Keshav A.I.R.1927. Bom. 611 where this statement was made:

I am not prepared to say that a person who over many years has never intermeddled or acted as a guardian can then come forward and claim to be a guardian de facto and authorized to sell property on behalf of a minor.

17. For the reasons which I have given, I do not think that the case in Tulsidas Jesingbhai Parikh and Others Vs. Raisingji Fulabhai Vaghela and Another, nor the case in Hemraj Dattubuva v. Nathu A.I.R.1935. Bom. 295 are in point, as in those cases the question was not so much as to whether a person was a de facto guardian as what were the powers of a de facto guardian. Mata Din v. Ahmad Ali (1912) 34 All 213 was also quoted, but there may be a distinction in that case although I do not so decide, on the ground that that was a case under Mahomedan law. In my judgment Ravaneshwar could not correctly be described in this case as a de facto guardian; and whether de facto or ad hoc, the matter is concluded by considerations which applied to the question whether the grant of the lease was for the necessity and benefit therefore of the estate.

18. As I have said, it is contended that the grant of the lease was for the benefit of the minors. Neither alleged nor proved as we have seen, Sir Sultan Ahmed was forced to fall back on certain facts--admitted facts perhaps which emerged from the evidence in the case. It was contended that the act of the granting of that lease was that of a prudent manager for the following reasons, first, that the net income of this portion of the estate was Rs. 5134 odd and that as Agabeg was put in possession for at least two years after the granting of the lease, for at least that period there was a sum of over Rs. 10,000 which would be swallowed up. It was at this time that the High Court had held that the estate was alienable and therefore Sir Sultan points out the creditors would probably take the whole: and the third fact was that the rent reserved was Rs. 1200 per annum which would ensure to the minor an income of at least that amount.

19. This contention is tantamount to saying that the benefit, to secure which a prudent manager would act, is to be determined upon the probable financial result of the transaction. It cannot be said in this case that the lease was granted in the ordinary course of management of the minors property for one reason alone that there was no evidence that apart from this gift the minor had any property. And again the avowed purpose, according to the appellants case, was to put the property beyond the reach of creditors.

20. That in my opinion was not what was intended by their Lordships of the Judicial Committee in the well-known statement made in the leading case in Hunoomanpershad Pandey v. Mt. Babooee Munraj Koonweree 1854.6.M.I.A. 393 to the effect that the power of a manager for an infant) heir to charge ancestral estate is a limited and qualified power only to be exercised rightly in a case of need or for the benefit of the estate--I am paraphrasing the words used by their Lordships. Their Lordships of the Judicial Committee of the Privy Council in the equally well-known case in Palaniappa Chetty v. Devasikamony Pandara Sannadhi A.I.R.1917. P.C. 33 referred to a later passage in the judgment of Knight Bruce L.J. in the leading case to this effect:

The actual pressure on the estate, the danger to be averted, or the benefit to be conferred upon it in the particular instance, is the thing to be regarded.

21. Lord Atkinson after quoting that passage proceeds to say that the words benefit to the estate cannot be precisely defined but include

the preservation of the estate from extinction, the defence against hostile litigation... the protection of it or portions from injury or deterioration by inundation,

and similar circumstances. To ward off effectively danger to the estate is what was in my opinion meant, and I am convinced that the transaction, which might in certain circumstances be attacked as fraudulent preference, could not in my judgment be held to be of that nature. In making this statement I rely particularly upon the contention of the appellant that the purpose of the lease was to put the property beyond the reach of creditors.

22. It was the contention of Sir Sultan that the words benefit to the estate were not confined to the protection of the estate and he relied up on a statement to that effect of one of the learned Judges in the case reported in Hemraj Dattubuva v. Nathu A.I.R.1935. Bom. 295 a case which I have referred to in another connexion. But the transaction in this case, as the Judge in the Court below has pointed out, is both speculative and imprudent. The annual income of this property was approximately Rs. 15,000 which was disposed of for a premium of Rs. 3000 and a rent reserved of Rs. 1200. Had the consideration to be paid been sufficient to pay off the creditors of the estate, the matter would have, in my judgment, been different; but that could never be said under the circumstances of this case. There is another matter which puts the question of the benefit to the estate in my opinion beyond controversy.

23. The circumstances under which this lease was granted were as follows. Ravaneshwar is said to have had a contract with the Ghatwal for the grant of a permanent mukarrari lease of the estate for which he was to pay a consideration of Rs. 10,000. He is alleged to have approached the plaintiff to lend him Rs. 5000, the balance required by him for the purpose of paying this consideration. It is alleged, but not proved according to the judgment of the Court below, that there was in the result a contract by Ravaneshwar to assign his rights under this contract to the plaintiff, and, as this contract was not carried out although stamps had been purchased and other expenses incurred by Ravaneshwar, one of the officers (so called) of the plaintiff had filed a criminal case for cheating and also it was alleged the plaintiff was about to file a suit for specific performance of the contract. Under those circumstances the lease was granted. The defendants contended that it amounted to duress or undue influence. This contention was accepted by the Judge in the Court below and has not been controverted in this Court. That in my judgment, as I have already said, is an end of the plaintiffs case. There can be no question in those circumstances of the lease having been granted by a prudent manager for the benefit of the minors estate. That in my judgment concludes the case against the plaintiff.

24. However I propose to deal shortly with the deed of gift. It was in my judgment made at a time when the receiver was in possession, by the manager Agabeg. That a receiver had been appointed we know, and whether Agabeg should retain possession or the receiver, was the matter determined by this Court in the judgment to which I have already referred. The receiver necessarily was an officer of the Court, and so was Agabeg. That is clear from para. 1 of the terms of the scheme. That he was to pay himself out of the rents and profits which arose from the property, the subject matter of the usufructuary mortgage, would in my judgment make no difference. He was to account for the balance and the elaborate conditions as to his position as the person in possession of the Basouri mahal would have been irrelevant and would have formed no part of the scheme, had Basouri mahal been excluded from the operation of the order. It is to be remembered, and it is admitted as regards the remainder of the estate, that although Agabeg was in possession, he was in possession for the receiver and therefore for the Court.

25. Upon the plain terms of the scheme particularly the first eight paragraphs. I am of the opinion that the possession was possession of the Court through the receiver and Agabeg, the manager. I would refer to another matter of which I made a, mention in the earlier part of my observation and that is the fact of Agabeg announcing to the Court that his dues had been paid. Now, if the contention of Sir Sultan Ahmed is correct that the Basouri mahal, the subject-matter of the usufructuary mortgage, is entirely outside the order made by the Court in the sense that that portion of the estate was not in possession of the Court through the receiver and manager, the proper course for Agabeg to have pursued would have been to give possession of that portion of the estate to Thakur Ashutosh Deo, the Ghatwal. That fact at any rate is a sufficient indication that the position of Agabeg in his own mind at any rate was by no means uncertain.

26. I now come to the question of lis pendens. The litigation which proceeded to the Privy Council was in Bansidhars execution started in 1921 and concluded in 1928. The parties were Bansidhar on the one side and the Ghatwal and Agabeg on the other; the receiver (defendant 5) was not a party. The contention on this point is with regard to Section 52, T.P. Act:

The property cannot be transferred or otherwise dealt with by any party to the suit so as to affect the rights of any other party thereto.

27. "Any other party thereto" is construed by Sir Sultan Ahmed as meaning "any opposite party or any party who has opposing interest"; and, unless for the purpose of giving relief to the plaintiff in the litigation it is necessary to decide a controversy between the defendants, the doctrine of lis pendens would not apply. A number of authorities are relied upon including the case in Krishnaya v. Vasudeva Mallayya A.I.R.1918. Mad. 578 and also the cases decided by their Lordships of the Judicial Committee of the Privy Council. I think Mr. Manuks contention in this connexion is right, although I do not expressly decide the matter for the reason which I think I have sufficiently indicated by the observations I have already made, the question whether the doctrine of lis pendens applies in my judgment not strictly arising.

28. But if I am to express a view with regard to the matter, it seems to me to be difficult to rely upon the English authorities, particularly Bellamy v. Sabine (1857) 1 De. 566 for the construetion of the Indian statute. The words any other party seem to be unconditional and I should find it difficult to hold that those words are in any way restricted by reference to decisions even of their Lordships of bhe Judicial Committee of the Privy Council where the point in issue was as between the parties (opposite parties) and not as between co-defendants as Mr. Manuk has pointed out.

29. To sum up my observations, it seems to me that the appeal fails for the following reasons: In the first place it has been decided against the plaintiff, appellant that Ravaneshwar Singh, de facto guardian or not, had no right to make a grant of this lease. The finding which has been accepted by the appellant that the deed of gift was not a benami transaction also helps to con elude this part of the case. The second question which seems to me to make the appeal to this Court quite hopeless is the decision of the learned Judge in the Court below that the lease was obtained by undue influence and on that finding alone it is quite impossible for the appellant to succeed in this Court. There is one other matter to which I shall refer and that is this. The Judge in the Court below has held that that part of the contract, which was to be performed by the plaintiff, namely the payment of Rs. 3000 premium, has not been performed. The plaintiff neither alleges in this case nor does he prove that he was ready and willing to perform his part of the contract. That is the further fatal bar to the success of the plaintiff in the action.

30. For these reasons, I would hold that this appeal fails and must be dismissed with separate costs both to defendant 4, Mt. Lachmi Koeri, wife of Lachmi Narain Singh, and to the receiver, defendant 5.

Manohar Lall, J.

31. I agree but I wish to add a few observations. In my opinion the appeal can be disposed of on a very narrow point, namely whether the plaintiff has succeeded in establishing the case which was sought to be made in paras. 4 and 5 of the plaint. A plain reading of these paragraphs makes it clear that the plaintiff rested his title on the ground that defendant 3 had obtained a transfer of the disputed properties from Ashutosh Deo, defendant 2, by a deed of gift dated 17th March 1925, benami in the name of his minor daughter-in-law, defendant 4, and that, in order to avoid a contemplated civil suit for specific performance of the contract said to have been entered into between defendant 3 and the plaintiff for transferring mukarrari tenancy right in the Rohini estate, and also as a result of the plaintiffs agreeing to withdraw the criminal case which was filed against defendant 3 for defrauding and cheating him (plain., tiff) because of the formers dishonest and ulterior object of fraudulently avoiding specific performance of the above mentioned contract made by defendant 3 in favour of the plaintiff, defendant 3 agreed to execute and did in fact execute the lease of February 1926 for a certain consideration.

32. It is to be noticed that in these paragraphs which are the foundation of the claim of the plaintiff, it is nowhere suggested that the title in the disputed properties was with defendant 4, the minor daughter-in-law, in whom the apparent title lay by virtue of the transaction of 17th March 1925. The case proceeded to trial on this very footing and indeed the question whether the transaction of 17th March 1925 was a benami transaction was rightly treated by the parties as the principal issue in the case. Upon this matter the learned Subordinate Judge has given a careful finding in these words :

The evidence and the surrounding circumstances do not support the view that the gift was in favour of Ravaneshwar Prasad Singh benami in the name of his daughter-in-law.

33. Sir Sultan Ahmed appearing for the appellant did not challenge this finding of fact and in this he was well advised because the evidence and the circumstances disclosed in the case do not point reasonably to any other conclusion. Now this being so, in my opinion, there was an end of the case of the plaintiff and this appeal must be dismissed. But inasmuch as the learned Subordinate Judge allowed himself to be engaged in discussing other questions and as they have been argued before us, it is right that I should shortly give my reasons thereon.

34. It was argued by Sir Sultan Ahmed that assuming that the deed of gift was good and operative and that it did convey the properties in suit to defendant 4, nevertheless defendant 3 as the guardian of the minor daughter-in-law executed the lease on 23rd February 1926 in favour of the plaintiff and that this transaction was binding upon the minor, because (so it is argued) it was for her benefit and was such as a prudent owner would have reasonably entered into in the ordinary course of good, management of his own or his wards property. The first difficulty in the way of this argument is that the evidence upon the record is wholly unsatisfactory and insufficient to establish that defendant 3 was the legal guardian of the minor on the date of the transaction.

35. On the other hand it is proved that defendant 4s husband was himself of age and therefore the natural guardian of his wife. Apart from this the evidence in the case satisfies me that the minor and her husband were both living with the ghatwal, and if it is assumed that the husband was a minor then and unable to understand the affairs of his wife, the natural guardian in such a case would be the father, but in no case defendant 3 was the guardian. Again the plaintiff has no evidence whatsoever to prove that the husband was not of mature understanding to look after the affairs of his wife as he has been doing in this litigation throughout.

36. Sir Sultan Ahmed relies upon the absence of the horoscope and the non-production of the account books by the defence and wants us to draw an inference that if these documents had been produced, they would, have shown that the husband of the minor was himself a minor at the relevant date. It is enough to state that the plaintiff did not call upon the defendants to produce these documents, if they indeed contained any relevant and material entries on the matter in issue. It was then argued that the recital in the lease of 23rd February 1926, was itself admissible to prove that on that date the husband of the minor was himself a minor. In my opinion, this statement is wholly inadmissible in evidence because the maker of the statement in the recital was alive at the date of the trial and was not examined as a witness and I do not know of any Section of the Evidence Act which would make this statement admissible.

37. I have therefore no hesitation in holding that defendant 3 was not the guardian of the minor on the date of the transaction. It was then argued that defendant 3 was a de facto guardian. I do not understand the meaning of the words de facto guardian and how the situation of an unauthorized guardian is improved by describing him as a de facto guardian. Such a person by reason of his being de facto guardian may assume important responsibilities in relation to the minors property, Mata Din v. Ahmad Ali (1912) 34 All 213, and be thereby liable for any damage that may be occasioned by his wilfully meddling with the affairs of the minors estate, but by so doing he cannot clothe himself with any legal power to dispose of the property of the minor.

38. I therefore think that it is impossible to entertain the argument that defendant 3, if he was not a legal guardian of the minor, could by simply arrogating to himself the responsibilities of a de facto guardian be allowed to legally deal with or transfer the properties of the minor. Such a transfer is wholly unauthorized and the question of any benefit to the minor is beside the question. The minor, it is to be noticed, has repudiated the transaction as soon as it came to her knowledge and this repudiation is being vehemently insisted upon throughout the trial and before us. Sir Sultan Ahmed then relied upon the case in Tulsidas Jesingbhai Parikh and Others Vs. Raisingji Fulabhai Vaghela and Another, in support of his contention for the view that there is something peculiar to the Hindu system of jurisprudence which confers special power on a person who without authority assumes the office of guardianship. The decision of the Full Bench was a dissenting decision where the learned Chief Justice took a contrary view. The other learned Judges have made observations which appear to be in support of the contention of the appellant.

39. The learned Judges were impressed by the observations of the Privy Council in the well-known case in Hunoomanpershad Pandey v. Mt. Babooee Munraj Koonweree (1854-6 M.I.A. 393. I propose to show that the observations of the Privy Council do not mean what has been stated by the learned Judges to imply. In the case in Hunoomanpershad Pandey v. Mt. Babooee Munraj Koonweree 1854. 6 M.I.A. 393 the Privy Council definitely found

that the acts of the Rani cannot be reasonably viewed otherwise than as acts done on behalf of another, whatever description she gave to herself, or others gave to her; that she must be viewed as a manager, inaccurately and erroneously described as "proprietor" or "heir" and it was found that the case that the plaint makes is not that she intruded upon him (the complainant) and assumed proprietorship; the plaint itself says she had possession as guardian, that is, as managing in that character

[underlined by me: here italicized]. It must not be forgotten that their Lordships considered

that the right of a bona fide incumbrancer who has taken from a de facto manager [underlined by me: here italicized] a charge on lands created honestly, for the purpose of saving the estate or for the benefit of the estate, is not affected by the want of union of the de facto with the de jure title.

40. In other words if that case be carefully examined, it will be found that the charge was created by a person who was de facto in possession with an apparent title either in himself or as the manager of another and in that capacity had created a charge on the estate honestly and in the interest of that estate [It is needless to observe that the Rani was the mother of the complainant (plaintiff) in that case]. I take the decision of the Privy Council to mean no more than what it says, namely that the alienation validly made by the manager in actual possession of the estate for purposes binding on the estate is valid.

41. The learned Judges in the Bombay case under consideration also relied upon the following observations of Mr. Mayne in his Hindu Law, Edn. 9, p. 297:

Where the act is done by a person who is not his guardian but who is the manager of the estate in which he has an interest, he will equally be bound, if in the circumstances the step taken was necessary, proper or prudent.

42. It is noteworthy that the learned author uses the words " manager of the estate in which he has an interest." The observation of Sir Dinshaw Mulla in his Hindu Law, Edn. 7, p. 568 were also quoted:

A de facto guardian is one who manages the minors estate, such person not being a natural guardian nor a guardian appointed by the Court, and that a de facto guardian has the same power of alienating the property of the minor as a natural guardian.

43. Attention is also directed to the observations of Kumaraswami Sastri, J. in Ramaswamy v. Kashinatha A.I.R.1928. Mad. 226:

That he would be disposed to hold that the observations of Lord Robson would be applicable equally to cases where the parties were Hindus, as there was nothing peculiar to the Hindu system of jurisprudence which conferred on a person who without authority assumed the office of guardianship any special powers.

44. In my opinion if the argument of the appellant was accepted, the Guardians and Wards Act would be considered to be abrogated. An honest money lender or a person who honestly takes transfer of a minors estate should be careful to see that the person who is making the transfer in question is either a legal and natural guardian, or a guardian appointed by the Court or is a person who is actually managing the, estate for the minor in which he has an interest. In the majority of cases there, will be no difficulty to hold that such a manager is a de facto guardian. But, I strongly dissent from the view that wholly unauthorized persons should be given the powers to deal with the estate of a minor for his supposed benefit. I would hold that the observations of Lord Robson in Mata Din v. Ahmad Ali (1912) 34 All 213 are of general application, applicable to all subjects of His Majesty be they Hindus, Mahomedans or Christians.

45. In the present case, even if the view of the majority Judges in the Bombay High Court in the case which is considered is accepted to be good law, it does not help the appellant in the least. It is no where suggested in the evidence that defendant 3 was the manager of the estate of the minor. The minor, that is, defendant 4 had no estate to manage. She was never in possession of any estate. The estate in question which is the subject of controversy in the present appeal was to come into her possession after a lapse of two years at least. Defendant 3 was never her guardian either de jure or de facto nor her manager in possession. I therefore overrule this contention of Sir Sultan Ahmed.

46. The learned advocate for the appellant then argued that the net income of the estate was Rs. 5135 and that in the year 1926 when the lease in question was granted, a sum of Rs. 10,000 was still due to Agabeg, that the High Court had decided that the Ghatwali tenure was alienable and the claim of the creditors to an amount of about two lacs remained to be satisfied and therefore the transaction entered into by defendant 3 on behalf of the minor was for her benefit, because by this transaction the minor was entitled to get a permanent income immediately of Rs. 1200 a year without having to wait for an indefinite time and without incurring the risk and expenses of, protracted and certain litigation, and over and above that, the minor was paid Rs. 3000 in cash. The learned Subordinate Judge on the other hand has found that the annual income from the property in suit was Rs. 15,000 and we are not satisfied that this finding which is based upon an examination of the various documents and the oral evidence in this case is incorrect. Now if this is so, it is clear that the permanent transfer of a property yielding about Rs. 15,000 per annum for a salami of Rs. 3000 (which has never reached the minor) at an annual rental of only Rs. 1200 cannot be said to be a transfer into which a prudent owner would enter in the ordinary course of human conduct. Even if the transaction had been more advantageous to the minor, I do not think that it could be said that it was for the "benefit of the minor." There is some confusion in the minds of the litigants as to the true meaning of the words "benefit to the estate" or "benefit to the minor."

47. It is necessary in this connexion to refer to the case in Palaniappa Chetty v. Devasikamony Pandara Sannadhi A.I.R.1917. P.C. 33 where Lord Atkinson proceeded to ascertain the sense in which such general and elastic terms were used in the authorities which he examined in that case and observed:

It is impossible to give a precise definition of it (benefit of the estate) applicable to all cases.... The preservation however of the estate from extinction, the defence against hostile litigation affecting it, the protection of it or portions from injury or deterioration by innundation, these and such like things would obviously be benefits. The difficulty is to draw the line as to what are, in this connexion, to be taken as benefits and what not.

48. Keeping this observation in mind, I am of the opinion that the transaction in question was neither for the benefit of the estate of the minor nor was it compelled by any pressure on the estate, nor was it such as a prudent owner would reasonably enter into; and unless the benefit of the estate within the technical meaning of the expression as illustrated by Lord Robson is established it is open to the minor to repudiate it. I therefore have no hesitation in holding that the plaintiff has failed to prove the basis of his title, namely the validity of the lease granted to him by defendant 3 either for self or as de facto guardian or manager of the minor. A good deal of discussion took place in the Court below as to whether the deed of gift in favour of the minor was valid and whether it was hit by the doctrine of lis pendens enacted in Section 52, T.P. Act, and lastly whether the deed of gift was inoperative by reason of the fact that the transfer was made by the Ghatwal in favour of his daughter-in-law while the property was still in the hands of a receiver. The learned Subordinate Judge held that the deed of gift having been executed during the pendency of the suit or execution proceedings in which the right to the immovable property, which is the subject of the gift, was in question, was void and inoperative; bat he held that the receiver was not in actual possession of the property in suit and therefore there was no bar on that account to the Ghatwal executing the deed of gift. The learned Subordinate Judge, when dealing with the rival claims of defendant & and defendant 2 as to the validity or other, wise of the deed of gift, observed:

It is not my function in the present trial to decide the suit between the defendants inter se but only to determine the rights and title of the plaintiff.

49. In the High Court there is no appeal on behalf of defendant 4 against the finding that the deed of gift was void and inoperative, and as it is unnecessary for this Court to go into this question in order to decide the present appeal, I refrain from entering into the merits of this controversy. In this view it is immaterial to consider whether the learned Subordinate Judge was right in holding that the doctrine of lis pendens applied in this case or whether the receiver was or was not in possession of the property in suit on the true interpretation of the compromise order of the High Court dated 28th May 1919 or as was suggested by Mr. Manuk, the learned advocate for the Receiver, that the deed of gift was void against the creditors by virtue of the provisions of Section 53, T.P. Act. But I generally agree with the reasoning and conclusion of my learned brother on these points also. No other points were argued before us on behalf of the appellant and I would affirm the findings of the learned Subordinate Judge on the other questions of fact decided by him.

50. In the result I agree that this appeal fails and must be dismissed with costs.

Advocate List
Bench
  • HON'BLE JUSTICE Wort, J
  • HON'BLE JUSTICE Manohar Lall, J
Eq Citations
  • AIR 1938 PAT 487
  • LQ/PatHC/1937/211
Head Note

Civil Appeal No. 13210 of 1985, decided on 27-02-1990** **Appellants:** Commissioner of Income-tax **Respondents:** Eli Lilly & Co. (India) (P.) Ltd. **Appellants/Revenue’s Contentions:** 1. Whether the Income Tax Appellate Tribunal was correct in law in holding that the orders passed under Sections 201(1) and 201(1-A) of the Income Tax Act, 1961 are invalid and barred by time having been passed beyond a reasonable period? **Court’s Observations & Held:** 1. Having heard the learned counsel on both sides, the Court was of the view that, on the facts and circumstances of these cases, the question on the point of limitation formulated by the Income Tax Appellate Tribunal in the present cases need not be gone into for the simple reason that, at the relevant time, there was a debate on the question as to whether TDS was deductible under the Income Tax Act, 1961, on foreign salary payment as a component of the total salary paid to an expatriate working in India. 2. This controversy came to an end vide judgment of Supreme Court in CIT v. Eli Lilly & Co. (India) (P.) Ltd. 3. The question on limitation has become academic in these cases because, even assuming that the Department is right on the issue of limitation still the question would arise whether on such debatable points, the assessee(s) could be declared as assessee(s) in default under Section 192 read with Section 201 of the Income Tax Act, 1961. 4. The Court further observed that the assessee(s) have paid the differential tax. They have paid the interest and they further undertake not to claim refund for the amounts paid. 5. Before concluding, the Court also stated that, in Eli Lilly & Co. (India) (P.) Ltd. vide para 21, it has clarified that the law laid down in the said case was only applicable to the provisions of Section 192 of the Income Tax Act, 1961. 6. Leaving the question of law open on limitation, these civil appeals filed by the Department were disposed of with no order as to costs.