JUDGMENT
1. This is an appeal by the plaintiffs, whose suit for the recovery of Bs. 15,500 on the basis of a hypothecation bond, dated 14th June 1921, has been dismissed by the Court below. The plain-tiffs prayed for a decree under Order 34, Rule 4; Civil P.O., for sale of the hypothecated property, and in the alternative they prayed that if the debt claimed in suit be deemed to have been taken not for the benefit and legal necessity of the defendants' family then the amount claimed may be treated as a prior charge on the property which was by means of pre-emption acquired by the defendants. The mortgage was executed by Zorawar Singh, Amar Singh, Pirthi Singh, Puran Singh, and Lekhraj Singh in favour of Pat Earn and Sohan Lal. The plaintiffs to the suit were Sohan Lal and the sons of Pat Ram (Pat Earn being dead) namely Bansidhar and Chheda Lal. The pedigree of the mortgagors might be given at this stage:
2. The defendants to the suit are indicated in the pedigree given above. At the time of the execution of the mortgage deed Baldeo Singh, Kalyan Singh and Lai Singh were dead, and it would thus appear that the executants to the document were the adult members of the three branches with this exception that Hukum Singh, one of the sons of Zorawar Singh, who also was major, did not join in the execution of the document, and it was thought that Zorawar Singh would represent him as well. The other defendants were, as is clear from the ages given above, minors, and although Tikam Singh's age is not given in the plaint, but from the evidence of Pirthi Singh it appears that apart from the executants, Hukum Singh alone was major in the family at the time of the execution of the bond. The plaintiffs' case was that all the defendants were members of a joint Hindu family and defendant 1, Zorawar Singh, was the manager. Amar Singh from amongst the executants of the bond was dead at the time of the institution of the suit. The defence of the surviving executants, namely Zorawar Singh, Pirthi Singh, Puran Singh and Lekhraj Singh, was that the plaintiffs were under no circumstances entitled to get the property obtained by preemption sold, and the other defendants while advancing this plea further asserted that the document sued on was not executed for any valid necessity and therefore the ancestral property hypothecated under the document was not saleable in execution of any amount under the document sued on. Almost all the defendants admitted that their family was joint, although Chhatarpal who was under the guardianship of the central nazir of Bulandshahr, pleaded that the family of the father of the contesting defendant had been a sic one long before the date of the execution of the document and also at the time of the execution thereof, but he too asserted that the hypothecation in question was not enforceable against the ancestral property and the plaintiffs had no right to have the amount in question declared a prior charge on the pre-empted property, particularly when that property was not included in the hypothecated property mentioned in the document sued on.
3. The Court below dismissed the plaintiffs' suit, but it observed that:
So far as the valid execution of the bond in suit and the payment of its consideration is concerned, it does not appear that the defendants want to challenge it seriously. Defendants 1 to 4. of course who are themselves the executants, do not question it and the others did not appear to be very serious about it as cross-examination of plaintiffs' witnesses on these points on their behalf was practically insignificant and ineffective. There is however sufficient and convincing evidence also-in this case to establish the fact that the bond in suit was duly executed by the executants and that the consideration stated therein had duly passed.
4. The appeal before us is by the plaintiffs but learned Counsel for the defendants-respondents did not challenge the above observation of the learned civil Judge. The Court below further came to the conclusion that the plaintiffs could not under the law be granted a mortgage decree in respect of the pre-empted property and no objection has been taken by the plaintiffs on this point. The Court below further observed:
It is clear that all the mortgagors were members of a joint Hindu family, being an uncle and his brother's sons. All the defendants are either-sons or grandsons of the mortgagors. The legal presumption is also in favour of the jointness of all the defendants and the defendants have failed to suggest or to prove anything to the contrary.
5. It was not urged before us by the defendant that this finding is in any way open to objection. On a consideration of the evidence the Court below however was of the opinion that the loan raised under the document in suit could not be justified as-one for payment of an antecedent debt or for legal necessity. It was also of opinion that the transaction which necessitated' the loan was not conducive to the advantage or benefit of the defendants' joint family in this case, and upon this view the suit was dismissed It would thus appear that the controversy before us is to be decided on the assumption that the defendants are members of a joint Hindu family, that the valid execution of the document and the passing of consideration have been established and that the plaintiffs cannot claim a charge on any property which is not covered by the mortgage. The plaintiffs contend that. they are entitled to recover the money by sale of the hypothecated property and the defendants contend that the mortgage is not binding on the family or on the family property and no personal decree can be passed against the executants of the document, inasmuch as such a claim is barred by time. There is no dispute on the question of the personal decree, because if is clear that limitation for that has expired, but the other question has been argued at length before us. It is necessary at this stage to state the circumstances under which the loan was taken. The property covered by the mortgage is admitted to be ancestral property. Prom the khewat printed at p. 36 of our record it appears that the defendants had 4 biswas 15 biswansis in the mouza of Baghiapur. There was a patti of 2 biswas 15 biswansis owned by one Kale Khan and another patti of 2 biswas and 15 biswansis owned by certain other Hindu co-sharers, but very nearly half the mohal, namely 9 biswas patti, was owned by Mrs. "Victoria Ingram. On 5th August 1919 she sold the said patti to one Wajid Ali Khan, and Suit No. 143 of 1920 was instituted on 5th August 1920 by Puran Singh, Lekhraj Singh, Amar Singh, and Pirthi Singh to pre-empt the above sale. The suit was decreed on 28th February 1921 on condition of the plaintiffs paying Rs. 21,750 to the defendant Mohammad Wajid Ali Khan or making a deposit of that sum in Court for payment to the defendant within 30 days of the decree becoming final. Although Zorawar Singh was also a co-sharer along with the other plaintiffs, yet he does not seem to have joined in, the pre-emption suit, but it cannot be seriously contested that he was not as much interested in that litigation as the other plaintiffs. It may be that Zorawar Singh was not at home when the suit was filed or there were some other good reasons why he could not be joined as a plaintiff. The fact remains that on 14th June 1921 Zorawar Singh, along with the other plaintiffs in the pre-emption suit, joined in executing the mortgage deed in question in favour of Patram and Sohan Lal for Rs. 8,000. It is recited therein:
We, Amar Singh, Pirthi Singh, Puran Singh and Lekhraj Singh had filed a pre-emption suit against Mohammad Wajid Ali Khan and obtained a decree on 28th February 1921 from the Oourb of the Second Additional Subordinate Judge of Aligarh under which we shall now deposit money in Court; we shall take in cash at the time of registration Rs. 8,000 of the current coin... and for further satisfaction of the creditors and in lieu of the amount of this deed we hypothecate, that is, make a simple mortgage...
6. Zorawar Singh, therefore, made common cause with the other plaintiffs of the preemption suit in order to reap the fruits of the pre-emption decree. The entire sum of Rs. 21,750 was deposited in Court on 23rd June 1921 after allowing three months for the filing of an appeal against the preemption decree and taking advantage of the thirty days allowed by the Court. They also applied for possession of the pre-empted property and obtained possession. The defendant Wajid Ali appealed and his appeal was allowed by the High Court on 18th January 1923. Wajid Ali then applied for restitution and by an ex parte order he was restored to possession on 2nd February 1923. Thereupon Puran Singh, Lekhraj Singh, Pirthi Singh and the representatives of the deceased plaintiff Amar Singh made an application on 16th February 1923 asking that they should be restored to possession, their ease being that Amar Singh having died pending the appeal in the High Court the decree passed by that Court was a nullity and therefore Wajid Ali got nothing by the decree made by the High Court in his favour. The Court of first instance held that the sons of Amar Singh were entitled to keep possession of the entire property if the three surviving plaintiffs agreed that the entire consideration money might be taken as having been deposited by the heirs of Amar Singh. Wajid Ali, the vendee, appealed and the three surviving plaintiffs of the preemption suit also filed an appeal, but counsel appearing for them stated that his clients were willing to have the entire money credited as paid by Amar Singh and that the order passed by the Courb below may be taken as effective. The vendee Wajid Ali, however, contested the matter and ultimately it was decided by this Court in 1924 that all the four plaintiffs, that is to say, the three surviving plaintiffs and the representatives of Amar Singh, should be restored to possession. The above facts we have taken from the reported case in Wajid Ali Khan v. Puran Singh A.I.R. 1925 All. 108 Wajid Ali appealed to the Privy Council, and in their Lordships' opinion the order of the Subordinate Judge wa3 right and the decree of the High Court, dated 11th July 1924, was liable to be set aside and in lieu thereof it was declared that the representatives of the deceased plaintiffs were entitled to re-delivery of possession on condition that the money deposited in Court should be made over to Wajid Ali with the consent of the surviving plaintiffs of the pre-emption suit. The judgment of the Privy Council is dated 6th December 1928, and from the khewat printed at p. 47 of our record it appears that the property at the present moment is entered in the names of Puran Singh, Lekhraj Singh, Pirtbi Singh and Mt. Bhagwati Devi, wife, and Chhatarpal, minor son of Amar Singh. It appears that the consent mentioned in the judgment of their Lordships of the Privy Council was given and the property sub-sequently was mutated in the name of the three surviving plaintiffs of the preemption. suit and the representative of plaintiff 4.
7. It is contended on behalf of the plaintiffs that the acquisition of the pre-empted property was in the best interests of the family and for its benefit as well as for the benefit of the family estate, and therefore the loan taken to acquire such property is binding on the ancestral property. It cannot be disputed that so far as this Court is concerned a loan taken not necessarily as a defensive measure to avert a family danger in which case it would be binding strictly on the ground of legal necessity but for the benefit of the estate is valid. It was held by a Full Bench of this Court in Jagat Narain v. Mathua Das A.I.R. 1928 All. 454 that:
In order to sustain an alienation of joint family property made by the managing member of the family, the transaction must be one which is for the benefit of the estate and such as a prudent owner would have carried out with the knowledge available to him at the time. Transactions justifiable on the principle of 'benefit to the estate' are not limited to those transactions which are of a 'defensive nature.'
8. It would thus appear that benefit to the estate was recognized as a separate head. Another Full Bench of this Court in Ram Nath v. Chiranji Lal A.I.R. 1935 All. 221 held that the family property is liable for the payment of a loan which is taken either for the benefit of the estate and the family or for legal necessity. In Venkata Hanumantha Bhushana Rao v. Gode Subhayya A.I.R. 1936 P.C. 283, at p. 992, their Lordships of the Privy Council observed.
The power of a Hindu widow to alienate the estate inherited by her for purposes other than religious or charitable is analogous to that of a manager of an infant's estate as is described in Hanoonmanpersaud Panday v. Mt. Babooee Munraj Koonweree (1854) 6 M.I.A. 393. She can alienate it not only for legal necessity but also for the benefit of the. estate.
9. The power of a Hindu manager to charge the family property in order to benefit the estate was thus re. affirmed by their Lordships of the Privy Council in the above case. It is therefore, clear that apart from the question of legal necessity it is open to the manager or managers. of a joint family to mortgage ancestral property in order to benefit the family and the family estate, and in this state of the. authorities learned Counsel for the respondents did not seriously dispute the proposition of law, but contended that in the-circumstances of the present case the transaction was not a prudent one and was not in the best interests of the family.
10. In this connexion it was pointed out that even in the mortgage deed in suit there was no recital of any benefit; but it must be remembered that the mortgage deed was executed in June 1921, and according to the exposition of the law prevailing in these Provinces at that time a loan taken for the purpose of paying a. pre-emption decree was a good loan. In Nathu v. Kundan Lal (1911) 33 All. 242 it was held that a decree for pre-emption providing that the pre-emptor shall acquire the property if he pays the amount mentioned therein otherwise his suit will be dismissed, was a debt such as will support a bond given by the father of a joint family to raise money for its satisfaction. The mortgagees might well have thought that there was no danger in the transaction and the debt would be binding on the sons as an antecedent debt irrespective of any question of benefit to the estate. This view was dissented from for the first time in 1923 when it was held in Chaturbhuj v. Govind Ram A.I.R. 1923 All. 218 that money needed to pay up a decree for pre-emption in favour of the borrower is not an antecedent debt such as will support a mortgage of joint family property. The same view was reiterated in Shankar Sahai v. Bechu Ram A.I.R. 1928 All. 333 and Kishen Sahai v. Raghunath Singh A.I.R. 1929 All. 193. A recital in the mortgage deed is not necessarily] any evidence of the truth of the statements contained therein nor is a person debarred from proving other facts not recited in the document which would go either to validate or invalidate a document executed by the manager of a joint family when the question arises as to how far the family property is bound thereunder. There can however be no doubt that in para. 3 of the plaint it was asserted that the debt was taken by defendant 1 as the manager and by defendants 2 to 4 and father of defendant 5 as members of a joint family in order to pay the pre-emption money in respect of the property specified at the foot of the plaint which was calculated to benefit the family and property of the defendants, and evidence was given on both sides to prove or disprove this statement contained in the plaint. After the Full Bench decision in Jagat Narain v. Mathua Das A.I.R. 1928 All. 454 when 'benefit to the estate' was recognized as a different head and it was not necessary that the loan should be taken for a defensive act for something undertaken for the protection of the estate already in possession, there have been several cases dealing directly with the question as to how far a loan taken for acquiring property by pre-emption is valid, In Amraj Singh v. Shambhu Singh A.I.R. 1932 All. 632, the learned Chief Justice observed at p. 896 as follows:
Where a pre-emption claim is in reality in the nature of a speculation or is not in the best interests of the family, the action of the manager would be without justification. But there may, for instance, be a case where a rival proprietor wishing to become a co-sharer in the village and thereby causing considerable interference in the management of the family estate, purchases property when it is highly beneficial to the family and the estate, if not actually necessary, to exclude him from the village so as to avoid all future trouble; or there may be a case where a substantial share in the ancestral village has been sold very cheap and its acquisition will bring about a considerable improvement in the comfort and support of the family owning a small share in the village and a better enjoyment of the ancestral share. When satisfied that the acquisition was not speculative but in the best interests of the family and for its benefit as well as for the benefit of the family estate, which an ordinary prudent manager would make, it would be open to a Court to hold that the transaction is binding on the other members of the family.
11. In the same case King, J. at page 907 observed:
In certain circumstances it might be held that the acquisition of new property by pre-emption was a beneficial and prudent act such as would justify a mortgage of joint family property by the manager. But the facts showing that the transaction was beneficial and prudent must be proved.
12. In the Full Bench case in Ram Nath v. Chiranji Lal A.I.R. 1935 All. 221 the learned Chief Justice remarked at p. 187 as follows:
The question whether the transaction was for such benefit or not is a question of fact depending, on the circumstances of the case, and it is for the Court to decide whether it was so beneficial and was such as an Ordinary prudent manager. would have entered into in the interests of the family.
13. In Dhara Singh v. Bharat Singh A.I.R. 1936 it was held by &, Bench of this Court, of which one pf us was a member, that a mortgage of joint family property by the manager of a joint Hindu family, in order to raise money to pay off a pre-emption decree, may be a mortgage executed, for the benefit of that family and for the benefit of the property and consequently binding upon the property and the family. It was pointed; out in that case that the authority of the Full Bench in Amraj Singh v. Shambhu Singh A.I.R. 1932 All. 632 was binding on the Court, and we may also point: out that we are equally bound by the view expressed in that ease. In F.A. No. 151 of 1933, in which judgment was delivered by, us yesterday, we held that loan taken by a. Hindu widow for the purpose of depositing; pre-emption money was under the circumstances of that particular case binding on the reversioners, inasmuch as the acquisition of fresh property was beneficial to the estate.
14. In this view it is necessary to discuss, the evidence and the circumstances bearing on the question of fact, but before we1 do so it is necessary to dispose of a small; point taken by the respondents. It is said that litigation in its essence is speculative and a pre-emption suit is much more so. and a manager of a joint Hindu family is not entitled to indulge in a speculative act and borrow money for that purpose on the mortgage of family property. In the present case, however, the money was not borrowed for the purposes of litigation but for the purpose of reaping the fruits of litigation. The question that one has to determine in a matter like this is not whether the suit was a speculative suit but whether the acquisition was a speculative acquisition. The pre-emption decree was given on 28th February 1921 and the money was not borrowed till 14th June 1921, and there is nothing on the record to show that the borrowers were aware of the fact that Wajid Ali, the vendee in the pre-emption suit, had filed an appeal in the High Court. The pre-emptions waited very nearly four months before they took the loan and the pre-emption money was deposited on 23rd June 1921, when very nearly ninety days allowed for the filing of an appeal in the High Court and thirty days as allowed by the pre-emption decree had expired. At the time when the trans. action of loan took place there was to all intents and purposes an end of the preemption litigation so far as the pre-emptions were aware, and all that we have got to see is whether the acquisition of fresh property was beneficial to the estate or not. It is hot difficult to conceive of a case where a manager may think that by good husbandry and proper management a fresh property acquired by the family, if properly developed, would yield good results in future, even though at the time of acquisition it might not be very advantageous, and in that case it will be open to argue that the acquisition was speculative. In the case before us we shall show presently that all the circumstances pointed to the acquisition being in the best interests of the family.
15. The family of the mortgagors was a family of landlords and their occupation was samindari and money lending, as stated by Nand Kishore patwari, a witness for the plaintiffs. They owned in this very village a patti of 4 biswas and 15 biswansis; another of 9 biswas, practically half the village, was sold by an English lady to a stranger, who was a Mohammadan, and the family thought that this property, if it came into their hands, would result in great advantage.
16. Such complications as sometimes arise in the case of a sale by a Hindu which is afterwards assailed by co-parceners or in the case of a sale by a Mohammadan when claims are brought forward by the wife for dower were not present here. They had a sum of Rs. 13,000 odd in their own house and a dacoity had occurred at their place in December 1919, and they might well have thought that the money lying idle at home and at the mercy of the dacoits if another dacoity took place, could not be better invested than by acquiring the 9 biswas patti sold by Mrs. Ingram. It is not suggested that the price paid by Wajid Ali was an exorbitant price. The patwari says that:
The market price might be Rs. 4,000. or Rs. 5,000 more than the price for which it was sold out, and although Pirthi Singh, one of the mortgagors who has examined himself in the present case, says that really speaking it was not worth as much as they had to pay for it;" we have no reason to discredit the patwari's evidence. He says that the net profits of this patti of 9 biswas in 1921 were Rs. 954-9-0 and the value of the property at that time was estimated at 25 times the net profits. On that calculation the property was worth very nearly Rs. 24,000 and we know that the property was sold for Rs. 21,750. Bansidhar and Mewa Earn, witnesses for the plaintiffs, deposed that the value of the pre-empted property was Rs. 40,000. This might be an exaggerated estimate, but it was certainly somewhat more than the price entered in the sale deed, and the introduction of another Mohammadan co-sharer, who was a relation of one of the existing co-sharers, might have resulted in some discord, and in any event would have lessened the importance of the mortgagors, even though the existing co-sharer and the plaintiffs in the pre-emption suit were pulling on harmoniously. The fresh property would not have entailed any great additional expenditure, for they were already in possession of 4 biswas 15 biswansis in the village. The net profits of Rs. 954-9-0 mentioned by the patwari are apart from some other culturable land in the patti whose area is 33 bighas 3 biswas, and this area along with another 13 bighas is not assessed to any rent, thus showing that the property was capable of development. Further, we know that the property was actually developed, and the net profits now are Es. 1.593-&0; there has been enhancement of rent and enhancement in Government revenue. Pirthi Singh himself had to admit that:
The main idea under which the property was purchased was to provide investment to the money-lying with us and a secondary idea was that the new property would add to our convenience of collection and management of the property which we already owned.
17. He says that since purchase the average net profits from the property did not exceed Rs. 400 per annum, but this cannot be believed in view of the evidence given by the patwari and in view of the fact that although Pirthi Singh says that he maintains the account of collections he has not filed those accounts in the present case. The price was, therefore, a fair price. It might be mentioned that it was never pleaded in the pre-emption suit, as is almost uniformly pleaded in such cases, that the price entered in the sale deed was inflated.
18. The pre-emption case was fought in several Courts and although there were several opportunities to the plaintiffs and to the defendant of that suit when they might well have ended the litigation by-keeping quiet, they persisted in the same. Thus, there was great anxiety on both sides to retain the property. The pre emptors won in the first Court, and if the bargain had been a bad bargain Wajid Ali might well have remained content, for he after all had got the money which he paid. Instead, he appealed to the High Court; The decision in the High Court was given in ignorance of the fact that one of the plaintiff pre-emptions was dead at the time of the passing of the High Court decree, and one would have thought that if the property was not worth coveting, there would have been no opposition when Wajid Ali sought restitution, but the family of the pre-emptions made a common cause and fought tooth and nail in the High Court so that by some means the property might remain in possession of the family, and they were satisfied even when Privy Council laid down a condition that the property should go only to the representatives of the deceased pre-emption, provided the money deposited in Court should be made over to the vendee with the consent of the other pre-emptions. The property is even now, as we said before, in the possession of the family. It is true that during the no rent campaign, and when there were some remissions, the net profits had gone down, but nobody could peep into the future with certainty, and, as far as human affairs go, the acquisition was such as a prudent manager would have taken advantage of. In Raj Singh v. Kishan Lal A.I.R. 1935 All. 299 it was held that the transaction should be such as no prudent person acting as manager could fail to take advantage of, and even if the test is so severe as this, (although in other cases it has been stated in more qualified language) it has been satisfied in the present case.
19. We might further point out that practically all the adult members of the family joined' in borrowing the money, although Zorawar Singh was not one of the pre-emptions, and all the defendants in the present suit have urged that the plaintiffs are under no circumstances entitled to obtain a charge on the pre-empted property. This makes it clear that all the defendants are in possession of the pre-empted property, even though the names of Zorawar Singh and his sons do not appear in the khewat against it, but, as mentioned before, even they maintained that the plaintiffs cannot touch the pre-empted property. There is nothing to arouse our suspicion in the integrity of business management of the persons who entered into the present transaction, and the entire course of the pre-emption litigation shows how eagerly the property was coveted by the plaintiffs and the defendant of that suit. In Markandey Singh v. Badan Singh A.I.R. 1933 All. 568, it was held that it is within the competence of a Hindu father to alienate the joint family estate where the transaction is for the benefit of the estate and is such as a prudent owner would have made with the knowledge that was available to him at the time. With all the knowledge available to the mortgagors in 1921 they entered into this transaction and the property acquired by them through pre-emption is still in their possession and the entire family has been benefited by it and is interested in it. There is yet another way of looking at the matter. The minor defendants should not be permitted to retain the property and at the same time to repudiate the transaction whereby they came into possession thereof. In Jado Singh v. Natthu Singh A.I.R. 1929 All. 511 the learned Chief Justice referred to the case in Indar Kuar v. Lalta Prasad (1882) 4 All. 532 and observed:
Since then this court has accepted the view that a transfer of joint property by the manager can be justified if it is not a mere speculation but results in actual benefit to the estate. The other members of the family cannot retain the benefit and at the same time repudiate the transaction by means of which the benefit has been acquired.
20. A subsequent passage might also be quoted as being apposite to the facts of the present case. The learned Chief Justice says:
At the time of the sale deed the only male members of the family were Natthu Singh and Arjun Singh and Natthu Singh's minor child, Jado Singh. The adult members were the only persons who could judge of the prudence and prospective benefits of the transaction that they were entering into These people were in the best position to judge whether the transaction was prudent and beneficial or not. That their judgment was not wrong has been demonstrated by the enormous increase in the value of the property and the actual benefit which has accrued. The plaintiffs have derived full benefit from it and are determined to retain the property. Under these circumstances it seems to us impossible to allow them to get rid of the sale deed by means of which they were provided with the means by which the unencumbered property which they are retaining was acquired.
21. In Sohan Lal v. Atal Nath A.I.R. 1933 All. 846 a Bench of this Court, of which one of us was a member, held that:
Where the adult members of a joint family acquired new property by raising a loan and by entering into a contract for the discharge of that loan either by payment by themselves or by transfer of the newly acquired property, and their minor nephew benefited by the enjoyment of profits for the period of 12 years, the minor was bound by the act of the adult members of the family and of his natural guardians, and he could not retain the benefit of the property and repudiate the authority of his uncles to restore this property to the lender if the money borrowed from him was not paid.
22. All the circumstances therefore point out to the validity of the mortgage. We, therefore, allow this appeal, set aside the decree of the Court below and decree the plaintiffs' suit with costs in both Courts. The decree will be drawn up under Order 34, Rule 4, Civil P.C., against the property covered by the mortgage, and six months are allowed from this date for payment.