Posted On by &filed under Allahabad High Court, High Court.

Allahabad High Court
Girraj Singh And Ors. vs Mul Chand on 29 April, 1907
Equivalent citations: (1907) ILR 29 All 627
Author: Aikman
Bench: G Knox, Acting, Aikman


Aikman, J.

1. This appeal arises out of a suit of a somewhat peculiar nature. In the Bulandshahr district there lived one Rao Umrao Singh who owned large estates. He had in his employ one Mul Chand, an old and trusted servant, who had been in his service since the Mutiny, In 1870, Mul Chand wished to purchase some property, and for that purpose he applied to Udai Ram, a money-lender of the Meerut district, for a loan. As Mul Chand was not a resident of those parts and had no property, Udai Ram refused to lend him the money, but offered to let him have the sum he wanted, namely, Rs. 2,000, if his master, Umrao Singh, stood security for him.

2. Mul Chand accordingly applied to Rao Umrao Singh, and the latter, at Mul Chand’s request, executed a bond for Rs. 2,000 in favour of Udai Ram and his father. This bond is printed at page 12 of appellant’s book in F.A. No. 236 of 1897. It bears date the 3rd of November 1870, and begins as follows: “I Rao Umrao Singh, declare as follows: I have borrowed Rs. 2,000 of the Queen’s coin from Lala Khub Chand, and brought it to my use.” The obligor covenanted to pay the money on demand with interest at the rate of Rs. 1-8-0 per cent, per mensem. The loan. not having been repaid, the bond was renewed on the 25th October 1876, by the execution of a fresh bond by Rao Umrao Singh for Rs. 3,500, being the principal and interest due on the first bond. In this bond Rao Umrao Singh admitted the money to be due by him and agreed to pay it on demand with interest at the same rate as that fixed in the first bond. The second bond not having been satisfied, Rao Umrao Singh executed on the 35th of November 1879 a third bond in favour of Udai Ram for Rs. 4,000 on account of the amount due by him under the bond of the 25th of October 1876. He covenanted to pay this amount in two years with interest at the same rate as that specified in the previous bonds. This debt not having been paid, Rao Umrao Singh, on the 1st of November 1887, executed a fourth bond for the sum of Rs. 15,000, which, as the bond recites, had been found due by him on account of the bond, dated the 15th of November 1879. He covenanted to pay this amount within two years with interest at the rate of 1 percent, per mensem. All these bonds were registered, and it will be noticed that in none of them is any mention made of Mul Chand. Mul Chand was examined as a witness in the suit which Udai Ram brought to recover the amount due under the last mentioned bond. His deposition is printed at page 13 of the appellant’s paper book in this case. With reference to the bonds he says, at page 17 (h);–“On none of the occasions when the bonds were renewed, did the plaintiff (i.e., Udai Ram), consent to my joining the Rao Sahib in the execution of the bond.” The last bond not having been satisfied, Udai Ram, on the 30th of October 1895, i.e., just within the six years period of limitation from the date when the money was payable, instituted a suit against Rao Umrao Singh to recover the amount due under the bond which by this time had swelled to upwards of Rs. 37,000. On the 23rd of August) 1897 the then Subordinate Judge dismissed Udai Ram’s suit on a preliminary point. The plaintiff appealed to this Court, and, on the 12th April 1899, the decree of the Subordinate Judge dismissing the suit was set aside by this Court and the case remanded under Section 562 of the Code of Civil Procedure for decision on the merits. Before the suit could be disposed of Rao Umrao Singh died and his sons were brought upon the record as his legal representatives. On the 2nd of January 1900 the Subordinate Judge passed a decree against them for Rs. 37,139-6-6, together with interest pendente lite and costs; in all for Rs. 48,288-5-11, with future interest at the rate of 6 per cent. per annum. Against this decree the sons appealed to this Court, but, acting on the advice of their counsel, they compromised the case, undertaking to pay a sum of its. 51,000 to the plaintiff, and the appeal was thereon withdrawn. Out of this amount of Rs. 51,000, the sons of Umrao Singh paid Rs. 40,000 to Udai Ram on the 5th of November 1902. On the 14th of July 1903 they instituted the suit out of which this appeal arises, to recover from Mul Chand the amount they had paid, namely, Rs. 40,000, together with Rs. 954-9-3, being the costs which they had incurred in the High Court. The suit has been dismissed by the Subordinate Judge, and the plaintiffs come here in appeal.

3. The costs of the High Court were paid by the plaintiffs on the 29th of the March 1900, i.e., upwards of three years before the institution of the present suit, and the claim for that item is clearly time-barred. Although a plea is taken in the memorandum of appeal in regard to this item, it is not supported. In the plaint in the present suit it is alleged that all the bonds mentioned above were executed by Rao Umrao Singh as surety for the satisfaction of the creditor and for the benefit of the defendant.” It is quite clear, however, from the bonds and from the evidence in the case that Umrao Singh was indebted to Udai Ram as a principal and not as a surety, the only resemblance to a surety being that the himself did not benefit by the money which Udai Ram lent to him on his credit, and that the money was handed over to Mul Chand. The main defences to the suit were that the claim was barred by limitation and that the payment of Rs. 40,000 by the plaintiffs was in reality a gratuitous payment which they were not obliged to make. The learned Subordinate Judge found for the plaintiffs on the issue as to limitation, but he held that the act of the plaintiffs in compromising the case was a wrongful act. He further held in regard to the bond that the transaction, namely, the execution of the bond by Rao Umrao Singh; was, so far as Udai Ram was concerned, that of a surety for Mul Chand that Mul Chand was the principal debtor that Udai Ram’s claim as against him was barred, and that the surety i. e., Umaro Singh, was therefore absolved from his obligations, to discharge the debt. In my opinion this view of the Subordinate Judge cannot be supported. On the bond as it stood the obligor, Umrao Singh, had no defence to Udai Ram’s suit as by it he rendered himself liable as a principal for the amount secured thereby. It appears to me impossible to hold that Rao Umrao Singh was absolved from liability by the failure of Udai Ram to institute a suit against) Mul Chand. The evidence leaves no doubt whatever that the money was borrowed by Umrao Singh from Udai Ram for Mul Chand’s benefit and at his request, and that the bonds were renewed from time to time at Mul Chand’s request. It is further proved in my opinion that Mul Chand undertook to discharge the bonds when they fell due, that is, he undertook to indemnify Udai Ram. The evidence discloses both an express and implied contract to hold Umrao Singh free from liability under the bonds. In his deposition in the suit of Udai Ram, Mul Chand said [see page 15 of the appellant’s book; between letters (g) and (h): “If a decree be passed against the Rao Sahib, he will bring a suit against me.”

4. When the bond of the 1st November 1887 was not paid, Mul Chand and Udai Ram endeavoured to get Rao Umrao Singh to renew the bond again, and as an inducement to get him to do so, Mul Chand executed and registered a bond in favour of Rao Umrao Singh. This bond is printed at page 4 of the appellants’ book and bears date the 14th of May 1893. Its language throws an important light on the real nature of the transaction. It opens as follows:

5. “In 1870 I stood in need of money and could not get it by my own exertions, so my master, Rao Umrao Singh, executed on. my request a bond for Rs. 2,000 on the 25th of October 1870, in favour of Udai Ram and made it over to me… Subsequently I renewed the said bond from time to time in the aforesaid manner. At last, on the 1st of November 1887, a bond for Rs. 16,000 was executed on the admission of the said Rao Sahib, and I got it registered on the 10th of November 1887. Now the amount due under the said bond, including interest, is Rs. 28,000. As the item has largely increased, and with reference to the wording of the bond the aforesaid Rao Sahib is liable therefor, though he has not been benefited by this bond and he signed it for my sake, it is necessary for me to pay this money to the Rao Sahib and I am liable to pay the same to him.” Accordingly Mul Chand covenanted to pay to Rao Umrao Singh Rs. 28,000, with interest at 1 per cent, per mensem, and as security for payment hypothecated some zamindari property belonging to him. Rao Umrao Singh, however, absolutely refused to renew his bond in favour of Udai Ram and declined to take the bond which Mul Chand had executed.

6. Mul Chand has died since the institution of this appeal and his legal representatives have been brought upon the record. The learned Counsel in supporting the decree of the Court below has argued, first, that the suit is barred by limitation, and next, that the plaintiffs are not entitled to recover as the payment of Rs. 40,000 by them was a gratuitous payment which they were under no necessity to make. I may mention here that in the written statement filed by the defendant there was a plea to the effect that he had spent about Rs. 4,000 out of his own pocket in defending Udai Rani’s suit, and that he had done this on the express agreement of Rao Umrao Singh and with the knowledge and permission of the present plaintiffs, that he would be freed from liability. No issue as to this was framed in the Court below, and no reference to the plea has been made by the respondents’ counsel, so it is unnecessary to allude to it further.

7. On the question of limitation, I have no hesitation in agreeing with the Court below. The suit is brought within three years of the date when the plaintiffs paid Rs. 40,000 in terms of the compromise, and it was upon making that payment that the plaintiffs became entitled to recover. The suit is within time whether the case be considered to fall under Article 61 or Article 83 of the second schedule of the Limitation Act.

8. Coining to the second ground of defence set up on behalf of the respondents, I am of opinion that it cannot be sustained. It is argued that the payment by the sons was gratuitous, as they had a good defence to the suit, and that when the payment was made by them, their pious liability as Hindu sons was no longer enforceable. I cannot assent to this argument. At the time when the sons were brought on the record as defendants to Udai Ram’s suit, there was a subsisting debt, not tainted by immorality, due from their father, and this debt they were bound by Hindu law to discharge. The suit against the sons cannot be held to have been barred. The second proviso to Section 22 of the Limitation Act provides that when a defendant dies and the suit is continued against his legal representative, it shall, as regards him, be deemed to have been instituted when it was instituted against the deceased defendant. I may mention that with regard to this defence we sent down an issue to the Court below, to ascertain whether the sons of Rao Umrao Singh inherited from their father any property other than the joint ancestral property to which they succeeded by survivorship. The Court below found that they inherited no such property. Objections were taken to this finding, and if it were necessary to dispose of them, I should have little difficulty in coming to the conclusion, that having regard to the circumstances under which the Kuchesar and Muhi-ud-dinpur properties were acquired by Rao Umrao Singh they were not ancestral properties to which the sons succeeded by survivorship. The learned Counsel for the appellants in support of his objection refers to what is said by Mayne in paras. 274 and 275 of his Hindu Law and Usage, and this in my judgment fully supports his objections. However, it is unnecessary to decide this point as, under the circumstances stated, the sons were in my opinion bound by Hindu law to pay the debt incurred by their father, a debt in no way tainted by immorality, out of any property which had belonged to their father, to which they succeeded either by survivorship or inheritance.

9. For the above reasons I am of opinion that the appeal must succeed in so far as it relates to the Rs. 40,000. I would therefore set aside the decision of the lower Court and decree in favour of the plaintiffs for Rs. 40,000, together with Rs. 3,280 interest, up to date of institution of the suit, and thereafter interest to date of realization at the rate of 6 per cent per annum. This decree not to be against the present respondents personally, but to be realized from such property of Mul Chand as may be in their hands and as may be liable for the decree. To this extent I would allow the appeal. I would direct that the parties pay and receive costs in proportion to their failure and success.

10. The order of the Court is that the decree of the Court below be set aside and that the appeal be allowed to this extent, namely, that a decree be passed in favour of the plaintiffs for Rs. 40,000, together with Rs. 3,280 interest, up to the date of the institution of the suit, thereafter interest up to the date of realization at the rate of 6 per cent per annum. This decree will not be against the present respondents personally, but will be realized from such property of Mul Chand as may be in their hand’s and as may be liable for the decree. Quoad ultra the appeal is dismissed. The parties will pay and receive costs in both Courts in proportion to their failure and success.

Leave a Reply

Your email address will not be published. Required fields are marked *

* Copy This Password *

* Type Or Paste Password Here *

107 queries in 0.162 seconds.