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

Calcutta High Court
Solema Bibi And Ors. vs Hafez Mahammad Hossein And Ors. on 15 February, 1927
Equivalent citations: AIR 1927 Cal 836
Author: B Ghose


B.B. Ghose, J.

1. These two appeals arise out of one decree made by the Subordinate Judge for foreclosure of a mortgage, alleged to be by conditional sale by the plaintiff. There were three sets of defendants in the Court below. There were two brothers named Akbar Khan and Amanat Khan. Both of them are dead. The defendants 1 to 9 are the representatives in interest of Akbar Khan. The defendants 10 to 18 are the legal representatives of Amanat Khan. The defendants 19, 20 and 21 are three firms of Marwaris, who may be described as the Marwari defendants, who were made defendants on the ground that they had attached certain of the mortgaged properties for debts alleged to have been due from the mortgagors. The mortgage is dated the 18th March 1921 and it purported to have been made by Akbar Khan for himself and as ammukhtear for Solema Bibi, defendant 10, the widow of Amanat Khan, and also as am-mukhtear for Rohima Bibi, the adult daughter of Amanat, and as guardian on behalf of the minor sons and daughters of Amanat named Soleman Khan. Rahamat Khan, Sarifatennessa, Shamedanessa and Hamidanessa. It also purported to have been executed by Md. Nainuddi, the adult son of Amanat, and by Asrabannessa, the adult daughter of Amanat. Amanat died on the 8th December 1909 and Akbar died on the 8th October 1921.

2. Appeal No. 77 is by defendant 10, the widow of Amanat, and defendants 13, 15, 16, 17 and 18, the sons and daughters of Amanat. The defendant 13 is Asrabannessa who had attained majority at the time of the mortgage and who is said to have herself executed the bond. The other sons and daughters who have appealed were as already stated infants at the time of the execution of the bond. The adult son of Amanat, called Naimuddi, was defendant 12 in the Court below. He has not preferred any appeal. Appeal 116 is by defendants 19, 20 and 21, the attaching creditors of the mortgage properties.

3. The case of the plaintiff is that the two brothers Akbar Khan and Amanat Khan carried on a trading business and with regard to that business they had dealings in money with the plaintiff, who acted as their commission agent and aratdar in connexion with that business. After the death of Amanat the old business continued and the heirs of Amanat continued as partners with Akbar in the business, and that after taking accounts of the dues of the plaintiff it was found that the plaintiff was entitled to get Rs. 29,074-14 annas from the defendants, and in consideration of that debt the mortgage bond already mentioned was executed in his favour, and as defendants 19, 20 and 21 had attached some of the properties they were joined as defendants in the suit. The plaintiff asked for a decree for foreclosure according to the terms of the bond, as they were entitled to sue for foreclosure on any attachment being made of the properties mortgaged by any person. Various defences were raised to this suit by the contesting defendants in the Court below. It is unnecessary to mention now all these. The points that were taken in appeal against the judgment of the Subordinate Judge will be stated later on. The Subordinate Judge found for the plaintiff and made a preliminary decree for foreclosure allowing the defendants two months time from the date of the decree for repayment.

4. The points taken in appeal in both the cases are the same with slight variations. The points taken in the appeal of the Marwari defendants in Appeal 116 are these : First, that the mortgage bond of 1921 in favour of the plaintiff was not an honest transaction, but was intended to defeat and delay the creditors of the mortgagors, and so was vitiated under the provisions of Section 53, Transfer of Property Act. The second point taken is that on a proper construction of the mortgage bond it would appear that it was not a mortgage by conditional sale as defined in the Transfer of Property Act. According to the terms of the bond three years time was given to the debtors for redemption. The plaintiffs having sued for foreclosure before the expiry of the three years, the time fixed for repayment of the mortgage money, the suit is premature and should be dismissed on that ground. The third point is that the plaintiff is under no circumstances entitled to any decree on this document, for foreclosure regarding the property belonging to any person except the heirs of Akbar and Naimuddin Khan, and the shares of the other defendants cannot be made liable.

5. The appellants in Appeal 77 do not rely much upon the first point because it is not their case that they were parties in the intention to defraud any creditors. Their case principally is that they are not liable under the bond having regard to the facts of the case. The Subordinate Judge held that the bond was not vitiated under the provisions of Section 53, Transfer of Property Act. He also held that it was a mortgage by conditional sale and the plaintiff was entitled to a decree for foreclosure, and that under the circumstances stated in the bond he was entitled to maintain the suit at the time when it was brought. With regard to the third point the Subordinate Judge held that the power of attorney executed by Solema Bibi and Rohima Bibi did not confer any power on Akbar to mortgage their interest in any property and therefore those persons are not bound by the execution of the mortgage made by Akbar as am-mukhtear on their behalf. He also held that Akbar could not, as guardian of the infant heirs of Amanat, execute the mortgage of their share of the properties. Akbar was appointed guardian under the Guardians and Wards Act by the District Judge by an order dated 16th March 1911, and as he had not taken the sanction of the District Judge for creating a mortgage the infants or any person interested in the property were entitled to avoid the mortgage. The Subordinate Judge also held that the deed was not properly executed by Asrabannessa, the adult daughter of Amanat. But the Subordinate Judge-held that the two brothers Akbar and Amanat jointly carried on a, trading, partnership, and after the death of Amanat the heirs of Amanat continued to remain as partners with Akbar in the business. As Akbar was the managing partner of the trading business he was entitled to effect the mortgage and the properties being partnership properties the mortgage is binding on all the partners including the infants, and a foreclosure decree can therefore be made on the bond in suit.

6. I will now take the objections urged on behalf of the appellants in the order in which they have been placed before us. It is urged in the first place on behalf of the Marwari defendants that Akbar and Amanat carried on business, in stationery and other articles and if was long after the death of Amanat that Akbar began the trade in hides, and that these were two businesses thus continued between the plaintiff and Akbar and the sum of Rs. 29,000 odd, if it was at all due to the plaintiff, was only due from Akbar. It was further urged that the amount of Rs. 29,000 and odd was not at all due, because the accounts filed by the plaintiff show that before the end of 1325 all debts with regard to the Dhubri account with the firm of the plaintiff was closed. But at the end of 1325 it appears that Rs. 10,173 was due to the plaintiff on account of the Dhubri Mokam. It is said that this was advanced in cash received by Akbar himself and for his personal benefit. This was, therefore, a personal debt of Akbar for which the partnership business was not at all liable.

7. It is further urged that the circumstances under which the bond was executed also show that it was not a bona fide transaction. It is pointed out that the Marwaris began pressing the debtors for their money from December 1920. They were being put off by promises of payment and were entreated not to bring their suit. This was done by Akbar and Naimuddi. Even after the date of the kot kabala Akbar had written to a third party that the deed was executed with the object of facilitating the payment of the debt due to the Marwaris and asking them not to be anxious. The plaintiff knew about the indebtedness of the debtors to others and being neighbours, he was consulted by the debtors about their affairs. The provision in the mortgage bond that the plaintiff would be entitled to sue for foreclosure as soon as there was attachment of the property was for the benefit of the debtors. It is further urged that it is quite clear from the circumstances that the plaintiff and Akbar were acting in concert to defeat other creditors of Akbar, and it is also urged that, as the evidence shows that there were two businesses and the heirs of the deceased brother Amanat can under no circumstances be made liable for the entire debt to the plaintiff, the bond making all of them equally liable is not bona fide, specially as the plaintiff knew about the involved circumstances of the debtors. One other fact is shown, that on a particular date that is the 23rd January 1921, all the skins that there were in the godown of the plaintiff belonging to Akbar were sold off, for Rs. 20,000 odd. These things according to. the appellants’ contention lead to the conclusion that this was a fraudulent transfer falling within the provisions of Section 53, Transfer of Property Act.

8. In my opinion it has not been shown that the debt to the plaintiff did not amount to Rs. 29,000 odd, or that there was any stipulation in the bond that may be construed as being for the benefit of the debtors. It is quite true that the plaintiff knew that the debtors were in involved circumstances, otherwise they would not have been anxious to obtain security for their debt. It might also be assumed that the heirs of Amanat could not be made liable for the entire debt. Whether those persons are at all liable or not will be considered later on. In my opinion, however, if the creditor having a real demand against his debtor takes security from other persons jointly with the debtor for his debt, that cannot be considered as a fraudulent transaction on any ground whatsoever. Another ground is taken that the bond mortgaged all the properties of the debtors. It is pointed out that Akbar had executed a hiba-bil-ewaz in favour of his wife on the 30th December 1920, and the evidence on which the Subordinate Judge relies for his conclusion that the debtors had other valuable properties does not support his conclusion. For example, the plaintiff in his deposition says that there were other properties belonging to the debtors, but the Dacca properties mentioned were given away to the wife previously. The evidence of Yakub Meah also does not show that there was any property of any value remaining to the debtors apart from those mortgaged. Rahaman’s evidences on which the Subordinate Judge relies does not support the inference that there are any other properties of any value. But conceding all that, I do not think that the Subordinate Judge is wrong in holding that the transaction is not vitiated under the provisions of the Transfer of Property Act. The law on the subject is settled by the decision of the Judicial Committee in Musahar Sah v. Lala Hakim Lal A.I.R. 1915 P.C. 115. Their Lordships quoted with approval in that judgment the following observations of Palles, C.B.:

Now it follows from this that security gives by a debtor to one Creditor upon a portion of or upon all his property although the effect of it or even the interest of the debtor in making it may be to defeat an expected execution of another creditor is not fraud within the statute because notwithstanding such an act the entire property remains available for the creditor or some one of them, and as the statute gives no right to rateable distribution the right of the creditors by such act is not invaded or affected.

9. That case further lays down that what Section 53, Transfer of Property Act, invalidates is a transfer which removes the whole or a part of the debtor’s property from the creditors as a body to the benefit of the debtor. In this case there is nothing which shows that there was anything to the benefit of the debtor in the transaction and if the plaintiff was a vigilant creditor and had taken security for his debt, the transaction cannot be vitiated as a fraudulent conveyance. The first argument, therefore, urged on behalf of the appellants must fail.

10. With regard to the second question that the document is not one of conditional sale properly so called, the learned advocate appearing for the respondent concedes that it is not a document of conditional sale as defined under Section 58, Transfer Property Act, but the document is a mortgage all the same and it is an anomalous mortgage referred to in Section 98 of the Transfer of Property, Act. That being so, the rights and liabilities of the parties should be determined by their contract as evidenced in the mortgage deed in the terms of that section. In the bond it was provided thus:

We shill pay off your said amount within three years from to-day. But if in the meantime a third party brings any suit against us or any one of us and attaches or endeavours to bring into auction or brings in auction any property of us then without waiting for the due date you shall forthwith bring a suit for foreclosure of this kot kobala and having got a decree shall be owners of the properties mentioned in the schedule below,

and so forth. This circumstance has happened on the Marwari defendants having attached the properties mortgaged by the bond, and the plaintiff is therefore entitled to enforce the contract by bringing the suit for foreclosure. The second argument therefore also fails.

11. The third point seems to me to be the most important point for decision in the case, and both sets of appellants strongly urge that point against the decision of the Subordinate Judge. It must first be observed that it is not a Hindu family trading partnership which is governed by the Hindu Law. The parties are Mahomedans, and any partnership transaction between two Mahomedan brothers must be governed by the contract between the parties as regards the partnership. This proposition is not contested on behalf of the respondent. Ordinarily the partnership terminates on the death of one of the partners and the contention of the appellants is that on the death of Amanat the partnership business that was carried on between him and Akbar terminated. It is, however, contended on behalf of the respondent that the course of dealings of the heirs of Amanat shows that there must have been a contract to the contrary as mentioned in Section 253, Indian Contract Act, that the partnership would not be dissolved by the death of one of the partners, that is, Akbar or Amanat. The appellants contended that there is no such evidence while the respondent relies upon some oral evidence as well as the statement contained in the amamukhtearriama executed by the two ladies, Solema Bibi and Rohima Bibi, in support of his contention that the partnership continued after the death of Amanat, The evidence on which the respondent relies, contained in the statement of the witness Fatik Chandra De Sarkar, who was examined as a witness for the Marwari defendants. The appellants in appeal 77 object to this evidence being used as against them. Their contention is that the case of the Marwari defendants is different from their case. The Marwari defendants are interested in showing that there was some joint karbar of which Akbar and the heirs of Amanat were partners. But their case is that after the death of Amanat they had nothing to do with any partnership business with Akbar. (After considering evidence his Lord-proceeded.) It is quite clear that the sons of Amanat did not continue to be partners after the death of Amanat. Therefore no inference can be made from the course of dealings with regard to the partnership that there was a contract to the contrary with regard to the provisions of Sub-section (10) of Section 253, Contract Act. Further, nothing has been shown from the accounts of the business either of the plaintiff or that of Akbar that any of the heirs of Amanat had obtained any share of the profits of the partnership business. An observation has been made by the Subordinate Judge in his judgment as regards the account books of the partnership business. The Subordinate Judge observes in his judgment:

I consider the allegation of defendants 10, 15 and 18 to the effect that some khatas were taken away by the plaintiff and Naimuddi recently from the custody of defendant 10 to be unworthy of credit,.

12. The Subordinate Judge seems to have overlooked the fact that these khatas About which the witness spoke were khatas of the joint business during the life time of Amanat. The production of those khatas would not in any way assist us in the decision of the question in controversy between the parties as to whether there was any partnership continuing between the heirs of Amanat and Akbar after the death of Amanat.

13. The documentary evidence with regard to the question of the partnership continuing after the death of Amanat on which the respondent relies is the am-muktearnama executed by the two ladies, Solema Bibi, the widow of Amanat, and Rohima Bibi, the daughter of Amanat, dated the 30th July 1910. The passage on which reliance is placed runs thus:

Appoint an am-mukhtear with full or partial powers for looking after and managing property of our joint tejarati business and do any other work for our benefit as necessity arises.

14. It is argued by the learned advocate for the respondent that the words “tejarati business” does not bear the common meaning of the word as “money-lending,” but it means “trade” as that is the sense in which the word is locally used. There is no evidence in support of the word being use in that sense in this document. But assuming that it was so, the question is whether the lady, Solema Bibi, herself used the word in that sense. We must take this expression in connexion with her own evidence. She says that she had executed a hukumnama for the collection of all outstanding debts of the firm; and she further says that that hukumnama was not read over to her. In order to establish that these illiterate ladies entered into a partnership with Akbar more positive evidence should have been brought forward. It might very well be, even assuming that the meaning given by the learned advocate for the respondent is the right meaning, that this document was executed for the purpose of enabling Akbar to realize the outstanding debts of the firm and cannot be construed as moaning that the ladies entered into a partnership with Akbar.

15. It is next contended that the partnership transaction was carried on for the benefit of Amanat’s heirs, and under the provisions of Section 247, Contract Act, the infants would be liable to the extent of the property of the firm for the obligation of the firm; and it is further argued that under Section 251, Contract Act, Akbar, as partner of the firm, can bind his co-partners by executing this mortgage as it was for the purpose of carrying on the business of the partnership. It is contended by Mr. Biswas on behalf of the appellant in appeal 77, that this mortgage was not for the purpose of carrying on the business of the partnership and therefore would not under any circumstance be binding on the minors or the adult persons, who have not been found to have been a party to the mortgage. But that contention seems hardly to be right. A valid mortgage by one partner of the partnership property may be made in order to secure a partnership debt. The authority for this proposition may be found in the case of Jugjeewan Das v. Ramdas [1841] 2 M.I.A. 487. The question, however, in this case is, were the minors admitted to the benefit of any partnership and the second question is, are the properties mortgaged the properties of the firm? There is nothing on the record to show that the minors were admitted to the benefits of the partnership. If that is so, Section 247, Indian Contract Act, has no application to the present case, and I have already stated that there is nothing to show that the adult heirs of Amanat had anything to do with the partnership business as alleged.

16. The next question is whether these are properties of the firm. There is no evidence on the record as to the source of the purchase money of the properties mortgaged. It is contended by the learned advocate for the respondent that it can be shown from the fact that certain properties were included in the application for guardianship made by Akbar on the 15th August 1910, on which he was appointed guardian of the infant of Amanat. In that application in the schedule certain properties have been described as belonging to the late Haji Amanat Khan, and his contention is that comparing the schedule of that application with the schedule of the mortgage bond, the properties which are outside the schedule of the application but included in the mortgage bond must be considered to be partnership property liable for the debt of the plaintiff.

17. But the difficulty in accepting that proposition is that the petition made by Akbar cannot be taken as a true and exact enumeration of all the properties left by Amanat. It was an application made by Akbar, whose interest might have been to show that Amanat had not left any considerable property both for his own benefit in future and also with reference to the amount of security he would have to furnish for being appointed guardian of those infants. Besides, even assuming that that was a correct list of the properties left by Amanat, it cannot properly be said that the purchase money with regard to the properties subsequently acquired came from the partnership firm. Further, having regard to the findings I have already arrived at, that the heirs of Amanat did not carry on any partnership business with Akbar even if Akbar took money from his trading business and gave the heirs of Amanat a title to any property purchased by -him from such profits of the business, the interest of the heirs of Amanat cannot be treated as property belonging to the firm or in other words, money or property given away does not continue to be the assets of the firm when it is given over to a third party. Solema Bibi, however, gives evidence that the properties were inherited from her father-in-law and there is nothing to show that it is not true. One other point was urged on behalf of the appellants and it is this : that assuming that Akbar had the power to mortgage those properties as partner of the firm, but having been appointed guardian under the Guardians and Wards Act his powers must be exercised in accordance with the provisions of the Act. The authority for this proposition is the case of Bhupendro v. Nemye [1888] 15 Cal. 627. The mortgage was effected without the sanction of the District Judge. It can, therefore, be invalidated at the instance of the infant or the persons interested, under Section 30, Guardians and Wards Act. That is a sound contention.

18. A contention has been made on behalf of the respondent in support of the decree of the Subordinate Judge that under the am-mukhtearnama of the two ladies Solema Bibi and Rohima Bibi, Akbar was empowered to effect a mortgage with regard to their share of the property. The Subordinate Judge, as I have already stated, has found against the plaintiff on that point. The argument of the learned advocate is that as the document confers the power on the agent to borrow any money for any purpose and do any other work for their benefit as necessity arises, it confers the right to effect a mortgage. It is well settled that these powers must be strictly construed. In addition to the case cited by the Sub-ordinate Judge the authority for the proposition, that the powers should be strictly construed, will be found in the cases of Poorna Chunder v. Prosunno [1881] 7 Cal. 253 and Jonmenjoy v. Watson [1884] 10 Cal. 901, and various other cases. No express power to mortgage has been given and it is difficult to say that the terms of the am-mukhtearnama can be construed into a power for giving a mortgage.

19. On all these findings the result must be this, that by the mortgage bond, dated the 18th March 1921, the shares of Akbar Khan and Nainuddi Khan only must be-considered to have been properly mortgaged. I ought here to mention that it is contended by the learned advocate for the respondent that the properties outside the application for guardianship made by Akbar in 1910 do not belong to the heirs of Amanat, and he says that the title deeds of all the properties mortgaged have been given to the plaintiff many of which show that the properties were acquired after the death of Amanat and stand in the name of Akbar. This is a point which the plaintiff never raised in the Court below. The case was fought out on the footing that the properties belonged to all the ostensible mortgagors and all the mortgagors were bound by the mortgage. In this Court the plaintiff cannot take up the position that if all the mortgagors are not found to be bound by the mortgage it should be decided that some of the properties included in the mortgage do not belong to all of the mortgagors. Such a contention cannot be allowed to be raised for the first time in appeal.

20. The judgment and decree of the Subordinate Judge must therefore be varied in this way : that the decree for fore-closure should be made with regard to the shares in the properties mortgaged belonging to the heirs of Akbar and Naimuddi, that is to say, the half share belonging to Akbar originally and now belonging to his heirs and the share of Naimuddi which is 7/88ths of the whole property. The result, therefore, is that the decree for foreclosure should be made with regard to 51/88ths share of the properties in suit. The period of redemption is extended to two months from this date.

21. The appellants in appeal 77 are entitled to their costs in this Court as well as in the Court below. In appeal 116 the plaintiff respondent will be entitled to half his costs in the Court below which will be added to his mortgage money. He will also get half his costs in this Court from the appellants defendants 19, 20 and 21. The defendants 19, 20 and 21 will get half of their costs in the Court below from the plaintiff and also half of their costs in this Court from the plaintiff. One set of hearing fee for the appellants in appeal 116.

Roy, J.

22. I should like to add a few words. It seems to me also that the fallacy underlying the Subordinate Judge’s judgment is that he applied the considerations which would attach to a joint Hindu family business to the present case where the family is Mahomedan. The partnership business of Akbar and Amanat came to an end on the death of Amanat. There is nothing in the conduct of the heirs of Amanat to show that they agreed to continue the joint business. Akbar was appointed guardian of the minor children of Amanat by the District Judge. It is to be noted that he did not inform the Judge that he would carry on the business on behalf of the minors. In the schedule of the properties he submitted to the Judge he merely mentioned the amount of capital which would fall to the share of the minors. He asked for no direction from the Judge in respect of this business. Naimuddi, the stepson of Solema Bibi, was a minor at the time, but he seems to have joined Akbar later on when he attained majority. His case is different and he himself was a signatory to the kot kobala. It cannot be said that because Akbar constituted himself the managing partner he continued to represent the other minors. As to Solema Bibi, the widow of Amanat and Rohimar Bibi, the adult daughter of Amanat, who gave an am-mukhtearnama to Akbar their contention was that they gave him power to realize the outstanding dues that would fall to their share on the death of Amanat. The circumstances of the case are susceptible of an inference of that kind. The plaintiff has not produced any evidence to show that these-minors or these ladies participated in the profits of the business after Amanat’s death, or took any steps which would give rise to the inference that they were partners in the alleged joint business.

23. The learned Advocate appearing for the plaintiff refers to the evidence of a certain gomastha or karmachari to the effect that after Amanat’s death Amanat’s heirs became also maliks or that the joint karbar continued. As a matter of fact some of these witnesses are forced to admit or admitted willingly, that they cannot say who were the actual maliks of the business. The evidence produced is not enough. An inference was sought to be drawn from the fact that Solema Bibi, the widow of Amanat, did not produce certain account books. It appears that when giving her deposition she was only asked about books of the time when her husband was alive. It is not clear how she could have account books of Akbar after Amanat’s death. No inference like-what the Subordinate Judge has drawn, and in my opinion wrongly, can be drawn against Solema Bibi in respect of the business. There was some controversy as to whether Akbar had also a separate business in addition to the alleged joint business. At any rate this much is clear that from 1322 Akbar was the only person shown in the plaintiff’s books. I do not thick that the plaintiff can be allowed now to say that Amanat’s heirs are also liable. The learned advocate appearing for the plaintiff sought to fix the liability on some of the properties on the ground that they were bought with the profits of the joint business. For this argument he relied on the fact that there were more properties in the kot kobala than in the application for guardianship which Akbar made on the death of Amanat, his elder brother. On this slender material we cannot make the violent inference that the properties, if they were purchased by Amanat’s heirs, were purchased from the profits of the joint business. The evidence to my mind is wholly insufficient to bind the heirs of Amanat except of course Nadnuddi.

24. I, therefore, agree with the conclusion arrived at by my learned brother.

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