SETH BABU LAL Vs. BABU LAL

JUDGEMENT

(1.) This appeal arises out of a suit to enforce two simple mortgages dated 6th May 1929 and 27 June 1929 executed, by two Hindu brothers, Babu Lal and Kashi Prasad in favour of Seth Ram Chandra for Rs. 7000 and for Rs. 600 respectively. The mortgagee Seth Ram Chandra being dead, his son Pearey Lal instituted a suit for recovery of Rs. 13,662 on the basis of the said two mortgages, after making adjustments of certain payments made by the mortgagors. To this suit he made originally his mortgagors as the defendants; but later on four minors, sons of the mortgagors, applied to be made and were made defendants and the main contest in the suit had been between the mortgagee and the sons of the mortgagors. The property mortgaged under the mortgages were 12 shops and houses in the city of Banda and these were ancestral properties of the mortgagors. The purpose for which the loan was raised was Rs. 1827 for payment of an antecedent debt and the rest of the loan "for purchasing grain at the time of harvest for grain business." According to the plaintiff the mortgagors were in the habit of purchasing grain and grain-pits at the time of harvest when rates were low and selling the commodity later in the season when rates went high and this business had come down to the mortgagors from the time of their father and was continued by them. The plaintiff alleges that money under mortgages was borrowed to finance an ancestral or joint family business of the mortgagors and even if in fact such a business did not exist a representation was made to him at the time of the mortgage that it existed and the mortgagee honestly believed in it and advanced money on the basis of the statement. The mortgages are therefore binding upon the entire family including the minor sons of the mortgagors. It is further alleged that the mortgages were made by two managers of the joint family in the interest of the joint family and for the benefit of the family and of the estate, and on that ground also they are binding upon the defendants.

(2.) The defendants on the other hand contend that the mortgagors were given to gambling and the plaintiff was one of their associates and the money was advanced under mortgages for the purposes of gambling. The trial Court has found that a sum of Rs. 1827 out of the total mortgage consideration was for payment of a valid antecedent debt of the mortgagors and the remaining consideration of the mortgages was a loan taken for the purposes of grain business. But the grain business was a separate business of the mortgagors and was not their ancestral or joint family business. It has further found that the mortgagee rested on his own personal knowledge and made no enquiries as regards the ancestral or joint family character of the business and that the mortgages were not justified by legal necessity or family benefit. It accordingly granted a decree to the plaintiff for a sum of Rs. 1827 and its interest, in all for Rs. 3177 and dismissed the rest of the claim. The defendants have submitted to the decree, but the plaintiff has made this appeal against the said judgment and decree.

(3.) The mortgagors Babu Lal and Kashi Prasad are Tamolis (betel-sellers) by caste. But it is in evidence that for years now they have not followed their caste profession. They and their father Nand Ram and their grandfather Sheo Gharan owned and possessed certain amount of house property which brought the family some income which varied from time to time. This family income has been variously estimated by the witnesses at the trial. But about the time when the mortgages were made, it could not be less than Rs. 60 per mensem. Whether the family property was the sole means of livelihood of the family or whether the family followed some other occupation and had some other income is a matter of controversy fa the case. In the year 1918, Nand Ram, the father of the mortgagors, entered into a purchase and sale transaction relating to a grain pit through a firm of commission agents at Banda by the name of Mool Chand Brij Behari of the value of Rupees 7596-4-0. Again, in 1920 Nand Ram entered into a second transaction of purchase and sale of a grain pit through a firm of commission agents at Banda by the name of Mool Chand Ram Prasad of the value of Rs. 3991-2-3. In or about 1920, Nand Ram died leaving two sons Babu Lal and Kashi Prasad, the mortgagors, the former aged about 19 and the latter about 15. Between 1920 and 1924, there is no evidence that any more grain pits were purchased by the mortgagors or by the family or any fresh grain business was done by them or on their behalf. In the years 1924-25 the elder of the two mortgagors, namely Babu Lal, borrowed a sum of Rs. 2300 from the plaintiff. This money was partly borrowed on the pledge of ornaments and partly on a promissory note. Between 1925 and 1930 both the mortgagors borrowed various sums of money from the plaintiff. Some of these borrowings were on the basis of promissory notes, some on pledge of ornaments and others on the basis of mortgage bonds, two of which are the subject-matter of the present suit. In 1928 the mortgagors purchased and sold a grain pit through the firm of Lakhichand Babulal of the value of Rs. 2694 and in the same year they entered into another abortive transaction of two grain pits through the firm of Moolchand Brijbihari which led to a dispute which was finally settled by arbitration, as a result of which all parties including the mortgagors had to suffer some small loss. In 1930 the mortgagors entered into a fresh transaction relating to a grain pit through the firm of Deokarandas Gulraj of the value of Rs. 2593-14-6 and in the same year they entered into another transaction through the firm of Moolchand Ram Prasad of the value of Rs. 168-10-6.