AMOLAK SAO MARWADI Vs. DHONDBA

JUDGEMENT

(1.) 1. Tukaram and Dayaram executed a mortgage of some immovable property in favour of Dhondba: the deed bears the date 19th June 1928. A suit was filed by a creditor on 4th July 1928 and the mortgaged property was attached before judgment two months later. Tukaram and Dayaram filed an insolvency petition on 4th October 1928 and were adjudicated insolvents on 15th December 1928. One of the creditors of the insolvents alleged that the mortgage in question was not executed in good faith and for valuable consideration. The insolvency Court upheld this contention and annulled the mortgage. In appeal the District Judge held that although a certain amount of suspicion was thrown on the mortgage transaction, absence of good faith or valuable consideration had not been proved. I am asked to interfere in revision. I cannot in revision interfere with a finding of fact reached on consideration of the evidence, but, in my opinion, the finding of the District Judge has been reached owing to misconception of the method by which the question should be considered. I consider that there is material irregularity in the exercise of jurisdiction, if there is no proper consideration of pleadings and evidence.

(2.) THE decision of the learned District Judge has been affected by a misunderstanding of a Privy Council decision in Official Receiver v. P. L. K. M. R. M. Chettiar Firm . If a creditor comes to Court and merely alleges that a transfer within two years of Insolvency has not been made in good faith and for valuable consideration, the burden of proof rests initially on him. But where detailed allegations are made and some of these allegations are admitted, this is not necessarily the case. I need only refer to a remark quoted from Official Assignee v. Khoo Saw Cheow AIR 1930 PC 265: There was nothing in the admitted facts to shift the onus of proof to the respondent.

(3.) THE learned District Judge, who usually is quick in detecting difficulties in a story, has failed to notice the inherent improbability of the story told by Dhondba. Possibly he did not realise that it was necessary for him to see whether the story was improbable. Money-lenders charge interest and debtors do not usually know the exact amount which they have to pay. This amount too is likely to be increased after a month or so. It is difficult then to believe that on 19th June 1928 a mortgage for Rs. 600 was executed and that Rs. 208 were paid, the exact amount due to Shamrao Rs. 392 being reserved for payment at a future date. It is also not explained why Tukaram and Dayaram should desire to pay off Shamrao at once, when shortly after, they along with their father borrowed Rs. 600 from him or why if they did so desire the debt was not paid off by a havala that day. Again, the curious coincidence that Dhondba should on behalf of the mortgagors pay Rs. 392 to Shamrao on the very day when Shamrao advanced money to the mortgagors together with the family does not appear to have received sufficient consideration.