CHIRANJI LAL Vs. SYED ILIAS ALI

JUDGEMENT

(1.) THE suit out of which this appeal arises was brought for a declaration that a mortgage-decree of 12 May 1919 is not binding on the plaintiffs who are minors. THE facts are not in dispute. THE plaintiffs father died in 1903 leaving seven sons. Most of these sons were minors and their eldest brother, the defendant Niaz Ali, was appointed their guardian by the District Judge. On 8 April 1911 Niaz Ali as guardian made an application to the District Judge for permission to mortgage certain property belonging to the minors for a sum of Es. 200 for payment of debts. THE District Judge gave sanction for the execution of a usufructuary mortgage for a sum of Rs. 200. In contravention of this permission the guardian proceeded to execute a simple mortgage, carrying interest for a sum of Rs. 400. THE mortgagees subsequently brought a suit on this mortgage impleading the minora under the guardianship of Niaz Ali and obtained a decree. THE plaintiffs have filed this suit for a declaration that the mortgage is not binding on them on the ground that it was executed in contravention of the provisions of the Guardians and Wards Act and is consequently voidable at their instance. Section 30 of the Guardians and Wards Act is clear on the point, and there can be no question that the mortgage was voidable at the option of the minors under that section. THE controversy before us has turned on the question whether the position is affected by the fact that a decree against the minors has been passed on the mortgage. This depends on the further question whether the minors were properly represented in the suit. On behalf of the appellants reliance is placed on Order XXXII Ruler 4 of the Civil P. C., and it is urged that the Court in the suit brought on the mortgage was bound to appoint Niaz Ali as guardian ad litem of the minors unless, for special reasons to be recorded, it considered that this would be contrary to the minors welfare. THE answer to this contention is that in this particular case the mortgagees at have been aware of the facts which rendered it improper that Niaz Ali should act as guardian ad litem. THE mortgage having been executed by Niaz Ali it was difficult for him to take the plea on behalf of the minors that the mortgage was invalid as having been executed contrary to the permission given by the District Judge. Even if he could take such a plea the effect of taking it would be to cast the whole burden of the mortgage of the share of Niaz Ali himself and of those of his brothers who had come of age. Niaz Ali had, therefore, under the circumstances, an interest adverse to that of the minors and this was a fact of which the mortgagees, who were parties to the transaction, must have been aware. It is now settled law that where a guardian ad litem has an interest adverse to the minors they are to be considered as not having been properly represented in the suit and the decree is not binding on them. One further argument has been urged. It is said that even if the decree of the Court below is otherwise upheld the plaintiffs should be required to refund the mortgage- money to the extent of Rs. 200, either on the equitable principle of restoring a benefit received or on the ground that to that extent the mortgage was in accordance with the permission granted. THE first alternative is excluded by the finding of fact of both the Courts below that there is no evidence that the minors benefited in any way by the mortgage-money. THE second is excluded by the fact that, even to the extent of Rs. 200, the mortgage was not executed in accordance with the sanction given. THE sanction was for a usufructuary mortgage. THE mortgage actually executed was a simple mortgage. THE difference is of great importance. If the guardian had executed a usufructuary mortgage as directed by the District Judge the liability on the estate would be limited to the principal money advanced. Under a simple mortgage there is the additional liability that interest may not be paid punctually and the mortgage-money may mount up to such an extent as to lead to the sale of the entire property. We are, therefore, unable to accept this plea.

(2.) THE result is that the appeal fails and we accordingly dismiss it with costs including in this Court fees on the higher scale.