NAROTAM DAS Vs. SHEO PARGASH SINGH

JUDGEMENT

(1.) THE issue raised in this case is, can the bond be held to be a valid document and binding upon the Defendant when it was executed during the time the estate was under the operation of the Incumbered Estates Act (Act XXIV. of 1870)? It is not necessary to consider whether a talukdar whilst his taluka is under management in pursuance of that Act, is competent to make a personal contract, inasmuch as it does not arise in the present case. The question depends upon the construction of the document which is set out in the record, and which their Lordships consider to be a mortgage of the estate and nothing else. It contains no personal contract by the Defendant to pay out of his personal estate, but it is a mere contract to pay out of the hypothecated estate.

(2.) THE contract commences by stating that he has borrowed the sum of Rs. 4100 at a certain rate of interest. Then it goes on: "I have by this instrument hypothecated the whole of my property in taluka Chandipur Birhar, situate in Fyzabad." There he describes it as an hypothecation. " As the aforesaid taluka of Chandipur Birhar is under management under the Incumbered Estates Act, and I have already filed in the office of the Superintendent a schedule of my debts, specifying the names of my creditors, I do hereby promise and give it in writing, that I shall without any plea repay the principal with interest within the term of two years." But the contract does not stop there. It goes on: "The mode of payment will be, that after paying up the scheduled debts, I shall first of all pay up the debt covered by this bond, including interest"--that is to say, that he will pay this bond after he has paid the scheduled debts. "I shall thereafter appropriate the profits of the estate and attend to the liquidation of other debts. I shall not take the profits of the estate without paying up the present debt with interest; if I do take the profits it will be for the payment of this debt. I shall, until this debt is repaid abstain from contracting other debts from the bank or anywhere else." Up to this period it is evidently a mere hypothecation of the estate as a security for the money. Then he says lower down: "When my estate is released from management under the Incumbered Estates Act, I will immediately first of all pay the debt due to the said banker, and will pay the other creditors afterwards." That is merely an intention on the part of the borrower that this debt shall be a prior charge upon the estate after payment of the scheduled debts. "In both cases, that is, while the estate is under management and after it is released, the repayment of this debt will be the subject of my first consideration. In the event of any breach of contract taking place on my part, the said banker is at liberty to institute a suit within the time fixed in this bond and recover the money. I will not transfer or mortgage to anyone the hypothecated property till the principal and interest of this debt is paid up; if I do so it will be illegal." Then he goes on: "These few lines have therefore been written as an unconditional bond hypothecating my property, so that it may serve as a document and be of use when required.

(3.) LOOKING at the whole of this deed, their Lordships cannot place any other interpretation upon it than that it was a mere hypothecation of the taluka which was then under management.