DAN KUER Vs. MT SARLA DEVI

JUDGEMENT

(1.) This is an appeal from a judgment and decree of the High Court of Judicature at Allahabad dated 12-3- 1942, which reversed a judgment and decree of the Court of the Additional Subordinate Judge of Etah dated 31-7-1935. The main questions to be determined in this appeal are:- (1) Whether a registered partition award dated 8-1-1921, created a valid charge in favour of the respondent, Sarla Devi, on the property (the two villages of Quazipur and Mai) allotted to her husband Nidhan Singh; and (2) whether Drigpal Singh, the predecessor in title of the appellant, Dan Koer, had notice (actual or constructive) of the said award and charge, when he took a usufructuary mortgage of the said two villages on the following day, 9 July (sic January) 1921, wherein a reference was made to the said award. The pedigree of the family, so far as it is material to the case, is as follows:- The family was subject to the Mitakshara Law of the Benares School. It had considerable property. After the death in 1911 of Kanhaiya, Nidhan Singh and his three brothers effected about 1912 a partition of their joint family property and separated. After the partition, Nidhan Singh, without any lawful family necessity, improperly contracted debts. He became a spendthrift. His wife the respondent, who is a purdanashin lady, objected, on behalf of herself and two minor sons, to this extravagant behaviour of her husband. She therefore consulted Drigpal Singh (who was related to the family and was a well-wisher), and also her brothers-in- law, about securing a partition between her husband and two sons. The object was to save some of the joint family property from liability to satisfy the debts of Nidhan Singh and to safeguard the interests of her sons and of herself. Drigpal Singh, she affirms, advised a partition and told her he would get her a maintenance allowance of Rs. 75 per month set apart for her in the partition deed. Five arbitrators, including the three brothers of Nidhan Singh, made a partition award dated 8-1-1921. By it, Nidhan Singh was allotted the two villages mentioned above, and the shares of the two minor sons were separated from the share of Nidhan Singh. The relevant part of the award, the construction and the legal effect of which are involved in this appeal, is in the following terms: "We allot the property mentioned in List A specified below, to Kunwar Nidhan Singh, which shall remain in his possession subject to a charge for the maintenance of Mst. Sarla Devi (the respondent); and if she ever falls out with Kunwar Nidhan Singh and they cease to live together, the charge for maintenance thereon will be at the rate of Rs. 75 a month, the amount fixed by us." On the following day, 9-1-1921, Nidhan Singh borrowed Rs. 40,000 from Drigpal Singh on the security of the said two villages, and executed a usufructuary mortgage deed, in which the property was expressed to be free from all liabilities, and the arbitration award was expressly mentioned. On 5-8-1921, Nidhan Singh sold the mortgaged villages to Drigpal Singh for Rs. 30,000. In or about 1923, the Court appointed the respondent the guardian of her minor sons. About 1925, Drigpal Singh died, leaving him surviving his third wife, the appellant. About 1928, Nidhan Singh died, leaving him surviving a widow, the respondent, and two sons. On 9-1-1933, the respondent filed the present suit in the Court of the Additional Subordinate Judge of Etah against the appellant. In her plaint, after setting out the facts stated above, she alleged that the property was given to Nidhan Singh charged with her maintenance, and that after the award Nidhan Singh had mortgaged the property to Drigpal Singh and then sold it to him. Drigpal Singh took the property subject to the maintenance charge, and on his death the appellant succeeded to the property subject to the same charge, but, in spite of repeated demands, the appellant had refused to pay the maintenance, with the result that a suit had to be brought for the recovery of Rs. 10,800 the amount of maintenance for twelve years from 8-1- 1921 the date of the award, to the date of the suit. She prayed that a decree might be passed in her favour. On 20-3-1933, the appellant filed a written statement stating, among other things, that no charge had been created as alleged in the plaint, that at the time of the mortgage and sale Drigpal Singh had no notice of the partition or arbitration award; that he had taken the property on the understanding that it was free from all liabilities; that the charge for the maintenance allowance was mentioned in the award deed as the result of a conspiracy and fraud committed against Drigpal Singh in which the respondent, the members of the family and their servants had joined, and that the respondent was not entitled to any maintenance either during the period when her husband was alive or thereafter. The learned Additional Subordinate Judge raised certain issues, including the two questions mentioned above and, after recording oral and documentary evidence, he held on the first of the said two questions that the award was valid in other respects but the portion thereof relating to the maintenance of the respondent was invalid and unenforceable; the respondent was not a party to the reference to arbitration, and the arbitrators had no power to adjudicate on her right of maintenance and make it a charge on the property; a trick had been played on Drigpal Singh by making the said provision in the award out of the property mortgaged to him. He further held that the charge was a conditional one, that such a charge could be conditionally created, the condition being that she should fall out with her husband and they should cease to live together. On the second of the said questions he held that Drigpal Singh was not aware of the maintenance charge on the mortgaged property, that it had not been brought to his notice, it was entered surreptitiously in the award behind his back with some ulterior motive, there was an active concealment of the charge from him and he, having purchased the property for a good consideration without notice of the charge, took the property free from it. On these grounds he dismissed the suit with costs. A decree dated 31-7-1935, was accordingly drawn up. From this decree the respondent appealed to the High Court of Judicature at Allahabad. On 12-3- 1942, the High Court (Allsop and Verma, JJ.) delivered judgment. They held that upon a proper construction of the award a charge had been created by it from the time of partition, that the charge was not conditional and there was no question of any condition having to be satisfied. They further held that the award definitely mentioned the charge and was also mentioned in the mortgage deed, and Drigpal Singh had been conversant with the whole arrangement, that he had not been deceived about the conditions of the partition, and that the appellant, as the representative in interest of Drigpal Singh, could not avoid the consequences of the charge on the allegation that Drigpal Singh was a transferee without notice of the charge, and that he was in no better position when he later bought the property. They therefore allowed the appeal and decreed the suit with costs in both Courts. A decree dated 12-5-1942, was accordingly drawn up. From this decree the appellant has appealed to His Majesty in Council.

(2.) On the two main questions set out above, their Lordships feel no difficulty in agreeing with the conclusions which the High Court has arrived at. On the first of the said two questions, viz., whether the award created a valid charge in favour of the respondent on the property (the two villages of Quazipur and Mai) allotted to Nidhan Singh, the terms of the award clearly charged the property allotted to Nidhan Singh. Nothing could be clear than the words in the award: "We allot the property mentioned in List A specified below to Kunwar Nidhan Singh, which shall remain in his possession subject to a charge for maintenance of Mt. Sarla Devi."

(3.) On the second question, whether Drigpal Singh, the predecessor in title of the appellant, had notice of the said award and charge when he took the mortgage on the following day, the circumstances which led to the award are mentioned in it. From them and the other evidence in the case, it clearly appears, as the High Court judgment points out, that after the partition, Nidhan Singh led a life of great extravagance and got involved in debt. The result was that the respondent sought the assistance of his brothers and other well-wishers of the family (including Drigpal Singh) and obtained the partition between him and her two sons, who were minors at the time. The arbitration award was drawn up, signed and registered on 8-1-1921. The arbitrators who made the award were no strangers but were the three brothers of Nidhan Singh and two other gentlemen apparently well known to the family, the last of whom was a Deputy Collector. The arbitrators say in the award that they had been approached by the respondent to effect the partition because of her husband''s extravagance and that they thought it proper to accede to her request in spite of her husband's objection, because the latter had admitted that he could not act cautiously in spending money and because they knew from personal knowledge and enquiries that he had been extremely extravagant. The result was that they allotted the property to Nidhan Singh and other property to the minor sons and they charged the property allotted to the husband with the maintenance of the respondent. On the next day, 9 January, Nidhan Singh executed a deed of usufructuary mortgage of the whole property allotted to him in favour of Drigpal Singh and the deed was registered on 10 January, and on 3-8-1921, he sold the equity of redemption to Drigpal Singh. This is the substance of the story evidenced by the award and other evidence. It is clear to their Lordships from these circumstances, and also the evidence of Todar Singh, the general attorney of Drigpal Singh, and the main evidence produced on behalf of the appellant, that Drigpal Singh figured in the transaction from the beginning, being regarded as one of the well-wishers of the family, and that he knew full well what was happening. Todar Singh had to admit, in spite of his strong leaning in the appellant's favour, that the respondent requested Drigpal Singh to agree to advance a loan to Nidhan Singh as the latter was heavily indebted. Drigpal Singh's wife supported her request. Nidhan Singh's wife then pressed him adding that her children were going to be ruined. Thereupon Drigpal Singh said he would look into the papers and then give a definite reply. Drigpal Singh came out and had a talk with Nidhan Singh and others on the proposal of advancing a loan. Nidhan Singh and others requested him to take a usufructuary mortgage of the property, and Drigpal Singh agreed. Gopi Chand, the general attorney of Nidhan Singh, showed papers to Drigpal Singh then and there. Nidhan Singh and all those who were present there had informed Drigpal Singh that a partition between Nidhan Singh and his sons had already taken place and that the villages sought to be mortgaged were allotted to the share of Nidhan Singh. This is a clear statement of what happened, drawn out of the mouth of a partisan witness in favour of the appellant. This is apart from the circumstance that the effect of the partition and the charge are expressly mentioned in clear terms in the award and in the deed of mortgage which Drigpal Singh took on the very next day after the award. Similarly, the sale deed, which followed a few days later also states that the property which was the subject-matter of the sale was allotted to the share of the mortgagor under the arbitration award dated and registered on 8-1-1921. It is further to be noted that the mortgage amount of Rs. 40,000 was not paid into the hands of Nidhan Singh but was, under covenant 1 of the mortgage deed, to remain with the mortgagee for payment to the creditors and for meeting other necessities, which fact clearly supports the conclusion that Drigpal Singh was on terms of trust and confidence with the family, including the respondent, who was a purdanashin lady. It is true that in covenant 3 of the mortgage deed the property was conveyed free from all liabilities. That clause appears to be a distant imitation of the covenants usually found in an English mortgage, but it is clear that the formal and general nature of this clause cannot override the conclusion suggested by the other terms of the mortgage and the facts in evidence in this case. Their Lordships have therefore no difficulty in coming to the conclusion, as the High Court has done, that Drigpal Singh was conversant with the whole arrangement leading to the partition, award and the charge on the property. In this view of the case, it would seem unnecessary to go into the question argued before their Lordships about constructive notice or the effect of registration arising under the provisions of S. 3, T. P. Act.