KABUL CHAND Vs. BADRI DAS

JUDGEMENT

(1.) These two appeals arise out of a suit for sale on foot of a mortgage deed, dated 2 July, 1919, executed by Raja Ram, who is now represented by his sons, and by Lajja Ram who is defendant 3. The sum secured by the deed was Rs. 200 carrying interest at the rate of Re. 1-8-0 per cent, per mensem, compoundable every year. The plaintiff, in whose favour the deed was executed, brought the ? suit, which has given rise to these appeals against the sons of one of the mortgagors and the other mortgagor (defendant 3), impleading also, among others, defendants 4 and 8, the appellants in the two appeals before us, who were described as subsequent mortgagees. The suit was contested by some of the defendants on the ground that the property mortgaged by Raja Ram and Lajja Ram belonged to a joint Hindu family consisting of the executants and other members of their family, and that there was no legal necessity for the loan evidenced by the mortgage deed in suit. Defendants 4 and 8, the appellants in this Court, contested it on the ground that a portion of the mortgaged property did not belong to the mortgagors on the date of the mortgage and that qua such portion the mortgage deed was invalid. Subsequently it became common ground that the property hypothecated under the deed in suit included a portion of a mahal in the village comprising the share of the mortgagors and that of another cosharer, who had executed a sale deed in favour of a stranger, giving rise to a right of preemption exercisable by the mortgagors. It was also common ground that the mortgagors were contemplating a suit for preemption in respect of the share transferred to the stranger when they executed the mortgage deed in question. Their right to pre-empt was so clear that they had no doubt that they would acquire the property sold to the stranger, and in anticipation of the exercise of their pre-emptive right they included, as part of the mortgaged property, the share which had been sold to the stranger and which they intended to acquire by exercising their right of pre-emption. It is conceded that this share was subsequently acquired by the mortgagors by preemption. To the defence put forward by defendants 4 and 8, the plaintiff replied that though part of the mortgaged property did not belong to the mortgagors on the date of the suit, yet as it was subsequently acquired by them, the mortgage, as regards such share became effective when the mortgagors acquired it. The plaintiff relied on Section 43, T.P. Act.

(2.) Both the lower Courts held that the entire consideration of Rs. 200, advanced by the plaintiff, was warranted by legal necessity, the same having been borrowed by the mortgagors for payment of Government revenue and for the purchase of bullocks. Both the lower Courts likewise found that the mortgage deed enured for the benefit of the plaintiff in respect of the share which did not belong to the mortgagors on the date of the mortgage, but was subsequently acquired under a decree for pre-emption. On these findings the plaintiff's suit for recovery of principal and interest due under the mortgage deed in suit by sale of the mortgaged property was decreed. Defendants 4 and 8 filed separate appeals in the lower Appellate Court. They have done the same in this Court. S.A. No. 1505 of 1933 is that of defendant 4. S.A. No. 513 of 1935 is that of defendant Section As identical questions have been raised and argued in these appeals, we propose to dispose of both of them by this judgment.

(3.) It was argued by learned Counsel for the appellants that in the absence of a finding by the Courts below, it should be held that no legal necessity for contracting a loan at a high rate of interest has been made out. It is contended that the validity of the mortgage having been challenged, the plaintiff ought to have established not only that there was legal necessity for the loan itself, but also for raising it at the high rate of Re. 1-8-0% per mensem compoundable every year. No specific plea in reference to the rate of interest was raised in the written statement filed by any of the defendants. The judgments of the lower Courts do not indicate that the questions which are argued in second appeal were mooted in those Courts. The question of legal necessity was raised by members of the family of the mortgagors. Strictly speaking, it is not open to defendant 4 and 8, the appellants in this Court, who are subsequent transferees, to raise any question of this kind. In any case, we think that they are not entitled to raise it in second appeal. If the plea had been taken at the proper time, the plaintiff might have established that the mortgagors, whose need of money was urgent, could not obtain a loan at a more favourable rate of interest. Accordingly we overrule the appellant's contention on this part of the case.