DAWSONS BANK LTD Vs. MAUNG MYA THWIN

JUDGEMENT

(1.) This appeal is against a decree of the High Court of Judicature at Rangoon (dated 12th January 1938) which affirmed a decree of the District Court of Pyapon. It is necessary to state the relevant facts which led up to the litigation out of which this appeal arises. In the year 1926 a mortgage deed in favour of the present appellants, Dawson's Bank Ltd. (hereinafter referred to as the Bank) was executed and registered. The persons described in the deed as mortgagors were ten in number, viz. a mother, her daughter, and the eight children of the latter. Of these eight children, four (including the three present respondents), were minors. They did not execute the deed, but it is stated therein that they were represented by their guardian. He was their eldest brother and he executed the deed. He had no authority to bind the infants, and it is clear, and is admitted by the Bank that the mortgage deed in no way binds the respondents or affects their shares in the mortgaged properties, which consisted of nine items numbered one to nine and described in a list set out in the deed. The principal sum secured was a sum of Rupees 40,000, with interest at the rate of Rupee 1-4-0 per mensem. Neither the grandmother, nor the mother of the eight children, had any title to or interest in the mortgaged properties. The youngest of the three respondents attained his majority some time in the year 1930.

(2.) In the autumn of the year 1935 the amount due to the Bank under the mortgage deed for principal and interest amounted to a sum exceeding Rs. 54,000. The Bank was minded to enforce its security. At the same time the family who had been carrying on an electric plant and installation and lighting business (item 9 in the list of mortgaged properties) under a Government sanction due to expire on 31 October 1935, were faced with a Government requirement for improved plant involving an expenditure of some Rupees 10,000 to Rs. 12,000. As the result of negotiations with the Bank, three documents were prepared to which the Bank and the eight children were expressed to be parties, each dated 8 October 1935. The first document, and the one more immediately relevant on this appeal, is a deed of sale, by which the eight children transferred outright to the Bank the nine mortgaged properties in satisfaction of the mortgage debt which is stated to be only Rs. 50,000. By the second document the Bank agreed (provided the Government would grant a sanction to the Bank to supply electrical energy) to purchase all additional plant required by the Government up to a limit of Rs. 12,000. The Bank also agreed, subject to Government's approval, to lease the electrical business to the family for a period of five years at a rent to be fixed as therein mentioned; and further agreed that the family should (subject to Government sanction) have the right during the lease to purchase the business and the plant new and old for the sum of Rs. 5000 plus the cost of the additional plant limited to Rs. 12,000. By the third document the family was given the right, to be exercised within three years, to repurchase the other items of the mortgaged property for the sum of Rs. 45,000.

(3.) The grandmother had died in 1934. The mother was made a party to these documents. These facts, however, have no bearing on this appeal. Apparently it became impossible to carry out the provisions of the second document. The Government refused the Bank's application for a sanction, but extended the sanction to the family for a few weeks, when it lapsed. In the meanwhile the Bank was compelled to obtain compulsory registration of the deed of sale. This was obtained on 3 February 1936. The Bank then proceeded, by the suit in which this appeal arises, to endeavour to get possession of the properties comprised in the sale deed. The defendants to the suit were the mother and the eight children. A tenth defendant was added as the legal representative of the grandmother. By the plaint, dated 9th February 1936, the Bank claimed possession of the properties enumerated in the deed of sale. Alternatively the Bank claimed as against one defendant, who had not executed the deed of sale, specific performance, and that the shares of the others be partitioned and possession thereof delivered to the Bank. The three present respondents (defendants 6, 8 and 9), delivered a separate written statement, the relevant paragraphs of which as amended run thus : 8. With reference to para. 5 of the plaint these defendants submit that they were induced by the plaintiff to execute, and executed, the alleged sale deed without any consideration whatever on the misrepresentation of the plaintiff to the effect that they (these defendants) were legally liable to execute the same. The sale deed is therefore null and void and of no effect as against them. They deny that they had ever agreed voluntarily to convey their interest or shares in the suit property. 10. With reference to paras. 7, 8 and 9 of the plaint, these defendants submit that the sale deed, though compulsorily registered, is void ab initio as against them inasmuch as they were neither mortgagors nor debtors of the plaintiff inasmuch as the alleged consideration of Rs. 50,000 is the old debt due on the mortgage.