This case is related to rights of alienation of the property of minor by ‘karta’ or ‘manger’. The main points for consideration before the Privy Council are-
1. Whether the property of minor or his interests can be alienated by the ‘karta’ or ‘manger’.
2. If yes, then under what circumstances and up to what extent, and
3. Whether the repayment of debt of ‘karta’ or ‘manager’, the doctrine of pious obligation of sons is applicable in any case?
Bux pandey, the father of appellant Hunooman Prasad Pandey, was in the business of granting loan as money lender to the land holders in Gorakhpur district. During the course of his business, some money was given by him to Raja Jobraj Singh as a loan. In the form of security, a land was mortgaged by Jobraj Singh to Bux pandey. In the years 1831, Raja Jobraj Singh had died. After the death of Jobraj Singh, an adjustment of account was done by his son Raja Shivbux Singh with Bux Pandey and an agreement was executed according to which an amount of Rs. 5252/- was to be paid by Raja Shiv Bux Singh. Later on, Raja Shiv Bux Singh had also died. As such in the year 1835 adjustment of account was done by Hunooman Prasad Pandey with Rani – Digamber Kanwar and an agreement was held between them according to which Rani – Digamber Kanwar agreed to pay Rs. 3200/- on the other hand due to non – payment of outstanding payment to government by Rani – Digamber Kanwar, the land was likely to be happened seized. Under the situation, Hunooman Prasad Pandey deposited the outstanding amount of Rani in the office of collector. As a result, three bonds of Rs. 1000/- each was executed by the Rani in favour of Hunooman Prasad Pandey. Later on in year 1842, adjustment of accounts was done by both the parties and Rani agreed for payment of Rs. 15800/-. In security of his some lands were mortgaged in favour of appellant by Rani and Lal Indra Diwan Singh. At the time Lal Indra Diwan Singh was minor.
On attaining majority by Lal Indra Diwan Singh, a suit was filed by him in the court of Gorakhpur for collection of mortgaged deed executed in the year 1842 and demanded the relief of regetting possession of land. The plaintiff presented following contentions-
1. Rani Digamber Kanwar was guardian of plaintiff during the period he was minor.
2. She was an uneducated women and being kept in pardah.
3. Loan was taken by servants and agents, which was not in knowledge of Rani.
4. Mortgage of land was got done by appellant by fraud
5. The guardian was not having any right to alienate the property of plaintiff (minor)
The appellant laid down following contentions-
1. Loan was taken by the respondents from appellant from time to time.
2. As a security some lands were mortgaged by them.
3. On attaining majority, the plaintiff acknowledged the loan given by appellant.
4. Bonds were also executed by them in favour of appellant.
5. Due to death of Lal Indra Diwan Singh during the suit, the loan was acknowledged by the mother Muss Badooi Moonraj Kanwar as a guardian of his minor successor Lal Sheetla Bux Banadur Singh.
After hearing both parties, the trial court dismissed the plaint of plaintiff on following grounds-
1. That the aforesaid loan was taken without the knowledge of Rani has not been proved.
2. That the bonds and mortgage deed executed at that time was in acknowledge of Rani.
3. That at the time of transaction, the family of Rani was in need of money, if the loan was not taken at that time then the property of Rani was liable to be seized in recovery of government dues.
4. That no objection was made by the Rani at the time of mortgaging lands.
Against the above decision of trial court, an appeal was filed by the plaintiff in upper court at Agra which was accepted and the upper court set aside the decision of the trial court. Against this decision, the appellant plaintiff, Hunooman Prasad Pandey filed an appeal in Privy Council.
However, the connections made by both parties at trial court, more or less, the same logics were made by both the parties before the Privy Council heard both parties. This case was remanded again to upper court with the following directions by Privy Council that –
1. Whole case be re – examined
2. The account be re – examined as per the circumstances in the case.
3. Mortgage deeds and bonds are viewed carefully and a right decision be taken.
For remanding the case, the Privy Council opined as follow:
1. Karta or manager may alienate the property of minor to an extent for need of family and benefit of property.
2. Property was mortgaged by Rani as a guardian who cannot be said an illegal
3. In obtaining loan, if there is a misconduct of loanee and loaner then they cannot take benefit of their own wrong.
4. For payment of previous debts, the property can be alienated
5. Point of appropriateness of charge depends on the circumstances prevailing at that time.
Principles of laws:
Following principles have been propounded by the Privy Council in this case-
1. That the loan can be obtained for legal necessity of family and benefit of property.
2. That it is the liability of loaner that before giving loan, the necessities be examined.
3. That the loaner is not bound to observe utility of loan.
4. That payment of loans of father is a pious obligation of son
5. That under mitakshara school of Hindu law, minor’s coparcency right is not a personal property.
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