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1856.

PERSAUD
PANDAY

v. MUSSUMAT

MUNRAJ KOONWERES.

the rent fixed by the pottah. It is said for the AppelHUNOOMAN- lant, that the Sudder Dewanny Adawlut did not set

aside the pottah. In terms they certainly did not.

But their Lordships think that it was part of one BABOOEE mortgage-security, consisting of several instruments of equal date with the mortgage Bond; and that it

; was intended to create, not a distinct estate, but only a security for the mortgage-money. Mr. Palmer contended that a stipulation such as this pottah evidences, may stand in India between mortgagor and mortgagee, and that the Regulations as to interest do not touch such a case. The Regulations provide for the case of an evasion of the law as to interest by invalidating the mortgage security, and forfeiting the claim of the mortgagee to his principal and interest : but Mr. Palmer contends that where there is no such evasion, and a bona fide and fair rent is fixed upon as representing, communibus annis, the rents and profits of the estate, the Court ought to stand on that, the agreement of the parties, and not to direct the taking of the accounts between mortgagor and mortgagee on any other basis. It is certainly possible that, by reason of the provision that the rent shall be a fixed one, notwithstanding losses and casualties, the mortgagee might be a loser, in his character of lessee, on an account calculated on this basis; but, notwithstanding that contingency, their Lordships think that, as it was not meant that the principal should be risked, it was virtually a provision to exclude an account of the rents and profits, and that the decree of the Sudder Dewanny Adawlut, directing an account of the actual rents and profits, therefore, proceeds on the right principle, and is in accordance with the true nature of the security and the spirit of the Regulations.

1856.

PERSAUD

v. MUSSUMAT BABooEP MUNRAJ

In the case of Roy Juswunt Lall v. Sreckishen Lall, reported in the decisions of the Sud. Dew. Adaw. in HUNOOMAN1852, vol. 14, p. 577, the Court seems to have thought

PANDAY that where a mortgage lease was granted, and whilst the term was running, the mortgage account could not be taken ; but it appears from that case, that in

KOONWEREE former decisions of that Court not reported, where the lease had expired, the Court directed the account to be taken on the ordinary footing of the receipt of rents and profits of the mortgaged estate. Their Lordships think that, under the Regulations, unless the principal is meant to be risked, and is put in risk, the estate created as part of a mortgage security, whatever be its form or duration, can be veiwed only as a security for a mortgage debt, and must be restored when the debt, interests, and costs are satisfied by receipts.

Upon the whole, their Lordships are of opinion that the cause must be sent back for further inquiry. They think it desirable, however, in order to prevent a future miscarriage, to state the general principles which should be applied to the final decision of the

case.

The power of the Manager for an infant heir to charge an estate not his own, is, under the Hindoo law, a limited and qualified power. It can only be exercised rightly in a case of need, or for the benefit of the estate. But where, in the particular instance, the charge is one that a prudent owner would make, in order to benefit the estate, the bona fide lender is not affected by the precedent mismanagement of the estate. The actual pressure on the estate, the danger to be averted, or the benefit to be conferred upon it, in the particular instance, is the thing to be regarded. But of course, if that danger arises or has

1836.

PERSAUD
PAYDAY

V.

В MUNRAJ

arisen from any misconduct to which the lender is or HUNOOMAN- has been a party, he cannot take advantage of his own

wrong, to support a charge in his own favour against

the heir, grounded on a necessity which his wrong has MUSSUMAT

BABOOEE helped to cause. Therefore, the lender in this case,
KOONWEREE.

unless he is shown to have acted malá fide, will not
be affected, though it be shown that, with better
management, the estate might have been kept free
from debt. Their Lordships think that the lender is
bound to inquire into the necessities for the loan, and
to satisfy himself as well as he can, with reference to
the parties with whom he is dealing, that the Manager
is acting in the particular instance for the benefit of
the estate. But they think that if he does so inquire,
and acts honestly, the real existence of an alleged suf-
ficient and reasonably-credited necessity is not a con-
dition predecent to the validity of his charge, and they
do not think that, under such circumstances, he is bound
to see to the application of the money. It is obvious
that money to be secured on any estate is likely to
be obtained on easier terms than a loan which rests
on mere personal security, and that, therefore, the
mere creation of a charge securing a proper debt
cannot be viewed as improvident management; the
purposes for which a loan is wanted are often future,
as respects the actual application, and a lender can
rarely have, unless he enters on the management, the
means of controlling and rightly directing the actual
application. Their Lordships do not think that a bond
fide creditor should suffer when he has acted honestly
and with due caution, but is himself deceived.
Their Lordships will, therefore, humbly report to

,
Her Majesty in the following terms :-

“Their Lordships are of opinion that the Ranee

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1836.

PERSAUD
PANDAY

v. MUSSUMAT BABOOEE

MUNRAJ KOONWEREE.

ought to be deemed to have executed the mortgage Bond, dated Assar Soodee Poornumashee, in the plead- HUNOOMANings mentioned, as and in the character of guardian of the infant Lal Inderdowun Singh.

“And their Lordships are of opinion that the validity, force, and effect of the Bond, as to all and each of the sums, of which the sum of Rs. 15,000, thereby purporting to be secured, is composed, depend on the circumstances under which the sums, or such of them as were advanced by the Appellant, were respectively so advanced by him, regard being had also, in so far as may be just, to the circumstances under which the same were respectively borrowed.

“And their Lordships are also of opinion that, assuming the Bond to be invalid and ineffectual, the Appellant would, nevertheless, be entitled to the benefit of any prior mortgage or mortgages paid off by him affecting the property comprised in the Bond, if and in so far as such prior mortgage or mortgages was or were valid and effectual.

“And their Lordships, therefore, are of opinion that the decrees of the Zillah and Sudder Courts respectively ought to be reversed, and the cause remitted to the Sudder Court, with directions that inquiry be made into the several matters aforesaid, and that all such accounts be taken and such other inquiries made as, having regard to such matters and to the circumstances of the case, may be found to be necessary and proper, with directions also that the Sudder Court do proceed therein as may be just, both with respect to the said mortgage Bond and the several instruments of even date therewith ; and that the costs of the appeal be costs in the cause, to be dealt with by the Suilder Court."

B 2

VOL. VI.

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On appeal from the Governor in Council of Bombay.

1850.

lages, granted

for services rendered to

Ilearid e.r-parte. The question in this appeal was the right of the U1th July,

Appellant to a partition of certain Enun villages Enam vil. in the Southern Jinhratta Country, which had been by Govern- granted by the Government of Bombay by a sunud, nient to the dated the 9th of April, 1823, to linnmont Rum, the grantee and his male heirs, ancestor of the Appellant and Respondents, to hold

to him and his posterity in the male line from the State, are not, by the generation to generation. ,

The circumstances which gave rise to this question

were these :country, dis- The Appellant and Respondents were l'indoo Enai tinguishabie Jagecılars, and inhabitants of looilgole in the Talook ancestrul real Dunnrul, of the Dharwar Zillah, in the Presidency of are divisible Bombay. The Respondent, Nursing Rao, being a among the

Sirdur of the second class, was exempt from the jurisdiction of the ordinary Zillah Courts, but by Reg.

Hliniu law
in force in the
Southern
Jahrutter

from other

heirs of the grantee.

* Present : Members of the Judicial Committee,—The Right Hon. T. Pemberton Leigh, the Right Hon. Sir Edward Ryan, the Right Hon. Sir John Dodson, and the Right Hon. Sir William H. Maule.

Assessor; ---The Right Hon, Sir Lawrence Peel.

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