Case Summary
| Citation | Hunooman Prasad Panday v. Mussumat Babooee Munraj Koonweree(1854-1857) 6 Moore’s Ind. App. 393 (PC) |
| Keywords | legal necessity, mortgaged, coparceners |
| Facts | Bux Pandey, the father of the appellant-Hunooman Prasad Pandey, was a moneylender who gave loans to landowners in the Gorakhpur district.He gave Raja Jobraj Singh some money as a loan throughout the course of his company. Jobraj Singh mortgaged a piece of land to Bux Pandey as collateral. Raja Jobraj Singh died in the year 1831. After Jobraj Singh’s death, his son Raja Shivbux Singh adjusted his account with Bux Pandey and signed an agreement in which Raja Shiv Bux Singh agreed to pay an amount of Rs. 5252/- to Bux Pandey.Raja Shiv Bux Singh died later as well. As a result, Hunooman Prasad Pandey adjusted the account with Rani – Digamber Kanwar in 1835, and the two reached an agreement in which Rani – Digamber Kanwar agreed to pay Rs. 3200/-.However, due to Rani – Digamber Kanwar’s non-payment of outstanding payments to the government, the land was likely to be seized.In this scenario, Hunooman Prasad Pandey submitted Rani’s unpaid payment in the collector’s office. As a consequence, the Rani executed three bonds of Rs. 1000 each in favour of Hunooman Prasad Pandey.Both parties adjusted their accounts later in 1842, and Rani agreed to pay Rs. 15800/-. Rani and Lal Indra mortgaged some lands in favour of appellant Diwan Singh as collateral. Lal Indra Diwan Singh was a minor at the time. When Lal Indra Diwan Singh reached the age of majority, he filed an action in the Gorakhpur court for the collection of a mortgaged deed issued in 1842 and claimed the relief of regaining the title of the property. |
| Issues | What is extent of the power of a mother as manager of the estate of her minor son, to alienate the estate? |
| Contentions | |
| Law Points | “A widow, like a manager of the family, must be allowed a reasonable latitude in the exercise of her powers, provided … she acts fairly to the expectant heir”. The Court will not interfere with her management, unless there is danger to the estate from the manner in which she is dealing with it. A widow or other limited heir is entitled to manage the estate inherited by her. Her power to manage the estate is similar to that of a manager of an infant’s estate. However, 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…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. However, they think that if he does so inquire, and acts honestly, the real existence of an alleged sufficient and reasonably-credited necessity is not a condition precedent to the validity of his charge, and they do not think that, under the circumstances, he is bound to see the application of the money. 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 bona fide creditor should suffer when he has acted honestly and with due caution, but is himself deceived. |
| Judgement | They decided that the mortgage was executed, but that because the mortgagee obtained the mortgage from a restricted owner, he bore the burden of proving necessity. Their Lordships believed that the case of a mortgage for anything had been established prima facie. |
| Ratio Decidendi & Case Authority |
Full Case Details
THE RIGHT HON. THE LORD JUSTICE KNIGHT BRUCE–
The power of the Manager for an infant heir to charge an estate not his own, is, under the
Hindu 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 bonafide 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 arisen from any misconduct to which the
lender is or has been a party, he cannot take advantage of his own erring, to support a charge in
his own favour against the heir, grounded on a necessity which his wrong has helped to cause.
Therefore, the lender in this case, unless he is shown to have acted malafide, 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 sufficient and reasonably
credited necessity is not a condition precedent 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 bonafide creditor should suffer when he has acted honestly
and with due caution, but is himself deceived.
