This article is written by Diksha Shastri. It attempts to uncover the case of Hunoomanpersaud Panday vs. Mussumat Babooee Munraj Koonweree, an important case of ancient times that revolved around the boundaries of powers of the manager, or Karta, of a Hindu family. Moreover, it unravels the various aspects of the rights of a minor pertaining to mortgaged ancestral lands. Delving deep into the concepts of usufructuary mortgage and Zamindari rights, it also uncovers the alienability of the rights of purdah nasheen women in making decisions for the mortgage of ancestral land.
Table of Contents
Introduction
In ancient India, most of the land was owned through the Zamindari system. In this system, there were Zamindars, hereditary landholders, who used to charge interest from farmers and allow them to farm on their ancestral lands. Now, these rights of land ownership, passed down from generation to generation, typically by coveting ownership to the eldest son.
However, life was not always simple and easy, even for the Zamindars. In tough times, these landowners used to borrow money from money lenders. As security over these loans, they would sign a mortgage deed where the land was collateral. As per this deed, if the person fails to repay the loan, the moneylender becomes the rightful owner of the land.
Let’s move to the interesting question, though: what happened in cases where the person who took the loan passed away? What would happen to the mortgage deed then? Moreover, if a representative of the minor owner of the land took stringent decisions without the consent of the actual owner, would it be valid?
These interesting aspects of the loan system of usufructuary mortgages of the olden days are covered in this case of Hunoomanpersaud Panday vs. Mussumat Babooee Munraj Koonweree (1854-1857) 6 MOORE‘S IND. APP. 393 (PC)
Details of the case
Let’s start with understanding the basic details of the case.
- Name of the case: Hunoomanpersaud Panday vs. Mussumat Babooee Munraj Koonweree (1856)
- Court: Privy Council
- Date of the judgement: 08 July, 1856
- Parties: Hunoomanpersaud Panday (Appellant), Mussumat Babooee Munraj Koonweree (Respondent)
- Citations: (1854-1857) 6 Moore‘s Ind. App. 393 (PC)
Facts of the case
This case arose as an appeal from the decision of the Sadr Diwani Court of Agra (Principle Revenue Court) established under the British Raj to handle civil and land revenue related matters. Let’s take a look at how the facts unravelled and the case reached the Privy Council.
The objective behind filing this suit before the Principal Trial Court of Gorakhpur by Lal deceased Inderdowun Singh for the recovery of possession of ancestral properties named as:
- Daree Deha;
- Mohundur; and
- C
These properties were situated in the Pergunnah Nugger Bastee of the Gorakhpur District of India. Apart from this, the original appellant also wanted to get the mesne profits and interest accumulated over the property, to set aside a mortgage bond dated July 1839, and finally to remove the name of the appellant as mortgagee from the records.
Now that we know why the suit was filed in the first place, let’s take a look at the circumstances leading to this situation.
The appellant was a banker in the District of Gorakhpur and used to make loan advances to his friends, neighbours, etc. The Appellant’s father, Mr. Buccus Panday, who was also indulged in similar business, had given a loan of approximately Rs. 8002/- to one Raja Tobraj Singh. As collateral to this loan, Raja Tobraj Singh entered into various deeds and conveyed a usufructuary mortgage of many villages from his estate to the appellant’s father.
Then, in 1831, Raja Tobraj Singh passed away. This led to an adjustment of accounts between the lender, i.e., Mr. Buccus Pandat and Raja Sheobuksh Singh, who was the heir of Raja Tobraj Singh. As a part of this arrangement, the son of Raja Tobraj Singh agreed to pay Rs. 5,252. To facilitate this, a few bonds were signed, and certain lands and villages were assigned to Buccus Panday by way of a usufruct mortgage.
Shortly after finalising this transaction, the son, i.e., Raja Sheobuksh Singh, also passed away. He left behind an infant son named Lal Inderdowun Singh and a widow, Ranee Degumber Koonweree. After her husband’s death, Ranee Degummber Koonweree took over the ownership of her late husband’s estate and officially became the guardian of their infant son.
Once she assumed the position of guardianship, another adjustment of accounts took place between the appellant (as successor of his father) and the Ranee Degummber Koonweree (as representative of her son). Where, she agreed to pay a sum of Rs. 3200/-. However, at that time, since the Ranee had missed out on some of the governmental payments, the land was very likely to be seized by the government by sequestration due to default in arrears. As a result, the appellant, under the approval of the Ranee Degumber Koonweree, paid an amount of Rs. 3000/- to the local collectorate.
For this payment made by appellant Hanooman Prasad Panday on behalf of the Ranee, they entered into three bonds of Rs. 1000/- each.
Later, in 1842, both parties again adjusted their accounts, and as a result, the Ranee agreed to pay Rs. 1500/-. For this, the Ranee and her then minor son Lal Inderdowun Singh, through a mortgage bond, conveyed certain lands and villages to the Appellant. The following are the properties in this usufructuary mortgage:
- Daree Deha;
- Dee Mar;
- Bhundeheree;
- Raja Baree;
- Mohunder; amd
- Gundherea Faiz.
In this final bond, the Ranee was also described as the possessor of mortgaged property and, hence, having proprietary rights over it.
After all of this, after attaining the age of majority, on 10th December 1849, Lal Inderdowun Singh filed a petition in the Zillah (trial) Court of the Principal Sudder of Gorakhpur for the following reasons:
- Possession of Zamindari rights; and
- To set aside the mortgage bond.
In this plaint, he alleged that the Ranee was his guardian and was taking care of his properties while he was a minor. However, being a purdah nasheen woman, he alleged that she was ignorant of business matters and, hence, had been deceived into giving away the rights to his property. Moreover, he also claimed that the properties had been obtained by fraud in the name of a mortgage. That the villages being a part of his ancestral Raj were a part of his inalienable rights.
It was found that the Ranee was indeed incapable of handling business matters, and it was also found that the mesne profits were also greatly exaggerated. Moreover, the Ranee had also appointed the appellant, Hanooman Parsad Panday, to act in her capacity.
During the proceedings, Lal Inderdowun Singh passed away. Thus, the court admitted Mussumat Babooee Munraj Koonweree as a party and as the guardian of Inderdowun’s son, Lal Seetla Buksh Bahadur Singh.
Then, on 3rd April 1859, the matter was heard by the Principal Sadr Ameen of Gorukhpur. The petition was dismissed, and aggrieved by this decision, the respondent then appealed to the Sadr Diwani Adalat at Agra. The grounds of appeal here were as follows:
- That Lal Inderdowun Singh was a mere minor when the bond was made;
- That Rannee was not named a guardian but a proprietor in the bond;
- That the bond was hence completely invalid;
- That even if the bond was valid, the Ranee was not empowered to execute any such bond under Hindu law, and
- Lastly, that the Ranee was not cognizant of the bond being executed.
A hearing was conducted before the full court on 22 January 1852. In this hearing, the full bench decided on the issue related to the Ranee’s right to execute the mortgage deed as a guardian. It was emphasised by the defendants that the deed stated Ranee acting as the proprietary and not a guardian of her son. Whereas, the plaintiffs stuck to avoiding the bond by denying the Ranee’s proprietary rights to the ancestral property.
Looking at the facts and circumstances of the case, the bench declared that even if it was assumed that the Ranee had voluntarily signed and executed the mortgage deed, the bond was not legally binding on the then appellant. Hence, neither he nor his property could be used to retrieve the mortgage bond.
With reference to the issue of mesne profits, since no investigation took place until that point, the court below was remitted to resolve the same. The present appeal before the Privy Council arises from the above mentioned facts.
Issues raised
Four major issues were raised before the Privy Council in this case. Including:
- Whether or not the Ranee signed the mortgage deed with consent and was the mortgage bond valid or not?
- Whether the appellant would have right over the land until the encumbrance was paid or was the debt repayment the only responsibility of the heir?
- As per Hindu law, whether the Ranee was allowed to borrow money and mortgage ancestral property on behalf of the son or whether the purpose of it was to prevent sequestration?
- If the mortgage and loan were held valid, would the burden of proof shift to the heir to prove the loan wasn’t required?
Arguments of the parties
Petitioners
The petitioner in this case was Hanooman Parsad Panday. Throughout the proceedings, their arguments remained as follows:
- That the mortgage deeds and loans that were executed were within the knowledge and consent of the Rannee;
- That it was a regular practice of the defendants to borrow money from the banker;
- Hanooman Prasad had been in possession of these properties since a while now, so the silence of the Ranee and original appellant, Inderdowun Singh, made it evident that the mortgage was valid, and
- When the mortgage deed was entered, the family of the Ranee was in dire need of money to protect their lands from being taken away.
Respondent
The respondent in this case, the son of the Ranee, had the biggest contention that, being a purdah nasheen woman, the Ranee had no awareness or knowledge of business matters. In fact, the appellant, along with various workers, made plans to manipulate her and take over the property by making her sign the mortgage deed. Moreover, they also stated that the loan was taken by the staff without any knowledge of the Ranee.
The second point of contention was that even in the mortgage deed, the Ranee was held to be the proprietor of the properties and not acting as a guardian. When the property mortgaged was the minor son’s ancestral right, the Ranee had no legal authority to mortgage those properties on his behalf. Besides, the action wasn’t even performed in her capacity as the legal guardian but as a proprietor.
Concepts involved in Hunoomanpersaud Panday vs. Mussumat Babooee Munraj Koonweree (1856)
As we can see, this case dates back ages. Many of the land and succession-related laws have become obsolete since then. However, the major concepts that this case law involves are discussed herein.
Usufructuary mortgage
A usufructuary mortgage is a specific type of loan through which the borrower can get money and retain rights over their property. The right of retention of property of the borrower is what makes this type of mortgage unique and beneficial. The mortgage deed signed for the ancestral property in this case was an usufructuary mortgage. So, let’s take a look at its salient features:
Transfer of possession
In this type of mortgage, there is a temporary surrender of possession of property by the borrower to the lender. This is referred to as the usufruct, which allows the lender to enjoy the possession and allied rights of the property. Based on the arguments of the appellant, in this case, it was also evident that the banker and then his son, Hanooman Parsad Panday, were in possession of the lands and villages. Moreover, they had also argued that the silence of the Ranee and Inderdowun Singh over this matter proved the existence of a mortgage. This worked in their favour, especially since they had seen him enjoy the benefits of their ancestral property for a few years. In this mortgage, hence, the lender becomes a temporary owner, also known as the usufructuary.
Income and repayment
Additionally, in this type of bond or deed, the lender also gains rights over the income earned from the mortgaged property. So, in the present case, if the property of zamindari rights reaped any income or fruits, it would belong to Hanooman Parsad after the bond was executed. This income also acts as a settlement or repayment towards the originally owed money.
Ownership retention
This is the most important part of the usufructuary mortgage that gave rise to the present suit in the first place. Retention of ownership means that the borrower still retains their legal rights over the mortgaged property throughout the loan period. Moreover, once the loan is complete, the borrower can easily re-obtain possession and control over the property.
Overall, this type of mortgage works best for income generating land. However, as seen in this case, it also leads to the loss of access to and control of the property. Thus, the original appellant filed an appeal for the restoration of the land rights.
Purdah nasheen woman
The term comes from the custom of women in veils. It refers to parda, meaning a curtain. This in itself shows that these are the women who live a life of seclusion and confinement in their homes. In most cases, the world of these women revolves around their families, and they have minimal contact with anyone else. Not just that, in the olden days, most of these women used the purdah to even communicate within the walls of their homes. As a result of this customary lifestyle, purdah nasheen women often face the below mentioned challenges:
Limited worldview
Restrictions in interaction with the outside world often limit the ability to develop an independent and strong perspective on outside matters.
Lack of experience
Due to the restrictions, a sense of isolation is generated. As a result of this, the opportunities and new windows for such women are comparatively less than those of a normal human.
Education
In most cases, such women are also deprived of formal education, as it is deemed not required.
Deprivation of information
Another important loss is access to information. Such women usually aren’t involved in major decision-making processes, and hence, it also deprives them of useful and knowledgeable information.
Vulnerability
As a result of so many restrictions and limitations, they lack the skills to interact with others. This makes such women vulnerable to exploitation. This point is also one of the contentions on the defendant’s grounds. It was pointed out by them that the Ranee, being a pardah nasheen woman, was not very aware of how the business takes place. Moreover, it was also contended that the staff and other workers had taken advantage of her vulnerability, making her sign the mortgage bond without her knowledge of any such matters.
Karta of a Hindu Family
In the context of Hindu law, a Karta plays a really important role in all the family matters of a Hindu Undivided Family (HUF). It is typically the male head member of the family and is also responsible for managing the family’s shared or ancestral properties and finances.
Simply put, in a Hindu joint family, a Karta is the eldest and senior most male member of a family property. This position comes with the following roles and powers:
Management
The Karta is solely responsible for making decisions on behalf of the family for all joint family property. His duty of management includes everything from income and expenses to investments.
Authoritative power
As per Hindu law, Karta has the final power to represent his family in all legal matters, making him an authoritative member of the family. Simply put, he can sue or be sued on behalf of his entire family.
Fiduciary duty
A fiduciary duty is the legal obligation to act in the best interest of the person one is representing. Hence, this imposes a very important duty on the Karta to act on behalf and in the best interests of the Hindu Joint Family, rather than his personal gains or interests.
Salient features of a karta as described in the case
In this case, the Karta of the family used to manage all finances, including the mortgage of properties and the bonds of the mortgage. However, the property concerned is ancestral property, belonging to the entire Hindu family. Hence, considering the facts of this case, the following features of a Karta are relevant:
Borrowing powers
It is also a power of the Karta that they can borrow money on behalf of the family for their best interests. In this case, from the facts, it is pertinent that the Karta’s of this family used to borrow funds from the appellant and his banker father. The question that remained to be solved was, if the deed was valid, was the Rannee acting in her capacity as a Karta and acting on behalf of the family interests or not?
Limitations on authority
When any such borrowing of funds happens for personal gains, then the entire family or the family property cannot be held personally liable. Hence, in this case also, if the validity of the deed was approved, the question would shift to whether or not there was a necessity for the family’s benefit to borrow the money by giving up possession of the lands.
Accountability
Along with the powers, the Karta of a Hindu family is also responsible for answering to his fellow family members. Hence, they have accountability over these family members. So, in this case also, if it was found that there was no necessity for the benefit of the family and the Rannee was acting out of her capacity as representative of the minor son, she could be held personally liable.
Relevant judgements referred to in the case
The following precedents were referred to by the Privy Council while deciding this case. Let’s take a look at those in relation to the facts of this case.
Gopee Churn Burral vs. Mussamut Ishwaree Dabeea [(3, Sub. Dew. Adaw. Rep. 93)]
In this case, the court emphasised the role of a de facto manager in a Hindu family as someone who manages family materials without taking on the formal responsibilities of a Karta. Moreover, it was also held in this case that when any encumbrance is taken in a bona fide manner, the encumbrancer is protected by the Hindu Law against personal liability. However, if the de facto manager is found to be acting in bad faith, then he or she shall be personally liable. This case was referred to consider the actions of a Karta in borrowing money and creating a charge on the ancestral joint family property. This reference helped the court determine the intent of Ranee’s actions as a de facto manager in the present case.
Oomed Rai vs. Heera Lall [(6 Sud. Dew. N. W. P. 218)]
This case, decided by the Sadr Diwani Adalat, Agra, was also cited by the Privy Council while deciding the case of Hanooman Persuad. In this referred case, the sons of a living father challenged a charge on the ancestral property by the father. Now, in some sense, there are similarities in both cases. However, the main similarities that helped were the consideration of the burden of proof, validity of the encumbrance or charge, etc. Both cases, however, significantly imply that the validity and burden of proof, in such cases, can vary based on the particular circumstances of the case.
Roy Fuswunt Lall vs. Sreekishen Lall [(Sud. Dew. Adaw, in 1852, vol. 14. p. 577)]
Another case, decided by the Sadr Diwani Adalat, was referred to understand the treatment of mortgaged property. Moreover, how to deal with the mesne profit and encumbrance once the mortgage expires. It was held in this case that the mortgaged property remains a security for the debt until the debt is completely discharged by the borrower. Moreover, it was also held that if the benefit of the family was involved, the mesne profits could be used to discharge the amount of the debt. However, in the present case, the court was yet to decide whether the borrowed money benefited the family or not. Lastly, it was also held that once a debt was fully realised, the property, interests, etc. would all be shifted back to the borrower, the original owner of the land. Simply put, this case was referred to understand the treatment of property, interests, and penalties in the case of a mortgage of ancestral property as per Hindu law.
Judgement in Hunoomanpersaud Panday vs. Mussumat Babooee Munraj Koonweree (1856)
The key issues in this present case revolved around four major points, such as:
- Power of the Karta, or Manager of Hindu ancestral property;
- The necessity of a loan for the family, i.e., benefit to the estate as a whole;
- If the mortgage was valid, the burden of proof would shift to the party challenging such a charge; and
- The bona fide or mala fide intent behind application of funds.
For these issues, after consideration of the facts and every detail, it was held that the decrees passed by lower courts were reversed. However, the Privy Council decided to remit the case back to Sadr Diwani Court with the following directives:
- To check the circumstances of a loan for a necessity or see how the advances were actually used;
- To decide on the validity of the mortgage bond; and
- To consider the rights of the lender for the benefits of mortgages that were paid off by him.
Rationale behind this judgement
The case was remitted back to the lower courts for further research and to look over the technical issues they faced at this point. However, the Privy Council also stated that the mortgage bond was valid as long as the intention was bona fide. The court even decided that even though there were issues with the Ranee being the representative or proprietor, if the bona fide intention was established, the bond would be valid. Let’s take a look at the various points that the court discussed and interpreted to reach this final decision.
Validity or nature of the bond
One of the most important issues to resolve in this case was the capacity of the Ranee in which she executed the bond and, consequently, the validity of the entire bond. As per the facts of the case, the bond stated the Ranee as acting as the proprietor instead of a guardian to the heir. The nature of the bond was to be determined.
Interpretation
The court further recognised that the contracts need to be liberally interpreted as per the Indian laws. With this approach, it became easier for the court to focus on the substance of the case rather than the mere literal interpretation.
Managerial role of the Ranee
Based on the findings and the fact that the Ranee was indeed a Purdah Nasheen woman, it was held that the Ranee was definitely not acting as a proprietor while signing the mortgage bond. Instead, it was held by the Privy Council that all her actions done on behalf of her son were performed in the managerial capacity for the original heir of the land, i.e, her minor son.
Hindu law
Another major deciding factor for the case were the Hindu law principles considered by the Privy Council. According to Hindu law, a manager can act on behalf of the heir, as long as all of the actions are done for the benefit of the joint family property in a bona fide manner. Hence, the court could easily emphasise based on this principle that the Ranee was in fact acting in a bona fide manner to benefit the state, even if the title of proprietor in the bond was wrongful.
Burden of proof
The burden of proof was on Hanuman Persaud as the lender to prove the existence and execution of the deed. For this purpose, the court relied on various official documents, possession of the land, and other supportive evidence.
Decision about the validity of the mortgage bond
At the end, the privy council concluded that, at a prima facie level, it was evident that the mortgage bond was valid. However, due to certain other important measures of the case, it was held that the case would be remitted to the lower courts for a proper finding and decision, based on stronger evidence.
Analysis of the case
Most of the issues discussed in this case have also become obsolete with time. However, the main substance of the case is that it helps in validating the actions of a manager or Karta of a Hindu family while acting in a bona fide manner for the family estate as a whole. There are so many different reasons that make this case significant in the legal aspect. When looked at with a keen eye, we can see how the Britishers used to deal with Indian familial and land related disputes during the British Raj.
The issue of the remittance order by the privy council proved that even though a prima facie case of the validity of a mortgage was found, there were certain matters that could not be neglected.
Moreover, looking at the decision of the council and how they have considered the mortgage to be valid, despite the technical issues, it is quite evident that they have taken the necessity of the time and the Ranee’s signing for the benefit of the estate into consideration. Hence, in this case there was a lot of significance to the doctrine of necessity, which validates certain actions because those are necessary for the well-being of the family.
Another point of significance here is that the court also held the Ranee’s action as the heir’s representative and the de facto Karta to be valid. Lastly, the judgement as a whole also protects and emphasises the equitable principles, which ensure the minor’s estate is preserved and protected, even if there were certain irregularities.
Conclusion
To conclude, this judgement went down as one of the most significant in the judgements under British law, especially for the rights of the managers of the Hindu joint family property. As one of the earlier cases, this judgement not only holds precedential value but also helped take forward the legal developments of the country during and after the British Raj. Being one of the earliest judgments, it protected the rights of the minor while also protecting the manager for their actions performed with bona fide intentions.
Frequently Asked Questions (FAQs)
Are managers and Karta the same in the Hindu Joint Family?
Yes, a Karta can also be called as the manager of the Hindu Joint family. On the basis of his responsibility to make all the decisions for the family’s welfare. He is responsible for the income, expenses, investments and the property of the joint family. However, not all managers of the family are Karta. Sometimes, a person can hold the power and responsibilities of a Karta without officially taking the title. These are known as de facto managers.
Can a manager sign a contract on behalf of a minor heir?
In the case of Hanooman Persaud Panday, it was held that as long as the contract is executed in the interest of the minor with a bona fide intent, it can be held as valid.
Is it better to have a usufructuary mortgage?
In India, taking a usufructuary mortgage is usually preferable when the borrower has some earnings from the land they are mortgaging. This way, even though they have to let go of the possession, the income generated from the mortgaged property can easily be used to clear the debt.
References
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