PRIVY COUNCIL

                  Ch. Gur Narayan and others

                  Vs.

                  Sheolal Singh and others

                              P.C.A. No. 21 of 1916
(Lords Atkinson, CJ, Phillimore, Sir John Edge and Mr. Ameer Ali. JJ)

                  17.10.1918

                  JUDGMENT

Mr. Ameer Ali J.

1. This consolidated appeal from a judgment and four decrees of the High Court of
Calcutta arises but of four suits brought by the plaintiffs in June, 1906, in the Court of
the first Subordinate Judge of Gaya. The object of the suit, was to obtain possession of
certain specific landed properties which originally belonged to one Ram Dyal Singh,
who died so long ago as 1845. These four actions were separately decreed by the
Subordinate Judge. On the defendants' appeals the High Court dismissed two of the
suits and in the two others varied the first Court decrees. The plaintiffs preferred four
appeals to their Lordships' Board which were subsequently consolidated. After the
appeals ware filed two of the suits were compromised. The present appeal is thus
confined to the two decrees of the High Court in suits Nos. 99 and 101 of 1906,
respectively. A short statement of the facts relating to this family will explain the
nature of this litigation.

2. Ram Dyal had left him surviving a widow named Birja Kunwar and two married
daughters named respectively Sham Sundar Koer and Maha Sundar Koer. It is stated
that before his death he had made an oral disposition by which he had devised the
bulk of his property to his two grandsons, one named Ajodhya, the son of Sham
Sundar, and the other Sheo Charan, the son of Maha Sundar, subject to a life interest
in his widow, Birja Kunwar.

3. Both the Courts below have found in favour of this disposition, and it may now be
accepted as undisputed that the two grandsons under Ram Dyal's will obtained vested
interests in the properties specifically devised to them. The villages which form the
subject of the four suits were given to Sheo Gharan. Birja Kunwar died in 1851, and
on her death the properties devised to Ajodhya and Sheo Charan vested in them
absolutely. Sheo Charan died in 1852, and on his death the villages devised to him
under the will of his grandfather came into the possession of Maha Sundar Koer by
virtue of her right to succession as a Hindu mother. Maha Sundar purported to deal
with these properties in her lifetime; she borrowed money on mortgages, created
mukarraris, and sold several of the villages. Two of the sales form the subject of
dispute in the present appeal.

4. Maha Sundar died on the 15th June, 1894, when the succession opened to Sheo
Charan's agnatic relations. The plaintiffs claim to have derived title under assignments
from the reversioner's, and their case is that the alienation's made by Maha Sundar in
her lifetime in favour of the defendants or their predecessors are invalid, as they were
not made for purposes which make them binding on the reversioner's. and they
accordingly seek to recover possession of the villages purported to have been sold by
her to the defendants or their predecessors-in-title. They in their written statements in
the two suits raised a number of objections which, in the course of the trial, resolved
themselves into the three main points which their Lordships have to determine on this
appeal. The relative position of the parties and the nature of these objections will
appear from the following pedigree:-

       Jiwan Lal had three other sons, one of whom alone left issue, but his
       descendants at the time of Maha Sundar's death were more remote to Sheo
       Charan than the plaintiff's vendors.
5. It will be seen from this pedigree that Sheo Charan's father, Kali Charan, had a
grand-uncle of the name of Jiwan Lal. Jiwan Lal's two grandsons, Sheo Sahay and Bal
Gobind Sahay, were admittedly the nearest male agnates of Sheo Charan, surviving at
the time of Maha Sundar's death in 1894. It will be observed also that Maha Sundar
had a daughter, Bhawani Kunwar, who was married to one Tukanath. She appears to
have died in 1884, leaving her surviving a son, Hanuman Sahay; and on the 30th
April, 1895, Sheo Sahay and Bal Gobind Sahay as the nearest reversioner's, conveyed
all their right, title and interest, in the properties in suit to Hanuman Sahay. Hanuman
died in February 1906, leaving him surviving the plaintiffs, Gur Narain and Sheo
Charan, his sons and heirs. On the 2nd July, 1906, Gur Narain and Sheo Charan
conveyed a half share of their interest in the said properties to one Mohesh Lal, and
these three persons brought the four suits against the different alienee's of Maha
Sundar for setting aside her transactions and for recovery of possession. The
defendants, among other pleas, challenged the right of Mohesh Lal to maintain the
action in respect of his share as he was only a benamidar for a person named
Rafiuddin. Secondly, they contended that as Hanuman Sahay was a party to the
conveyance by Maha Sundar in respect of mauza Arnhara, he and his heirs were
estopped from questioning that particular transaction. and they pleaded generally that
all the transactions that were impugned were entered into for justifiable necessity.

6. The trial Judge held against the defendants on all points, and made a decree in
favour of the plaintiffs. The learned Judges of the High Court of Calcutta, on the
appeal of the defendants, have taken a different view. They have held, firstly, that as
Mohesh Lal is alleged to be a benamidar, his claim in respect of the moiety claimed
by him must be dismissed.

7. They also held, differing from the trial Judge, that in respect of the village of
Amhara, Hanuman Sahay being a party to the transaction, his heirs, the plaintiffs,
were estopped from disputing the validity of the sale.

8. With regard to the three villages involved in suit No. 101, they came to the
conclusion that a part of the consideration for the sale was proved to have been
applied in the payment of debts due from the estate. They accordingly dismissed the
claim of the plaintiff No. 3 in suit No. 101, and made a decree in favour of the
plaintiffs Nos. 1 and 2 in respect of half of the property conditioned on their payment
of 7,500 rupees with interest at 12 per cent per annum to the representatives of the
original purchaser, Jai Lal, they on their part accounting for the profits " enjoyed by
them in respect of that half."

9. On the question whether a person who has no beneficial interest in the property
which stands in his name or is acquired in his name can maintain an action in respect
thereof, there seems to be considerable diversity of judicial opinion in India. The
system of acquiring and holding property and even of carrying on business in names
other than those of the real owners, usually called the benami system, is and has been
a common practice in the country. There is nothing inherently wrong in it, and it
accords, within its legitimate scope, with the ideas and habits of the people. The rule
applicable to benami transactions was stated with considerable distinctness in a
judgment of this Board delivered by Sir George Farwell (Bilas Kunwar v. Desraj
Ranjit Singh1 Referring to a benami dealing, their Lordships say :- " It is quite
unobjectionable and has a curious resemblance to the doctrine of our English law that
the trust of the legal estate results to the man who pays the purchase-money, and this
again follows the analogy of our common law that where is made without
consideration the use results to the reoffer."

10. So long, therefore, as a benami transaction does not contravene the provisions of
the law the Courts are bound to give it effect. As already observed, the benamidar has
no beneficial interest in the property or business that stands in his name; he represents,
in fact, the real owner, and so far as their relative legal position is concerned he is a
mere trustee for him. Their Lordships find it difficult to understand why, in such
circumstances, an action cannot be maintained in the name of the benamidar in
respect of the property although the beneficial owner is no party to it. The bulk of
judicial opinion in India is in favour of the proposition that in a proceeding by or
against the benamidar, the person beneficially entitled is fully affected by the rules of
res judicata. With this view their Lordships concur. It is open to the latter to apply to
be joined in the action; but whether he is made a party or not, a proceeding by or
against his representative in its ultimate result is fully binding on him. In case of a
contest between an alleged benamidar and an alleged real owner, other considerations
arise with which their Lordships are not concerned in the present case. Here the
learned Judges of the High Court, differing from the trial Judge, have held that there
were grounds for supposing, or rather suspecting, that the purchase by Mohesh Lal of
a moiety of the villages in suit was for the benefit of Rafiuddin, and as he did not join
in the action they dismissed Mohesh Lal's claim. Mohesh Lal had persistently denied
the defendant's allegation that he was a benamidar for Rafiuddin and had no beneficial
interest in the property; nor does Rafiuddin appear to have put forward a claim
adversely to Mohesh Lal. In these circumstances it appears to their Lordships that the
decree of the High Court dismissing his claim in both suits on the ground that as a
benamidar he was not entitled to maintain the actions, is unsustainable.

11. The High Court further held that the plaintiffs are estopped from questioning the
sale by Maha Sundar of the 8 annas share of Amhara, as Hanuman Sahay was a party
to the transaction. This village forms the subject of suit 99 of 1906. In support of their
view the learned Judges have relied on the provisions of section 115 of the Indian
Evidence Act and the general doctrine of equitable estoppel embodied in that section,
to which their Lordships will presently refer. The High Court also considered that
Hanuman Sahay's purchase from the reversioner's accrued to the benefit of Maha
Sundar's vendees in consequence of the fact that he had joined with her in conveying
the property to the predecessors of the defendants. and they rested their judgment on
the equitable doctrine of what is called "feeding the estoppel", and on the provisions
of section 43 of the Indian Transfer of Property Act (IV of 1882), which practically
reproduces this rule.

12. To consider how far the learned Judges are right in their view on the question of
estoppel, it is necessary to examine the clause in Maha Sundar's conveyance which is
said to create the estoppel. It bears date the 19th March '1880, and, as already
observed, purports to be executed by Maha Sundar in conjunction with her daughter,
Bhawani 'Kunwar, and the grandson, Hanuman Sahay. The description of the vendors
is in the following terms:-

       "We are Mussummat Mahasundar Kunwar younger daughter and heiress of
       Mussummat Birja Kunwar, deceased, widow and heiress of Babu Ramdayal
       Singh, deceased, inhabitant of mouza Jagarnathpur, pargana Maher, and at
       present of mouza Sugrigrandi, pargana Pachrukhi; Mussummat Bhawani
       Kunwar, eldest daughter of Mussummat Mahasundar Kunwar aforesaid and
       Chowdhri Hanuman Sahai, son of Mussummat Bhawani Kunwar aforesaid and
       grandson by daughter of Mussummat Mehasundar Kunwar aforesaid, all
       inhabitants of mouza Samhri, pargana Roh, district Gaya, by occupation
       zamindars."
13. The deed then goes on to say as follows:-

       "Whereas the entire 16 annas of mouza Amhara, appertaining to lot
       Sugrigrandi.... has been and is in the possession of me, Mussummat
       Mahasundar, subsequently I, Mussnmmat Mahasundar Kunwar, had granted in
       gift mouza, Sugrigrandi, Kulna Surajpura, Amhara, Harna Sikaria, Buksouti,
       Ghazipur and Bahpuri Majrahi,appertaining to the said lot Sugrigrandi, to
       Mussummat Bhawani Kunwar, my eldest daughter, and Mussummat Gir
       Kunwar, my youngest daughter, with a view to avoid future disputes under
       deeds of gift, dated the 28th August, 1868.....in equal shares of 8 annas, with
       conditions that during the lifetime of mine, Mussummat Mahasundar Kunwar, I
       shall continue in possession of the same, and that after the death of me,
       Mussummat Mahasundar Kunwar Mussummat Bhawani Kunwar should get
       possession of 8 annas and Mussnmmat Gir Kunwar, of the other 8 annas. But
       the said Mussummat Gir Kunwar died in 1862 and Babu Ram Anugrah
       Narayan, husband of the said Mussummat Gir Kunwar, deceased, instituted a
       suit in the Civil Court of Gaya in respect of 8 annas of the said mouzas, and
       fought the case from the District Court to the Privy Council, and according to
       the final judgment of the Privy Council, dated the 27th June, 1873, it was held
       that I Mussummat Mahasundar Kunwar, one of the executant's, should remain
       in possession of all the aforesaid properties; that, after the death of me,
       Mussummat Mahasundar Kunwar, I, Mussummat Bhawani Kunwar eldest
       daughter, should obtain possession of 8 annas and Babu Ram Anugrah Narayan,
       husband of Mussummat Gir Kunwar deceased, should obtain possession of the
       other 8 annas share. In accordance with the same, I, Mussummat Mahasundar,
       am in possession of 16 annas up to this time, and I, Mussummat Bhawani
       Kunwar, eldest daughter, and after me Chowdhri Hanuman Sahai son of me,
       Mussummat Bhawani Kunwar, are entitled to take possession of 8 annas,
       mentioned in the deed of gift, as absolute proprietor after the death of me,
       Mussummat Mahasunder Kunwar.....Therefore we, Mussummat Bhawani
       Kunwar and Chowdhri Hanuman Sahai, have absolutely sold and vended our
       future proprietary interest and right to possession in 8 annas out of 16 annas of
       the said mouza Amhara in which we Mussummat Bhawani Kunwar and
       Chowdhri Hanuman Sahai, have acquired the right of possession after the death
       of Mussummat Mahasundar Kunwar and I, Mussummat Mahasundar Kunwar,
       have absolutely sold and vended my life-interest to obtain possession in 8 annas
       of mouza Amhara, in short, all the right title, and interest of us, the executants,
       in the 8 annas of the said mouza Amhara."
14. It is to be noticed that in this document Maha Sundar makes no reference to the
fact that the properties were in her possession as a Hindu mother by right of
succession to her son Sheo Charan. She describes herself as the " daughter and
heiress" of her mother, Birja Kunwar, and claims to be absolutely entitled to the
property in question, and purports to deal with it as such. It cannot be said that this
misdescription or assumption of absolute ownership could possibly have misled the
purchaser. For the proceedings in the suit of Anugrah against Maha Sundar and the
decision of this Board in Ramanugra Narain v. Mahatundar Kunwar2. are recited in
the conveyance in question. Their Lordships in that case expressly confined the
adjudication to the parties to the suit. They did not enter upon a consideration of the
question whether Maha Sundar had the power to make the gift or gifts which were in
controversy in that action. The declaration made by the Board could not enlarge the
power of Maha Sundar to deal with the properties she held as the heiress to her son to
the prejudice of the son's reversioner's. The vendee was entering into a transaction
with a Hindu female. It lay upon him to acquaint himself with the extent of her
powers. He was in full possession of the proceedings in Ram Anugrah's suit and the
facts connected with the Mitakshara family. The evidence of his witnesses shows that
enquiries were made on his behalf and that he had even some legal advice. Whether
these measures were adopted with the object of creating grounds of defence in some
future action by reversioner's or were bona fide enquiries, their Lordships have little
doubt on the facts that the Mahant purchaser had full knowledge of the powers and
disabilities of the vendor. At this time Hanuman had no interest of any kind in the
property. Maha Sundar had held it as a Hindu mother by right of succession to her son
Sheo Charan. On her death it would pass to his heirs. Hanuman's mother was alive at
the time of the sale; whatever interests they had were of a purely contingent character.
It is quite evident that they were joined as parties to the conveyance at the instance of
the vendee as a piece of precaution. Whether the vendee entered into the transaction in
the belief that Maha Sundar's title was derived, as she described in the sale deed, from
her mother, or whether he knew, as is more probable from the circumstances, that she
was in possession of the property as heiress to her son, he must have known that
Hanuman had no assignable interest which he could convey or the assignment of
which he could assure to the purchaser. His interest, if it can be so called, in either
view of the facts, was a mere expectancy, contingent, firstly, on his mother surviving
Maha Sundar, and, secondly, on his surviving his mother. His association in the deed
of sale was in their Lordships' opinion, wholly futile and had no legal effect in
validating the transaction if otherwise invalid. The High Court have rested their
judgment on the question of estoppel on the provisions of Evidence Act, section 115,
(Here the section was quoted) there is absolutely no evidence that the vendee was
induced to alter his position in any respect in consequence of Hanuman's
representation contained in the deed of conveyance. The Subordinate Judge in his able
judgment has given abundant reasons for holding that in the whole transaction
Hanuman must have been a mere passive instrument in the hands of his elders, and
that his so-called statement could not have materially influenced either the vendor's or
the vendee's conduct in the matter.

15. As regards the theory that Hanuman's subsequent purchase of the property in 1895
from the reversioner's should accrue to the benefit of the purchaser from Maha Sundar,
it is based on the assumption that what happened in 1880 created an estoppel against
Hanuman. In their Lordships' opinion there is no estoppel. Besides, it should be
observed that Hanuman did not acquire the property as a contingent reversioner to
Maha Sundar. The title on which the plaintiffs have brought their suit is based on an
independent purchase by Hanuman from the rightful heirs.

16. Their Lordships are of opinion that the view of the learned Judges on the question
of estoppel cannot be sustained.

17. Suit 101 relates to three properties called respectively Thali Khurd, Budhwara and
Korianna, which were sold by Maha Sundar in 1854 for alleged legal necessities to the
predecessors of the present defendants. The sale deed is not forthcoming, and some
evidence has been given of its loss which the High Court have accepted, and their
Lordships are not prepared to dissent from their decision that the defendants had
proved the sale of 1854. Their Lordships further agree with the learned Judges that
legal necessity to the extent found by them has been established. In the result,
therefore, their Lordships are of opinion that in suit 99 of 1906 (Appeal 2 of 1911) the
decree of the High Court should be reversed and that of the Subordinate Judge
restored; and that in suit 101 of 1906 (Appeal 3 of 1911) the decree of the High Court
should be varied by the inclusion of the name of Mohesh Lal, and that the decree
should be in favour of the three plaintiffs (including Mohesh Lal) to the full extent of
the properties claimed, subject to the payment by the plaintiffs to the defendants of
7,500 rupees under the terms and conditions set forth in the decree of the High Court.
The appellants are entitled to their costs of this appeal, and of the appeal to the High
Court in suit 99. In the appeal to the High Court arising out of suit 101, they will get
their costs as decreed by that Court. and their Lordships will humbly advise His
Majesty accordingly.

Order accordingly.

Cases Referred:

   1. [1915] 37 All. 557 : 30 I.C.299 : 42 I A.202.
   2. [1873] 12 B.L.R. 433 : 3 Sar. 277 (P. C)