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1917 Supreme(SC) 51
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD DUNEDIN, LORD SHAW OF DUNERMLINE, LORD SUMNER, SIR JOHN EDGE, AND MR. AMEER ALI.
MAUNG KYIN - Appellant
Versus
MA SHWE LA - Respondents
On Appeal From The Chief Court of Lower Burma.
Decided On : July 26, 1917.
Solicitors for appellants:Arnould & Son. Solicitors for respondents: Brammall & White.
Section 92 of the Indian Evidence Act, 1872, does not bar oral evidence to prove that an absolute conveyance was intended as a mortgage if the evidence relates to the rights of a third party (the actual owner) in a transfer a non domino.
Headnote:(A) Indian Evidence Act, 1872 - Section 92 - Admissibility of oral evidence to contradict terms of a written instrument - Absolute conveyance intended as mortgage - Transfer a non domino - Evidence regarding rights of a third party - Section 92 applies only "as between the parties to any such instrument or their representatives in interest" - Evidence showing that a grantee knew the grantor was not the owner and the transaction was a mortgage is admissible as it relates to the rights of a third party not party to the deed - Such evidence is not barred by the statutory restriction against oral evidence to vary written terms. (Paras 20-25)
(B) Principles of Equity - A person is forbidden from dealing with an estate which they know they hold in security as if they held it in property - In jurisdictions where evidence is regulated by statute, the admissibility of facts to prove such equity depends on whether the statutory bar applies to the specific nature of the evidence tendered. (Para 21)
Facts of the case:
The owner of certain land granted absolute conveyances to lenders as security for loans. These lenders subsequently conveyed the properties to third parties via absolute conveyances. The original owner later attempted to dispose of the equity of redemption, indicating the transactions were viewed as mortgages. The subsequent grantees, despite taking absolute deeds, were aware that the grantors were not the actual owners but merely lenders and that the transaction was intended as a transfer of mortgages. The heirs of the grantees subsequently sued for possession of the land.
Findings of Court:
The court found that the grantees knew the grantors were not the owners of the property and that the conveyances were intended to be mortgages. Since the evidence pertained to the rights of the actual owner, who was a third party to the deeds, the evidence was admissible and the suit for possession was rightly dismissed.
Issues: Whether Section 92 of the Indian Evidence Act, 1872, precludes the admission of oral evidence to prove that deeds of absolute conveyance were intended to operate as mortgages, particularly when the transaction was a transfer a non domino with the grantee's knowledge.
Ratio Decidendi: Section 92 of the Indian Evidence Act applies only as between the parties to an instrument or their representatives in interest. It does not prevent proof of a fraudulent dealing with a third person's property or proof of notice that the property purporting to be absolutely conveyed in fact belonged to a third person who was not a party to the conveyance. Therefore, evidence regarding the rights of a third party is admissible and not barred by the section.
Result: Appeal allowed.
Legal Category Hierarchy
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practice and procedure
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evidence
- admissibility of oral evidence
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evidence
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property law
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transfer of property
- mortgages
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conveyances
- transfer a non domino
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transfer of property
Judgement
Appeal from a judgment and decree of the Chief Court, Appellate Side (August 3, 1914), reversing a judgment of Robinson J. upon a new trial.
The respondents, as heirs and representatives of U Shwe Pe and Ma Shwe La, his wife, instituted a suit in the Chief Court of Lower Burma against Maung Kyin (since deceased) and Ma Ngwe Zan, his wife. They claimed possession of immovable property in the neighbourhood of Rangoon under two deeds of conveyance, both dated March 4, 1903. The defendants contended that the deeds, though in form absolute conveyances, were intended by the parties to be transfers of the rights of the defendants under deeds by which the property was in form absolutely conveyed to them, but which they contended were intended by the parties to operate merely as mortgages.
The facts appear from the judgment of their Lordships.
The suit originally came on for trial before Ormond J. on April 17, 1901, when it was held, upon the authority of the Full Bench ruling in Maung Bin v. Ma Hiding (3 Lower Burma Rulings, 100.), that the defendants, the present appellants, were precluded by s. 92 of the Indian Evidence Act, 1872, from giving oral evidence to show that the conveyances were intended to operate as mortgages or transfers of mortgages, and a decree for possession was made. On December 16, 1908, the decree was affirmed upon appeal. The present appellants appealed from that decision to His Majesty in Council, contending, in substance, that they were not precluded by s. 92 from adducing evidence as to the acts and conduct of the parties to the deeds with a view to establishing the nature of the transaction.
The Judicial Committee, by a judgment delivered on July 11, 1911, reported at L. R, 38 Ind. Ap. 146, held that the case for the appellants disclosed a charge of fraud against the respondents in relation to matters antecedent to the deeds of March 4, 1903, upon which charge much of the evidence tendered would be material; further, that s. 92 did not preclude evidence as to a fraudulent dealing with a third persons property, nor proof of notice that the property purporting to be absolutely conveyed belonged to a third party who was not a party to the conveyance. Their Lordships, without expressing any opinion upon the construction or application of s. 92 in relation to the deeds of March 4, 1903, held that the evidence tendered should be admitted, subject to objection, and they ordered a new trial.
Upon the new trial Robinson J., by his judgment delivered on June 17, 1912, held that Myaing and Maung Kyin intended the transfers between them to be merely mortgages ; that Myaings object in the negotiations which resulted in the deeds of March 4, 1903, was to transfer the mortgages to U Shwe Pe, and that the latter knew this and agreed to take over the mortgages; and that U Shwe Pe was guilty of fraud in taking absolute conveyances. He accordingly dismissed the suit.
Upon appeal the learned judges (Hartnoll and Ormond JJ.) agreed with the findings as to the knowledge of U Shwe Pe and the intention of the parties, but were of opinion that as Myaing knew the nature of the instruments there was no antecedent fraud, and they pointed out that fraud at the time of, or antecedent to, the deeds of March 4, 1903, was not alleged. They held that in these circumstances the defendants were precluded by the Full Bench ruling already referred to from showing that the deeds of March 4, 1903, were not absolute conveyances. They accordingly allowed the appeal and made a decree for possession.
1917. June 26, 28. Sir Erie Richards, K.C., and F. J. Coltman, for the appellants. It is now established by concurrent findings that the conveyances were taken with the knowledge that Myaing was the owner of the property. Under those circumstances the former decision of the Board in this case is conclusive that s. 92 does not apply and that the evidence was admissible. (( 1911) L. R. 38 Ind. Ap. 146, 153, 154) The appellants have acquired the e
