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Civil Appeals Nos. 20 of 1964 and 68 of 1966, decided on 8th June 1967.

(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 29th June 1961, in Letters Patent Appeal No. 37 of 1960).

(a) Contract Act (IX of 1872), S. 126‑"Surety"‑Fixed deposit receipts in name of wife deposited by husband as security in respect of his own over‑drafts from the Bank‑Such receipts not alleged to be benami‑Wife, held to be a surety within meaning of S. 126.

(b) Contract Act (IX of 1872), Ss. 148 & 161‑Bank handing over goods pledged to it, to third person by means of a "trust receipt"‑Such person held to be a "bailee"‑"Trust receipt" recognised mode of making a person a "bailee"‑Such bailee liable for criminal breach of trust to Bank if he fails to account for the goods‑Pager's Law of Banking, Fifth Edition, pp. 397 and 398 and Banking Law and Practice in India by M. L. Tannan, Eleventh Edition, p. 380.

(c) Contract Act (IX of 1872), Ss. 133, 134, 135 & 139 (Variance in terms of contract)‑Mere forbearance on part of creditor to sue principal debtor or enforce any remedy against him in absence of any provision to contrary, would not discharge surety.

(d) Contract Act (IX of 1872), Ss. 139 & 141‑Earlier security in form of goods pledged to it lost by Bank by its own act Additional security inform of deposit of fixed deposit receipts in name of surety‑Failure of Bank to pursue remedy against goods discharges surety.

(e) Muhammadan Law‑Guardianship ‑Father has power to pledge his minor son's or daughter's goods for his own debt‑Son or daughter cannot assimilate themselves to position of sureties and claim benefit of S. 141, Contract Act (IX of 1871)‑[Bank fixed deposit receipts in name of minors pledged by father as security for his own over‑drafts from Bank].

A survey of the authorities reveals preponderance of opinion in favour of the father's power to pledge his minor son's goods for his own debt. It follows that, in respect of the fixed deposit receipts, standing in the names of the minor daughters, they cannot assimilate themselves to the position of sureties. The father himself had pledged these receipts and he could do so in his own right. The remedy of these minors would seem to lie in reimbursing themselves out of the estate left by their father, if necessary.

Mulla's Principles of Muhammadan, Law, 13th Edn., Para. 366 ; Fatawa‑i‑Alamgiri by Maulana Amir Ali, 1932 Edn. p. 222 ; Syed Ameer Ali's Muhammadan Law, Vol. II, 1965 Edn., p. 503 ; Durr‑ul‑Mukhtar, p. 846 ; Jam'a‑ush‑Shittat by Hedaya; Kitab‑ur‑Rehn, Vol. 11, p. 270 ; Ghayat‑ul‑Autar by Maulana Khurram All ; "Radd‑ul‑Muhtar" by Allama Ibn‑i‑Abidin ; "Bad a‑i‑As‑Sanai‑Fi‑Tartib‑ish‑Sharai" by Imam Abiddin Abi Bakr Bin Masud Alkasani ; Hamilton's Hedaya, Grady's Edn., p. 638, (1957 Lah. Edn.,) ; "Ain‑ul‑Hedaya" (Urdu translation of Hedaya) by M. Amir Ali ; Muhammadan Law by Saxena, 1955 Edn., p. 328 ; Muhammadan Law by Tyabji, Third Edn., p. 300; Muhammadan Jurisprudence by Abdur Rahim, 1958 Edn., p. 345 ; Maenaghten's Principles and Precedents of the; Muhammadan Law, 1897 Edn., p. 63 ; Wilson's Digest f Anglo‑Muhammadan Law, 1895 Edn., p. 123 and Jagun h Sirkar in Tagore's Law Lectures, p. 482, Article 560 DLX.

Imambandi v. Mutsaddi 45 I A 73 considered.

Ihsanul Haq, Advocate Supreme Court instructed by Siddiq, Senior Attorney for Appellant in C. A. No. 20 of 15 and Respondent No. 1 in C. A. No. 68 of 1966.

Sirajuddin Ahmad Pal, Senior Advocate Supreme Court (Shaukat Ali Khawaja, Advocate Supreme Court with him) instructed by Gulzar Hasan, Attorney for Appellant in C. A. No. 68 of 1966 and Respondents Nos. 1 and 2 in Civil Appeal No. 20 of 1964.

Respondent No. 2 in Civil Appeal No. 68 of 1966: Ex parte. Dilawar Mahmood, Advocate Supreme Court instructed by Abid Nawaz Minto, Attorney for Respondent No. 3 in C. A. No. 68 of 1966.

Dates of hearing : 15th and 16th May 1967.

JUDGEMENT

S. A. RAHMAN, J.‑

This order will dispose of two Civil Appeals Nos. 20 of 1964 and 68 of 1966, which have arisen out of the same proceedings in the High Court of West Pakistan, Lahore. The appellant in the second appeal, Mst. Yasmin was panted a certificate for . . . . . appeal to this Court by the High Court itself in view of the valuation of the subject‑matter. The appellant in the first appeal is the Central Exchange Bank Ltd., Lahore, through its Liquidator, the State Bank of Pakistan. Special leave to appeal was granted to the Bank by this Court. The circumstances giving rise to the appeals are as follows:‑

Some fixed deposit receipts were deposited as additional security for certain overdraft accounts with the Central Exchange Bank Ltd., Lahore, by the late Mr. Rafi Butt, who was also the Managing Director of the Bank. Some of the receipts were in his own name and others were, either individually or jointly with himself, in the names of his wife, Mst. Zaitoon Begum, or his minor daughters, Mst. Shamim Akhtar and Mst. Yasmin. Out of the relevant accounts, one was in the name of Mr. Raft Butt personally, the second in the name of Messrs Ghulam Nabi & Sons, the third in the name of Messrs Hind Enamel Works and the fourth in the name of Messrs Ghulam Nabi Corporation Ltd. Mr. Rafi Butt and his brother, Mr. Taqi Butt, were partners in the three firms mentioned above. Mr. Taqi Butt is alive, but Mr. Rafi Butt appears to have died sometime in 1948.

The sum owned by the Bank had run up to a figure of Rs. 90,748‑8‑0. The fixed deposit receipts matured on the 5th April 1950, when their value had risen to Rs. 93,553‑1‑9, with the addition of interest. It appears that the Bank adjusted part of the money, due on these receipts, in the personal account of Mr. Rafi Butt, which showed an overdraft of Rs. 48,523‑13‑6, on the 5th April 1950. The remaining amount of fixed deposit receipts, to the tune of Rs. 45,029‑4‑3, was carried to the Sundry Creditors' account. The fourth account of Messrs Ghulam Nabi Corporation Limited had been transferred along with its assets and liabilities to one, Malik Fateb Muhammad Khan Tiwana, and we are not concerned with that item in the present appeals. The overdraft in the account of Messrs Ghulam Nabi & Sons was found to be Rs. 2,811‑3‑9 and that in the Hind Enamel Works to be Rs. 30,136‑15‑0, on the 5th April 1950, but there was no attempt made at that time to adjust the fixed deposit receipts against these accounts. The first security for these overdraft accounts consisted of certain goods pledged by Mr. Rafi Butt and Mr. Taqi Butt, his brother.

The Bank went into liquidation in 1952 and the State Bank of Pakistan was appointed its Liquidator.

On the 2nd January 1949, a letter was sent by an Advocate, on behalf of Mst. Zaitoon Begum, widow of Mr. Rafi Batt, to the General Manager of the Central Exchange Bank Ltd:, Lahore, demanding the return of fixed deposit receipts, deposited as additional security for overdraft accounts of Messrs Ghulam Nabi Corporation Ltd., Hind Enamel Works and Gnulam Nabi & Sons, Lahore. It was mentioned therein that the charge of the Bank was on the goods of the firms, which were in the Banks possession and that the Bank was to realize the debt due to it out of the sale‑proceeds of those goofs. It was also added in the end that Mr. Rafi Butt had left Mst. Zaitoon Begum, his widow, one minor son and a minor daughter from her, as well as another daughter from his first wife, as his heirs. The heading of the letter was in the following terms:

"Re: F. D. Rs. of Mr. Rail Butt deceased."

To this the Bank sent a reply, dated tide 12t;i January 1949, through its legal advisor. In the absence of any particulars of the fixed deposit receipts the Bank expressed its helplessness to trace out the receipts is question. As it was admitted in the notice of Mst. Zaitoon Begum herself that the fixed deposit receipts were deposited with the Bank as additional security against the overdraft of the three firms is question, the Bank's position was that the receipts could not be returned unless and until all the accounts were adjusted.

This was followed by another letter from Mst. Zaitoon Begum, written on the 22nd January 1949, in which particulars of some 17 fixed deposit receipts given. It was reiterated that the additional security of tile Axed deposit receipts was to be touched only if the pledged goods were found to be insufficient to pay off the outstanding loans. The letter also mentioned that it had been brought to 41st. Zaiton Begum's notice that some pledged goods had been removed from the custody of the Bank, without cash payment, and conveyed a warning to the Bank that it would be responsible for any deficit caused by such removal Information was asked for, regarding the present condition of the overdraft accounts of tile three firms. If the Bank sent any reply to this letter, it is not known in what terms it was couched, because no such letter has been placed on the record.

The State Bank of Pakistan had been appointed Liquidator of the Bank on the 26th April 1955. The Official Liquidator applied to the High Court at Lahore, saying that the above

mentioned firms bad failed to pay their outstanding debts, in spite of notice, that several representatives of the firms had come and discussed the matter, but nothing had been decided, that the Bank held two types of security, covering the advances one of "hypothe cation" of goods, worth its. 1,26,000 from Taqi Butt, a partner in the three firms and a younger brother of Mr. Rafi Butt, and the second of 10 fixed deposit receipts, valued at Rs. 90,748 in favour of sundry parties, which had been pledged with the Bank by Mr. Rafi Butt. The amount of Rs. 45,029‑4‑3, the undisbursed balance of the receipts, after adjusting Rs. 48,523‑13‑6 towards the personal account of Mr. Rafi Butt, had heen transferred to the sundry creditors' account, pending adjustment. Mst. Zaitoon Begum had demanded sometime back that the Bank should admit her claim as a creditor, on account of the fixes deposit receipts in her name to the extent of Its. 53,748‑8‑c3. In respect of the goods, it was pointed out that they were not "pledged" but Mr. Taqi Butt had accepted the position of a trustee, in respect of them. When called upon to clarify his position, Mr. Taqi Butt contended that those goods had been hypothecated by him only as a temporary measure, in the absence abroad of his brother, and that after his brother had returned from Europe and pledged other goods and fixed deposit receipts, all the goods of Mr. Taqi Butt were presumed to have been automatically released. The Bank's application, however, set out that the record showed that the contention of Mr. Taqi Butt was not correct. In the end it was prayed that the amount out standing in the two accounts may be allowed to be adjusted, out of the balance of the fixed deposit receipts, still lying in the sundry creditors' account, and the balance paid to Mst. Zaitoon Begum, according to the dividends already declared.

This petition was allowed by the learned Liquidation judge by order, dated the 4th May 1956, without any notice to Mst. Zaitoon Begum. On the 19th July 1955, however, a dividend warrant of Rs. 130 had been sent to Mst. Zaitoon Begum, on account of the balance of Rs. 2,081‑1‑6, still lying to the credit of the fixed deposit receipts. In reply to this intimation, Mst. Zaitoon Begum, on her own behalf and on behalf of her minor daughter, Yasmin, for whom she had been appointed guardian by the Court, wrote to the Bank, (omitted) the purport of the previous correspondence that had passed between the parties and requested that her claim should be met in full as the Liquidator had apparently discovered the relevant account in the books. She asked for dividends to be paid to her on the total sum of Rs. 53,748‑8‑0.

The Bank on the 2nd of October 1956, replied, giving details of the ten receipts, two of which stood in the name of Mr. Rafi Butt alone, and the remaining ones in the names of the widow, the minor daughters, or jointly in the names of Mr. Rafi Butt and these persons. It was explained that, after meeting the out standing overdraft account of Mr. Rafi Butt to the tune of Rs. 48,523‑13‑6, the balance of Rs. 45,029‑4‑3, at the credit of the receipts, was later adjusted by the Bank against the accounts of Messrs Ghulam Nabi & Sons and Hind Enamel Works, to the extent of Rs. 12,811‑3‑9 and Rs. 30,136‑15‑0, respectively, with the prior permission of the learned Liquidation Judge. That left only a sum of Rs. 2,081‑1‑6 in the fixed deposit receipt account, for which the claim of Mst. Zaitoon Begum was accepted and the dividend, thereon declared accordingly.

On the 16th October 1956, an application was filed by Mst. Zaitoon Begum under section 183(5) of the Companies Act in the High Court of West Pakistan. In this, she claimed that on the 29th October 1953, she had applied to the Liquidator that a sum of Rs. 53,748‑8‑0 was due to her and her minor daughters under the following fixed deposit receipts :‑

FD.R. No. Amount Favouring

Rs.

1. 207/28/48 2,000 Mst. Zaitoon Begum

2. 211/32/48 9,800 ditto

3. 231/50/48 10,000 Mr. Rafi Butt and Zaitoon

Begum

4. 233/42/48 9,800 Yasmin minor

5. 235/54/48 9,800 Yasmin and Shamim Akhtar

6. 237/56/48 4,248 Yasmin and Zaitoon Begum

She mentioned that en the 19th July 1955, she had received three notices of dividends, informing her that 3 installments of Rs. 130‑1‑0 each were payable to her. She had again made a plain from the Bank of the sum of Rs. 53,748‑8‑0 but the Liquidator had not accepted it. On the contrary, he had only given out that Rs. 2,081‑t‑6 was standing in her name on account of the fixed deposit receipts. The action of the Liquidator, in adjusting the fixed deposit receipts in question in any other account, without her permission, was challenged as not in accordance with law. It was submitted that goods were pledged against the relevant overdraft accounts as security and the outstanding amount of those accounts could have been realised by sale of those pledged goods. It was, therefore, prayed that the Liquidator may be ordered to accept her full claim and award proportionate dividends.

In the reply, on behalf of the Bank, the Liquidator did not take up the position in the High Court that the fixed deposit receipts standing in the name of the wife and the minor children of Mr. Rafi Butt, were benami and that in fact they belonged to Mr. Rafi Butt deceased. After enquiry, the learned Liquidation Judge of the High Court held that the fixed deposit receipts in question had been pledged as security for the repayment of loans owing from Mr. Rafi Butt, Messrs Ghulam Nabi & Sons, Messrs Hind Enamel Works and Messrs Ghulam Nabi Corporation. It was further found that the fixed deposit receipts had been dealt with by Mr. Rafi Butt as if they were his personal property although they stood in the names of his wife and daughters and therefore section 141 of the Contract Act could not be availed of by Mst. Zaitoon Begum, as she was not a surety in her own right. This finding was recorded despite the fact that there was no issue whether these receipts were the personal property of Mr. Rag Butt and the ostensible owners were only benamidars. It was also decided that Mr. Rag Butt could lawfully pledge the receipts standing in the name of his minor daughter, Yasmin, for the payment of his own loans under the Islamic Law.

A Letters Patent Appeal was taken, on behalf of Mst. Zaitoon Begum and her daughter, Yasmin, to a Bench of the High Court. Apparently, Mst. Shamim Akhtar, the step daughter of Mst. Zaitoon Begum, had not been made a party to the proceedings before the Liquidation Judge. She was impleaded as a party at her own request, in the appeal before the Letters Patent Bench.

The learned Judges did not accept the contention, raised on behalf of the widow and the two daughters, that Mr. Rag Butt bad deposited the receipts in question, without authority from his wife. It was pointed out that this was against the position of Mst. Zaitoon Begum herself, as set out in her letter, dated the 2nd January 1949 (Exh. D. 1), sent through her Advocate. Therein she had clearly admitted that her deceased husband had deposited the fixed deposit receipts, as additional security against overdraft accounts, but she did not say then that the act was unauthorised. Apparently, Mst. Zaitoon Begum, when examined by the Liquidation Judge as a witness, had tried to shift her position by saying that she had given the receipts in question to her husband for renewal only and not for pledging them as security. In view of the above admission, however, in the letter sent through her Advocate to the Bank, her statement was not accepted as correct. The Bank, it seems, had also relied on a letter (Exh. P. W. 1/l), purporting to be dated the 20th November 1944, and said to have been signed by Mst. Zaitoon Begum, which expressly authorised her husband to operate her fixed deposit account. She denied her signatures on this letter. Despite the fact that expert evidence was against it, the learned Liquidation Judge expressed the opinion that this was a genuine letter, signed by her. The Letters Patent Bench differed from this view. The fixed deposit receipts had apparently been mislaid by the Bank when the records were shifted to the State Bank of Pakistan, after liquidation, and they could not be produced in Court. Mst. Zaitoon Begum probably took advantage of this fact and tried to shift her ground, while giving evidence in the case. The learned Judges of the Letters Patent Bench repelled her allegation, on the ground that in the document (Exh. R. W. 1/4), which was relied upon by the learned Advocate on her behalf, as showing the goods pledged with the Bank by Mr. Taqi Butt and Mr. Rag Butt and which were allowed to remain in their possession as trustees of the Bank, a list of the fixed deposit receipts, 10 in number, shown as pledged with the Bank was also set out. Those receipts included the 6, on which the claim of Mst. Zaitoon Begum and her daughters was founded. It is significant, however, to remember that in this document (Exh. R. W. 1/I) the words used in connection with the goods are "pledged with the Bank". The Letters Patent Bench further did not agree with the learned Liquidation Judge that the receipts were treated by Mr. Rafi Butt as his personal property. After discussing the relevant evidence, they reached the conclusion that no question of benami arose in the case, in view of the pleadings of the parties. No such suggestion was made to Mst. Zaitoon Begum when she appeared as a witness and no attempt was made to establish the source of the money for the deposit receipts. In the circumstances, it was decided that Mst. Zaitoon Begum could have the benefit of section 141 of the Contract Act as a surety. The mere fact, that it was her husband who deposited the receipts as additional security for her, was quite consistent with this position as she acted through her husband as agent. It was further found that the goods, mentioned in Exh. R. W. 1/4 were pledged with the Bank and, since the Bank had allowed Mr. Taqi Butt to appropriate the goods to the extent of their value, the Bank was accountable to Mst. Zaitoon Begum, as a surety. Since the value of the pledged goods exceeded the overdrafts, it was held that there was no justification for her fixed deposit receipts being adjusted against those accounts. The learned Judges went on to hold that, in respect of the fixed deposit receipts of the minor daughters, Yasmin and Shamim Akhtar, Mr. Rafi Butt, as father, had power under Muslim Law to pledge them in his own account, as principal debtor, and section 141 of the Contract Act would not, therefore, be available to the minors. As a result of these findings, it was directed that the Official Liquidator should regard Mst. Zaitoon Begum but not her daughter, Yasmin, or her step‑daughter, Shamim Akhtar, as entitled to the amounts, represented by her share of the fixed deposit receipts in question and to the dividends payable on those amounts. In the absence of any indication of shares, the receipts, which were in the join names of two persons, were to be deemed to entitle each person to one‑half of the amount stated therein.

The appeal on behalf of the Bank is directed towards showing that the Bank was justified in adjusting, as it did, the overdraft accounts against the fixed deposit receipts, and the appeal, on behalf of the minor daughter, Mst. Yasmin, assailed the findings of the Letters Patent Bench that her father had full authority under Muslim Law to pledge her receipts in his own debt. The other daughter, Shamim Akhtar, is one of the respondents to both the appeals.

The first point urged, on behalf of the Bank, by Mr. Ihsanul Haq is that the deposit of the

fixed deposit receipts standing in the name of Mst Zaitoon Begum by her husband, Mr. Rafi Butt, did not give her the status of a surety, as defined in section 126 of the Contract Act. He argues that no guarantee had been personally given by Mst. Zaitoon Begum in this case. Her case, however, has all along been that she had deposited the receipt through her husband, as an additional security. It is true that while she was in the witness‑box, she tried to change her position and suggested that she had made over the receipt to her husband for renewal only. This is, however, inconsistent with her own position, as adopted in her letters to the Bank sent through an Advocate prior to the initiation of the proceedings in the High Court. It may be, therefore, accepted that the fixed deposit receipts were deposited, by way of security by Mr. Rafi Butt on her behalf, and it is clear that Mr. Rafi Butt could not have A deposited these receipts, without the consent of his wife. There being no question of any benami transaction in this case, in view of the pleadings of the parties, it must be, therefore, held that Mst. Zaitoon Begum had given a guarantee for the payment of the debt by Mr. Rag Butt and was, therefore, a surety, within the meaning of section 126 of the Contract Act. As was rightly pointed out by the learned Judges of the Letters Patent Bench, if the receipts in question did belong to Mst. Zaitoon Begum then she assumed the position of a surety, as a third person; contracting to perform the promise or to discharge the liabilities of her husband, in case of his default.

The next question that arises for determination is whether the Bank was entitled to realise its outstanding loans, from the additional security of the fixed deposit receipts, without, first exhausting its remedies against the goods pledged with it, by Mr. Rafi Butt and Mr. Taqi Butt. Mr. Ihsanul Haq, on behalf of the Bank, placed his reliance on section 128 of the Contract Act for the proposition that the liability of the surety is co‑extensive with that of the principal debtor, unless it is otherwise provided by contract. Now in the present case, the contract of guarantee had not been produced by the Bank, nor the fixed deposit receipts are now available, as the documents in question are said to have been mislaid. I fear that the Bank had been negligent in not making serious effort to trace out the documents from their record. From the very start, the notice sent by Mst. Zaitoon Begum through her Advocate to the Bank, made it clear that her case was that the Bank was obliged to first look to the pledged goods for realization of its dues, and the fixed deposit receipts could only be touched if the pledged goods were found insufficient to meet the demand. This contention of hers was not rebutted by the Bank by any documentary evidence. Indeed the withholding of the relevant documents would lead to an inference adverse to the Bank's position. It may be that the documents in question contained an express clause that the surety would only be liable if any debt remained due, after exhaustion of the first security.

A suggestion was made, on behalf of the Bank, that the first security in the shape of goods did not constitute a pledge but a mere hypothecation, as the goods never came into the possession of the Bank. In the first place, in the document (Exh. R. W. 1/4), the Bank's own document, the goods are shown as under a pledge. It is also mentioned therein that they were handed over to Mr. Raft Butt and Mr. Taqi Butt un,ler trust receipts. The execution of a trust receipt is a recognised mode of making a person bailee of the goods and in such circumstances the Bank must be deemed to be in possession or control of the goods. The validity and efficacy of such instruments of trust are now generally acknowledged. Reference in this connection may be made to Paget's Law of Banking, Fifth Edition, pp. 397 and 398, and Banking Law and Practice in India by M. L. Tannan, Eleventh Edition, p. 380. If a person who has signed such a trust receipt, fails to hand over to the Bank the sale‑proceeds of the goods sold, the former would be liable for criminal breach of trust. The Bank's own position, with regard to the allegation of Mr. Taqi Butt that he had merely temporarily offered the security, in the shape of goods, for the loans of his brother who was absent abroad, and that the security terminated on the return of his brother, was not accepted by the Bank as correct. The Bank seems to have, however, allowed both the brothers to appropriate the proceeds of the pledged goods to their own use. To this extent, the Bank appears to have been negligent and the question is as to the effect of this step on the position of the surety.

The failure of the Bank to call upon Mr. Rafi Butt and Mr. Taqi Butt to pay them the proceeds of the pledged goods, may not amount to a variance of the terms of the contract between the principal debtor and the creditor, within the meaning of section 133 of the Contract Act. The legal consequence of this failure was not the discharge of the principal debtor and so section 134 of the Contract Act would not be attracted to the case. Nor would section 13 S seem to be applicable, because there was no composition with, or promise made to give time to, or not to sue the principal debtor. Mere forbearance, on the part of the creditor to sue the principal debtor, or to enforce any other remedy against him, would not, in the absence of any provision in the guarantee to the contrary, discharge the surety, as is provided by section 139 of the Act. However sections 1391 and 141 of the Contract Act may call for consideration in this behalf.

Section 139 lays down that if the creditor does any act which is inconsistent with the rights of the surety, or omits to do any act which his duty to the surety required him to do, and the eventual remedy of the surety against the principal debtor is as surety for B, together with a bill of sale of B's furniture, which gives power to C to sell the furniture, and apply the proceeds in discharge of the note. Subsequently, C sells the furniture, but, owing to his misconduct and wilful negligence, only a small price is realised. A is discharged from liability on the note."

Section 141 enacts that "a surety is entitled to the benefit of every security which the creditor has against the principal debtor, at the time when the contract of surety ship is entered into, whether the surety knows of the existence of such security or not; and, if the creditor loses, or, without the consent of the surety, parts with such security, the surety is discharged to the extent of the value of the security". The earlier security was obviously lost by the Bank by its own act and as the value of the goods pledged was approximately Rs. 1,26,000, which greatly exceeded the outstanding loans due to the Bank, the failure of the Bank to pursue its remedy against that security completely discharged the liability of Mst. Zaitoon Begum. It is clear that she could not have, if she paid off the Bank, pursued any remedy against the pledged goods which were no longer available. Under both the sections, the result, in the circumstances of this case, would be identical.

The contention that the pledged goods' security had been already lost when the additional security of the fixed deposit receipts was deposited with the Bank, has no firm basis in the evidence. The material on the record tends to the contrary inference and, in any event, no document has been placed on the record to show the chronological sequence of the two securities as alleged by the learned counsel.

The inference, therefore, seems clear that both by virtue of section 139 and section 141, the Bank was disentitled from realising its dues from the fixed deposit receipts of Mst. Zaitoon Begum.

The last question that falls for determination is whether the view of the High Court was correct that under the provisions of Muslim Law, Mr. Rafi Butt, as the father, could utilize the fixed deposit receipts of his minor daughters, by way of security, for payment of his own debts. On this point, the learned Judges of the Letters Patent Bench referred to the proposition stated in Paragraph 366 of the Mulla's Principles of Mohammadan Law, 13th Edition, which is to the effect that: "A legal guardian of the property of a minor has power to sell or pledge the goods and chattels of the minor, for the minor's imperative necessities, such as food, clothing and nursing." As was pointed out by the learned Judges, this proposition is based entirely on the decision of the Privy Council in Imambandi v. Mutsaddi (45 1 A 73), which was a terms :‑

"If the father has pledged his minor child's property for such debt as he has incurred either for himself or for his minor child, then it is lawful."

Accepting this view, the learned Judges held that the minors could not, in the circumstances, be regarded as occupying the position of sureties, within the meaning of section 141 of the Contract Act and, therefore, the Bank was entitled to utilize the fixed deposit receipts, standing in the names of the minor daughters, to adjust their outstanding overdrafts.

The learned counsel for the daughters, however, drew our attention to the fact that in the Fatawa‑i‑Alamgiri, in the passage referred to above, it was also said that the father would not be entitled to pledge the chattels of his major son. It was argued that as the minor needed greater protection, the rule stated above was really inequitable. But the book itself makes it clear that the reason for distinction is that the father is not the guardian of his major son. It is added in that book that, even on attaining puberty, if the father has died, the son cannot get back the pledged goods, without payment of the debt, though, of course, he would be entitled to reimburse himself for this debt out of the estate left by his father.

Our attention was also invited to the statement of the relevant law by Syed Ameer Ali in his Muhammadan Law, Vol. 11, 1965 Edition, at p. 503. The learned author has stated that according to the Redaya, a father may pledge the movable property of his minor child to himself, for a debt due from the child to himself, or he may pledge it to another, on account of a debt of his own, remaining, however, always liable for the value of the goods to the child. It is added, however, that "other jurists seem to disagree with the author of the Hedaya in this latter view". According to them, in the opinion of Mr. Ameer Ali, the father stands in the same position as any other guardian ; that is, it is not lawful either for him or for a tutor to pay off his own personal debts with the goods of the minor, or to pledge them on account of his debts. In the footnote, reference is made to the authority of the Durr‑ul‑Mukhtar, p. 846 and the Jam'a‑ush‑Shittat, besides the Hedaya.

Unfortunately I have not been able to lay hands on the Jam'a‑ush‑Shittat. From the original text of the Durr‑ul‑Mukhtat however it seems that the opinion expressed by Syed Ameer Ali, on the basis of that book, is open to question. I find the following at p. 270 of Vol. II in the Chapter headed Kitab. ur‑Rehn in the Durr‑ul‑Mukhtar, published with e commentary on the margin, known as Kashfulastar by Syed Muhammad Abdul Ahad and printed at the Mujtabai Press, Delhi, in 1334 Hijra, corresponding to 1916 A. C.:

This may be freely translated as: "And it is lawful for the father to pledge his minor son's slave for his own debt, for he has the power of giving on amanat (deposit in trust). If the goods are destroyed, in the case of a deposit in trust, there is no liability on the person in possession whereas in the case of a pledge there will be liability and so this (pledge) is preferable. The case of the executor is similar. Abu Yousaf has said that they (the father and the executor) do not own the property (and so they have no right). And Tumurtashi says, the executor will be liable for the full price, for the father is entitled to benefit from the goods of the minor but not the executor. But in the Zakhira and other books, they are placed on the same footing."

There is an Urdu translation of this book available known as Ghayat‑ul‑Autar by Maulana Khurram Ali, which was completed by Maulana Muhammad Ahsan Siddiqui Natotnvi, This was published at Lucknow in 1925, A. C. corresponding to 1342 Hijra. 1 have verified the correctness of the above translation by comparing it with the Urdu translation of this passage at p. 290 of Vol. IV of that book.

The "Radd‑ul‑Muhtar" by Allama Ibn‑i‑Abidin, which is a commentary on the Durr‑ul‑Mukhtar (bublished by the Mujtabai Press, Delhi, in 1238 Hijra) explains at p. 319 of Vol. V that the contrary opinion expressed by Abu Yusuf and Zufur is based on QcnVas but the rule favouring the father has been formulated by way of Istehsan.

The rule, as laid down in the Fatawa‑i‑Alamgiri, is also stated in the same terms in "Bad a‑i‑As‑San ai‑Fi‑Tartib‑ish‑Sharai" which is a contention of Imam Alauddin Abi Bakr bin Masud Alkasani who died in 578 Hijra. At pp. 135 and 135 of the Sixth Vol. in the Part, headed "Kitab‑ur‑Rehn" (published in Egypt) occurs the following passage :‑

Its (the pledged goods) existence as property of the pledge is not a condition of the validity of the pledge. For it is not outside two positions. It may amount to a deposit on trust or it may the an exchange and the father as guardian has capacity over both transactions ill respect of his minor son's goods, whether he sells the minor's goods for his own debt or deposit his goods with another. If the goods are destroyed in the hands of the pledge before they are redeemed by the father, the destruction will go to the minimum price of the goods out of the loan for which the pledge was made for the pledge is valid and this is the injunction in the case of a valid pledge. The father will be liable for the amount that has been discharged out of the debt because of the destruction of the goods for he paid his debt with the goods of his son."

As has b‑.en mentioned above. Hamilton's Hedaya, Grady's Edition, at p. 638 (1957 Lahore Edition), also declares the law in the same terms, though he also mentions the contrary opinion of Abu Yusuf and Zufar. I have also referred to "Ain‑ul‑Hedaya", which is the Urdu translation of Hedaya by M. Amir Ali, printed at Lucknow, in the year 1896 A. C., corresponding to 1314 Hijra. Apparently, Hamilton's Translation is not a full one. The authority for the view adopted in the original Hedaya is mentioned as the "Jame Saghir" It is also stated therein that in case the father or his executor sells his minor son's goods to his own debtor, it is valid for according to Imam Abu Hanifa and Imam Muhammad this will amount to an exchange between the price of the goods and the debt and the father or the executor in such a case will be liable to reimburse the son. According to Abu Yusuf, however, this will not operate as an exchange. The learned Translator has also, on the authority of Fath‑ul‑Qadir" expressed a similar opinion on this question.

Learned counsel for the minors also quoted a passage from Muhammadan Law by Saxena, 1955 Ed., p. 328, which, however, is not at all helpful, as it incorporates only the decision in Imambandi's case. Tyabji in his Muhammadan Law, Third Edition, p. 300 does not proceed beyond what is stated in that case. There is also a general statement about the guardian's power over the property of the minor son in Muhammadan Jurisprudence by Abdur Rahim, 1958 Edn. at p. 345. The learned author talks of the validity of transactions which may be profit able to the minor only. Apparently, he has drawn no distinction between movable and immovable property, though such a distinction is expressly drawn in the older authorities. A similar general proposition occurs in Maenaghten's Principles and Precedents of the Muhammadan Law, 1897 Edn. at p. 63. Wilson's Digest of Anglo‑Muhammadan Law, 1895 Edn. at p. 123 mentions the conflicting views which have been discussed above. Jagunath Sirkar in his Tagore's Law Lectures at p. 482, Article 560 DLX has favoured the rule laid down in the Hedaya.

A survey of the authorities, therefore, reveals preponderance of opinion in favour of the father's power to pledge his minor son's goods for his own debt. We consider, therefore, that the view that prevailed in the High Court is not open to exception. It follows that, in respect of the fixed deposit receipts, standing in the names of the minor daughters, they cannot assimilate them selves to the position of sureties. The father himself had pledged)

these receipts and he could do so in his own right. The remedy of these minors would seem to lie in reimbursing themselves out of the estate left by their father, if necessary.

As a result of the above discussion, both the appeals fail and are hereby dismissed. In view of the circumstances of the case, we would make no order as to costs in this Court.

A.H. Appeals dismissed.

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