Statutory sanction for ward's estate transactions depends on honest application of mind; a void covenant may be severed from valid leases.

Section 18 of the Bengal Court of Wards Act was treated as conferring a judgment-based power to sanction transactions for the benefit of the property and advantage of the ward, and the Court would not reopen that assessment on mere merits if the authority had honestly applied its mind and obtained proper sanction in substance. On that basis, the 1915 and 1917 deeds were held valid and binding on the estate. The 1937 deed postponing minimum royalty, however, lacked valid sanction and was void, but that covenant was severable; the remaining lease terms, having been sanctioned in their essential particulars, continued to operate.

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Issues: (i) Whether the deeds dated 26-3-1915 and 23-11-1917 executed by the Court of Wards were within the power conferred by Section 18 of the Bengal Court of Wards Act and were binding on the estate. (ii) Whether the deed dated 1-6-1937 and the corresponding covenant in the leases dated 2-8-1937 were invalid for want of sanction and for being beyond the Court of Wards' powers.

Issue (i): Whether the deeds dated 26-3-1915 and 23-11-1917 executed by the Court of Wards were within the power conferred by Section 18 of the Bengal Court of Wards Act and were binding on the estate.

Analysis: Section 18 vested in the Court of Wards the authority to sanction leases and other acts which it judged to be for the benefit of the property and the advantage of the ward. The standard was not whether the act was shown in fact to be the best possible one on merits, but whether the Court had applied its mind and reached an honest judgment. The 1915 deed was found to have been considered and approved after negotiation and scrutiny, including the cess clause. The 1917 deed likewise was entered into after prolonged consideration of the estate's interests, the necessity of long-term development of the coalfield, and the need to secure revenue through minimum rent, salami, and royalty. The fact that the ward would attain majority earlier did not disable the statutory authority, and the arrangement was not a gift but a transaction involving mutual obligations. Proper sanction was also held to exist, since the essential terms had been approved by the competent authority.

Conclusion: The deeds dated 26-3-1915 and 23-11-1917 were valid and binding on the estate.

Issue (ii): Whether the deed dated 1-6-1937 and the corresponding covenant in the leases dated 2-8-1937 were invalid for want of sanction and for being beyond the Court of Wards' powers.

Analysis: The 1-6-1937 deed, which postponed the minimum royalty, was not sustained because it had not been validly sanctioned in the form required. But that invalid covenant was severable from the leases themselves. The remaining terms of the leases stood independently and were more advantageous to the ward. Once sanction had been granted to the transaction in its essential particulars, the subsequent invalidity of one covenant did not destroy the sanction for the rest of the transaction.

Conclusion: The deed dated 1-6-1937 was invalid, but the leases dated 2-8-1937 remained valid apart from the void covenant postponing minimum royalty.

Final Conclusion: The appeals succeeded, the decrees of the High Court were set aside, and the trial court's decrees were restored, with the principal instruments upheld except for the impugned 1937 postponement clause.

Ratio Decidendi: Where a statute confers on a statutory authority power to act on its own judgment for the benefit of property and the advantage of a ward, a court will not reopen that judgment on mere merits if the authority honestly applied its mind and obtained the requisite sanction in substance; an invalid covenant severable from an otherwise sanctioned transaction does not invalidate the whole instrument.

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