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Lingbhat Tippanbhat Joshi and ors. Vs. Parappa Mallappa Ganiger and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtMumbai High Court
Decided On
Case NumberS.A. No. 776 of 1948
Judge
Reported inAIR1951Bom1; (1950)52BOMLR846
ActsHindu Law
AppellantLingbhat Tippanbhat Joshi and ors.
RespondentParappa Mallappa Ganiger and ors.
Advocates:V.H. Gumaste, Adv.
DispositionAppeal dismissed
Excerpt:
.....of money, out of their interest in the joint family properties, where under the terms of the surety bond the father has rendered himself personally liable.;where the father has rendered himself personally liable even in the case of a mortgage bond or a hypothecation or pledge of goods to pay the balance over or any deficit after realization of the security, the sons' obligation to pay the father's debt by reason of the pious obligation would arise and the debt to the extent that it has not been satisfied by the realization of the security would be recoverable by the creditor from the father as well as the sons out of the joint family properties inclusive of the sons' share, right, title and interest therein.;where, however, on the terms of the surety bond the father has not..........of the debt due by defendant 3, the debtor, to defendant 2, the creditor. he had executed a surety bond for repayment of the debt due by defendant 3 to defendant 2. defendant 3 failed and neglected to pay the debt due by him to defendant 2 and defendant 2 filed a suit, being suit no. 223 of 1938 against defendant 3, the principal debtor, and defendant 4, the surety. a decree was obtained by defendant 2 in that suit and he applied for execution of the decree against defendant 4 by darkhast no. 383 of1941. in execution of that decree, the suit lands being the joint family properties belonging to the joint hindu family constituted by plaintiffs 1 and 2 and defendant 4 were attached. the auction sale was held on 19-2-1943, and defendant 2 purchased the suit lands. defendant 2 obtained.....
Judgment:

Bhagwati, J.

1. An interesting question of Hindu law arises in these two appeals, whether the sons are liable by reason of their pious obligation to pay the father's debt incurred as a surety for payment o money, out of their interest in the joint family properties.

2. Defendant 4 is the father of plaintiffs 1 and 2. He had stood surety for the repayment of the debt due by defendant 3, the debtor, to defendant 2, the creditor. He had executed a surety bond for repayment of the debt due by defendant 3 to defendant 2. Defendant 3 failed and neglected to pay the debt due by him to defendant 2 and defendant 2 filed a suit, being suit No. 223 of 1938 against defendant 3, the principal debtor, and defendant 4, the surety. A decree was obtained by defendant 2 in that suit and he applied for execution of the decree against defendant 4 by darkhast No. 383 of1941. In execution of that decree, the suit lands being the joint family properties belonging to the joint Hindu family constituted by plaintiffs 1 and 2 and defendant 4 were attached. The auction sale was held on 19-2-1943, and defendant 2 purchased the suit lands. Defendant 2 obtained possession of the suit lands on 31-3-1945. Two suits were filed by the parties, each against the other. Suit No. 244 of 1945 was filed by defendant 2 and his tenant to obtain a perpetual injunction restraining plaintiffs 1 and 2 from interfering with their possession and enjoyment of the suit lands. Suit No. 309 of 1945 was filed by plaintiffs 1 and 2 against defendant 2 and his tenant, their father defendant 4, and the debtor defendant 3, for a perpetual injunction restraining defendants l and 2 from interfering with their possession and enjoyment of the suit lands. Both these suits were tried together, a common question of law and fact arising therein, and the trial Court came to the conclusion that the auction sale was not binding on plaintiffs 1 and 2, that plaintiffs 1 and 2 were in possession of the suit lands and granted an injunction against defendants 1 and 2. The appeal Court reversed this decision holding that the auction sale was binding on plaintiffs 1 and 2 and that they were not in possession of the suit lands. The appeal Court thus dismissed the suit of plaintiffs 1 and 2. An appeal was filed by plaintiffs 1 and 2 against this decision of the appeal Court. The appeal which was filed from the decision of the appeal Court in suit No. 309 of 1945 was S. A. No. 776 of 1948 and the appeal which was filed from the decision of the appeal Court in Suit No. 244 of 1945 was S. A. No. 847 of 1948. Both these second appeals were heard together again for the same reason that a common question of law and fact arose in both of them.

3. These second appeals came on for hearing before Dixit J. sitting singly and in so far ashe thought that certain observations of their Lordships of the Privy Council in Kesar Chand v. Uttamchand were too wide and were calculated to effect a departure from what had thitherto been known to be the true position in law, he referred these appeals to a Division Bench. These appeals have now come on for hearing before us.

3a. Up to the time that the decision in Kesar Chand v. Uttam Chand was pronounced by their Lordships of the Privy Council the law in regard to the surety's debts due by the father had been well settled. The position in law has been summarised in Sir Dinshah Mulla's Hindu Law, 10th Edn., p. 382, S. 298. It was laiddown that :

'Sons, grandsons and great-grandsons are bound to pay all debts contracted by the father, grandfather or great-grandfather except the following debt :--....

(5) debts for being surety for the appearance or for the honesty of another.'

There is at p. 383 of the book a paragraph in small type under the heading 'Surety' in which the various types of surety debts incurred by the father are discussed. The following passageoccurring there may be noted :

'According to Vrihaspati, there are four different classes of sureties, namely, sureties (1) for appearance, (2) for honesty, (8) for payment of rent; and (4) for delivery of goods. In respect of the first two kinds, the eons are not liable unless the father received consideration for accepting the suretyship. In respect of the last two kinds the sons are liable, but the grandsons are not liable unless the grandfather received consideration for accepting the suretyship. It has thus been held that when the father is surety for repayment of a loan the son is clearly liable but the grandson is not, unless consideration was received by the grandfather for accepting the suretyship.'

The case with which we are concerned here is the case of the sons, and according to the position as it has been enunciated above, the sons would be liable when the father stood surety for repayment of a loan. It is well known that in the matter of the father having rendered himself personally liable as a surety for the repayment of a loan, it would be open to the creditor to sue the father on the surety bond, obtain a decree against him and in execution of that decree attach the joint family properties not only to the extent of the share, right, title and interest of the father therein but also including the share, right, title and interest of the sons in those properties. This is what was done by defendant 2 in execution of the decree which he obtained against defendant 4 in Suit no. 223 of 1988 and he was declared the auction-purchaser at the sale held on 19-2-1948, of the wholeof the suit lands belonging to the joint family inclusive of the share, right, title and interest of the sons therein.

4. The question, however, which arose was whether by reason of the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand there was any difference created in the position as it thitherto obtained in the matter of the sons' liability under the pious obligation to pay the father's debt where the father had stood surety for the repayment of a loan. The case before their Lordships of the Privy Council was the case of the father Uttam Chand having stood surety for the judgment-debtor in an application by the judgment-debtor for stay of execution proceedings. The High Court before whom the appeal against the decree was pending had ordered that security should be furnished in the form of a charge on immovable property and a security bond was thereupon, executed by the father which provided :

'I hereby stand as surety for the minors and agree that in the event of the appellate Court's decision being against the judgment-debtors, my movable and immovable properties detailed hereinafter, shall be liable for making, good the deficiency if the amount under the decree was not recovered in full.'

The mortgage debt was not paid in time and the decree-holder had the mortgaged property sold in execution and the decretal debt not being thereby realised in full, four items of ancestral immovable property belonging to the guardian the father, only one of which was covered by the surety bond, were sold in execution. The two sons and the grandsons of the surety who constituted with him a joint Hindu family claimed to get aside the sale as not binding on them and for possession of the ancestral properties so sold. Their Lordships of the Privy Council held on the construction of the surety bond that the scope of the liability of the surety was limited to proceedings against the properties specified only, thus creating a charge on them excluding all personal liability. They held that the obligation undertaken by Uttam Chand was merely confined to the extent of the properties charged by him for the satisfaction of the amount. On this construction of the surety bond, their Lordships further proceeded to observe that there being no debt due by Uttam Chand but the security bond having been executed by him only for payment of a debt which was due from third parties, there was no question of the doctrine of the pious obligation of the sons to pay their father's debt making the transaction binding on the ancestral property. They also observed that as it was not shown that Uttam Chand had made himself personally liable for theamount that remained due to the decree-holder there was no debt due from him, and it followed, therefore, that the unsecured property in question could not be validly sold in enforcement of the security bond. They there-lore eschewed the liability in regard to both these properties, secured as well as unsecured ones, by reason of the pious obligation on the sons to pay the father's debt and passed the decree accordingly in favour of the sons and the grandson.

5. Mr. Gumaste for the appellants contended before us that having regard to these observations of their Lordships of the PrivyCouncil, we should also hold that there was no debt due by the father but that the surety bond was executed by the father for payment of the debt which was due from third parties and that therefore the suit lands which were the joint family properties could not be attached and sold in execution of the decree which had been obtained by defendant 2 against defendant 4 the father.

6. He wag confronted with an unreported decision of our appellate Court consisting of the learned Chief Justice and Gajendragadkar J. delivered in Rudragouda Nemangouda v. Gudnaya, S. A. no. 645 of 1945, D/- 3-4-1947. There the father of the plaintiffs had stood surety for payment of certain costs and had executed two bonds, one a personal surety bond, and the other a mortgage bond in favour of the Registrar of the High Court. These bonds had been assigned by the Registrar of the High Court in favour of the respondentsand the respondents had sought to enforce the liability against the father. The plaintiffs, who were the two minor sons of defendant 2 the father, thereupon filed a suit for a declaration that their two-thirds' share an the ancestral property was not liable for the payment of this debt of their father. Both the lower Courts dismissed the plaintiffs' suit and the plaintiffs then came before this Court in second appeal. The learned Judges of the appellate Court reiterated the principles of Hindu law which we have referred to above and in regard to the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand said that the Privy Council had considered the effect of the bond executed by the father and come to the conclusion that on the terms of the bond the father had not undertaken any personal liability and therefore the Privy Council held that as there was no personal liability undertaken by the father, there was no obligation on the sons and the ancestral property could not be sold in satisfaction of what was claimed by the mortgagee on that surety bond. It was emphasised that the decision of the Privy Council proceeded on the assumption that but for the father not having undertaken a personal liability, the sons would have been liable on the principle of pious obligation. The only ground why the Privy Council came to the conclusion that the sons were not liable was that the father had not undertaken a personal liability. These observations of their Lordships of the Privy Council were therefore not taken by our appeal Court as militating in any manner whatever against the position which had been enunciated thithertofore in regard to the sons' liability under the pious obligation to pay the father's debt due on a surety bond for the repayment of a loan, out of their share, right, title and interest in the joint family properties.

7. The whole question, in our opinion, turns on the terms of the surety bond. If under the terms of the surety bond the father has rendered himself personally liable, be it an ordinary personal bond or even a mortgage or a pledge importing personal liability for the deficit if any on the realisation of the security, the sons are certainly liable to pay the father's personal debt incurred in this manner to the extent of their right title and interest in the joint family properties. If it is a pure personal bond, the question can never arise of the nature which has been mooted before us. If it is a mortgage bond or a pledge, as and by way of security, even there the question would have to be considered whether in the event of a deficit arising on the realisation of the mortgage or the pledge by the creditor there would remain over a personal liability of the father to the extent of the deficit if any. If the surety bond was of the nature which obtained before their Lordships of the Privy Council in Kesar Ghand v. Uttam Chand , there would be no question of the sons being liable for any debt due by the father by reason of their pious obligation, because there would be no personal liability of the father and consequently there would be no debt due by the father as such. In such a case there would not arise any question of the sons being liable to pay the father's debt by reason of the pious obligation because there would be no debt due by the father. In those cases, however, where the father has rendered himself personally liable even in the case of a mortgage bond or a hypothecation or pledge of goods to pay the balance over or the deficit, if any, after the realisation of the security, the sons' obligation to pay the father's debt by reason of the pious obligation would arise and the debt to theextent that it has not been satisfied by the realisation of the security would be recoverable by the creditor from the father as well as the sons out of the joint family properties inclusive of the sons' share, right, title and interest therein.

8. This being the true position in law, the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand do not make any departure from the tru e position as it had been enunciated before 1945 and the observations of our appeal Court in Hudragouda's case, S. A. no. 645 of 1945 D/- 3-4-1947 also are to the same effect. This position in law was enunciated by our appeal Court as early as 1898 in the decision which is reported in Tukarambhat v. Gangaram 23 Bom. 454, where it was held that the ancestral property in the hands of the sons was liable for the father's debt incurred as a surety. No change has been made in this position which has obtained ever since by the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand and the position continues to be as it has been enunciated herebefore and has been understood all along at the Bench as well as the bar.

9. The result, therefore, is that both the appeals will be dismissed. The respondents have not appeared before us and therefore there will be no order as to their costs. The appellants will bear and pay their own costs of the appeals.


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