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Shankar Vaman Ainapure Vs. Nathu Krishna Kale - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case NumberSecond Appeal No. 424 of 1929
Judge
Reported inAIR1932Bom480; (1932)34BOMLR1001
AppellantShankar Vaman Ainapure
RespondentNathu Krishna Kale
DispositionAppeal dismissed
Excerpt:
minor-certificated guardian-promissory note-business of minor-debt incurred/or purpose of family-minor not hound by promissory note.; a promissory note passed by the certificated guardian of a minor for the purpose of carrying on the ancestral trade of the minor is not binding on the minor personally or on his property.; waghela rajsanji v. shekh masludin (1887) l.r. 14 i.a. 89 : s.c. i.l.r. 11 bom. 551, followed. - .....case, it was held that where a minor is a coparcener in a joint family, his share in the family property is liable for debts contracted by his managing coparcener for any family purpose or any purpose incidental to it. if the family is a trading firm, the same rule mast apply with this difference that the tertas family purpose or purposes incidental to it must have given way for the expression trading purpose or purposes incidental to it having regard to the nature and objects of the family business. it has further been contended that defendant no. 2 being a certificated guardian under the guardians and wards act, his powers are defined under section 27 of that act, under which he is bound to deal with the property of the ward as carefully as a man of ordinary prudence would.....
Judgment:

Baker, J.

1. The plaintiff, a shopkeeper at Wai, sued the defendants, of whom defendant No. 1 was a minorre presented by his certificated guardian defendant No. 2. Defendant No. 3 was added in the appeal in the lower appellate Court on the ground that his deceased father was defendant No. 2's surety in the proceedings under the Guardians and Wards Act in which defendant No. 2 was appointed guardian of the minor. The claim is based on a promissory note passed by defendant No. 2 as guardian of defendant No. 1, dated August 31, 1921, for Rs. 4,407. The first Court dismissed the suit as against defendant No. 1, but awarded the plaintiff Rs. 4,19915-0 and costs from defendant No. 2. On appeal the District Judge confirmed the finding of the lower Court, holding that defendant No. 1 the minor was not liable on the promissory note. The facts are set out in the judgment of the lower appellate Court. The father of defendant No. 1 died in 1907, leaving a grocery business at Wai, which was inherited by defendant No. 1. Defendant No. 2, who was his maternal uncle, was appointed guardian of his person and property by the District Court of Satara. He, however, misappropriated the minor's property, and in the year 1923 an inquiry was held, and he was ultimately prosecuted on charges of misappropriation and breach of trust, He was acquitted in the Sessions Court, but on appeal by the Government, he was convicted by the High Court, and sentenced to three years' rigorous imprisonment, which he was undergoing at the time of the suit, The only point which is raised in the second appeal is that the defendant No. 1, a minor, who has since attained majority, is liable on the promissory note. This is a question of pure law which is covered by authority. The learned Counsel for the appellant has argued that under the rulings in Rampartab Samrathrai v. Foolibai and Goolibai I.L.R. (1896) Bom. 767 and Raghunathji Tarachand v. The Bank of Bombay I.L.R. (1909) Bom. 72 : 11 Bom. L.R. 255 which follows Bampartab Samrathrai's case, the plaintiff is entitled to a decree against defendant No. 1, In Rampartab Samrathrai v. Foolibai and Goolibai, it was held that under Hindu law where an ancestral trade descends upon a minor as the sole member of the family, and the ancestral trade is carried on under the superintendence of the minor's natural guardian for the benefit of herself (she having a claim for maintenance) and the said minor, the minor will be bound by all acts of the guardian necessarily incidental to or flowing out of the carrying on of the trade. In that case the guardian was the mother, the natural guardian, and not the certificated guardian. In Raghunathji Tarachand v. The Bank of Bombay, which follows Rampartab Samrathrai's case, it was held that where a minor is a coparcener in a joint family, his share in the family property is liable for debts contracted by his managing coparcener for any family purpose or any purpose incidental to it. If the family is a trading firm, the same rule mast apply with this difference that the tertas family purpose or purposes incidental to it must have given way for the expression trading purpose or purposes incidental to it having regard to the nature and objects of the family business. It has further been contended that defendant No. 2 being a certificated guardian under the Guardians and Wards Act, his powers are defined under Section 27 of that Act, under which he is bound to deal with the property of the ward as carefully as a man of ordinary prudence would deal with if it were his own, and subject to the provisions of that chapter, he may do all acts which are reasonable and proper for the realisation, protection or benefit of the property, and the only check upon him is Section 29, which prohibits a certificated guardian from mortgaging or transferring by sale, gift, exchange or otherwise any part of the immoveable property of his ward or leasing it for a term exceeding five years, and it is contended that the passing of a promissory note for goods supplied to the minor's shop is within the powers of the guardian, and is binding on the minor, and therefore the person in whose favour the promissory note is passed is entitled to recover the money from the minor or his estate. It has been found by the learned Judge of the lower appellate Court, and is a finding of fact which I must accept, that the shop of Krishna Nana Kale, that is, defendant No. 1, which was conducted by Shankar Wagdole after 1914 and which made the transactions with the present appellant, was in fact indentical with the old shop of Krishna Nana Kale owned by respondent No. 1's father. It is to be noted that in 1916 the District Judge directed defendant No. 2 not to incur any debts without the previous sanction of the District Court. That was an order given by Exhibit 77 on November 26, 1917, and acknowledged by defendant No. 2 by Exhibit 76, It is contended that the promissory note being dated August 31,1921, is directly contrary to the orders of the District Judge, as it has not got his sanction, and therefore was beyond the scope of the authority of the guardian, and to this it is replied that the promissory note being in respect of transactions already entered into, was within the scope of the authority of the guardian, and is not a case of the incurring of a new debt. The question of the powers of a guardian has been decided by the Privy Council in Waghela Rajsanji v. Shekh Madudin I.L.R. (1887) Bom. 551 : L.R. 14 IndAp 38 which is quoted in Maharana ShriRanmalsingji v. Vadilal Vakhatchand I.L.R. (1894) Bom. 61. In Maharana Shri Ranmalsingji v. Vadilal Vakhatchand, which was a case of a certificated guardian, it was held that a minor cannot be bound personally by contracts entered into by a guardian which do not purport to charge his estate, and the remarks of the Privy Council in Waghela Itajaanji v. Shekh Masludin are quoted (p, 561):

Their Lordships are not aware of any law in which the guardian has such a power, nor do they see why it should be so in India. They conceive that it would be a very improper thing to allow the guardian to make covenants in the name of his ward, as do impose a personal liability upon the ward....

2. It is, therefore, established law, and has been held by this Court in many subsequent cases that a minor cannot be bound personally by a contract entered into by a guardian which does not purport to charge his estate, and this promissory note, therefore, cannot bind the ward personally, nor does it purport to charge his estate. The same view has been taken in Parbhubhai v. Bai Lahta (1923) Civil Application No. 257 of 1922, decided by Macleod C.J. and Crump J., on January 19, 1923, (Un. rep.), This is not a suit on the obligation, the debt, but on the promissory note. A similar case was before Mr. Justice Rangnekar within the last few days, Keshav v. Balaji : AIR1932Bom460 , the question in which was whether a minor is held liable on a promissory note renewed by his guardian with the sanction of the Court. The present case is a much stronger one, as the promissory note was without the sanction of the Court, Mr. Justice Rangnekar held that the minor was not bound, and he relies on the cases which I have already referred to, viz., Waghela Rajsanji v. Shekh Masludin, Maharana Shri Ranmasingji v. Vadilal Vakhatchand, and the unreported decision, Parbhubhai v. Bai Lalita. It has been argued by the learned couusel for the appellant that it would be open to the guardian to extend limitation by an acknowledgment, and he refers to Annappagauda v. Sangadigyapa I.L.R. (1901) Bom. 221 : 3 Bom. L.R. 817 f.b and Subramania Ayyarv. Arumuga Ghetty I.L.R. (1902) Mad. 330 but this argument does not meet the case. Annappagauda v. Sangadigyapa lays down that a guardian appointed under the Guardians and Wards Act can sign an acknowledgment of liability in respect of, or any part of the principal of, a debt, so as to extend the period of limitation against his ward in accordance with Sections 19 and 20 of the Indian Limitation Act (XV of 1877), provided it be shown in each case that the guardian's act was for the protection or benefit of the ward's property. That has no application where a guardian has signed a promissory note for debts alleged to be due by the minor, and the circumstances of the present case make it very doubtful whether his action was for the protection or benefit of the ward's property. In Subramania Ayyar v. Arumuga Chetty there was antecedent debt of the father's time which was binding on the son's share in the ancestral estate, and the promissory note which was executed in respect of that was held to be binding. That also is on different facts from the present case. The only remaining case that I need refer to, which has been quoted by the learned advocate for the respondents, is Bhawal Sahu v. Baijnath Pertab Narain Singh I.L.R. (1907) Cal. 320 where it is stated that the general proposition that a guardian of a minor cannot bind his ward personally by a simple contract debt, by a covenant or by any promise to pay money or damages, is subject to the modification that the promise will not bind the minor unless it has been made merely to keep alive a debt for which the ward's property was liable. In these circumstances, I do not think that defendant No. 1, who was a minor, is liable on the promissory note, and the view taken by the lower appellate Court is correct.

3. It has been suggested that future interest was not given as against defendant No. 2, It is reasonable that future interest should be allowed, and the decree may be varied by directing that the plaintiff do recover the amount awarded by the lower Court and costs from defendant No. 2 with future interest at six per cent, per annum from the date of the decree till payment.

4. As regards defendant No. 3, no claim is made against him, and the appeal against him must be dismissed with costs.

5. The appeal will, therefore, be dismissed with costs with the slight variation I have already made. Respondent No. 3 will be entitled to a separate set of costs.


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