1. The suit, which has given rise to this appeal, was instituted by Madivallappa Irbhadrappa, as the manager of a joint Hindu family, to recover damages for a breach of contract. The plaintiff alleged that Basappa, the husband of defendant No. 1, had entered into an agreement for the purchase of twenty-five bales of yarn at a specified rate; that Basappa deposited the sum of Rs. 2,000 and agreed to pay the balance on December 8, 1918; that he failed to take delivery of the goods and thereby broke the contract; that the contract had been made with Rachappa, who was then conducting the family, business as its manager; that Rachappa was dead, and the plaintiff had succeeded him as the manager of the joint family business.
2. The defence was that the contract was made with Rachappa personally and not as manager of the family-business and the suit should, therefore, have been brought by his son Kalyan-appa, and not by the plaintiff; that the agreement was by way of wager; and that it was Rachappa who broke the contract.
3. The trial Judge held that it was not competent to the plaintiff alone to bring this action. He said :-
In the evidence recorded there is nothing to show that Raohappa entered into the contract now in suit in the course of the ordinary business of the firm or that he was empowered to enter into contracts of that sort as manager. The contract is in Rachappa's own name and he is now dead. The defendant has a perfect right to insist that Rachappa's heirs or survivors in union be brought on the record, so that there be no fear of a future litigation. The mere fact that the transaction in suit perhaps finds a place in the accounts of the family-business would not save him under all circumstances.
4. The Judge further held that the agreement was by way of wager. He, accordingly, dismissed the suit.
5. On appeal, the learned District Judge held that the transaction was not a wager; also, that Basappa had broken the contract. But he affirmed the decree of the trial Court on the ground that Rachappa's heir was the only person who could maintain the suit. He says :
It has been admitted that the firm had not been dealing in yarn but in cloth and money-lending and that Rachappa made the contract not at his shop ah Jamkhandi but at the village of Rabkavi. The contract was the first of its sort, and was for a vary large sum; so it is difficult to see how the other members of the family could have been held to be liable for any loss which might have resulted. In the absence of evidence of this consent, as in this case, they would have had a perfect defence, since partners in a family business are only bound by the acts of their manager when he is engaged in a business which they have authorised him to conduct.
6. He then goes on :
The result is unfortunate. Had Rachappa advanced money to Basappa and had the plaintiff sued to recover it he would have got a decree. But as Rachappa purchased the yarn and sold it to Basappa, thus entering into a contract which was not within the scope of the family business, the plaintiff must fail.
7. In support of his case on the various issues, the plaintiff relied upon certain entries in the books of account relating to the family business. The learned District Judge has held that those books were kept in the regular course of business, and were reliable documents. Now the evidence shews that as soon as the transaction in question was entered into, it was brought into the books of account of the family; the sum of Rs. 2,000 paid by Basappa, was brought into the family business; and items connected with the transaction continue to appear in those books. The plaintiff contends that the learned Judge has failed to take these important facts into consideration. The contention is, in my opinion, sound. The books clearly shew that the family had authorized the transaction and adopted it. In Gan Savant v. Narayan Dhond Savant I.L.R. (1883) 7 Bom. 467 west J. observed (p. 4)71):-
The Hindu family was, in fact, considered as a corporation whose interests were necessarily centred in the manager; while the manager, as the chief member of the family, was understood to represent the common interests whenever these were subject to be affected by transactions in which he engaged, even in his own sole name. Union and undivided interests being the rule, the presumption was that a manager was acting for the family, unless it were made out that he acted and professed to act, for himself alone.
8. These observations are pertinent to the present case.
9. The rule of Hindu law is that a joint family is represented in all transactions or concerns with the outside world by its karta (manager), provided they are for the benefit or necessity of the family; and that any coparcener, who does not occupy that position of manager, can represent and bind the family in such transactions or concerns, provided he was either previously authorized to represent it, or, in the absence of such authority, the other coparceners subsequently by words or conduct ratified his acts. Per Chandavarkar J. in Vithu Dhondi v. Babaji I.L.R. (1908) 32 Bom. 375.
10. In the circumstances of this case, if Rachappa were alive he could have maintained this suit. For, it may now be considered as settled that the managing member of a joint family business can sue in matters affecting the business, without joining in the suit the other members of the family (Kishen Parshad v. Har Narain Singh Section c. 13 Bom. L.R. 359 Mayne's Hindu Law, 9th Edition, (208)). The subject has been fully considered in this Court by Fawcett J. in Ramnath v. Ramrao : (1921)23BOMLR1135 , On the death of Rachappa, the plaintiff Madivallappa became the manager; and, in my opinion, it was competent to him to institute this suit, as he has done, in a representative character, as manager of the joint family business.
11. The family entered into the contract by its managing member and by its managing member it can sue in matters arising out of that contract. On the finding recorded by the learned District Judge on the other issues in the case, I hold that the plaintiff is entitled to a decree for Rs. 2,564-10-9 with interest on judgment at six per cent. per annum and costs on that amount throughout. He has claimed Rs. 1,683 as interest on the damages from December 8, 1919, to the date of filing the suit; but the claim is inadmissible.
12. I would, therefore, allow the appeal and pass a decree accordingly.
Norman Macleod, Kt., C.J.
13. I agree.