Skip to content


Nagindas Gokuldas Shet Vs. Bhimrao Damu Patil - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtMumbai
Decided On
Case NumberSecond Appeal No. 3 of 1941
Judge
Reported inAIR1943Bom44; (1942)44BOMLR894
AppellantNagindas Gokuldas Shet
RespondentBhimrao Damu Patil
DispositionAppeal dismissed
Excerpt:
.....guardian of minor--paternal grandmother acting as uncertificated guardian of minor--promissory note passed by agent of such guardian in renewal of notes executed by minor's father--whether promissory note binds minor's property.;under hindu law the paternal grandmother of a minor is not his natural guardian.;chennappa v. onkarappa [1940] mad. 358, f.b. and re gulbai and lilbai (1907) i.l.r. 32 bom. 50, s.c. 9 bom. l.r. 923, referred to.;a promissory note passed by a de facto guardian of a hindu minor, in renewal of former notes executed by the minor's father, cannot bind the property of the minor.;the paternal grandmother of a hindu minor, acting as his uncertificated guardian, executed a promissory note in favour of the plaintiff in renewal of former notes executed by the minor's.....divatia, j.1. this is a plaintiff's appeal in a suit to recover rs. 2,071 on a promissory note passed on june 8, 1934, in favour of the plaintiff by defendant no. 2 who held a power-of-attorney from the paternal grandmother of defendant no. 1 whose estate was managed by her during his minority. the promissory note was the last in a series of notes the first of which for rs. 1,000 was passed by damu, the father of defendant no. 1, in plaintiff's favour on july 29, 1923. on february 19, 1926, damu passed to the plaintiff a fresh note for rs. 1,300 in renewal of the first note. thereafter in january, 1928, damu died and the estate of his son was managed, though without any certificate as a guardian, by bahinabai, the mother of damu. on march 17, 1928, bahinabai executed a power-of-attorney.....
Judgment:

Divatia, J.

1. This is a plaintiff's appeal in a suit to recover Rs. 2,071 on a promissory note passed on June 8, 1934, in favour of the plaintiff by defendant No. 2 who held a power-of-attorney from the paternal grandmother of defendant No. 1 whose estate was managed by her during his minority. The promissory note was the last in a series of notes the first of which for Rs. 1,000 was passed by Damu, the father of defendant No. 1, in plaintiff's favour on July 29, 1923. On February 19, 1926, Damu passed to the plaintiff a fresh note for Rs. 1,300 in renewal of the first note. Thereafter in January, 1928, Damu died and the estate of his son was managed, though without any certificate as a guardian, by Bahinabai, the mother of Damu. On March 17, 1928, Bahinabai executed a power-of-attorney in favour of defendant No. 2 for doing all acts on her behalf for the management of defendant No. 1's estate. On January 17, 1929, defendant No. 2, acting under the power-of-attorney, executed a promissory note for Rs. 1,700 in renewal of the last promissory note passed by Damu. Then on April 12, 1931, defendant No. 2 passed to the plaintiff another promissory note for Rs. 2,050 in renewal of the former note. There was a repayment under this note to the extent of about Rs. 370 in 1932 and 1933. Thereafter on June 8, 1934, defendant No. 2 passed the suit promissory note to the plaintiff for Rs. 2,300 in renewal of the last note. The present suit was brought by the plaintiff to enforce this promissory note on June 8, 1937. The defendant being an agriculturist, and therefore entitled to ask for past accounts, the plaintiff limited his claim to Rs. 1,093 as principal and Rs. 978 as interest from the date of the first promissory note of 1923. The defence was that Bahinabai, who was only in de facto management of the minor's property, had no power to execute the promissory note either by herself or through defendant No. 2, that the note was not binding on defendant No. 1, and that the suit was barred by limitation.

2. The trial Court held that Bahinabai acted as guardian of defendant No. 1's property and she had, therefore, power to pass the promissory notes during the course of her management, that the note was, therefore, binding on defendant No. 1 and that the suit was in time. It was held that the plaintiff was entitled on taking accounts to Rs. 544 for principal and the same amount for interest. A decree was accordingly passed for Rs. 1,088 in plaintiff's favour.

3. On appeal by defendant No. 1 the decree was reversed by the Assistant Judge. He held that although the suit was in time, the promissory note by defendant No. 2 on behalf of Bahinabai was not binding on the minor personally or against his estate, as a guardian had no power to bind the minor's estate except by a document purporting to charge it, and as the promissory note did not create any such' liability, it cannot be enforced. The suit was therefore dismissed.

4. The plaintiff has preferred this appeal against that decision, and the appeal is confined to a claim against the estate of defendant No. 1.

5. It is contended by Mr. Dixit on behalf of the plaintiff-appellant that the decisions relied upon by the lower Court against the plaintiff could be distinguished from the facts of the present case. Those decisions are Waghela Rajsanji v. Shekh Masludin I.L.R. (1887) 11 Bom. 551 Maharana Shri Ramalsingji v. Vadilal Vakhatchand I.L.R. (1894) 20 Bom. 61, Keshav v. Balaji : AIR1932Bom460 , and Shankar v. Nathu : AIR1932Bom480 . They are all to the effect that a minor is not personally bound by a contract, nor is his estate liable for a promissory note by his guardian, even though he may be a certificated guardian. The ground on which those decisions are sought to be distinguished is that in all those cases the promissory notes were passed by the guardians during the course of their management for the first time; and were not, as in the present case, in renewal of former notes executed by the minor's father which would, under the Hindu law, be binding on his estate. It is further contended that Rangnekar J., who decided the case of Keshav v. Balaji, was of the opinion in a later decision in Vishwanath v. Raghunath (1937) 40 Bom. L.R. 458 that in certain circumstances the estate of a minor would be liable under a promissory note passed by his guardian. In that case the guardian was appointed by a person under his will and was authorised to carry on the business of the testator. The guardian executed a promissory note for the purpose of the business, and it was held that although the minor was not personally liable on the debts incurred by his guardian in the course of business and although the creditors of the business had no right of direct recourse against the minor, the guardian would be entitled to indemnity for liability properly incurred out of the assets of the business, and the creditors of the business could therefore proceed directly against such assets for liability properly incurred by the guardian. The guardian in that case was a lawful guardian and the promissory note was passed for the purpose of the management of the ancestral business which was authorised by the testator. It was for those reasons held that the assets of the business were liable although the minor was not personally liable on the promissory note. That decision, in our opinion, does not affect the former decisions which were distinguished by Rangnekar J. on the ground that in those cases there was no question of the passing of the promissory note by the guardian for the purpose of any business which he was authorised by the testator to carry on. As a result of the previous decisions the law on this point summarised by him in Keshav v. Balaji is that 'although a guardian can under certain circumstances sell or charge his ward's estate or property, he cannot bind him personally by a simple contract debt, nor can he bind his estate except by a document purporting to bind it.' A promissory note is not a document creating a charge on the minor's estate and it would not therefore be binding either on the person or the property of the minor. It is true that in none of those cases was there a pre-existing liability. Mr. Dixit has pressed upon us this difference and relied upon several decisions of the Madras High Court in which the promissory notes were passed for a pre-existing liability which would be binding on the minor under his personal law. The decisions relied upon by him are Subramania Ayyar v. Arumuga Chetty I.L.R. (1902) Mad. 330, Ramajogayya v. Jagannadhan I.L.R. (1918) Mad. 185 and Satyanarayana v. Mallaya I.L.R. (1934) Mad. 735. In the first of these cases the promissory note was passed by the mother as the minor's guardian for a debt for which the son's share in the ancestral estate was liable at that time, and it was held that the minor was liable on the note to the extent of his share in the ancestral estate on the ground that the guardian's contract was to keep alive a liability to which, at the date of the contract, the minor's share of the ancestral estate was already subject. In the second case also the promissory note was passed by the mother of the minor acting as his natural guardian. The majority of the full bench held that on a contract entered into on behalf of a minor by his guardian under which the latter borrowed money but no charge was created on the minor's estate, no decree can be passed against the minor on his attaining majority or his estate except in cases in which the minor's estate would have been liable for the obligation incurred by the guardian under the personal law to which he is subject, and that a decree can be passed against the estate of a Hindu minor for a debt contracted by his guardian for the marriage of his sister. Wallis C.J. dissented from the majority and held that a decree cannot be passed against a minor on his attaining majority or against his estate on a covenant entered into on his behalf by a guardian for his benefit. One of the circumstances mentioned in the majority judgment was the case of a guardian in management giving a bond in renewal of debt binding on the minor, and it was held that in such a case the estate could be proceeded against as the act of the guardian might be regarded as keeping alive by acknowledgment a pre-existing liability. It is important to note that in that case the capacity to acknowledge a debt was placed on the same footing as the power to pass a promissory note binding on the minor's estate. In the third case a promissory note was passed by the mother as the natural guardian of the minors in renewal of a note passed by the father, and it was held that in such cases the Court has to look into the surrounding circumstances to find out whether the maker of the promissory note intended to exclude her personal liability as guardian but to make the wards liable and that such intention could be inferred if the promissory note was in renewal of earlier promissory notes ultimately leading up to the liability of the father of the minors. It was further held that in a proper case it was within the competency of a guardian by executing promissory notes to make a minor liable to the extent of the joint family property in his hands.

6. As against those three cases, we have a decision of the Madras High Court itself in Arumugam Chetti v. Duraisinga Tevar I.L.R. (1911) Mad. 38 following Bhowal Sahu v. Baijnath Pertab Narain Singh I.L.R. (1907) 35 Cal. 320 that even if articles purchased by a guardian with the money advanced by the money-lender were necessaries, the responsibility would rest on him when a bond is taken for the debt to take care that the bond is so drawn as to render the estate of the minor liable in law for the debt. In our opinion the same principle would apply also where the bond is passed for an antecedent debt of the father. Moreover there is one feature in the present case which distinguishes it from the three decisions relied on by Mr. Dixit. In all those cases the promissory notes, as I have said above, were passed by the mother as the natural guardian of the minor while in the present case it is passed by an agent of the paternal grandmother of the minor acting aa his uncertificated guardian. Now, it is quite clear that under the Hindu law the mother is a natural, and therefore a lawful, guardian of the minor. But the same cannot be said of the paternal grandmother. The father and the mother of the minor with the possible exception of the paternal grandfather are the only persons who are natural guardians, and the paternal grandmother cannot be regarded as such. It has been recently held by the Madras High Court in Chennapa v. Orkarappa [1940] Mad. 358 that a paternal grandmother of a Hindu minor is not, even when she happens to be his nearest living relation, the lawful guardian of the minor for the purpose of Section 21 of the Indian Limitation Act. The decision in Re Gulbai and Lilbai I.L.R. (1907) 32 Bom. 50 also implies that the paternal grandmother could not be a natural guardian.

7. The position, therefore, is that the paternal grandmother is not a natural guardian, nor was she appointed by the District Court as guardian. She is only a person in management of the minor's property and can, at the most, be regarded as a de facto guardian. This distinction, in our opinion, is very important, because the Madras High Court has itself held in Swaminatha Odayar v. Natesa Iyer I.L.R. (1932) Mad. 879 that a de facto guardian is not entitled to impose any liability upon a minor by executing a promissory note on his behalf even for necessary purposes. This decision has been overruled on a different point in the full bench case in Satyanarayana v. Mallayya I.L.R. (1934) Mad. 735. The point on which it was overruled is the opinion expressed by Reilly J. therein about the nature of the liability created by a promissory note under the Negotiable Instruments Act. On the other hand, the decision in Swaminatha Odayap's case that a promissory note passed by a de facto guardian is not binding on the minor's estate is mentioned with implied approval in the full bench decision in Satyanarayana's case. Ramesam J. observes at pages 741-42 of that report:--

The actual conclusion in the case before him rested on the fact that the promissory note was not executed by a lawful guardian at all. Otherwise, that decision must be regarded as overruled.

8. The same may be said of the decision in Ramajogayya v. Jagannathan I.L.R. (1918) Mad. 185. The ground on which it was held that a bond in renewal passed by the guardian would be binding on the minor's estate was that the guardian had the power to make an acknowledgment, and reliance was placed for that purpose on the full bench decision in Annapagauda v. Sangadigyapa I.L.R. (1901) 26 Bom. 221. In that case the acknowledgment was held as valid as there was a Court guardian, and it is quite clear that under Section 21 of the Indian Limitation Act a de facto guardian has no power to acknowledge a debt because he is not a lawful guardian. That has been held in Ramaswamy v. Kasinatha : AIR1928Mad226 . In our opinion, therefore, none of the three cases relied upon by Mr. Dixit apply to the facts of the present case in which the promissory note is passed by a de facto guardian and not by a lawful guardian. A promise to pay by a de facto guardian cannot bind the minor. It is well known that a minor cannot be held personally liable for a debt, and nobody who is not a lawful guardian of the minor can make either the person or the property of the minor liable by entering into a contract on his behalf. As observed by their Lordships of the Privy Council in Kocharlakota Venkata Jagannatha Rao Garu v. Ravu Venkata Kumara Mahipati Surya Rao Bahadu r a minor is not personally liable for the payment of a debt and no decree against the general assets of the minor could be made. With regard to a contract entered into by a guardian on behalf of a minor, their Lordships have held in Partap Singh v. Sant Kaur (1938) L.R. 65 IndAp 213 that the rule of law is firmly established that a minor is not competent to contract, and a person who takes the role of a guardian and has, therefore, no authority to enter into a contract on the minor's behalf, cannot enter into a deed of settlement binding on the minor as against whom it is a void transaction. In our opinion, therefore, a promissory note passed by a de facto guardian, even for necessary purposes, cannot bind the property of a minor.

9. Mr. Dixit has, however, urged that the principle of the recent full bench decision of our Court in Tulsidas v. Vaghela Raisingji I.L.R. (1932) 57 Bom. 40 should be applied to the present case. That decision is to the effect that under Hindu law a de facto guardian of a minor can validly sell the minor's property to a third person for legal necessity. The contention is that an alienation by a de facto guardian should be treated on the same basis as a promissory note passed by such a guardian if the alienation as well as the promissory note are for a purpose binding on the minor. There is, in our opinion, however, a material difference between an alienation and a promissory note made by a de facto guardian. A minor, as observed before, is not personally liable, and a contract by a de facto guardian in the nature of a promissory note creates only a personal liability, while an alienation affects his estate. As observed in Mayne's Hindu Law, 10th edn. (pages 309-310):--

A de facto guardian of an infant's estate has, in case of necessity or benefit to the minor, power to sell or mortgage his property... But one who has no authority under the personal law applicable to the minors to enter into a contract or to make a compromise or family settlement on their behalf cannot bind them by any such transaction.

10. It should be noted that in Tulsidas v. Vaghela Raisingji the full bench was constrained to hold that as regards alienation by a de facto guardian the matter was concluded by the authority of Hunoommpersaud Panday v. Mussumat Babooe Munraj Komweree (1816) 6 M.I.A. 393 which had been followed in a number of decisions, and that therefore on the principle of stare decisis the existing law should not be disturbed. The Chief Justice who gave a dissenting judgment was definitely of the opinion that a de facto guardian is merely a person who assumes without authority to act as a guardian and that it was a strong thing to hold that by such assumption he had acquired the right to deal with the minor's immoveable property. Even Patkar J., who delivered the main judgment of the majority opinion, observes (page 57):--

On general principles I agree that a de facto guardian should not have the power to alienate the property of a minor. I also agree that there will be inconvenience in the matter of sales or conveyances of property belonging to a minor, and that it is desirable that before a de facto guardian purports to alienate property on behalf of the minor, he should get himself appointed as guardian under the Guardians and Wards Act. I have not to consider what the law on this point should be, but I am bound to ascertain the Hindu law as laid down by the ancient texts, and in the absence of texts as laid down by the decisions of the Privy Council, I think that the decision of the Privy Council in Hunoomanpersaud's case has been considered consistently ever since that decision as supporting an alienation by a de facto guardian in case of necessity.

11. As observed in Keshav v. Balaji : AIR1932Bom460 , the estate of the minor was charged in Hunoomanpersaud's case and the question was whether the charge was incurred for legal necessity or for the benefit of the minor. In our opinion, therefore, we would not be justified in extending the full bench decision; so as to cover the case of a promissory note passed by a de facto guardian even though it may be for an antecedent debt of the father.

12. Mr. Dixit has also relied on a decision of this Court in Nathuram v. Shoma Chhagan I.L.R. (1890) 14 Bom. 562 that the nearest male relative and guardian of a Hindu orphan minor had authority to bind the estate of the minor in so far as the loan which he borrowed was necessary to secure the proper performance of the funeral ceremonies of the minor's father. The ground of the decision was that whoever was in possession of the estate was bound to provide for the funeral ceremonies of its deceased owner, and that as the loan was required for the proper discharge of that duty, it was a charge on the estate of the deceased. That decision therefore, is in accordance with the authority of Maharana Shri Ranmalsingji v. Vadilal Vakhatchand I.L.R. (1894) 20 Bom. 61 that a minor's estate may be bound by contract by a guardian which purports to charge the estate. In the present case, it cannot be said that because the promissory note was passed for the father's debt, it created a charge on the estate. Moreover, the decision in Nathuram's case can be supported on the principle laid down in Bhawal Sahu v. Baijnath Pertab Narain Singh I.L.R. (1907) Cal. 320, that where the promise is to pay money which has been expended for necessaries, the estate of the minor may be liable not on the promise but because the money has been supplied. In the present case the suit is only on the promise.

13. In the view we take it is not necessary to go into the question as to whether the decisions of the Madras High Court which would make the minor's property liable for a promissory note passed by the guardian for a preexisting debt of the father are correct. In our opinion, even in such cases, the promissory note must be passed by a proper or lawful guardian and not by a de facto guardian who is in possession and management of the estate without being lawfully authorised to do so. Such a de facto guardian cannot create any obligation on the minor's estate by executing a bond which does not create a charge on the estate.

14. We think, therefore, the decision of the lower appellate Court is correct. The appeal is dismissed with costs. Separate sets of costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //