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Shivlal Gulabchand Vs. Taniram Sadashiv - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtMumbai
Decided On
Case NumberFirst Appeal No. 450 of 1925
Judge
Reported inAIR1928Bom444; (1928)30BOMLR1136; 113Ind.Cas.353
AppellantShivlal Gulabchand
RespondentTaniram Sadashiv
Excerpt:
.....right to dispute the alienation.;where a family shop is being carried on for the benefit of a joint family, the adult members in charge of such shop have powers to borrow money for purposes of the business and mortgage family properties to secure repayment of such money. such a mortgage is binding on the shares of the minor coparceners in the family properties.;raghunathji tarachand v. the bank of bombay (1909) i.l.r. 34 bom. 72 s.c. 11 bom. l.r. 255 followed.;defendant no. 10 filed a suit against the members of a joint family and obtained attachment before judgment on july 12, 1916. on july 21, 1917, the suit ended in an ex pane decree against some of the defendants and a consent decree against others. the consent decree imposed a charge on the family properties, which were already..........3 had been purchasing cloth from the plaintiff for their cloth shop from time to time and that the suit bond was passed for the balance of the price.6. then the contention that the bond was executed by defendants nos. 1 to 3 in order to prejudice the other defendants who are members of this joint family was not proved and, in fact, no evidence was given in support of that contention. accordingly i think that it is a case where defendants nos. 4 to 8 should have been held liable by the lower court to the extent of their interest in the joint family property.7. in regard to the second point about the mortgage bond being void under section 64 of the civil procedure code, it is clear that defendants nos. 9 and 10 set up the plea that the mortgage bond was invalid, and the mere fact that they.....
Judgment:

Mirza, J.

1. The appellant-plaintiff in this case sued to recover a certain sum on a. simple mortgage bond dated December 11, 1917. The mortgage bond is executed by defendants Nos. 1, 2 and Section The defendants Nos. 1 to 8 are sued as members of a joint undivided family, defendants Nob, 1 to 6 being the sons of one Sadashiv, defendant No. 7 as grandson of one Lotan, who was a brother of Sadashiv, and defendant No. 8 a son of another brother of Sadashiv, one Ananda. The appellant's case was that defendants Nos. 1 to 8 were jointly interested in a family shop carried on in the name of Sadashiv Narayan Shimpe. Defendants Nos. 9 and 10 are auction purchasers of the two survey numbers, the subject-matter of the mortgage bond, being purchasers at an auction sale held in execution of a certain decree. The learned Judge held that the mortgage bond was not binding on defendants Nos. 4, 6, 7 and 8, defendant No. 5 being dead. The learned Judge also held that the claim of the plaintiff which he decreed held good against the two properties to the extent only of the shares of defendants Nos. 1 and 3 therein, Against this decree, the plaintiff has appealed and defendants Nos. 9 and 10 have filed cross-objections, The contention of defendants Nos. 9 and 10 is that the plaintiff's mortgage is void as against them and the shares of defendants Nos. 1 and 3, which form part of the sale to defendants Nos. 9 and 10, are not subject to the plaintiff's mortgage.

2. The respondents other than defendants Nos. 9 and 10 have not appeared, Mr. Nadkarni on behalf of defendants Nos. 9 and 10 does not contend that defendants Nos. 1 to 8 are not members of a joint family. He contends that defendants Nos. 1, 2 and 3 were in possession of the properties, the subject-matter of the mortgage as adult members of the family, the other defendants at the time were minors and the plaintiff has failed to show that there was any legal necessity for the mortgage. The ground taken by Mr. Nadkarni is not the same as the ground taken by the learned Judge, The learned Judge held that on the evidence before him he did not believe the plaintiff's gumasta, Gangaram Nago, that defendants Nos. 1 to 8 were joint on the date of the bond. The learned Judge was of opinion that there was no other evidence worthy of consideration on the point. We find, however, that in addition to the deposition of Gangaram Nago there is considerable evidence on the record to show that there existed about this time a family shop in which defendants Nos. 1 to 8 were interested. The shop dealt in cloth from the year 1908. There is evidence of certain dealings between the plaintiff and this shop. Several promissory notes were passed from time to time by the predecessors in interest of the defendants and by some of the defendants to the plaintiff in respect of the indebtedness of the shop to the plaintiff for goods supplied or moneys advanced. The mortgage bond of December 11, 1917, is in respect of such indebtedness. Where a family shop is being carried on for the benefit of a joint family, the powers of the adult members in charge of such shop to borrow money for purposes of the business and mortgage family properties to secure repayment of such money, are clearly very wide, as was laid down by this Court in Raghunathji Tarachand v. The Bank of Bombay I.L.R (1909) Bom. 72: 11 Bom. L.R. 255. Chandavarkar J. remarks (p. 78):-

The rule of Hindu law that debts contracted by a managing member of a joint family are binding on the other members only when they are for a family purpose, is subject to at least one important exception...where a family carries on a business or profession, and maintains itself by means of it, the member who manages it for the family has an implied authority to contract debts for its purposes, and the creditor is not bound to inquire into the purpose of the debt to bind the whole family thereby, because that power is necessary for the very existence of the family.

The evidence shows that defendants Nos. 9 and 10 filed suits and obtained decrees against the representatives of the three branches of Sadashiv, Lotan and Ananda as members of a joint family in respect of their respective business dealings with the shop. From a consideration of these points, the finding of the lower Court that the remaining defendants Nos. 4, 6, 7 and 8 are not liable to the plaintiff appears to me to be incorrect, In my opinion they would be so liable a members of a joint family to the extent of their interest in the joint family properties.

3. With regard to the contentions of defendants Nos. 9 and 10, it appears that defendant No. 9 had filed a suit against the members of the joint family in June 1916 being Suit No. 287 of 1916. On July 12, 1916, he obtained an order in that suit for attachment before judgment. That order was made absolute on March 1, 1917. On July 21, 1917, the suit was decreed ex parte against some of the defendants in that suit and a consent decree was taken between the plaintiff' and the defendants who appeared at the hearing. By the consent decree the decretal amount was made payable by instalments and in the meanwhile a charge was created on the properties, the subject-matter of the attachment before judgment. There is nothing in the decree to indicate that the attachment before judgment was raised. Defendant No. 10 had also filed a suit against the joint family about the same time being Suit No. 324 of 1916, On August 1, 1916, he obtained an order in the suit for attachment before judgment of properties belonging to the joint family including the properties in suit. That order was made absolute on July 9, 1917. The claim of defendant No. 10 was decreed on July 11, 1917, ex parte against some of the defendants who did not appear and a consent decree wai9 taken between him and the other defendants who appeared. The mortgage bond in the suit was executed on December 11, 1917, which is subsequent to the dates of the two orders of attachments and the two decrees obtained in the two suits. The properties were sold in execution proceedings in Suit No. 287 of 1916, one survey number being purchased by defendant No. 9 other survey number being purchased by defendant No. 10. In the proclamation of sale the fact that there was a mortgage on these properties in favour of the appellant was mentioned. The appellant was served with a notice of the proposed sale. The property sold in the execution proceedings, however, was not the equity of redemption to which the members of the joint family would be entitled subject to the mortgage, but was the property itself. It does not appear from the record that the executing Court held any enquiry into the mortgagee's claim or decided that the attachment was subject to the mortgage. It is contended on behalf of defendants Nos. 9 and 10 that at the date of this sale, the original attachment before judgment of July 12, 1916, was still subsisting and the mortgage bond was executed during the subsistence of the attachment. If that contention is correct the alienation of the property by means of the mortgage bond dated December 11, 1917, would b? void against any interest claimed under the attachment. The case of Ganu Singh v. Jangi Lal I.L.R (1899) Cal. 531 is an authority for that proposition. It is there laid down that the effect of an attachment of a property under the Civil Procedure Code, whether made before or after decree, is the same, provided that in the former case a decree is made for the plaintiff at whose instance the attachment takes place. Mr. Pradhan has argued that the attachment before judgment must be deemed to be merged in the decree. He contends that defendants Nos. 9 and 10 by their respective decrees have chosen to substitute for the attachment, a charge on the properties and the fact of the mortgage claim being mentioned in the proclamation of sale is tantamount to the sale having taken place subject to the mortgage claim, Under Order XXXVIII, v. 9, of the Civil Procedure Code, it appears that where an order is made for attachment before judgment, the Court shall order the attachment to be withdrawn when the defendant furnishes the security required, together with security for the costs of the attachment, or when the suit is dismissed. Under Rule 11, where property is under attachment by virtue of the provisions of Order XXXVIII, and a decree is subsequently passed in favour of the plaintiff, it shall not be necessary upon an application for execution of such decree to apply for a re-attachment of the property. In the absence of a specific order by the Court raising the attachment before jndgment, and in the absence of a definite statement in the decree that the attachment before judgment was being abandoned by the plaintiff, we must take it that the attachment continued. In that view of the case the alienation of the property on December 11, 1917, by means of the mortgage bond would be void against defendants Nos. 9 and 10 under Section 64 of the Civil Procedure Code. Mr. Pradhan has argued that the mention of the mortgage in the proclamation of sale debars defendants Nos. 9 and 10 from contending that they have not purchased the property subject to the mortgage In Roshan Lal v. Lallu I.L.R (1922) All. 714 a similar contention was raised but overruled. The facts in that case were very similar to those with which we have here to deal, I respectfully agree with the ruling of the Allahabad High Court that the notification of the mortgage at the time of the sale does not prevent the auction purchasers from disputing its validity.

4. The learned Judge has held that the attachment before judgment must be deemed to have continued as against such of the defendants as were not parties to the consent decree but against whom ex parte decrees were passed. He is of opinion that by the consent decree the attachment came to an end as between the parties to the consent decree and the defendants Nos. 9 and 1 J. Defendant No. 2 was not a party to the consent decree. Defendants Nos. 1 and 3 were. On that ground he has held that the shares of defendants Nos. 1 and 3 in the properties would be liable for the mortgage debt. I do not agree with that statement of law. In my opinion the attachment continued against all the defendants whether they were parties to the consent decree, or only ex parte decrees were passed against them. The cross-objection taken by defendants Nos. 9 and 10 on this point should, in my opinion, be allowed.

Charles Fawcett, Kt., A.C.J.

5. I agree. With regard to the first point the liability of defendants Nos. 4 to 8, no doubt they were minors at the date of this mortgage bond, and the general rule applies that, where the manager of a joint family business has contracted debts for the ordinary purpose of the family business, the minor co-parceners are liable to the extent of their interest in the joint family property. With regard to Raghunathji Tarachand v. The Bank of Bombay I.L.R (1909) Bom. 72: 11 Bom. L.R. 255 the judgment of Chandavarkar J. has baen criticised in Vithal Yeshvant v. Skivappa Mallappa I.L.R (1923) Bom. 637: 25 Bom. L.R. 323 where it was held that it was necessary for the mortgagee to prove not only that the mortgagor was carrying on a family business, but also that the money was required for that business. In that particular case it was held that that burden of proof was not discharged. In the present case, however, I think that the findings of the Subordinate Judge on issue No. 4 clearly suffice to show that the money was required for this family business. The plaintiff's accounts show that defendants Nos. 1 to 3 had been purchasing cloth from the plaintiff for their cloth shop from time to time and that the suit bond was passed for the balance of the price.

6. Then the contention that the bond was executed by defendants Nos. 1 to 3 in order to prejudice the other defendants who are members of this joint family was not proved and, in fact, no evidence was given in support of that contention. Accordingly I think that it is a case where defendants Nos. 4 to 8 should have been held liable by the lower Court to the extent of their interest in the joint family property.

7. In regard to the second point about the mortgage bond being void under Section 64 of the Civil Procedure Code, it is clear that defendants Nos. 9 and 10 set up the plea that the mortgage bond was invalid, and the mere fact that they referred to the mortgage in their applications for execution and asked for the property to be sold subject to the mortgage does not preclude them from questioning its validity. This has been ruled in Ganesh v. Purshottam I.L.R (1908) Bom. 311 : 11Bom. L.R. 1312 and Narayan Sadoba Halwai v. Urnbar Adam Memon I.L.R (1911) Bom. 275: 13 Bom. L.R. 307. Nor does the fact that this mortgage was also mentioned in the proclamation of sale prevent the provisions of Section 64 applying, if they can otherwise be properly applied. The Subordinate Judge would have applied them but for his view that defendants Nos. 9 and 10 must be taken to have substituted a charge for the attachment, so far as the defendants who were parties to the consent decree were concerned. That is to say, he sets up a waiver by defendants Nos. 9 and 10 of their rights under the attachment before judgment. But any such waiver must be properly proved; the ordinary principle is that waiver is an intentional act; and a clear act showing such an intention to waive must be shown. In the present case there is no evidence of any such waiver; on the contrary, I find that in the application for execution that was made by defendant No. 9 in regard to his decree in Civil Suit No. 287 of 1916 (Ex, 82) he expressly says in paragraph 10:-

I apply as follows :-firstly that the immoveable property mentioned at the end of the Darkhast application as belonging to the said... has been already attached previously and that attachment still remains and is continuing and is not raised.

Clearly, far from being any waiver, he says the attachment is still continuing. It is not clear whether a similar statement was made in the application of defendant No. 10 (Ex. 71), because the paper containing paragraph 10 in that application-according to the translation-appears to have been torn. But even if he did not make a similar assertion, that does not establish that he intended to waive his right under the attachment. Accordingly, in my opinion, the view of the lower Court on this point cannot be sustained, and T agree that the mortgage decree for the sale of these two properties should not be upheld.

8. Mr. Pradhan asks that the plaintiff' should be allowed to have the properties sold upon his payment of the decretal amounts that defendants Nos. 9 and 10 obtained in satisfaction of their decrees. Mr. Nadkarni for defendants Nos. 9 and 10 objects to this, and it seems to us that we could not properly pass any such order as defendants Nos. 9 find 10 are not in the position of mortgagees but are now auction purchasers with the rights that this involves. It is, of course, open to the plaintiff to try and come to some arrangement with defendants Nos. 9 and 10, or their assignees. But it is not possible for us to give relief in this particular form. We, therefore, substitute for that part of the lower Court's decree against defendants Nos. 9 and 10 that the property be sold, & c, a decree against defendants Nos. 1 to 3 for the sum of Rs. 7080 and costs of the suit, with interest on R. 8. 5019-3 at six per cent, per annum from the date of suit to the date of payment, and a decree against defendants Nos. 4, 6, 7 and 8 to pay the same amount to the extent of their shares in the joint family property. We also reverse the order that the plaintiff' should pay the coats of defendants Nos. 4 to 6, and substitute au order that their costs shall be borne by them. As to the order as to costs of defendants Nos. 2, B, 9, 10 and 11, we do not interfere with the order for costs in regard to defendants Noh. 2, 3, and 9; but in regard to the costs of defendants Nos. 10 and 11, we direct that the, plaintiff' appellant shall bear one set of costs in regard to them both in this Court and in the lower Court, No order as to the coats of the cross-objections.


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