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Parbhudas Girdhardas Shah Vs. Lallubhai Khushal Mehta - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 52 of 1930 and Suit No. 1661 of 1926
Judge
Reported inAIR1932Bom117; (1932)34BOMLR35; 137Ind.Cas.710
AppellantParbhudas Girdhardas Shah
RespondentLallubhai Khushal Mehta
DispositionAppeal allowed
Excerpt:
.....that although the learned judge states that he is satisfied on the evidence that defendant no. before dealing with the merits i would like to refer tomr. 1 managed the joint family properties and did what he liked with them......are members of a joint undivided hindu family and that defendant no. 1 is the manager of the joint family business. then in paragraph 3 it is alleged that the plaintiffs from time to time under instructions of the defendants purchased in bombay various goods and consigned them to the defendants at pen, and then it is alleged that an account was made up when a sum of rs. 3,150 was found due and payable by the defendants to the plaintiffs at foot thereof, and that the defendants through their said manager, defendant no. 1, signed an acknowledgment in respect of the plaintiffs' goods. so that, reading the plaint as a whole, i think it is clearly a claim against the defendants as members of a joint hindu family, the allegation being that the manager of the family-defendant no. 1-had.....
Judgment:

John Beaumont, Kt., C.J.

1. In this case the plaintiffs who are a firm carrying on business as commission agents in Bombay sue the three defendants for a sum of Rs. 3,150, balance agreed by defendant No. 1 to be paid in respect of purchase price of goods sold and delivered. The plaint alleges in paragraph 1 that the defendants are members of a joint undivided Hindu family and that defendant No. 1 is the manager of the joint family business. Then in paragraph 3 it is alleged that the plaintiffs from time to time under instructions of the defendants purchased in Bombay various goods and consigned them to the defendants at Pen, and then it is alleged that an account was made up when a sum of Rs. 3,150 was found due and payable by the defendants to the plaintiffs at foot thereof, and that the defendants through their said manager, defendant No. 1, signed an acknowledgment in respect of the plaintiffs' goods. So that, reading the plaint as a whole, I think it is clearly a claim against the defendants as members of a joint Hindu family, the allegation being that the manager of the family-defendant No. 1-had signed an acknowledgment of the amount due.

2. The first defence taken by defendant No. 2, who is the appellant, was that he was an agriculturist and that having regard to the Dekkhan Agriculturists' Relief Act this Court had no jurisdiction. On that plea a reference was made to the learned Commissioner to ascertain the amount of the income, agricultural and non-agricultural, of defendant No. 2. The Commissioner found that the non-agricultural income exceeded the agricultural income, and on exceptions being taken to that finding, the learned Judge dismissed them, and we have already held that the learned Judge's decision was right. But in the course of those proceedings before the Commissioner the plaintiffs no doubt came to the conclusion that they would have considerable difficulty in proving that this business to which they had supplied goods, which was a grocery business, was joint family business. Accordingly before the hearing they applied to the learned Judge for leave to amend the plaint by alleging as an alternative claim that defendants Nos. 2 and 3 were liable by reason of the provisions contained in Sections 247 and 248 of the Indian Contract Act as having been admitted to and derived benefits from the said grocery business, and that amendment was allowed. It was not, I think, brought to the attention of the learned Judge when he allowed the amendment that the claim of the plaintiffs at the date of the amendment was more than three years' old, and their claim, if a new one, was, therefore, barred by limitation. It is well established by many authorities that the Court will not as a rule allow an amendment which deprives the opposing party of a right which he has acquired. It was contended before us that the amendment in question really introduced a new cause of action which had become barred at the date of the amendment and that therefore the amendment ought not to have been allowed, Mr. Coltman for the respondents on the other hand says that the cause of action is the same in the original and amended plaint though the grounds upon which the case is based may be different in the two cases and he referred us particularly to the case ofKisandas Rupchand v. Rachappa Vithoba I.L.R. (1909) Bom. 644 : 11 Bom. L.R. 1042 I only desire to say in reference to that case that I think the general principles on which the Court acts in relation to amendments were accurately stated by both the learned Judges; whether in applying those principles the Court arrived at a correct conclusion it is not necessary to consider. It was further contended by Mr. Coltman, and I think correctly, that even if the amendment did introduce a new cause of action, it is within the power of the Court in special circumstances to allow the amendment even though the cause of action may be barred by limitation. He drew our attention to the judgment of the learned Judge in this case in dealing with the exceptions to the Commissioner's report from which it appears that defendant No. 2 had been guilty of very gross delay, and it was only because of that delay that any question under the Indian Limitation Act might arise. I think there is a good deal of force in that argument. I am myself disposed to think that the amendment offended against the general principle discussed above, since it deprived defendant No. 2 of an acquired right, but having regard to defendant No. 2's own conduct, I am not prepared to say that this was not a special case in which the amendment might be allowed. We have, therefore, to deal with the case on its merits.

3. Now, on the merits, the learned Judge held in the first place that this shop to which the plaintiffs had supplied goods was not a joint family ancestral shop and that the plaintiffs could not succeed on the ground of joint family. Against that finding there are no cross-objections and therefore that finding is conclusive. Then the learned Judge went on to hold on the amended plea that the evidence showed that the appellant (defendant No. 2) who was a minor had been admitted by defendant No. 1 to the benefits of the partnership in the grocery business, and that, therefore, Section 247 of the Indian Contract Act applied. He further held that the evidence showed that the appellant on attaining majority did not give public notice under Section 248 of the Indian Contract Act, and, therefore, he was liable under that section. The learned Judge does not in terms say on what evidence he relies, and having been through the relevant passages of the evidence to which Mr. Coltman has referred, I am quite unable to see any evidence in support of the proposition, that the appellant was admitted to the benefits of this business, and, that, therefore, Section 247 applied. The case of Sanyasi Charan Mandal v. Krishnadhan Banerji referred to by Mr. Somji, shows that it is for the person setting up the claim under Section 247 to prove the facts which bring the case within that section. In this case the evidence was in a very peculiar state, because at the hearing the plaintiffs tendered' a certified copy of the whole of the evidence taken before the Commissioner on the issue as to the appellant's income, and that evidence was admitted en bloc I think that course was wrong. No doubt the appellant's own evidence was admissible against him as an admission. But I fail to see how the evidence of defendant No. 1 could be evidence of an admission against defendant No. 2. Mr. Coltman has, somewhat boldly, argued that inasmuch as defendant No. 1 was called before the Commissioner as defendant No. 2's witness upon the issue as to defendant No. 2's income, therefore he was an agent for defendant No. 2 before a different Judge upon a totally different issue, viz., as to whether defendant No. 2 was admitted to the benefits of the partnership with defendant No. 1, and that as such agent his evidence was admissible under Section 18 of the Indian Evidence Act. We invited Mr. Coltman to produce authority in support of his proposition, but I need hardly say he was unable to do so. Apart from the fact that defendant No. 1 was called as a witness before the Commissioner, it is quite clear that he was not an agent of defendant No. 2, because before the hearing before the Commissioner defendants Nos. 1 and 2 had separated and had ceased to be members of a joint family. We think, therefore, that before the learned Judge the evidence of defendant No. 1 taken before the Commissioner was not relevant. In my opinion there was really no evidence at all to bring the case within Sections 247 and 248 of the Indian Contract Act. That being so, I think the appeal must be allowed with costs.

4. Appeal allowed with costs. Suit dismissed with costs except in respect of any costs directed to be paid by the order of August 15, Attachment to be raised.

Rangnekar, J.

5. The plaintiffs brought this suit to recover a sum of Rs. 3,150 from the defendants alleged to be due on an adjustment at the foot of a current agency account in respect of goods supplied to the defendants. They alleged that the account was made up and adjusted and the adjustment was signed by defendant No. 1. On the fact of the adjustment there was nothing to show that it was passed by defendant No. 1 on behalf of the other defendants.

6. The three defendants were members of a joint and undivided Hindu family up to September 1926 when a partition of the joint family properties was effected and they separated from each other. Defendant No. 1 is a cousin of defendants Nos. 2 and 3, and admittedly the latter were minors at the date of the transactions in respect of which the adjustment was pasaed. Defendant No. 2 attained majority in September 1925, and defendant No. 3 was still a minor at the date of the hearing of the suit. The plaintiffs' case was that all the three defendants were carrying on joint family business and that defendant No. 1 was the manager of the joint family business and also of the joint family estate. Looking at the plaint and the prayer and the history of the family to which I have referred, it seems to me to fee clear that the plaintiffs really looked upon this business as an ancestral business in which defendants Nos. 2 and 3 took an interest by birth. For, it is clear that in a family consisting of a major coparcener and two minor coparceners any business started by the former would not be a joint family business in the sense that the latter would take an interest in it by birth. It is a rule of Hindu law which has been laid down by decisions of the Privy Council that a manager of a Hindu joint family as such has no authority to start a new business and impose liability in respect of it upon the other minor coparceners, See Sanyasi Charan Mandal v. Krishnadhan Banerj It is only on the footing that the business, which in this case was a grocery shop, was considered to be ancestral that the prayer of the plaint can be understood and oven then the prayer as it stands goes beyond the provisions of the law in that it seeks to make defendant No. 3 personally liable.

7. The answer of defendant No. 2, who is the appellant before us, was that the grocery business was the separate business of defendant No. 1, that it was not a joint family business, that he was not interested in it, and he was not bound by any transactions entered into by defendant No. 1. He also pleaded that he himself was an agriculturist within the meaning of the Dekkhan Agriculturists' Relief Act. On these pleadings the suit in the first instance was referred to the Commissioner of this Court to ascertain whether the agricultural income of defendant No. 2 exceeded his non-agricultural income.

8. On the reference the parties agreed that the income of the joint family as a whole should be taken under both these heads and on that footing the question as to whether the income from agricultural exceeded that from non-agricultural sources should be ascertained. It is unnecessary to consider the question as to whether the mode of taking the account, apart from the agreement of the parties in this case, would be correct, and I reserve to myself the liberty of considering the question when it arises, as to whether on a reference as in this case the income of the joint family as a whole should be considered to be the income of an individual member of the joint family. In this case, however, it was agreed, as I have stated, that this particular method should be followed, and, therefore, the question whether the method adopted was proper or not does not arise, The Commissioner found that the income of defendant No. 2 from non-agricultural sources exceeded that from agriculture and made his report accordingly. Exceptions were filed on behalf of defendant No. 2 which came before Mr. Justice Mirza. The learned Judge dismissed the exceptions and confirmed the Commissioner's report, but for reasons which differed from those of theCommissioner. Speaking personally, I think the basis adopted by the Commissioner was correct. In his interlocutory judgment Mr. Justice Mirza held that the grocery business carried on by defend-ant No. 1 was not a joint family business in which defendants Nos. 2 and 3 were interested.

9. With that finding before them the plaintiffs realised that they would have little chance of succeeding on the merits against defendant No. 2, and therefore when the case came on for hearing before Mr. Justice Mirza they promptly applied for an amendment of the plaint and it was allowed by the learned Judge overruling defendant No. 2's objection to it. The amendment in effect states that even if defendant No. 2 was not liable to the plaintiffs on the ground that the business was not a joint family business, still he was liable by reason of the provisions contained in Sections 247 and 248 of the Indian Contract Act as having been admitted to the benefits of the grocery business. At this date it is clear that if the plaintiffs had withdrawn their original cause of action and filed a fresh suit seeking to make defendant No. 2 liable under the provisions of Sections 247 and 248, their claim would have been barred by the law of limitation. The application for amendment was made in August 1980 and the adjustment on which the suit was brought passed in July 1926.

10. It is argued on behalf of the appellant that the learned Judge was in error in allowing the amendment for two reasons, firstly, that the amendment prejudiced defendant No. 2 and caused an injury to him which could not be sufficiently compensated for by costs, and, secondly, that the effect of the amendment was to deprive the appellant of a right which had accrued to him by lapse of time, that is, the right to plead limitation to the amended plaint. The second point was not specifically put before the learned Judge, for if it had been, I feel sure that the learned Judge would have hesitated before allowing the amendment. In view of the conclusion to which we have come on the merits, it is not necessary to examine in detail the contention put before us. But speaking for myself I have a doubt in my mind as to whether the amendment was properly allowed. It is established by decisions that if the effect of an amendment is to deprive a part of a right which bad accrued to him such as a right to pleadlimitation, such amendment ordinarily should be refused although if there are any exceptional circumstances in the case it may be allowed. I need only refer to the well known case of Weldon v. Neal (1887) 19 Q.B.D. 394 and the judgment of Lord Esher M. R. at p. 396. Mr. Coltman has argued that the amendment did not introduce a different cause of action so as to bring the case within the rule to which I have referred. Having regard to the frame of the suit and the evidence which is now before us I am unable to agree that the effect of the amendment was not to introduce in the case a different cause of action from that on which defendant No. 2 was originally sued. There is some force in his contention, however, that having regard to the conduct of defendant No. 2 this was an exceptional case within the meaning of the rule laid down by Lord Esher, and was properly allowed. The point, however, need not be pursued further.

11. As to the other objection to the amendment, however, speaking for myself, I am not prepared to say that the effect of the amendment was not to cause prejudice or injury to defendant No. 2, and forthis reason. Defendant No. 2 was originally sued as a member of a joint family and as a person having an interest in the joint family business and on that footing he agreed that the accounts of the joint family business should be taken for ascertaining the income for the purpose of his status. If he had been originally sued, not on the ground that there was a joint family businesss but on the ground that although the business was one which belonged to defendant No. 1 alone still defendant No. 2 was admitted to the benefits of it and therefore was liable to the extent of his share in the assets of the business under Section 247, two defences would have been open to defendant No. 2, (1) that he was not admitted to the benefits of the partnership under Section 247, and (2) if he was, then the accounts to be taken should be taken on the footing of a partnership between him and defendant No. 1. If this had been done, there is no doubt on the evidence he would have succeeded in establishing that his income from agriculture exceeded that from non-agricultural sources, as the partnership had made a loss of about Rs. 8,000 in 1918. There seems to me, therefore, considerable force in Mr. Somji's argument that the learned Judge was wrong in allowing the amendment. But in view of the conclusion to which we have come it is unnecessary to pursue the point further. The question then is whether the plaintiffs have succeeded in discharging the burden which lay on them to establish the amended cause of action against defendant No. 2.

12. At the outset I feel this difficulty that although the learned Judge states that he is satisfied on the evidence that defendant No. 2 was admitted to the benefits of the partnership he has unfortunately not referred to the evidence on which he bases his conclusion, and Mr. Coltman had to refer to the relevant evidence. Before dealing with the merits I would like to refer toMr. Somji's complaint that certain evidence was wrongly admitted by the learned Judge and used against defendantNo. 2. After the amendment was allowed, what happened was, that the whole record of the evidence given by defendant No. 1 before the Commissioner and that given by defendant No. 2 was tendered on behalf of the plaintiffs. It was objected to on behalf of defendant No. 2, but the objection was overruled by the learned Judge and the record admitted in evidence. The order made by the learned Judge shows that he admitted the evidence of defendant No. 1 not only as against him but also against defendant No. 2 as 'admissions ' made by defendant No. 1 on the ground that he was a witness for defendant No. 2. Now, with respect to the learned Judge, I think the procedure followed by him is not supported by authority and this is conceded by Mr. Coltman. The general rule is that an admission can only be given in evidence against the party making it and not against any other party. There are exceptions to this rule which are laid down under Sections 18 to 20 of the Indian Evidence Act. An admission made by defendant No. 1 could have been proved against him and similarly an admission of defendant No. 2 could have been proved against him. But to prove a statement made by a party and amounting to an admission within the meaning of Section 17 of the Indian Evidence Act is one thing and to admit the record of evidence given by a party on a former occasion on the ground that it contains some statements which are admissions is quite a different thing.

13. But the more serious objection to the course followed by the learned Judge is that he admitted the evidence of defendant No. 1 before the Commissioner as 'admissions' against defendant No. 2 on the ground that defendant No. 1 was examined by defendant No. 2 as his witness. Now, this order can only be supported under the first para. of Section 18 of the Indian Evidence Act, and so Mr. Coltman had to go the length of saying that a person called by a party as his witness would be an 'agent' within the meaning of that section. This seems to me, with respect, a bold proposition and has no authority in law to support it. Mr. Coltman's second argument was that defendant No. 1 was the manager of the joint family and therefore statements made by him which are admissions could be proved against defendant No. 2. Unfortunately, however, the facts are against Mr. Coltman, for when defendant No. 1 was examined before the Commissioner he had ceased to be the manager of the joint family if at all he was one before. As stated above, a partition was effected in March 1926 between defendant No. 1 on the one hand and defendants Nos. 2 and 3 on the other, and defendant No. 1 was examined as a witness for defendant No. 2 in June 1929. I think, therefore, that the evidence was wrongly admitted.

14. But, even if the evidence is looked at, I do not think that it carries the case of the respondents any further. The effect of the whole of the evidence is that the three defendants were living together, when defendants Nos. 2 and 3 were minors. Defendant No. 1 managed the joint family properties and did what he liked with them. He started various businesses which he stated were his own. All that is alleged against the appellant is that he sometimes sat at the grocery shop and sometimes made some entries in the account books of the shop. Apart from the fact that an entry in one of the books shows that after he attained the majority he was employed as a servant in the shop and his salary credited to him, there is hardly any evidence to justify the contention that defendant No. 2 was admitted to the benefits of the partnership in the grocery shop. I agree, therefore, that the appeal must be allowed with costs.


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