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Haridas Lalji Vs. Narotam Raghavji - Court Judgment

LegalCrystal Citation
Decided On
Case NumberSuit No. 930 of 1910
Reported in(1912)14BOMLR237
AppellantHaridas Lalji
RespondentNarotam Raghavji
hindu law--joint family property--self-acquired property--contribution is the test--manager--liability to account--minor coparceners--widow--maintenance--charge--estate on which it is a charge--transfer of property act (iv of 1882), sec. 130--actionable claim--transfer.; where a hindu father and sons and where hindu brothers live together as a joint family, work together and acquire property together, that property has the character of joint family property, as those terms are used in the hindu law, entirely irrespective of its having originated out of any former family fund.; the point of nicety, particularly where the case is that of a hindu father and his children, in determining precisely when the common family fund becomes imprinted with that character is to discover the intention.....seaman, j.1. this is a suit by the plaintiff to enforce partition of what he alleges to be joint family property in the hands of the defendant no. 1, his undivided uncle, and to have an account of all moneys received as joint family property by the said defendant no. 1 from some time, (it has never been very clearly stated by learned counsel for the plaintiff), before the death of raghovji, the father of the defendant no. 1 and grandfather of the plaintiff. the defendant no. 2 who is the widow of lalji, a predeceased son of raghovji and the step-mother of the plaintiff, has been impleaded as having a charge upon the whole joint family property for maintenance. in the alternative the plaintiff asks that the suit may be treated as a common administration suit of the estate of the deceased.....

Seaman, J.

1. This is a suit by the plaintiff to enforce partition of what he alleges to be joint family property in the hands of the defendant No. 1, his undivided uncle, and to have an account of all moneys received as joint family property by the said defendant No. 1 from some time, (it has never been very clearly stated by learned Counsel for the plaintiff), before the death of Raghovji, the father of the defendant No. 1 and grandfather of the plaintiff. The defendant No. 2 who is the widow of Lalji, a predeceased son of Raghovji and the step-mother of the plaintiff, has been impleaded as having a charge upon the whole joint family property for maintenance. In the alternative the plaintiff asks that the suit may be treated as a common administration suit of the estate of the deceased Raghovji.

2. It is well to recall some of the incidents which mark the earlier stages of this litigation.

3. Within about a month after the death of Raghovji, the plaintiff who is a minor, four years of age, was made to file a suit by his next friend Vallabhdas, for the administration of his grandfather's estate. Simultaneously an urgent motion was made before me for the appointment of a receiver to take possession of the defendant No. 1's shop, books of accounts, papers, and all his stock in trade. As soon as. the defendant could be heard, it was made to appear to me very clearly that that Interim Order for the appointment of a receiver had been obtained upon wholly inadequate grounds, and the whole proceeding bore the imprint of malice and oppression. I had no hesitation whatever in setting aside the order and discharging the receiver. Then there was an appeal but the parties settled the matter before the appellate Court on terms of defendant No. 1 himself being appointed receiver. It is noteworthy that up to this time it does not appear to have occurred to the plaintiff to suggest that the estate of the deceased Raghovji was joint family property between himself and the defendant No. 1. When the hearing of this case commenced, I was told by the learned Counsel for the plaintiff that the Interim Order for a receiver, which I had been induced to make, had materially contributed to justice and the elucidation of the truth. I wish I could bring myself to believe that that were really so. But considering that upon the most important question in issue between the parties, the plaintiff's chief evidence has been that of Hirji Topan, who is clearly on intimate terms with the next friend Vallabhdas of the minor, it is certainly strange that the original plaint should have been framed as it was and that it was only at a later stage and upon the discovery of certain papers, which the plaintiff alleges first gave grounds for this contention, that it was converted into its present form embodying a prayer for partition upon the footing that the whole property was joint family property and further the particularly oppressive prayer, which has really been the cause of this case having been fought out so bitterly, that the defendant No. 1 should be called upon to account as manager of the joint family for all moneys received over a period of many years during which Raghovji, his father and the plaintiff's grand-father, was still alive. There can, I think, be no doubt that the change in the character of the suit is attributable to the discovery of the fact that two life-policies aggregating in value some Rs. 10,000, had been assigned by Raghovji to defendant No. 1 and further to the desire, by menacing the defendant No. 1 with responsibility to account for very large sums of money, to bring pressure to bear upon him, to cripple him in the conduct of his business and, if successful, very likely to compass his complete ruin. I have felt very little doubt throughout the progress of the hearing about the true nature of the plaintiff's claim and the true motives of his next friend. Defendant No. 1 has contended throughout that this is not an honest litigation, that it has been set on foot by a rival in trade for interested reasons and also to make costs; and at the conclusion of the case I have no doubt that these contentions are substantially true. But for the plaintiff's insistence upon the defendant's liability to account as manager long before the death of his father Raghovji I do not think that there would have been any difficulty in settling the case without the need of protracting the hearing over many days. For so far as the question whether the family property was joint family property or not reaches, the rights of the plaintiff and the defendant No. 1 appear to me to be substantially the same and unaffected except touching the two policies, whether that question be answered in the affirmative or negative. And once or twice during the hearing defendant's counsel offered to give up the policies in satisfaction of the debts left by his father provided the plaintiff would withdraw his claim to any account prior to the death of Raghovji. That suggestion was not accepted and the result has been that the case has been fought out with great bitterness and, what I cannot help thinking, disproportionate expenditure of time and money.

4. When Mr. Lowndes opened his concluding address for the plaintiff, he very discreetly, and I may say very properly, admitted that in the state of the evidence he would not press the point which had really occasioned most difficulty throughout, namely, that the defendant No. 1 was at any time during Raghovji's lifetime acting as manager of the joint family. I have only to add to that that there does not appear to have been any foundation whatever for the assertion ever having been made. If I had entertained the slightest doubt about it even before hearing the defendant's evidence, the appearance of the defendant No. 1 in the witness-box and five minutes listening to the manner in which he gave his evidence, would have been enough to satisfy any Court that no reasonable man in the full possession of his faculties would ever have appointed defendant No. 1 in his place to be the sole manager of his domestic and business concerns.

5. All the evidence shows that whatever else Raghovji may have been, he was a man of considerable vitality and energy

6. It is common ground that he was entirely the architect of his own fortune, and by the time he withdrew from his partnership from Mulji Pudumsey & Co., he had amassed a considerable fortune. He appears to have oscillated between the pleasures and vanities of this world and austere preparations for the next. When not on the race course, he appears to have been on pilgrimage. But wherever he was, and whatever he was doing, he appears to have displayed considerable force of character.

7. The defendant No. 1, on the other hand, is a miserable creature with apparently little or no mind, no initiative, hardly any education, who from his school days onwards appears to have submitted to personal chastisement without murmur or complaint first at the hands of his school-master up to the age of twenty and thereafter at the hands of his volatile parents up to the age of over thirty. To suppose that any man in his senses who had built up his fortune for himself, would have entrusted the management not only of his business but of all his domestic expenditure to such a man as the defendant No. 1 is too absurd to need serious consideration; and yet it was upon this footing that the parties joined issue and that the greater part of this case was fiercely fought out. Indeed even in its final form the Court is still asked to believe that Raghovji during the concluding years of his life allowed his moneys to be withdrawn and mis-appropriated to his own use by the defendant No. 1 neither asking nor taking any account from him of his stewardship.

8. Since however the plaintiff has abandoned as a separate ground the contention that the defendant No. 1 was ever actually the manager of the joint family before Raghovji died, it is unnecessary to say more on that head.

9. There remains then the single question whether or not the property left by Raghovji was joint family property and in answering that question I must consider whether, if answered in the affirmative, it is not still open to the defendant No. 1 to show that the policies at any rate had not fallen into the general family fund and become affected with the character of joint family property.

10. I have been referred by both sides to my judgment in Karsandas v. Gangabai : (1908)10BOMLR184 , each side drawing therefrom arguments to suit its own purpose. I am glad that my attention has been drawn to that case because while it was being cited, I noticed a passage which certainly stands in need of correction. For there I appear to have put into the mouth of the most eminent and distinguished counsel at this bar an argument which I am sure that that learned Counsel could not have used. I refer of course to that passage in which I said that he argues from English coparcenary being always dependent on devise etc. It is just possible that in his long and intricate argument addressed to me that learned Counsel may have made that slip but I think it much more probable that the slip was mine and I take this opportunity, therefore, of saying that the passage ought to be corrected. Apart from that, I adhere to the principles laid down in that judgment although I must always remember that what purports to be a broad abstract classification of jural notions is subject to qualification when sought to be applied to varying facts as they may arise in each case. It is, I think, incontestibly true that where a Hindu father and sons or where Hindu brothers live together as a joint family, work together, and acquire property together, that property has the character of joint family property, as those terms are used in the Hindu law, entirely irrespective of its having originated out of any former family fund. The point of nicety, particularly where the case is that of a Hindu father and his children, in determining precisely when the common family fund becomes imprinted with that character, is to discover the intention of him or those who have the control of that fund or parts of it, that it should be appropriated to the common uses of the family. It is clear that where a Hindu father starting upon nothing begins to earn money for himself, it does not necessarily follow because he may have infant children whom he feeds and clothes and houses, that he intends or they expect that his individual earnings should become a common fund and so have all the legal incidents of joint family property. As the children grow up, particularly where they are associated with their father in his business, it becomes more and more difficult to define with any accuracy the point at which and the conditions under which accumulations of one kind become accumulations of the other. Where self-acquired property passes into joint family property, ordinarily the easiest and the most conclusive test is the crucial test of contribution. Where children earn as well as their father and contribute their earnings to the common family fund, then the presumption becomes almost invincible that that fund is joint family property. So also in the case of brothers living and working together if they contribute their earnings to a common fund.

11. In the present case, there might have been considerable difficulty on the facts adduced in determining what was the intention of Raghovji Couching the money he had himself made in spite of the fact that both his sons, the defendant No. 1 and Lalji, were employed in his business but for his own written declaration. I do not think it possible, in face of the terms of the release given by Raghovji and his sons to the firm of Mulji Pudumsey, to. doubt that this family was at that time in all senses a joint Hindu family and that the funds of the family were joint Hindu family property. This is not an isolated document, the same assertions were repeated, though not so explicitly, in other papers; and I do not think that it is open now to the defendant No. 1 to deny for himself alone that at any rate on and after the date of the release, the funds of the family were joint family property. But for those declarations I say the question might still have presented difficulties, for the evidence is that Lalji died while still too young to have really earned or contributed any thing, while Narotam swears that he was only employed as a kind of superior Mehta, selling goods over the counter. He swears that his father never paid him more than Rs. 5 a month. In strictness, however, that would go rather to support than refute the conclusion that the resultant wealth of the family, if any, had been contributed to by Narotam's exertions and personal service. For, if those services and those exertions were worth anything, they must have been worth considerably more than Rs. 5 a month and the surplus unestimated in money wages would of course represent his contributions to the family fortune. In the particular case after hearing the man speak for himself I might well doubt whether his employment really conduced to the welfare of the family trade. But I am now concerned rather with the general principle than the particular case and it would be a difficult, possibly an unsafe ground upon which to make an exception to that principle that a member of a family who had participated in its trade concerns as a manager without salary had not thereby contributed to the aggregated family fortune merely because the man himself appeared in the witness-box to be a foolish and incompetent person.

12. Thus far then I am of opinion that the Court must hold generally that the property left by Raghovji at his death was joint family property.

13. Then as to the two policies of Insurance. I have been told here that even assuming the Court were disposed to treat these as self-acquisitions ear-marked by Raghovji himself as such and disposed of in the way in which every Hindu may dispose of his self-acquired property, yet the assignments of these policies are bad and invalid. It was pointed out that all assignments of a chose in action used to be bad in common law unless specially authorized by statutes. I do not pause upon the exceptional cases in which the Crown is concerned. It is, however, equally true that a chose in action was always assignable at equity at any rate from a very early date for valuable consideration, and in this country our Courts are rather Courts of equity than Courts of common law. Since the Judicature Act, the rigidity of the old common law has been relaxed, yet when all is said by way of argument on this point the Courts here I suppose must come back to the terms of their own statute. Section 130 of the Transfer of Property Act if it is meant to be exhaustive would certainly appear to throw some difficulty in the way of accepting these assignments as good and valid. The terms of that section appear to require that, every good assignment of a chose in action should be an out and out unqualified assignment. Here the assignments are subject to two conditions, (i) that the assignee shall not deal with the chose in action assigned during the lifetime of the assignor, and (2) should the assignee predecease the assignor, the assignment is revoked. I have felt considerable hesitation in coming to any conclusion upon this rather novel point. I am, however, inclined to think that, having regard to the nature of the chose in action and of the conditions which are said to invalidate the assignment, it would not be necessary to take so strict a view once the conditions had been fulfilled and the assignment in this way become absolute. That is now certainly the case so far as defendant No. 1 is concerned. There can, as I have said, be no doubt as to the intention of the deceased Raghovji. I do not myself think in the events that have happened that that intention need be frustrated by reason of the rather strict terms of Section 130 of the Transfer of Property Act, but I confess that I am not free from doubt upon this point. It really has but little practical importance since the defendant No. 1's counsel has over and over again assured the Court, and I think I may accept that assurance, that the whole of this money will be applied in discharge of the debts of Raghovji. So that it will make little, if any, difference to the minor whether it is held to be personal property of defendant No. 1 or divisible between defendant No. 1 and the minor.

14. But I have not exhausted the condition precedent which I have assumed throughout this part of the argument namely, that these moneys were the self-acquired moneys of Raghovji and that he was free to dispose of them as he chose, notwithstanding the fact that the remainder of the property he left behind him has been found to be joint family property. These policies were taken out in the year 1900, and at that time, I think, there can be little difficulty in holding that neither defendant No. 1 nor his brother Lalji, the plaintiff's father, had contributed anything to the family purse nor can it be said that at that time Raghovji had evinced any very clear and definite intention of converting his self-acquisition into joint family property. So that, I think, it was quite open to him at that period, had he chosen to do so, to set apart as much as he pleased of all his accumulations for his own use.

15. It has been pointed out that the premia on these policies were afterwards paid out of the proceeds of the Mulji Pudum sey partnership in which, by his subsequent declaration, Raghovji has admitted that he treated himself and his children as a joint family in partnership with the said firm of Mulji Pudumsey. I think, however, in view of the acts of the deceased Raghovji and the clear intention they manifest to treat these policies as his own personal property and dispose of them as he chose, that that would be stretching the principle, upon which I find the first issue in plaintiff's favour, rather too far. I think that I can hold quite consistently with that principle that these policies were a self-acquisition and were kept apart as a self-acquisition by Raghovji and following upon that, though with less confidence, I hold that his assignment of them in the events that have happened is well enough and need not be disturbed.

16. I am reminded that I have said nothing on the subject of the lease of the shop. My excuse for that must be that it was not referred to by any learned Counsel in the long concluding addresses I have listened to yesterday and to-day. I do not, however, think that that item presents any special difficulties. That undoubtedly must be part of the general family property. No special contention to the contrary has been advanced by defendant No. 1 nor can I recall any grounds upon which such a contention could be sustained.

17. I have now upon these findings to dispose of the defendant No. 1's liability to account. In view of the abandonment of the contention that he was a manager, I cannot see how he can be asked to account for any period anterior to the death of Raghevji. The plaintiff has contended strenuously throughout that he has traced considerable sums of money to the hands of defendant No. 1 during the lifetime of Raghovji and his concluding argument was that when the brothers come to divide, each must throw all the common property he had into hotchpot so that the defendant No. 1 must still account for every thing which the plaintiff has traced or believes he has traced to his hands during his father's lifetime. I am quite unable to accede to. that view of the law or the liability of defendant no. 1 The broad and general rule is that while there is a manager of a Hindu family, he and he alone is responsible, and that those who seek partition must take the estate as they find it when partition is asked for. That general rule has its exceptions engrafted upon it in favour of the minor, for it is said that the rule rests upon the acquiescence or presumed acquiescence of all adult members of the family in the management, and no such acquiescence can be presumed in the case of minors. But it is going much too far to carry the liability of one member of the family back into the management of another. There cannot be the slightest doubt, after hearing the evidence, in my mind or I think in any mind, that to the last day of his life Raghovji retained complete control over all the family money. It is perfectly true that he left the defendant No. 1 in the position of manager of the shop. Beyond that I do not think that he confided any power to him. His letters of April 1908 to the defendant No. 2 appear to me to be conclusive upon this point and to the very end. The evidence, such as it is, is consistent with those letters and proves that in every detail of account that is to say in the handling in the management, in the spending of moneys, it was Raghovji, and not the defendant No. 1 who exercised authority.

18. As to the sums which the plaintiff believes he has traced to the possession of defendant No. 1 during Raghovji's lifetime, the defendant No. 1's explanation is that he merely carried those moneys to and fro at his father's bidding. Mr. Lowndes was disposed to laugh this out of Court. I on the contrary believe that it is very near the truth. The evidence of the brokers strongly confirms the evidence of Narotam on this point and, having regard to the observations I have already made upon the character of Narotam himself, I should find it difficult indeed to believe that Raghovji was allowing him to traffic in such large sums on his own responsibility. I believe that in every one of these dealings Raghovji was the true principal, that he both applied and received back the moneys, and, if they disappeared, it is from him and not from defendant

19. No. 1 that an account ought to be sought.

20. It has been suggested for the plaintiff that these moneys most certainly did come over to Narotam or to Raghovji and that Narotam has given the Court no satisfactory explanation of what has become to them. Three explanations were offered losses in business, losses in speculation, and losses in the turf. When challenged to produce the proof, Narotam admits that he is not in a position to show that there were losses in trade. Then there is nothing, Mr. Lowndes says, to point to any losses in speculation, while a few race-cards, which were found among the effects of the deceased Raghovji, show according to the plaintiff that he made a profit of some Rs. 2,ooo and no loss. No one, however, can guess or estimate what may or may not have happened during the last three or four years of Raghovji's life. No one knows how money betted on the turf may have melted away. These few papers which appear in Court were merely offered as proof of Raghovji's betting proclivities, no one pretends that they are exhaustive or represent the result of his turf betting, and as to his speculation we have no evidence at all. It is, however, abundantly clear, I think, that Raghovji was a speculator and a betting man, and anyone acquainted with the possibilities of loss in this direction would feel little surprise at the disappearance of Rs. 30,000 or 40,000 during the last three or four years of Raghovji's life. I do not think it necessary to go into such minor explanations as the defendant No. 1 suggested, namely, gifts to Shri Nathji, moneys spent on various family ceremonies and so forth. I do not think that it would be fair to ask any man to account for the expenditure of another, when once I am satisfied that it was that other who had the control of the moneys and the power of spending them virtually unchecked at his own will.

23. I do not think, therefore, that the plaintiff is entitled to anything more than an account of such properties as came to the hands of defendant No. 1 on the death of Raghovji sometime in September 1910. Of those properties he is certainly entitled to an account and equal partition, but I do not understand that defendant No. 1 has ever been unwilling to give him either. So that in this respect the litigation, which has been launched by one whom I consider to be utterly unscrupulous and actuated by personal and malignant motives, has in no way benefited the minor but has rather involved him in heavy pecuniary

24. There remains a question of the rights of defendant No. 2 in this litigation. She is represented by Mr. Wadia and he claims that her maintenance should be made a charge upon the entire property coming to the hands of the uncle and nephew before a partition is effected between them. In support of this claim he invites the attention of the Court to passages in such well-known text-book writers as Mayne and West and Buhler. These passages certainly lay down in the broadest terms that a widow's maintenance is a first charge upon the whole state and should be satisfied before that estate is divided. But when we come to look at the authorities upon which those passages professedly rest, it will be seen that the facts are quite different from the facts in this case. It does not appear to me to be necessarily Hindu law, as it certainly does not appear to be natural justice, that where there has to be a partition between let us say a brother and a nephew and the nephew has a mother, the mother's maintenance should be charged equally upon the two halves of the joint family property. Ordinarily I should have thought that such a maintenance charge ought to be defrayed from the property of that branch of the family to which the lady belongs. I do not know that in this case it will make any very substantial difference since I am afraid the amount is so small that the defendant No. 2's maintenance is likely to be inconsiderable. On principle, however, since she is the widow of the plaintiffs father and the plaintiff is to take half the property in place of his father, I think that the widow's maintenance ought to be a charge upon that half of the property and not made first a charge upon the whole before partition. So that if there is any need of this matter going before the Commissioner after this judgment, I think that the defendant No. 2's maintenance ought to be fixed upon the plaintiff's share of the property.

25. The result of this is that the plaintiff is entitled to have an account and partition of the assets which came into the hands of defendant No. 1 on Raghovji's death without the defendant No. 1 being called upon to account prior to that date and defendant No. 2's maintenance to be fixed with due regard to the poroportion borne by it to the whole share of the minor plaintiff when that share is ascertained upon the plaintiff's share.

26. At the conclusion of my judgment, Mr. Taraporewalla is instructed to say that on this judgment they will apply the policies to the discharge of Raghojvi's debts and any surplus will be divided equally with the minor.

27. Having heard counsel on the question of costs, notwithstanding the very ingenious manner in which Mr. Lowndes has presented his case, I still feel that the next friend of the minor has been answerable for litigation that never would have been brought before the Court had he not had other motives than those of concern for the minor only. I should, therefore, be extremely reluctant to give him out of the estate one penny more than I felt absolutely obliged to do by the result of the suit. I do not think, however, that it would be just to make any order for costs, until the Commissioner has had an opportunity of examining into the state of the family property.

28. I, therefore, shall reserve the order for costs until this matter comes back from the Commissioner.

29. I think it would be desirable in the interests of the parties that some competent receiver should be appointed to carry on the business until the partition has been effected.

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