Karamat Husain and Chamier, JJ.
1. The following pedigree will stow the relation of some of the parties to this case:
Gordhan Das______________________|______________________| |Ram Prased. Khairati Lal________________________ || | Keshab Deo.Raghunath Das Manohar Lal |Kashi Nath.
2. The plaintiffs, Munni Lal and Chhedi Lal instated this suit against Ram Prasad, Raghunath Das, Manohar Lal keshab Deo Kashi Nath, Ganpat Rai and Puran Chand on the following allegations. Ram Prasad, defendant No.1, was the proprietor and manager of the firm styled Gordhan Das Ram Prasad at Shts. In order to carry on the business of the said firm he borrowed from the plaintiffs Rs. 16,000 by hypothecating the family property, known as the Putaria Mahal in the city of Agra, under a registered bond, dated the 25th of January, 1903. Out of the amount of principal and interest due on the mortgage, Rs. 13,170 were paid by Babu Puran Chand, defendant No. 6, on the 4th of September, 1906. The balance, amounting to Rs. 6,585, has not been paid by the defendants. Keshab Deo, after the execution of the mortgage bond dated the 25th of January, 1903, in. order to defraud the plaintiffs and other creditors, sold a portion of the hypothecated property to Ganpat Rai by a deed, dated the 14th July, 1905, alleging himself to be the adopted son of Khairati Lal. Keshab Deo and his representative in interest, Ganpat Rai, are bound to pay the balance due on the mortgage bond inasmuch as the property of the family was mortgaged for the payment of debts contracted in the ordinary course of the business of the firm and for the benefit of Keshab Deo and his representative Ganpat Rai. The plaintiffs, on the above allegations, prayed for the recovery of the balance by sale of the property hypothecated. The pleas put forward by Ganpat Rai were to the effect that Keshab Deo was the adopted son of Khairati Lal; that the mortgage deed, dated the 25th of January, 1903, was a fraudulent transaction; that no consideration passed for it; that the debts for payment of which the mortgage deed was executed were not contracted for any legal necessity, nor were they of such a nature as to be binding on Keshab Deo or his representative ; that Ram Prasad at the time of the execution of the mortgage deed was not. the manager of the firm, and that he had no authority to transfers the joint family property, nor did he in that capacity execute the mortgage deed in question. The court below framed the following issues:--(1) Whether Ram Prasad was the manager and working agent of the firm Gordhan Das, Ram Prasad; whether he in the same capacity executed the mortgage deed, dated the 25th of January, 1903, and whether the said deed was executed for consideration. (2) Whether Keshab Deo is an adopted son of Khairati Lal and how far he and his representative, Ganpat Rai, are bound by the mortgage deed in suit. (3) Whether the plaintiffs are entitled to the interest claimed. Is there any mistake in the calculation of the amount? (4) Whether two-thirds of the 'house purchased by defendant No. 6 are not liable for the plaintiffs 'claim. (5) To what reliefs are the plaintiff's entitled? The Court found as a fact that Ram Prasad was the manager and working agent of the firm Gordhan Das Ram Prasad; that he executed the mortgage deed in his capacity of a managing member of the firm; that the deed was executed for consideration ; that Keshab Deo was the adopted son of Khairati Lal; that there was no sufficient evidence of the fact that the debts for the payment of which the mortgage deed was executed were gambling debts, and that Ganpat Rai, the representative of Keshab Deo, was bound by the mortgage in suit. On these findings the court below decreed the plaintiff's suit. Lala Ganpat Rai, the vendee under the deed of 14th July, 1905, has appealed, and the plaintiffs have filed objections. The substance of the pleas taken in the memorandum of appeal is that the mortgage deed was executed without consideration ; that it was a fraudulent transaction; that Ram Prasad was not competent to borrow the money; that he was not the manager of the firm at the time of the execution of the mortgage deed; that the mortgage deed was not executed for the benefit of the firm or for legal necessity or for the benefit of Keshab Deo or with his consent, and that the share of Keshab Deo now in the possession of the appellant as a bond fide purchaser was not liable for the payment of the debt contracted by Ram Prasad. The substance of the objections taken by the plaintiffs is that the adoption of Keshab Deo is not proved nor is it pro- that Khairati Lal authorized his wife to adopt a son. For the reasons stated by the learned Additional Judge in his judgment, we agree with him that Ram Prasad was the manager of the firm styled Gordhan Das Ram Prasad; that the mortgage deed dated the 25th of January, 1903, is not a fraudulent transaction, and that it was executed for consideration. The only points which remain for determination are the following:--Is Keshab Deo the adopted son of Khairati Lal? Are the debts for the payment of which the family property in question was mortgaged gambling debts Is the share of Keshab Deo, which was purchased by the appellant, Ganpat. Rai, liable for the payment of the mortgage debt?.
3. [A portion of the judgment dealing with the evidence as to the first and second points is here omitted. The court found that Keshab Deo was the adopted son of Khairati Lal. The judgment thus continued:]
4. We therefore, disagreeing with the learned Judge of the court) below, hold that the debts for the payment of which the mortgage deed of 25th January, 1903, was executed by Ram Prasad were gambling debts. That being so, they cannot be regarded as the debts contracted by Ram Prasad in his capacity of a manager of the firm in the course of the ordinary business of firm, and if the statement of Munni Lal that he lent the money to Ram Prasad alone be taken into account, it becomes evident that Ram Prasad was not raising funds for the ordinary business of the firm. There is no evidence to show that there was any urgent necessity for raising that money by the mortgage of the family property, nor is there any evidence that Keshab Deo was in any way benefited by that loan or that it was raised with his consent. In these circumstances it is necessary to see what is the law applicable to the facts of the case. In Soiru Padmanabh Rangappa v. Narayanrao bin Vithalrao (1893) I.L.R. 18 Bom. 520 it is laid down that there is no presumption that a loan contracted by a manager of a joint Hindu family has been contracted for family purposes. In Sunkur Pershad v. Goury Pershad (1879) I.L.R. 5 Calc. 321 it is laid down: 'The condition of a Hindu family is primd facie joint, and, therefore, property held by the managing member of a Hindu family is primd facie joint;' but as there is nothing to prevent an individual managing member from contracting debts on his own account there is no presumption that a 'debt contracted by him is joint.' In Nagendra Chandra Dey v. Amar Chandra Kundu (1903) 7 C.W.N. 725 it was held that in order to make the brother of the manager liable it was necessary to find (1) whether the trading business was a joint family business, (2) whether the note given was for the purposes of the trading business of the family, and (3) whether the amount covered by the note was appropriated to the purposes of such trading business. In Krishna Ramaya Naik v. Vasudev Venkatesh Pai (1896) I.L.R. 21 Bom. 808 (815) it is laid down that there is no presumption that money borrowed by a manager was borrowed for family purposes. The above cases are authority for the proposition that there is no presumption that a debt contracted by the manager of a firm or family was contracted for the benefit of the firm or family, and the plaintiff who seeks to bind the other members of the joint family will have to prove that it was a debt contracted for their benefit or with their consent, or that there was an urgent family necessity therefor. During the course of his argument the learned advocate for the respondents relied on Sheo Pershad Singh v. Saheb Lal (1892) I.L.R. 20 Calc. 453. But that case does not touch the points which we have to determine. In that case the debt was incurred in the ordinary course of business, and a decree was passed in execution of which the family property in dispute in that case was sold, and the plaintiffs as members of a joint Hindu family sued for a declaration that their shares were not liable. The Calcutta High Court with reference to the facts of that case came to the conclusion that the plaintiffs were not entitled to the declaration they sought, As in the case before us the plaintiffs have failed to prove that there was any real necessity for the loan, or that the loan in question was taken with the consent of Keshab Deo, or that he in any way was benefited thereby, and as there is evidence that the debts for the payment of which the family property was mortgaged were gambling debts, we are of opinion that the share of Keshab Deo which was sold to Ganpat Rai is not liable for the payment of those debts. The result is that we allow the appeal and set aside the decree of the court below in respect of the property which was sold by Keshab Deo to Ganpat Rai.