1. This appeal arises out of a suit brought by the plaintiffs-appellants for the recovery of money due on a mortgage effected by Dwarka Singh and Kuar Singh on behalf of the defendants and certain minors in favour of Jagmohan Das, Raghunath Das and Baijnath Das on the 25th of November 1919, and the main question for consideration was whether the mortgage bond aforesaid had been allotted by partition to the plaintiffs, i.e., to the branch of Jagmohan Das and Baijnath Das; and if so, was that partition binding on the contesting defendants-respondents who were the other members of the family to which the mortgagees originally belonged.
2. At the time the mortgage died was executed Raghunath Das, Jagmohan Das and Baijnath Das were joint. Hari Das another member of the same family had separated some time in 1917. Baldeo Das, a descendant of the branch of Girdhar Das, had similarly separated in 1919. When Hari Das separated the indigo factory at Bela and the village of Sheopurwa with the tenancy and mortgagee rights appertaining to the same were left with the branches represented by, Raghunath Das Jagmohan Das and the descendants of Girdhar Das. When Baldeo Das separated some cash was given to him, and he went out of the family estate. The allegation of the plaintiffs was that in 1921 there was a further partition and the mortgage bond in suit along with the indigo factory at Bela and the village of Sheopurwa with the tenancy and mortgagee rights appertaining to the same were sold by auction with liberty to each of the members of the family to bid for the same and then to divide the sale proceeds, and that by virtue of the arrangement and the sale so effected the mortgage bond in question was allotted to the shares of Jagmohan Das and Baijnath Das, who paid Rs. 43,400, for the purchase of the said lot. Badri Das, one of the sons of Lachman Das and the sons of Raghunath Das contested the exclusive right claimed by the plaintiffs to sue for the recovery of the mortgage money. They denied that any partition had been effected and further pleaded that if it was effected it was not binding on them.
3. The trial Court found that the property in question representing the Bela factory and the village Sheopurwa, including the tenancy and mortgagee rights appertaining thereto, had been purchased by Jagmohan Das and Baijnath Das for an inadequate value, and that the consent of Bisheshar Prasad, the elder brother of Badri Das, could in no case bind Badri Das or the other members of the family to the partition of the said property by the method which was then adopted to effect the same.
4. The lower appellate Court however held that the sale to Jagmohan Das and Baijnath Das was effected for an adequate value, but that Badri Das was not bound by the act of Bisheshar Prasad, his elder brother, in agreeing to the partition of the family property being effected in that manner, and that as the partition was not binding on Badri Das it could not be enforced against the other members of the family, who were disputing its validity. Both the lower Courts agreed in finding that Badri Das was not a consenting party to the above partition and that he was not present at the time it was made, nor had he otherwise authorized Bisheshar Prasad to agree to it on his behalf.
5. There was no suggestion made in the pleadings on behalf of Badri Das that he was separate from his brother Bisheshar Prasad. In his deposition he stated that he was employed as a Railway Engineer at Fyzabad, and used to come to Benares two to four times a month, but he had separated from Bisheshar Prasad. He did not however produce any evidence in support of that allegation, and the Courts below, acting on the presumption that he must have been joint with Bisheshar Prasad, his elder brother, proceeded to consider whether the act of Bisheshar Prasad as the manager of the family in agreeing to the said partition by auction sale was binding on him. It does not appear to have been disputed before them that Bisheshar Prasad was the manager of the particular branch of the family to which Bisheshar Prasad, Badri Das and Sri Nath Das belonged; and the only point that seems to have been seriously challenged was whether Bisheshar Prasad could, on his own authority, agree to a partition by auction sale so as to bind the adult members of that branch.
6. As observed by their Lordships of the Privy Council in Hari Baksh v. Babu Lal AIR 1924 PC 126 the fact of a separation having been effected between brothers, who constituted a joint Hindu family governed by the Mitakshara, raises no presumption that there was a separation within each branch or a separation of the joint family, constituted by one of the brothers and his descendants. The effect of the separation obtained by Hari Das and Badri Das was to destroy the presumption as to the existence of a joint family between the different branches to which Hari Das and Baldeo Das respectively belonged, but it did not raise any inference that the descendants of each branch had similarly separated amongst themselves. In the absence of any evidence to the contrary the presumption that the descendants of each branch remained joint amongst themselves continued, and since Bisheshar Prasad was the eldest member of the family, to which Badri Das and his brother Sri Nath Das belonged, and he admittedly looked after the family business and property while Badri Das was away, he must be regarded as having been the de facto manager of the family. In his dealings with third parties he could represent the family and adopt all possible steps to protect the family interests, and we can see no distinction in principle between his dealings in connexion with the partition of the family property with the other branches and his dealings with third persons in respect of other matters as long as he acted as a prudent manager intent upon protecting and preserving the family interests. In other words, if no fraud or collusion or bad faith was established he could bind the other members of the family, of which he was the manager, in the matter of the partition of the family property between his own branch and the other branches of the family in the same way as he could bind the other members of his family in respect of other dealings connected with that property other than a voluntary sale or a transfer for his personal benefit.
7. In a Hindu family the karta occupies a position superior to that of the other members in so far as he manages the family property or business or looks after the family interests on behalf of the other members. In fact he exercises a complete authority over the family affairs, as the common interests requiring protection, so long as full and absolute confidence is reposed in him by the other members and no separation is effected, but that authority does not include an authority to transfer or alienate the family property except for family purposes. A partition of the family property between his branch and the other branches of the family is not an alienation and if he acts in good faith and in the interests of the family to which he belongs or of which he is the manager, that partition is binding on the adult members of the family, and particularly on those who are absent on employment elsewhere or are minors unless there is anything to show that they were prejudiced by it. In the present case the lower appellate Court found that there was no prejudice either to the minors or to the absent adult members of the family and the partition must therefore be deemed to be binding on the persons on whose behalf he is shown to have acted.
8. Manu says that after the death of the father and the mother the sons, being assembled, may divide among themselves the paternal and the maternal estates, or the eldest brother may take the entire patrimony and the others may live under him as they lived under their father, unless they choose to be separated (Manu XI, 104, 105). He further declares:
By the eldest at the moment of his birth, the father, having begotten a son, discharges his debt to his own progenitors; the eldest son therefore ought, before partition, to manage the patrimony (Manu 9, 106),
9. It was stated by Jagmohan Das that the partition was effected by the heads of the different branches, who had agreed to the sale of Bela and Sheopurwa properties including the mortgage deed in question by sale as the most convenient arrangement for the allocation of the property. In fact the proceeds derived from the sale divided between the different branches represented by Raghunath Das, Jagmohan Das, and Girdhar Das each of whom was allotted one third share, and the lot prepared at the time bears the signature of Raghunath Das, Jagmohan Das and Bisheshwar Prasad.
10. It is argued on behalf of the defendants-respondents that the interests of Badri Das and the other contesting defendants could not have been transferred by the auction sale except by a registered deed evidencing the transfer. It is admitted that no registered deed of conveyance was executed in this case, but it does not appear that any such deed of conveyance was necessary, because whether Raghunath Das, Jagmohan Das and Bisheshar Prasad and the members of the family, whom they represented, where as between themselves, tenants in common or joint tenants, there was no actual transfer by one branch of the family of their interests to the other. A partition may be effected in respect of each property by metes and bounds or by an interchange of separate or distinct properties and it may similarly be effected by an auction sale of any of the properties with the right of purchase restricted to the members of the family who have a joint interest therein to be followed by a distribution of the sale proceeds realized from the same. The Court below has granted the plaintiffs a decree subject to the rights of the contesting defendants, but as we find that the partition is binding on them, that portion of the decree must be discharged.
11. We allow the appeal accordingly and modify the decree passed by the Courts below so as to declare the exclusive right of the plaintiffs to recover the mortgage money in question by the sale of the mortgaged property without any reservation of rights in favour of the defendants second party, being the Defendants Nos. 5 to 18. The plaintiffs will get their costs here and in the lower appellate Court from the defendants second party, including fees in this Court on the higher scale. The defendants will bear their own costs throughout.