Skip to content

Lala Sri Ram Vs. Lala Parshadi Lal (Deceased Through His L.Rs.) - Court Judgment

LegalCrystal Citation
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal Nos. 56 and 476 of 1956
Reported inAIR1982All60
ActsHindu Law; Code of Civil Procedure (CPC) , 1908 - Sections 96 and 100; Indian Penal Code (IPC), 1860 - Sections 405
AppellantLala Sri Ram
RespondentLala Parshadi Lal (Deceased Through His L.Rs.)
Appellant AdvocateA.N. Bhargava and ;J.N. Chaterji, Advs.
Respondent AdvocateS.N. Agarawal, Adv.
DispositionAppeals dismissed
family - alienation of joint family property - hindu law, sections 100 and 96 of code of civil procedure, 1908 and section 405 of indian penal code, 1860 - suit questioning validity of alienation of joint family property to pay back the misappropriated money - nothing immoral or illegal - no criminal breach of trust - held, alienation legal and legal representatives are bound by it. - - 8. sri ram, major and his three minor brothers, filed a regular civil suit as well before filing the objection under order 20 rule 100 c. out, of this latter amount he invested some of it in augmenting the family business which was in a poor condition and such investment was for the benefit of the family. 6. as regards sri ram, it has been held that he was a major on 3-9-1940 but the fact that he did.....r.r. rastogi, j.1. these two appeals are inter-linked and may be conveniently taken up together.2. the following pedigree is relevant for the appreciation of the case. ghasi ram _____________________|_____________________ | | | genda mal madho ram bhikhari das d. 11 | | | ___________|____________ thakur das ram swarup | | | (died issueless) d. 12 shyam kunj lal | govind bahari behari ____________ |_____________________ | | | | sri ram sita ram ram ram p. 1 p. 2 govind auter p. 3 p. 43. sahu har prasad and raja radha raman of pilibhit had an oil mill at pilibhit. at the same time ghasi ram and bhikhari das was a firm carrying on business in food grains of a long standing at pilibhit. this firm entered into a partnership with sahu har prasad and raja radha raman under an instrument of.....

R.R. Rastogi, J.

1. These two appeals are inter-linked and may be conveniently taken up together.

2. The following pedigree is relevant for the appreciation of the case.



| | |

Genda Mal Madho Ram Bhikhari Das

D. 11 | |

| ___________|____________ Thakur Das

Ram Swarup | | | (Died issueless)

D. 12 Shyam Kunj Lal

| Govind Bahari Behari

____________ |_____________________

| | | |

Sri Ram Sita Ram Ram Ram

P. 1 P. 2 Govind Auter

P. 3 P. 4

3. Sahu Har Prasad and Raja Radha Raman of Pilibhit had an oil mill at Pilibhit. At the same time Ghasi Ram and Bhikhari Das was a firm carrying on business in food grains of a long standing at Pilibhit. This firm entered into a partnership with Sahu Har Prasad and Raja Radha Raman under an instrument of partnership executed on 20-1-1926. The management of the oil mill was entrusted to the firm. It appears that the business did not prosper and there were Josses and as on 12-5-1934 when accounts were taken the share of the firm in the losses came to Rs. 21046/13/-. The firm executed a pronote in respect of that amount in favour of Sahu Har Prasad and Raja Radha Raman. Sometime thereafter partnership was formed between this firm and the aforesaid two gentlemen for running the oil mill business and Ram Swarup was entrusted with the job of looking after that business. From the profits of that business some payments were made towards the aforesaid pronote and on 31-3-37 it was renewed for Rs. 20046/13/- and again on 21-1-40 for Rs. 16900/-.

4. The business of the oil mill again ran into difficulties because Ram Swarup made some withdrawals for payments on behalf of the partnership firm but did not debit those amounts in the books of the firm. Further, he made some realisations on behalf of the firm but did not credit those amounts in the books of the firm. Ultimately when Sahu Har Prasad came to know of the sorry state of affairs in which this business was, he asked for accounts. On 30-8-40 some sort of accounting was done and Sri Ram one of the sons of Ram Swarup who was a major at that time wrote out the accounts and it was found that a sum of Rs. 26398/-10/3 which had not been credited in the books of the firm had been misappropriated by Ram Swarup. By that time the family comprised of Genda Mal his son Ram Swarup grandson Sri Ram and the three sons of Madho Ram, as adult members. Further, this family was possessed of eleven items of immoveable properties. They agreed to sell all these properties to Sahu Har Prasad and Raja Radha Raman for a total sum of Rs. 44100/-, the consideration being comprised of the amount due on the pronote dated 21-1-1940 and the amount which was found to have been misappropriated by Ram Swarup. The remaining amount appears to have been given up by Sahu Har Prasad and Raja Radha Raman. This sale deed was executed on 3-9-1940.

5. On the very next day i. e. 4-9-1940 Sahu Har Prasad and Raja Radha Raman sold properties Nos. 8. 9 and 10 to Lala Parshadi Lal, who is father-in-law of one of the sons of Madho Ram. The consideration was Rs. 7000/-. Property No. 8 is the residential house of Genda Mal and Ram Swarup.

6. It appears that these persons did not vacate that house and Parshadi Lal filed a suit against them being suit No. 4 of 1942. That suit was decreed ex parte and in the execution of that decree Parshadi Lal obtained actual possession over this property, on 22-5-1944. On 5-7-1944. Sri Ram and the other three sons of Ram Swarup who were noticed filed an objection under Order 20 R. 100 C. P. C., being Misc. Case No. 117 of 1944. Their claim was accepted and it was held in those proceedings that the sale deed dated 3-9-1940 aforesaid being in lieu of embezzled amount was not binding on the sons of Ram Swarup. Restoration of possession was directed to be made. Parshadi Lal filed a revision against that order in the High Court and obtained an interim stay order. The revision was not admitted and Parshadi Lal filed suit No. 8 of 1945 against Sri Ram and his brothers for declaration that he was owner of house No. 3 and was entitled to remain in proprietary possession thereof.

7. The suit has been contested by the sons of Ram Swarup and the main defence is that the sale deed having been executed in respect of embezzled amounts was void ab initio. In regard to the earlier liability due under the pronote aforesaid, it was contended that there was no such legal liability. Another contention raised was that the disputed property had been purchased by Genda Mal and others benami in the name of Parshadi Lal and that Genda Mal and Ram Swarup had adverse interest in that suit and did not represent the defendants and they also allowed the suit to be decreed ex parte.

8. Sri Ram, major and his three minor brothers, filed a regular civil suit as well before filing the objection under Order 20 Rule 100 C. P. C. That suit was filed on 29-4-1944 with an application for permission to sue as indigent persons. That prayer was allowed and the suit was registered as suit No. 5 of 1946. The case taken up by them in the plaint was almost the same which was taken by them in written statement in Parshadi Lal's suit except with this difference that about Sitaram it was said that since his consent was not obtained for this alienation he was not bound by it.

9. The defendants to the suit were Lala Har Prasad and Raia Radha Raman, defendants 1 and 2, Defendants 3 to 10 were subsequent transferees of the disputed properties. Defendants 11 and 12 were Genda Mal and Ram Swarup. Since in the mean time proceedings under the Provincial Insolvency Act had been taken against Ram Swarup, the official receiver was impleaded as defendant No. 13.

10. The suit was contested by defendants 1 and 2 who filed one written statement defendant No. 3, filed another. Defendants 4 to 8 and 9, also filed their written statements. The defence taken by defendants 1 and 2, inter alia, was that the disputed sale deed had been made for legal necessity and for the benefit of the family. It was for consideration, inasmuch as rupees 16,900/-, It was for payment of the earlier pronote and the remaining consideration was in lieu of the amount found due against the firm when accounts were taken on 30-8-40. It was claimed that the defendants gave up their claim to the remaining dues because Genda Mal and others had executed the sale deed in respect of all their immoveable properties. It was also claimed that since defendants 1 and 2 had sold away all these properties, they were not necessary parties to the suit.

11. The defence of Lala Parshadi Lal was the same as were the allegations made by him in his suit No. 8 of 1945. The contesting subsequent transferees apart from filing the written statements did not participate in the subsequent proceedings.

12. Sahu Har Prasad died during the pendency of the suit and his legal representative was brought on record, who filed a separate written statement but raised the same defence as had been raised by his father.

13. A large number of issues were framed in both the cases by the court below. With the consent of the parties the two suits were consolidated and decided by a common judgment. The main finding recorded by the court below are as under.

1. The business was originally started by Ghasi Ram. Some of the disputed properties were acquired by him and the rest were acquired from the proceeds of that business and in this way the entire properties in dispute were ancestral.

2. That the pronote dated 21-1-1940 for Rs. 16900/- being in respect of dues payable by M/s Ghasi Ram Bhikhan Das, was valid and it was ultimately set off in the consideration of the sale deed dated 3-9-1940.

3. That both the first and second partnership which were entered into between Ghasi Ram Bhikhari Das on the one hand and Sahu Har prasad and Raja Radha Raman on the other, did not represent the exclusive business of Ram Swarup.

4. That Ram Swarup had no permission to take out money from the oil mill business and invest the same in firm Ghasi Ram Bhikhari Das, that he did not debit the following three amounts in the books of the partnership business :--

(i) Rs. 4,050/- debited in the name of Banwari Lal Ratan Lal.

(ii) Rs. 2000/- debited in the name of Garib Das Harnam Das and

(iii) Rs. 2,200/- debited in the name of pursottam Saram Ram Rakshpal. Similarly there were numerous receipts made by him on behalf of the partnership business which he did not credit in the books and thus taking out of the money of the business amounted to an act of misappropriation.

5. The learned Civil Judge has, further, found that the consideration of the impugned sale deed was made up of Rs. 16900/- which was legally due under and earlier pronote and Rs. 26398/10/3 which had been misappropriated by Ram Swarup. Out, of this latter amount he invested some of it in augmenting the family business which was in a poor condition and such investment was for the benefit of the family. He also invested some amount in forward transactions but it had not been proved that they were speculative in nature and that they could not have been done by the firm itself. The alienation was, thus, binding on the plaintiffs.

6. As regards Sri Ram, it has been held that he was a major on 3-9-1940 but the fact that he did not join in the sale deed was not of much consequence because he being joint with his father and grandfather it would be taken that the alienation made by them was on his behalf as well.

7. The learned court below has also held that Parshadi Lal was not the benamidar of Genda Mal and others but he was the real purchaser of properties Nos. 8, 9 and 10. The remaining findings are not of much consequence. Ultimately the suit of Sri Ram and others being suit No. 5 of 1946 has been dismissed with costs to the contesting defendants Suit No. 8 of 1045 of Parshadi Lal has been decreed for declaration that he is owner of the disputed house i. e. property No. 8 and he is entitled to remain in proprietary possession of it. He has also been awarded the costs of the suit. Aggrieved these two appeals have been filed, one by the plaintiffs of suit No. 5 of 1946 and the other by the defendants of suit No. 8 of 1945 who are none else but Sri Ram and his brothers, sons of Ram Swarup.

14. Two contentions were urged on behalf of the plaintiffs appellants by their learned counsel Sri G. P. Bhar-gava, firstly that the entire property in dispute having been found to be ancestral, burden lay on the alienees to justify the alienation and that in the present case it being admitted that the transfer was made in consideration of moneys misappropriated by Ram Swarup, there can be no room for any doubt that the alienation was void ab intjo. Accord-ing to the learned counsel the debt, if any, was immoral or Avayaharika. The second submission was that the transfer, having been made for inadequate consideration, is liable to be set aside even if it is found that it was for legal necessity.

15. We may first take up the second submission. As for inadequacy of consideration, there was no plea taken by the plaintiffs-appellants either in their suit for cancellation of the sale deed or in their written statement filed in the case of Parshadi Lal. No issue was framed on any such plea. Evidently, therefore, this plea cannot be entertained at this stage. Nonetheless it was contended by Sri Bhargava that he can raise such a legal point because of the fact that such is the law laid down by Full Bench of this Court in Dudh Nath v. Sat Narain Ram : AIR1966All315 . This decision was not available to the plaintiff-appellants at the time when they filed the suit for cancellation of the disputed alienation or when they filed their written statement in Parshadi Lal's suit. According to the learned counsel this Full Bench decision has made a change in the law applicable in this behalf and, therefore, it should be taken notice of and since this plea goes to the very root of the case, the plaintiffs-appellants should be allowed to raise it. We are not inclined to agree with this learned submission. It may be that this plea goes to the root of the case but it is neither a pure question of facts nor can it be said that for the first time any change in law has been made by the Full Bench in Dudh Nath's case. The question referred to the Full Bench in Dudh Nath's case was :-- (at p. 315).

'Whether an alienation of ancestral joint family property by a Hindu father is not binding on his son if it was made for inadequate consideration, even if there was legal necessity.' The answer given to this question by the Full Bench is that an alienation of ancestral ioint family property by a Hindu father is not binding on his son if it was made for inadequate consideration even though it was made for legal necessity. Their Lordships have referred to 'several earlier decisions of this Court on this point. In Kailash Nath v. Tulshi Ram : AIR1946All349 , i1 was laid down that an alienation by a Hindu father of joint family property would be valid only if in addition to the legal necessity it was also proved that the property was not alienated for wholly inadequate consideration. In that case property worth Rs. 40,000/- was sold for Rs. 30,000/-. The consideration was held to be inadequate and the sale was set aside. In Kailash Nath's case reliance was placed on the decision of Judicial Committee in Ram Charan Lonia v. Bhag-wan Das Maheshri. ILR (1926) 48 All 443 : (AIR 1926 PC 68). The Judicial Committee observed in this case :--

'In these circumstances, a transaction even involving the disposal by Gopal Das of this entire immovable family property might well be justifiable and be binding on the whole family provided the property was not sacrificed for an inadequate price and provided the consideration was calculated to relieve the necessity, the existence of which called for the disposition.' Referring to these observations it was observed in Kailash Nath's case : AIR1946All349 (supra).'

'It is, therefore obvious that the adequacy of the price was a factor emphasized by their Lordships and that it was not merely enough that the consideration was calculated to relieve the necessity. Both conditions were to exist. Their Lordships, therefore, proceeded to consider the market value of the property and to see whether Ram Narain agreed to sell it for its proper value or sacrificed it for on inadequate consideration.

16. D. F. Mulla in his principles of Hindu Law, 14th Edition, in para 245 at page 308 has stated the principle as below :--

'Although there may be legal necessity justifying alienation, it is not open to a father or other manager to sacrifice family property for an inadequate consideration. A transfer in such cases is liable to be set aside at the instance of other coparceners.

17. As for this principle reliance has been placed by the learned Author upon Kailash Nath's case (AIR 1946 All 3491 (supra).

18. There is vet another earlier decision of this Court which throws some light on this question. It is in Bankey Lal v. Natha Ram : AIR1929All199 .

In that case Sulaiman J, was of the opinion :--

'I am not prepared to say that once necessity has arisen for the transfer of ancestral property the sale by the father is always binding on the minor members no matter whether the consideration is grossly inadequate or not.' However Ashworth J. expressed some doubt and observed :--

'I consider it open to doubt whether when once it is shown that a sale by a Hindu father and manager is necessary, any suit, will lie against the vendee on the ground of insufficiency of price, inasmuch as the father is empowered to make arrangements for the sale and the vendee can scarcely be expected to see that the price is inadequate. According to his Lordship unless there is fraud or collusion imputed, a suit will not lie for cancellation of an alienation of a joint Hindu family property made by a father on the ground of inadequacy of price.

19. Any how, after the decision of Kailash Nath's case which in turn was based on the decision of the Judicial Committee in Ram Charan Lonia's case (AIR 1926 PC 68) so far as this Court is concerned it had become a settled law that an alienation by a Hindu father of a joint family property would be valid only if in addition to the legal necessity it was also proved that the property was not alienated for wholly inadequate consideration. It is, therefore, not correct for Sri Bhargava to urge before us that it was Dudh Nath's case : AIR1966All315 which made a change in the law in this behalf and that the decision in Kailash Nath's case : AIR1946All349 (supra) was only an obscure decision and hence he cannot be estopped from taking this plea. No doubt, it is well settled that an appellate Court is entitled to take into consideration any change in the law, vide Lachmeshwar Pd. Shukul v. Keshwar Lal Chaudhuri and Kotturuswami v. Veeravva : AIR1959SC577 , but, as discussed above, it was not a subsequent change in the law made in Dudh Nath's case. We, therefore, decline to entertain this submission.

20. We now pass on to consider the first submission advanced before us by Sri Bhargava. Before examining this contention on merits, we have to be clear about the legal aspect applicable to this question. Under the Mitakshara system of Hindu Law sons, grand-sons, great grand-sons are bound to pay all debts contracted by the father, grandfather or great-grand-father unless they are tainted with immorality or illegality. This liability is based on the pious obligation of the sons which continues to exist in the lifetime and after the death of the father. It does not come to an end even if there is a partition of the joint family property unless a provision had been made for the payment of the just debts of the father, grand-father or the great-grand-father as the case may be.

21. A question arises as to what are immoral or illegal debts, better described as Avyavaharika in the Hindu texts. Various definitions of this expression have been attempted but its translation by Colebrooke as 'a debt for a cause repugnant to good morals' has been taken to represent its correct meaning by the Supreme Court in S. M. Jakati v. S. M. Borkar : [1959]1SCR1384 . An attempt has also been made by Mulla in his Principles of Hindu Law, Fourteenth Edition to illustrate at page 385 as under:--

(1) debts for spirituous liquors:

(2) debts due for losses -- at play;

(3) debts due for promises made without consideration;

(4) debts contracted under the influence of lust of wrath;

(5) debts for being surety for the appearance or for the honesty of another;

(6) unpaid fines;

(7) unpaid tolls, and

(8) any debt which is avyavaharika which is rendered by Colebrooke as equivalent to a debt for a cause 'repugnant to good morals.'

22. It may, however, be noted that the burden of proving that the debt is Avyavaharika or illegal lies on the son, vide Sita Ram v. Radha Bai : [1968]1SCR805 . In the present case the consideration of the disputed alienation was made up of two items (1) Rs. 16900/- in respect of pro note dated 21-1-1940 and (2) the remaining amount represented the money belonging to the partnership firm which was misappropriated by Ram Swarup. So far as the first item is concerned, there is no dispute that as early as in 1926 this family had entered into a partnership with Sahu Har Prasad and Raja Radha Raman for running the oil mill business. That business suffered some losses and when accounts were taken on 12-5-1934 it was found that the share of the family firm in those losses was Rs. 21046/13/-. The partners of the firm executed a pro note for that amount on 12-5-1934. It was renewed on 31-3-1937 and again on 21-1-1940. Ultimately the amount due on that account as on 21-1-1940 was Rs. 16,900/-. There is absolutely no suggestion whatsoever from the side of the plaintiff-appellants that any embezzlement or misappropriation had been committed by Ram Swarup during that first partnership. That was, therefore, an antecedent debt. i. e, antecedent in fact as well as in time. It was entirely independent of the transaction now impeached. Therefore, so far as this part of the consideration is concerned, the finding recorded by the learned court below is absolutely correct in law and on facts.

23. Now coming to the second part of the consideration, it has to be kept in mind that Ram Swarup was a Partner in this partnership firm and whatever amount he received on behalf of the firm or whatever amount he withdrew from the funds of the firm for meeting the expenses or for making the payments for and on behalf of the firm, was as a partner of the firm. The question arises as to whether when subsequently he misappropriated those amounts, the liability arising out of such misappropriation can be enforced against the joint family estates and the sons can be held liable for it. There is a clear distinction which is to be borne in mind in this behalf and it is that unless the entrustment of dominion over the disputed property and criminal breach of trust in respect of the same, were not established, this misappropriation which only created civil liability will not become a criminal liability in law. In order to make out an offence under Section 405 I. P. C. it must be established that the person accused of such (sic) was either entrusted with or entrusted with dominion over that property which he is said to have converted into his own use. As observed by their Lordships of the Supreme Court in Velji Raghavji Patel v. State of Maharashtra : 1965CriLJ431 'In order to establish 'entrustment of dominion' over property to an accused person the mere existence of that person's dominion over property is not enough. It must be further shown that his dominion was the result of entrustment.'

24. It was further observed that 'in the case of a partnership, every partner has dominion over the partnership property by reason of the fact that he is a partner. This is a kind of dominion which every owner of property has over his property. But it is not dominion of this kind which satisfies the requirements of Section 405. The prosecution must further establish that dominion over the assets or a particular asset of the partnership was by a special agreement between the parties, entrusted to the accused persons. If in the absence of such a special agreement partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or, in other words, cannot be held to have been 'entrusted' with dominion over partnership properties. Where, therefore, under an agreement between the partners the working partner is authorised to recover the dues of the partnership and to spend the money for the business of the partnership, he cannot be said to have been guilty of criminal breach of trust even with respect to the dues realised by him from certain person by not depositing them in the bank, as alleged by the prosecution.

25. This proposition is based on the principle that a partner has undefined ownership along with the other partners over all the assets of the partnership. If he chooses to use any of them for his own purposes he may be accountable civilly to the other partners. But he does not thereby commit any misappropriation. In the present case as well Ram Swarup being a partner of the firm had undefined ownership on the monies received by him for the firm or taken out by him for payment for the firm. If, however, he chose to use some of those amounts for his purpose, he would have been called upon to render the accounts. It cannot be said that he committed any criminal breach of trust in respect of such monies. The decision in Velji Raghavji, therefore, is a complete answer to the objections taken by Sri Bhargava, learned counsel for the plaintiff-appellants.

26. There is yet another decision of the Supreme Court apposite to the fact of the present case to which our atten-tion has been invited by Sri Jagdish Swarup, learned counsel for the defendants-respondents. It was rendered in the case of Prem Ballabh Khulbe v. Mathura Datt Bhatt : [1967]2SCR298 . Briefly stated the facts of that case were that the appellant, the respondent and two other persons carried on business in partnership. The respondent was the managing partner and was in charge of the partnership assets. The firm was dissolved and a suit was instituted by the appellant for the taking of the accounts of the dissolved firm. Eventually a final decree was passed in the suit in favour of the appellant against the respondent for recovery of certain sums of money. In execution of that decree reliance was placed on behalf of the respondent on Clause (c) of the proviso to Section 51 of the Civil P. C. That proviso empowers the Court to order execution of a money decree by detention of the judgmentdebtor in prison if it is satisfied that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account. That contention was repelled by the executing court but on appeal was accepted by the High Court. That view was affirmed on further appeal by the Supreme Court. Their Lordships referred to Halsbury's Laws of England, 3rd Edition Vol. 38, Article 1363 page 820 where in regard to the nature of business between the partners it has been stated :--

'Partnership itself does not create a fiduciary relation between the partners or make one of them a trustee for the other or for his representatives. The relation may, however, arise On the death of one of them or be created by other special circumstances.'

This statement of law was held by the Court to be consistent with the provisions of the Indian Partnership Act, 1932 and the Indian Trusts Act. 1882-What comes out, therefore, is that though a partner must observe the utmost good faith in his dealings with the other partners but, inter se the partners there is no fiduciary relationship created. A partner is bound to render accounts of the partnership assets in his hands. But in the absence of special circumstances he cannot be regarded as a kind of trustee for the other partners or liable to render accounts t0 them in a fiduciary capacity. 27. We may also refer to a Full Bench decision of the Andhra Pradesh High Court in Sri Venkateswara and Channakeswaraswami Temple v. Ben-dapudi Radhakrishna. : AIR1963AP425 . In that case two suits were filed by the Temples for recovery of certain amounts collected by the 1st defendant who was one of the hereditary trustees of those institutions and was also elected as managing trustee. He had collected the disputed sums between the period when he had ceased to be managing trustee. He failed to account for the sums and the two actions were laid against him. His minor sons and his undivided brother were impleaded as defendants and their main defence was that since they were not benefited by those amounts and as the 1st defendant might have used them for his own illegal purposes, they were not liable to discharge the debt from out of the family properties. The trial court dismissed the suits but on appeal they were decreed by the High Court. After referring to various authorities cited at the bar, their Lordships concluded:

'What emerges from these rulings is that a son could claim immunity only where the debt in its origin was immoral by reason of the money having been obtained by the commission of an offence, but not where the father came by the money lawfully but subsequently misappropriated it. It is only in the former case that the debt answers the description of an avyaharika debt. If originally the taking was not immoral i. e. if it did not have a corrupt beginning or founded upon fraud, it could not be characterised as an avyavaharika debt and the son could not be exempted from satisfying that debt. The supervening event namely, the misappropriation later on would not change the nature of the debt. The vices should be inherent in the debt itself.'

Thus it is clearly established that if the debt is in its inception not immoral or founded upon fraud, subsequent dishonesty of the father will not exempt the son. The son can claim immunity only when the father's conduct is utterly repugnant to good morals and is grossly unjust or flagrantly dishonest. In the case of a partner who has undefined ownership in all the assete of the firm, it cannot be said that there is any vice inherent in his taking or retaining the money of the firm and if he misappropriates the same, he renders himself liable to an accounting only. He does not take the money in any fiduciary capacity and there being no entrustment of or dominion over the property he cannot be held liable for any criminal breach of trust, if this distinction is kept in mind, even in respect of the amounts for which it was found that Ram Swarup had utilised them for his own purposes, there would be no taint of immorality attached.

28. In brief we may refer to the evidence which is on record in this behalf. All that has come on record is that Ram Swarup used to supervise the oil mill business and he received certain amounts for and on behalf of the firm and took out certain money from the funds of the firm for making certain payments but he did not credit and debit the same. When the state of business noticeably deteriorated, a sort of accounting was done on 30-8-40. Those accounts were written by Sitaram one of the sons of Ram Swarup who was major at that time and it was found that a sum of Rs. 26398/10/3 was due to Sahu Har Prasad and Raja Radha Raman from Ram Swarup and the other members of his family. It has, of course, been said in evidence that this amount had been misappropriated by Ram Swarup and for this our attention was invited to certain statements given by Sahu Har Prasad and his agents on earlier occasions. Sahu Har Prasad in Suit No. 1453 of 1942 Hari Shanker v. Lala Ram Swarup gave a statement on 17-1-1943, a. copy of which is at pages 235-236 of the appellant's paper book. In that statement Sahu Har Prasad said that 'Ram Swarup committed embezzlement in the accounts of the firm of the mill. I had invested Rs. 18,000/-. He embezzled all of it.' He further went on to say that when he started making preparations for bringing a criminal case against Ram Swarup, these persons offered to sell all their property in their favour and the sale deed executed in his favour was in lieu of the embezzled amount and some previous debts.

28A. Sahu Har Prasad was dead by the time the trial in the two suits under consideration began. This was, of course an admission of Sahu Har Prasad but a question arises as to whether it has any binding effect on the defendants-transferees. Any how the use of words 'misappropriation' or 'embezzlement' would not render an action a criminal breach of trust, under Section 405 I. P. C. Therefore, even if this admission be regarded as substantive piece of evidence, it does not make much of a difference in view of the legal position discussed above. Almost to the same effect were the statements of Hori Lal who appears to be Standing Counsel for Sahu Har Prasad, Riven in Misc. Case No. 1 of 1940 a copy of which is Ex. 13, of Nanhe Mal Munim, Ex. 14 and Shiv Saran, Private Secretary of Sahu Har Prasad. Ex. 15. All these statements were recorded in the aforesaid Misc case. It is not known whether these persons were alive or dead at the time when the evidence was recorded in these two suits under consideration and in our opinion no evidentiary value can be attached to them. On the basis of this evidence it is not possible to say that there was no debt and if there was any debt it was avyavaharika.

29. The Court below on a consideration of the evidence on record has found that the amounts taken out by Ram Swarup from the funds of the firm were misappropriated by him. As noted above that will not change the nature of the debts. Any how it has been further found and rightly so that most of the amount was invested by Ram Swarup in supplementing his family business fortunes which were in a poor state and all that investment was for the benefit of the family. Some of the amounts, of course, he lost in some forward transactions, but the plaintiff-appellants withheld the books of the family firm and failed to establish the extent of such losses. In our opinion therefore, there was no taint of immorality or illegality attached to the two parts of the consideration of the disputed alienation and the plaintiffs-appellants could not claim cancellation of the same.

30. The result in Parshadi Lal's suit is consequential to the findings in the suits of the sons of Ram Swarup and we, thus, confirm the decrees passed in both the suits.

31. In the result these appeals fail and they are dismissed with costs.

Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //