1. In a suit for partition of Hindu joint family property, the appellants (plaintiffs) also challenged certain alienations of the joint family property made by the manager in favour of the defendant alienees Ratnakar Jha (respondent 12), Nandkishore Sao (respondent 13) and Smt. Sushiladevi (respondent 14) and claimed that the aforesaid alienations, not being for legal necessity, were not binding on them and that consequently the properties covered by the se alienations should be available for partition.
2. The trial Court held the alienations to be for legal necessity and consequently binding on the estate. The plaintiffs have, therefore, come up in appeal.
3. The alienations in question are three sales of three houses in the town of Durg made in favour of Ratnakar Jha, Nandkishore Sao and Smt. Sushiladevi on 19-6-1952, 21-6-1952 and 21-6-1952 respectively. The first was for a consideration of Rs. 8,000/-, the second for a consideration of Rs. 20,000/- and the third for a consideration of Rs. 10,800/-. The recitals regarding legal necessity in the registered sale deeds, which were more or less in similar terms, were that the alienor manager and the joint family needed the monies for making repayments to satisfy the liabilities connected with the business of the family:
gesa vkSj gekjs ifjokj dks vius O;kikj vkSjmlds lEcU/k dh nuxh jde dh vnkbZ ds fy, jde dh t:jr gS
The question is whether there is evidence to establish any such legal necessity.
4. The evidence of the plaintiff Dayaram (P.W. 1) himself shows that the joint family business included money-lending lkgdkjk dealing in 'hundis' and acceptance of deposits, which was all looked after by the manager Kashiram.
lkgqdkjh dk /ka/kk] gqMh ysuk fMikftV ysuk ;glc dke dkf'kjke djrk FkkA ;g lc [kkunkuh jkstxkj FkkA
One of the alienees, Nandkishore Sao, as D.W.1 fully bears him out. According to his dk'khjke crZudk jkstxkj] lkgqdkjh] gqaMk ysuknsuk vkSj :i;s Hkh vekur esa ysrs FksA He further states that on 5-24951 he had deposited Rs. 15,000/- in the joint family firm 'Ajitsingh Dularsingh', and on 1144952 and 124-1952 endorsed two hundis in its favour in the sum of Rs. 2,5007- each for deposit. Similarly, the evidence of Ghanshyamsingh (20 D.W. 3) shows that as the plaintiffs' banking business needed money, he drew a cheque for Rs. 10,000/- on the Allahabad Bank in favour of his daughter. Smt. Sushiladevi, who endorsed it in favour of the joint family firm 'Ajitsingh Dular singh'. In return two hundis of Rs. 5,000/- each were drawn in her favour. These were not repaid on their due date, viz., 21-24952. Thus, the plaintiff firm through Kashiram did business of banking in the course of which it accepted deposits and dealt in hundis. Shri Padhye, learned counsel for the appellants-plaintiffs, brought to our notice that during the period 5-24951 to 18-64952, deposits received and hundis issued by the plaintiffs' joint family firm totalled about Rs. 63,000/- and it was to satisfy these liabilities that the alienations in suit wera made. Both Nandkishore Sao (D.W. 1) and Ghanshyamsingh (20 D.W. 3) tell us that in spite of repeated dunnings, the liabilities owed to them by the plaintiffs' joint family firm were not satisfied till at last Kashiram executed the sala deed in their favour in full satisfaction of their dues. The liability owed to Ratnakar Jha, due on deposits and hundis, was also similarly satisfied by executing the sale deed dated 19-64952 for a consideration of Rs. 8,000/- in his favour.
5. It is not disputed that Kashiram was the manager of the joint family, who was looking after the joint family business. It is also not disputed that the alienations to suit were for valuable considerations. What is contended is that when the manager of a ioint Hindu family sells joint family property, the purchaser is bound to enquire into the necessity for the sale and the burden lies on him to prove either that there was legal necessity in fact or that he had made proper and bona fide enquiries as to the existence of such necessity and had done all that was reasonable to satisfy him as to the existence of such necessity. It is further contended that the powers of a manager, who is not the father, to alienate joint family property for an antecedent debt are limited to cases where such debt was for a legal necessity. Alienations for antecedent debts which were not incurred for legal necessity were not permissible. It is, therefore, contended that the mere aroof that the joint family firm was indebted and that the alienations in question were made to satisfy the se antecedent debts would not absolve the defendant alienees from proving that the se antecedent debts were Incurred for legal necessity; and, in the absence of such proof, the suit of the plaintiffs must fail.
6. This argument, however, loses sight of the fact that such considerations have no application when the joint family firm does the business of banking wherein it accepts deposits and issues hundis. In such a case the business of the joint family firm is to deal in money and the mere existence of an antecedent liability incurred In the course of business ordinarily carried on and to satisfy which an alienation by the manager was being made, would justify the alienation on the ground of legal necessity. The allenee cannot be expected to ascertain how the liability had come to arise. It is enough for him to be satisfied that aliability existed; and it is not disputed in this case that such liabilities did exist. The alienees cannot be expected to ascertain whether the business of banking had been carried on prudently to warrant the incurring of liabilities to satisfy which the alienations in question were made. It may be that the business had been unprofitable for sometime and were better closed; but that is a decision which the manager alone was competent to take. If he chose to continue the business and incur liabilities which ultimately had to be satisfied by raising money by sales of joint family properties, the alienations cannot be challenged as not justified by legal necessity.
7. In Niamat Rai v. Din Dayal, 54 Ind App 211 at p. 214 : (AIR 1927 PC 121 at p. 121), where the plain-tiffs who were challenging the alienation of joint family property as not being for legal necessity, had succeeded to a joint family business, i.e., a business carried on with joint family funds, for the benefit of the joint family, Sir John Wallis, speaking for the Board, said that 'the properties of the Joint family, both movable and immovable, including the shares of minor members of the family, are liable for debts incurred in carrying on the business, and that it is within the powers of the managing member in a proper case to sell immovable as well as the movable property for the purpose of discharging such debts or enabling the business to be carried on'.
8. On a parity of reasoning the managing member would be in a still better position to validiy alienate joint family property where the joint family business is a kind of banking business, viz., 'sahukari', dealing in hundis and acceptance of deposits, because in such a case payments of deposits and honouring of hundis on due dates would be the legal obligations of the business if it was meant to be carried on and of which the managing member was the Judge. In such a case, sale of joint family properties to meet the obligations of the banking business would always be justified for legal necessity without proof of anything more. If it were otherwise, a joint family doing banking business would always be in a position to defraud its creditors by first utilising the deposit funds 1 in buying valuable securities and properties which would then become assets of the joint family and then, when the manager member meets the legal obligations of the business by selling some of the properties, by challenging the se alienations as not justified by legal necessity and by insisting that the alienees prove that the business debts (viz., acceptance of deposits and issuing of hundis) were incurred for legal necessity when, in fact, the contracting of such debts and liabilities was inherent in the nature of the business itself.
9. It is further significant that the plaintiffs have not cared to examine the manager member, nor produced the account books of their joint family business as their contention that no such books were kept is not worthy of belief. It is also important that the plaintiffs have not cared to challenge some of the alienations of the joint family property, alleged to be contemporaneous, to the tune of Rs. 25,000/- and made for meeting the debts of the joint family business, which were also liable to challenge for the same reasons as the other alienations, which are the subject-matter of this suit. These circumstances, in our opinion, are further corroborative of the fact that legal necessity existed for the alienations In suit.
10. The appeal, therefore, fails and is dismissed withcosts.