1. This a plaintiff's appeal against the reversing judgment of the learned District Judge, Cuttack, modifying the decree passed by the trial Judge to the extent that defendant 2 is not liable for the debt.
2. The facts leading up to this appeal are rather simple. The plaintiff filed a suit for recovery of money on a handnote dated 5-3-49 (Ext. I) for a sum of Rs. 600/-. The defendant 1 alone executed the document in favour of the plaintiff, but the plaintiff filed the suit against both the defendants 1 and 2. Defendant 1 is the nephew of defendant 2, and they are members of a Joint family. The plaintiff in paragraph 1 of his plaint stated that defendant 1 as Karta of the joint family, for their common benefit, that is, to pay up the decretal dues of one Sri Kasinath Mukherjee of Howrah as well as for maintenance borrowed the aforesaid sum of Rs. 500/-. The defendants in spite of demand by the plaintiff, did not Pay anything towards the loan, and accordingly forced the plaintiff to file the present suit for realisation of his dues, that is, both principal and the interest.
3. Defendant I filed a written statement admitting the execution of the document, but took the plea that the document was taken from him by force, and without any consideration. He also averred in his written statement that he is not the Karta of the joint family and that there was no necessity for the loan. After filing the written statement, defendant I did not appear in the proceeding and set down ex parte. Defendant 2 filed a separate written statement alleging that he is long separated from defendant 1 and that defendant 1 being his nephew cannot be the Karta or the manager of the Hindu joint family, and further, there was no legal necessity for the loan and hence he cannot be held liable for the debt under the suit-handnote.
4. The learned Additional Munisif of Jajpur,on a consideration of the evidence on record decreed the suit both against defendants I and 2, hold-ing that they were members of the joint familyand the document executed by defendant 1 is equally binding on defendant 2. On appeal, however,the learned District Judge modified the judgmentof the learned Munsif, as Indicated above, anddecreed the suit only against defendant I, absolving defendant 2 from all liability. But the learned District Judge on his part considered the entirecase afresh and came to the finding that the hand-note was genuine and for consideration, and thatdefendant 2 did not pay his share of the decretaldues, due to the decree-holder Kashinath Mookherjee of Howrah. The learned District Judge further came to the finding that defendants 1 and were members of a joint family and there was legal necessity for the payment of the previous loan due to the decree-holder, and defendant paid the said decretal dues by borrowing the money from the plaintiff. But he came to the finding that the defendant 1 being a junior member of the family, could not be held to be the Karta. The plaintiff has also failed to prove that in fact defen-dant-1 was the Karta of the Hindu joint family, and, as such, the loan contracted by defendant 1 could not bind defendant 2.
5. Mr. E. N. Sinha, learned counsel appearing on behalf of the appellant, contended that in view of the findings of fact arrived at by the learned District Judge, he is entitled to a decree against both the defendants I and 2 on two grounds, viz., (1) that the finding being that the loan was contracted for legal necessity, if would bind all the members of the family; and (2) that the original loan evidenced by a handnote even if contracted for by a Junior member of the family, would bind the entire family. I need not cover the grounds that have been discussed in the Judgment of the learned District Judge and neither, party had ques. tioned the findings of fact arrived at in this case. Both parties rather proceeded to argue the case accepting the findings as they stand.
6. Now, taking the first point as contended for by Mr. Sinha that the finding being that the loan was contracted for legal necessity, would bind the entire family, he relied upon a decision reported, in Dhanukdhari Singh v. Rambirich Singh, AIR 1922 Pat. 553(A). It was held in that case that:
'The rule of Hindu law upon which the act of the Karta and his dealing with the family property are binding upon the other members of the family does not restrict it to the Karta alone. It is wide enough to authorise any member of the family to deal with the family property, such as to incur debts provided the act is done in times of distress and for family necessity.'
Their Lordships while coming to this conclusion relied upon certain portions of the text of Mita-kshara in Chapt. I sloke 1, para 28, which says:
'Even a single individual may conclude a donation, mortgage or sale of family immoveable property during a season of distress for the sake of the family and especially for pious purpose.'
in order to apply this rule of law to the instant case, it is necessary to go into certain facts in some detail. It is an admitted case that Kasinath Mookherjee of Howarh obtained a decree against both the defendants 1 and 2 on 16-9-48 on compromise (Ext.2). Both the defendants admittedly filed the compromise petition in that case, the compromise being, let a decree for a sum of Rs. 950/- be passed, but if within six months from the date of the decree a sum of Rs. 600/- is paid, the entire decree will stand Satisfied. The six months according to the terms of the compromise decree were to expire about the middle of March, 1949, and the suit-loan was transacted on 5-3-49. The contention of the second defendant was that he paid his share of the decretal dues to the first defendant and so he cannot be bound by the debt incurred by him. The story of part payment by the second defendant has been disbelieved by both the courts below. It is an admitted fact that the money due to the decree holder was paid within the time limit fixed in the compromise petition. The Joint family estate, if the amount were not paid within the time fixed in the compromise decree, would have been liable to pay Rs. 350/. more.
In order to avoid that distress the def endant-1 who, according to the plaintiff, is a literate person and is much younger in age -- the second defendant being 65 years of age -- was managing the affairs of the family. I find from the records that Ext. I the handnote was scribed by defendant-1 himself. In the document itself, there is a recital that this loan is being contracted for pay-ment of the decretal dues of Kasinath Mookherjee, which admittedly was a joint decree against both. Therefore the case reported in AIR 1922 Pat., 553 (A), applies in terms to the present case. Mr. Sinha also relied upon a decision reported in Naraindas v. Khatamal, AIR 1926 Sind 22 (B). In that case the Chief Court of Sind followed the Patna decision referred to above and relied upon several other decisions including a decision of the Judicial Committee reported in Brij Narain Rai v. Mangla Prasad, AIR 1924 PC 50 (C), wherein their Lordships of the Privy Council in summing up the propositions as to the power of alienation of the co-parcenery property as the result of authorities have laid down that :
'a managing co-parcener cannot alienate or burden the estate qua manager except for legal necessity, but have not qualified the proposition further by providing that it is obligatory for him to obtain the express consent of the adult coparcener and it may well be assumed that such consent is not necessary.'
Reliance was also placed upon a decision in Ram Das Singh v. Tanak Singh, 9 Pat LT 758 : (AIR 1928 Pat 357) (D), wherein their Lordships Kul-want Sahay and Macpherson, JJ. held that an alienation of joint family property by a member who is not the managing member of the family may be binding on the family if the alienation be for joint family necessity. Any member of a joint family is entitled to deal with the family property and to incur debts binding upon it provided the act is done in times of distress and for family necessity.
7. In support of his second contention, Mr. Sinha relied upon a decision reported in Dhane-swar Sahu v. Ramrup Girl, 9 Pat LT 471 : (AIR 1928 Pat 426) (E) and the same learned Judges of the Patna High Court held that :
'Even in cases where the lending of the money and the execution of the promissory note are contemporaneous, the plaintiff lender is en- titled to maintain a suit for recovery of the money lent and to adduce evidence, other than the instrument of the promissory note itself, in order to prove the loan'.
In this case, according to the statement in paragraph 1 of the plaint. the money was first token by defendant No. 1 and, as evidence of the loan, the document was executed. Paragraph 4 states that the cause of action arose from the following day. Thus, there is sufficient force in the contention of Mr. Sinha.
8. Mr. S. K. Dey, learned counsel appearing on behalf of the respondent (defendant 2) contended that under Section 35 of the Indian Contract Act. the plaintiff can only look upon the executor of the handnote and not upon the joint family. The first defendant may or may not have his remedy against the second defendant, but the plaintiff can only realise the amount from the 1st. defendant who was the executant of the document. I am afraid, this contention of Mr. Dey cannot hold good, because, it was not his contention in the written statement, to begin with.
Secondly, the money that was due for repayment of the decretal dues was paid by him according to his share and that the first defendant mighthave contracted the loan under the suit-handnotefor his share of the money. The plaintiff in thevery first paragraph of his plaint had stated thatboth the defendants being members of a jointfamily had contracted the suit-handnote though itwas executed by defendant-1 alone, a junior member of the family.
Mr. Dey then contended that the onus is up-on the plaintiff to prove, under Sections 26 and 27 of the Negotiable Instruments Act, that the lst defendant had acted as the agent of the 2nd defendant. I do not see how that contention can arise on the facts of this case. In my opinion, Sections 20 and 27 of the Negotiable Instruments Act have no application to this case, since no question of agency arises. Mr. Dey then relied upon a decision of this Court reported In Pramode Kumar Pati v. Damodar Sahu, ILR (1953) Cut. 221: (AIR 1953 Orissa 179) (F).
That is a decision which far from supporting his contention supports the contention of Mr. Sinha. In that case, their Lordships have held that it is well settled that the manager of a Hindu joint family can borrow for purposes of the family and that he can bind the other members for the debts thus incurred by him. He is the representative of the family and can bind the other members for necessary purposes. His authority to incur expenditure and contract loans is determined by family necessity and family benefit.
While, therefore, the members of the family, of which he is the manager, are liable for the debts and their interests in the family property can be attached for the realisation of the debts, they are not personally liable either for the debts, or upon a negotiable instrument executed by the manager. There is, however, no presumption that the borrowing was not for his own private purposes and that the other members of the joint family are liable on the promissory notes, in the absence of satisfactory evidence that the money was borrowed for purposes of family business.
In this case, it cannot be contended that the money was not necessary for the benefit of the family, nor can it be said that the family did not derive any benefit from the money that was borrowed under the suit-handnote. Undoubtedly, the family has benefited to the extent of Rs. 350/.-which otherwise would have been payable in excess had the decretal dues were not paid within the time specified. The family undoubtedly Was in distress for the repayment of the loan, because time was running fast.
Therefore, once the learned District Judge has come to the finding that both the 1st and the second defendants were members of a joint Mita-kahara family, and that the money was borrowed for legal necessity, there was no justification for him to dismiss the suit against the 2nd defendant and decree is against the first defendant alone. In mv opinion, both the defendants 1 and 2, on the findings of the learned District Judge, are bound to make good the money and hence, I would set aside the judgment and decree of the learned District Judge, and restore those of the learned Munstf.
In the result, the appeal is allowed with costs throughout.