1. This is a second appeal by the plaintiff. It arises out of a suit for declaration that the plaintiff is not personally liable to pay the sales-tax dues of the partnership firm, consisting of three partners, of whom the plaintiff's father was one, and for permanent injunction restraining the defendants from selling the articles mentioned in the schedule of plaint; and for their return to the plaintiff.
2. Plaintiff's case, in short, is this:
The joint family comprising of the plaintiff, his brother, and his father disrupted on 31-12-51, and there was a partition by metes and bounds of all the joint-family-properties. A partition-deed was drawn up and registered on 4-2-52 in evidence of such partition. The plaintiff further received a cash of Rs. three thousand and left the house, and ultimately, became a Babaiee. His brother also cut off all connections with him and left the village, and shifted to Rambha where he settled down. There was a partnership firm at Purushottampur whose firm name was Mangulu Sahu and Damodar Panda. This firm was registered in the sales-tax department in 1947, its sales-tax registration number being 836. In 1959, the sales-tax department got some evidence that the plaintiff's father was a partner of the firm, though in fact, he was not a partner, but a mere financier. The firm was assessed to sales-tax, and a sum of Rs. 758.49 was found due from the firm towards the sales-tax and penalty. The sales-tax department called upon the plaintiff to pay by a notice. The latter denied his liability and refused to pay. Therefore the department moved the Collector for realisation of the amount from the plaintiff under the Madras Revenue Recovery Act. Accordingly, the Tahasildar, Chatrapur, started a case against the plaintiff and seized the articles from the plaintiff on 28-2-64. The plaintiff exhausted his remedies before the revenue authorities for releasing the seizure of the movable articles, but without any success. Ultimately he filed the present suit for the aforsaid reliefs, after serving notice under Section 80. C.P.C.
2A. The case of the defendants is that the plaintiff's father was the Karta of the joint family comprising of himself, the plaintiff and his brother, and had entered into business as a partner of the partnership firm representing the family. The sales-tax dues of the firm could be realised from the plaintiff as the successor of his father even though there was division of the property by metes and bounds between the plaintiff and his brother in 1951.
It was further averred that even though there was a division of the property in 1951, the division was not exhaustive, inasmuch as the cloth shop rum by the father of the plaintiff as Karta of the family was kept joint and subsequently transferred in the name of the plaintiff on 24-6-54. So, as the plaintiff was in possession of the property of the joint family, he was liable to pay the taxes of the firm.
3. The trial court found that the plaintiff's father was the partner of the firm, and the plaintiff was a divided son before the year of assessment which related to the period from 1955-57. He further found that the plaintiff expressed his intention to retire from the joint family firm as early as 1954 and even though the accounts of the firm were settled in 1957, the plaintiff must be construed to have retired with effect from 1954, and as such the plaintiff's father was not a partner of the firm during the period to which the assessment relates, and hence the plaintiff is not liable to pay the tax. Alternatively, he held that even if it be granted that the plaintiff's father was a partner during the period of assessment, and was liable to pay the tax in question, the plaintiff can avoid the liability inasmuch as he was separated from his father long before, and specially when other partners are alive possessing their own properties.
4. The learned lower appellate court disagreeing with the trial court held that the plaintiff's father was liable for the sales-tax dues till 10-4-57. Further disagreeing with the trial court he came to the conclusion that even though the plaintiff was divided from his father, he was bound under the pious obligation to discharge the dues outstanding against his father. The lower appellate court also disagreed with the other conclusion of the trial court and held that there was no bar under the provisions at Section 19(3) of the Sales-tax Act to proceed against the plaintiff without proceeding against the other partners of the firm, in the first instance. On these findings, he reversed the trial court's decision and decreed the suit.
5. The only ground urged is that the plaintiff being a divided son will not be liable for the debts incurred by his father after such separation. In the instant case, the concurrent findings are:
(a) the plaintiff, his brother and father were separate with their properties, divided by metes and bounds, since 1951; and
(b) that the business of the plaintiff's father, as a partner of the firm which was assessable to sales-tax, relates to a period from 1955-57, much subsequent to the said partition. The sales-tax dues art thus a debt of the plaintiff's father which had been contracted after the partition. The alternative case of the defendants, that despite the partition of the year 1951, there were some joint family properties which have come to the plaintiff thereby making the latter liable to pay the debt of his father, has been negatived by both the courts below.
6. The law regarding the liability of a son for the antecedent debt of the father, and the theory of pious obligation have been elaborately discussed and laid down by the Supreme Court in the case of Pannalal v. Naraini, AIR 1952 SC 170. The principles laid down in this decision are: (i) The son is not personally liable for the debt of his father even if the debt was not incurred for an immoral purpose, and the obligation it limited to the assets received by him in his share of the joint family property, or to his interest in such property, and it does not attach to his self-acquisitions, (ii) The pious liability of the son to pay the debts of his father exists whether the father is alive or dead, (iii) This pious liability ceases to exist if the debt of the father is tainted with immorality or vice, (iv) Since it is open to the father during his lifetime, to effect a transfer of the joint family property including the interests of his sons in the same to pay off an antecedent debt not incurred for family necessity or benefit, provided it is not tainted with immorality, it is equally open to a creditor to obtain a decree against the father, and in execution of the same put up to sale not merely the father's but also the son's interest in the joint estate. This right of the creditor can be enforced against sons, even though the latter were not impleaded in a suit against the father, (v) As regards the debts contracted by the father, after partition, the sons are not liable for such debts. The share which the father receives on partition, and which after his death comes to his sons, may certainly, at the hands of the latter, be available to the creditors of the father, but the shares allotted on partition to the sons can never be made liable for the post-partition debts of the father.
In view of these principles enunciated above, and having regard to the facts found in the case that there was a full and completed partition between the plaintiff his fattier and brother of the entire joint family properties in existence at the time, in which each of the coparceners had carved out his own share, and that the share which the plaintiff's father took has not been proved to come to the hands of the plaintiff by wav of inheritance or otherwise, and the sales-tax dues in question being in the nature of post-partition debts of his father, the plaintiff cannot be held liable for the same. The suit was accordingly rightly decreed by the trial court, and the lower appellate court has gone wrong because his erroneous view of this branch of law.
In the result, the judgment and decree of the lower appellate court are set aside, and those of the trial court are restored; and the suit is decreed. The plaintiff shall be entitled to costs throughout.