1. This appeal is brought by the plaintiffs against a decree of Mr. Sham Lai, Senior Sub Judge, Dharamsala, decreeing the plaintiffs' suit against the defendants and holding that their liability is not personal but is only to the extent of the property of the firm in their hands. Both parties belonged to Bannu. On the 1st December 1946 a pronote was executed by Messrs. Mehr Chand Bhana Ram through Bhagwan Singh Gandh in favour of Babu Bishan Singh Santokh Singh Gulati for a sum of Rs. 8,000/-with interest at eight annas per. cent per mensem.
When Bhagwan Singh was coming to India from Bannu he was killed on the way and therefore the defendants in the present case are Narnajan Singh brother and Mohindar Singh and Kartar Singh minor, sons of Bhagwan Singh through their uncle Naranjan Singh. Mr. Man-chanda has told us that of them Mohindar Singh has now become a major and Kartar Singh is still a minor.
2. In the plaint it was alleged that Messrs Mehr Chand Bhana Ram. General Merchants, were carrying on business at Bannu. Its proprietor and karinda was Bhagwan Singh the father of defendants 2 and 3 and real brother of defendant 1, and that the money was borrowed for the purpose of running the shop and for the benefit of the joint Hindu family. It was prayed that a decree be passed in favour of the plaintiffs against the defendants.
A written statement was filed by Narnajan Singh wherein he denied that Bhagwan Singh was a karta or had any authority to bind the other members of the family, but he appeared in Court and admitted that the document had been executed by Bhagwan Singh, and the Judge had held that Bhagwan Singh was acting as the karta of the joint Hindu family and therefore the debt is binding on the family.
3. The sole point before us is as to the personal liability of the members of the joint Hindu family in circumstances such as these. Of the three respondents those who were minors at the time when the document was executed or when the suit was brought cannot be held to be personally liable for the debts of the firm, and there is no authority which the researches of counsel have helped him in bringing out, nor do we know pf any such authority where minor members of a family have been held liable for a debt incurred by a father, even though it may be for a joint family business.
4. Counsel then submits that Naranjan Singh is, in any case, personally liable because he was taking part in the partnership business. In support he relics upon the statements of certain witnesses, the first one amongst whom is Autar Singh P. W. 5 who is a son of the plaintiff Bishan Singh. He states that Naranjan Singh, Bhagwan Singh and Dalip Singh were living together and they formed a joint Hindu family and their dealings were joint and Naranjan Singh and Bhagwan Sinsh were working in the shop and Dalip Singh was a student and he himself was a manager of their shop, i. e. of the shop of Bhagwan. Singh and his brothers.
The plaintiff Bishan Singh himself as P. W. 6 has stated that Bhagwan Singh was the elder brother of Narnajan Singh and Dalip Singh They had joint dealings. They lived together and carried on business jointly. On these facts counsel contends that the liability of Naranjan Singh is personal, apart from his liability as a member of the joint Hindu family, and he relies upon certain judgments of the Madras, Allahabad and Patna High Courts. The law as to the liability of members of a joint family in a trading firm has been stated in Mulla's Partnership Act at page 314 in the following words;
'Further, the managing member of the family can pledge the credit or property of the family for the ordinary purposes of that business; but the other coparceners are liable to the extent of their interest in the family property only, unless the contract relied on, though purporting to have been entered into by the manager only, is in reality one to which the other coparceners are actual contracting parties or one which they have subsequently ratified'.
In Mayne on Hindu Law in note (gl) at page 381, it is stated that the fact that a junior member works at the shop by itself is not such conduct as will cause him to be treated as one of the contracting parties, and reliance is placed upon certain judgments of the Lahore High Court, Man Raj v. Firm Sher Singh, Jialal, AIR 1938 Lah 694 (A), and Mutsaddi Lal v. Sakhir Chand, ILR 17 Lah 311: (AIR 1935 Lah 735) (B) where it was held that other coparceners whether they be adults or minors are liable to the extent of their interest in the joint family property.
They are not liable personally unless in the case of adult coparceners, the contract sued upon, though purporting to have been entered into by the manager alone, is in reality one to which they can be treated as being contracting parties by reason of their conduct, or one which they have subsequently ratified. The same was held in Shiv Charan Das v. Hari Ram, ILR 17 Lah. 395 : (AIR 1937 Lah. 247) (C) another Division Bench Judgment.
The passage in Mulla on Partnership at page 314 is supported by the judgments of three High Courts in Chalamayya v. Varadayya, ILR 22 Mad. 168 (D). Bisbambhar Nath v. Sheo Narain, ILR 29 All. 166. (E), Bishambhar Nath v. Fateh Lal, ILR 29 All 178 (F), and Samalbhai v. Someshvar, ILR 5 Bom 38 (G). This is also in consonance with the principles of Hindu Law by which the liability of a coparcener, for a debt incurred by the karta extends only to the joint Hindu family property; see Mulla's Hindu Law page 360.
5. Counsel, however, relies upon certain judgments which, he submits, support the contention which he has raised before us. He first of all relies upon a judgment of the Lahore High Court in Ghulam Muhammad v. Sehna Mal, AIR 1927 Lah 385 (H). That was a case in which there were two partners of a firm who were brothers, and it was held that they were equally entitled to participate in the management of the business and either of them could give a discharge and if a younger brother had given a discharge it was good and binding on the partnership.
This is a case which really was decided in accordance with Section 251 of the Contract Act which applies to contractual firms and not to joint faintly firms and in Section 5 of the Partnership Act the difference in law relating to these two kinds of partnerships has been pointed out. It is there expressly provided that the members of a Hindu undivided family carrying on family business as such are not partners in such business.
6. The next case relied upon by counsel for the appellant' is another Lahore case, Bhagwan Singh and Co. v. Bakhshi Ram, AIR 1933 Lah. 494 (I), but in that case no question of personal liability was raised. All that was decided was that if there is a promissory note executed by a karta and the liability of members appears on the face of it, then it is not open to the other members of the family to plead that because their names were not on the promissory note they are not liable.
In this case, as I have said, there was no question of personal liability raised and therefore this case also does not help the appellants, But he strongly relies upon two judgments one of the Madras High Court and the other of the Patna High Court. In the Madras High Court judgment in Somasundaram Chettiar v. Kanoo Chettiar, AIR 1929 Mad 573 (J), the question whether a junior member of a joint family partnership could be declared an insolvent or not.
That is a different matter, and whether this ruling will be good law after the enactment off Section 5 of the Partnership Act or not still remains to be decided. And I may say the same thing about the other Allahabad case, Debi Dayal v. Baldeo Prasad, AIR 1928 All. 491 (K), and the Patna case Benares Bank Ltd., Bhagalpur v. Krishna Das, AIR 1932 Pat 206 (L). The law, in my opinion, as far as this Court is concerned, is what is laid down by the three Division Benches of the Lahore High Court, and I would therefore hold that the liability of the defendants is not personal and would therefore dismiss the appeal, but as there is no appearance on behalf of the respondents there will be no order as to costs in this Court.
7. I agree.