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Sangameswara Iyer Vs. Krishna Iyer - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKerala High Court
Decided On
Case NumberA.S. 177 of 1959
Judge
Reported inAIR1960Ker108
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rule 16; Hindu Law
AppellantSangameswara Iyer
RespondentKrishna Iyer
Appellant Advocate C.V. Narayana Iyer, Adv.
Respondent Advocate T.S. Venkiteswara Iyer, Adv. for 1st Respondent
DispositionAppeal dismissed
Cases ReferredPannalal v. Mt. Naraini
Excerpt:
.....by defendant no. 1 and 2 - assignee (son of defendant no. 1) obtained assignment on payment of decree debt and filed execution petition - defendant no. 2 contended that assignment taken by defendant no. 1 and assignee not entitled to execute decree against him - assignment accepted as real transaction intended for benefit of assignee - assignee permitted to execute decree - appeal dismissed. - - no doubt, under the doctrine of pious obligation recognised by mitakshara law, the son has an obligation to discharge the debts of his father under certain exceptional circumstances. this liability of the son is subject to certain well-recognised limitations. those who may have an ultimate liability to discharge the debt on account of the doctrine of pious obligation or on account of..........to the bank. the 1st defendant's son obtained an assignment of the decree on payment of the entire decree debt to the bank and himself, along with the original decree-holder, filed an execution petition praying for recognition of the assignment and for permitting the assignee to proceed with the execution of the decree. when notice was served on the judgment-debtors, the 2nd defendant appeared and contended that execution should not be allowed to proceed. the main objections raised by him are that he joined in the execution of the plaint promissory-note merely as a surety for the 1st defendant and therefore the primary liability is on the 1st defendant, that the assignee who is the son of the 1st defendant is equally liable for the decree-debt and as such he is not entitled to execute.....
Judgment:

Sankaran, C.J.

1. The 2nd defendant's challenge to the right of the assignee-decree-holder to execute the decree has given rise to this appeal. The decree is in favour of the Lakshmi Prasad Bank Ltd., and it is based on a promissory-note executed by defendants 1 and 2. These two defendants are brothers who have he-come divided in interest. They are governed by Hindu Mitakshara Law. Under the decree both the defendants are jointly and severally liable for the debt due to the bank.

The 1st defendant's son obtained an assignment of the decree on payment of the entire decree debt to the bank and himself, along with the original decree-holder, filed an execution petition praying for recognition of the assignment and for permitting the assignee to proceed with the execution of the decree. When notice was served on the judgment-debtors, the 2nd defendant appeared and contended that execution should not be allowed to proceed.

The main objections raised by him are that he joined in the execution of the plaint promissory-note merely as a surety for the 1st defendant and therefore the primary liability is on the 1st defendant, that the assignee who is the son of the 1st defendant is equally liable for the decree-debt and as such he is not entitled to execute the decree against the other judgment-debtors and that the assignment itself has been taken by the 1st defendant with his own funds and for his own benefit and hence the benamidar should not be permitted to execute the decree. All these objections were overruled by the execution court and hence this appeal.

2. The first objection that the appellant-2nd defendant joined in the execution of the promissory-note only as a surely for the 1st defendant, was not pressed at the hearing of the appeal. There is little substance in that objection. The decree, as it stands, makes both the defendants equally liable and hence it is not open to the 2nd defendant to raise a contention against the terms of the decree. The next objection is based on the second proviso to Rule 16 of Order XXI of the Code of Civil Procedure.

That proviso is to the effect that where a decree for the payment of money against two or more persons has been transferred to one of them, it shall not he executed against the others. In order to at-tract this proviso, it is obvious that the transferee or assignee of the decree must be one of the persons made liable under the decree for payment of the debt. In the present case the decree is only against defendants 1 and 2 and not against the assignee also.

However, it is argued on behalf of the appellant that under the Mitakshara Law, the assignee who is the son of the 1st defendant, is also liable for the debt of the father. No doubt, under the doctrine of pious obligation recognised by Mitakshara Law, the son has an obligation to discharge the debts of his father under certain exceptional circumstances. This liability of the son is subject to certain well-recognised limitations. It is not that any debt of the father can be enforced against the son. The extent-to which the son can be made liable for the debt of the father has been explained by the Supreme Court in Pannalal v. Mt. Naraini, AIR 1952 SC 170, in the following terms :

'The position therefore is that 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 is 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. The duty being religious or moral, it ceases to exist if the debt is tainted with immorality or vice.'

This limited liability of the son for the father's debt is certainly different from the legal liability of the son for the debts due from him under a decree against him. Where he is himself a judgment-debtor his liability is unqualified. The assignment of a decree would come within the mischief of the secondproviso to Rule 16 of Order XXI of the Code of Civil Procedure only where the assignee happens to be a judgment-debtor under the same decree in the strict sense of the term. Clause 10 of Section 2 of the Code defines 'judgment-debtor' as follows :

' 'Judgment-debtor' means any person against whom a decree has been passed or an order capable of execution has been made'.

The same idea is indicated by the second proviso to Rule 16 of Order XXI, G. P. C. which speaks of a decree for payment of money against two or more persons, where each of them will be personally liable for the debt. Those who may have an ultimate liability to discharge the debt on account of the doctrine of pious obligation or on account of other obligations undertaken by special agreement, cannot be said to be persons against whom there is a decree for payment of money and hence they will not come within the mischief of the second proviso to Rule 16.

The proviso can be attracted only if all the conditions contemplated by it we fully satisfied. The principle underlying this proviso is that where one of the persons liable under the decree takes an assignment of the decree there is a merger of the right conferred by the decree with the liability imposed by it. This principle can have no application to the present case where the assignee is a person who is not one of the judgment-debtors under the decree.

The mere fact that he happens to be the son of the 1st judgment-debtor is not sufficient to place him in the category of persons against whom a decree for payment of money has been passed. There is no legal impediment in the son of a Hindu judgment-debtor taking an assignment of the decree and enforcing it against all the judgment-debtors including the father. It follows, therefore, that the assignment taken by the 1st defendant's son in respect of the rights under the decree in this case is not hit by the second proviso to Rule 16 of Order XXI of the Code of Civil Procedure. The execution court was right in overruling the objection raised by the 2nd defendant on the strength of the above said proviso.

3. Lastly there is the objection that the assignee is only a benamindar for the 1st defendant, the assignment having been taken for the benefit of the 1st defendant and with his own funds. In support of this contention, it is pointed out that the amount necessary for payment of the consideration for the assignment was raised by operating the joint account in the names of the 1st defendant and his son. They had executed an over-draft agreement in favour of the Lakshmi Prasad Bank and had given their joint family property as security for the loans to be advanced from the Bank in connection, with the boll-metal industry started by these persons.

Even though this business was originally started as a family business, it was converted into a partnership concern long prior to the date of Ext. P-1 dated 19-12-1957, which is the deed under which the decree in this case was assigned in favour of the 1st defendant's son. Ext, P-2 is the partnership deed executed by the 1st defendant and all his sons including the present assignee on 7-12-1956 for carrying on the bell-metal industry. Ext. P-3 dated 15-10-1956 is the acknowledgment issued by the Registrar of Firms in respect of the statements relating to the formation of the partnership. Ever since the formation of the partnership the 1st defendant find his sons had distinct and separate rights and liabilities in respect of the business.

Exts. P-6 to P-13 assessment orders by the income-tax authorities, also go to show that the business was accepted as a partnership concern and thatthe several partners were assessed on that basis. The entries in the ledger Ext. P-4 and the day book Ext. P-5, maintained by the partnership, also confirm the fact that the business was being carried on as a partnership business. When the 1st defendant's son obtained the assignment of the decree in the present case, the consideration for the assignment was satisfied by him by issuing a cheque in favour of the decree-holder Bank. The amount under the cheque was debited in the joint account which the assignee and his father, the 1st defendant, had in the Bank.

These facts are mentioned in Ext. P-1 itself, The argument advanced by the 2nd defendant is that the consideration having been raised under the joint account of the father and the son, the amount must be taken to have been paid by the 1st defendant himself. Such an inference need not necessarily follow. The assignee and his father could each of them separately draw amounts under the joint account. Exts. P-4 and P-5 show that the amount drawn by the assignee for payment of the consideration for the assignment was debited against him alone in the partnership account. It cannot therefore be said that the considerations proceeded from the 1st defendant.

Even though the relationship between the assignee and the 1st defendant might throw some suspicion as to the motive with which the assignment was taken, the circumstances under which the assignment was taken do not justify an inference that the assignment was taken for the benefit of the 1st defendant himself. If the decree was executed against the 1st defendant, there was the possibility of the joint family properties belonging to the 1st defendant and his sons being sold for realisation of the debt. It is obvious that the assignee wanted to avoid his interest in the joint family properties being sold away in that manner.

If was to avoid such a contingency and thus to safeguard his own interests that he took an assignment of the decree. The legitimate inference is that he look the assignment for his own benefit and not as a benamidar for the 1st defendant. It may be that be wanted to saddle the liability under the decree cm the 2nd defendant alone. Even such an unfair attempt on the part of the assignee cannot make the assignment as a benami transaction for and on behalf of the 1st defendant. The other circumstances relied on by the 2nd defendant that the assignment was taken on payment of full consideration and subject to all risks, cannot also go against the real nature of the assignment and lead to an inference that it was taken benami for the 1st defendant.

The assignment bas therefore to be accepted as a real transaction intended for the benefit of the assignee himself. It has to be accepted and the assignee permitted to execute the decree as it stands. Since both the defendants are jointly and severally liable under the decree, the remedy of the 2nd defendant in case the entire decree amount is realised from him alone by the assignee decree-holder, will be to seek contribution from the 1st defendant.

4. In the result this appeal fails and it is dismissed with costs.


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