1. The suit from which this appeal arises was instituted by the respondent-plaintiff in the Court of the Civil Judge (S.D.) at Ahmedabad for recovering in all a sum of Rs. 17,131-86 p. Due as per statement of accounts dated 27-10-1954 with future interest and costs of the suit, against the defendants-appellants.
2-5. Xx xx xx xx
2. Two points have been urged by Mr. Mody, the learned advocate for the appellants, before us. The first is that the trial court has erred in holding that the amount due from defendant No. 1 the firm running in the name of Ramprasad Chhotalal was in the nature of a deposit so as to be governed for the purpose of limitation by Art. 60 of the Indian Limitation Act. According to him, it was merely a loan and not a deposit and would therefore, be governed by Art. 57 or 59 of the Indian Limitation Act. As the period of Limitation in that event commences from the date when the loan is made, this suit filed after a period of three years provided for the same, would be barred by limitation. On the other hand, it is said that the cause of action for a claim for money deposited with the firm under Article 60 of the Indian Limitation Act would commence from the date when the demand is made. On that basis the suit is within time - it having been filed within a period of three years from the demand period of three years from the demand made in the month of May, 1956. The other point raised by him is that the right and share in the ancestral Joint family properties of Chhotalal Lallybhai, with defendants Nos. 4 to 10 cannot be held to any way liable for the suit claim since the family had nothing to do with that firm, and its partners were only Ramprasad and Natwarlal. Natwarlal, according to him was taken as a partner in the firm in his individual capacity and not as manager or the eldest member in the family. In order to appreciate the contentions raised before us, as few facts may well be set out. One Atmaram Kalidas happened to have close connections with both Ramprasad and Chhotalal. He had deposited in the name of his a first wife by name Kamala a certain amount with the firm running in the name of Ramprasad Chhotalal Patel, even prior to S. Y. 1938. After her death, Atmaram's marriage took place with the present plaintiff. The amount that stood due in the name of his first wife with the firm was then transferred to the name of his second wife- the plaintiff. At any rate, that amount stood in the firm's accounts in the name of the plaintiff since 10-11-1931. A statement of accounts as per ext. 85 sent by the firm shows that Rs. 8784-12-0 were due to her. Later on it appears that some amounts were withdrawn by her and some were added to her account. It is common ground that the firm used to prepare statement of accounts at the end of every Samvat year and it was sent to her. That went on up to the death of Chhotalal which took place on 21-11-1950. Even after his death the firm continued in the same name and as the evidence discloses, Natwarlal-defendant No. 2 the eldest son of Chhotalal, joined in that partnership firm. He appears to have looked after the affairs of the firm as well. The statement of accounts in respect of the plaintiff's dues came to be sent to the plaintiff as usual every year as would appear from Exs. 87 to 106 and the last one was sent under the signature of Natwarlal as per Ex 107. The amount due thereunder was Rs. 13,773-1-0 on Kartik Sud 1 of S.Y. 2010. As already pointed out hereabove, a demand was made in the month of May 1955 and since nothing came out from it a notice under Ex. 108 dated 3-10-55 was sent to the defendants. The reply as per Ex. 111 dated 31-10-1955 thereto was given by defendants Nos. 2 and 3 both for themselves and on behalf of the firm-defendant No. 1 whereby while they admitted the amount due from them, they denied the liability of the other heirs and legal representative of Chhotalal, including in respect of their shares in the ancestral or joint family properties of Chhotalal. In the suit, defendants Nos. 1, 2 and 3 did not appear and contest the claim. However, defendants Nos. 1 and 3 and also the heirs and legal representatives of defendant No. 2 have joined as appellants along with the defendants Nos. 4 to 10 - the heirs and legal representatives of deceased Chhotalal in this appeal, against the decision passed by the trial Court.
3. As to the amount due to the plaintiff, there is no dispute whatever raised before us. The question however, is whether the amount due from the firm-defendant No. 1 was a deposit so as to be governed by Art. 60, or that it was a loan contemplated in Art. 57 or 59 of the Indian Limitation Act as urged by Mr. Mody before this Court. Mr. Mody's contention is that the onus of proving that the amount was deposited so as to entitle the plaintiff to claim it on demand with the firm would be on the plaintiff and she has failed to discharge the same. According to him, when a person hands over money to any person not being in the nature of a gift, even though payable when demanded would ordinarily mean a loan so as to say that money was lent to the other person. In order to show that it was in the nature of a deposit so as to have the claim brought under Art. 60 of the Limitation Act, it would be essential for the plaintiff to show that it was not merely a loan but was a deposit. In support thereof, he invited a reference to the observations made in a decision in the case of Govind Chintaman Bhat v. Kachubhai Gulabchand, AIR 1924 Bom 28. The contention was of a similar character we have before us and while dealing with that contention it was observed as under:-
'it is not clear what the Legislature meant by the word 'deposited' in Article 60 but there must be some difference between 'money lent' and 'money deposited' and one can only assume that a plaintiff relying upon Art. 60 must prove that something took place between the parties at the time the money passed which would constitute the handing over of the money 'a deposit', and not 'a loan'.
Going further, the material observations relied upon run thus:-
'Ordinarily when A hands over money to B on the understanding that it is not a gift but has to be repaid when demanded, that would be considered in law 'a loan' and when the plaintiff seeks to prove that the money so handed over was 'a deposit', the onus would lie upon him to prove that there are additional circumstances which turned the 'loan' into a 'deposit'. There is no distinction in the Act between the money lent and money deposited with regard to the agreement to re-pay. So that it is not the agreement that the money should be payable on demand that distinguishes a deposit from a loan. There must be something further proved, and it is not possible to define exactly what that something further must be. It has sometimes been suggested that facts must be proved which create a sort of fiduciary relationship between the lender and the borrower. It cannot be said that that is always necessary.'
4. It was pointed out by Mr. Mody that the firm was carrying on business in cloth etc, and was not acting as a banker and that there existed no fiduciary relationship with the firm so as to say that amount was taken by way of deposit. No special circumstances are also shown to suggest that it was not a loan and that it was a deposit. In those circumstances, he argued that it was a claim for money payable for money lent so as to come under Art. 57 or even if it were to come under Art. 59 as a suit for money lent under an agreement that it shall be payable on demand, since the period of limitation commenced from the date when the loan is made, the suit would be time barred. It cannot be called a deposit as contemplated under Article 60 so as to say that the suit is in time from the date of the demand made for the same. If it is found to be a loan, it is not in dispute that the suit would be time barred. Now in the first place it is essential to point out that Art. 60 does not say that the amount due to become not say that the amount due to become a deposit must be given to a banker or that he must be in a fiduciary position. In order to apply Art. 60, itis no doubt required to be shown that the amount was deposited with the firm. The evidence in that regard can well appear from circumstances disclosed, leading to an inference that it was not a loan but kept as a deposit with the firm. Before we refer to som of the decisions referred to by Mr. Vakil, the learned avocate for the respondents we may observed, that it appears clear from the very decision relied upon by Mr. Mody that it cannot be said that there must exist fiduciary relationship between them though if that existed, it may help in determining the nature of the transaction. In the case of Bhimanna Kumaji v. Venichand Fattechand : AIR1926Bom168 it was pointed out that under Art 60 of the Indian Limitation Act, it is not necessary to prove that the borrower is carrying on business only as a banker. It has been further observed that a man might bcome a banker, or place himself in the position of a banker, with regard to a particular customer, and if the dealings with the lender and the borrower are such that the Court is satisfied that it can be said that the borrower is in the position of a banker to the lender then the money so lent can be considered as a deposit. The mere fact, therefore, that the firm was carrying on some business in cloth etc.would not necessarily mean that it cannot be treated as a banker qua the plaintiff in the circumstances of the case. As observed in the case of V.E.A. Annamalai Chettiar v. S. V. V. S. Veerappa Chettiar : AIR1956SC12 , whether a transaction is a transaction of laon or deposit does not depend merely on the terms of the document but has got to be judged from the intention of the parties and all the circumstances of the case. Even though the transaction is a transaction of deposit the deposit can be coupled with an agreement that it will be payable on demand. Such an agreement can be express or implied and if an express agreement in that behalf is recorded in the document that transaction of deposit cannot be thereby converrted into a transaction of loan and the words 'we shall pay the said sum' cannot convert the document into a promissory note. The promise to pay will be involved in a promissory note as well as in a deposit within the meaning of Art. 60. Limitation Act and the Court will have regard to the intention of the parties and the circumstances of the case. In other words, even if there existed any document wherein there had been a promise to pay the said sum, it would not necessarily be taken as a document of loan and that the Court would be required to find out the intention of the parties as to whether the amount sought to be secured was a deposit or a loan secured by the document itself. In the various statements of accounts sent by the defendant-firm under the signatures of defendant No. 2 or Natwarlal, the words 'Baki lewa' have been used. They indicate no doubt about their having made a statement to the effect that they owed to them that much amount stateed therein. But the use of such expression in the statments of account would not necessarily mean to conveythat it was not a deposit and that it was not a deposit and that it was in the nature of a loan. Going further, we may refer to a decision in the case of Suleman Haji Ahmed Umer v. Haji Abdulla Haji Rahimtulla , where their Lordships of the Privy Council laid down some of the tests to determine as to whether any such amount given to the other person was in the nature of a deposit or loan. The facts of the case were that the plaintiff handed over this money to the defendant who credited it in a bank in his own name, and credited it in his account-book to the plaintiff. That went on from time to time over a long period of time. A question having arisen whether the transaction was a loan or deposit for the purposes of the Indian Limitation Act, it was held that the transaction was not a loan falling within Arts. 57 and 59 of the Act because of the absence of any security for the alleged loans such as of any receipt in writing, or any promissory note or any agreement as to what rate of interest the loan was to carry. It further held that the course of dealing between the parties was that the defendant was acting very much as a banker for the plantiff, he received for safety custody whatever moneys the plaintiff wished to hand over to him and he paid those moneys to the plaintiff only when the plaintiff asked for them and that there was nothing to show that the defendant was under any duty to seek out the plaintiff to repay him. In these circumstances, the transaction was that at a deposit and the suit was governed by Art. 60 of the Indian Limitation Act Applying these tests to the present claim by the plaintiff, it appears that at no stage any writing was obtained so as to serve as a security for the amount given to the defendants viz by way of a receipt or a promissory note or the agreement. All that was done was that the amount was handed over to the defendant-firm and a Khata in her name was maintained in the account books of the firm. The intrest was added to the same every year and afer making accounts at the end of the year, a statement thereof was sent to the plaintiff showing the amount due from the firm to her. This course of conduct continued for long. It shows that it was not the defendant No. 1 who had borrowed the amount out of same necessity on its part or about the plaintiff having advanced or lent any such sum. On the contrary the circumstances indicate, that having regard to the close connection of the plaintiff's husband with the firm and with a view to have the amount remain in the name of his wife that the amount was kept by way of a deposit with the firm. The firm was carrying on business and there is hardly any suggestion much less any evidence or record to show that the firm was in need of money or had at any ime asked for any amount to say that it borrowed the same from the defendant. There was, therefore, no question of lending the money, but it was a question of depositing the amount in the name of the plaintiff in view of such relationship that existed between her husband and defendant No. 1 and the manner in which the amount has been allowed to remain with the firm. It also appears clear that the defendant-firm was not under duty to seek out the creditor such as the plaintiff in the suit for repaying the amount as it should have ordinarily happened in the case of having received a loan. On the contrary, the defendant had to repay the same only on a demand made by the plaintiff. The defendant-firm can, in those circumstances, well be said as if it had acted as a banker or shroff qua the plaintiff in the case. If we turn to the pleadings in the caes, a clear case of deposit with the firm-defendant No. 1 was set out in the plaint. While the defendant-firm and its partners Nos. 2 and 3 have not chosen to appear and contest the claim, the other defendants also had not even suggested that it was in the nature of a loan and not a deposit. More than that we find some reference at two different places in the reply Ex. 111 given by defendants Nos. 1, 2 & 3 to the notice Ex 108 whereby this amount was demanded by the plaintiff from them. In the very first para thereof it has been stated that in about the S.Y. 1988 the amount was deposited in the name of Bai Reva with interest at the rate of 4 1/2 per cent. 'Teriklhe Vyajuka nana jama mukela' (Original in Gujarati transliterated here - Ed.). Towards the end of the reply in para 10 thereof a similar reference has again been made by saying that the amount was deposited at the rate of 4 1/2 per cent by Atmaram in the name of his wife Bai Reva with the firm and that a Khata was maintained and that it continued for all the time. The words 'nan jama mukela' (Original in Gujarati transliterated here - Ed,). Clearly indicated about her having deposited the same and not about the firm having borrowed the same or about the plaintiff having lent or advanced the same to the defendant No. 1. There is, therefore, hardly any substance in the contention now raised that the amount was in the nature of a loan and not as a deposit so as to come within the ambit of Article 57 or 59 of the Indian Limitation Act. In our view, therefore apart from clear admissions made by the persons concerned, in respect of the amount lying with the firm, applying the different tests to the facts of this case, we feel amply satisfied that the amount was in the nature of a deposit with the firm and that was payable on demand under an implied agreement and that the interest was to run at the rate of 4 1/2 per cent. The suit claim would, therefore, be governed by Article 60 of the Indian Limitation Act and that the cause of action for filing a suit commenced from the date when the demand was made by the plaintiff in May 1955. That way the suit was filed within a period of three years contemplated for the same under article 60 of the Indian Limitation Act. The finding of the learned Civil Judge in that respect is, therefore, correct.
5. The next question relates to the nature of liability of the defendants Nos. 4 to 10, the heirs and legal representatives of deceased Chhotalal who happened to be a partner in the firm till his death. The liability of the firm is not in dispute. Its partners Ramprasad and Chhotalal were also personally liable for any such debt. There is no challenge on account of Ramprasad's heirs and legal representatives. The only question before us is whether the shares of defendants Nos. 4 to 10 in the joint family properties of Chhotalal were liable for the debt of Chhotalal. Mr. Vakil, the learned advocate for the respondents, urged that even on the basis that in the firm-defendant No. 1, Chhotalal was a partner in his individual capacity and not as a Karta or manager of the family, the liability in respect of such a debt of the firm would certainly be even against the joint family properties in which defendants Nos. 3 to 10 had the coparcenary interest by reason of the doctrine of pious obligation to pay the debt of the father unless it is shown that the debt was illegal or immoral. In that respect, he invited a refernece to some decisions the principles whereof have been well set out in paragraph 290 of Mulla's Hindu Law. We may, therefore, conveniently refer to them insisted of referring separately to those decisions. Clause (1) of paragraph 290 refers to the pious obligation of son, grandson and great-grandson to pay ancestor's debts. It relates to debts which have been contracted by the father in the capacity of manager and head of the family for family purposes. In that even his sons as members of the joint family are bound to pay the debts to the extent of their interest in the coparcenary property. The second part thereof, however, is important and that relates to debts which have been contrated by the father for his own personal benefit while the sons are joint with him. When such is the case, as stated therein, the sons are liable to pay the debts provided they are not incurred for an illegal or immoral purpose. The liability to pay the debts contracted by the father, though for his own benefit, arises from an obligation of religioin and piety which is placed upon the Mitakshara law to discharge the father's debts, where the debts are not tainted with immorality. The fact that the father was not that the family consisted of other coparceners besides the father and sons, does not affect the liability of the sons in any way. This pious obligation as set out in Cl (2) thereof, to pay the ancestor's debts to the extent of their interest in the joint family property is not abrogated by the Hindu Succession Act and then as stated in Cl (3) thereof, their liability is not a personal one, that is to say the father's creditor is not entitled to proceed against their person or their separate property. It is limited to their interest in the joint family property unless there is acceptance of personal liability. Then we may usefully refer to Clause (4-A) in paragraph 292 which relates to a creditor's suit. This Clause 4(A) relates to a suit against the son after father's death, there being no suit against the father. In such a case, the creditor may file a suit and obtain a decree against the son, and attach the entire interest of the father and son in the coparcenary property, and have it sold in execution of the decree. The son being under a pious obligation to pay the father's debts, he cannot claim the benefit of survivorship. Such a debt as contracted by the father must be not one for an unlawful or immoral purpose. We may in this connection refer to the decision in the cse of S. M. Jekati v. S. M. Borker : 1SCR1384 , where it has been held that the liability of Hindu sons in a Mitakshara coparcenary family to discharge the debts of the father, the karta, which are not tainted with immorality or illegality is based on the pious obligation of the sons which continues to exist in the lifetime and after the death of the father and which does not come to an end as a result of partition of the joint family property unless a provision has been made for the payment of the just debts of the father. In other words the liabiltiy of the sons to discharge such a debt contracted by the father continues not only during his lifetime but also after his death. It is, therefore, not necessary that a decree must have been obtained agianst the father as a head of the family or that the sons should have been party to a suit in which that decree is passed. It is, therefore, clear that the firm-defendant No. 1, even as admitted by defendant No. 5 in his deposition before the Court, was a running concern till Chhotalal's death which took in November 1950. Taking Chhotalal as a partner of that firm in his own personal capacity and not acting as a manager or a head of the family by reason of his being the father of the members in the family, the liability in respect of any debt devolves or, at any rate, is required to be discharged by the sons by reason of this doctrine of pious obligation provided that it was not tainted with immorality.
6. Before we consider this aspect of the matter, we may deal with some points raised by Mr. Mody having reference to the claim being due on death of Chhotalal. In our view, the debt such as the one in this case continued to exist so far as the firm was concerned and that the cause of action in respect of that debt for recovering the same against the firm would only arise on the demand made thereof. The demand was made both from defendants Nos. 1, 2 and 3 as also from the members of the family of Chhotalal in May 1955 and the suit filed is in time. It was said that as soon as Chhotalal died, the partnership stood dissolved by reason of his death as contemplated under Section 42(c) of the Indian Partnership Act and, therefore, the debt became payable with effect from that date. On a perusal of the provisions of the Indian Partnership Act, we find no provision which says that the rights of the strangers to the partnership firm are affected thereby. Such a right continues in the creditor unless it is discharged by the firm or its partners, provided the claim is otherwise in time. Now in this connection we may state that it is no doubt true that the firm would be dissolved by the death of a partner, but that is always subject to the contract between the partners as contemplated in Section 42 of the Act. Such a contract need not be express. It may be implied and can well be gathered from the conduct of the paries and the circumstances disclosed in the case. We may in this connection point out that it is with effect from the date of the death of Chhotalal that defendant No. 3 Natwarlal is said to have entered into this partnership firm. That wold appear from the registration certificate produced at Ex. 116. It is dated 14th January 1952. The recitals thereof indicate that Natwarlal joined this partnership firm running in the same name as the defendant No. 1 with effect from 21-11-1950, the date on which Chhotalal died. He was the eldest member in the family surviving after Chhotalal's death, the other sons being minors then. They were all joint and were living together. In those circumstances, there was hardly anything to the contrary to suggest that Natwarlal was taken in as a partner of the same firm in his individual capacity as is attempted to be said by Natwarlal and Ramprasad in their reply Ex. 111 to the notice given by the plaintiff. Ramprasad was the brother of chhotalal and that way the uncle of Nartwarlal. The course of events clearly suggests that Ramprasad on Chhotalal's death took Natwarlal, the eldest member in the joint family, as a partner in the firm, and he must have thus been a partner as representing the family. He has chosen to say otherwise, with a view to enable other members of the family escape the liability to the extent of their shares in the joint family property. Neither Natwarlal nor Ramprasad has chosen to produce the partnership deed. Nor any of them has appeared in the suit and given evidence in the case. In those circumstances we feel inclined to hold that Natwarlal being the eldest member in Chhotalal's branch was taken as a partner representing the members of the joint family of Chhotalal. That has been the plaintiff's case and it has remained almost uncontroverted by any evidence whatever led by Natwarlal or Ramprasad. Mere registration certificate Ex. 116 cannot justify them to say or even help other defendants in saying that Natwarlal was joined as a partner of that firm in his personal capacity and that he did not represent the family. In those circumstances, there would not arise any question of the dissolution of the firm so as to say that any money was required to be demanded on the dissolution of the firm. In fact the firm continued in the same name and the statements of account had thereafter continued to be sent to the plaintiff in the name of the firm in the same way as it was done before. No demand was at that time made and consequently the character of the amount of deposit lyig with the defendant-firm cannot be said to have been lost so as to say that it was in the nature of a loan as is attempted to be said by Mr. Mody before us.
7. Mr. Mody also tried to suggest in that connection that even a receipt of some amount from the deposit amount lying with the firm would amount to a demand and that way he tried to show that the plaintiff had off and on recovered some amounts long before and the cause of action for the remaining amount had started from that date when some amount was withdrawn and that way the suit was time-barred. As we said above, the nature of the amount lying with the defendant-firm does not lose its character. It does not become a loan by reason of the fact that the partnership was taken to have been dissolved in the circumstances of the case, nor could it be said that even a receipt of some amount out of the deposit amount lying with the firm could amount to a demand made in respect of the whole amount so as to allow the period of limitation to run against the plaintiff. In the case of Daw Hnit v. Anamalai, AIR 1938 Ran 335, such an argument was advanced and it was held that the demand contemplated by Art. 60 is demand for the repayment of the whole amount for the deposit due, and not a demand for partial payment. As to the change in the character of the amount lying with the defendant, a similar argument appears to have been advanced in that case and it was observed that the creditor's claim was that of a deposit and that deposit had not lost its character as such by reason of insolvency proceedings. In other words, the dissolution even if it had taken place of the partnership firm with the death of Chhotalal cannot be taken to change the character of the amount lying with the defendant so as to affect the plaintiff, and the cause of action would, therefore, only arise when a demand is made in respect of the entire amount of deposit due from the defendant-firm.
8. We may incidentally refer to the effect of the dissolution of the partnership or say winding up of the partnership arising under the provisions of the Indian Partnership Act. In order to wind up the affairs of a dissolved partnership it is necessary first to pay its debts and then to settle other questions of amount between the parties. In other words, the consequences of a dissolution of a partnership arise both as regards the creidtors and as regards the partners themselves. As between the partners, as to the consequences on a dissolution of a partnership we are not concerned in this suit. But we may refer to the principles deduced from different decisions in so far as they relate to the creditors of the partnership firm, in 'Lindley on Partnership' (Eleventh Edition) at page 772. Of the six principles so set out, the first two are of some relevance. They are as under:-
1. That a dissolution of partnership whether general or partial, does not discharge any of the partners from liabilities incurred by them previously to the time of dissolution.
2. That in order that a member of a firm, wholly or partially dissolved, may be freed from his liability to a person who was a creditor of the firm at the time of its dissolution, such creditor must either have been paid, or satisfied, or must have released or dishcarged the late partner,or have accepted some fresh obligation in lieu of that which existed when the firm was dissolved.
We may point out that certain arguments advanced by Mr. Mody would be amply met thereby. His first argument was that the original partnership which ran in the name of Ramprasad Chhotalal was between four persons as would appear from the partnership deed Ex. 114 dated 7th December 1931. The amount was deposited with the firm even befoe that. Now this document makes no reference whatever about the plaintiff's dues. But it appears from the statement of accounts as per Ex. 85 that it has come to be acknowledged by this partnership firm from the previous one. That firm can be taken to have taken over the liability to the plaintiff for her dues from the previous firm. It was not discharged at any time. It can hardly be said that the liability came to an end with the same firm taking over some other partners or relesing some therefrom. How it came to be so changed we have no material on record. Now we find that the partnership again continued in the name of M/s. Ramprasad Chhotalal as per the other partnership deed Ex. 115. This deed shows that Chhotalal Lallubhai had ten annas share as against six annas share in a rupee of Ramprasad Lallubhai. This partnership admittedly continued till the death of Chhotalal and it was on the death of Chhotalal that Natwarlal is said to have joined viz., on 21-11-1950 in place of his father Chhotalal. The firm name remained the same. The partners thereafter continued to be Ramprasad Lallubhai and Natwarlal in place of his father Chhotalal. During the existence of the partnership firm, as per the deed Ex. 115 the claim of the plaintiff continued to remain and the firm had sent statements of accounts to the plaintiff every year. As already pointed out hereabove, Natwarlal joined the firm on the death of Chhotalal. The partnership agreement which was arrived at between them has not been before us. In fact Natwarlal was summoned to produce the same and he failed to do so. The only inference that can be drawn is that Natwarlal continued to be in place of his father and that he beiung the eldest member in the family, represented the family in that partnership firm. The said firm san be said to have continued on the same basis in absence of anything shown to the contrary. Even after Natwarlal having joined his father's firm, in the statements of accounts sent by the firm and in fact as already pointed out hereabove. In the reply to the notice given by the plaintiff, both Ramprasad and Natwarlal had admitted it. Even if, therefore, the partnership had come to be dissolved for one reason or the other, and so far as the first partnership was concerned or even the second partnership was concerned, it will have to be assumed that the next partnership had accepted the same obligation in lieu of that which existed when the firm was dissolved. In absence of any material whatever to show that the creditor must have been paid or his claim was satisfied or that he had released or discharged any such partner of the firm, this position would be covered in the second principle just set out hereabove from Lindley on Partnership. It is equally clear that even with the dissolution of partnership unless it is shown otherwise, the partners cannot be said to be discharged from the liability incurred by them previously till the time of dissolution. In view of these principles, the claim of the plaintiff would in no way stand affected by reason of the change in the partners of the firm, and the character of the dues so far as the plaintiff is concerned may also remain unchanged in respect of the firm having two partners and later, on the death of Chhotalal, Natwarlal having been taken over on behalf of the family. Thus, by reason of the fact that Natwarlal happened to be the manager of the family of defendants Nos. 4 to 10, they would be liable, though not personally, to the extent of their interest and share in the joint family property.
9. Turning back to the doctrine of pious obligation even if Natwarlal was a partner of the firm in his individual capacity and not in his capacity as a head of the family representing all the members of the family, they would be liable to the extent of their share or interest in the joint family property by reason of the doctrine of pious obligation to discharge the debts of their father who was the partner of the firm till his death and in respect of which no demand was made till 1955. His liability as a partner continued in absence of the same having been dicharged or taken over with the consent of the plaintiff by the new partners. That has not been so shown. As we said above, defendants Nos. 1, 2 and 3 were ex parte. They have not appeared and challenged the claim. Defendants Nos. 4 to 10 have also not alleged that Chhotalal had contracted a debt which was illegal or immoral so as to enable them to avoid their liability in regard to their share or interest in the family property. No such plea is raised. It was urged by Mr. Mody that there has been no averment to that effect in the plaint for holding them liable on that basis viz., upon the doctrine of pious obligation to pay the father's debts, that they would be able to contend that the debt was of an immoral character. The claim of the plaintiff has been obviously on the basis that Natwarlal had become a partner of the firm as a head of the family and he represented them as such in that partnership firm in place of Chhotalal. The attempt on the part of the defendants was that Natwarlal had joined the firm in individual capacity and if that was the contention, naturally the question would arise as to their liability in respect of the debts of deceased Chhotalal by reason of his being a partner in that firm. That liability would be based on principle of law and if at all it was a suggestion or contention of the defendants that such a debt was illegal or immoral, the plea ought to have been raised that they are in no way responsible for paying the debts incurred by the father on such a ground. It was, however, pointed out by Mr. Mody that he can show that it was a debt contracted by the father in starting a new business, and that he cannot bind his sons for the debt contracted for a new business which may well be called Avyavaharik debt. Some cases were referred to by him. It may not be so very necessary to refer to them for we find the principles well deduced from those decisions and have been set out in paragraph 224, clause (2) at page 264 in Mulla's Hindu Law under the caption 'New Business'. The principle set out therein is that the manager of a joint family cannot impose upon a minor member of the family the risk and liability of a new business started by himestate in order to provide money for one self and the other adult memebrs. Even where the father is the manager, he is not entitled to mortgage the joint family of his sons to start a new business. Such a mortgage is wholly invalid against minor coparceners. Later on it has been observed that as regards adult members it has been held in India that the manager cannot impose even upn them the risk and liability of a new business started by him, unless the business is started or carried on with their consent express or implied or though started by the manager only, joint funds were afterwards utilised for the business to the advantage of the joint family or its continuance was found beneficial to the family or it was adopted as a family business by the other members who continued to enjoy the benefits of the same. Before applying any such principles, it has to be established that the debt was contracted for the purpose of entering into a new business by any individual member in the firm so as to bind other members in the family. In the present case, as already pointed out hereabove, we have no material on record to exactly know how and for what purpose the amount was accepted by the firm. The only thing that we are able to gather from the material on record is the statement of accounts sent to the plaintiff every year from time to time by the firm acknowledging the firm's liability to pay the same. What happened to the first partnership and in what manner it came to be dissolved we do not know. All that could well be known by the defendants themselves. Their accounts would have shown the same. None of those accounts has been produced to show as to whether this amount was taken by way of a loan for starting a new business so as to create any such effect in respect thereof. Subsequently. Since the first partnership had two partners Ramprasad and Chhotalal, this amount was carried forward as the amount deposited with them. In other words there is not an iota of evidence or material on record to suggest much less show that this amount was borrowed for the purpose of starting a new business. No attempt is made to explain the same and the material in that regard could only be with the defendants who have remained ex parte and have not chosen to produce the same. The written statement Ex. 24 filed by the defendants Nos. 4 to 10 does not even suggest any such thing and all that it says is that Natwarlal had become a partner of the firm in his individual capacity and that they were not bound by it. No such plea is raised and even there has been no material in that regard to substantiate any such argument advanced before us. In those circumstances, it is abundantly clear that the interests or shares in the joint family property so far as defendants Nos. 4 to 10 are concerned, would be liable for the claim of the plaintiff against the firm-defendant No. 1 of which Ramprasad and Chhotalal were partners and later on on Chhotalal's death Natwarlal joined the same as the head of the family. The learned Civiil Judge was, therefore, right in holding accordngly.
10. In the result, the appeal fails and it is dismissed with costs.
11. Appeal dismissed.