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Shrikishan Vs. Bhanwarlal - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 279 of 1966
Judge
Reported inAIR1974Raj96; 1973()WLN778
ActsNegotiable Instruments Act, 1881 - Sections 118; Evidence Act, 1872 - Sections 3 and 114
AppellantShrikishan
RespondentBhanwarlal
Appellant Advocate A.L. Mehta, Adv.
Respondent Advocate D.S. Shisodiya, Adv. for Respondents Nos. 1 and 2,; Jitendra Kumar Singhvi, Adv. for minor Respondent
DispositionAppeal allowed
Cases ReferredOfficial Receiver v. Abdul Shakoor
Excerpt:
.....obligation and hindu succession act, 1956--debt contracted by father when sons are members of joint family--held, liability of sons is limited to the extent of their shares in the joint family property.;where the sons are joint with their father and debts have been contracted by the father for his personal benefit, 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 religion and piety. the pious obi gat ion of the sons to pay the ancestor's debt to the extent of their interest in the joint family property is not abrogated by the hindu succession act 1956. the liability is, however, not a personal one and is limited only..........case as set out in the plaint is that ganpatlal deceased took a loan of rs. 1,000/- from him for joint family business on 29-1-1963 bearing interest at 'rs. 1.50% per month and executed a promissory note and a receipt in lieu thereof as a collateral security, the same day. he has further alleged that the defendants nos. 1 and 2 bhanwarlal and ramniwas brothers of ganpatlal constituted a joint hindu family with ganpat lal who left behind his widow smt. kamla bai--defendant no. 2, three sons defendants nos. 4, 5 and 6--mahendra, kailash and rajkumar respectively and a daughter defendant no. 7 smt. ramu bai. a decree for rs. 1,000/- principal and rs. 75/- as interest was prayed for against all the defendants. defendants 'nos. 1 and 2 denied the execution of the promissory note as well as.....
Judgment:

C.M. Lodha, J.

1. This is a plaintiff's second appeal arising out of a money suit based on a promissory note marked Ex. 1 on the record.

2. The plain tiff-appellant Shri-kishan's case as set out in the plaint is that Ganpatlal deceased took a loan of Rs. 1,000/- from him for joint family business on 29-1-1963 bearing interest at 'Rs. 1.50% per month and executed a promissory note and a receipt in lieu thereof as a collateral security, the same day. He has further alleged that the defendants Nos. 1 and 2 Bhanwarlal and Ramniwas brothers of Ganpatlal constituted a joint Hindu family with Ganpat Lal who left behind his widow Smt. Kamla Bai--defendant No. 2, three sons defendants Nos. 4, 5 and 6--Mahendra, Kailash and Rajkumar respectively and a daughter defendant No. 7 Smt. Ramu Bai. A decree for Rs. 1,000/- principal and Rs. 75/- as interest was prayed for against all the defendants. Defendants 'Nos. 1 and 2 denied the execution of the promissory note as well as its consideration and further pleaded that they never constituted a joint Hindu family with 'Ganpat Lal nor had any joint family business with Ganpat Lal. Defendant No. 3 also denied the suit. A separate written statement on behalf of defendants Nos. 4 to 7 (minors) was filed by their Court-Guardian Shri Aklesh Chandra Ojha, Advocate. It was a denial of the plaintiff's claim based on lack of know ledge.

3. After recording the evidence produced by the parties the learned Civil Judge, Bhilwara by his judgment dated 24-11-1965 dismissed the plaintiff's suit The plaintiff filed appeal in the Court of District Judge, Bhilwara but was unsuccessful. Hence this appeal,

4. A preliminary objection was raised by the learned counsel for the respondents that there is no valid appeal against the minor respondents Nos. 4 to 7 as they have not been impleaded through the proper guardian appointed by the Court, but their mother Smt. Kamla Bai (respondent No. 3) has beenshown as their guardian in the Memo of Appeal.

5. It appears that Smt. Kamla Bai did not put in appearance in spite of notice having been served upon her as guardian of the minors. On 5-10-1966 learned counsel for the appellant stated that since in the lower court Shri Aklesh chandra Ojha had been appointed as guardian of the minors, he would make an application for substituting Shri Aklesh Chandra's name as guardian in place of Smt. Kamla Bai. On 10-10-1966 the counsel for the appellant filed application that in the Memo of Appeal the name of the minors' mother Smt. Kamla Bai has been mentioned as guardian of the minors by oversight, and, therefore, he may be permitted to substitute the name of Shri Aklesh Chandra Ojha, Advocate in place of Smt. Kamla Bai. There upon it was directed on 4-11-1966 that the notice to respondents Nos. 4 to 7 be issued through their Court-Guardian Shri Aklesh Chandra, Advocate. Shri Aklesh' Chandra Ojha was served on 7-6-1967. However, during the pendency of the appeal he died on 7-3-1973, and an application was moved by the appellant praying that since the erstwhile court-guadian Shri Aklesh Chandra had expired, another guardian may be appointed by the Court. Thereupon Shri Jitendra Kumar Singhvi, Advocate was appointed by this Court as Court-Guardian of the said minors.

6. For the decision of the preliminary objection, it may be relevant to refer to Order 32, Rule 3 (1), Civil P. C. which runs as under:--

'Rule 3 (1). Where the defendant is a minor, the Court, on being satisfied of the fact of his minority, shall appoint a proper person to be guardian for the suit for such minor.'

From the language of the rule, it is clear that the provision is mandatory and the court is bound to appoint a proper guardian for the minor defendant on being satisfied of the fact of his minority. In Chimna v. Chunilal, 1953 Raj LW 592 it was observed by Modi, J. 'that it is the minor who is the real party; the next friend only represents him and acts for him and is not a party to the suit in the proper sense of the term.' This observation was cited with approval in a Bench decision of this Court--Bachh Raj v. Sunder Mal, 1963 Raj LW 167 = (AIR 1963 Raj 119), and in almost similar circumstances it was held that it is a case of misdescription and can be rectified even at a subsequent stage after the institution of the appeal. I may also here observe that even if I were to treat it as not a case of mere misdescription. I would have granted benefit of Section 5 of the Limitation Act to the appellant It is also significant that when the appellant made an application On 10-10-1966 praying that the name of Shri Aklesh Chandra may be substituted in place of Smt. Kamla Bai as guardian of the minor respondents, ho objection was raised by the learned counsel for the respondents Nos. 1 and 2 and notices were ordered to be issued to the respondents Nos. 4 and 7 through their Court-Guardian Shri Aklesh Chandra Advocate. The Memo of Appeal was also got corrected in this respect. Looking to all the facts and circumstances of the case, I do not consider the defect pointed out by the learned counsel for the respondents as in any way fatal to the appeal and here-by overrule the preliminary objection.

7. Coming to the merits of the appeal, it may be immediately mentioned that the execution of the promissory note Ex. 1 by Ganpat Lal has been upheld by both the courts below and the suit has been dismissed solely on the ground that consideration for the same is not proved. Learned counsel for the appellant has, consequently, argued that the learned District Judge took an erroneous view of law in not presuming the promissory note to be with consideration and in not accepting the statement of the plaintiff in light of the presumption provided in Section 118(a) of the Negotiable Instruments Act as sufficient for holding the pro-note with consideration. On the other hand, the Court Guardian Shri Jitendra Kumar Singhvi and Shri Shisodiya, learned counsel for the respondents Nos. 1 and 2 have urged that Section 118(a) of the Negotiable Instruments Act has no application to the facts and circumstances of the case because the suit has been filed against the defendants not as heirs and legal representatives of Ganpat Lal but as survivors in the joint family headed by Ganpat Lal. In support of this contention, they have relied upon Narayana Rao v. Venkatapayya, AIR 1937 Mad 182, and Official Receiver v. Abdul Shakoor, AIR 1965 SC 920. It has been further urged that on the basis of the evidence adduced by the parties the learned District Judge has found that the pro-note is not proved to be with consideration, and as this is a pure finding of fact it cannot be interfered with in second appeal. It has also been argued that the suit is not founded on pro-note but the pro-note has been relied upon by the plaintiff only as a collateral security and therefore the presumption contained in Section 118(a) cannot be pressed into service.

8. Before appraising the rival contentions of the parties, I might state here that it has been found by the courtsbelow that defendants Nos. 1 and 2 did not constitute a joint Hindu family, with the deceased Ganpat Lal, nor the alleged debt in question is proved to have been borrowed by Ganpat Lal for joint business of the deceased Ganpat Lal and the defendants Nos. 1 and 2. This finding has not been called into question before me by the appellant. On the other hand learned counsel for the appellant frankly stated that he would not press the appeal against the said defendants. The decree of dismissal of the suit against the defendants Nos. 1 and 2, therefore, stands and does not call for any further? discussion,

9. As against the defendants Nos. 3 to 7 the learned District Judge has observed, in the first instance, that in the plaint the promissory note 'has been referred to as a collateral security and as the loan is said to have been advanced on the basis of an oral agreement, it is doubtful whether the principle under lying Section 118(a) can be invoked in favour of the plaintiff. Again while discussing the question of burden of proof regarding consideration the learned District Judge has said that because 'the plaintiff has based his claim upon the advance of oral loan, it cannot be said that the burden, of consideration was wrongly put upon the plaintiff'. In the plaint no doubt the words, 'collateral security' have been used by the plaintiff in respect of the promissory note. But this is very likely due to the fact that the implications of the words 'collateral security' were not understood by the plaintiff who himself seems to have drafted the plaint and presented it. The averment in fact is that the loan was advanced and the promissory note was executed simultaneously. The statement of the plaintiff also is to the effect that the advance of the loan and the execution of the promissory note were part of the same transaction. In fact it is not a case where the loan was advanced at one point of time and subsequently on a later date the promissory note was taken from the debtor by way of security for the loan. I am fortified in this view by the fact that there is also a receipt for the amount (Ex. 2) and according to the plaintiff's statement both the receipt as well as the promissory note were written at the time the loan was advanced. When the loan and the note are contemporaneous, it would not be correct to say that the transaction regarding advance of loan was separate and distinct from that of the execution of the promissory note. The applicability of Section 118(a) cannot therefore be excluded on this ground, relied upon by the learned District Judge.

10. Then while considering the evidence adduced by the plaintiff, the learned District Judge has observed that since the person who borrowed the money, namely Ganpat Lal is dead the question of rebutting the presumption arising under Section 118(a) even if it applies, does not arise, as nobody from the side of the defendants could say positively about it. This view is also erroneous. If in the facts and circumstances of the case the presumption under Section 118(a) arises, the Court has no option but to raise it because it is a statutory presumption. Merely because the person who took the loan and signed the promissory note is dead cannot be a ground for refusing to raise the presumption.

11. The plaintiff Shrikishan (P.W. 1) has stated that the amount was paid, in the presence of Satyanarayan and Radheyshyam. P.W. 2 Satyanarayan has however stated that the amount was not paid to Ganpat Lal in his presence but fee had attested the receipt in presence of Ganpat Lal at the latter's instance and that Ganpat Lal had told him nothing about payment. Similarly P.W. 3 Radhey Shyam has stated that Shrikishan and Ganpat Lal both came to him and on their request he attested the receipt Ex. 2. He has further deposed that since he was in a hurry he did not enquire from them as to what for the receipt had been got written. During cross-examination he has deposed that no amount was paid in his presence and that he had attested the receipt at his own shop. In view of the fact that the plaintiff had not been corroborated by his witnesses regarding the actual payment of the amount, the learned District Judge came to the conclusion that the consideration stood disproved from the plaintiff's own evidence. It may be pointed out that the Evidence Act has drawn a clear distinction between the words 'disproved' and 'not proved'. A fact is said to be disproved when after considering the matters before it, the court either believes that it does not exist or considers its non-existence so probable that a prudent man ought under the circumstances of the particular case,, to act upon the supposition that it does not exist. On the other hand a fact is said to be not proved when it is neither proved nor it is disproved. Merely because the plaintiff's statement regarding the presence of the other two witnesses at the time of payment is not corroborated by the statements of the two witnesses P. W. 2 Satyanarayan and P.W. 3. Radheyshyam, It cannot be said that the plaintiff's case regarding consideration has been disproved. I find myself unable to agree to the aforesaid findings arrived at by thelearned District Judge. Nevertheless the questions which arise for consideration are firstly, whether the plaintiff is entitled to a presumption being raised in his favour regarding consideration and secondly whether in the facts and circumstances of the case the consideration is proved.

12. A serious objection has been raised on behalf of the respondents regarding raising of presumption under Section 118(a) of the Negotiable Instruments Act and it has been argued that since none of the defendants is a party to the promissory note and the sons of Ganpat Lal are sought to be made liable on the basis of the theory of pious obligation of the sons in respect of the property taken by them by survivorship, the plaintiff cannot call in aid the presumption under Section 118(a).

13. In AIR 1937 Mad 182 it was observed by Varadachariar, J. that a suit on a promissory note instituted against the undivided son of a Hindu promisor governed by the Mitakshara law after the latter's death cannot be regarded as one against the heirs or representatives of the promisor, because it only seeks to enforce the Hindu Law theory of pious obligation of the sons in respect of property which the sons have taken by survivorship. The pious obligation can arise only on the assumption of the existence of a debt due by the father; and in such a case the onus of proving the existence of a debt must prima facie be laid on the creditor, who can call in aid the presumption permissible under the general law of evidence, namely Section 114 of the Indian Evidence Act and not the presumption under Section 118(a) of the Negotiable Instruments Act. The learned Judge observed,

'Though this section is not, like Sections 119 to 122, limited in terms to a suit upon the instrument, it seems only reasonable to hold that the special rules of evidence laid down in Section 118 must have been intended to apply only as between the parties to the instrument or those claiming under them. In other cases the presumption can only, be in the terms enacted in Section 114 of the Evidence Act (vide illus. (c)) which by the use of the expression 'may presume' leaves it to the court to apply the presumption or not according to circumstances.'

These observations were quoted with approval by their Lordships of the Supreme Court in Official Receiver v. Abdul Shakoor, AIR 1965 SC 920.

14. The question then arises whether in the facts and circumstances of the present case the defendants should be regarded as heirs or representatives ofthe promisor? The plaintiff has stated in the plaint that the loan in question was taken for joint family business and that all the defendants constituted a joint Hindu family with the deceased Ganpat Lal. It has been held time and again that where the manager of a joint family borrows money on a promissory note for a joint family business or to meet a joint family necessity, the other members of the joint family may be sued on the note though they are not parties to it, but their liability is limited to their share in the joint family property. Apart from that, even where the sons are joint with their father and debts have been contracted by the father for his personal benefit, 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 religion and piety. The pious obligation of the sons to pay the ancestor's debt to the extent of their interest in the joint family property is not abrogated by the Hindu Succession Act, 1956. The liability is, however, not a personal one and is limited only to the interest in the joint family property.

15. There is nothing in the statement of P.W. 1 Shrikishan, that he had sued the defendants in their capacity as persons claiming under Ganpat Lal or as his heirs and legal representatives. On the other hand in view of the averment contained in the plaint that the loan was taken by Ganpat Lal for joint family business, there is no escape from the conclusion that the defendants were not sued as heirs of deceased Ganpat Lal but as members of the joint Hindu family headed by the deceased Ganpat Lal as the father. In this view of the matter it is not permissible to raise the statutory presumption regarding consideration contained in Section 118(a) of the Negotiable Instruments Act. This, however, does not bring the matter to a close, inasmuch as even where Section 118 is not applicable presumption can be made in the terms enacted in Section 114 of the Evidence Act (vide illustration (c)) which is ,as follows:---

'That a bill of exchange accepted or endorsed was accepted or endorsed for good consideration,'

In AIR 1965 SC 920, their Lordships, were pleased to observe that under the third illustration to Section 114, the court may presume that a bill of exchange accepted or endorsed was accepted for good consideration. The use of the expression 'may presume' however leaves it to the court to apply the presumption or not according to the circumstances. Attention of the learned DistrictJudge, it appears, was not drawn to this provision at all. The question then arises whether in the facts and circumstances of the present case the presumption under Section 114(c) can be called in aid? The plaintiff has stated in clear terms that he got the promissory note and the receipt executed by the defendant after payment of the amount. The execution as well as consideration were both denied by all the defendants, who have pleaded want of knowledge regarding the whole transaction. The execution has been held to be proved. Both the attesting witnesses Satyanarayan & Radhey Shyam have stated that they attested the receipt Ex. 2 at the instance of Ganpat Lal deceased, though the amount was not paid in their presence. There is a clear recital in the receipt that the amount as mentioned therein had been paid in cash. It may be due to fault of memory or some misunderstanding that the plaintiff has stated that the money was paid to Ganpat Lal in the presence of the two attesting witnesses. However, in face of the clear admission in the receipt that the amount had been paid, it cannot be held on account of this slight discrepancy which is not material in the circumstances of the case, that the promissory note and the receipt were got executed by the deceased Ganpat Lal without consideration. There is nothing on the record to show that the plaintiff had any motive for bringing a false case against the defendants. There is not even a suggestion to that effect from the defendants' side. It is also incomprehensible that if a bogus promissory note and a bogus receipt had been got executed by Ganpat Lal, he would have remained silent and would have raised no objection, more particularly when Ganpat Lal was a literate businessman. Judging this evidence in the light of the presumption under Section 114(c) of the Evidence Act I am inclined to hold that it is a fit case where this general presumption should be applied. The presumption in Section 118 of the Negotiable Instruments Act is in terms enacted in Section 114, Evidence Act and leaves it to the Court to apply it or not according to the circumstances. But once the presumption is made it must be displaced or disproved by the opposite party. Admittedly there is nothing from the side of the defendants to rebut the presumption.

16. The net result of the foregoing discussion is that the promissory note and the receipt in question must be held to be with consideration. Consequently, I allow this appeal against the defendants Nos. 3 to 7, and set aside the judgments and decrees of the courts below qua them and hereby decree the plaintiff's suit for Rs. 1,075/- against thedefendants Nos. 3 to 7. The plaintiff shall be entitled to costs of both the lower courts from defendants Nos. 3 to 7, but the plaintiff as well as defendants Nos.3 to 7 will bear their own costs of this Court. The liability of the defendants for the decretal amount shall be limited to the joint family property or other property received by them from Ganpat Lal. The plaintiff-appellant shall also be entitled to get interest on the principal amount of Rs. 1,000/- at the rate of 3% per annum from the date of the suit till realisation.

17. The appeal against defendants Nos. 1 and 2 is dismissed. Defendants 1 and 2 shall be entitled to get their costs of this appeal from the appellant.

18. Shri Jitendra Kumar Singhvi, Guardian Ad Litem for defendants Nos.4 to 7 prays for leave to appeal to Division Bench. Leave is refused.


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