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P.L.P.L. Palaniappa Chettiar and ors. Vs. Pana Lana Seena Shanmugam Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported in(1918)35MLJ90
AppellantP.L.P.L. Palaniappa Chettiar and ors.
RespondentPana Lana Seena Shanmugam Chettiar and ors.
Cases Referredand Krishna Ghettiar v. Nagamani Ammal I.L.R.
Excerpt:
.....village in favour of the chatram pay to murayur p. that case however, like the case from which it differed, was not a case of a negotiable instrument but of a covenant in a deed as to which other considerations are applicable. sufficiently indicated that he was acting as an agent within the meaning of section 28 for the whole family who are heriditary hukdars including himself, this would merely render the other members of the family liable as well as himself, i do not however think that any clear indication can be gathered from this signature of an intention to make anyone liable but himself. when the agent of a chetty firm in executing a negotiable instrument prefixes the firm's vilasam this is a well understood indication that he is acting only as an agent and has been so..........consideration of the plaintiff's relinquishment of his claim to a certain village in favour of the family charity. the village was not one of those expressly dedicated to charity by the family. the plaintiffs father had claimed it, and the plaintiff himself had been enforcing his claim to it with some success in the years preceding the execution of the promissory note. the appeal of defendants 3 and 5 to 7 therefore fails and is dismissed with costs of the plaintiff.3. the learned judge has given to plaintiff a decree against the charity properties in the hands of the defendants 2 to 15, and the plaintiff in his memorandum of objections claimed that the 1st defendant was personally liable on the suit note and that he was entitled to a decree against his sons and grandson. he asked in the.....
Judgment:

Sir John Wallis, C.J.

1. This is an appeal from a decree of Kumaraswami Sastri, J., in a suit brought by the plaintiff on a promissory note executed by the 1st defendant describing himself as ' P.R.P.L.S.Hukdar.' The plaint sought to make the 1st defendant personally liable on the note. The 1st defendant pleaded that the suit was bad for non-joinder of the other members of the family who as he alleged, were also hukdars of the charity, that it was without consideration and that he was not personally liable. He died after the settlement of issues, and the plaintiff then brought on the record not only his legal representatives but also the other members of the family to meet the objection of non-joinder, and additional issues were settled as to their liability.

2. The learned Judge found on the 1st issue that the promissory note was not without consideration or intended to be inopera-. tive, and we see no reason to differ from that finding. The subsequent correspondence clearly shows the note was not intended to be inoperative. As regards consideration, the note appears to have been given in consideration of the plaintiff's relinquishment of his claim to a certain village in favour of the family charity. The village was not one of those expressly dedicated to charity by the family. The plaintiffs father had claimed it, and the plaintiff himself had been enforcing his claim to it with some success in the years preceding the execution of the promissory note. The appeal of defendants 3 and 5 to 7 therefore fails and is dismissed with costs of the plaintiff.

3. The learned Judge has given to plaintiff a decree against the charity properties in the hands of the defendants 2 to 15, and the plaintiff in his memorandum of objections claimed that the 1st defendant was personally liable on the suit note and that he was entitled to a decree against his sons and grandson. He asked in the plaint for a personal decree against the 1st defendant, and at the hearing of the appeal his vakil stated that, if this were granted him, he did not want a decree against the charity properties. Defendant 3 and the representatives of the deceased 1st defendant contended that the charity properties alone were liable, and that, if this were not so, the other members of the family who had been joined as defendants were equally liable with them. The family charity was constituted in 1887 pursuant to Exhibit K a letter addressed to the P.L.R.M. firm at Madras, in which it was stated that the family had set apart the three villages named and Rs. 50,000 for charity/and the P.L.R.M. firm were directed to credit Rs. 50,000 separately under the style of P.R.P.L.S. for the charity and carry on dealings separately for the choultry under that style. The letter went on to say that only P. L. Palaniappa, the 1st defendant, was to supervise the chatram and building and that the P. L. E. M. firm were to honour the hundis drawn by the said person for the said matters and debit the account and to correspond with him.

4. The 1st defendant was accordingly provided with a book of blank hundis like a cheque book on one of which he executed the suit hundi, on 31st July 1906, 'In consideration of his abandoning his claim to the Seersenthamangalam village in favour of the chatram pay to Murayur P.L.S.S.'s (the plaintiff's) order Rs. 17,000 with nadappu interest from this date and debit it in P.R.P.L.S. account entering the payment.'' The words P.R, P.L.S, Hukdar were printed at the place for signature which the 1st defendant completed by signing his name Palaniappa Chetty.

5. The instrument satisfies the definition of a bill of exchange in Section 5, and of a cheque in Section 6, of the Negotiable Instruments Act, and the first question is whether the learned Judge was right in holding that the 1st defendant, the drawer was not personally liable. Under Sections 26 and 27 the drawer binds himself by drawing the bill himself or by his agent, and under Section 28 an agent who signs a bill without indicating therein that he acts as an agent or that he does not intend to incur personal responsibility is liable personally. 'Agent' however in these sections means the agent of a person capable of contracting within the meaning of Section 26; and when the agent is not liable, the principal is. A person drawing a bill or making a note as trustee of a temple charity is not acting on behalf of such a principal and cannot claim the benefit of the section. Accordingly such trustees have, been held personally liable by Subramania Aiyar, J., in Pasupatia Pillai v. Sundarappier (1907) 17 M.L.J. 615 by Krishnaswami Aiyar, J., in Aiyasami Aiyar v. Dharmasiva Aiyar (1911) 1 M.W.N. 143 and in Kasivasi Somasundara Thambiran v. Venkata Narayana Pillai (1914) 26 I.C. 358 to which I was a party with Seshagiri Aiyar, J., and in Swaminath Aiyar v. Srinivasa Aiyar (19l6) 32 M.L.J. 259 where the personal liability of the temple trustee on the promissory note was not questioned. The decision, of Sadasiva Aiyar, J., in Sundaresa Gurukkal v. Sambasiva Aiyar (1914) 2 L.W. 183 which the learned Judge has followed is opposed to these rulings and is not in my opinion supported by Konetti Naicker v. Gopala Aiyar : (1913)25MLJ425 or by Chapman v. Smethhurst (1909) 1 K.B. 1927 on which it was based, as in those cases the question was whether the agent or the principal was personally liable on the bill. Sundaresa Gurukkal v. Sambasiva Aiyar (1914) 2 L.W. 183 was no doubt referred to with approval by Kumaraswami Sastri, J., sitting with Sadasiva Aiyar, J., in Ammalu Ammal v. Namagiri Ammal : AIR1918Mad300 where In re Bobbinsons Settlement : Gant v. Hobbs I.L.R. (1916) M 915 was referred to as supporting it. That case however, like the case from which it differed, was not a case of a Negotiable Instrument but of a covenant in a deed as to which other considerations are applicable. Moreover the observations in Ammalu Ammal v. Namagiri Animal : AIR1918Mad300 were obiter, the only question there being the right of recourse against the deceased's estate on a promissory note executed by his executrix as to which the executrix's personal liability was not questioned. We have also been referred to Krishna Chettiar v. Nagavalli Ammal I.L.R. (1916) M 915. That was a case in which the estate of a minor was held liable on a promissory note executed by his mother who was also his guardian but did not describe herself as such. The correctness of the decision in so far as it holds the minor's estate directly liable has been questioned by Sadasiva Aiyar, J., in Ammalu Ammal v. Namagiri Ammal : AIR1918Mad300 It does not as I understand it decide that the mother was not personally liable. The view I have taken is entirely in accordance with the English decisions. In Byles on Bills 16th Edn., page 86, the leaned author says 'If persons who fill official situations as churchwardens, overseers, surveyors, commissioners, managers of a joint stock banks agents and secretaries to companies, give bills or notes on which they describe themselves in their official capacity, they are nevertheless personally liable,' citing Row v. Pettit (1839) 1 Ad. & E, 197 : 110 E.R. 1181 the case of churchwardens and other cases. Here the 1st defendant described himself as ' P.R.P. L.S. Hukdar'. P.R.P.L. was the vilasam of the whole family. 'S' admittedly signifies chuthram, so that he described himself as hukdar of the P.R.P.L. chuthram, a description which would not affect his personal, liability on the note. A further contention has however been raised that the use of the vilasam P.R.P.L.S. sufficiently indicated that he was acting as an agent within the meaning of Section 28 for the whole family who are heriditary hukdars including himself, This would merely render the other members of the family liable as well as himself, I do not however think that any clear indication can be gathered from this signature of an intention to make anyone liable but himself. When the agent of a chetty firm in executing a negotiable instrument prefixes the firm's vilasam this is a well understood indication that he is acting only as an agent and has been so recognised by the court. But when a man signs as hukdar prefixing the charity vilasam, it appears to me that on the face of the document there is no clear indication that he contracts for any one but himself. If it were otherwise, it would be necessary to find whether the other hukdars had authorised him to draw hundis on their behalf. There is not even on the facts of the case any reason to find that he intended to draw the hundi on behalf of anyone else. He was supervising the chuthram and in charge of its funds, and it was prima facie for him to arrange for payment of the money which the chuthram had to pay to secure its title to the village. The plaintiff does not desire to have recourse to the trust property and there is no need to consider whether it would properly be made liable in the present suit. The memorandum must be allowed and the decree Varied by releasing the charity properties and making defendants 3 to 10 liable to the extent of the joint family properties in their hands with costs of the plaintiff's 1st respondent. Time for tender and execution of sale deed is extended by 3 months from this date.

Spencer, J

6. I entirely agree. I have no doubt that the 1st defendant made himself personally liable under the hundi (Exhibit A) and that the decree must be amended by releasing the charity properties and making the joint family assets in the hands of defendants 3 to 10 liable. 'To the authorities Pasupathi Pillai v. Sundarappier (1907) 17 M.L.J. 615 Aiyathurai Aiyar v. Sambasiva Aiyar (1911) 1 M.W.N. 143 Koneti Naicker v. Gopala Aiyar (1013) 25 M.L.J. 425 : I.L.R, 38 M 182. I would add that of Sri Yerruganti Chinna Venkatanarayana v. Kotagiri Venkatanarasimha (1913) M.W.N. 1005. I do not think that Sundaresa Gurukkal v. Sambasiva Aiyar (1914) 2 L.W. 188 was correctly decided. The learned judge who decided it in quoting Koneti Naicker v. Gopala Aiyar (1918) 25 M.L.J. 425 may have been misled by the clerical error consisting in the accidental omission of the 'not' between the words 'intention' and ' to incur personal responsibility' in the judgment of Oldfiled, J., as reported both in the Law Journal and in the authorized reports.

7. I am prepared to follow Krishna Chettiar v. Nagamani Ammal I.L.R. (1915) M. 915 which does not appear to me to be inconsistent with Sanka Krishnamurthi v. The Bank of Burma I.L.R. (1911) M. 692 as it decided upon principles of Hindu law that a mother could make her minor son's estate liable for a debt incurred for purposes binding upon him, but that there could be no personal decree against the defendant (who in that case was the minor). I think that cases of guardians and managers of joint Hindu families signing promissory notes on behalf of minors should be distinguished from cases of agents, trustees and executors who sign on behalf of principals, trusts or estates of deceased persons. The observations of the Judicial Committee in Kunwar Doorganath Roy v. Ram Chunder Sen I.L.R (1876) C. 341 to the effect that the manager of a debutter estate had an analagous right to that of the manager of an infant heir was not made with reference to a negotiable instrument.

8. The signature of the guardian of a minor or of the manager of an infant's estate to a contract ia a substitute for the signature of the ward or infant, who is incapable of contracting, and it has the effect of making the minor's estate liable when the contract is made for necessary purposes, but the minor cannot be made personally liable thereby. (See Sanka Krishnamurthi v. The Bank of Burma I.L.R. (1911) M. 692 I do not understand Krishna Ghettiar v. Nagamani Ammal I.L.R. (1915) M. 915 as going beyond this.

9. The case of agent's signing negotiable instruments is especially provided for in Section 28 of the Negotiable Instruments Act. Cases of Trustees, executors, church warders, etc., who sign promissory notes on behalf of inanimate objects such as trusts, temples, estates of deceased persons and parish vestries, etc. fall into a different class. In such cases there is a very strong presumption that the trustee, executor or churchwarden intended to incur an individual responsibility because he does not represent any other person in law. An incorporated company is however both in England and in India a distinct persona and therefore the case of a Director of a company signing a promissory note in the name of the company is on a different footing again. So we find Section 72 of the Indian Companies Act raising a presumption that a person acting under the authority of a company and signing a promissory note in the name of the company means to make the company liable. In the present case not only is there no indication in the hundi that Palaniappa Chettiar (1st defendant) did not intend to incur personal responsibility, but the fact that he signed as hukdar of the chuthram makes it clear that he must be liable for the chuthram debt, as the chuthram itself has no personal liability. 1st defendant's legal representatives are also liable to the extent of the family properties in their possession.


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