Skip to content


Alapati Anandarao and ors. Vs. the President, Co-operative Credit Society and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtChennai
Decided On
Reported inAIR1940Mad828; (1940)2MLJ179
AppellantAlapati Anandarao and ors.
RespondentThe President, Co-operative Credit Society and ors.
Cases ReferredToshanpal Singh v. District Judge of Agra
Excerpt:
- - that the sons are bound by reason of their pious obligation to discharge a debt a arising out of a civil liability of their father is well settled......where the moneys were originally obtained by the father by the commission of an offence; the sons' liability is, on the other hand, recognised where, in its origin, the debt was not immoral but there was a supervening dishonest act of the father.6. that i regard as being not only an accurate summary of the decisions of this court, but as correctly stating the law.7. mr. somasundaram has, however, contended that the decision of the privy council in toshanpal singh v. district judge of agra (1934) 68 m.l.j. 1 : l.r. 61 indap 350 : i.l.r. 56 all. 548 has in effect overruled the decisions of this court. an examination of the judgment does not support this contention. in fact it shows that the judicial committee, left this court's decision untouched. in that case the hindu secretary of.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. The appellants are the sons of the fourth respondent and are all minors. They filed a suit through their maternal grandfather as their next friend in the Court of the Subordinate Judge of Ellore for partition of the family properties and the setting aside of certain alienations made by their father. They attached to their plaint three schedules. Schedule A contained the descriptions of ten items of immovable property belonging to the family. Schedule B was a list of the family's movable properties, and Schedule C, a list of the debts owed by the family. Of the immovable properties, items Nos. 1 to 9 had been mortgaged by their father and item No. 10 had been sold. These alienations were said to be invalid so far as the interests of the appellants were concerned and it was also alleged that some of the debts were not binding on them. The mortgage of items Nos. 1 to 9 was in favour of the Co-operative Credit Society of Pedatadepalli, which is represented by its President, the first respondent. The appellant's father had been employed as Secretary of the Society and it was his duty to collect moneys from its debtors. Out of his collections he misappropriated amounts totalling Rs. 8,073-4-8. As security for Rs. 5,490-4-8 he executed a mortgage of items Nos. 1 to 9 in Schedule A, and for the balance of Rs. 2,583 he gave a letter acknowledging his liability. Item No. 10 was sold by the father to the second respondent who has transferred his interest in the property to the third respondent. The respondent society averred that all the immovable properties were the self-acquired properties of the father. After considering the evidence adduced by the parties, the Subordinate Judge found that items Nos. 1 and 9, half of item No. 2 and a quarter of item No. 10 represented ancestral properties, the rest being the separate estate of the father. The Subordinate Judge also held that the interests of the appellants in the ancestral properties were liable for the debts of the father to the respondent society. The finding of the Subordinate Judge that items Nos. 1 and 9, half of item No. 2 and a quarter of item No. 10 formed the ancestral properties is accepted, by all the parties. The appellants, however, say that the Subordinate Judge erred in holding that the other properties belonged to their father separately. They further say that the Subordinate Judge erred in holding that their interests in the ancestral properties are liable for their father's debts. These are the only two questions which arise in this appeal.

2. The finding of the Subordinate Judge with regard to the father's separate properties is not really open to serious question. When the father separated from his brothers about the year 1916 his share in the family, estate was confined to the properties which the Subordinate Judge has held to be ancestral properties and the income merely sufficed to maintain himself and his wife. The evidence of the father's own brother establishes this. The father, however, held the office of village karnam and was in receipt of its emoluments. He also entered into contracts for the construction of works for local boards and acted as a school master. The non-ancestral properties could only have been acquired out of the income he received from these occupations. We have no hesitation in concurring in the fin8ing of the Subordinate Judge on this question. The alienations of items Nos. 3 to 8, half of item No. 2 and three quarters of item No. 10 therefore cannot be challenged.

3. The contention of the appellants with regard to the finding of the Subordinate Judge that their shares in the ancestral properties are liable for their father's debts is this. Inasmuch as their father misappropriated moneys of the respondent society he committed a crime and in these circumstances they say that the resultant debt is not binding on them. This argument ignores a long line of decisions of this Court to the contrary. This Court has always held that where a father has lawfully received money the fact that he misappropriates it later will not change the character of the debt and the son is liable under the pious obligation rule. Where a person receives money on behalf of another a civil liability immediately arises and the fact that the person who has received it fails in his duty to pay it over to the person entitled to it does not alter the civil character of the debt - see Natessayyan v. Ponnuswami (1892) 3 M.L.J. 1 : I.L.R. 16 Mad. 99, Kanemar Venkappayya v. Krishna Charia (1907) 17 M.L.J. 613 : I.L.R. 31 Mad. 161, Thirnmalayappa Mudaliar v. Veerabhadra (1909) 19 M.L.J. 759, Venugopala Naidu v. Ramanathan Chetty : (1912)23MLJ61 , Garuda Sanyassayya v. Narella Murthenna : (1918)35MLJ661 , Venkatacharyulu v. Mohana Panda : AIR1921Mad407 and Ramasubramania Pillai v. Sivakami Ammal (1925) 21 L.W. 606.

4. In Mc Dowell v. Raghava Chetty I.L.R.(1903) Mad. 214, White, C.J. and Subramania Aiyar, J., held that the sons of a Hindu father who had committed criminal breach of trust were not liable for the father's debts. The father was a cashier and he took out of his employer's cash box, which was in the employer's custody, moneys for his own purposes. This was not a case of lawful receipt of money. The act of taking the money out of the cash box constituted an offence. There was here no antecedent civil liability and the decision in Natessayyan v. Ponnuswami (1892) 3 M.L.J. 1 : I.L.R. 16 Mad. 99, was distinguished on this ground. In Gurumthan Chetty v. Raghavalu Chetti I.L.R.(1908)Mad. 472, White, C.J., sitting with Wallis, J., delivered a judgment which at first sight suggests that where a father has made himself amenable to the criminal law the pious obligation rule cannot apply even when a criminal liability arises subsequent to a civil liability, but it is to be doubted whether the learned Judges there intended to depart from the rule laid down in the other cases which I have cited.

5. I agree with the remarks of Venkatasubba Rao, J., in Ramasubramania Pillai v. Sivakami Ammal (1925) 21 L.W. 606, where he said with reference to the decisions of this Court:

It cannot be gainsaid that there is absolute want of harmony, so far as the decisions were made to rest upon particular grounds. But if the facts of the cases are examined, the conflict is only apparent and the true principle appears to be that the sons are not liable, where the moneys were originally obtained by the father by the commission of an offence; the sons' liability is, on the other hand, recognised where, in its origin, the debt was not immoral but there was a supervening dishonest act of the father.

6. That I regard as being not only an accurate summary of the decisions of this Court, but as correctly stating the law.

7. Mr. Somasundaram has, however, contended that the decision of the Privy Council in Toshanpal Singh v. District Judge of Agra (1934) 68 M.L.J. 1 : L.R. 61 IndAp 350 : I.L.R. 56 All. 548 has in effect overruled the decisions of this Court. An examination of the judgment does not support this contention. In fact it shows that the Judicial Committee, left this Court's decision untouched. In that case the Hindu Secretary of a School Committee was in charge of a fund deposited at a bank and was authorized to draw upon it only for specific purposes connected with the school. He drew on it for, his own purposes and thereby committed criminal breach of trust. The Privy Council held that as the father had committed a crime the sons were not responsible for the resultant loss. Lord Blanesburgh delivering the judgment of the Board expressly posited out that until the moment of the withdrawal from the fund the father had been guilty of no breach of duty civil or otherwise, and later observed:

In view of the powers and duties prescribed for Dhianpal (the father) 'in relation to the Rs. 62,000 there was, as their Lordships have already shown, in relation to the moneys misappropriated by him, no antecedent duty in respect of which any similar liability was either created or survived.

8. This judgment in effect accords approval to the decision of this Court in Mc Dowell v. Raghava Chetty I.L.R. (1903)Mad. 71, but leaves entirely unaffected the line of cases which say that the sons are liable where there was lawful receipt of money and subsequent misappropriation. In this case the father had received moneys lawfully on behalf of the Society and the fact that he had at a later stage used them for his own purposes does not alter the liability of the sons.

9. The appeal fails and will be dismissed with costs, one set to be divided among respondents 1, 3 and 6 according to the values of their respective claims. As the appeal was filed in forma pauperis the appellants will pay the court-fee due to Government.

Krishnaswami Aiyangar, J.

10. I entirely agree, but I shall, however, add a few words expressing the result of the decisions of this Court on the question argued before us. That the sons are bound by reason of their pious obligation to discharge a debt a arising out of a civil liability of their father is well settled. The application of this principle is beset with difficulty in cases where the father receives or retains money with a duty to apply it for the benefit of a third party but omits so to apply it. Where the original taking or the receipt of the money amounted in itself to a criminal offence the sons are not bound. (The reason is quite plain and easily understood. A liability resulting through the commission of a crime is necessarily a tainted liability in its origin. Such would be the case where as in Mc Dowell v. Raghava Chetty I.L.R. (1903)Mad. 71, the cashier took for his own purposes money out of the cash chest of his employer and in the Privy Council decision in Toshanpal Singh v. District Judge of Agra (1934) 68 M.L.J. 1 : L.R. 61 IndAp 350 : I.L.R. 56 All. 548 , where the Secretary after having properly lodged the money in the bank drew it out for his own purposes. The position will be different where the father is guilty of no misconduct or crime in receiving or withdrawing the money in the first Instance though he might be civilly liable to account for it. The civil liability will attach the moment the money is received without any impropriety, and with it will also attach the liability of the sons to relieve the father from the burden of the debt. The pious obligation which thus springs into existence simultaneously with the receipt or withdrawal, subsists so long as the debt itself subsists. Once the liability is thus established it is irrelevant to consider whether the money received or retained by the father lawfully in the first instance was subsequently misappropriated by him. The subsequent misconduct of the father will not be allowed to prejudice the rights already accrued in favour of the third parties on the receipt of their money by the father. This distinction runs through all the decisions of this Court and it is quite apparent that it rests on a logical, intelligible basis. I can see little reason for considering that any doubt has been cast on the rationale of the decisions of this Court by anything said by the Privy Council in Toshanpal Singh v. District Judge of Agra (1934) 68 M.L.J. 1 : L.R. 61 IndAp 350 : I.L.R. 56 All. 548 . It will be found on an examination of the case that their Lordships considered that the case fell within the class of cases where the original taking or withdrawal itself amounted to an offence.

11. Referring to the conduct of the father in that case in withdrawing the money from the Bank and misappropriating it, their Lordships observed:

With reference to these balances (at the Bank) he was under no further obligation unless and until their application was otherwise directed by the Committee. No such direction was ever given. Accordingly if, and to the extent to which Thakur Dhianpal Singh (the father) withdrew those moneys and applied them for his own purposes, he was guilty, as from the moment of withdrawal of a criminal breach of trust. But until the moment of withdrawal he had been guilty of no breach of duty civil or otherwise in relation to them.

12. Their Lordships then proceeded to declare that this statement furnished the key to the decision of the appeal, and held that the sons were not liable, as up to the amount of the misappropriation, the father had completely fulfilled his duty, and there was therefore no antecedent liability established as against him. Their Lordships noticed the argument of the respondents in the case before them, which is identical with the case of the respondents here, but held that that 'difficult and doubtful question of law' did not call for decision in the view that the father was, in relation to the moneys withdrawn from the Bank guilty of a criminal breach of trust simpliciter.

13. The question may be difficult but a solution has been found and consistently acted upon in this Court, and so long as it is not declared erroneous by a higher authority, it must govern our decision.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //