1. In this appeal, the learned Counsel for the plaintiff (respondent) has reported no instructions and the appeal has, therefore, been heard ex parte.
2. The appeal is by the third defendant, against so much of the decree of the lower Court as declared that his interest in the joint family properties is also liable to be proceeded against for the recovery of the plaint claim. The material facts are as follows: defendants 1, 2 and 3 are the sons of one Sundaram Aiyar who died in May, 1922, leaving him surviving, three sons-the first defendant (then aged about 20 and the other two-defendants, minors at that time). The third defendant attained majority only pending this appeal. During his lifetime, Sundaram Aiyar started a mundy business in February, 1920, in partnership with one Narasinga Rao and in the course of this business he had dealings with the plaintiff's firm. It has been stated on behalf of the appellant - and we see nothing on record to the contrary - that at the time of his death Sundaram Aiyar left no debts. Any how, it is common ground that the present claim of the plaintiff represents the unpaid balance of the price of goods supplied by him between September, 1922, and March, 1926, to the business carried on by the first defendant in partnership with Narasinga Rao.
3. In the plaint, a decree is claimed against defendants 2 and 3, on the footing that the trade in question had been started by their father and continued by the sons for the benefit of the family. As stated already, so far as the third defendant was concerned, there was no question of his being a contractual party to the new business in partnership with Narasinga Rao. The learned Judge has held that the third defendant's interest in the joint family property is also liable for the plaintiff's claim because the trade begun by the father and continued by defendants 1 and 2 is a family or 'ancestral' trade; and in support of that proposition he relied on the decision in Subbaraya Mudali v. Thangavelu Mudali (1922) 45 M.L.J. 44.
4. As to the law relating to the circumstances under which the interest of a minor member in a joint family property can be made liable for trade debts, it is not necessary to go earlier than the decision of a bench of this Court in Venkataswami Naicker v. Palaniswami Chettiar I.L.R.(1928) 52 Mad. 227 : 56 M.L.J. 380 where the divergent views of the Courts on the subject are adverted to. In that case, the learned Judges held that a Hindu father governed by the Mitakshara law can start a new trade and make it a ' family business in the sense that moneys raised for the purpose of that business will be a debt of necessity for which the father could mortgage his son's interest in the joint family property. The learned Judges had then only to distinguish the Privy Council decision in Sanyasi Charan Mandal v. Krishna Dhan Banerji (1921) L.R. 49 IndAp 108 : I.L.R. 49 Cal. 560 : 43 M.L.J. 41 and it was sufficient to point out that in the Privy Council case the business in respect of which the minor's share was sought to be made liable had been started only by an elder brother. Since the decision of this Court in Venkataswami Naicker v. Palaniswami Chettiar held that, for the purpose of this rule of the Hindu law, a business started by a father stands on no different footing from that started by a managing member other than a father such as a brother or an uncle. This makes it impossible for us to follow the decision of this Court in Venkataswami Naicker v. Palaniswami Chettiar I.L.R.(1928) 52 Mad. 227 : 56 M.L.J. 380. Much of the reasoning in that judgment will be difficult to sustain in view of the basis of the later Privy Council decision in Benares Bank, Ltd. v. Hari Narain .If debts had already been incurred by the father in a business started by him, then the position will be different, because an alienation made by him to secure payment or for the discharge of such debts, will be justified on the footing that it was for the purpose of securing or paying off antecedent debts. But where the money is raised by him for the purposes of the business and the doctrine of antecedent debts does not come in, the test to be applied is whether it was an ' ancestral' business or not. Though, in a sense the father is an ancestor to the son, the reasoning in Benares Bank, Ltd. v. Hari Narain shows that it is not in that sense that the expression ' ancestral business' is to be understood; because their Lordships clearly say that a business started by the father will not, as against his son be an ancestral business within the meaning of this rule.
5. The present case differs on the facts from Benares Bank, Ltd. v. Hari Narain (1921) L.R. 49 IndAp 108 : I.L.R. 49 Cal. 560 : 43 M.L.J. 41 their Lordships at pages 567 and 568 make these observations:
The distinction between an ancestral business and one started like the present after the death of the ancestor, as a source of partnership relations is patent. In the one case these relations result by operation of law from a succession on the death of an ancestor to an established business, with its benefits and its obligations. In the other they rest ultimately on contractual arrangement between the parties.
6. If this test is to be literally applied, it cannot exactly correspond to the one suggested by Mr. Venkatachariar. For the purposes of the present case, it is not necessary to express a final opinion, upon this question. As we have already stated, the father in this case started the business in 1920 in partnership with Narasinga Rao, prima facie that partnership could not be regarded as a 'family business'. See for the latest authority, the judgment in Pichappa Chettiar v. Chockalaingam Pillai (1934) 40 L.W. 256 : 38 C.W.N. 1185 at best, it was only a partnership between the father on the one hand and Narasinga Rao on the other. On the father's death, that partnership became dissolved; and if later on the first defendant 'did business in partnership with Narasinga Rao, it can only be regarded as a new business and a new partnership between the first defendant and Narasinga Rao. In this view, the business done by the first defendant in partnership with Narasinga Rao cannot be said to satisfy even the test indicated in Sanyasi Charan Mandal v. Krishna Dhan Banerji (1921) L.R. 49 IndAp 108 : I.L.R. 49 Cal. 560 : 43 M.L.J. 41 . On this short ground we hold that the third defendant's interest in the joint family property cannot be made liable for the suit claim, which admittedly relates to the price of goods supplied to the new business carried on by the first defendant in partnership with Narasinga Rao. The third defendant's appeal is therefore, allowed and his interest in the joint family property will be excluded from liability. With reference to that portion of the lower Court's decree which declares his interest in the plaint mentioned business liable to the suit claim, we only wish to make it clear that the third defendant has all along asserted that he has no interest whatever in the plaint mentioned business and that therefore it is sufficient to say that he has no objection to the suit claim being recovered out of any properties belonging to the business, provided it is not part of his share in the property of the joint family apart from the business.
7. The decree of the lower Court will, therefore, be modified by omitting the words 'the third defendant out of his joint family properties and his interest in' and inserting in their place the words 'and from'.
8. As regards costs, the liability imposed on the third defendant's share of the family properties in respect of costs by the decree of the lower Court will be discharged and the appellant will recover from the respondents his costs of the appeal inclusive of the court-fee that he may pay to the Government. The appellant will pay the court-fees due to Government on the memorandum of appeal.