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irukulapati Venkateswara Rao, Styling Himself as Kannaganti Venkateswara Rao Vs. Vemuri Ammayya and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtChennai
Decided On
Reported inAIR1939Mad561; (1939)1MLJ493
Appellantirukulapati Venkateswara Rao, Styling Himself as Kannaganti Venkateswara Rao
RespondentVemuri Ammayya and ors.
Cases ReferredBenares Bank Ltd v. Hari Narain
Excerpt:
.....were good friends at this time and seeing that the margin of security afforded by ex. the cordial relations between the parties also seem to account for the plaintiff's failure to insist on delivery to him of the documents discharged by the first defendant from out of the money borrowed under ex. but we are not satisfied that any occasion arose before the trial of the suit when the plaintiff need, in the ordinary course, have set forth these details. a would prima facie be binding on the second defendant's share as well......of the first defendant and deposed to the amounts due to them having been paid out of the money borrowed under ex. a, accepted their evidence as reliable. it is true that they have not produced any account books or other materials in corroboration of their story; and their inability to remember other transactions entered into by them has also been rightly commented on. but their evidence has got to be read as a whole and in the light of the other circumstances established in the case. we see no reason to differ from the learned subordinate judge's view that the plaintiff's version is substantially true.6. some point has been made of the fact that the plaintiff admittedly joined as surety for the first defendant in some of his borrowings after the date of ex. a. one such.....
Judgment:

Varadachariar, J.

1. The second defendant appeals against a preliminary decree for sale passed by the lower Court on foot of a mortgage-deed (Ex. A) executed on 10th March, 1926, by the first defendant for himself and as guardian of his then minor son the second defendant. The mortgage deed had been executed to secure repayment of a sum of Rs. 10,000 made up of Rs. 2,429-3-3 then due to the plaintiff himself on promissory notes that had been executed by the first defendant and of a sum of Rs. 7,570-12-9 recited to have been received in cash by the first defendant for discharging debts that had been contracted by him from others. The first defendant contended that Ex. A was supported by consideration only to the extent of Rs. 2,429-3-3 and that as regards the balance, the statement of cash payment in Ex. A was not true and that the understanding between the parties was that the document should serve as security for any amounts for which the plaintiff might ultimately become liable in connection with loans which the parties intended to borrow for the benefit of the first defendant, with the plaintiff standing as surety therefor. The second defendant who had attained majority by the date of the suit contended that even as regards the sum of Rs. 2,429-3-3, there was no genuine or binding debt and that in any event the mortgage was not binding upon his share in the family property. At a later stage, a further question was raised by an additional issue, namely, whether the mortgage-deed has been duly attested.

2. The learned Subordinate Judge held that the bond had been duly attested and that the sum of Rs. 10,000 had been paid as recited in the document and that the cash payment of Rs. 7,570-12-9 paid by the plaintiff to the first defendant at the time of Ex. A had been utilised for discharge of antecedent debts due by the first defendant to other creditors. He accordingly passed a preliminary decree for the sale of the mortgaged property. Before us, the lower Court's finding on the question, of attestation has not been challenged nor has any objection been taken to the binding character of the mortgage so far as it related to the sum of Rs. 2,429-3-3 found to be due from the first defendant to the plaintiff on the date of Ex. A.

3. The learned Counsel for the appellant has directed his arguments mainly to the question of the truth of the plaintiff's story as to the cash advance of Rs. 7,570-12-9 and as to the application of this sum in the discharge of antecedent debts by the first defendant. The decision of both these questions rests to a certain extent on the appreciation of oral evidence. The onus of proof is, of course, on the plaintiff, so far at any rate as he seeks to hold the second defendant's share in the property liable under the mortgage. Besides examining himself, the plaintiff has examined a number of witnesses, some of whom prove that a portion of the money required' to be advanced under Ex. A was borrowed from them by the plaintiff just prior to Ex. A and the rest claim to be creditors of the first defendant whose debts were discharged out of the moneys borrowed by the first defendant under Ex. A. As against this body of evidence, there is, on the other side, only the testimony of the first defendant who has shown himself to be a very unreliable witness.

4. There are three documents in the case, besides Ex. A, which lend considerable support to the plaintiff's case. Exs. D and E are two promissory notes executed by the plaintiff on 8th March, 1926, in favour of certain relatives of his and it is the plaintiff's case that as he had not on hand at the time the whole amount required to be advanced under Ex. A, he borrowed part of the amount under these promissory notes. That these notes cannot be a later fabrication is shown by the fact that the first defendant has himself attested them and when confronted with them in the box, the first defendant did not impeach their genuineness. These notes recite in terms that the money was borrowed for the very purpose of being advanced to the first defendant. No reason has been suggested why false recitals should have been put in either in Ex. A or in Exs. D and E. The explanation attempted by the first defendant in respect of these recitals is difficult to understand. At one stage, he suggested that Ex. A was secretly executed, but it does not seem to be part of his case that he had any creditors to cheat at the time. The argument founded on the purchase of the stamp papers for Ex. A in three different names is absolutely disingenuous. The stamp papers were purchased on the same date from the same stamp vendor and as, under the rules, the vendor could not sell to the same person stamps in excess of the value of Rs. 50, the parties found it convenient to purchase three papers in three different names at the same time. It is regrettable that this circumstance should have been pressed into service for a baseless suggestion of fraud. If the understanding was that Ex. A was in part to be security to plaintiff in respect of transactions wherein he might stand surety for the defendant, there was no conceivable reason why it should not have been so recited in Ex. A. As regards the recitals in Exs. D and E, the first defendant suggested that they were put in with a view to enable the plaintiff to escape liability for income-tax. We can only say that it is not easy to understand the suggestion. It is only if money was really due under Ex. A and interest was paid by the debtor on that basis that any question of liability for income-tax or of escaping from it will arise. If no money was due under Ex. A to the extent of Rs. 7,500, there is no point in the parties taking steps to evade payment of income-tax. The evidence further shows that Exs. D and E were discharged by the plaintiff by the sale of some of his lands under Ex. F. P.W. 4, the vendee under Ex. F, proves this sale and the payment of money in pursuance thereof to the promisees under Exs. D and E. This witness has not been cross-examined at all on behalf of the defendants. In the face of these documents which prove that the plaintiff did borrow money to advance under Ex. A and subsequently sold some of his lands to pay off the moneys thus borrowed, it is difficult to accept the story of the defendants that Ex. A is not what it purports to be and that no money was in fact advanced on the date of Ex. A as recited therein.

5. That the first defendant must have had other debts than what he had borrowed from the plaintiff or with his help is shown by his admission that even in connection with his purchases of lands, he has had to borrow moneys and by the admission in his Insolvency Petition Ex. K of the existence of other debts. He is also obliged to admit that he had been carrying on trade at least since 1922. Though as a mere Kamma agriculturist, it would be nothing strange if he did not keep account books, it is hardly likely that he would not have kept accounts in connection with his trade. If these accounts had been produced, they would have shown what debts he had borrowed and how they had been discharged. The learned Subordinate Judge who recorded the evidence of P.Ws. 5 to 8 who claimed to be creditors of the first defendant and deposed to the amounts due to them having been paid out of the money borrowed under Ex. A, accepted their evidence as reliable. It is true that they have not produced any account books or other materials in corroboration of their story; and their inability to remember other transactions entered into by them has also been rightly commented on. But their evidence has got to be read as a whole and in the light of the other circumstances established in the case. We see no reason to differ from the learned Subordinate Judge's view that the plaintiff's version is substantially true.

6. Some point has been made of the fact that the plaintiff admittedly joined as surety for the first defendant in some of his borrowings after the date of Ex. A. One such transaction was put to him when he was in the witness-box and was admitted by him. Four other notes in which he had joined were sought to be filed in the lower Court but were rejected by that Court as not having been produced in time. An attempt has been made to ask us to receive them in evidence. We do not think it propel to admit them in evidence at this stage, as, in view of the allegations in the counter-affidavit, further examination of witnesses will be necessary to appreciate their bearing on the case. We are however willing to proceed on the footing that the plaintiff did accommodate the first defendant in some of his subsequent borrowings. This by itself does not necessarily establish the truth of the first defendant's story as to Ex. A. It is the common case of the parties that the plaintiff and the first defendant were good friends at this time and seeing that the margin of security afforded by Ex. A was fairly-large, it is nothing strange that the plaintiff was prepared to take the risk of accommodating the first defendant in some of his borrowings, without insisting on security. The cordial relations between the parties also seem to account for the plaintiff's failure to insist on delivery to him of the documents discharged by the first defendant from out of the money borrowed under Ex. A. It has been argued that the omission of the plaintiff to refer on earlier occasions in detail to the pre-existing debts of the first defendant now proved through P.Ws. 5 to 8 militates against the truth of that story. But we are not satisfied that any occasion arose before the trial of the suit when the plaintiff need, in the ordinary course, have set forth these details. In the notice which the first defendant issued to the plaintiff in 1929, he denied that Ex. A was supported by-cash payment as recited therein to the extent of Rs. 7,570 and the plaintiff merely repudiated this assertion. We do not see that he was at that time called upon to say how exactly this amount had been applied by the first defendant. It was only when the second defendant attempted to impeach the binding character of Ex. A in this suit, that the question of the discharge of antecedent debts assumed importance. We accordingly concur in the finding of the lower Court that Ex. A is fully supported by consideration and that the sum of Rs. 7,570 borrowed in cash under it is shown to have been utilised by the first defendant for the discharge of antecedent debts.

7. On the above finding, Ex. A would prima facie be binding on the second defendant's share as well. But it has been contended on his behalf that as the debts of the first defendant were incurred by him in connection with a trade started by himself, when trade was not the normal occupation of the family, the debts must be held to be avyavaharika debts and as such not binding on the son. The learned Counsel for the appellant admitted that this contention was opposed to the decision in Achutharamayya v. Ratnajee Bhootaji (1925) 50 M.L.J. 208 : I.L.R. 49 Mad. 211 hut he argued that it is supported by the decision of the Privy Council in Benares Bank, Ltd. v. Hari Narain . We find nothing in Benares Bank, Ltd. v. Hari Narain that supports this argument. Their Lordships there decided only the question of the binding character of the mortgage as such on the footing that moneys had been borrowed contemporaneously with the mortgage for the purpose of carrying on a trade started by the father. They declined to deal with the question of the son's liability for the debt under the pious obligation doctrine, on the ground that the question had not been raised in the Courts in India. We have been asked to say that the decision in Achutharamayya v. Ratnajee Bhootaji (1925) 50 M.L.J. 208 : I.L.R. 49 Mad. 211 as to 'commercial' debts is opposed to the Hindu law texts. We are not prepared to accede to this contention. All that could be said against it is based upon an ambiguous text of Gauthama which has been differently read and variously interpreted by different commentators. It is too much at this time of the day to ask the Court to hold that all debts borrowed for purposes of trade by a Hindu father are avyavaharika debts. The fact that on another question, the decision in Achutharamayya v. Ratnajee Bhootaji (1925) 50 M.L.J. 208 : I.L.R. 49 Mad. 211 must be deemed to have been overruled by the decision in Benares Bank Ltd v. Hari Narain does not affect the present question.

8. The appeal fails and is dismissed with costs. The court-fee payable on the memorandum of appeal will be paid by the appellant.

9. C.M. Ps. Nos. 4674 and 4675 of 1938 are dismissed.

10. C.M.P. No. 4676 of 1938 is an application under the Madras Agriculturists' Relief Act for scaling down the debt. The counter-affidavit filed by the first respondent denies that the applicant is an agriculturist. The affidavit filed in support of this application is too meagre to be acted on. The petitioner will, within a fortnight, file a more detailed affidavit stating the grounds on which he claims to be an agriculturist within the meaning of the Act and also whether even his father, the first defendant, is claimed by him to be an agriculturist within the meaning of the Act.


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