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Yeluri Satyanarayana (Deceased) and ors. Vs. Yelluri Mallayya and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Civil
CourtChennai
Decided On
Reported inAIR1935Mad447; 155Ind.Cas.581; (1935)68MLJ540
AppellantYeluri Satyanarayana (Deceased) and ors.
RespondentYelluri Mallayya and ors.
Cases ReferredKrishna Chettiar v. Nagamani Ammal I.L.R.
Excerpt:
- - believed in good faith that there was a real necessity for the execution of the promissory notes or that the agent was acting for the benefit of the minor's business. 11. in that case it was found that this was not shown, and hence the bank failed......it is within the competence of the guardian by executing a promissory note to make the minors liable to the extent of the joint family property in their hands. on this point it was held in some of the early cases that the minors may be liable under such circuirtstances : see subramania aiyar v. arumuga chetti i.l.r.(1902) mad. 330, krishna chettiar v. nagamani animal i.l.r.(1915) mad. 915 and venkitaswami naicker v. muthusami piilai (1917) 34 m.l.j. 177.9. the matter came up before a full bench in ramajogayya v. jagannadhan i.l.r. (1918)mad. 185 : 36 m.l.j. 29 , wallis, c.j., held that a guardian cannot make personal covenants in the name of the ward so as to impose personal liability upon him, relying upon waghela rajsanji v. shckh masludin , and they were of opinion that.....
Judgment:

Ramesam, J.

1. This Revision Petition arises out of Small Cause Suit No. 1399 of 1929 on the file of the Court of the District Munsif of Guntur in which the plaintiff sought to recover a sum of money due to him evidenced by the promissory note (Ex. A) which itself was in renewal of an earlier promissory note (Ex. A-1). Both these notes were executed by the defendants' mother Venkayamma. In the body of the notes the minor defendants are described as the makers with the words 'represented by their mother and guardian Venkayamma' but she signed the notes without any such description attached to her name. Ex. A-l itself was in renewal of an earlier promissory note (Ex. A-2) executed by the defendants' father on the 28th February, 1922. According to the Hindu Law the sons are liable to pay their father's debt to the extent of the joint family properties received by them from their father or other assets inherited by them from him. The District Munsif held that on a construction of the suit promissory note it was not intended to make the defendants liable. Referring to Subbanna v. Subbarayudu (1925) 50 M.L.J. 125 the learned District Munsif observed:

that the liability on a promissory note must be determined on the wording of the note and, in each case, the question is whether the instrument has been so drawn in form as to make the executant liable personally or only in his capacity as agent, guardian etc.

2. He then thought that the mother did not intend to make the sons liable because she had used feminine gender in the operative part of the note. This seems to be scarcely relevant as one finds it difficult to conceive in what other form the promissory note can be drawn up. Finally purporting to follow the decisions in Ramaswami Mudaliar v. Muthuswami Aiyar (1915) 30 I.C. 481 (1), Subbanna v. Subbarayudu (1925) 50 M.L.J. 125 and Muthuswami Naicken v. Soma-sundaram Mudaliar : (1927)53MLJ814 he dismissed the suit. The plaintiff has filed this Revision Petition.

3. The Revision Petition first came on for hearing before Sundaram Chetti, J. The respondents did not appear. Following the decision in Ramajogayya v. Jagannadhan I.L.R.(1918)Mad. 185 : 36 M.L.J. 29 and Meenakshisundaram Chetti v. Ranga Aiyangar (1931) 139 I.C. 383 the learned Judge set aside the lower Court's decree and passed a decree in favour of the plaintiff as sued for. Afterwards the respondents applied to set aside the ex parte decree by showing sufficient cause for their non-appearance. The ex parte decree was accordingly set aside and the petition came up for disposal before our brother Varadachariar, J. The learned Judge referred the matter to a Bench of two Judges who referred it to a Full Bench.

4. In Subbanna v. Subbarayudu (1925) 50 M.L.J. 125 the question in a similar case was whether the guardians were personally liable. It was held that they were not as it was clear on the note that they intended to exclude personal liability. Whether the minor was liable or not did not arise in that case. But as it must have been intended to bind somebody and as it was held that the guardians were not liable, probably it would have been held that the minor was liable if the question had arisen. A portion of the case related to executors and the conclusion was different. This case does not therefore support the District Munsif's conclusion.

5. The decision in Muthusami Naicken v. Somasundaram Mudaliar : (1927)53MLJ814 is a decision of a single Judge.

6. The case in Ramaswami Mudaliar v. Muthuswami Aiyar (1915) 30 I.C. 481 was decided in 1915 and is similar to the case in Muthusami Naicken v. Somasundaram Mudaliar : (1927)53MLJ814 . So far as the form of the promissory note and the intention of the maker are concerned, the case before us is similar to Subbanna v. Subbarayudu (1925) 50 M.L.J. 125. The intention of the maker of the note was to exclude the personal liability of the guardian but to make the wards liable.

7. One must look at all the surrounding circumstances in inferring the intention. Seeing that the note was in renewal of earlier promissory notes - ultimately leading up to the father's liability, I think this is the proper inference to draw.

8. But the further question arises whether in such circumstances it is within the competence of the guardian by executing a promissory note to make the minors liable to the extent of the joint family property in their hands. On this point it was held in some of the early cases that the minors may be liable under such circuirtstances : See Subramania Aiyar v. Arumuga Chetti I.L.R.(1902) Mad. 330, Krishna Chettiar v. Nagamani Animal I.L.R.(1915) Mad. 915 and Venkitaswami Naicker v. Muthusami Piilai (1917) 34 M.L.J. 177.

9. The matter came up before a Full Bench in Ramajogayya v. Jagannadhan I.L.R. (1918)Mad. 185 : 36 M.L.J. 29 , Wallis, C.J., held that a guardian cannot make personal covenants in the name of the ward so as to impose personal liability upon him, relying upon Waghela Rajsanji v. Shckh Masludin , and they were of opinion that the liability of a minor under the Hindu Law is not affected by the fact that the promissory note was made by a guardian. They referred to a number of decisions of this and other High Courts which are in accordance with that view. This decision has always been followed in this Court as settling the law, and I do not think that anything has happened since to induce me to depart from that decision. Its effect, as stated by Curgenven, J. in Zamindar of Polavaram v. Maharajah of Pittapuram I.L.R.(1930)Mad. 163 : 60 M.L.J. 56, is that any liability to which the minor would be subject under the Hindu Law is not the less a liability because it was incurred by his guardian on his behalf: See also Ramakrishna Reddiar v. Chidambara Swamigal (1927) 27 L.W. 322, and Meenak-shisundaram Chetty v. Ranga Aiyangar (1931) 35 L.W. 397.

10. In the Imperial Bank of India at Madras v. Veerappan 67 M.L.J. 573 our brother Pandrang Row, J. observed:

The appellant bank can succeed in fixing the liability on the minor in respect of the promissory notes only if it is shown that the bank. believed in good faith that there was a real necessity for the execution of the promissory notes or that the agent was acting for the benefit of the minor's business.

11. In that case it was found that this was not shown, and hence the bank failed. There is no such difficulty in the present case. That decision implies that minors may be liable on a promissory note under such circumstances.

12. But the decision in Meenakshisundaram Chetty v. Ranga Aiyangar (1931) 35 L.W. 397, has been doubted in Swaminatha Odayar v. Natesa Aiyar I.L.R. (1932)Mad. 879 : 65 M.L.J. 350 In the latter case the promissory note was executed by a person who was not the lawful guardian at all but at p. 883 Reilly, J. proceeded to observe:

how can any guardian impose a liability upon a minor by executing a promissory note on his behalf? If a promissory note is to effectanything.it must create an unconditional personal liability.

13. The doubt seems to arise because of the fact that the payee of the note can succeed against the minor and his estate only if I certain facts are established. This is true. But I do not think I' this fact makes the liability under the promissory note one f' other than an unconditional personal liability. What is meant by that phrase is that the liability mentioned in the note should 1 not be made contingent on some event, for if it is so made g conditional or contingent upon the happening of some event it will not conform to the definition of a promissory note. But so long as the form of the promissory note conforms to the definition of a promissory note under the Negotiable Instruments Act, it is not the less unconditional simply because when the matter goes to a Court of law and the defendant raises some defence, the plaintiff has got to establish certain facts before he can succeed against the minor. The truth is that in no transaction entered into by a guardian on behalf of a minor, can the opposite party succeed, if challenged, without establishing some facts such as that the transaction was for the benefit of the minor or some such other fact. That such a fact has got to be established does not, in my opinion, make the liability under the promissory note a conditional liability. On the doubt entertained by Reilly, J., it follows that a promissory note on behalf of a minor is impossible. Such a view is opposed to the trend of all the decisions in all the High Courts including the Full Bench decision in Batcha Ramajogayya v. Vijjula Jagannadhan I.L.R.(1918)Mad. 185 : 36 M.L.J. 29 I am unable therefore to agree with the doubt suggested by Reilly, J. The actual conclusion in the case before him rested on the fact that the promissory note was not executed by a lawful guardian at all. Otherwise, that decision must be regarded as overruled.

14. It was suggested that in such a case the suit should be on the debt and not on the note. But this seems to be a merely verbal distinction and not one of substance : Krishna Chettiar v. Nagamani Ammal I.L.R. (1915)Mad. 915 A note is only evidence of a debt. It is true that in the case of insufficiently stamped promissory notes parties are not allowed to fall back upon the debt where the debt and the making of the note were simultaneous. Such a principle is necessary to protect the interests of public revenue. It is not necessary to extend the principle beyond such a case. In my opinion therefore the plaintiff is entitled to a decree.

15. This is also the view of Sundaram Chetti, J. and of Vafada-chariar, J.

16. I would therefore set aside the decree of the District Munsif and give a decree to the plaintiff as prayed for with J. costs throughout.

Horace Owen Compton Beasley, Kt. C.J.

17. I agree.

King J.

18. I agree.


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