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Nidavolu Atchutam Alias Atchutaramayya and ors. Vs. Ratnaji, Carrying on Business Under the Name and Style of Ratnajee Bhootaji and Two ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Civil
CourtChennai
Decided On
Reported in(1926)50MLJ208
AppellantNidavolu Atchutam Alias Atchutaramayya and ors.
RespondentRatnaji, Carrying on Business Under the Name and Style of Ratnajee Bhootaji and Two ors.
Cases ReferredThe Official Assignee of Madras v. Palaniappa Chetty
Excerpt:
- - i am clearly of opinion that commercial debts fall into this category and that we ought to say that the pious obligation extends to them. it may well be that in the time of gautama it was thought that to engage in trade was degrading, at any rate in the case of the higher castes. 695-3-0.'in the case of a suretyship for payment, it may be taken as well settled that a hindu son is liable. it is equally well settled that the son was not under any such liability in the case of debts contracted for illegal or immoral purposes......purposes) the whole of the family undivided estate would be, when in the hands of the sons or grandsons, liable to the debts of the father and grandfather.'8. in the case before us the trade the father carried on was a trade in hardware and there was nothing illegal or immoral about it. there is not even any suggestion to this effect in the written statement and all that is alleged is that the business was neither an ancestral nor family business; that the sons had become divided from their father; and that the business was carried on by the father for his sole benefit. the finding is that the business was carried on for the benefit of the family and that the partition was fraudulent. in ramkrishna trimbak v. narayan ilr (1915) 40 bom. 126 it was held that a son cannot escape liability.....
Judgment:

Murray Coutts Trotter, J.

1. The Chief Justice: In this case the father of the appellants embarked on hardware trade in 1914 and was sued along with them in respect of debts contracted 22nd October, 1925by him in the conduct of that venture. The appellants' vakil relied on a text of Gautama XII. 41, which runs as follows:

Money due by a surety for a commercial debt, a fee due to the parents of a bride, debts contracted for spirituous liquor or in gambling, and a fine shall not involve the sons of the debtor

and the bold contention is put forward that the pious obligation does not extend therefore to commercial debts. I have discussed this subject at length in paragraph 303 of the 9th Edition of Mayne on Hindu Law and I have very little to add to what I said there. This Court has held in Thangath Ammal v. Arunachalam Chettiar : (1918)35MLJ229 that sons are liable in a case of a surety bond executed by the father for payment as distinct from obligations as a surety for appearance and for honesty; and there are other decisions of the Calcutta and Patna Courts to the same effect. This appears to me to be based upon the view that governing the provision in the texts is that which excludes from the rule debts that are not vyavaharika, an expression taken from Usanas (apud Mitakshara, II. 48) and Vyasa (apud Jagannatha, I. v. 203). From 1874 onwards the decisions of the Privy Council have adpoted this view and have crystallised the translation as ' illegal or immoral '. It appears in Girdhari Lal v. Kantoo Lal (1874) LR 1 IA 321 and has been repeated in many subsequent cases. If this be correct, it will follow, as I have said, that the particular instances given in the Smritis must be treated as a mere expression of opinion on the part of the authors as to what classes of debts would fall under the general words. A modern Court would, therefore, be free in interpreting the general term to consider the particular instances given as obsolete under the conditions of to-day. I am clearly of opinion that commercial debts fall into this category and that we ought to say that the pious obligation extends to them. It may well be that in the time of Gautama it was thought that to engage in trade was degrading, at any rate in the case of the higher castes. No one could pretend that that view would be entertained to-day. For these reasons I am of opinion that the sons are liable in this case and that the appeals must be dismissed with costs.

2. Of course the whole of the pious obligation is itself a relic of antiquity based originally on a religious and not a legal conception but it has been controlled and moulded into shape by a series of decisions which, in my opinion, make it a working rule which in its actual application is neither inconvenient nor unjust.

Viswanatha Sastri, J.

3. Appeal by defendants 3 to 5 against the decree of the Court of the Additional Subordinate Judge, Rajahmundry, in O.S. No. 25 of 1920.

4. Appellants are the sons of the first defendant, and the second defendant is their maternal uncle. The suit was laid for the recovery of a sum of money (Rs. 6,898-11-6) due in respect of money dealings between defendants 1 and 2 and plaintiff. Defendants 1 and 2 are said to have carried on in partnership a trade. in hardware for the purpose of which money was being borrowed from time to time from plaintiff. It was also alleged that the 1st defendant and defendants 3 to 5 were undivided, and that the trade was being carried on by the 1st defendant for the benefit of the family. Defendants 3 to 5 contended that as they had become divided from their father (1st defendant) they had nothing to do with the trade; that the trade was never an ancestral trade nor a joint family trade; and that they were not liable. They also contended that the settlements of account alleged in the plaint, between plaintiff and defendants 1 and 2, were false. The Subordinate Judge held that the settlements of account were true, that the partition set up was brought about to defraud creditors and he passed a decree against defendants 1 and 2 and against the joint family properties in the hands of defendants 3 to 5.

5. The contentions urged in appeal are: (1) That the trade not being an ancestral trade, and the 1st defendant having started it only in 1914, appellants could not be held liable for sums said to have been borrowed for the purposes of th~e trade; and (2) that as Rs. 1,926-6-3 and Rs. 695-3-0 were due from third persons, and as the partnership took them over, they (defendants 3 to 5) were in any event not liable for these sums. The contention that defendants 3 to 5 had separated themselves from their father was not pressed before us.

6. Taking the second contention first, the allegation in para. 6 of the plaint is that on January 5, 1918, defendants 1 and 2 'made themselves liable in the sum of Rs. 1,926-6-3 for the share of E. Venkatasubbarayudu in the katha debt due by him and Anr. K. Venkatanarayana Row; and the pronote debt of the said E. Venkatasubbarayudu in the sum of Rs. 695-3-0.' In the case of a suretyship for payment, it may be taken as well settled that a Hindu son is liable. See Sitanamayya v. Venkatramanna (1888) 11 Mad 373, Thangath Animal v. Arunachalam Chettiar : (1918)35MLJ229 Tukaram Bhat v. Gangaram : (1918)35MLJ229 ILR (1899) 23 Bom. 408 and Rasik Lal Mandal v. Singheswar Rai (1912) 39 cal 843 The decision in Narayan v. Venkatacharya ilr (1904) 28 Bom. 408 relates to the liability of a grandson and has no application to the case before us. The text of Gautama (S. 41) was referred to by the vakil for the appellants, but it appears to me that Gautama simply repeats Manu (S. 159) and that he refers only to a suretyship for appearance. In the case of a suretyship for payment, the text of Yajnavalkya recognises the liability of a son. This contention therefore cannot prevail.

7. Coming to the first contention it was urged that the father was not continuing any ancestral trade but was starting a new trade, and that for debts contracted for a new trade, the sons were not liable. That under ancient texts a son was under a legal obligation to pay his father's debts was the opinion held by that eminent Judge (Muthuswami Aiyar, J.) in Ponnappa Pillai v. Pappuvayyangar ILR (1881) Mad 18. According to Yajnavalkya if a father be long absent in a distant country or be dead the debt must be repaid by the son. It is equally well settled that the son was not under any such liability in the case of debts contracted for illegal or immoral purposes. According to Yajnavalkya a son was not bound to pay a debt, even though hereditary, if it was contracted for the purpose of drinking, debauchery or gambling. According to Gautama a son was not bound to discharge a debt incurred by his deceased father if due by him to a wine shop or a gambling saloon. ' By the Hindu Law, the freedom of the son from the obligation to discharge the father's debt has respect to the nature of the debt.' See Hanooman Persaud Pandey v. Mussumat Babbooee Munraj Koonwaree (1856) 6 MIA 393. In Suraj Bunsi Koer v. Sheo Pershad Singh ILR (1879) Cal 148their Lordships of the Privy Council refer in the appeal to the following dictum of Westropp, C.J., in the case of Udaram Sitaram v. Ranu Panduji and Venku Panduji (1875) 11 Bom. HCR 76'subject to certain limited exceptions (as, for instance, debts contracted for immoral or illegal purposes) the whole of the family undivided estate would be, when in the hands of the sons or grandsons, liable to the debts of the father and grandfather.'

8. In the case before us the trade the father carried on was a trade in hardware and there was nothing illegal or immoral about it. There is not even any suggestion to this effect in the written statement and all that is alleged is that the business was neither an ancestral nor family business; that the sons had become divided from their father; and that the business was carried on by the father for his sole benefit. The finding is that the business was carried on for the benefit of the family and that the partition was fraudulent. In Ramkrishna Trimbak v. Narayan ILR (1915) 40 Bom. 126 it was held that a son cannot escape liability for payment of the debts of his father contracted in fish trade. The decision in The Official Assignee of Madras v. Palaniappa Chetty : (1918)35MLJ473 is no authority for the, proposition that where a Hindu father starts for the first time a new trade, and for the purpose of the trade contracts debts his sons cannot be held liable for the debts so contracted. In that case the question arose in bankruptcy proceedings whether a Hindu son can be adjudicated insolvent in respect of debts incurred in a business newly started by his father during his minority, and in which he actively participated after attaining majority, and there was no question as to the liability of joint family properties for such debts.

9. I would therefore dismiss the appeal with costs.

10. Appeal No. 362 of 1923: Appeal by defendants 2 to 4 against the decree of the Court of the Additional Subordinate Judge of Rajahmundry in O.S. No. 24 of 1923.

11. Appellants are the sons of the 1st defendant, and the suit was laid for the recovery of a sum of money (Rs. 3050) due in respect of money dealings carried on between plaintiff and 1st defendant. It was alleged that the dealings were for the purpose of financing a trade in hardware which 1st defendant was carrying on for the benefit of the undivided family consisting of himself and his sons. Appellants contended that they had become divided from their father; that the trade was not an ancestral trade; and that it was never carried on for their benefit. The Subordinate Judge held that the dealings were proved; that the partition was brought about to defraud creditors; and that the joint family properties were liable.

12. The contention urged in appeal is that the trade not being an ancestral trade and the 1st defendant having started it only in 1914, appellants could not be held liable for sums said to have been borrowed for purposes of the trade. The contention that they had separated from their father was not pressed before us.

13. This appeal was heard with Appeal No. 436 of 1922, and for reasons given in my judgment in that appeal, I would dismiss the appeal with costs.


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