1. This appeal is from the judgment and decree in O.S. No. 35 of 1958, on the file of the Sub-Court, Salem, granting a preliminary decree for partition and separate possession of a quarter share in favour of the plaintiff regarding plaint A and B schedule properties. The first defendant in the suit is the appellant. It will be convenient to refer to the appellant as the first defendant and to the first respondent as the plaintiff in this judgment. Respondents 2 and 3 to this appeal were defendants 2 and 3 in the suit.
2. The plaintiff is the son of the first defendant, by his first wife. Defendants 2 and 3 are the sons of the first defendant by his second wife, Samppoornam, who is not a party to the suit. The parties are hereditarily rich and have been trading in yarn. They are Sengunthar-Mudaliars by caste governed by the Hindu Mitakshara law. The suit was one for partition in which the plaintiff claimed one-fourth share in the plaint A and B and C schedule properties; A schedule consists of bank deposits, shares in limited companies, Government promissory notes, cash and sundry outstandings; B schedule comprises improvable properties; C schedule consists of moveables like silver wares, gold jewels and diamond jewels. A Commissioner appointed by the Court below took an inventory of the household and submitted a report on 18th April 1958. The Court below has granted a decree for division of plaint A and B schedule properties and of items 1 to 33 in the Commissioner's inventory. There is no decree in respect of plaint C schedule and the necessary implication is that the suit ,is dismissed so far as C schedule is concerned. The first defendant has two unmarried daughters, of kinder years staled to_ be now 9 years and 6 years of age and a provision has been directed to be made in the final decree for their marriage expenses in the sum of Rs. 2000 each. This is the decree which is now the subject-matter of the appeal.
3. in this appeal the first defendant raises the following contentions : (1). The sum of Rs. 2,63, 300-62 nP. received by the first defendant as solatium for the resignation of the office of managing agency in the Pullicar Mills Ltd., Trichengode is not a divisible joint family asset; (2) the amount of Rs. 4800 standing to the credit of Sampoornam (first defendant's second wife) in Jawahar Mills Ltd. Salem noted as item 40 in the plaint A Schedule does not belong to the family and should therefore be excluded from division; (3), Items 11, 12, 24, 25, 27, 28 and 29 in the inventory dated 18th April 1958 are jewels belonging to Sampoornam and hence not divisible; (4) the marriage provision for the two daughters of the family at the rate of Rs. 2000 for each is parsimonious and inadequate having regard to the wealth and status of the family and that it should be increased substantially befitting the social position of the family. We may at once mention that the point which is much debated before us is that relating to the sum of Rs. 2,63,200 and odd; the other points were not keenly contested as Mr. V. Thyagaraja Iyer, learned counsel for the plaintiff adopted a fair and reasonable attitude in the matter.
4. In order to appreciate the true character of the sum of Rs. 2,63,200-62 it is necessary to go into the genesis of the managing agency business. The father of the first defendant was one Vaiyapuri. Vaiyapuri had live sons including the first defendant. The names of the other sons of Vaiyapuri, (the brothers of the first defendant), are Gopala Mudaliar, Pomiuswami Mudaliar, Chockalinga Mudaliar and Ganapathi Mudaliar. Vaiyapuri promoted the company, Pullicar Mills Co., at Tiruchengode which was formed to carry on business as a spinning mill. Vaiyapuri was a scion of a rich family and it is not pretended that he started from a scratch, earned moneys and then promoted the Pullicar Mills. The company was started in the year 1936. The first defendant was Vaiyapuri's eldest son. The memorandum of association of the company shows that shares of the company were held both by Vaiyapuri and the first defendant in their individual names. Almost contemporaneously with the incorporation of the company and the commencement of its business the managing agency of the company was given to and taken up by Vaiyapuri who carried op the business in the name and style of Vaiyapuri Mudaliar and Sons. The evidence of the first defendant is that one Gopalaswami was a partner with Vaiyapuri in the agency business but there is no documentary evidence to support it. Apart from the fact that the evidence of the first defendant is interested, he admitted in cross-examination that the arrangement between Gopalaswami and Vaiyapuri was only 'private'. Admittedly there was a partition between Vaiyapuri and his sons in 1942 as evidenced by Ex. A. 1.
There is no reference to the managing agency in the partition deed. But it is not in dispute that after the partition Vaiyapuri and all his adult sons constituted themselves into a partnership and carried on the managing agency business. One of the sons of Vaiyapuri, Ganapathi was a minor on that date and it is obvious that he did not join the partnership as he could not do' so in law. In 1952, however. Ganapathi. also became a partner in Vaiyapnri Mudaliar and Sons; presumably by that time Ganapathi had attained majority. This managing agency with six partners subsisted till 1953 when Ponnuswami and Chockalingam, two of the brothers of the first defendant, retired from the partnership after receiving cash for their due share and interest, in the business. Vaiyapuri died in 1956 and a fresh partnership was therefore constituted between the first defendant, Gopala Mudaliar and Giniapati Mudaliar under Ex. R.4 dated 25-3-1956. The first defendant had in all 325 shares in the Pullicar Mills Ltd., which he obtained partly by acquisition and partly by inheritance from his father. After a year of Vaiyapuri's death the managing agency was relinquished by all the brothers in favour of G. Krishnan of Coimbatore. It appears that the shares held by the first defendant were also sold in favour of the said G. Krishnan.
The three brothers obtained compensation or solatium for the relinquishment of the managing agency rights and the first defendant's one third share of that was Rs. 2,63,200-62 nP. This amount was brought into the family accounts by the first defendant as evidenced by the entry dated 22-10-1957, in Ex. B.8 (ledger). The recital of that entry is as follows : Credit one third share of the amount received on account of the resignation of the managing agency in Pullicar Mills Rs. 2,63,200-62'. These facts are either admitted by the first defendant or sufficiently established by the evidence on record.
5. P. W. 1, who was in the service of the family of the first defendant for thirty five years and who is now employed as cashier of the Pullicar Mills has given evidence stating that a partnership deed was executed in 1942 after the disruption of the joint family and it is with Gopala Mudaliar, presumably the brother of the first defendant. He has also deposed that the accounts of the managing agency are with the said Gopala Mudaliar. Neither the partnership deed nor the managing agency accounts have been produced before the Court. There' can be no doubt, that these documents are not only relevant but would have been of great evidentiary value either in support of the first defendant's case or against him had they been made available, It is not necessary to go into the question as to who should suffer the plaintiff or the first defendant, in the absence of these documents in view of the fact that the case can be quite satisfactorily disposed of on the evidence on record.
6. The first defendant has admitted in the witness box that 'Vaiyapuri Mudaliar and Sons is a joint family firm.' The following extract from his deposition would show how clearly and categorically he has made the admission : ('V. V. C. R.) Vaiyapuri Mudaliar and Sons was a joint family firm. V. V. C. R. Vaiyapuri Mudaliar and Sons were the managing agents prior to the partition of 1942 (page 59 of the printed papers)...... After the partition of 1942 the joint family managing agency business was converted into a partnership firm. My brother Ganapathi was a minor at the time of that partition' (page 61 of the printed papers). This admission, which has not in any way been sought to be explained by the first defendant, practically cuts at the Toot of his present contention that the sum of Rs. 2,63,200-62 would represent his individual or separate asset. The learned Subordinate Judge has therefore quite properly observed in his judgment as follows :
'The managing agency business was admittedly joint family business, and the money got by defendant 1 by releasing his family's one third share in the managing agency, admittedly entered in the joint family accounts are joint family monies. It cannot therefore be held that those moneys are his self acquisitions and that the plaintiff is not entitled to any share in those monies and investments.'
In our opinion, this admission of the first defendant is fairly destructive of. his case in regard to this amount. But this is not all.
7. We wish to refer to three circumstances which establish quite clearly that the first defendant himself did not at any time entertain any doubt that his share in the managing agency business is a joint family asset. There is evidence to show that the plaintiff desired to have an amicable division of the joint family properties outside the Court. The plaintiff was married in 1957. Himself and his wife could not get on well with his stepmother and the result was he sought refuge under/ his father-in-law. The first defendant is of course very bitter against his 'sambandhi' and according to him the suit itself has been engineered by him. The plaintiff caused a suit notice to be issued through his learned counsel, and that is Ex. A.5. This refers to the managing agency in these terms-: Your (first defendant's) father had been the managing agent of the yarn mill by name Pullicar Mills Ltd., Tiruchengode and the family held a very considerable part of the shares of the said company'. Curiously enough the first defendant failed to send any reply to this notice and his only unconvincing explanation, when confronted with that fact in the witness box is as follows : 'I did not send reply to the plaintiff's notice as he went at his father-in-law's instigation.'
After the institution of the suit, there was an, attempt at mediation and settlement between the parties and according to the plaintiff the first defendant gave him the balance sheet Ex. A.7, written in his own handwriting. This balance sheet if accepted as true and correct, indicates that the managing agency is a family asset. Cross-examined with reference to Ex. A.7, the first defendant deposes as follows :
'I did not give Ex. A. 7 to plaintiff. It is in my handwriting. I gave it to Sundaram, who is my paternal uncle, as he said we effect a settlement. He said that the settlement could not be effected.' Even accepting this version of the first defendant to be true, Ex. A.7 cannot be discredited. As stated already in Ex. B. 8 there is a credit entry dated 22-10-1957 of this sum of Rs. 2,63,200-62. The course of conduct of the first defendant which; can be gathered from the above circumstances is only consistent with his having treated the agency business as part of the joint family properties.
8. Mr. R. Gopalaswami Aiyangar learned counsel for the first defendant, contends that the partnership business of the managing agency was not a joint family business as the joint family of Vaiyapuri and his sons became disrupted in 1942, that the quondam members of the family formed, themselves into a partnership, and that such a partnership rather indicated that the business was the individual business of the partners and not a joint family business in the guise of partnership. Learned counsel was at pains to point out that the business of managing agency had no relation to the holding of shares in Pullicar Mills Ltd, by the first defendant or his father, Vaiyapuri and that there is no evidence to show that the business was the outcome of the employment of joint funds, if the managing agency did not grow out of any ismily asset, so the argument runs, it must be presumed that it was a separate venture of the family memtiers unconnected with the properties of the family or their status as coparceners. We wish to point out at this stage that it is conceded by Mr. Gopalaswami Aiyangar that the shares held by the first defendant in the Pullicar Mills Ltd., constitute joint family assets available for division. His contention is that the agency of the mills has to be dissociated from the holding of the shares.
9. It is true that the test of self-acquisition is that it should be 'without detriment to the father's estate'. (See Mayne's Hindu Law, 11th Edn, page 352). The relevant Hindu law text of Yainavalkva is as follows o
'Whatever is acquired by the coparcener himself, without detriment to the father's estate, as a present from a friend, or a gift at nuptials, does not appertain to the co-heirs. Nor shall he who recovers hereditary property which has been taken away give it up to the coparceners; nor what has been gained by science.'
This text of Hindu law does not throw any light on the 'degree of detriment' necessary to attribute, to the acquisition, the character of joint family property. The Court cannot undertake the impossible task of fixing the minimum standard of 'detriment'. It is of course clear that some detriment is necessary; this can only mean that it should not be vague or merely sentimental but should be something real. What would be the position if the 'detriment' were trifling and unsubstantial, we do not propose to consider as the question does not arise in this case. It seems to us that the question whether or not an acquisition was made to the detriment of the family estate is very largely one of fact.
10. The decision in Murugappa Chetti and Sons. Tiruppur v. Commissioner of Income-tax, Madras : 21ITR319(Mad) is referred to by Mr. Gopalaswami Aiyangar, in support of his contention that a managing agency should not be held to be a joint family estate merely because the agency was held by the members of the family as partners, and merely because the family as such had shares in the managed company. The facts of that case were as follows. Two brothers, Murugappa and Chikkanna Chettiar entered into a managing agency agreement with a company called Dhanalakshmi Mills Ltd. The brothers constituted themselves as partners in the name and style of Nanjappa Chettiar and Sons. All the time when the agreement was entered into they were members of a Hindu undivided family. Subsequently they became divided. The division was evidenced by a partition deed which made no reference to the managing agency agreement. The firm continued to manage the company and in the year of account 1942-43, Murugappa obtained for his share of the managing agency commission a sum of Rs. 26607. This amount was treated by the Income-tax Officer as income of the joint family of Murugappa and his sons and was assessed as such, overruling the objection of Murgappa that it was really his individual income. This decision was upheld by the Appellate Assistant Commissioner and also by the Appellate Tribunal. The following question was therefore referred to this Court:
'Whether on the facts and in the circumstances of the case, the Tribunal was right, in holding 'that the proportionate income of the managing agents Messrs IVI. Nagappa Chettiar and Sons was the income of the Hindu undivided family of Murugappa Chettiar and not the individual income of the kartha?'
A Division Bench of this Court, Satyanarayana Rao and Viswanatha Sastri, JJ. held that the amount in. question was the separate earning of Murugappa not includible in the joint family income. Satyanarayana Rao, J. observes thus at page 19 (of Mad LJ) : (at pp. 829-830 of AIR):
'The next contention is that a large amount was invested by the two brothers in purchasing shares in Messrs. Dhanalakshmi Mills Ltd., and from this it is argued that there is utilisation of the joint funds and hence the managing agency commission earned by the brothers must be deemed to be income of the family. That there is really no connection between the purchase of the shares from and out of the joint family funds and the managing agency agreement is made clear by the agreement itself as it specifically states that the agreement was entered into between the two brothers and 'the company in consideration of the firm of Messrs Nagappa Chettiar and Sons having promoted the company and not for the reason that they purchased the shares in the Dhanalakshmi Mills. There is no qualification prescribed in the agreement that the managing agents should hold any shares in the company and that they should so hold and continue to bold the shares during the continuance of the managing agency agreement. The purchase of the shares, the acquisition of the rights under the managing agency agreement, and. the agreement itself are not in any manner connected and therefore it cannot be stated that the joint family properly suffered any detriment 'to any extent by the conduct of these two persons in obtaining the managing agency agreement.'
This decision was followed by another Division Bench of 'this Court, consisting of Satyanarayana Rao and Rajangopalan, JJ. in Hanumanthappa and Son v. Commissioner of Income-tax, Madras : 22ITR364(Mad) .
11. These decisions have been referred to by the Supreme Court in a recent decision in Commissioner of Income-tax West Bengal v. Kalu Babulal Chand, : 37ITR123(SC) . In that case there was a Hindu undivided family of which one E. K. Rohatgi was the kartha. He was one of the promoters of a company called India Electric Works Ltd. In anticipation of the incorporation of that company he took over a concern called India Electrical Works, carried it on, and applied the family funds to finance that business. The. articles of association of the company provided for the appointment as managing director of the very person who as the kartha of the family had promoted the company. In the accounting year relevant to the assessment year 1943-44, the managing director's remuneration received by B. K. Rohatgi amounted to Rs. 61282 and during the 1943-44 assessment proceedings it was claimed that the whole of it was the personal earnings of the said B. K. Rohatgi and should not be added to the income of the Hindu undivided family. The two questions raised in consequence of a reference Under Section 66 of the 'Indian Income-tax Act were as follows :
'1. Whether on the facts and in the circumstances of this case, the Income-tax Appellate Tribunal was justified in apportioning the sum of 'Rs. 61,282 into parts assessing one in the hands of the assessee Hindu undivided family and the other in the hands of Mr. B. K. Rohatgi?
2. If the answer to the above question be in the negative, whether the assessment of the said sum of Rs. 61,282 should be on Mr. Rohatgi personally or on the assessee Hindu undivided family'.
The Calcutta High Court answered the first. question in the negative and the second question! in favour of the assessee holding that the sum of Rs. 62,282 was Rohatgi's personal income. Before the Supreme court, only the correctness of the answer to the second question was canvassed. The short point for consideration was whether the sum of Rs. 61,282 represented income of the family or was it the personal and separate income of Rohatgi. Referring to the decisions of this Court, S. R. Das C. J. observes as follows at page 84 : (of Mad. LJ (SC) ) : (at p. 1292 of AIR) :
'Reference is, however, made to certain decisions in support of the contrary view; but those decisions appear to turn on the facts found to be established in those particular cases. Thus in : 21ITR319(Mad) it had not been established either that the managing agency agreement; had, in fact, been obtained by the kartha for and on behalf of the Hindu undivided family of that the income was earned by utilising the joint family property or utilising it to its detriment. The case of : 22ITR364(Mad) : 22ITR364(Mad) simply follows Murugappa Chetti's case, : 21ITR319(Mad) and does not carry the matter any further'.
The Supreme Court set aside the decision. of the, Calcutta High Court and held that the remuneration received by N. K. Rohatgi as managing director was not his personal income but income of the family of which he was the kartha. The basis of the conclusion is thus set out :
'The kartha of the family...............supplied the finance at all stages out of the joint family funds...........................The Articles of association of the company provide for the appointment 'as managing director of the very person, who, as the kartha of the family, had promoted the company. The acquisition of the business, the flotation of the company, and the appointment of the managing director appear to us to be inseparably linked together. The joint family assets were used for acquiring the concern for financing it. and in lieu of all that detriment to the joint family properties the joint family got not only the shares standing in the names of two members of the family but also, as part and parcel of the same scheme, the managing directorship of the company when incorporated'.
In our opinion, the decisions of this court in : 21ITR319(Mad) and : 22ITR364(Mad) are clearly distinguishable from the facts of the present case. in the light of the decision of the Supreme Court in : 37ITR123(SC) , we wish to point out that where members of a joint family acquire shares in a company and they unite and form themselves into a partnership to obtain the managing agency of the company, under a scheme of integrated transactions, it would be a proper inference to draw that the contract of agency was a result of the holding of the shares. But as stated already no general rule can be deduced in matters of this description as the question of the nature of the managing agency would depend upon the background of facts and circumstances in which the agency was created. In the case before the Supreme Court, the family funds were utilised and employed in promoting the company and in acquiring the shares. It was also found that the Managing Directorship was closely linked up with the floatation of the company. In Murugappa Chettiar's case, : 21ITR319(Mad) there was complete paucity of evidence to connect the managing agency with the holding of the shares and apart from the fact that the family owned shares in the company and that there was a partnership regarding the managing agency between the members no further evidence was available.
12. If in any given case it can be postulated, that the managing agency was given to the members of a family in view of their predominant share position in the company, and that the shares were acquired from and out of the family funds, it would seem to follow inevitably that the managing agency itself was a product of the investment of the family funds in shares. But so far as this case is concerned, it is not necessary for the plaintiff to establish that there was a detriment to the father's estate. This is a case where Vaiyapuri Mudaliar has treated the managing agency business as a family business. It is the admission of the first defendant that Vaiyapuri Mudaliar and Sons is a joint family business. At the inception therefore when the partnership between Vaiyapuri and his sons was constituted, the agency business, acquired the character of a family asset. It is now settled law that a separate property can be conversed into a joint family asset by unambiguous and unequivocal declaration. We need only refer to the decision of this court in M. K. Stremann v. Commissioner of Income-tax. Madras, : 41ITR297(Mad) , where it was held that the declaration in a partition deed amounted to an unequivocal declaration that all the properties dealt with in the partition were treated as properties available for division between the members of the family. The first defendant himself having obtained a share in the partnership only in lieu of his share in the family properties belonging to Vaiyapuri and Sons cannot now turn round and say, that his son the plaintiff, would not be entitled to attribute that character to that business. The sum of Rs. 263200-62 represents only the first defendant's share of the agency business and that business being a joint family asset the amount also should be treated as divisible. We agree with the finding of the learned Subordinate Judge that the plaintiff is entitled to a quarter share in this amount as well.
13. The sum of Rs. 4800 standing to the credit of Sampoornam, the first defendant's second wife, in Jawahar Mills, Salem, is certainly not a joint family asset. The evidence of the first, defendant shows that his wife purchased 16 shares from and out of her own moneys and that she sold these shares at Rs. 300 per share and invested it under a fixed deposit with the Jawahar Mills. This evidence has not been contradicted. No doubt can be entertained about the affluence of the first defendant's second wife. P. W. 1, a witness examined by the plaintiff himself deposes as follows : Defendant l's second wife is the daughter of one A. Y. C. Sengoda Mudaliar who owns 7 or 8 lakhs of rupees worth of properties'. Sampoornam has not been impleaded. as a party to the suit. Any decree which the plaintiff might obtain for a quarter share in the sum of Rs. 4800 would not certainly bind her. When confronted with this position Mr. V. Thyagaraja Iyer, learned counsel for the plaintiff, conceded that he is unable to sustain his claim in regard to this amount.
14. Items 11, 12, 24, 25, 27, 28 and 29 in the Inventory of the Commissioner are articles of jewellery; they are diamond ring with nine stones; diamond ring with single stone, a gold chain, diamond rings, jadavilla, diamond car rings and gold necklace. These ornaments are claimed by the first defendant as belonging to his second wife. It is very likely that these jewels belong to her. What is however, pointed out by learned counsel for the plaintiff is that even in the partition between Vaiyapuri and his sons the 'first defendant obtained certain articles of jewellery like diamond ring, chain and addigai, necklace etc. This partition was of the year 1942, and there is no evidence to show that the articles described in the inventory are the same as the items of jewellery obtained by the first defendant under the partition of 1942, with his father and brothers. It is for the plaintiff to establish that the items of jewellery mentioned in the inventory are the family assets. There is absolutely no evidence of any acceptable variety to show that these are family jewels available for division. The plaintiff's claim in regard to these items must fail.
15. The learned Subordinate Judge has fixed a sum of Rs. 2000 for each of the two daughters as and for marriage provision. There cannot be any doubt that the amount so fixed is ludicrously low. The contention urged on behalf of the plaintiff is that in the community to which the parties belong the marriage is performed only at the bridegroom's residence and that the parents of the bride, do not incur much by way of expenses for marriage. It is also pointed out that the plaintiff's marriage itself cost to the first defendant only a sum of Rs. 4000. The evidence of the first defendant is as follows :
'In our family a sum of Rs. 5000 has to be spent: for the marriage of each girl, and jewels for Rs. 10,000 have to be purchased. My sisters have been married at such expense and jewels of such value have been given to them also. The, marriage is performed in the bridegroom's (sic) house. After the marriage in the bride's house music and . feast is engaged and they were arranged for ray two sisters also'.
The family is very rich and the total value of the plaint schedule properties is estimated by the plaintiff himself at Rs. 9,39,078. The court, must, strike a balance between lavishness which involves waste and unnecessary show and austerity which may involve a denial of even ordinary and customary expenses imparting gloom on a happy occasion like marriage. In making the provision, the nature of the daughter's right to maintenance and marriage expenses out of the joint family property, that it is in lieu of a share on partition, should not be lost sight of. The scale of expenses must of course be commensurate with the wealth of the family. Mr. V. Thyagaraja Aiyar, learned counsel for the plaintiff, submits that a sum of Rs. 7000 may be fixed as and for marriage expenses for each of the two daughters. In our opinion, having regard to the wealth of the family, and their status and position in society, a, proper marriage provision would be to allot Rs. 10,000, for each of the two daughters. A provision to this effect should be made and incorporated in the final decree. The learned Subordinate Judge should also consider the question whether it would not be proper to direct the first defendant to invest these amounts in the names of the minor girls themselves, so that the amount may be available to them on their attaining age and be useful for celebrating their marriages.
16. Subject to the modification referred to above, the decree of the court below is confirmed. This litigation is a result of an unseemly fight between a father and his son. The son was no doubt obliged to file the suit as the father appears to have been very adamant. The plaintiff has also not been considerate towards the father, even, to the extent to which it was possible for him, as ho obtained an ex parte order for the appointment of a Commissioner to take an inventory of the moveables of the household, a few days after the commencement of 'he Tamil New year in 1958. In the, circumstances, we are of opinion that the parties should bear their respective costs both here and in the court below.