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Myneni Pundarikakshayya Vs. Kondamudi Sreeramulu - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported inAIR1946Mad1; (1945)2MLJ375
AppellantMyneni Pundarikakshayya
RespondentKondamudi Sreeramulu
Cases ReferredPartap Singh v. Sant Kuar
Excerpt:
- - the rest of the consideration was supposed to be satisfied by the discharge of the promissory note which the de facto guardian had executed in favour of the defendant on the 22nd june, 1931, the amount of the debt then being rs. he also conceded that the de facto guardian had administered the estate to the best of his ability......is necessity, make the minor's estate liable in respect of the debt evidenced by a promissory note executed by him and that by such an instrument he can extend the period of limitation, because he is in law the agent of the minor. there have been cases in which a suit has been filed against the minor's estate on the instrument itself, but this is wrong. the minor's estate can only be made liable on the debt. an example of this is to be found in krishna chettiar v. nagamani ammal i.l.r. (1943) bom. 117, although it would appear that in that case there was a paragraph in the plaint referring to the binding character of the debt. where the suit is merely on a promissory note a decree should not be passed without the plaint being amended. it has been suggested that there is an.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. The main question in this appeal is whether a person, who without lawful authority takes upon himself the management of the estate of a Hindu minor, can in law execute a promissory note in the name of the minor in respect of money borrowed for a necessary purpose and thereby bind the minor's estate. The person who without lawful authority takes charge of a minor's estate is commonly referred to as the de facto guardian and it will be convenient to use the expression in this judgment.

2. The appellant is the adopted son of one Chelamaiya Chowdri, who died on the 9th January, 1925. Chelamaiya Chowdri was survived by two widows and by his will dated the 20th November, 1924, he gave the junior widow, Sri Krishnamma, power to adopt a son to him. She exercised the power in favour of the plaintiff soon after the testator's death. The validity of the adoption is not in question. Sri Krishnamma died in the month of November 1928 and after her death the plaintiff's natural father, China Seshayya, entered upon the management of his estate. In Chennappa v. Onkarappa : AIR1940Mad33 , a Full Bench of this Court held that the Hindu law only recognises the father or the mother of a minor as his lawful guardian and that when both of them are dead there can be no dejure guardian without an order of the Court. China Seshayya had not been appointed the plaintiff's guardian by an order of Court and therefore he had no authority to manage the minor's estate.

3. On the 1st February, 1923, Chelamaiya Chowdri borrowed Rs. 3,000 from the defendant, who was his pleader. On the 23rd April, 1925, Sri Krishnamma, then the dejure guardian of the minor, renewed this promissory note. With interest the debt had by that time amounted to Rs. 3,802. On the same date she executed another promissory note in the name of the minor in respect of a further loan of Rs. 1,200. On the 23rd April, 1928, Sri Krishnamma executed a promissory note for Rs. 6,802-11-6 in renewal of the two promissory notes of the 23rd April, 1925. On the 22nd June, 1931, China Seshayya, the de facto guardian, purported to renew that promissory note. The debt then amounted to Rs. 9,251-11-6. It will be observed that this promissory note was executed more than three years after the date on which the de jure guardian had signed the last promissory note. The explanation of this is that the period of limitation expired during the Court vacation and the payee had the right of instituting a suit on the re-opening of the Court. The new promissory note was executed on that day in order to avoid a suit being filed.

4. On the 1st September, 1919, Chelamaiya Chowdri executed a promissory note in favour of one Gutta Punniah for Rs. 4,082-9-6. Chelamaiya Chowdri renewed this promissory note on the 27th August, 1922, by the execution of a fresh note. On the 12th July, 1925, and on the 8th July, 1928, Sri Krishnamma executed promissory notes in acknowledgment of the debt. On the 12th November, 1928, the de facto guardian purported to renew the promissory note of the 12th July, 1925, and on the nth November, 1931, he signed a fresh promissory note in the minor's name for Rs. 9,497-14-9 as a renewal of the promissory note of the 12th November, 1928.

5. On the 2nd June, 1932, the de facto guardian conveyed the immoveable properties in suit to the defendant for the sum of Rs. 14,873. Only Rs. 75 was paid in cash and this sum represented the cost of the stamp on the conveyance and the registration charges. The rest of the consideration was supposed to be satisfied by the discharge of the promissory note which the de facto guardian had executed in favour of the defendant on the 22nd June, 1931, the amount of the debt then being Rs. 10,207-6-6, and the payment of Rs. 4,590-9-6 to Gutta Punniah in part discharge of the promissory note which the-de facto guardian had executed in his favour on the nth November, 1931.

6. On the 9th December, 1937, the plaintiff attained his majority and on the 9th December, 1940, he instituted this suit. He averred that his natural father had no power to renew the promissory notes executed by Sri Krishnamma and no power to convey the properties in suit in discharge of these debts. The learned Subordinate Judge held that as the original debts were binding on the minor's estate, the de facto guardian had power to renew the promissory notes in order to avoid the creditors instituting suits against the estate. Consequently the Subordinate Judge dismissed the suit. He rejected a plea advanced by the defendant that the plaintiff had ratified the action of the de facto guardian in conveying the properties to him. The plaintiff contends that the Subordinate Judge erred in dismissing the suit. The defendant relies on the reasons given by the Subordinate Judge for the dismissal but says that he erred in rejecting the plea of ratification. The defendant further says that in any event he is entitled to a charge on the properties in respect of the Rs. 4,590-9-6, which he paid to Gutta Punniah. There were other questions raised in the trial Court but it is not necessary to consider them, because Mr. Satyanarayana Rao, on behalf of the plaintiff, has for purposes of the appeal conceded that the promissory notes executed by Chelamaiya Chowdri were executed for full consideration and that the debts were binding on the estate up to three years after the last renewals by Sri Krishnamma. He also conceded that the de facto guardian had administered the estate to the best of his ability.

7. We will now proceed to examine the reported cases which have bearing on the powers of a de facto guardian of a Hindu minor. In Hunooman Persaud's case1, which was decided in 1856, the Privy Council observed that under the Hindu law, the right of a bona fide incumbrancer who has taken from a de facto manager a charge on lands created honestly for the purpose of saving the estate or for' the benefit of the estate is not, provided the circumstances would support the charge had it emanated from a de facto and de jure manager, affected by the want of union of the de facto with the de jure title. Since that judgment the Courts in India have consistently held that a de facto guardian can not only charge, but sell immoveable property belonging to a minor's estate when such action is required in the interests of the minor. It is true that in Ramaswami Pillai v. Kasinatha Aiyar (1927) M.W.N. 356 : A.I.R. 1938 Mad. 226, Kumara-swami Sastri and Curgenven, JJ., said that, were the matter res Integra, they would be inclined to hold that a de facto guardian had no power to convey a right or interest in immoveable property which the transferee could enforce against the minor and would have applied the same principles laid down by the Privy Council in Mata Din v. Ahmed Ali (1912) 23 M.L.J. 6 : L.R. 39 IndAp 49 : I. L.R. 34 All. 213 and Imambandi v. Mutsaddi (1918) 35 M.L.J. 422 : L.R. 45 LA. 73: I.L.R. 45 Gal. 878 , which were decisions under the Muhammadan law. The matter, however, was not res Integra and therefore it was too late in the day to reopen the question.

8. In Ramajogayya v. Jagannadhan : I.L.R. 11 Bom, Ayling and Seshagiri Aiyar, JJ. (Wallis C.J., dissenting) held that no decree could be passed against a minor or his estate on a contract entered into on his behalf by his guardian under which covenant no charge was created on the estate, except in cases in which the minor's estate would be liable for the obligation incurred by the guardian under the personal law to which he was subject. Put in other words, the guardian could covenant on behalf of the minor so as to make his estate liable without creating any charge on the estate, provided that the money borrowed by the guadian was for a necessary purpose. The rule laid down by the Privy Council in Waghela Rajsanji v. Shekh Masluddin : AIR1935Mad447 , that a Hindu guardian cannot contract in the name of the ward so as to impose on him a personal liability was not, in the opinion of Ayling and Seshagiri Aiyar, JJ., intended to affect the Hindu law liability of the minor. Wallis, C.J., was of the opinion that a decree could not be passed against a minor on his attaining his majority or against his estate on a covenant entered into in his behalf by a guardian for his benefit. In that case the contract had been entered into by a de jure guardian.

9. The majority opinion in Ramajogayya v. Jagannadhan (1932) 56 M.L.J. 350 : I.L.R. 56 Mad. 879 has since prevailed in this Presidency and it can now be regarded as settled law that a de jure guardian can borrow money on behalf of the minor for a necessary purpose without expressly charging the estate and by the contract make the estate liable for the payment of the debt. The only case in which this principle has been applied by this Court where the contract was made by a de facto guardian is Sudarsana Rao v. Dalayya : AIR1940Mad33 . There a boy had been adopted by a Hindu widow to her deceased husband under a power given to her whereupon the boy's natural father without any order of Court entered upon the management of his estate. While so acting the de facto guardian entered into an agreement with the adoptive father's mother with regard to the amount to be paid to her for maintenance and it was held that the agreement was binding on the minor's estate, as under his personal law he was bound to maintain her out of the estate. The learned Judges did not discuss the question whether the powers of a de facto guardian differ in this respect from those of a dejure guardian. We will assume that a de facto guardian can enter into such a contract and thereby bind the minor's estate. It is quite another thing, however, to say that a de facto guardian can bind the estate by executing a promissory note in the name of the minor.

10. Admittedly in no circumstances can a de facto guardian make the minor personally liable. Even a dejure guardian cannot do this, but it has been recognised that a de jure guardian can, where there is necessity, make the minor's estate liable in respect of the debt evidenced by a promissory note executed by him and that by such an instrument he can extend the period of limitation, because he is in law the agent of the minor. There have been cases in which a suit has been filed against the minor's estate on the instrument itself, but this is wrong. The minor's estate can only be made liable on the debt. An example of this is to be found in Krishna Chettiar v. Nagamani Ammal I.L.R. (1943) Bom. 117, although it would appear that in that case there was a paragraph in the plaint referring to the binding character of the debt. Where the suit is merely on a promissory note a decree should not be passed without the plaint being amended. It has been suggested that there is an observation to the contrary in Seetharamayya Garu v. Satkiah (1856) 6 M.I.A. 393, because it was there said that the guardian of a Hindu minor could bind a minor in respect of a promissory note in proper circumstances. I delivered the judgment in that case and all that the Court intended to imply was that a minor's estate could be bound by the debt evidenced by the promissory note, not that the estate could be sued on the instrument.

11. The position was very aptly stated by Krishnaswami Aiyangar, J., in delivering the judgment in Annamalai v. Muthuswami : AIR1940Mad33 when he said:

It is necessary to sound a note of caution against the error of thinking that the promissory note evidences a contract binding on the minor by force of the instrument itself. The liability does not arise on the instrument, but on the debt evidenced by it, and is enforced against the estate, not on account of the fiction that the contract of the guardian is the contract of the minor, but on account of the substantive principle of the personal law of the minor which creates the liability. It is scarcely necessary to add that the liability of the estate, though personal in the English law sense of the word, is not personal in the sense that the person of the minor even after majority can be arrested in execution. A personal liability arising out of the contract of the guardian is a liability of the minor's estate only.

12. In Swaminatha Odayar v. Natesa Iyer I.L.R. (1938) Lah. 313, a Bench of this Court (Reilly and Cornish, ]|.) held that a guardian of a minor could not impose a liability upon the minor by executing a promissory note on his behalf, even for a necessary purpose, and a distinction was drawn between the liability arising from an ordinary debt and that arising from a debt secured by a negotiable instrument. There, as here, the instrument had been executed by the natural father of a boy who had been adopted. The judgment in, that case was overruled by the Full Bench which decided Satyanarayana v. Mallayya : AIR1935Mad447 , but on another point. The Full Bench apparently approved of the view expressed in Swaminatha Odayar v. Natesa Iyer (1932) 56 M.L.J. 350 : I.L.R. 56 Mad. 879 that a de facto guardian cannot in law sign a promissory note on behalf of the minor.

13. In Vembu Aiyar v. Subbiah Pillai : AIR1940Mad33 , Kuppuswami Ayyar, J., sitting alone, held that a minor was not bound by an indorsement of payment made by his de facto guardian on a promissory note which the de facto guardian purported to execute in the minor's name. A Bench of the Bombay High Court in Nagindas Gokuldas v. Bhimrao Damu (1915) 18 M.L.J. 216 : I.L.R. 39 Mad. 915 also expressed the opinion that a promissory note executed by a de facto guardian on behalf of a minor even for a necessary purpose cannot bind the estate of the minor.

14. We are of the opinion that the cases in which it has been held that a de facto guardian cannot bind the minor's estate by a promissory note executed by him in the minor's name have been rightly decided. He could only bind the minor by such an instrument if the personal law of the minor allowed him to do so. The ancient texts do not, of course, contemplate such a situation and it is not suggested that authority has been conferred by custom. It is one thing for a de facto guardian to borrow money for a necessary purpose and quite another thing to sign a negotiable instrument on the minor's behalf. There is nothing in the judgment in the Hanooman Persaud's case3 or in any later case to support such a proposition. On the other hand, as we have shown, there are decisions directly to the contrary. A power to borrow does not in itself imply a power to execute a negotiable instrument in respect of the debt.

15. In Chennappa v. Onkarappa : AIR1939Mad538 a Full Bench of this Court held that a de facto guardian is not the lawful guardian within the meaning of Section 21 of the Indian Limitation Act, 1908, and therefore is not an agent duly authorised to sign an acknowledgment of liability. There is here direct authority for the statement that the promissory notes which the natural father of the plaintiff signed could not operate to extend the period of limitation, which means that when the conveyance was executed by the de facto guardian in favour of the defendant there were no debts binding on the minor's estate.

16. The learned Advocate-General has suggested that the promissory note signed by the de facto guardian operated to create fresh obligations; in other words, they evidenced fresh debts. The debts were not fresh debts. They remained the old debts and the de facto guardian could not continue them beyond the period of limitation by merely signing fresh promissory notes in the minor's name. The learned Advocate-General has also suggested that the consideration for the sale deed was the abstention from suing. This argument is equally fallacious. The deed itself shows that the consideration, except for the Rs. 75 paid for the stamp and the registration charges, was the discharge of one of the promissory notes executed by the de facto guardian and the partial discharge of another promissory note executed by him.

17. We hold that the minor's natural father had no authority in law to execute promissory notes on behalf of the minor and therefore there was no consideration for the conveyance to the defendant. We also hold that the de facto guardian could not extend the period of limitation in respect of the debts contracted by the adoptive father and consequently those debts were barred at the time of the conveyance. From whichever way the matter is viewed the conveyance cannot bind the minor. Before we pass on to the question of ratification we must refer to another argument advanced by Mr. Satyanarayana Rao on behalf of the plaintiff. It was based on the judgment of the Privy Council in Partap Singh v. Sant Kuar : AIR1935Mad447 . In that case it was held that a Hindu minor was not bound by an agreement entered into by a de facto guardian and it was suggested by Mr. Satyanarayana Rao that the rule applied in all cases, even where the contract was for a necessary purpose. Their Lordships were not considering a case where a de facto guardian had entered into a contract for a necessary purpose within the meaning of Hanooman Persaud's case (1938) M.W.N. 677. The contract in Partap Singh v. Sant Kuar (1932) 56 M.L.J. 350 : I.L.R. 56 Mad. 879 had no reference to such a situation and therefore the decision of their Lordships has no bearing on the present case.

18. The issue with regard to ratification was decided against the defendant by the Subordinate Judge without discussion, but we agree with his conclusion. Gutta Punniah had obtained a decree against the estate in respect of moneys which he had advanced to the adoptive father. The plaintiff then applied for the scaling down of the decretal debt under the provisions of the Madras Agriculturists' Relief Act. The sum of Rs. 4,580-9-6 had been paid by the defendant to him before that suit was filed and in the plaintiff's application for scaling down he had to mention this payment. It is said that this amounted to ratification of the conveyance. Obviously it could not. As a decree had been passed against the plaintiff in favour of Gutta Punniah the plaintiff was entitled to escape with the minimum payment allowed by the law of the land. Moreover the validity of the conveyance to the defendant was not in question in that case.

19. The defendant is on firm ground in asking that he be given a charge over the properties in suit in respect of the Rs. 4,590-9-6, which he paid to Gutta Punniah. Mr. Satyanarayana Rao has in fact accepted the justice of this claim. The defendant will be granted a charge on the properties in suit for this amount with interest at six per cent, per annum from the date of payment to Gutta Punniah. The correctness of a finding by the Subordinate Judge that the mesne profits amounted to Rs. 1,000 per annum has not been disputed. The plaintiff is entitled to mesne profits at this rate from the year 1932.

20. The appeal is allowed and a decree for possession granted subject to the charge on the properties in favour of the defendant in respect of the Rs. 4,590-9-6 with interest. The plaintiff will be paid mesne profits at the rate of Rs. 1,000 per annum until possession is given. The plaintiff will have two-thirds of his costs in the trial Court and in this Court.


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