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Somasundaram Chettiar Vs. Kanoo Chettiar (Died) and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Civil
CourtChennai
Decided On
Reported inAIR1929Mad573; 118Ind.Cas.494
AppellantSomasundaram Chettiar
RespondentKanoo Chettiar (Died) and ors.
Cases ReferredOfficial Assignee of Madras v. Palaniappa Chetty
Excerpt:
- - this, however, goes further than, is necessary in the present case, and inasmuch as the appellant is clearly personally liable for the debts of the firm he has rightly been adjudicated an insolvent. i cannot understand why in these cases the creditors who obtained these decrees prayed only for, or were satisfied with, decrees against the family property so far as the appellant is concerned......appellant, his uncle and his uncle's son, and it is alleged in his insolvency petition that this family firm owed a debt to respondent 1, that they ware unable to pay their debts, that one member of the firm had absconded and that the place of business had been closed. respondent 1 had already filed a suit for the recovery of his debt and there were other creditors who filed suits shortly after this insolvency petition was filed. the district judge states that the parties agreed that they would be bound by the findings come to in these suits. the real question at issue in these suits was whether the appellant and his cousin were liable for the debts incurred by the managing member of the firm. the subordinate judge found that the firm was a family firm and was conducted by all the.....
Judgment:

Phillips, J.

1. Respondent 1 in this appeal is a creditor of a family firm consisting of the appellant, his uncle and his uncle's son, and it is alleged in his insolvency petition that this family firm owed a debt to respondent 1, that they ware unable to pay their debts, that one member of the firm had absconded and that the place of business had been closed. Respondent 1 had already filed a suit for the recovery of his debt and there were other creditors who filed suits shortly after this insolvency petition was filed. The District Judge states that the parties agreed that they would be bound by the findings come to in these suits. The real question at issue in these suits was whether the appellant and his cousin were liable for the debts incurred by the managing member of the firm. The Subordinate Judge found that the firm was a family firm and was conducted by all the members and the debts were binding not only on the managing member but also on the joint family consisting of the appellant, his uncle and cousin. Notwithstanding this finding he only gave a decree against the uncle personally and against the family properties of the other two members of the firm This was apparently because in nearly all the suits this was the sole relief asked for by the respective plaintiffs. When, however, members of a family trade together and are partners in a joint firm they are all personally liable for the debts of that firm, and this can hardly be disputed in view of the pronouncements of this Court. The case relied on by the appellant is the Official Assignee of Madras v. Palaniappa Chetty [1918] 41 Mad. 824 but that case was closely concerned with the liability of a minor member of a joint trading family for debts incurred by the firm before he attained majority. Six Judges took part in the proceedings of this case and all of them were of opinion that in the case of a major member of such a firm there was personal liability but it was held that a minor member was not liable for debts incurred during his minority. The argument therefore that the appellant cannot be declared an insolvent because under the decrees which have now been obtained he has not been made personally 'liable cannot avail him, because at the time this petition was filed there was a debt owing by the firm for which he as an adult member was personally liable. There is also an unreported decision of this Court-C.M.A. 47 of 1916-in which it was held that in order to make a person liable to be declared an insolvent the debt need not be one for which he was liable to arrest. It is sufficient if he owns a debt for which he is personally liable. This, however, goes further than, is necessary in the present case, and inasmuch as the appellant is clearly personally liable for the debts of the firm he has rightly been adjudicated an insolvent. It is suggested that the appellant should be allowed to re-open the findings in the suits filed by the creditors, but inasmuch as the District Judge has stated that the parties to the insolvency petition agreed to be bound by these findings and as there is no suggestion in the appeal memorandum that there was no such agreement, the appellant cannot now he heard to say that the District Judge's statement is incorrect and consequently he cannot ask to reopen the findings in those cases. No doubt, under the decrees the appellant is not personally liable for these debts but only the family property in his hands.

2. It is not suggested that he has any other property and in fact it is hardly possible for him now to allege that he has, inasmuch as he has filed all his appeals in forma pauperis asserting that he has no money to pay for the stamp duty. The question as to how the debts will be enforced need not be considered as all we are concerned with is whether the adjudication was right or wrong. Holding that the District Judge was right for the reasons given above this appeal must be dismissed with costs of respondents 4 and 11.

Appeals Nos. 409 to 415 of 22 and 36 to 45 and 147 of 25.

3. These are appeals filed in respect of decrees obtained for debts due by the appellant's firm. The appellant is now an insolvent and the Official Receiver is unwilling to continue the appeals on his behalf. They therefore abate. Appeal No. 147 is dismissed with costs of respondent 1 and the other appeals are dismissed with costs of the contesting respondents and appellant must pay the stamp-fee payable to Government.

Reilly, J.

4. The order of the learned District Judge on the insolvency petition in A.A.O. 309 of 1922 appears to me unfortunately elliptical. It contains no express finding that any particular act of insolvency had been committed by the appellant within the necessary period. But there is evidence that the appellant and his uncle and cousin. are members of a trading joint family. The petitioning creditor had obtained a decree for Rs. 5,000 against that joint family, and he gave evidence that the business of the family had been stopped, which is equivalent in the words of the Act to 'suspending payment,' that their stock-in-trade had been hidden, that their family jewels had been secreted and that the manager of the family business had left British India and had sent his moveables, by which I understand the family moveables, to various places. These are the acts of insolvency alleged, and I infer that the learned District Judge found that they were established. The manager's acts under Section 6, Prov. Ins. Act, would be sufficient to bring responsibility on the present appellant. In regard to the time when these acts were committed the petitioner's evidence is very indefinite. At first he says that the business was stopped six months before the date of his petition, which would be too long before the petition to make it available for him as an act of insolvency. Later on he says that it was about the time when the manager left for Karaikal that the business was stopped and that he went there about three months before the petition. I infer again that the learned District Judge found that evidence sufficient to show that the acts of insolvency had been committed within three months before the petition, though it is unfortunate that he did not state his finding on the point definitely.

5. Mr. Bhashyarn Ayyanar has urged for the appellant that, because the decree obtained by the petitioning creditor and the other decrees which have been obtained against the appellant are only against his share of the family property they are not available as any basis for adjudging him insolvent. I cannot understand why in these cases the creditors who obtained these decrees prayed only for, or were satisfied with, decrees against the family property so far as the appellant is concerned. It is true that in or out of the insolvency proceedings these decrees can only be enforced, so far as the appellant is concerned, against his share of the family property. It is true also that decrees against family property in a man's hands may not in certain circumstances be any basis for adjudication in insolvency, for instance in certain circumstances a decree against the karnavan of a Malabar tarwad for a tarwad debt or in certain circumstances a decree against a son for his father's debts. But here we have got acts of insolvency established against a man and decrees against his own property, that is, his own share of the family property, which it appears is his only property. It is not suggested that he has any other property and the fact that he filed pauper appeals in large numbers before he was adjudged insolvent makes it very difficult to suggest anything of the sort. In the circumstances, although the appellant cannot be arrested or execution taken personally against him on these decrees, I agree that there is no sufficient reason to interfere with the order of the learned District Judge adjudging him an insolvent and his appeal against his adjudication must be dismissed with costs of respondents 4 and 11. I also agree that the other appeals must be dismissed with costs.


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