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Vankadari Somappa Vs. Chippagiri Nagi Reddy - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtChennai
Decided On
Reported in(1941)2MLJ1050
AppellantVankadari Somappa
RespondentChippagiri Nagi Reddy
Cases Referred and Lakshmana Chettiar v. Muthu Chellia Goundan
Excerpt:
.....proposition that even when all the members of a joint hindu family have not been made parties to a suit, the entire family estate is, when the debt is incurred by a managing member or members, bound by the act of the latter and can pass at the sale in execution of a decree although he or they may not have been described to be such or stated to have been sued in their representative capacity. but if after hearing the junior members, the finding is that the debt satisfies the 'touchstone of necessity' and is, therefore, binding on them, their interest in the property will be held to have passed at the sale, as effectively as if they had been made parties to the original suit. he subsequently brought a suit for the recovery of possession of the property purchased by him and to this suit he..........in o.s. no. 166 of 1932 and could not therefore be dispossessed of the share which he owned in the family property. the 'auction-purchaser contended that as linga reddi was the manager of the family at the time when the suit was brought against him, as the debt was incurred by him for joint family necessity and as he was entitled to alienate the whole of the property for that debt, the entire family property sold in execution of the decree and not merely linga reddi's share, must be held to have been purchased by the auction-purchaser. relying on the decision in lakshmana chettiar v. muthu chellia goundan (1934) 68 m.l.j. 104 the lower courts held that the question of necessity could not be gone into in this suit and inasmuch as the decree was passed against linga reddi alone on the.....
Judgment:

Abdur Rahman, J.

1. This appeal raises a question of some importance. The facts are these. A promissory note was executed on the 24th July, 1930, by one Linga Reddi for Rs. 400 in favour of D. W. 1 Bhimakka. A suit was brought on the basis of the promissory note by the promisee (O.S. No. 166 of 1932) which resulted in a decree. In execution of that decree, a house and certain lands belonging to the joint family consisting of Linga Reddi and his nephew, the present plaintiff respondent, were attached and purchased on the 22nd September, 1933, by the defendant appellant who is a stranger. A sale certificate was accordingly granted to him on the 27th November, 1933, (Ex. II). The sale certificate describes that the whole of the property mentioned therein and not merely the share belonging to Linga Reddi was sold in execution of the decree. When the auction-purchaser proceeded to recover possession of the property purchased by him, he was obstructed by the other member of the joint family of which Linga Reddi was the kartha. The auction-purchaser applied for removal of the obstruction (E. A. 1276 of 1935) and it was ordered to be removed on the 6th February, 1936. The obstructor, that is, Linga Reddi's nephew brought a suit to set aside the order passed in execution on the ground that he was no party to the suit in O.S. No. 166 of 1932 and could not therefore be dispossessed of the share which he owned in the family property. The 'auction-purchaser contended that as Linga Reddi was the manager of the family at the time when the suit was brought against him, as the debt was incurred by him for joint family necessity and as he was entitled to alienate the whole of the property for that debt, the entire family property sold in execution of the decree and not merely Linga Reddi's share, must be held to have been purchased by the auction-purchaser. Relying on the decision in Lakshmana Chettiar v. Muthu Chellia Goundan (1934) 68 M.L.J. 104 the lower Courts held that the question of necessity could not be gone into in this suit and inasmuch as the decree was passed against Linga Reddi alone on the basis of the promissory note, his nephew, that is, the present plaintiff, could not be held bound by that decree with the result that his share of the property could not be held to have passed to the defendant appellant in execution of the decree. The auction-purchaser was thus prevented from establishing that the debt incurred by Linga Reddi was for family necessity and that the entire family property had passed to him in the auction sale. The question to decide in this appeal is whether the decision of the subordinate Courts is correct.

2. It is well settled that a sale in execution conveys the entire family property:

If a decree is passed against the kartha or manager of a joint Hindu family in respect of a liability properly contracted for the necessities of the family,

and that:

The binding character of the decree upon the interests of the other members depends not upon their having or not having been parties to the suit, but on the authority of the manager to contract the liability.

(See Kunj Behari Lal v. Kandh Prashad Narain Singh (1907) Cri.L.J. 362 Hari Vithal v. Jairam Vithal I.L.R.(1890) 14 Bom. 597 Sakharam v. Devji I.L.R.(1898) 23 Bom. 372 Baldeo Sonar v. Mobarak Ali Khan I.L.R.(1902) Cal. 583 and Mayne's Hindu Law p. 450, para 348, Clause 2). Can Linga Reddi be held then to have been sued as a kartha and represented the other member of the family although he was not described in the plaint as such? The answer to this question is furnished by several decisions of the Privy Council which have been subsequently followed in a well discussed judgment of a Division Bench of the Lahore High Court and in a Full Bench decision of this Court. The first decision of the Privy Council to which reference may be made was in Nanomi Babuasin v. Modhun Mohun where their Lordships observed as follows:

Their Lordships do not think that the authority of Deendyal's case bound the Court to hold that nothing but Girdhari's co-parcenary interest passed by the sale. If his debt was of a nature to support a sale of the entirety, he might legally have sold it without suit, or the creditor might legally procure a sale of it by suit. All that the sons can claim is that, not being parties to the sale or execution proceedings, they ought not to be barred from trying the fact or the nature of the debt in a suit of their own. Assuming they have such a right, it will avail them nothing unless they can prove that the debt was not such as to justify the sale.

This was undoubtedly a case where the debt was incurred by a father, but the principle of that decision was subsequently applied by their Lordships to the case in Daulat Ram v. Mehr Chand where the debt was incurred by a managing member of the family who did not happen to be the father. As this case was attempted to be distinguished on the ground that it was a case of a mortgage and not that of a promissory note, I would advert to and examine that distinction later; but it is clearly an authority for the proposition that even when all the members of a joint Hindu family have not been made parties to a suit, the entire family estate is, when the debt is incurred by a managing member or members, bound by the act of the latter and can pass at the sale in execution of a decree although he or they may not have been described to be such or stated to have been sued in their representative capacity. It would not be so when the mortgage is effected or a debt is incurred for a purpose not binding on the family; but in order to test the correctness of the decision of the lower Courts, it must be assumed in the present case that the debt was of a nature that would bind the family of which Linga Reddi and the respondent were members. If a debt is therefore assumed or found to have been incurred for the family necessity by a manager who was not the father (or for a purpose that was not immoral or illegal when the father happens to be the managing member) in a subsequent litigation to which the other members were parties, it would have to be held that the managing member was sued in a representative capacity in the first litigation and that the whole of the family was bound by the decree passed therein. The only thing that the other members or the sons, as the case may be, can insist, as observed by their Lordships in the above decision, is that an opportunity may be afforded to them to contest their liability. If this is all, it is being given to them in the present litigation.

3. This and other Privy Council decisions were referred to in a judgment of the Lahore High Court and discussed by Tek Chand, J., in Jai Kishen v. Ram Chand A.I.R. 1935 Lah. 1. The head-note of that judgment is sufficiently clear and reads as follows:

A decree passed against the managing member of an undivided Hindu family in respect of a liability incurred within the scope of his authority is enforceable against the interest of the junior members in the family property, even though they had not been made parties to the suit, but such members are not precluded from contesting the authority of the manager, of the nature of the debt, and this they may do either in the course of execution proceedings or in a suit of their own. There is no presumption that a debt contracted by the manager of a Hindu family was contracted for family purposes and this fact must be proved by evidence. The mere circumstance that it had not been disclose 1 in the course of proceedings in the original suit against the managing member that the debt had been raised for family necessity, or that the decree does not show on the face of it that the judgment-debtor had been sued in his capacity as manager is not fatal to the right of the decree-holder to proceed against the entire family property. It is not the frame of the suit or the form of the decree which is conclusive of the matter; the essential point is whether in fact the debt, which is the basis of the decree, had been raised by the judgment-debtor within the scope of his authority as the manager and for the purposes of the family. This question of fact can be determined finally only after the junior members have had proper opportunity of being heard, either in the execution proceedings or in a separate suit specially brought for the purpose. But if after hearing the junior members, the finding is that the debt satisfies the 'touchstone of necessity' and is, therefore, binding on them, their interest in the property will be held to have passed at the sale, as effectively as if they had been made parties to the original suit.

4. This question came up for decision before a Full Bench of this Court in Vadlamannati Venkatanarayana Rao v. Gottumuhkula Venkata Somaraju : (1937)2MLJ251 . The facts of that case briefly were that A who constituted a member of a joint family with his sons B and C purchased on behalf of the joint family a certain property which was then subject to a mortgage. Sub-sequent to the purchase the mortgagee brought a suit to enforce the mortgage and impleaded A as the purchaser of the equity of redemption; A represented the joint 'family in the suit. There was a decree for sale and in execution of the decree the mortgagee purchased the property. He subsequently brought a suit for the recovery of possession of the property purchased by him and to this suit he impleaded not only A who had, as already stated, represented the family in the previous suit but his sons B and C as well. He also claimed mesne profits in that suit. On the plea raised by B and C that they had ceased to have any interest in the property by virtue of a partition under which the property had fallen to A's share they were exonerated. It however transpired that in that partition A had taken the property not only for himself but for himself as well as for a minor son D with whom he was joint at the time when the partition was effected. The suit was decreed and the mesne profits were ordered to be ascertained. The decree for mesne profits was ultimately passed on the 3rd April, 1935. Two months later A died and in February, 1936, an application, was filed on behalf of the decree-holder to recover the amount by sale of the other properties, in D's hands. D resisted the same on the ground inter alia that the properties in his hands could not be rendered liable in execution, firstly, as there had been a partition between him and his father A and secondly as the execution was being sought on the basis of the decree which was obtained against his father only. The partition alleged by D was found against him. On the second point the Full Bench held that the properties of the joint family in D's hands should be, in spite of the fact that he was not a party to the suit or to the decree, proceeded against in execution. It may be remembered, however, that this was so held not only on the ground that A happened to be the father of D but also on the ground that A was the kartha of the family of which D was a member. It was held by the Full Bench that when the suit related to joint family property and the person sued upon was either the father or the eldest member, that is, the accredited head of the family, it must be presumed that he was sued in his representative capacity and he need not have been described as such in the pleadings and that it was not necessary that the decree should have been passed against him specifically as such. It was also held that since the liability was declared to be a family liability every item of the joint family property was bound to satisfy the same. It may also be added here that although the three cases of the Privy Council on which reliance was placed by Venkatasubba Rao, J., who wrote the leading judgment in that case, related to immovable property, the principle of representation affirmed in that decision was held to apply 'to other transactions as well.' The decree for mesne profits which was being enforced against D was after all a decree for money.

5. On the basis of these authorities it would seem to follow that in a case where it can be made out that a person against whom the decree was passed occupied a representative capacity at the time, as Linga Reddi did, and that the debt for which the decree was passed was one for family necessity, as the debt incurred by him must be, for the present, assumed, the property belonging to the other members should be, on that assumption, held liable although they were not eo nomine parties to the suit. If this is the correct position, the decision of the lower Courts in disallowing the questions in regard to the binding nature of the debt and the respondent's liability to discharge the same from being gone into, would be apparently wrong.

6. It has been, however, contended by learned Counsel for the respondent that although Linga Reddi was the kartha of the family at the time when the decree in O.S. No. 166 of 1932 was passed, yet as the suit had not been brought on the basis of the original consideration but on the basis of the promissory note itself and the other members of the family were not impleaded in that suit as parties, the decree should be found to have been passed against him (that is, Linga Reddi) in his individual capacity and the entire family property of which he and his nephew were owners, could not be made liable in satisfaction of the decree. During the course of his arguments learned Counsel for the respondent tried to base this contention partly on the ground of waiver by the plaintiff in not basing his claim in O.S. No. 166 of 1932 on the original consideration against the other members of the family and partly on the ground that a decree on the basis of the promissory note could only be passed against the maker or those who were parties to the note and that unless the promissory note was on the face of it found to have been executed on behalf of the joint family (which it was not) a decree against Linga Reddi cannot be held to have been, passed in a representative capacity and the property belonging to the junior member of the family (that is, the respondent) could not be made liable. I do not think there is any force in either of these contentions. As for the question of waiver, it was never alleged by any one in this litigation that the decree-holder had waived his right, if any, to recover the decree amount from the family property. That would be a question of fact but it cannot be inferred merely from Bhimakka's omission to implead the other members of the family in O.S. No. 166 of 1932. As for the other contention, reliance was placed by learned Counsel for the respondent on the decision in Lakshmana Chettiar v. Muthu Chellia Goundan (1934) 68 M L.J. 104 and on the Full Bench decision in Maruthamuthu Naicker v. Kadir Badsha Rowther : AIR1938Mad377 . The question to decide in the Full Bench case was whether in a suit by an indorsee of a promissory note, persons other than those who were parties to the promissory note could be made liable. The promissory note in that case was found to have been executed by the managing member of a joint Hindu family but the promisee was held, in view of the words of the indorsement, not to have transferred the debt for which the promissory note was executed but the promissory note only. On these findings, the answer given by the Full Bench to the above mentioned question was in the negative. But this was because the indorsee was held not entitled to sue on the debt which was transferred to him but merely on the promissory note which was. An indorsee could not, in the circumstances, sue on the basis of the original debt, but the case of a payee is different. The suit in O.S. No. 166 of 1932 was by the promisee himself and the question whether he was the owner of the debt apart from the promissory note does not arise. Moreover the question whether the property belonging to the other members of the family could be made liable in execution of the decree passed against the maker of the promissory note or those who were parties to the same did not arise for consideration in that case, and was not considered. This would be clear from the following observation that was made in that judgment:

The maker alone can be sued on the note and the fact that under Hindu law sons are liable in respect of debts incurred on behalf of the family or by the father for his own purposes, provided that they are not incurred for illegal or immoral purposes, does not affect the principle involved.

The decision in Lakshmana Chettiar v. Muthu Chellia Goundan (1934) 68 M.L.J. 104 does undoubtedly proceed on the basis that the question of the binding character of the debt against the other members of the family cannot be, at least in cases when they are not the sons or descendants of the judgment-debtor, gone into in execution proceedings, but this was on the basis of the decision in Viraragavamma v. Samudrala I.L.R.(1885) Mad. 208 which was, in view of the Privy Council decisions, considered by the Full Bench in Vadlamannati Venkatanarayana Rao v. Gotiumukkula Venkata Somaraju : (1937)2MLJ251 , to be obsolete. It is true that the facts of the case in Lakshmana Chettiar v. Muthu Chellia Goundan (1934) 68 M.L.J. 104 as well as of Viraragavamma v. Samudrala I.L.R.(1885) Mad. 208 were similar to the facts of the present case, but the objection was being raised, as pointed out by Mr. Ramaswami Aiyangar in the last of the two cases, to the attachment and not as here after the property had been sold by the Court. This may make some difference although I very much doubt if it should. At all events, I see no justification for the reservation made by the learned judges to cases where the other members of the family happen to be the sons or descendants of the judgment-debtor. If it was on the theory of representation the members other than sons or grandsons must be held to stand in the same position and to be similarly represented by the kartha. It may be that the Hindu father may have greater powers than an ordinary managing member, but so far as the question of liability on the promissory note was concerned, they stood in the same position. And sons or other descendants are not always bound by the debt incurred by their father or ancestor, that is, where the debt is illegal or immoral. In any case in view of the Full Bench decision in Vadlamannati Venkatanarayana Rao v. Gottumukkula Venkata Somaraju : (1937)2MLJ251 , the authority of the decisions in Veeraragavamma v. Samudrala I.L.R.(1885) Mad. 208 and Lakshmana Chettiar v. Muthu Chellia Goundan (1934) 68 M.L.J. 104 must be found to have been considerably shaken. I find no reason for drawing a distinction between a debt raised on the security of a promissory note or of a mortgage after the decree is passed. The liability of the other members of the joint Hindu family must be, in both cases, determined by Hindu law and not by the reason that the kartha had executed a promissory note in one case and a mortgage deed in the other. Why should a distinction be drawn between various decrees and why should the liability of the other members of a joint Hindu family be determined in cases of some and not in cases of others, it is not quite easy to follow.

7. I must, therefore, hold that there is no merit in the contention that in a suit on a promissory note when the liability of persons other than the maker had not been alleged or determined, a creditor would be debarred for ever from enforcing the liability imposed by Hindu law as against the other members of the family of which the maker of the promissory note was the kartha or the head. The frame of the suit or questions relating to adjectival law or even considerations based on commercial convenience to be found in the Negotiable Instruments Act should not be allowed to prevail against the substantive law or to decide the point finally whether the other members of the family would or would not be liable for a debt incurred by the manager. A decree may be passed against a manager or a kartha alone who happens to be the maker of the promissory note even in cases where a suit is brought on the basis of a promissory note; but once a decree has been obtained, the question whether the judgment-debtor was liable individually or was also representing the other members of the family of which he was the kartha should be left to be determined in appropriate proceedings and the power of the creditor to get the liability of persons other than the judgment-debtor declared subsequently should not be taken away or held to have been impliedly adjudicated against him simply because he brought the suit against the maker in the first instance. This would contravene the principle enunciated by their Lordships of the Privy Council and by the various High Courts in cases some of which only have been noticed by me.

8. It was wrong to suggest that an auction purchaser in a case like this was trying to go behind the decree. He is not, first of all as contended by learned Counsel for the respondent, standing in the shoes of the decree-holder. If at all, he stands in the shoes of the judgment-debtor whose right, title and interest he has purchased and the questions whether the judgment-debtor could alienate the entire family property in discharge of the particular debt or whether the whole of it could have been sold in execution would depend upon the nature of the debt and the position which the judgment-debtor occupied at all relevant times. If the decree-holder succeeds in establishing that the debt was incurred for a family necessity and that the judgment-debtor did represent the family at the time when the debt was incurred and at the time when the suit was brought against him, the share of the other members in the family property must be held equally bound to discharge the debt incurred by the kartha of the family. In my view, a decree obtained on the basis of a promissory note against a person who is the manager or kartha of the family would be executable against the family property of the other members provided the necessary conditions are established; and it is on those points that the auction purchaser was not allowed to adduce any evidence. The decisions of the lower Courts in preventing him from establishing the fact which would have justified the sale of the property claimed by the plaintiff are consequently incorrect and must be set aside.

9. The appeal is, therefore, accepted and the case sent back to the trial Court for a full enquiry in the light of the observations contained in this order. This is an old case and must be expedited. The plaintiff will pay the costs of this appeal. The costs of the subordinate Courts will be costs in the cause.

10. (Leave to appeal is, granted).


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