1. These appeals raise the question which was left open by the Privy Council in Ganesh Rao v. Tuljaram Rao (1913) 36 Mad. 295, namely how far the act of a managing member of an undivided Hindu family may affect a party to a suit represented by another person as his next friend or guardian ad litem.
2. A Nattukottai Chettiar named Udayappa Chettiar had three sons, Raman, Kasi Viswanathan and Chellappa. Raman married Alagamma Achi, the appellant in Appeal No. 260 of 1942. He predeceased his father. Kasi Viswanathan married Umayal Achi, respondent 1 in Appeal No. 259 of 1942 and the only respondent in Appeal No. 260 of 1942. Chellappa married one Unnamalai Achi. He became of unsound mind and was represented in certain execution proceedings to which reference will be made in a moment by Unnamalai Achi as his guardian ad litem. On Umayal Achi's marriage with Kasi Viswanathan, her stridhanam was invested in her father-in-law's firm. In O.S. No. 1693 of 1931 of the Chief Court of Pudukottah, Umayal Achi sued her father-in-law, her husband, her brother-in-law Chellappa and Vellayya (the son of Raman) to recover her stridhanam moneys. Udayappa Chettiar died during the pendency of this suit. On 29th April 1933 a decree was passed in favour of Umayal Achi for Rs. 45,795-1-0. The decree was subsequently transferred for the purpose of execution to the District Court of West Tanjore. In E.P. No. 61 of 1934 Umayal Achi attached a mortgage held by the family. Subsequently Velayya's one-third interest in the mortgage was released, leaving the interests of her husband and Chellappa. By this time Chellappa had become insane and it was in these proceedings that his wife Unnamalai Achi was appointed his guardian ad litem. The sale of their interests in this mortgage was fixed for 16th March 1936, but Kasi Viswanathan obtained a postponement until 19th March 1936. The next day he assigned his own one-third interest to his wife in part satisfaction of her decree and on 18tb March he assigned, as the manager of the family, Chellappa's one-third interest. These mortgage interests were not sufficient to satisfy Umayal Achi's decree in full and on 19th March 1936 partial satisfaction was entered up. There can be no doubt that in arranging for the postponement of the sale and in making these assignments in partial satisfaction of the decree Kasi Viswanathan was helping his wife to avoid any claim for rateable distribution by other creditors.
3. In O.S. No. 537 of 1933 of the Chief Court of Pudukottah Alagammai Achi, Raman's widow filed a suit against the members of the joint family to recover her stridhanam, which had also been invested in the family business. On 11th July 1936 she obtained a decree for Rs. 1,70,000. In O.S. NO. 1450 of 1933 of the same Court Udayammai Achi, a creditor of the family, sued to recover what was due to her and on 20th January 1936 she obtained a decree for some Rs. 27,000. This decree was likewise transferred for execution to the District Court of West Tanjore and on 16th March 1936 she obtained an order for attachment of the same mortgage rights. The attachment was effected on 17th April 1936. In the meantime, the assignment to Umayal Achi had taken place. In E.A. No. 303 of 1936 Umayal Achi applied for the removal of the attachment which Udayammai Achi had obtained. This application was successful and consequently led to Udayammai Achi filing O.S. No. 10 of 1940 in the Court of the District Judge, West Tanjore, out of which Appeal No. 259 of 1942 arises. On 10th November 1936 Alagammai Achi attached the mortgage rights and again Umayal objected with success. This resulted in Alagammai Achi filing O.S. No. 11 of 1940, out of which Appeal No. 260 of 1942 arises. In both the suits it was alleged that the decree obtained by Umayal Achi in O.S. No. 1693 of 1931 was obtained as the result of fraud and collusion, but the Court held that this was not so, and in this Court the validity of the decree has not been questioned. It was also alleged that the assignment of Kasi Viswanathan's interest and that of Chellappa's interest were effected for the purpose of defrauding creditors. That contention was also negatived and this decision goes unchallenged. In this Court the only question which has been raised by the appellants is whether Kasi Viswanathan as the manager of the family was entitled in law to transfer Chellappa's interest in the mortgage without the sanction of the Court. It has been accepted that the transfer of his own one-third interest passed a valid title to his wife to that extent.
4. If Kasi Viswanathan had been the guardian ad litem of Chellappa, he could not have transferred Chellappa's interest in the mortgage without the consent of the Court. The decision of the Judicial Committee in Ganesh Rao v. Tuljaram Rao (1913) 36 Mad. 295 places this beyond doubt. In delivering the judgment of the Board in that case Mr. Ameer Ali said:
How far the acts of a father or managing member may affect a minor, who is a party to the suit represented by another person as next friend or guardian ad litem, is a question which does not arise in the case, and their Lordships are not called upon to express an opinion on it. But they consider it to be dear that when he himself is the next friend or guardian of the minor his powers are controlled by the provisions of the law and he cannot do any act in his capacity of father or managing member which he is debarred from doing as next friend or guardian without leave of the Court. To hold otherwise would be to defeat the object of the enactment.
Order 32, Rule 7, Civil P. C, expressly prohibits a next friend or guardian entering into an agreement or compromise on behalf of the minor with reference to the suit without the leave of the Court. Rule 15 applies the same provision to a person who acts as the guardian of one who is of unsound mind. But it does not follow from what their Lordships said in Ganesh Rao v. Tuljaram Rao (1913) 36 Mad. 295 that where the guardian is some other person than the father or manager the position is the same. It is the bounden duty of a manager of a joint family to pay the debts of the family out of the family assets and for that purpose he can, of course, also dispose of the interests of coparceners who happen to be minors. Therefore unless Rule 7 of Order 32 applies to a person in the position of Kasi Viswanathan, he had the right in law to transfer Chellappa's interest.
5. In Ramalingam Chetti v. Radhakrishna Chettiar : AIR1936Mad434 a Bench of this Court held that Rules 6 and 7 of Order 32 contain no restriction on the power of a father or a manager of a joint Hindu family to receive the amount of a decree and to give a discharge which will bind a minor member of the family who is a party to the suit, where he is not the next friend or guardian of the minor. In such a case the leave of the Court is not required. This judgment was relied on by Varadachariar J. in his judgment in Vannaji v. Rangarao A.I.R. 1937 Mad. 446 where the facts were these. A joint family consisted of a father and three sons, the third son being a minor. The adult members executed a deed of conditional sale which was also signed by the father as the guardian of his minor son. The deed was executed to discharge a liability due to the plaintiff under a previous mortgage. The mortgagee had sued on the mortgage and the Court had held that it was not binding on the second and third sons in respect of their shares in the ancestral property, as it had not been given to secure an antecedent debt, but that it was supported by consideration. The second deed was executed after this decision had been given and in due course the mortgagee sued to recover possession of the property by virtue of the deed of conditional sale. The Court treated that document as constituting a mortgage by conditional sale and gave a decree' for foreclosure. The minor was represented in the previous suit by a guardian appointed by the Court. In the appeal which was filed against the mortgage decree it was contended that the minor's share was not affected by the deed of conditional sale, but the Court held that the decision in the mortgage suit did not exonerate the minor. The debt due to the plaintiff was neither illegal nor immoral and he was bound by the second mortgage. Varadachariar J. held that Rule 7 only applies to a father who is also the guardian ad litem of his minor son and added that there was no justification for extending the provisions of the rule by analogy or considerations of policy. These two decisions are directly in point and run directly counter to the case set up by the appellant.
6. Ramalingam Chetti v. Radhakrishna Chettiar : AIR1936Mad434 was decided by a Bench and the decision is binding on us, unless there is a Bench decision which conflicts with it, in which case we shall have to decide the matter ourselves. Mr. Rajah Aiyer has suggested that Ramalingam Chetti v. Radhakrishna Chettiar : AIR1936Mad434 is in conflict with the decision of the Bench which decided Vijaya Ramayya v. Venkatasubbarao A.I.R. 1917 Mad. 672. An examination of the judgment in the latter ease however discloses a situation very different from the situation here. There the suit was brought by minors to set aside a compromise decree passed in a partition suit in which they had been defendants, together with an undivided brother and their father. In the partition suit the father acted as their guardian ad litem. The questions in dispute were referred to arbitration without the leave of the Court and the award which was given was made a decree of the Court in spite of opposition. The brother, on behalf of himself and as the guardian of the minors, filed an appeal, in which the father also joined. While the appeal was pending, the father entered into a compromise without the sanction of the Court. The subsequent suit was filed to set aside the compromise decree. The suit was decreed and on appeal it was argued that as the compromise was entered into by the plaintiffs' father and not by their guardian ad litem no sanction of the Court was necessary. This contention was rejected on the short ground that the Court could not accept the suggestion that when the father had no responsibility for them and when their interests were entrusted to another person, he should have larger powers to bind them. There the father had acted as the guardian ad litem in the trial Court, but he let his adult son fulfil that function for the purposes of the appeal. The facts are so different that we think that Vijaya Ramayya v. Venkatasubbarao A.I.R. 1917 Mad. 672 can be distinguished from Ramalingam Chetti v. Radhakrishna Chettiar : AIR1936Mad434 . In the former case the Court actually passed a decree in accordance with the compromise without having sanctioned it. We consider that the principle stated in Ramalingam Chetti v. Radhakrishna Chettiar : AIR1936Mad434 , should be applied here. In Guramallappa v. Mallappa Martandappa A.I.R. 1920 Bom. 37 Macleod C.J. said that though Rule 7 of Order 32 applies to execution proceedings,
there seems to me to be a distinction between a ease where the minor's liability has already been determined by a decree in his father's lifetime, and a case where the minor's liability in the first instance is in dispute. For, in the former case there is a debt which the guardian is clearly entitled to pay off in full, and the fact that the judgment-creditor has issued execution against the minor making an outsider his guardian ad litem, does not in my opinion alter the situation.
Heaton J. dissented from this opinion. He thought that the rule necessarily implied that during the continuance of proceedings in Court, the dispute between the minor and another party which the Court had to decide could not be compromised except by the guardian ad litem of the minor, and by him only with the leave of the Court.
7. In our judgment Rule 7 merely applies to the guardian or next friend in the suit and when the father or manager of the family is not the guardian or next friend of the minor, his powers are unaffected. We agree with Varadachariar J. that analogy or considerations of policy cannot be called in aid for the purpose of whittling down powers of the father or manager. Of course, if there is fraud or collusion, different considerations will apply; but it is now admitted that there was no fraud or collusion in this case. Moreover, the guardian of the lunatic has raised no objection. The objection merely comes from creditors. Even if the guardian had objected, the position would not be different, but the fact that she has not objected makes the case for the contesting respondents all the stronger.
8. For the reasons indicated we hold that the transfer by Kasi Viswanathan of Chellappa's share was lawful. Consequently the appeals will be dismissed with the costs of respondent 1 in Appeal No. 259 of 1942 and of the respondent in Appeal No. 260 of 1942.