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Dhulipalla Kanakam Alias Sitaramayya, Minor, by Mother and Guardian Ramamma Vs. Nadipalli Venkataraju and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1918Mad101; 43Ind.Cas.76
AppellantDhulipalla Kanakam Alias Sitaramayya, Minor, by Mother and Guardian Ramamma;dhulipalla Sitaramaswamy
RespondentNadipalli Venkataraju and ors.;sankachina Venkatappayya and ors.
Cases ReferredGrandhe Gangayya v. Grandhe Venkataramiah
Excerpt:
hindu law - joint family--partner ship with stranger--minor co-parcener, liability of, for debts incurred by film, extent of--family benefit contract act (ix of 1872), section 247. - - we fail to see why a person who is liable on an ordinary contract entered into by his elder brother as manager should be placed in a more advantageous position, because the manager happens to carry on partnership business with a stranger on behalf of the family the decisions in ramlal thakursidas v......to have been incurred for the benefit of the family. the 2nd defendant pleaded that the joint family property should not be held liable for the debt. the courts below have rejected this contention and have given a decree against the family property.2. mr. narayanamurthi in an elaborate argument contended that the objections of the 2nd defendant are governed by section 247 of the indian contract act and that the liability, if any, should be restricted to the assets of the partnership; on the other hand mr. somasundaram, for the 1st respondent, argued that the liability of the 2nd defendant is under the hindu law and the fact that the debt was incurred in the course of a partnership concern should not make any difference in his liability.3. if the position of the 2nd defendant were to.....
Judgment:

1. The plaintiff sues on a promissory note executed by defendants Nos. 1 and 3. The 2nd defendant is joined as being the undivided brother of the float defendant. The father of the first two defendants carried on a trade in timber with one Naganna. On his death, the 1st defendant, as the manager of the joint family, carried the stock in trade left by his father into a similar partnership with the 3rd defendant. The debt evidenced by the promissory note was contracted in the course of this trade and it has been proved to have been incurred for the benefit of the family. The 2nd defendant pleaded that the joint family property should not be held liable for the debt. The Courts below have rejected this contention and have given a decree against the family property.

2. Mr. Narayanamurthi in an elaborate argument contended that the objections of the 2nd defendant are governed by Section 247 of the Indian Contract Act and that the liability, if any, should be restricted to the assets of the partnership; on the other hand Mr. Somasundaram, for the 1st respondent, argued that the liability of the 2nd defendant is under the Hindu Law and the fact that the debt was incurred in the course of a partnership concern should not make any difference in his liability.

3. If the position of the 2nd defendant were to be looked at from the point of view of a person who was admitted to the benefits of the partnership, a great deal can be said in favour of the contention raised by the learned Vakil for the appellant. Prima facie, his case would be governed by Section 247 of the Act. The asset of the father in which he had a share was brought into the new partnership and consequently he must be regarded as a person admitted to the benefits of the partnership in which his elder brother and the 3rd defendant were the active partners. If this position is established, we are not prepared to say that the ancestral family property can be regarded as partnership assets. The definition given in Lindley on Partnership, page 384, is against the view that the family property was a part of the assets. One essential consideration for such a position is that all the partners, during the continuance of the business, must have the right to deal with that property. We do not think that the family property was an asset of the partnership. The definition given in Section 20 of the English Partnership Act is against holding properties not directly associated with the business as assets of the firm. Therefore, the 2nd defendant, regarded as one to whom Section 217 is solely applicable, could not be made liable in respect of the ancestral property.

4. But, in our opinion, the true view of the case is to regard the liability claimed as against him as proceeding from his position as a member of the joint family. We fail to see why a person who is liable on an ordinary contract entered into by his elder brother as manager should be placed in a more advantageous position, because the manager happens to carry on partnership business with a stranger on behalf of the family The decisions in Ramlal Thakursidas v. Lakhmichand Muniram 1 B.H.C.R.51 and in Ramachandra Padayachi v. Kondayya Chetti 24 M.A 555 recognise that the position of a member of a joint family is not changed by the fact of the manager carrying on trade. Mr. Narayanamurthi contended that Sanka Krishnamurthi v. Bank of Burma 11 Ind. Cas 79 is against this view. We do not think so. In that case the sole representative of a Hindu family who was a minor was admitted to the benefits of a partnership with a stranger. It was held that his property was not liable for the partnership debt. The reason of the rule is this: Any liability incurred by a minors unenforceable and void against him. If he is to be held liable at all, it can only be to the extent to which by Statute he is charged with liability. Section 63 of the Contract Act furnishes one illustration, Section 247 another. In the case of a minor in whose behalf the borrowing is made by a person who under the Hindu Law, is competent to pledge the credit of the family, the additional obligation which that law imposes is not rendered inefficacious by the fact that the debt was incurred in the course of the trade. We think that there is no reason for not making the 2nd defendant liable in respect of the family property, as the debt has been found to have been incurred for the benefit of the family. We do not think that the cases dealing with the relationships of the members of a family inter se in respect of a family trade have any bearing on this question. There is no question of partnership in such eases, but one of joint ownership of a business. Nor does the decision in Grandhe Gangayya v. Grandhe Venkataramiah 43 Ind. Cas. 9: (1917) M.W.N. 805 affect the present ease. The conclusion that in a partnership with a stranger the manager is the only person who can exercise the powers of a partner does not show that the Hindu Law liability of the other memberss is not to be recognised.

5. For all these reasons we are of opinion that the Courts below are right and we dismiss the second appeal with costs.

6. Second Appeal No. 1037 of 1916 follows and is dismissed with costs.


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