1. This is an appeal by defendants 6 to 9 against that portion of the lower Court's decree which held the properties of the appellant's tarwad liable to satisfy the plaintiff's claim under a promissory note (Ex. A) executed by defendants 1 to 4 in favour of defendant 5 and endorsed over by him to the plaintiff. The suit was in the first instance instituted against the executants alone; but as defendant 1 was also the karnavan of the tarwad, and as the plaint alleged that the promissory note has bean executed for tarwad necessity, the plaint prayed specifically for a direction for payment of the suit debt out of the tarwad properties. Defendant 1 denied the allegation that the note was executed for tarwad necessity. It however appears to have been considered safer to have this question of tarwad necessity raised by some of the other members of the tarwad: the appellants were on their own application added as defendants 6 to 9 and they put the point of tarwad necessity definitely in issue.
2. Questions were also raised as to whether the endorsement in favour of the plaintiff was supported by consideration and whether the plaintiff was a holder in due course. The lower Court held that in the circumstances a finding on these questions was unnecessary. We do not see how the question of 'holder in due course' would have any bearing on the question as to the liability of the tarwad properties, for that will always depend on proof as to the nature and purpose of the debt. However, we are not satisfied that the plaintiff was a holder in due course and we are of opinion that the plaintiff is entitled only to such rights as defendant 5 had. The point for determination in the appeal is accordingly that raised by the first issue, namely whether the suit pronote is binding on the tarwad. A contention was advanced before us on behalf of the appellants that even if defendant 5 could have proceeded against the tarwad property for the recovery of the debt evidenced by the suit note, the plaintiff who is merely an endorsee of the note and not an assignee of the original debt, must be limited to the remedy on the note and was entitled to a decree only against the executants. It was also argued that Ex. A had not been executed by defendant 1 in his capacity as karnavan and that reference to him in the body of the note as karnavan and manager of the tarwad, must be taken to be merely descriptive. Lastly, it was said that the suit had been framed only as an action on the promissory note and not as one on the original debt or consideration. These questions do not appear to have been argued before the lower Court; but as they are substantially questions of law, arising on the language of the plaint and the suit note, we allowed them to be argued at some length.
3. Notwithstanding the principle recognized in Sadasuk Janki Das v. Sir Kishan Pershad AIR 1918 PC 146, the High Courts in India have generally held that in cases not based on mere agency, a promissee's claim under a note is not limited to a personal decree against the executant but may also include relief against the properties of a partnership joint family, or Tarwad which, under the substantive law governing the executant, will be liable for the debt: see Krishnanand Nath Khare v. Raja Ram Singh AIR 1922 All 116 and the cases there referred to. The narrower view laid down in Manchersha Ardesar v. Govind Ganesh AIR 1930 Bom 424 is not reconcilable with the assumption underlying the recent judgment of the Privy Council in Abdul Majid Khan v. Saraswathi Bai , which proceeds on the footing that a promisee from one of several partners may in certain circumstances be entitled to relief against the partnership property. There is an obvious difference between the class of cases dealt with in Krishnanand Nath Khare v. Raja Ram Singh AIR 1922 All 116 and cases of agency; in the latter, the undisclosed principal must be held personally liable, if at all, whereas in the former, the plaintiff merely seeks in the suit an adjudication that the liability is of such a character that the interests in certain common property, even of persons who are not parties to the note, are liable for the debt. In the case of a Tarwad, it has been held that a decree obtained against the karnavan as such could be executed against the Tarwad properties: see Ittiachan v. Vellappan (1885) 8 Mad 484; Govinda v. Krishnan (1892) 15 Mad 333; cf. Manakat Velamma v. Ibrahim Lebbe (1904) 27 Mad 376; such a decree is more analogous to a decree against a Hindu father, than to one against one of several undivided brothers dealt with in Viraragavamma v. Samudrala, (1885) 8 Mad 208, Laxman Nilkant v. Vinayak Keshav AIR 1910 Bom 262, and Namdev Tukaram v. Vishnu Chintaman AIR 1924 Bom 395, for the junior members have no separate interests or shares in the Tarwad property.
4. In determining whether a decree was obtained against a karnavan as representative of the Tarwad, Courts have attached more importance to the nature of the debt and the substance of the claim and have not insisted upon any particular form of words in the frame of the suit. No useful purpose will be served in such cases by relegating the consideration of the question of the binding character of the debt to the stage of execution proceedings even if this could be legally done or to a separate suit. Reliance was placed ion the decision Govindan Nair v. Nanu Menon AIR 1915 Mad 618, in support of the contention that except where the note had been executed in terms making it clear that the karnavan was executing it in his representative capacity, no relief could be had either in the suit or in execution proceedings against Tarwad properties. This decision has been explained in Nachiappa Chetty v. Dakshinamurthy Servai AIR 1916 Mad 424 and Thankammal Vayamkar Amma v. Kunhamma AIR 1919 Mad 370. As pointed out in Padma Krishna Chettiar v. Nagamani Ammal AIR 1916 Mad 677, the Indian Negotiable Instruments Act has in Section 28 specially dealt only with cases of agency and contains no express provision (like that in Section 26, Bills of Exchange Act) in respect of all cases of execution in a 'representative capacity'.
5. Even in oases of agency, the Indian Act has been held only to require that execution in the character of an agent should be clearly indicated somewhere in the note and it does not insist that the signature should purport to be as of agent. If it were necessary to decide the question, we should be prepared to hold that Ex. A contains sufficient indication that defendant 1 became a party to it in his representative capacity. In coming to a decision on that point, it must be remembered that defendant 1 had little or no separate property of his own, that three of the anandravans were parties to Ex. A, and that in Malabar it is generally believed that if the karnavan and the senior anandravan join in a transaction it is some guarantee that it is one binding on the Tarwad.
6. In the above view, it is not necessary to discuss the apparent conflict between Seetharama Chetty v. Seshiah Chetty (1912) 17 IC 417, Shanmuganatha Chettiar v. Srinivasa Ayyar AIR 1917 Mad 108 and Seshayya v. Sanjivarayudu : AIR1934Mad350 on the one side and Ayyasami Pillai v. Guruswami Naicker AIR 1917 Mad 653 and Nataraja Naicker v. Ayyaswami Pillai AIR 1917 Mad 61 on the other, as to the rights of an 'endorsee' of a note (as distinguished from a regular assignee) to obtain a decree against the properties of non-executants; because appellant's learned counsel admitted that if the note had been executed in a 'representative' capacity, the endorsee could also proceed against the executant as a representative of the Tarwad. Nor is there much substance in the objection about the frame of the suit, because the plaint clearly asks for relief against the properties of the Tarwad and it is for this very reason that the appellants intervened in the suit.
7. For the determination of issue 1, it is necessary to refer at some length to the transactions that led up to the suit note and to the circumstances in which the note was executed. It is common ground that for some years prior to 1915, the affairs of the Tarwad had been so mismanaged by the then karnavan Krishna Menon that all the junior members joined in instituting a suit (O.S. No. 47 of 1915, Sub-Court, Calicut) for his removal. It is also admitted that for the expenses of that suit and for maintenance and other necessary expenses of the Tarwad during that time, monies had to be borrowed by the junior members (cf. Exs. 14 and 15). It would appear that till about the middle of 1916, all the junior members were united in their attitude against the karnavan. When, in July 1916, the present defendant 1 (Kesava Menon) who was the then seniormost anandravan and plaintiff 1 in O.S. No. 47 of 1915, filed a petition Ex. 11 praying to withdraw the suit on the terms of the karar Ex. 10, the junior members fell out amongst themselves, because the other adult male members and a few of the female members who sided with them objected to the advantages which Kesava Menon sought to secure for himself under the karar and to the favourable terms offered in return therefor to the former karnavan. In particular they took exception to the sole management which Kesava Menon tried to obtain by the karar in contravention of the original understanding that the management should be jointly conducted by Kesava Menon and the next junior anandravan. Numerically, however, far the greater proportion of the members of the Tarwad supported Kesava Menon but they were all female members. On the opposition of the dissentient members to the withdrawal of O.S. No. 47 of 1915, the suit was directed to proceed and was referred to a Panchayat but before the Panchayat could deal with the matter, Krishna Menon died and the suit terminated.
8. If it were clearly proved that the whole or even a substantial portion of the amount sought to be recovered in this suit had been borrowed at a time when all the junior members of the Tarwad were acting in concert, we should have had little difficulty in holding that the Tarwad properties would be liable for the debt. The learned Subordinate Judge finds, and the evidence certainly leads to the conclusion, that such is not the case here, though it may be that even prior to the date of Ex. 10 defendant 5 had been lending some monies from time to time to the junior members. The present defendants 2 to 4 and another junior member, Sankunni Menon, led the dissentient faction in the Tarwad and when they resolved to continue O.S. No. 47 of 1915,. they entered into an arrangement with defendant 5 for financing them for the purpose and also for their other expenses. On 12th August 1916 they executed Ex. 16, a registered bond for Rs. 10,000, in favour of defendant 5, stating that Rupees 5,000 was the amount found due on the taking of accounts in respect of prior advances and that another sum of Rupees 5,000 was to be advanced from time to time by defendant 5. Defendant 5 would have it that these statements are true and that he did advance the second Rs. 5,000 also; and in O.S. No. 55 of 1923 which he filed on that bond, he claimed to recover the full amount as per terms of the bond. He admits that the advances made by him from time to time were entered in a note-book kept by him and the entries were signed by one or other of the borrowing members. But this note-book has not been produced by him either in the present litigation or in O.S. No. 55 of 1923. We are not prepared to accept his explanation that he handed over this notebook to defendant 1 on the execution of Ex. A.
9. That defendants 2 to 4 must have-borrowed some monies from defendant 5 after they had quarrelled with defendant 1 is clear from the evidence of defendant 1 himself and also from Ex. 5, a document executed by defendant 1 in favour of defendant 5, but not completed by registration. We are not prepared to accept defendant 1's explanation that he signed Ex. 5 without reading it. It seems to us that we may safely accept the story set forth by defendants 2 to 4 in Ex. F, the. written statement filed by them in O.S. No. 55 of 1923 to the effect that in connexion with Ex. 16 they had altogether received only a sum of Rs. 2,118-1-10. We are also prepared to believe that as stated in Ex. F this amount must have been received partly for the expenses of conducting O.S. No. 47 of 1915 after the date of the karar, Ex. 10, partly for the maintenance of the dissentient members of the Tarwad and to some extent for the funeral expenses incurred in connexion with the death of defendant 2's mother. But in the absence of defendant 5's notebook or other reliable evidence giving details as to the advances, it is not possible to say how much was required or applied for each of the three purposes above referred to. Defendant 1 swears that notwithstanding the disputes between himself and the dissentient members, he paid them the monies required for their maintenance expenses and for the funerals of defendant 2's mother. But as he has not chosen to produce the accounts which he admits he kept, the learned Judge rightly refused to believe his statement.
10. The above, being in our opinion the true state of facts, the question arises, how far the amounts thus borrowed from defendant 5 by defendants 2 to 4 and Sankunni Menon could be held to be a debt binding on the Tarwad? As both parties found certain arguments on the circumstances attending the execution of Ex. A, it will be convenient to deal with them first. As stated already, O.S. No. 55 of 1923 had been instituted by the present defendant 5 for the recovery of the full amount due under Ex. 16 and as he prayed for a decree against the Tarwad properties, he had impleaded all the members of the Tarwad (more than 50 in number) as party defendants. The present defendant 1 had become karnavan by that time and he was accordingly impleaded as defendant 1 in that capacity. All the members of the Tarwad except the executants of Ex. 16 denied the plaintiff's right to a decree against the Tarwad and also questioned the consideration of Ex. 16. The executants in their written statement already referred to (Ex. F) admitted receipt of a portion of the consideration and alleged that to that extent the document was binding on the Tarwad. On 4th October 1924 a petition (Ex. D) was filed by the plaintiff and defendants 1 to 4 in that suit, stating that the suit had been compromised between them by defendants 1 to 4 executing to the plaintiff a pro-note for Rs. 4,100. This is the note (Ex. A) now sued on. The petition is signed by the then plaintiff and defendants 1 to 4 but it is signed by a vakil who appeared for Sankunni Menon also. Though the petition purported to be one Under Order 23, Rule 3, Civil P.C., it prayed that the Court may be pleased to record that the suit had been compromised as mentioned in the petition and to strike off the suit from the file. On the same day the Court simply passed an order 'suit dismissed'.
11. P.W. 1 swears that, though the compromise petition and Ex. A were signed by only a few of the defendants in that suit, the settlement was in fact agreed to by all the members of the Tarwad, The learned Subordinate Judge was also inclined to believe that this must have been so; and in support of that view he relied on two circumstances (1) that the settlement was arrived at in the presence of Mr. Raman Nair who had been vakil for the Tarwad for several years and (2) that none of the other members objected to the compromise or claimed their costs on the dismissal of the suit. We are not satisfied that this view is correct. It may be assumed that the other members of the Tarwad must have known of the arrangement and the execution of Ex. A. But we find it difficult to believe that if the parties had definitely agreed that the debt should be regarded as binding on the Tarwad, no statement to that effect would have been made in Ex. A or at least in the petition Ex. D. This circumstance assumes importance when it is remembered that all the members of the Tarwad had been impleaded as defendants in the suit and most of them had expressly denied the binding character of the debt if any. It is admitted that the junior members were represented by separate vakils and it is not explained why those vakils did not join in Ex. D, though it may be too much to expect the ladies to join in the execution of the promissory note.
12. The learned Judge seems to us to have overstressed the importance of the absence of any objection from the other members. If there was a positive statement either in Ex. D or in Ex. A to the effect that the debt had been accepted as binding on the Tarwad, it would be reasonable to draw some inference from the failure of the junior members to take exception to such a recital. But in the absence of any such statement, the junior members might well have been content to allow the matter to remain where it was. Nor does it appear to us proper to stress the point of the knowledge of Raman Nair, the Tarwad vakil, because in that litigation, he was appearing only for defendant 1 and the junior members were represented by other vakils. The concurrence of the anandravans is ordinarily no doubt a matter of significance. But that circumstance is not of much value in this case, because four of them had already undertaken liability under Ex. 16. There is no doubt about the fact that defendant 1 who had not joined in Ex. 16 undertook the liability by Ex. A and purported to join in it as karnavan and manager of Tarwad. The learned Judge observes that defendant 1 is not an illiterate simpleton who could have been easily induced to enter into a compromise unless he himself was satisfied about its advisability and reasonableness. But defendant 1 has by his conduct ever since the date of the Karar Ex. 10 shown himself so unreliable that we hesitate to attach much importance to his attitude in respect of any transaction. The promissory note which he executed to Krishna Menon, the former Karnavan, was later on contested and held not binding on the Tarwad. He has given an obviously false story about Ex. 5 and notwithstanding his execution of Ex. A he has not hesitated by his written statement and by his evidence In the present suit to repudiate liability therefor. In one portion of the judgment the learned Judge himself observes that:
With some inducement or other, defendant 5 had been successful in inducing defendant 1 to recognize and admit the validity of Ex. 16 by getting him to execute Ex. 5.
13. But he does not attempt to state what that inducement might have been. The evidence leaves little room for doubt as to defendant being a mere opportunist. As regards his capacity, defendant 5 himself admits in his evidence that defendant 1 was not considered to be a clever or compatent man before he became karnavan, though he would add that after becoming karnavan he has proved himself to be quite capable of managing the affairs of the Tarwad. In these circumstances it does not seem to us possible to hold that the execution of Ex. A or the circumstances attending that transaction have helped to put the liability of the Tarwad on any higher footing than it was prior to the execution of Ex. A. On the other hand, one is almost tempted to draw an adverse inference from the circumstance that when nearly the whole Tarwad had denied its liability in O.S. No. 55 of 1923, the plaintiff in that suit did not take care to put that question beyond reasonable doubt. It seems to us not improbable that he was content to leave that question where it was and was satisfied with the liability which defendant 1 was prepared to undertake as Karnavan. The result is that the binding character of the debt as against the Tarwad has now to be determined with reference to the nature of the original consideration.
14. The learned Subordinate Judge has in one portion of his judgment relied on the theory of a karnavan's power to enter into a bona fide compromise. We are not satisfied that the circumstances warrant the application of that rule here. For reasons best known to the parties, they did not ask for a decree in terms of the compromise in O.S. No. 55 of 1923, but preferred to have the suit struck off on the execution of Ex. A. It may be the law that the presence of the other members of the Tarwad on the record as parties to the suit does not of itself deprive the karnavan of his representative character (cf. Vesu v. Kannamma AIR 1926 Mad 991) or even of his power to compromise the suit. But the non-participation of the other members is undoubtedly a fact to be borne in mind in dealing with the argument of bona fide compromise. The mere fact that the plaintiff in O.S. No. 55 of 1923 gave up a large portion of his claim does not seem to us of much consequence in the absence of the evidence to show that the claim for the larger amount was reasonably well founded.
15. On behalf of the appellants, Mr. Kutti Krishna Menon put forward an extreme contention that after the dismissal of O.S. No. 55 of 1923 it was not open to the plaintiff therein or anyone claiming under him to re-agitate the question of the binding character of the original debt as against the Tarwad. We are unable to accept this contention. A dismissal Under Order 23, Civil P.C., does not amount to an adjudication but only precludes the institution of a second suit on the same cause of action. O.S. No. 55 of 1923 was founded on Ex. 16 whereas the present suit is based on Ex. A. It may be possible to argue that if the liability of the Tarwad is only in respect of the original debt and not based eithar upon Ex. 16 or upon Ex. A, the cause of action is the same for both the suits. But in the view that a karnavan may make the Tarwad liable by entering into a transaction, in his capacity of karnavan it does not seem reasonable to hold that Ex. A does not constitute an independent cause of action.
16. It was next argued that at the time of the execution of Ex. A a suit against the Tarwad on the original debt (as distinct from Ex. 16) had become barred by limitation and that therefore Ex. A could not be held to be binding on the Tarwad as a document executed for Tarwad necessity. Hero again, it must be said that if and so far as the claim in O.S. No. 55 of 1923 was sustainable against the Tarwad, a note executed by the karnavan in consideration of the withdrawal of the suit would be binding on the Tarwad, because O.S. No. 55 had been instituted in time according to the terms of the bond Ex. 16.
17. The decision of this appeal must accordingly turn on the question whether or not the sum of Rs. 2,100 odd which may be taken to have been received under Ex. 16 by defendants 2 to 5 in O.S. No. 55 of 1923 was recoverable from the properties of the Tarwad. It has been argued on behalf of the plaintiff that though this amount was borrowed by junior members and not by the karnavan, the Tarwad properties should be held liable therefor, because even junior members could pledge the credit of the Tarwad in circumstances of necessity such as for the preservation of the Tarwad property or even for their own maintenance, when the karnavan fails to pay for their maintenance. In support of this contention, reliance was placed upon certain observations of Turner, C.J. in Kunhammatha v. Kunhi Kutti Ali (1884) 7 Mad 233 and of Seshagiri Iyer, J. in Raja of Arakal v. Churia Kunhi Kannan AIR 1916 Mad 976. We find it difficult to hold that the facts of this case warrant the application of the rule relating to debts incurred for the preservation of the common property. As observed already, the debt now in question must be taken to have been incurred after the date of the karar Ex. 10, and on the materials before us, we are not able to say that the few dissentients who attacked Ex. 10 were attempting to preserve the Tarwad properties rather than the 50 members who wished to bring Ex. 10 into force.
18. The fact that the pro-note for Rs. 4,000 then executed by the present defendant 1 in favour of the deposed karnavan Krishna Menon was in a later litigation held not binding on the Tarwad does not seem to us decisive on this question. As regards the head of maintenance expenses and funeral charges, we are prepared to assume, for the purpose of this case, that junior members may in certain circumstances impose a liability on the Tarwad even in respect of their individual borrowings. But the plaintiff has not made it possible for us to say what portion of the suit claim could be held to have been borrowed for such purposes. Rama Kurup v. Shekara Kurn : (1911)21MLJ87 and Kunhanna Rai v. Manku Chetty AIR 1921 Mad 669 do not afford us any help in the determination of this case, because the former decision turned on the transferor's right as the holder of a decree relating to the property and the latter turned on the fact of the mortgagor being in de facto management of the common property. The omission of the junior members of the Tarwad (except D.W. 2) to give evidence is of course legitimately open to criticism, but the onus being on the plaintiff, we are unable to hold on the evidence that Ex. A has been shown to be binding on the Tarwad.
19. The appeal is accordingly allowed and the decree of the lower Court modified by deleting Clause (2) and by omitting from Clause (1) the words 'and defendant 1 in his capacity as the karnavan and Manager of his Tarwad'. The appellants will have the costs of this appeal from respondent 7. In the Court below, defendant 1 could by himself have raised and did raise the question of the liability of the Tarwad and there is room for the surmise of the learned Subordinate Judge that the appellants merely intervened at the instance of defendant 1 and it is the latter that is conducting the suit on their behalf. In these circumstances we do not think it proper to make any order as to the costs of the appellants in the Court below.