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Pulavarthi Lakshmanaswami (Deceased) and ors. Vs. Srimat Tirumula Peddinti Tiruvengala Raghavacharyulu, Minor by Maternal Grandmother and Guardian, Molugu Tiruvengalamma and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Civil
CourtChennai
Decided On
Reported inAIR1943Mad292; (1943)1MLJ104
AppellantPulavarthi Lakshmanaswami (Deceased) and ors.
RespondentSrimat Tirumula Peddinti Tiruvengala Raghavacharyulu, Minor by Maternal Grandmother and Guardian, Mo
Cases ReferredNagamtnam v. Seshayya
Excerpt:
.....in the hands of the son even for the sums found to have been advanced to the father for an immoral purpose is the son failed to show that the advances were made with knowledge of such purpose. but this obligation, it is well to remember, was based on the religious duty of the son to relieve the father from the evil consequences arising from the non-payment of his debts and was not designed for the benefit or the protection of his creditors; when the decree which was executed was made in a suit to which the sons were not parties and the property sold was the joint property of the father and the son, the sale was good on the principle of hindu law that it is the pious duty of a hindu son to pay his father's debts unless it is shown that the debt in respect of which the decree was..........dumpagadapa agrabaram can be regarded as an ' estate ' within the meaning of the madras estates land act as amended by the amendment act of 1934, notwithstanding the grant of portions thereof as devadayam inams to certain temples in the village.13. the contention that act iv of 1938 is ultra vires the local legislature so far as it affects negotiable instruments and therefore cannot apply to the suit debts is concluded against the appellant by the full bench decision in nagamtnam v. seshayya (1939) 1 m.l.j. 272 : i.l.r. (1939) mad. 151 14. in the result, the appeals fail and are dismissed with costs, advocate's fee one set; and the memoranda of cross-objections are allowed with costs; advocate's fee one set.15. as the last contention involves a substantial question of law as to the.....
Judgment:

Patanjali Sastri, J.

1. These appeals raise questions of some general importance relating to the true scope of the pious obligation of a Hindu son to discharge his father's debts.

2. One Viraraghavacharyulu and his brother Ramanujacharyulu were members of a joint Hindu family of which the former was the manager. Viraraghavacharyulu borrowed Rs. 2,000 from the appellant in both appeals on a promissory note, dated 18th December, 1929. The debt was renewed in 1932 by the execution of another note for Rs. 3,070-7-6 being the amount then due for principal and interest under the earlier note. A sum of Rs. 400 was paid on 23rd September, 1935 and the payment was endorsed on the note by both Viraraghavacharyulu and Rarrjanujacharyulu. Viraraghavacharyulu having died in 1936, the appellant sued his son and Ramanujacharyulu (O.S. No. 48 of 1938) for recovery of the balance due on the note. A.S. No. 412 of 1940 arises out of that suit. The connected appeal A.S. No. 383 of 1940 arises out of another suit (O.S. No. 50 of 1938) brought by the appellant against the same defendants to enforce payment of the balance of principal and interest due on a promissory note for Rs. 16,051-15-0 executed by both the brothers on 16th October, 1933. This note was given in renewal of an earlier note for Rs. 9,500 also executed by both of them. In this sum was included Rs. 1,563-15-0 being the principal and interest due under a promissory note executed by Viraraghavacharyulu alone for Rs. 1,000 on 20th December, 1926. The main defence in the first suit was that the debt was borrowed by Viraraghavacharyulu for payment to his concubine for meeting the expenses of her grand-daughter's marriage and that it could not therefore bind the defendants or their family properties. The defendants also pleaded that they are agriculturists within the meaning of the Madras Agriculturists' Relief Act and as such were entitled in any event to have the debt scaled down in accordance with the provisions of that Act. In the second suit also the defendants claimed relief under the Act as agriculturists, and in addition the son pleaded that a portion of the sum borrowed having been utilised for discharging a debt due to a third party from whom Viraraghavacharyulu had borrowed monies for payment to his concubine, the debt could not bind the family properties in the hands of the son. By consent of parties, both suits were tried together, the evidence being recorded in O.S. No. 50 of 1938.

3. The Court below has found that the debt sued for in O.S. No. 48 of 1938 was incurred by Viraraghavacharyulu for payment to his concubine one Saradamba for meeting the expenses of the marriage of her grand-daughter and must therefore be deemed to have been contracted for an immoral purpose; but he held that the debt was binding on the family property in the hands of the son as the appellant was a bona fide lender without knowledge of the purpose for which the amount was borrowed. On the question as to the agriculturist status of the defendants, the learned Judge held that they were disqualified under Proviso D to Section 3 (ii) of the Act from claiming its benefits as they were the holders of an estate called Dumpagadapa agraharam in respect of which they paid more than Rs. 100 an quitrent to the Government. He held, however, that the rate of interest charged, namely, Rs. 1-9-6 per cent. per month compound was substantially unfair and reduced it to nine per cent. per annum, simple, and passed a decree accordingly against the family properties in the hands of the son and dismissed the suit so far as Ramanuiacharyulu was concerned. In the second suit, the learned Judge found that a sum of Rs. 1,874-12-0 out of the amount borrowed under the suit promissory note (Ex. A) was paid in discharge of a debt due to D. W. 2 under an earlier note for Rs. 2,000 (Ex. XVI) executed by Viraraghavacharyulu and that the sum borrowed from D. W. 2 was also paid by Viraraghavacharyulu to Saradamba in connection with her grand-daughter's marriage. He held however that the debt as a whole was binding on the family properties in the hands of the son as the appellant advanced the loan bona fide, as in the other case, without any knowledge that part of the amount borrowed was to be applied in discharge of the promissory note, Ex. XVI. He reduced the rate of interest from Rs. 1-13-6 per cent. per mensem compound to nine per cent. per annum simple and passed a decree for the amount found payable against Ramanujacharyulu personally and against the family properties in the hands of the son. Not being satisfied with these decrees, the appellant has brought the present appeals to this Court and the respondents have preferred a memorandum of cross-objections in each appeal as regards the points decided against them in the Court below.

4. In A.S. No. 412 learned Counsel for the appellant endeavoured to show that Ramanujacharyulu was also liable for the debt by reason of his having signed the endorsement of payment of Rs. 400 in the suit promissory note (Ex. B). As stated above, this promissory note was executed by Viraraghavacharyulu alone in jenewa 1 of an earlier note (Ex. A) executed by him. It is difficult to see therefore how Ramanujacharyulu could be made liable for a debt borrowed by his elder brother not for any family purpose but for a private purpose of his own. It was suggested that, by signing the endorsement of payment along with his brother, he must be taken to have made a representation to the creditor that the borrowing was for a purpose binding on him also, that such implied representation must have led the appellant to defer his action on the note, and that therefore Ramanujacharyulu was estopped from denying his liability. We are unable to appreciate this argument. The endorsement was made in September, 1935, long after the loan had been originally advanced in 1929, and it is difficult to see how a representation supposed to have been made at the time of such endorsement can give rise to a liability by estoppel; nor is there any warrant for inferring such a representation from the mere fact of Ramanujacharyulu signing the endorsement of payment. It was not suggested that any such representation was actually made by him at the time or that the appellant agreed to defer suit if Ramanujacharyulu undertook liability and signed the endorsement on the note. We have no hesitation in rejecting this contention.

5. The second contention is hardly more sustainable. It was submitted that there was no clear proof that the borrowings by Viraraghavacharyulu under Ex. B and under Ex. XVI were for payment to Saradamba. It is true that there is no direct evidence that the sums borrowed under these promissory notes were the identical amounts paid to Saradamba. But the evidence hardly leaves any room for doubt on the point. Rs. 2,000 was borrowed on 18th December, 1929, under each of these notes and the family accounts show that on the very next day a sum of Rs. 4,000' was debited as paid to Saradamba. No attempt has been made to show that Viraraghavacharyulu had other funds on hand out of which he could have made the payment. In such circumstances, the conclusion is irresistible that the amounts borrowed under the notes were utilised for making the payment to her.

6. Even so, it was said, the purpose of the borrowings could not be regarded as immoral under the Hindu law as it appeared that Saradamba was in the continuous and exclusive keeping of Viraraghavacharyulu and was thus an avaruddhastri within the meaning of Hindu law texts, which recognise her status and provide for her maintenance. It was indeed suggested that Viraraghavacharyulu was 'morally' bound to meet the expenses of her grand-daughter's marriage. This argument is based on an obvious fallacy and cannot be accepted. The fact that Hindu law, like some other ancient systems of law, recognises and makes provision for certain human frailties cannot be taken as elevating them to the plane of good morals. Nor can the so-called moral duty of a paramour to provide his concubine with funds to meet her expenses render his borrowing for the purpose a vyavaharika debt as between him and his son.

7. The appellant next objected to the reduction of the rate of interest to nine per cent. simple throughout as unwarranted in the circumstances of the case. He does not however seek to recover interest at the contract rate which comes to more than twenty per cent. per annum compound but claims only 10 1/2 per cent. compound and has valued his appeal on that basis. It is however unnecessary to consider this point as we are holding that the respondents are entitled to the benefits of the Madras Agriculturists' Relief Act which wipes out all interest outstanding on 1st October, 1937 and reduces subsequent interest to the rate of 6 1/4 per cent. per annum where a higher rate has been stipulated.

8. Turning now to the memorandum of cross-objections filed in each of these appeals, the first contention was that the learned Subordinate Judge erred in granting a decree to the appellant against the family properties in the hands of the son even for the sums found to have been advanced to the father for an immoral purpose is the son failed to show that the advances were made with knowledge of such purpose. It was urged that it was sufficient for the son to prove, in order to avoid liability for his father's debt, that it was contracted for an immoral purpose and that it was not incumbent on him also to establish that the creditor had knowledge of such purpose. This contention is supported by the decision of this Court (Miller and Oldfield, JJ.) in Savumian v. Narayanan Chettiar (1913) 23 I.C. 248 : 15 M.L.T. 373 although the headnote makes no reference to this point. We should have followed this decision, holding the point concluded against the appellant, but we were strongly pressed by his learned Counsel with certain observations of the Privy Council in the later decision in Satnarain v. Behari Lal (1924) 47 M.L.J. 857 : L.R. 52 IndAp 22 : I.L.R. 6 Lah. 1 (P.C.) and the statement of the law based thereon in Mulla's Principles of Hindu Law (9th edition), page 339. We have therefore thought it necessary to examine the point afresh on principle and on authority.

9. It is no doubt settled law that in the case of a loan advanced to the manager of a Hindu joint family if the lender makes due inquiry into the necessity for the loan and lends the money bona fide, the debt is binding on the interest of all the members in the family estate although the reasonably credited necessity did not in fact exist. This rule is based on the qualified power of the manager or the representative of the family to borrow so as to bind all the members of the family only under certain circumstances which are in their nature variable and are often compendiously referred to as family necessity or benefit. In such a case if the creditor lends honestly after satisfying himself that the borrower is acting within the limits of his authority, the borrowing is regarded as duly authorised and, therefore, as binding on the other persons on whose behalf he purports to borrow. The principle is embodied, as regards transfers of immovable property, in Section 38 of the Transfer of Property Act which has now been made applicable to Hindus. In so far as the father is also the manager of the family, the same rule of course applies when he purports to borrow for an alleged family purpose. But when he borrows for his own private purposes without any representation, express or implied that he is borrowing for the family, he does not act on behalf of his family, and no question of his acting beyond the scope of his authority can arise and no question, therefore, of any bonafide lending. The Hindu law no doubt casts a pious obligation on the son to discharge his father's debts except those falling within certain categories which are usually referred to as illegal or immoral. But this obligation, it is well to remember, was based on the religious duty of the son to relieve the father from the evil consequences arising from the non-payment of his debts and was not designed for the benefit or the protection of his creditors; and, similarly, an examination of the Smrithi texts relating to the excepted categories shows that they are based solely on the impropriety of the father's conduct in contracting the debt, and have no reference to the propriety or otherwise of the creditor's conduct in advancing the loan. The position, therefore, is that if the father's debt is free from taint, a pious duty is laid on the son to rescue the father from the penalties of indebtedness the resulting advantage to the creditor being purely incidental; if, on the other hand, the debt originates in the father's misconduct the pious duty ceases to operate, and the son is not bound to pay off the debt, however bonafide the creditor may have been in advancing the loan. It follows that all that the son has to prove to establish his immunity from the pious obligation in a suit by the creditor is the immoral character of the debt, and it is not incumbent on him to show further that the creditor lent with the knowledge that the debt was contracted for an immoral purpose.

10. It remains to see whether the authorities relied on for the appellant compel a different conclusion. As already observed, reference was made to Mulla's Principles of Hindu Law where it is stated at page 339,

It is open to the son in such a suit (a creditor's suit against father and son) to show that the debt was incurred by the father to the knowledge of the lender for an immoral purpose and to resist a decree against his share on that ground.

(Italics ours.)

The Privy Council decision in Satnarain v. Behari Lal (1924) 47 M.L.J. 857 : 1924 L.R. 52 IndAp 22 : I.L.R. 6 Lah. 1 (P.C.) is cited in support of this proposition. In that case their Lordships observe as follows:

When the decree which was executed was made in a suit to which the sons were not parties and the property sold was the joint property of the father and the son, the sale was good on the principle of Hindu law that it is the pious duty of a Hindu son to pay his father's debts unless it is shown that the debt in respect of which the decree was made was contracted by the father to the knowledge of the lender for the purposes of immorality.

(Italics ours.)

The reference in this passage to the lender is perhaps an inadvertent slip as it is difficult to see how the lender's knowledge of the immoral purpose can render the sale bad if the execution purchaser had no knowledge of such purpose and purchased the property bona fide for valuable consideration. The knowledge of the purchaser was held by their Lordships to be the determining factor in such cases (see Girdharee Lal v. Kantoo Lal (1874) L.R. 1 IndAp 321 and Suraj Bansi Koer v. Sheo Prasad Singh and we cannot believe that their Lordships intended to lay down a different rule when they referred in passing to this subject in discussing a question arising under the Presidency Towns Insolvency Act. However that may be, their Lordships made these remarks with reference to family property sold in execution of a decree obtained against the father as to which different considerations arise, a bona fide purchaser not being bound to go further back then the decree (Suraj Bansi Koer v. Sheo Prasad Singh (1879) L.R. 6 LA. 88 : I.L.R. 5 Cal. 148(P.C.) . We notice that in the earlier edition of the work, also by the same editor, the proposition is stated without reference to the knowledge of the lender, as evidently the decision in Satnarain v. Behari Lal (1924) 47 M.L.J. 857 : L.R. 52 IndAp 22 : I.L.R. 6 Lah. 1(P.C.) was not then regarded as an authority requiring the son to prove also the lender's knowledge of the immoral purpose of the loan if he seeks to escape from having his interest in the family estate affected by the decree.

11. The other cases brought to our notice by the appellant's learned Counsel as supporting his contention are Krishnan Lal v. Garudhwaja Prasad Singh I.L.R.(1899) All. 238 and Babu Singh v. Behari Lal I.L.R.(1908) All. 156. In the former case the Court found that the debt was not shown to have been contracted by the father for an immoral purpose. The observations, therefore, of Burkitt, J., who delivered the judgment of the Bench that:

had it been proved that the debt had been contracted for immoral purposes and that the person who advanced the money was aware of the purpose for which it was being borrowed, the sons would not have been liable,

must be regarded as purely obiter. In Babu Singh v. Behari Lal I.L.R.(1908) All. 156 the point decided was that the burden of proving that the father's debt was contracted for immoral purposes lay on the son and reference was made in the course of the judgment to the observations of Burkitt, J., quoted above as supporting that view. We do not consider that these decisions are of much assistance to the appellant. On the other hand, that Court had to consider the question in Maharajah Singh v. Balwant Singh I.L.R.(1906) All. 508 and after an elaborate examination of the cases bearing on the point the learned Judges, of whom, it may be noted, Burkitt, J., was one, expressed the opinion:

We know of no express authority for the proposition advanced by Mr. Sundar Lal that a son who disputes his liability to pay his father's debt contracted for immoral purposes must ordinarily prove that the lender was aware of the object for which the money was borrowed, though there is the highest authority that he must do so if he is attempting to recover ancestral property which has already passed out of the family.

Again they observed at page 544:

It is no easy matter for sons to satisfy the heavy onus which lies upon them in impeaching loans obtained for immoral purposes, but it would, we think, be the death-blow to the rule of Hindu law, which gives immunity to sons when defending their title to ancestral property from liability to their father's immoral debts, if it were the law that in order to absolve themselves from liability the sons must prove, not merely the purpose for which such loans were contracted, but also that the lenders knew of the immoral purpose of the loan.

We respectfully agree with this observation.

12. It only remains to consider the respondents' claim to relief under the Madras Agriculturists' Relief Act. The respondents are admittedly the owners of an agraharam village called Dumpagadapa exclusive of certain minor inams situated therein. It is also common ground that a sum of Rs. 205 is payable to the Government as quitrent in respect of the village. It appears that the respondents have alienated portions of the agraharam and after such alienation, the proportionate liability which they have to bear as between themselves and the alienees is Rs. 149. The respondents would therefore be disqualified under proviso D to Section 3 (it) assuming the agraharam to be an estate from claiming the benefits of the Act unless Viraraghavacharyulu and his brother became divided in status in 1935 as alleged by the respondents so that the proportionate liability of each would be reduced to below Rs. 100. The learned Subordinate Judge has not made a definite finding on this point as he took the view that the respondents being jointly and severally liable to the Government for the whole quit rent of Rs. 205, each of them would be liable to pay more than Rs. 100 even if there was a division in status between the brothers--a view which cannot be supported after the decision of this Court in Srinivasayya v. Obula Raju : (1941)2MLJ164 , holding that a co-owner's proportionate share of the liability has alone to be taken into consideration in applying the proviso. We have therefore to determine whether the alleged division in status is true. The respondents relied mainly upon entries in the family accounts and upon Ex. XXIV which purports to be an agreement between the brothers to enjoy the income of the family properties in separate shares. Mr. Viyyanna for the appellant frankly conceded that if Ex. XXIV was to be accepted as genuine, it would establish that the brothers became divided in status from its date. The agreement is written on the last two pages of Ex. XXIV which is the family day book for the years 1935 and 1936. It purports to be in the handwriting of the family clerk (D.W. 4) and to bear the initials of Viraraghavacharyulu and the full signature of Ramanujacharyulu. Mr. Viyyanna strongly attacked the genuineness of this document suggesting that it must have been fabricated for the purpose of the suit. He pointed out that Ex XXIV was not filed in Court till after the commencement of the trial, and that the agreement was written on the last two pages of the written portion of the day book. While these circumstances no doubt suggest caution in accepting the document as genuine, we have come to the conclusion, on a consideration of the entire evidence and the general probabilities of the case, that the document is genuine. We have already seen that Viraraghavacharyulu was borrowing large sums of money for payment to his concubine Saradamba in whose name a separate folio was opened in the family ledger showing disbursements made to her from time to time. It is also in evidence that he had alienated some family lands to her. This conduct of Viraraghavacharyulu naturally led to misunderstandings and disputes between the brothers and an actual partition of the properties had to be put off only because their old mother had sentimental objections to her sons dividing the properties during her lifetime. The appellant himself admitted in the course of his cross-examination that in 1934 the brothers went to him as a mediator in connection with their disputes about monies being paid out of family funds to Saradamba, that Ramanujacharyulu told the appellant at the time that he was not going to remain joint with his elder brother any longer and that the assets and liabilities should be divided so that he might discharge his share of the family debts. Even if this statement of Ramanujacharyulu spoken to by the appellant is not to be regarded as effecting by itself a division in status as suggested for the respondents, it clearly shows that Ramanujacharyulu felt aggrieved by the conduct of his brother and was anxious to separate from him in order to protect his interests in the family properties. This background renders highly probable the respondents' case of division in 1935. There is also clear evidence that since 1935, the brothers were separate in mess and, what is more significant, separate folios were opened in the family accounts for the two branches and the entries therein show that the expenses as well as the income were periodically divided in equal shares between the two branches of the family. We have therefore no hesitation in holding that the brothers became divided in status in 1935, and the quit rent payable by each of the respondents in respect of his share of the lands in the agraharam being in that case less than Rs. 100, proviso D does not apply and the respondents are entitled to the benefits of the Act. In this view, it becomes unnecessary to deal with the further question raised as to whether Dumpagadapa agrabaram can be regarded as an ' estate ' within the meaning of the Madras Estates Land Act as amended by the Amendment Act of 1934, notwithstanding the grant of portions thereof as devadayam inams to certain temples in the village.

13. The contention that Act IV of 1938 is ultra vires the Local Legislature so far as it affects Negotiable Instruments and therefore cannot apply to the suit debts is concluded against the appellant by the Full Bench decision in Nagamtnam v. Seshayya (1939) 1 M.L.J. 272 : I.L.R. (1939) Mad. 151

14. In the result, the appeals fail and are dismissed with costs, advocate's fee one set; and the memoranda of cross-objections are allowed with costs; advocate's fee one set.

15. As the last contention involves a substantial question of law as to the interpretation of the Government of India Act, 1935, we certify accordingly under Section 205 of that Act.


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