1. The plaintiff brought this suit to recover a sum of Rs. 810 alleged to be due to him by two brothers defendants 1 and 2. Defendant 2 became an insolvent and defendant 3, the Official Receiver, was added. Defendants-2 and 3 remained ex parte in the suit. The plaintiff's case was that defendants-1 and 2 were members of an undivided Hindu family, that there was a joint-family shop at Adoni which both of them managed, that there was an understanding with him that both of them, would be responsible for money owing; by either of them, and that he accordingly opened a joint account in their names.
2. The suit was brought upon three items: first a sum of Rs. 1,000 borrowed on 5th December 1920 for which both the defendants executed a pro-note for Rs. 600' and for the remaining Rs. 400 gold jewels were pledged; and the interest in both the cases was to be 14 annas-per cent per mensem. On 27th July 1921 a further sum of Rs. 500 was borrowed by defendant 2 at one rupee per cent per mensem. On 30th October 1922; Rs. 15 was borrowed by defendant 1. Repayment of Rs. 500 was made by defendant 2, on 28th April 1921 and the-pledged jewels were also sold to the-plaintiff for the sum of Rs. 498-2-9. These sums were credited in the plaintiff's account and he sued for the balance-together with the charge of registering notice, As. 3-6 and Rs. 12-10-0 being charges incurred by the plaintiff in demanding his debt on 27th November 1923. Defendant 1, who alone contested the suit denied that the family was. joint. He alleged that there had been, a division in 1908 of the movable properties. Immovable properties were not-divided till 1921, when a registered partition deed, Ex. M, dated 7th December 1921, was executed. He denied that there was a joint shop and said he knew nothing about the pledge of jewels. He-alleged that the promissory note for Rs. 600 which he had jointly executed with defendant 2 had been fully discharged. The following issues were framed:
1. Whether defendants 1 and 2 divided their movables in 1908 and their immovables in December 1921 and whether defendants 1 and 2 are divided brothers? Prom what time the divided status should be allowed? 2. Is that matter of division considered fraudulent in O.S. No. 314 of 1922 res judicata in this suit? 3. Did defendants 1 and 2 carry on a joint business in Adoni and whether the items of loans are true and binding on defendants? 4. Whether the promissory note debt was fully discharged? 5. Was not defendant 1 declared insolvent, and whether the plaintiff obtained permission of the District Court to sue defendants? 6. To what relief?
3. The plaintiff contended that the alleged division effected under Ex. M was in fraud of the creditors. The trial Court found that there was no division in status in 1908 as set up by defendant 1. It disbelieved defendant 1 and gave a decree to the plaintiff for the amount claimed except a sum of Rs. 12-8-0 claimed as charges for sending a man to demand payment. On appeal the learned District Judge accepted the finding that only Rs. 500 was paid towards the promissory note and that the remainder was not discharged. He held that defendant 1 was not liable for the loan of Rs. 500 or for the Rs. 15 borrowed by his brother, and he further reduced the remaining liability on the promissory note which defendant 1 and his brother jointly executed by allowing him to set against this the surplus of Rs. 126-5-8 realized by the sale of the jewels. Except with regard to the item Rs. 12-8-0 the plaintiff prefers the second appeal. I may state at once that there is no clear finding of the lower appellate Court as to the question whether defendants 1 and 2 were divided in status on the dates the first two loans sued upon were granted, and whether as regards the third loan of Rs. 15 incurred after the execution of the partition deed, Ex. M, this partition deed was in fraud of creditors. The learned advocate for the respondent however undertook to support the judgment of the lower appellate Court even taking the view that neither of the alleged partitions was effected; and as on the argument I consider that he has made out his plea, I find it unnecessary to remand the suit for a finding on the question whether there was a division either in 1908 or 1921 as it would probably have been necessary to do otherwise.
4. A few important points may be stated. Defendant 2 in this case is the younger brother of defendant 1, and it is not alleged in the plaint, nor is it the plaintiff's case, that he was managing the family. It is defendant 1 who naturally would have been the manager. Secondly although the witnesses cannot give the date of the opening of the shop at Adoni it is sufficiently clear that the shop and the trade in it is not ancestral business. The village of the defendants and their ancestral property is at Kamalapuram which is many miles away. It has not been asserted by anybody for the plaintiff that this shop is an ancestral one. It is clearly a business started fairly recently, though at what exact time cannot be said. Bearing these facts in mind I proceed with the argument which is advanced by the learned advocate for the appellant. He argues that as there was a large family nucleus of property as shown by Ex. M, the shop must be held to belong to the joint family. He states and it is very clear from the plaint that in addition to this the plaintiff set up an independent oral contract by which either of the brothers undertook to be responsible for the debts incurred by the other. His argument is that the learned District Judge has looked at the matter from a wrong standpoint by assuming that the shop belonged to the younger brother solely and throwing on the plaintiff the burden of proving that the elder brother shared in its management. This matter as an abstract proposition of law is not free from difficulty. A Bench of this Court of which I was a member, in a case reported in Ramiah v. N. Mahalakshmma (1931) 136 IC 205, followed the decision in Ram Krishnam Das v. Tundal Mal (1911) 33 All 677. In that case we quoted the decision in Kannammal v. Ramathilakammal 1927 Mad 38, in which the law was settled as follows:
The party alleging that the property held by an individual member is joint family property must show that the family was possessed of some property with the aid of which the property in question could have been acquired. If this is shown, and only then, the onus shifts to the party alleging self-acquisition, to affirmatively make out that the property was acquired without any aid from the family estate. This is laid down in Ram Krishnan Das v. Tundal Mal (1911) 33 All 677. Ohamier, J., lays down two propositions.
1. There is no presumption that a family has any joint property.
2. There is no presumption that the property found in the possesssion of any one member is joint family property unless it is shown that the family as such possessed some property by means of which the property in question could have been acquired.
5. It is interesting to note the development of the law laid down in that Court, Ram Krishnan Das v. Tundal Mal (1911) 33 All 677 came up for consideration in Kundan Lal v. Shankar Lal (1913) 35 All 564. There the plaintiff asked for a declaration that a certain house property sought to be attached in execution of a decree against his son was his sole property and therefore not liable to be attached and sold. The finding of the lower Court had been that the family was a joint undivided Hindu family. The plaintiff-appellant contended on the evidence that the family had no ancestral property, that it was the separate property of the judgment-debtor. Richards, C. J., observed:
It seems to me however that it is unnecessary in the present case to express any view on the correctness of the decision of Ram Krishnan Das v. Tundal Mal (1911) 33 All 677, because I think that in the present case it is necessary for the plaintiffs to establish the proposition that where property has been acquired in the name of a member of a joint and undivided Hindu family, there is not only no presumption that the property is joint, but that there is actually a presumption the other way, viz., that the property is separate. This I think, would be a great expansion of the decision of Ram Krishnan Das v. Tundal Mal (1911) 33 All 677. It seems to me that the plaintiff coming into Court and seeking a declaration that property which was acquired at the time the family was joint, it lay upon him to show that the property was the separate property of the individual member of the family in whose name it was acquired....
It is common knowledge that joint property is seldom acquired in the name of all the members and not always in the name of the manager. This being so and the normal and natural condition of the family being one of complete unity of interest, I cannot hold that any presumption arises from the mere fact that the property has been acquired in the name or names of one or more members of the joint family....
6. The other learned Judge, Piggott, J., observed:
It seems to me that there is a presumption that the property thus devolved by survivorship and not by inheritance, and that this presumption is not rebutted by the mere fact that the purchase deeds of 1839 and 1860 stand in the name of Mohan Lai alone.
7. The first part of the headnote which runs:
property in the possession of a joint Hindu family should be presumed to be joint family property until the contrary is shown even though it may have been acquired in the name of a particular member of the family
seems to me to go somewhat further than what the learned Judges held in that case. No doubt there is a remark by the learned Chief Justice as follows:
In the absence of authority to the contrary, it seems to me that on principle there ought to be a presumption that property in possession of a joint Hindu family even though acquired in the name of a particular member of that family, is joint family property.
8. But later on as stated above he specifically says that he is not dissenting from the view in Ram Krishnan Das v. Tundal Mal (1911) 33 All 677, but he is not prepared to extend that decision by taking it to mean that there is not only no presumption that the property is joint, but that there is actually a presumption the other way, viz., that the property is separate. The headnote as given seems to be in direct conflict with Ram Krishnan Das v. Tundal Mal (1911) 33 All 677, and reading the judgment as a whole I understand them only to mean that there is no presumption either way and that he who seeks to establish self-acquisition must do so, as also he who seeks to establish joint-ness. There is no question of inheritance by survivorship or otherwise of the shop in the present case, for it seems to have been obviously started in the lifetime of the two brothers. The next decision is Gaya Prasad v. Jaswnt Rai 1930 All 550 . It lays down that though there is an initial presumption that the parties were members of a joint Hindu family there is no presumption that the family owns a joint family property in the absence of any proof of a nucleus (quoting Ram Krishnan Das v. Tundal Mal (1911) 33 All 677. Then it proceeds:
At the same time it would seem that there can be no presumption that any property which is in existence and is in the possession of one member oflthe jointlfamily is necessarily his separate property, or his self-acquisition. The party who wishes to make out that it is his separate property over which he had an absolute power of disposal should establish that case. No presumption can be drawn in his favour' (quoting the second Allahabad case).
9. In Gaghar Bhatak v. Satish Chandra 1919 Cal 351, which was subsequent to Ram Krishnan Das v. Tundal Mal (1911) 33 All 677 and Kundan Lal v. Shankar Lal (1913) 35 All 564 it was held that a transferee from a member of a joint Hindu family of property acquired and standing in the name of his vendor, must show that the property was the separate property of his vendor, although there was no nucleus of ancestral joint family property and that the presumption that property standing in the name and in the possession of a member of a joint Hindu family properly would arise even where there was in fact no nucleus of ancestral joint property. The respondents quote Mulla's Hindu Law, Edn. 7, p. 263, where he says:
There is no presumption that a business carried on by a member of a joint family is joint family business.
10. For this Mulla quotes Vadilal v. Shah Khushal (1903) 27 Bom 157 which certainly supports him, but he also says : see Grey v. Walker (1913) 40 Cal 523. This case is one which has been quoted for the appellant. It appears to me to lay down a quite contrary proposition at p. 529 where it says:
There cannot be any doubt in any cases of families of this nature that there is a presumption of jointneps not only of their properly, but. even as regards business which they carry on and if any member sets up that a particular portion of the property forms his peculium, or separate property, the onus of proving that lies on the particular member who sets up that case.
11. It has however to be observed that there is nothing to show that the particular business in that case was not an ancestral family business, the position of which would be quite different from that of a new business started either by the manager or by some other member of the family. Op the question of law however I do not see how the conclusion can be escaped in the present case that the onus of showing that the shop is not joint was shifted in fact on to the defendants when a large family nucleus was proved. But the really important aspect of the case is that urged for the respondent, that even a manager of the family cannot bind the other members for debts which were not incurred for family necessity and that anyone lending such moneys must satisfy himself that the money is required for family purposes. The principle applies in a far greater degree where debts are incurred by a junior member of the family who is not alleged to be the manager. The latest and most important pronouncement on the question is the Privy Council decision in Benares Bank Ltd. v. Hari Narain 1932 PC 182. It was there held:
that in the case of a joint Hindu family, whether governed by Dayabaga or the Mitakshara, the father or manager has no power to impose upon a minor member of the family the risk and liability of a new business started by him. A business started by the father as manager cannot, if new, be regarded as ancestral so as to render the minor members interest in the joint family property liable for debts contracted in the course of the business.
12. It is true that that case deals with minors for though there were adult members of the family joined as defendants they did not contest the suit. But is is difficult to see how the case of minors would differ from the case of adult members if the latter had not consented or acquiesced by taking part in the trade. In the light of this Privy Council decision the correctness of a previous Bench decision of this Court in Lakshmiah v. Official Assignee 1930 Mad 776, at p. 778, would appear to be open to doubt. In that case, the elder brother started a groundnut business as manager. The younger brother acquiesced and when he became the manager he carried on the business and mortgaged family property for debts incurred in the business. It was held in the absence of evidence that the business was their separate business; the mortgage would be binding on the interest of the other coparceners including minor members.
13. Now if a person who lends money to the manager of a Hindu family has to satisfy himself, that it is required for family necessity so that it could bind the other members, that principle must apply with greater force, where the loan was made to a junior member who is not the manager. Of course, if the business is ancestral in the case of a loan to the manager, a representation that the loan was required for business would ordinarily be sufficient to discharge this obligation. It is evidently not sufficient in the light of the Privy Council's decision even in the case of a loan to a manager starting a new business, still less in the case of a loan to a junior member not a manager who starts a new business. But if the plaintiff cannot succeed in recovering the loan on the basis of the liability of defendant 2, as a member of the joint family, there arc two alternatives which he can fall back on, both of which he has put forward in this case as facts. One is that defendant 1 who actually jointly manages the shop with his brother.
14. The learned District Judge has found that though there is evidence that ho used to assist in the shop, it does not mean that the evidence is sufficiently clear that he took part in the management, and 1 cannot say that this conclusion of fact is without evidence. He relies also on Ex. N, a promissory note under which defendant 1 borrowed money for a debt incurred by defendant 2 for the shop. There has been some dispute as to the correct translation of this promissory note, but I do not think it can be said that it is an impossible view that it asserts that the shop belongs to defendant 2. At any rate, it is a perfectly legitimate argument with which I would agree, that if defendant 1 had taken a loan for debt owing by both of them, for a shop which they both managed, it would have been more natural to say in that promissory note, Ex. N, that it was for 'our shop.' This Ex. N was executed on 25th April 1921 prior to the two main loans which are in dispute.
15. The recital in Ex. M, the partition deed, no doubt is of little value against the plaintiff who asserts that the partition was nominal and in fraud of the creditors. He only filed the document Ex. M to show that according to it the alleged partition of 1908 could not be true. Another fact that may be noted is that both the defendants were adjudicated insolvents, and that on appeal the adjudication was confined to defendant 2 alone. As observed by the learned District Judge, the best evidence is not forthcoming-the accounts of the shop-but for this neither defendant 1 nor the plaintiff is responsible : Sadasiva Mudaliar v. Mohammad Hazee Fakeer Sait 1922 PC 397 quoted for the appellant is not useful There the question was the liability of a member of a joint family who had accepted a contract made by his brother and derived benefit under it on coming of age. It has been argued for the appellant that defendant 1 nowhere clearly set out in his written statement that the shop at Adoni was the exclusive property of his brother. I am doubtful whether he was bound to do so. He denied that there was a joint shop and as the shop is obviously there and the plaintiff asserted that defendant 2 borrowed money for it as one of the managers the only possible inference from the written statement is that it was not a shop in which defendant 1 had any concern and it either belonged to defendant 2 alone or to him with others.
16. In cross-examination the suggestion was made to one of the witnesses, though it was denied, that the maternal uncle of defendants 1 and 2, Narasinga Eao, was connected with it. So it is not correct to say that the view was not suggested till the time of the defence. But as I said the real ground on which the decision of the learned Judge in this matter can be supported is, I think, that defendant 1 was not liable for a debt incurred by a non-managing member of the family for a newly started business unless it Can be shown beyond doubt that he himself was also managing the business. Of course, if independently of the question of joint Hindu family defendant 1 was either a partner in the business, or the alleged contract by which either of the defendants bound himself to be liable for the debt of the other is made out, the plaintiff can recover the suit amount; but it has not been shown that the learned District Judge was without evidence in holding neither of these facts proved. On the question however of allowing credit to this defendant 1 for the surplus realized by the sale of jewels, the learned Judge is clearly wrong and it has not been attempted to support this part of the decision. The case of defendant 1 was:
that he knew nothing about this pledge or redemption; he never stated that the jewels pledged were his and consequently on his own case he is not entitled to any benefit arising from their sale.
17. The learned District Judge says with regard to this:
It is however the case of the plaintiff that he was joint pledger and the postcard Ex. D demanding the payment of the pledge has referred to it as having been made by both the parties. There seems also no reason to suppose that the jewels pledged were not the properties of both the brothers, who did not execute their 'dibd of partition till some time after it had been made.
18. I have said above that there is no clear finding of the lower appellate Court as to whether the alleged division in 1908 is true or not, but from this sentence one would rather infer that it is found not true because if it were true the jewels being movables would have been divided. Now it is not open to the defendant, not having claimed the pledged jewels to be his and having -denied the pledge, to take advantage of 'the plaintiff's claim that the jewels were pledged for joint liability without also accepting the joint liability as set out in the accounts produced. Obviously he cannot have it both ways. The decree of the lower Court must be amended accordingly. As regards this item of credit the appeal is allowed. In other respects it is dismissed. The parties will pay and receive proportionate costs in both this and the lower appellate Court.