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S. Krishnasamy Ayyar Vs. Rava Ramanathan - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1935Mad314; 156Ind.Cas.418
AppellantS. Krishnasamy Ayyar
RespondentRava Ramanathan
Cases ReferredSanyasi Charan Mandal v. Krishnadhan Banerji
Excerpt:
.....started by father--whether binding on son's shares--'ancestral business', tests of--death of father--business, whether becomes ancestral--business in partnership with stranger cannot be ancestral business. - t.n. district police act, 1859 [act no. 24/1859]. section 10 & tamil nadu special police subordinate service rules, rule 14(b), clause (iv) explanation (1); [a.p. shah,c.j., f.m. ibrajhim kalifulla & v. ramasubramanian, jj] rule 14(b),ci.(iv) explanation (1) providing that a person acquitted or discharged on benefit of doubt shall be treated as person involved in criminal case - validity being questioned - held, the impugned rule 14(b) ci.(iv) explanation (1) has been issued in exercise of the power conferred upon the government under the tamil nadu district police act, the..........narasinga rao. the learned subordinate judge has held that the 3rd defendant's interest in the joint family property is also liable for the plaintiff's claim because the trade begun by the father and continued by defendants nos. 1 and 2 as a family or ancestral trade; and in support of that--proposition he relied on the decision in subbaroya mudali v. thangavelu pillai 72 ind. cas. 815 : 45 m.l.j. 44 : a.i.r. 1924 mad. 33.4. as to the law relating to the circumstances under which the interest of a minor member in joint family property can be made liable for trade debts, it is not necessary to go earlier than the decision of a bench of this court in venkataswami naidu v. palaniswami chettiar : air1929mad153 where the divergent views of the courts on the subject are adverted to. in.....
Judgment:

1. In this appeal, the learned Counsel for the plaintiff, (respondent) has reported no instructions and the appeal has, therefore, been heard ex parte.

2. This appeal is by the 3rd defendant against so much of the decree of the lower Court as declared that his interest in the joint family properties is also liable to be proceeded against for the recovery of the plaint claim. The material facts are as follows; Defendants Nos. 1, 2 and 3 are the sons of one Sundaram Ayyar who died in May 1922, leaving him surviving three sons, the 1st defendant (then aged about 20) and the other two defendants minors at the time). The 3rd defendant attained majority only pending this appeal. During his lifetime, Sundaram Ayyar, started a mnndy business in February 1920, in partnership with one Narasinga Rao and in the course of this business he had dealings with the plaintiff's firm. It has been stated on behalf of the appellant--and we see nothing on record to the contrary--that at the time of his death Sundaram Ayyar left no debts. Anyhow, it is common ground that the present claim of the plaintiff represents the unpaid balance of the price of goods supplied by them, between September 1922 and March 1926, to the business carried on by the 1st defendant in partnership with Narasinga Rao.

3. In the plaint, a decree is claimed against defendants Nos. 2 and 3 on the footing that the trade in question had been started by their father and continued by the sons for the benefit of the family. As already stated, so far as the 3rd defendant was concerned, there was no question of his being a contractual party to the new business in partnership with Narasinga Rao. The learned Subordinate Judge has held that the 3rd defendant's interest in the joint family property is also liable for the plaintiff's claim because the trade begun by the father and continued by defendants Nos. 1 and 2 as a family or ancestral trade; and in support of that--proposition he relied on the decision in Subbaroya Mudali v. Thangavelu Pillai 72 Ind. Cas. 815 : 45 M.L.J. 44 : A.I.R. 1924 Mad. 33.

4. As to the law relating to the circumstances under which the interest of a minor member in joint family property can be made liable for trade debts, it is not necessary to go earlier than the decision of a Bench of this Court in Venkataswami Naidu v. Palaniswami Chettiar : AIR1929Mad153 where the divergent views of the Courts on the subject are adverted to. In that case, the learned Judges held that a Hindu father governed by the Mitakshara Law can start a new trade and make it a 'family' business in the sense that moneys raised for the purpose of that business will be a debt of necessity for which the father could mortgage his son's interest in the joint family property. The learned Judges had then only to distinguish the Privy Council decision in Sanyasi Charan Mandal v. Krishnadhan Banerji 67 Ind. Cas. 124 : 49 C. 560 : 49 I.A. 108 : 30 M.L.T. 228 : 20 A.L.J. 409 : 21 Bom. L.R. 700 : 35 C.L.J. 498 : 43 M.L.J. 41 : (1922) M.W.N. 361 : 26 C.W.N. 954 : 16 L.W. 536 : A.I.R. 1922 P.C. 237 (P.C.), and it was sufficient to point out that in the Privy Council case the business in respect of which the minor's share was sought to be made liable had been started only by an elder brother. Since the decision of this Court in Venkataswami Naidu v. Palaniswami Chettiar : AIR1929Mad153 the Privy Council have in Benares Bank, Ltd. v. Hari Narain , held that, for the purpose of this rule of the Hindu Law, a business started by a father stands on no different footing from that started by a managing member other than a father such as a brother or an uncle. This makes it impossible for us to follow the decision of this Court in Venkataswami Naidu v. Palaniswami Chettiar : AIR1929Mad153 . Much of the reasoning in that judgment will be difficult to sustain in view of the basis of the later Privy Council decision in Benares Bank, Ltd. v. Hari Narain . If debts had already been incurred by the father in a business started by him, then the position will be different, because an alienation made by him to secure payment or for the discharge of such debts will be justified on the footing that it was for the purpose of securing or paying off antecedant debts. But where the money is raised by him for the purposes of the business and the doctrine of antecedent debts does not come in and the test to be applied is whether it was an 'ancestral' business or not. Though, in a sense the father is an ancestor to the son, the reasoning in Benares Bank, Ltd. v. Hari Narain , shows that it is not in that sense that the expression 'ancestral' their Lordships clearly say that a business started by the father will not, as against his son, be an ancestral business within the meaning of this rule.

5. The present case diners on the facts from Benares Bank, Ltd. v. Hari Narain , to this extent, namely, that the business has here been continued by the eldest son after the death of the father. The question is, whether though during the father's time it could not be described as an ancestral business, so as to make its liabilities binding on the interest of his sons in the joint family, property it could be so described the moment the father dies and the business is continued by the eldest son. It is not easy to define the stage at which the business can be said to become 'ancestral'. Mr. C.S. Venkatachariar, on behalf of the appellant, suggest that the business ought to have been carried on at least for two generations and only in the third generation it can be described as ancestral. It does not seem to us possible to lay this down as any definite test. In the decision in Sanyasi Charan Mandal v. Krishnadhan Banerji 67 Ind. Cas. 124 : 49 C. 560 : 49 I.A. 108 : 30 M.L.T. 228 : 20 A.L.J. 409 : 21 Bom. L.R. 700 : 35 C.L.J. 498 : 43 M.L.J. 41 : (1922) M.W.N. 361 : 26 C.W.N. 954 : 16 L.W. 536 : A.I.R. 1922 P.C. 237, their Lordships at p. 567 and 568 Page of 49 C.--[Ed.] make these observations:

The distinction between an ancestral business and one started like the present after the death of the ancestor, as a source of partnership relations is patent. In the one case these relations result by operation of law from a succession on the death of an ancestor to an established business, with its benefits and its obligations. In the other they rest ultimately on contractual arrangement between the parties.

6. If this test is to be literally applied, it cannot exactly correspond to the one suggested by Mr. Venkatachariar. For the purposes of the present case, it is not necessary to express a final opinion upon this question. As we have already stated the father in this case started the business in 1920 in partnership with Narasinga Rao, primafacie that partnership could not be regarded as a family' business. See for the latest authority the judgment in Pichappa Chettiar v. Chokalingam Pillai , at best it was only a parternship between the father on the one hand and Narasinga Rao on the other. On the father's death, that partnership became dissolved; and if later on the 1st defendant did business in partnership with Narasinga Rao, it can only be regarded as a new business and a new partnership between the 1st defended Narasinga Rao. In this view, the business done by the 1st defendant in partnership with Narasinga Rao cannot be said to satisfy even the test indicated in Sanyasi Charan Mandal v. Krishnadhan Banerji 67 Ind. Cas. 124 : 49 C. 560 : 49 I.A. 108 : 30 M.L.T. 228 : 20 A.L.J. 409 : 21 Bom. L.R. 700 : 35 C.L.J. 498 : 43 M.L.J. 41 : (1922) M.W.N. 361 : 26 C.W.N. 954 : 16 L.W. 536 : A.I.R. 1922 P.C. 237. On this short ground we hold that the 3rd defendant's interest in the joint family property cannot be made liable for the suit claim, which admittedly relates to the price of goods supplied to the business carried on by the 1st defendant in partnership with Narasinga Rao. The 3rd defendant's appeal is, therefore, allowed and his interst in the joint family property will be excluded liability. With reference to that portion of the lower Court's decree which declares his 'interest in the plaint mentioned business' liable to the suit claim, we only wish to make it clear that the 3rd defendant has all along asserted that he has no interest whatever in the plaint mentioned business and that, therefore, it is sufficient to say that he has no objection to the suit claim being recovered out of any properties belonging to the business, provided it is not part of his share in the property of the joint family apart from the business.

7. The decree of the lower Court will, therefore, be modified by omitting the words 'the 3rd defendant out of his joint family properties and his interest in' and inserting in their place the words 'and form' As regards costs, the liability imposed on the 3rd defendant's share of the family properties in respect of costs by the decree of the lower Court will be discharged and the appellant will recover from the respondent his costs of the appeal inclusive of the court-fee that he may pay to the Government. The appellant will pay the court-fees due to Government on the memorandum of appeal.


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