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Thirunavukkarasu Pandaram and anr. Vs. Purushotham Lakshmidas and Co. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1935Mad890; 159Ind.Cas.266
AppellantThirunavukkarasu Pandaram and anr.
RespondentPurushotham Lakshmidas and Co. and ors.
Cases ReferredChidambaram Pillai v. Rangaswami Naicker
Excerpt:
- .....3 besides being executor is also the son-in-law of suudaraliaga. he along with another was appointed executor under the will ex. a dated 13th september 1922 the will directed the executors to continue the business of sundaralinga for the purpose of realization of the outstandings due to the deceased; and in the course of such conduct of the business the suit debt was incurred. this was the case of the plaintiffs defendants 1 and 2 questioned the truth of the transactions and their binding nature on them. the first court dismissed the suit finding against the truth of the transactions. in appeal this finding was reversed and a decree was given in favour of the plaintiffs against the properties of defendants 1 and 2.2. in second appeal very interesting questions of law were argued by.....
Judgment:

Madhavan Nair, J.

1. Defendants 1 and 2 are the appellants. They are the sons of one Sundaralinga deceased who was a merchant trading in various places. Defendant 8 is impleaded as executor under the will of the father of defendants 1 and 2 and he continued the business of Sundaralinga. The suit is for the recovery of Rs 1,500 due on dealings with respect to the trade of Sundaralinga conducted after his death by the executor, defendant 3. Defendant 3 besides being executor is also the son-in-law of Suudaraliaga. He along with another was appointed executor under the will Ex. A dated 13th September 1922 The will directed the executors to continue the business of Sundaralinga for the purpose of realization of the outstandings due to the deceased; and in the course of such conduct of the business the suit debt was incurred. This was the case of the plaintiffs Defendants 1 and 2 questioned the truth of the transactions and their binding nature on them. The first Court dismissed the suit finding against the truth of the transactions. In appeal this finding was reversed and a decree was given in favour of the plaintiffs against the properties of defendants 1 and 2.

2. In second appeal very interesting questions of law were argued by Mr. Somayya on behalf of the appellants but none of these points were taken in either of the Courts below. His first argument was that in a suit like the present one the plaintiff's remedy is to proceed personally against the executor and that they can get relief against the estate of she deceased only if the executor has the right to enforce his indemnity against she estate and that unless the latter point is found in favour of the plaintiffs, no decree could be given in their favour against the estate. For this purpose it is argued that the case should be remanded to the lower Court as was done in Ammalu Ammal v. Namagiri Ammal 1918 Mad. 800. where in a case like the present in the last paragraph of his judgment Kumaraswami Sastri, J., remanded the suit to the lower Court to decide the question whether the executrix has lost her right to reimbursement out of the estate in respect of the sum of Rs. 3,500 borrowed by her on the promissory note sued on. It was suggested that such a course should be followed in this case also and that the only decree that the plaintiffs could get at present is a personal decree against the executor.

3. I was taken through the law bearing on the subject both according to the English and Indian decisions. Respondents' learned Counsel says that the question should not be allowed to be raised in second appeal for the first time. It is clear that the question was not raised in any of the Courts below nor has it been raised even in the memorandum of grounds of the second appeal. Assuming that it may be permitted to be raised, I am of opinion that the question does not arise for decision in this case having regard to the observations of Kumaraswami Sastri, J., in Ammalu Ammal v. Namagiri Ammal 1918 Mad. 800 , where' the learned Judge after discussing the case law summarizes the conclusions under seven heads. Under the third head he says:

Creditors cannot have any direct remedy against the testator's estate or proceed in execution, against the assets except in cases where a specific charge is validly created or the debts are incurred in pursuance of directions to carry on a trade or business or where a specific trust is created for a specific purpose and debts are incurred in the due carrying out of the trust.

4. This statement of the law makes it clear that if the claim was made by a plaintiff in a case where the debt was incurred in pursuance of the directions contained in a will to carry on a trade, then the rule of law that creditors cannot have any direct remedy against the testator's estate will not apply. Having regard to the facts of the present case, it clearly falls within the second exception mentioned in this rule. It is not disputed that under the will (Ex. A) the executors were asked to carry on the business though on a reduced scale, no doubt for the realization of outstandings for the purpose of the winding up of the business. The District Munsif found that in incurring the debts the executors went beyond the directions contained in the will apparently as he was of opinion that the dealings were on a larger scale than was necessary for carrying out the directions but on this ?point the appellate Judge differed from the District Munslf. The learned Judge's opinion is stated in para. 4 of his judgment when he says:

The will directs the executors to continue the business for the purpose of realization of the outstanding due to the deceased. That authority necessarily carries with it the authority to borrow for carrying on the business. The will no doubt says that it should be continued on a smaller scale, but Venkatrama Ayyar was not asked if the scale was unnecessarily large, and on the one hand it will be seen that the transactions were over varying dates, of moneys being taken from the plaintiffs and paid back to the plaintiffs, and sometimes we find money even to the credit of the defendants in the account of the plaintiffs.

5. So it is clear that in borrowing the suit money the executors were only acting according to the directions of the will, and if so according to the rule of law already stated the creditors can have direct recourse to the estate of the deceased. The observations of Kumaraswami Sastri, J., above quoted and the finding of the learned Subordinate Judge in para. 4 of his judgment give a complete answer to the question argued by Mr. Somayya. I would therefore hold that the lower Court was not wrong in giving relief to the plaintiffs against the estate of the deceased in the hands of defendants 1 and 2.

6. The next question raised by Mr. Somayya is also a point which was not argued in either of the Courts below though the point has been taken in the grounds of appeal and it is this : viz. that the testator and defendants 1 and 2 wore members of an undivided Hindu family and as such the testator had no power in law to make a valid will, and reliance was placed in support of this position on the decision of this Court in Chidambaram Pillai v. Rangaswami Naicker 1919 Mad. 1046, where it was laid down by the Full Bench that the only adult co-parcener of a Mitakshara family consisting of himself and his minor coparceners is not competent to appoint a testamentary guardian to the coparcenary properties of the minor co-parceners. Mr. Srinivasagopalachari on behalf of the respondents says that if this point had been taken in the lower Courts he would have been in a position to show that though the will in narrating the circumstances mentioned in it refers to the family as a divided family, the testator and his sons (defendants 1 and 2) were members of an undivided family. But it is not necessary to consider further this question. I will assume for purposes of argument that it was not competent for the testator to execute the will; but that does not necessarily make the action of the executor invalid in law. The case decided by the Full Bench was referred back after the expression of opinion by it to the Division Bench which made the reference. In disposing of the case the learned Judges of the Division Bench made these remarks:

As it has now been hold by a Full Bench of this Court that the will executed by Appukutti Pillai who was the only adult member of the family at the time of his death is invalid and that defendant 1 cannot claim any rights as executor or as guardian under the will, the case has to be decided on the footing of alienations made by a de facto guardian (the italics are mine) and having regard to the facts of the present case we do not think that there is any reason for holding that defendant 1 who was a near relation of the parties and in whom the testator and the other members of the family had confidence, had any object in defrauding the plaintiffs or acted for the benefit of third persona when he effected the sales.

7. It follows from the above observations that though the will may be invalid, still if it is clear that the executor has acted as de facto guardian, in entering on the transactions which he has entered into, then such transactions would, be binding upon the estate of the deceased. There can be no doubt in this case that defendant 3 was not only an executor under the will but he was also the guardian of the minors and acted as such. The will itself refers to the fact that he is to conduct himself as if he was the guardian. That he was an intimate relative of the testator is clear and there is nothing to show that he did not look after the interests of the appellants in the transactions entered into by him In fact one line of argument adopted by Mr. Somayya was that the executor acted as de facto guardian. It is not necessary to proceed with the point any further because the facts show that the family was looked after during the minority of defendants 1 and 2 by the executor (defendant 3) and he carried on the business of the deceased for the benefit of the family. It therefore follows that the debts incurred in carrying on the trade in pursuance of the directions of the will (Ex. A) will bind the estate in the hands of defendants 1 and 2. The second point raised by Mr. Somayya muse also be overruled.

8. The third point raised by Mr. Somayya relates to a question of fact, viz. whether the amount sued for was borrowed by the executor. On this question the District Munsif held one way, but the Subordinate Judge came to a different conclusion. I must accept the finding of the Subordinate Judge that the suit debt was proved, which is binding on me in second appeal. The last point is one on which there is not much dispute and that relates to the interest awarded by the learned Subordinate Judge from the date of the plaint to the date of the decree. In the decree (p. 10 of the printed papers) interest has been awarded at the rate of 12 per cent per annum from 11th April 1930, the date of plaint till date of decree. In the judgment in para. 8 the learned Judge has awarded interest only at the contract rate from the date of plaint till date of decree. Obviously a mistake was committed in drafting the decree. That mistake should be rectified and instead of 12 per cent the contract rate of 71/2 per cent should be substituted for the period from the date of plaint till the late of decree. In other respects the decree of the lower appellate Court will stand and the second appeal is dismissed with costs.


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