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Bharat Trading (international) Ltd. by Power-holder A.P. Kaimal and anr. Vs. P. Nachiar Ammal and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtChennai High Court
Decided On
Reported inAIR1976Mad393; (1976)2MLJ414
AppellantBharat Trading (international) Ltd. by Power-holder A.P. Kaimal and anr.
RespondentP. Nachiar Ammal and ors.
Cases ReferredP. Govinda Reddy v. Golla Obulamama
Excerpt:
- .....in such leaves and in the course of such dealings, the first defendant as such manager of the joint family, became indebted. the result was that the 6th defendant filed o.s. no. 30 of 1967andthe 7th defendant filed o.s. no. 29 of 1967 as is seen from exhibits b-19 and b-17 and obtained orders for attachment before judgment attaching all the family properties which devolved on the members of the family of palavesam pillai. palavesam pillai died on 14th september, 1958 as the father-member of the joint family and left behind him the first defendant, his son, who was the surviving coparcener and who continued the joint family business and the first plaintiff, his wife and defendants 2 to 5 his daughters. consequent upon the attachment of the joint family properties in its entirety, the.....
Judgment:

T. Ramaprasada Rao, J.

1. The 6th and the 7th defendants who are the creditors of a quandom joint family consisting of one Palavesam Pillai, the first defendant and the plaintiffs in O.S. No. 17 of 1969 on the file of the Subordinates Judge, Tuticorin are the appellants. It is common ground that defendants 6 and 7 supplied on credit senna leaves to the first defendant who continued the family business of dealing in such leaves and in the course of such dealings, the first defendant as such manager of the joint family, became indebted. The result was that the 6th defendant filed O.S. No. 30 of 1967andthe 7th defendant filed O.S. No. 29 of 1967 as is seen from Exhibits B-19 and B-17 and obtained orders for attachment before judgment attaching all the family properties which devolved on the members of the family of Palavesam Pillai. Palavesam Pillai died on 14th September, 1958 as the father-member of the joint family and left behind him the first defendant, his son, who was the surviving coparcener and who continued the joint family business and the first plaintiff, his wife and defendants 2 to 5 his daughters. Consequent upon the attachment of the joint family properties in its entirety, the plaintiffs as class I heirs of Palavesam Pillai basing their entitlement on the rule of succession provided for in Section 6 of the Hindu Succession Act, 1956, filed the present action for partition and separate possession of their shares in the suit properties which were, admittedly by then attached in execution of the decree obtained by the appellants ignoring the attachment. The appellants' case was that the borrowing made by the first defendant as the person in management of the affairs of the joint family including the joint family business was for the benefit of the plaintiffs as well as members of such family and that therefore, they were equally liable to suffer attachment and pay the decree amount obtained by them in O.S. No. 29 of 1967 and O.S. No. 30 of 1967 on the file of the same Court. The plaintiffs' case is that they are not liable for the debts incurred by the first defendant after the death of Palavesam Pillai, and that even though he continued the joint family business as the surviving coparcener, the said debts incurred by him would not be binding upon their share of the suit properties which they obtained by reason of Section 6 of the Hindu Succession Act. It is in that sense they filed the present action. Though in the plaint, as originally filed, the plaintiffs took up the position that the properties are not joint family properties yet, on 4th March, 1970, they admitted that the suit properties are ancestral properties and that they were claiming only their 5/12 share on the whole, i.e., 1/12 to each of the plaintiffs. The 6th and the 7th defendants in their joint written statement pleaded that the borrowings were made by the first defendant for the benefit of the joint family and in connection with the joint family business and that the present suit for partition by the female members of the family is only to defeat and delay the creditors and that the debt is binding upon the plaintiffs and their share of the properties, as they got a benefit under the debt and in consequence they prayed for appropriate orders in the suit. The 1st defendant remained ex parte. We are not referring to the statements filed by the other defendants in the action as it is not necessary for us to do so. On such relevant pleadings, the trial Court framed the following issues:

(1) Whether the debts said to be due to defendants 2, 3, 4, 5, 6 and 7 are true, valid and binding upon the plaintiffs?

(2) Whether the debt due to the 8th defendant is binding upon the plaintiffs 3 to 5?

(3) Whether plaintiffs 3, 4 and 5 are estopped from questioning the binding nature of the debt due to the 8th defendant?

(4) Whether the 1st plaintiff is estopped from questioning the debt due to the defendants 2 and 3?

(5) What is the share to which the plaintiffs are entitled in the suit properties?

(6) Whether in equity the properties in schedule to the written statement should be directed to be allotted to the share of the defendant?

(7) Whether the 4th defendant is entitled to equity? and

(8) To what relief, if any, are the plaintiffs entitled?

2. While dealing with the binding nature of the debts incurred by the first defendant in favour of defendants 2, 3, 4 and 5, the lower Court said that the first plaintiff only is liable in respect of the debt incurred under Exhibits B-2 and B-3 which were in favour of defendants 2 and 3 and he founded such a liability on the ground that the 1st plaintiff attested Exhibits B-2 and B-3 which were registered mortgages executed by the first defendant in favour of the creditors of the family. He has also observed that neither the 1st plaintiff nor the other plaintiffs objected to the mortgage deed, at any time, during the course of the trial. As regards the other debts in favour of 4th, 5th and 8th defendants, the lower Court was of the view that the debt in favour of the 4th defendant was not binding. No doubt, the 4th defendant examined his debtor. That debt related to a mortgage evidenced by Exhibit B-15. The plaintiffs did not make any active part in the borrowing nor was any evidence let in to show that they acted as such. In those circumstances, the learned trial Judge negatived the plea of the 4th defendant that the share of the plaintiffs in the family properties would be liable and equally binding for the debt due to him. As regards the borrowings made from the 5th defendant under Exhibit B-10 to B-12, the learned trial Judge found that it was only the first defendant who borrowed such money, though stating, ostensibly, that it was to meet family expenses and for family business. Here again, finding that none of the plaintiffs had anything to do with the borrowing nor did they concern themselves with it, the lower Court found that the debt cannot bind the plaintiffs' share in the properties. On the other hand, the 8th defendant's case that he lent money under Exhibit B-8 on a mortgage executed both by the first defendant and the first plaintiff, was accepted by the Court below as a binding debt not only on the first plaintiff but also on plaintiffs 3 to 5 who attested the same. It is common ground that the consideration for the mortgage was to meet marriage expenses of the 4th plaintiff. Taking such documentary evidence into consideration, the lower Court found that the debt in favour of the 8th defendant would be binding on the share of all the plaintiffs 1 and 3 to 5; Obviously, he omitted the 2nd plaintiff because she did not evince any interest nor did she concern herself with the borrowing.

3. We may, therefore, at once, state that the lower Court meticulously examined the facts and circumstances before it and considered the circumstances under which the borrowing was made and after finding whether the plaintiffs - all of them or one or more of them - were ever interested in the borrowing or concerned themselves with it, the lower Court upheld the contentions or disagreed with such contention of the respective creditors. Everything, therefore, was based on the evidence let in and on the fair inference that could be drawn on such evidence before it.

4. In the above context, the pleadings and the evidence let in connection with the debts incurred by borrowing from the 7th and the 7th defendants have to be considered. Ho doubt, the case of the defendants 6 and 7 as the appellants before us, is that the borrowing was for the purpose of joint family business and the joint family. Neither the 6th nor the 7th defendant entered into the box to speak about the circumstance under which they lent money or supplied goods to the first defendant. It is common ground that they did not hot seek for an elucidation of the bargain so that further light can be thrown upon it by calling for the account books maintained by the 1st defendant in connection with the family business end establish therefrom or aliunde that the plaintiffs did secure some benefit in some shape from the exercise of the profession by the first defendant and by the continuance of the joint family business by him. But, on the other hand, they were content by resting their contentions on the legal position which, according to them, flows from Section 6 of the Hindu Succession Act, 1956. The learned trial Judge was of the view that the plaintiffs can take advantage of the law as stated in the proviso to Section 6 and as they did not claim any share in the profits made by the first defendant in his business, it cannot be said that all the debts incurred by the first defendant, may be as manager of the joint family, can bind them, unless they actively or passively participated in the business and the consequential borrowings made by the first defendant. The learned Judge, therefore, held that though the debts due to the appellants are true and valid, they are not binding upon the plaintiffs and the properties which they inherited as heirs to Palavesam Pillai under the proviso to Section 6 of the Hindu Succession Act, are not liable to be attached in execution of the decree obtained by the appellants in O.S. Nos. 29 and 30 of 1967. The question, therefore, is whether the share of the plaintiffs which they obtained as stated by them and which are not in dispute is liable to be proceeded against in execution of the decrees obtained by the appellants as above. To appreciate this contention, it is necessary to understand the import of Section 6 of the Hindu Succession Act, 1956, hereinafter referred to as the Act. This section reads as under:

6. Desolation of interest in coparcenary property : When a male Hindu dies after the commencement of this Act, having at the time of his death as interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in. accordance with this Act:

Provided that, if the deceased had left him surviving a female relative specified in class I of the Schedule or a male relative specified in that class who claims through such female relative, the interest of the deceased in the Mitakshara co-parcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship.

Explanation 1. - For the purposes of this section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.

Explanation 2. - Nothing contained in the proviso to this section shall be construed as enabling a person who has separated himself from the coparcenary before the death of the deceased or any of his heirs to claim on intestacy a share in the interest referred to therein.

5. In the first paragraph of the section the sense and the spirit of the ancient Hindu Law is maintained as under it, if a male Hindu dies, having as interest in Mitakshara coparcenary property, his interest shall devolve by survivorship upon the surviving members of the coparcenary. The Act, therefore, does not affect the continuance of the coparcenary after the commencement of the Act. But, by reason of the proviso to Section 6 it has made an inroad into the old orthodox law by making a departure to the normal theory of survivorship. The proviso contemplates that if the deceased has left behind him suriving a female relative or male relative claiming through such female relative, specified as class I heirs in the schedule, then the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under the Act and not by survivorship. The Explanation expands the expression 'interest' of a Hindu in a Mitakshara coparcenary. By a fiction created under the Act a notional partition is contemplated. Under the Explanation the share which the class I heir specified in the proviso would inherit would be that share in the coparcenary property that would have been allotted to the deceased member if a partition of the property had taken; place immediately before his death, irrespective of whether he was entitled to claim partition or not. Thus in a notional partition statutorily contemplated under the proviso read with Explanation I to Section 6, the interest of the deceased coparcener in the joint family devolves by succession in the absence of testamentary disposition by the concerned member on all the class I heirs mentioned in the; proviso as above. All such heirs under the Act share such an interest of the deceased per capita and as tenant-in-common. Such statutory right to succeed creates, as it were, an independent proprietary interest in each of the statutory heirs in the property of the deceased member. Even though the quandom joint family may be continued for the purposes of orthodox Hindu Law and there is a manager or kartha in charge of the affairs of such joint family, yet such a manager or kartha cannot be reason of his peculiar position as such manager, contract debts or create obligations so as to bind the female members of the family specified as heirs in the proviso to the section or the male heirs mentioned therein, as a matter of course. Such female members or the male members classified therein, obtain such a statutory privilege, benefit or right by reason of a fiction created under the Act. There may be cases, however, where the female members as above or the male members might have, either expressly or by necessary implication, participated in, or involved themselves in, the affairs of the joint family or in the continuance of the joint family business or activity. We assume for the purpose of the present situation that there was a joint family business and that was; continued by the surviving member of the coparceneary, viz., the 1st defendant and he was the kartha or manager who was, looking after the said business. In all such cases, the female members or the male members specified in the proviso to Section 6 other than such a kartha cannot be made liable for the debts incurred by such kartha of the joint family or coparcenary without strict proof of participation or involvement of the female members or males other than the kartha in the said business. Such female or the heirs mentioned in the proviso might as members, obligators or parties to a particular contract or bargain, voluntarily bind themselves to become liable along with the manager or kartha. This is a matter for proof. But, it does not axiomatically, follow that since there is a kartha, since there is a joint family and since there is a joint family business, the heirs who inherit the share of the deceased member of the coparcenary under the Act are coparceners and are to be automatically made liable for all the debts incurred by such kartha or manager. To adopt with respect the words of Ismail, J., in Veerasekara Varmarayar v. Amirthavalliammal : AIR1975Mad51 .

The effect of Explanation to Section 6 is to carve out the interest of a deceased coparcener from the joint family property and from the moment of the death of the coparcener concerned, his interest ceases to be coparcenary property, and therefore, outside the powers and jurisdiction of the kartha to deal with the same.

We have already referred in this case, to the peculiar circumstances which the lower Court noticed which established such participation of the plaintiffs as female members of the family in the borrowings made by the 1st defendant in connection with the joint family business continued by the 1st defendant. After noticing such nexus between the activity of the concerned female member and the borrowing, the Court held that, in certain circumstances, one or the other of the plaintiffs are liable to pay such debts though incurred by the 1st defendant as the manager of the joint family.

6. Srinivasan, J., speaking for the Bench in Karuppa Goundar v. Palaniammal : AIR1963Mad245 , held that the 'persons (the heirs specified in the proviso to Section 6) are entitled to succeed to the interest of the deceased coparcener under the Act but they shall not be subject to the hazard of the fluctuating fortunes of the family.' The recitation within brackets is ours. When the learned Judges laid the accent on the hazard of the fluctuating fortunes of the family, they obviously made it clear that the female members, of which class we have been considering throughtout cannot be indiscriminately be held to be involved in the activities of the manager of the family irrespective of their voluntary zeal or interest in it by openly pr by necessary implication, participating in such activities.

7. A Full Bench of the Andhra Pradesh High Court in P. Govinda Reddy v. Golla Obulamama : AIR1971AP363 , dealt with the implications and the purport of Section 6 of the Act and the learned Judges observed thus:

If the deceased has left only coparceners, the rule of survivorship will apply. But, if he has left any female relatives specified in class I of the schedule viz., daughter, widow, mother, daughter of a pre-deceased son widow of a pie-deceased son...the devolution will be only under Act XXX of I95B and not in accordance with the law of survivorship....

Explanation I introduces out of necessity a legal fiction for ascertainment of interest of the deceased coparcener.... The legal fiction was designed for a. limited purpose, viz., for computation of the interest of the deceased coparcener for purposes of devolution of the same on his heirs so that there may be no difficulty in giving effect to the proviso....

The term 'interest' no doubt, is used even in the first part of the section. But the Explanation is of no practical importance in relation thereto for there can be no occasion for separation or ascertainment of this interest if the case fell exclusively within the first part of the section....

One would do well to bear in mind that Section 6 of the Hindu Succession Act, is concerned with the devolution of a deceased coparcener's interest alone. It has nothing to do with the disruption of the joint family status....

The effect of section 6 on the coparcenary, if at all, is that in case the proviso applied to the devolution of the interest of the deceased that interest or specified share will be taken in pursuance of the legal fiction, out of the coparcenary property in so far as the heirs of the deceased are concerned and will be available for allotment to them. Otherwise the coparcenary will continue as ever....

On the other hand, if the proviso of Section 6 of the Act applied on account of the existence of the heirs referred to therein, there will be of course no disruption of joint family status but the -coparcenary property will not include the interest of the deceased coparcener by reason of succession under the Act and it will not then be available to the coparceners and heirs as coparcenary property and the kartha in relation thereto therefore cannot exercise his powers as a kartha.

8. We respectfully adopt the above observations. The estate which devolved on the classified heirs under the proviso to Section 6 is one which is carved, out of joint family and is the independent and separate property of such heirs. If this understanding of Section 6 of the Act is correct, then, it follows that the property to which the classified heirs would succeed by reason of the statutory privilege under the proviso to Section 6 is their property and cannot be dealt with without reference to then by the kartha of the family on the foot that he is continuing the joint family business for the benefit of the, members of the joint family.

9. If, on the other hand, there is proof that the debt was incurred by the kartha of the joint family in conjunction with such classified heirs as above and with-their consent, either tacitly or by necessary implication then, by reason of such a bargain, the female and the other heirs to such sharers may become involved and that involvement or participation may make then liable for the debt. But, in order to make them liable in the eye of law, it is necessary that there should be acceptable proof and enough material so as to make them liable for such debts incurred by the kartha in the course of the management of the joint family. The liability or the obligation to shoulder such responsibility would therefore depend upon the proof of the connection or the nexus between the debt and the activity of the classified heir. If the female heir or the other heirs as mentioned in the proviso to Section 6 by reason of their conduct give a resonable man the impression that they allowed the kartha to borrow and they prompted the creditor to give on their assurances and on their being joint promisors or obligors, then, they cannot escape liability.

10. In the instant case, the appellants did not even get into the box. But they pleaded that the debt was incurred by the first defendant as kartha or manager of the family for the purposes of the joint family business. Reliance is placed by Mr. Ramasubramaniam, on the evidence let in by the other creditors who figured as defendants in the action to show that the borrowing made by the first defendant in the course of the family trade should be deemed to be for the benefit of the female members as well. This contention, as at present, rests purely on surmise. But, the first defendant who is the principal architect of this borrowing and who is behind the scene, did not care to contest the proceedings or assist the Court by producing such material before it to dislodge the impression that the debt was not for the benefit of all the members of the family including the plaintiffs. No doubt the primary burden of proof was on the plaintiffs to establish that they did not have anything to do with the debt by calling for all the account books of the joint family firm from the first defendant who is none else than the son of the first plaintiff and the brother of plaintiffs 2 to 5. Excepting for the statements filed by the plaintiffs, they had not also clearly established that, at no time, they did have anything to do with the borrowing made by the first defendant from the appellants. In contrast to this state of affairs, we have already seen that the lower Court found that the debts created under Exhibits B-8, B-2 and B-3 are binding on some of the plaintiffs. This conclusion was obviously based on the evidence let in before it. Even as regards the appellants, the lower Court adopted the same test and on the material placed could not find any such involvement of the plaintiffs with the debts incurred by the first defendant by borrowing from the appellants. We are of the view that justice should be done by giving an opportunity to the appellants to produce or cause the production of such acceptable evidence so as to connect the debt with the plaintiffs. In what manner the appellants are to establish this, we are not making any suggestions. If the appellants establish, in a manner known to law, before the trial Court to whom the subject-matter is being remitted by us, that the plaintiffs did involve themselves in the borrowing and actively participated in the business throughout, then, it would be just that the appellants should succeed and be in a position to proceed against the properties inherited by the plaintiffs as heirs under the proviso to Section 6. But, if, however they are unable to establish such a link as between the plaintiffs' activity and the borrowing then, the conclusion arrived at by the Court below is right though for a different reason.

11. In order to subserve justice, we are of the view that the matter should be remitted back to the Court below for purposes of further elucidation on the question whether the plaintiffs did, at any time actively or by necessary implication, in-solve themselves or participate in the borrowings made by the first defendant from the appellants and whether such involvement and participation gives the impression to a reasonable man that they had a benefit out of such borrowing. If the answer is 'yes' the plaintiffs' share which they obtained, as heirs of Palavesam Pillai, would be liable to be proceeded against. If not, that share would not be liable as such. It is not quite clear as to how the Court below came to the conclusion that the plaintiffs cannot claim any share in the profits made by the first defendant in his business. The trial Court did not examine the account books of the business nor did it call for the balance sheets or the Income-tax returns to find whether anyone other than the first defendant was paid any profits therefore or not. The observation so made by the lower Court is not based on any material considered by it. This appears to be a casual observation.

12. Taking all the circumstances into consideration the appeal is allowed and the subject-matter of the appeal is remitted for a reassessment of the issue, in the light of our observations. On result, if the-trial Court finds that the plaintiffs did have every thing to do with the borrowing, or that they had a benefit out of such borrowings, then, it would held that the plaintiffs' share in Palavesam Pillai's properties would also be liable for the debt in favour of the appellants. The appellants, even if they succeed in the Court below, shall not be entitled to the costs as it is their inaction that is responsible for this apparent confusion. There will1 be no order as to costs in this appeal. In all other respects the decree and judgment of the Court below, is confirmed.


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