Skip to content


Ramgopal Ghose Vs. Dhirendra Nath Sen and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1927Cal376,101Ind.Cas.573
AppellantRamgopal Ghose
RespondentDhirendra Nath Sen and ors.
Cases ReferredNicholson v. Ricketts
Excerpt:
- page, j.1. the decision in this suit depends upon whether the karta of a a hindu joint family, who for family purposes signs a promissory note in his own name, thereby binds the other members of the family or the property belonging to the joint family. the plaintiff claims rs. 2,026-13-4 as the balance due under two promissory notes drawn in his own favour, one for rs. 1,500 and the other for rs. 500, dated respectively 15th november 1916 and 23rd november 1921. each of these promissory notes purports to have been signed by norendro nath sen and the defendant dhirendra nath sen.2. it is not disputed that certain sums were paid to the plaintiff by noren in reduction of liability under the said notes. the last payment in respect of each note was made on the 12th february 1923.3. in 1916.....
Judgment:

Page, J.

1. The decision in this suit depends upon whether the karta of a a Hindu joint family, who for family purposes signs a promissory note in his own name, thereby binds the other members of the family or the property belonging to the joint family. The plaintiff claims Rs. 2,026-13-4 as the balance due under two promissory notes drawn in his own favour, one for Rs. 1,500 and the other for Rs. 500, dated respectively 15th November 1916 and 23rd November 1921. Each of these promissory notes purports to have been signed by Norendro Nath Sen and the defendant Dhirendra Nath Sen.

2. It is not disputed that certain sums were paid to the plaintiff by Noren in reduction of liability under the said notes. The last payment in respect of each note was made on the 12th February 1923.

3. In 1916 Noren was thirty years of age and at all material times was the karta of an undivided Hindu family living joint in estate and commensality under the Dayabhaga Law. The other coparceners were his brothers Jitendra Nath and the defendant Dhirendra Nath. Noren died in June 1923, and the second and third defendants are his heirs. Upon the evidence I am of opinion that the members of this joint family were not a trading firm, and mat the promissory notes in suit were not drawn by Noren as the manager of, or in the course of carrying on a family business : but I find as a fact that Noren signed the promissory notes in suit as the karta of the family in order to obtain funds to be expended for legitimate family purposes, and I also find that the proceeds of the loans were so applied.

4. Noren having signed the promissory notes and having undertaken the obligations thereby created for purposes that were not immoral, the Defendants Nos. 2 and 3, as his heirs, have no defence to the plaintiff's claim under the promissory notes; and a decree will pass against them to the extent to which they are, or have been, in possession of property as the heirs of Noren.

5. The controversy in this suit is with respect to the liability of the defendant Dhiren, and learned Counsel for Dhiren has raised several defences on his behalf. In the first place it is conten3ed that inasmuch as the plaint was not duly verified under Order 6, Rule 15(2) until the 8th December 1926 the plaint must be taken to have been presented for the first time on that day, and as the cause of action accrued on the 12th February 1923 the suit is barred by limitation. The plaint was presented originally on the 25th August 1925 and the verification was in the following form:

I Ramgopal Ghose, the plaintiff above-named do declare that the statements contained in pragraphs 1, 2, 3, 4, 5, 6, 7 and 8 of the foregoing plaint are true to my knowledge, information and belief. 1 sign this declaration at 19 A, Bagbazar Street in Calcutta this 24th day of August 1925.

6. An objection having been raised that the verification was not in accordance with Order 6, Rule 15(2) the verification was amended on the 8th December 1926 pursuant to an order of the Court, and as amended ran as follows:

I, Ramgopal Chose, the plaintiff above named do declare that the statements contained in paras. 1 to 7 of the foregoing plaint are true to my knowledge, and those contained in para. 8 are based on information received by me which I believe to be true. I sign this declaration in the Court house this 8th of December 1926.

7. In support of his contention learned Counsel for Dhiren relied upon the case of Baroda Prasad Bose v. Girija Nath Roy Choudhury [1905] 2 C.L.J. 11. The decision in that case turned upon the provisions of Section 53(b) of the Civil P.C., (Act 14 of 1882), under which a plaint, if not duly verified, might, at the discretion of the Court at, or at any time before, the settlement of issues, be returned for amendment. As the order for amendment in that case had not been made until after the issue? had been settled it was held to be incumbent upon the Court to order either that the plaint be removed from the file of registered suits, or that the suit be dismissed. Having regard to Order 6, Rule 17, however, the Court may now allow a pleading to be altered or amended at any stage of the praceedings, and the case of Baroda Prosad Bose v. Girija Nath Roy Choudhury [1905] 2 C.L.J. 11 no longer can be regarded as ad rem of a binding authority. I feel strongly the rights of litigants ought not to be decided upon 'the splitting of a straw' per Lindley, L.J., in Sidebotham v. Holland [1895] 1 Q.B. 378 and I am glad that 1 find myself able to hold that there is no substance in this contention. In my opinion when a pleading does not conform with the provisions of Order 6, Rule 15, the defect therein is a mere irregularity that can be cured by amendment and, the plaint in this case must be taken to have been presented on the 25th August 1925, and I not on the 8th December 1926, when the verification was amended : Rajit Ram v. Kateshar Nath [1896] 18 All. 396, Fateh Chand v. Mansab Rai [1893] 20 All. 442, Basdeo v. John Smidt [1899] 22 All. 55, Shibdeo Misra v. Ram Prasad 0043/1924 : AIR1925All79 , Mohini Mohun Das v. Bungsi Buddan Sahu Das [1889] 17 Cal. 580 (P.C.), Port Canning and Land Improvement Co. v. Dharnidhar Sardar [1905] 9 C.W.N. 608 and Charan Das v. Amir Khan. A.I.R. 1921 P.C. 50.

8. The defendant Dhiren further contended that he did not sign either of the two notes, and that his name had been placed thereon without his authority or consent. (The judgment then discussed. the evidence and continued.) For these reasons I am clearly of opinion that the defendant Dhiren neither signed the promissory notes himself, nor authorized anyone else to sign them on his behalf. Learned Counsel for the defendant Dhiren further contended that the plaintiff's cause of action in this suit, as set out in the pleadings, was based solely upon the obligations created under the promissory notes, and that, as the promissory notes were signed by Noren in his own name without any condition or qualification of his liability as the maker thereof appearing on the document, he alone was liable to pay the amount due according to the apparent tenor of the notes. In my opinion this contention must' prevail. It is well-settled according to the principles of Hindu Law that the share of each coparcener in the property of a Hindu joint family is liable for debts' contracted by the karta for urgent Necessity or for any legitimate family purpose; and the rule is the same whether the family is governed by the principles laid down in the Mitakshara or in the Dayabhaga : Dwarkanth Chowdhuri v. Bungsi Ch. Saha. [1905] 9 C.W.N. 879.

9. Now, the fundamental basis of this principle of Hindu Law, I venture to think, is the unity of the family, and the doctrine that where one of the members surfers all the members should suffer with him. But it follows from this conception of family union and responsibility (apart from debts contracted by the karta or other member of the family in the course of managing a family trading business, with which I am not concerned in the. suit) that the amenability of family property to meet family commitments depends upon whether the debts have been contracted or the proceeds of the loan applied for family purposes. Whenever proceedings have been taken for the purpose of attaching the interest of a coparcener in the family property to liquidate a debt contracted on behalf of the family it has always been open to the coparcener to repudiate liability upon the ground that the debt was not contracted on behalf or for the bonefit of the family. This plea, if made out, would provide a valid defence to such proceedings; and I have not been able to trace in the rules laid down by the Hindu sages or in any commentary upon the principles of Hindu Law any statement or opinion which would lead me to believe that according to Hindu Law the doctrine of family responsibility for family obligations would attach to a transaction in which such a defence would not be available to a coparcener.

10. Now, when the plaintiff lent to Noren as the karta of the joint family the moneys in respect of which the promissory notes were given, did Noren contract to re-pay the moneys lent by an agreement that was independent of the obligations which he undertook by signing the promissory notes? If he did, it was open to the plaintiff in proceedings aptly framed to sue him either upon the promissory notes or in the alternative upon the independent agreement into which he had entered. On the other hand, if Noren's obligations-under any pre-existing independent agreement to re-pay the moneys lent had become merged in the contract created under the promissory notes, or the receipt of the promissory notes was the, consideration for the loans, the plaintiff has no cause of action for money lent, and he cannot recover otherwise than upon the terms of the contract contained in the promissory notes, his sole cause of action being based upon the notes : Sheik Akbar v. Sheik Khan [1881] 7 Cal. 256, Saminathan v. Palamappa Chetty [1913] 41 I.A. 142, Sadusuk Janaki Das v. Kishan Pershad [1919] 46 Cal. 663, Hari v. Sourendra : AIR1925Cal1153 and Parbati Charan Mukerjee v. Amarendra Nath Bhattacharjee A.I.R. 1926 Cal. 831.

11. Further, if the plaintiff in this suit is entitled to recover the moneys lent as. a debt contracted by Noren as karta otherwise than under the promissory notes, it cannot be doubted that the property of the joint Hindu family, including Dhiren's share therein, is liable for the debt. Dwarkanath Chowdhuvi v. Bungsi Chandra Saha [1905] 9 C.W.N. 879. On the other hand, if the plaintiff's sole cause of action is upon the promissory notes, in my opinion the suit against Dhiren must be dismissed, At the hearing. I refused to allow an issue to be raised upon the footing that Noren had contracted to repay the loans under an agreement independent of the promissory notes for, having regard to the pleadings,. I am of opinion that the cause of action in this suit as framed is based solely upon the promissory notes : Sadusuk Janki Das v. Maharaja Sir Kishan Pershad [1919] 46 Cal. 663 and Vithalrao v. Vithalrao A.I.R. 1923 Bom. 244,

12. What, then, are the plaintiffs rights under the promissory notes? Now, the demands of the law merchant and the exigencies of business require that the obligations of a person who executes a negotiable instrument should be stringent and precise, and that the rights and liabilities of the parties to a negotiable instrument should be clearly defined and well understood.

it is of the utmost importance that the name of a person or firm to be charged upon a negotiable instrument should be clearly stated on the face or on the back of the document, so that the responsibility is made plain and can be instantly recognized as the document passes from hand to hand.... It is not sufficient that the principal's name should be in some way 'disclosed' : it mast, be disclosed in such a way that on any fair interpretation of the document his name is the real name of the person liable for the bill... Their Lordships attention was directed to Sections 26, 27 and 28 of the Negotiable Instruments Act, 1881, and the terms of those sections were contrasted with the corresponding provisions of the English statute. It is unnecessary in this connexion, to decide whether their effect is identical. It is sufficient to say that these, sections contain nothing inconsistent with the principles already enunciated, and nothing to support the contention, which is contrary to all established rules, that in an action on a bill of exchange or promissory note against a person whoso name properly appears. as party, to the instrument, it is open either by way of claim or defence to sholy that the signatory was in reality acting for an undisclosed principal Sadusuk Janki Das v, Maharaja Sir Kishan Pershad [1919] 46 Cal. 663.

13. The decisions of the Courts in India prior to this case must now be read in the. light of the above observations, further, if it is proved that legal consideration was given for a bill of exchange or promissory note, the Court will not further enquire into the nature or the adequacy of such consideration nor in a suit upon a bill of exchange or promissory note is the Court concerned with the purpose for which the defendant contracted liability under the instrument, or the use to which the consideration for executing the instrument was put : vide, e.g., Sections 8, 32, 36, 38, 43, 44, 78 and 118 of the Negotiable Instruments Act (26 of 1881). If the holder of a bill of exchange or promissory note was not able to ascertain upon a perusal of the document and without further investigation the persons who were the parties to it, and the extent of their liability, the purpose for which negotiable instruments were brought into being would be frustrated, and their usefulness seriously impaired. It follows, therefore, that the karta of a joint Hindu family, by executing a promissory note unconditionally in his own name for family purposes, cannot thereby bind the other members of the family, or the interest of any other member in the joint family property. The other members of the joint family would only be bound by a promissory note or bill of exchange signed by the karta for family purposes if the name of each member of the joint family to be charged appears on the instrument itself, and is

disclosed in such a way that on any fair interpretation of the document his name is the real name of the person liable upon the bill:

14. Sadusuh Janki Das v. Mahdrajd Sir Kishan Pershad [1919] 46 Cal. 663; Sreelal Mangtulal v. The Lister Antiseptic Dressing Co. Ltd. : AIR1925Cal1062 , Hari v. Sourepdra : AIR1925Cal1153 , Thaith Othathil v. Purushotam Dass : (1911)21MLJ526 , Subba Narayana v. Ramaswami Aiyar [1907] 30 Mad. 88, Govindan Nair v. K. Nanu Menon [1915] 27 M.L.J. 595, Vithalrao v. Vithalrao A.I.R. 1923 Bom. 244 and. In re Adansonia Fibre Co. [1874] 9 Ch. 635.

15. Learned Counsel for the plaintiffs, on the other hand, cited inter alia the following cases in support of his contention that the karta of a joint Hindu, family can bind the other members of the family by signing a promissory note for family purposes: Krishna Ayyar v. Krishnasami Ayyar [1900] 23 Mad. 597, Nagendra Chandra Dey v. Amar Chandra Kundu [1903] 7 C.W.N. 725, Baisnab Chandra De v. Ramdhan Dhor [1906] 11 C.W.N. 139, Nataraja Naicken v. Ayyasami Pillai [1916] 32 M.L.J. 354, Krishnanand Nath Khare v. Raja Ram Singh A.I.R. 1922 All. 116, Raghunath Singh v. Sri Narain [1923] A.I.R. 1923 All. 424. Krishna Ayyar v. Krishnasami Ayyar [1900] 23 Mad. 597 is the leading case, and the later cases upon which the plaintiff relies do little more than follow the ratio decidendi of the judgments of Shepherd and Subramania Ayyar's, JJ., in Krishna Ayyar s Case. [1900] 23 Mad. 597. I must confess, however, that I find it difficult to discover the real ground upon which Subramania Ayyar, J.'s decision was based in that case, for at page 600, his Lordship held that

the rule stated above is not applicable to the present case as the promissory note is not a negotiable instrument within the meaning of the Negotiablo Instruments Act, 1881.

16. And with all due respect to these learned Judges I find it equally difficult to ascertain the reason which led Shepherd, J., in that case to hold the property of the other members of the joint family liable for the debt contracted by the karta. After holding that the members of the family who were not parties to the promissory note were not liable upon the note, his Lordship observed that

the liability of persons in the position of the appellants which arises on its being shown that a debt has been property incurred in the management of the family affairs is founded on Hindu Law, and not on the law of agency,

17. and that it is

a liability which is, so to speak, ex-ternal to the obligation arising on the making of the promissory note.

18. The learned Judge then added that:

It is argued that the present suit was strictly confined to a demand for payment of the note and that the plaint did not include a demand in respect of original debt. It appears to me on reading the plaint that it contains all the allegations that are needed in order to charge the appellants with liability. The charge is that the debt was incurred for the expenses of the family and that they are bound to discharge it. There can be no doubt that the Courts below as well as the appellants understood fully the case which the plaintiff was seeking to establish.

19. On the other hand, Davies, J., in a dissenting judgment, held that the plaintiff's cause of action was based solely upon the promissory note, and his Lordship observed that

the name of no one but the first defendant appears in the promissory note, and that he does not purport to make it on behalf of anyone else hut himself : therefore, no one but the first defendant can be held liable to discharge it.

20. If the tatio decidendi of the decision of Subramania Ayyar and Shepherd, JJ. was that the plaintiff was entitled to recover the amount as a debt contracted for family purposes by a member of the family otherwise than under the promissory note cadit quocstio; but if the real ground of the decision in that case was that the shares of the other coparceners in the joint family property were liable to defray a debt contracted under the promissory note to which they were not parties, I am of opinion that that case was wrongly decided, and having regard to the decision of the Privy Council in Sadusuk Janki Das v. Kishan Pershad [1919] 46 Cal. 663 ought not to be followed.

21. The other cases upon which learned Counsel for the plaintiff relied all purport to follow Krishna Ayyir's case [1900] 23 Mad. 597, although in these cases also it is not always made clear whether the learned Judges were basing their decision upon the liability of coparceners for the debt contracted under the promissory note or for a debt under an agreement dehors the promissory note. In Baisnab Chandra De v. Ramdhan Dhor [1906] 11 C.W.N. 139, the decision turned upon the absence in the Indian Negotiable Instruments Act of provisions similar to those to be found in Section 23 of the later English Act (45 and 46, Victoria, Chapter 61); but since Sadusuk Janki Das's case [1919] 46 Cal. 663, such an argument will not help the plaintiff.

22. A contention that prevailed in Krishnanand v. Raja Ram Singh A.I.R. 1922 All. 116, that a promissory note executed by the karta of a joint Hindu family is in fact signed by the family as the maker thereof because the karta is the head of the family, with all due respect, appears to me to be altogether too fanciful to be accepted. Certain observations passed by Lord Justice James in In re Adansonia Fibre Co. [1874] 9 Ch. 635 will, I think, be found apposite in this connexion. His Lordship observed that

it is the law of this country, and it has always been the law of this country, that nobody is liable upon a bill of exchange unless his name or the name of some partnership or body of persons of which he is one, appears either on the face, or on the back of the bill. That is the clear law of this country. It was decided in Nicholson v. Ricketts 2 El. & El. 497 if authority be required for such a proposition, that an association which is absolutely without a name, has no name by which it can draw, accept or endorse bills of exchange. It was suggested, and the arguments appear to have prevailed with the Vfce-Chancellor, that where the members of such an association for the firm constituting such an association, for the purposes of that association, draw or accept bills in their individual names or in the names of their partnerships, that for that purpose and for the purpose of doing equity, or of reaching the real principal, it might be assumed that the name of the partner upon the bill, or the name of the partnership upon the bill might be considered, as being pro hac vice the name of the association. That, in my opinion, is a mere flatio jttris, and although it used to be said in fictione juris consistit acquitas. I think that in these prosaic days and in the old days of the Court, we do not indulge in those flights of imagination which our predecessors did.

23. Laarned counsel for the plaintiff further urged that a decision that Dhiren was not liable under the promissory notes would run counter to the Hindu doctrine of family responsibility for family debts. In my opinion, however, that doctrine would be violated if a decree in this case were to be passed against Dhiren, for as have ventured to point out, an essential ingredient on that doctrine is that in proceedings brought for the purpose of rendering the share of a coparcencer in family property liable for a debt contracted by the karta it should be open to the coparcener to prove that the debt was not contracted or the consideration applied for a legitimate family purpose. But if the joint family in the circumstances of this case was deemed to be in law the maker of the promissory notes - and it is upon this footing only that either Dhiren or the family property could be made liable under the promissory notes - such a defence would not be available to the defendant Dhiren in an action by the plaintiff as the holder against Dhiren as one of the makers of the notes. In my opinion a debt contracted under a promissory note signed by a karta for family (purposes does not attract the Hindu doctrine of family responsibility for family debts, and such a doctrine is incompatible with the object and effect of the law relating to negotiable instruments. I see no hardship to the plaintiff in so holding.

24. If a person has lent money to the karta of a joint family for family purposes upon the security of a promissory inote, lie is entitled to recover the full amount due under the promissory note irrespective of whether the money was or was not borrowed or applied for family purposes but if he elects to pursue this course, he is restricted to the remedy that he possesses against the party to the promisssory note, and must follow the special procedure provided in respect of negotiable instruments. On the other hand, in a suit aptly framed he may claim in the alternative the amount of the original debt for which the promissory note was given as security, and may proceed under the Hindu Law against the property of the joint family as a whole but if he chooses to adopt this alternative (which may involve the consideration of very different issues) the coparceners will be entitled to raise the defence that the debt was not contracted or the proceeds of the loan applied for family purposes. In short, the plaintiff in such a case may enforce the rights that he possesses ether under the law relating to negotiable instruments or under the Hindu law; but whichever remedy he pursues he is bound by the rules of the Code that he invokes. For these reasons, in my opinion, the suit against Dhiren fails, and must be dismissed with costs.

25. As regards the heirs of Noren, the plaintiff has undertaken to pay the costs of the guardian ad litem, and may add those costs to his claim against the estate of Noren.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //