Skip to content


Krishnadhan Banerji Vs. Sanyasi Charan Mandal - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtKolkata
Decided On
Judge
Reported in51Ind.Cas.597
AppellantKrishnadhan Banerji
RespondentSanyasi Charan Mandal
Cases ReferredJoyhisto Gowar v. Nittyanund Nundy
Excerpt:
hindu law - dayabhaiga--joint family--karta, power of, to bind infant members by act--trade, ancestral--minor members, liability of--karta, whether can start new trade--karta appointed guardian of minor member, powers of--guardian and minor--guardian, powers of, extent of--contract act (ix of 1872), sections 11, 247, 248--partnership--minor, whether can become partner--liubility of minor partner--firm, liability of, for debt contracted by partner--civil procedure code (act v of 1908), order xxi, rule 49. - 1. these two appeals arise out of two suits to recover money, one on a hand-note and the other on a hath chitta. in the lower court four suits were tried together. appeals have been preferred against the decrees in two only, suit no. 53 of 1914 corresponding to appeal no. 138 of 1916 and suit no. 243 of 1914 corresponding to appeal no. 140 of 1916.2. it appears that one bhuban mohan had two karbars, one for fuel wood at munshigunge, and another for rice and other articles at kalibazar. he died in kartick 1306 (november 1899) leaving five sons, viz., nilratan, amullya, sattya charan, fatik arid sanyasi charan. the last two were minors, and nilratan, the eldest brother, was appointed 1890. the ancestral karbars, viz' the munshigunge and the kalibazar business were carried on, on behalf of.....
Judgment:

1. These two appeals arise out of two suits to recover money, one on a hand-note and the other on a hath chitta. In the lower Court four suits were tried together. Appeals have been preferred against the decrees in two only, Suit No. 53 of 1914 corresponding to Appeal No. 138 of 1916 and Suit No. 243 of 1914 corresponding to Appeal No. 140 of 1916.

2. It appears that one Bhuban Mohan had two Karbars, one for fuel wood at Munshigunge, and another for rice and other articles at Kalibazar. He died in Kartick 1306 (November 1899) leaving five sons, viz., Nilratan, Amullya, Sattya Charan, Fatik arid Sanyasi Charan. The last two were minors, and Nilratan, the eldest brother, was appointed 1890. The ancestral Karbars, viz' the Munshigunge and the Kalibazar business were carried on, on behalf of the joint family, by Nilratan as Karta, assisted by the other two adult brothers. A new Karbar in rice at Orphangunge was started after the death of Bhuban Mohan and carried on on behalf of the joint family. The plaintiff in Suit No, 53 alleges that for the purposes of the joint family Karbars Rs. 5,000 was borrowed from him on a hand-note on the 7th June 1908, which was executed by Nilratan, Amullya and Sattya Charan. The plaintiff in Suit No. 243 bases his claim on a hath-chitta for Rs. 19,700, dated 1st October 1909,and executed by the four elder brothers, Fatik having then attained majority.

3. It appears that the family Karbars failed and the other sons of Bhuban Mohan have been declared insolvents. Some of the creditors attempted to have the defendant Sanyasi Charan also declared an insolvent but were unsuccessful. In the course of the insolvency proceedings, Nilratan was replaced by the one Motilal Roy as guardian of the minor Sanyasi Charan. The plaintiffs have shared in the distribution of the assets of the insolvents and they. seek to recover the balance of debts, due to them from the defendant Sanyasi Charan alone. The Court below has held that the defendant is not liable and the plaintiffs have appealed.

4. There can be no doubt, that the Orphangunge business was not an ancestral business. The two ancestral Karbars, viz, those at Munshigunge and Kalibazar were carried on under the style of Bhuban Mohan Nilratan, and the Orphangunge business stood in the name of Nilratan alone. The plaintiff's own witness No. 7 stated that it was started 3 years after Bhuban's death, and upon the whole evidence there is no doubt that it was started by Nilratan after Bhuban's death. It was suggested that the Orphangunge business was merely a branch of the Karbars at Munshigunge and Kalibazar, but the mere fact that sometimes money used to be taken from one firm for the other firm does not show that the Orphangunge firm was a branch of the other two.

5. Then the question is whether the money raised on the hand note and hath chitta in suit was borrowed for the ancestral business or for the Orphangunge business. The money raised by the hath chitta is credited in the Orphangunge accounts. The hand-note money is not credited in any of the account books produced in the case. Some interest paid to the plaintiff appears to have been debited to the accounts of the Katgola business but the learned Subordinate Judge observes: 'I have been asked to infor from it that the loan was taken for this firm. No such inference ought to arise and this for two reasons. Firstly, because the Exhibits noticed [Exhibits 2 (4), 2 (5), 3 (1) and 3 (3)] do not say that it was for a particular hand-note that the payments were made, and secondly, because we find it debited in the same accounts as interest paid upon hath-chitta money undoubtedly taken for Orphangunge business. The reason for such anomaly seems to be that the Orphangunge business having been started for the benefit of the family, Nilratan did not consider it of any importance whether the interest was paid from the fund of that business or any other irmali fund. The hand-note and the hath chitta do not show that the loans were on the credit of the ancestral firm, and when the defendant denied that they were taken for the ancestral firm, it was incumbent upon the plaintiffs to prove the affirmative. This they failed to do. The conclusion, therefore, is that the loans in question were not taken for the benefit of the ancestral firms. That they were taken for the Orphangunge firm can be accepted as established.'

6. It may be that the exhibits referred to above relate to payment of interest to the plaintiff on account of the hand-note in suit, but we agree with the Court below in holding that the Orphangunge business having been started as a joint family business, it was of no consequence that the interest on the hand-note was paid from the Katgola business, and the said fact does not prove that the money borrowed on the hand note was required for the ancestral business.

7. Exception is taken to the finding of the learned Subordinate Judge that the ancestral Karbars did not require any borrowing, and we are referred to the mortgage bond dated 3rd April 1901 (21st Chait 1307), by which Rs. 6,000 was taken and in which it was stated 'there being necessity for money for our business.' It was recited that moneys had been taken on hath chitta on several dates from the 25th Magh 1307, the last item of Rs. 50 J having been taken on the date of the bond. It is pointed out that Bhuban Mohan died in Kartick 1306 (November 1899) and the mortgage bond was executed after the death of Bhuban but before the Orphangunge business was started in 1303. The learned Subordinate Judge may be wrong in saying that no money was required for the ancestral business but it does not prove that the loan taken under the hand-note was required for the ancestral business, and it was for the plaintiff to prove affirmatively that it was so required, in order to bind the minor. We need not discuss the evidence in detail. We agree with the Court below in holding that it is not proved that the money under the hand-note and hath chitta was required for the ancestral

8. The next question is, whether the defendant is liable for the debts incurred by Nilratan for carrying on the Orphangunge business. We have been referred to various authorities in support of the proposition that a member of a joint Hindu family is liable for debts incurred by the manager for the purpose of carrying on a family trade. But they are cases where the debts were contracted by the manager for carrying on an ancestral family trade. An ancestral trade like other property is descendible upon the members of a Hindu undivided family, and in carrying on such a trade infant members of the undivided family are bound by all acts of the manager incident to and flowing out of the carrying on of that trade, including loans contracted for the purposes of the trade. [See Sausse, C.J., in Ramlal v. Lakhmichand 1 B.H.C.R. App. 51; Johurra v. Sreegopal 1 C. 470 ; 1 Ind. Doc. (N.S.) 293; Joykisto Oowar v. Nittyanund Nundy 3 C. 738 (F.B.); 2 C.L.R. 440 ; 3 Ind. Jur. 117; 1 Ind. Dec. (N.S.) 1053; Bemola Vossee v. Mohaun Dossee 5 C. 792 ; 6 C.L.R. 34, 2 Ind. Dec. (N.S.) 1112 and Rampartab Samrathrii v. Foolibai 20 B. 767 ; 10 Ind. Deo. (N.S.) 1082 see also Sakrabai v. Maganlal 26 B. 208 ; 3 Bom. L.R. 738 But the Orphangunge business was not ancestral trade and was started by Nilratan sometime after the deith of the father. Nilratan was appointed guardian of the defendant who was then a minor under Act VIII of 1890. We do not think that a guardian has any power to start a new business on behalf of the ward so as to make him liable for debts incurred in carrying on such trade. It is contended that Nilratan was Karta of the family, and that the powers of a Karta in respect of a trade started after the death of the ancestor for the benefit of the joint family are the same as those in respect of a trade started by the ancestor and carried on after his death by the Karta of the joint family; but we do not think that they stand on the same footing. In the latter case the trade is started by the ancestor, and the Karta of a joint Hindu family has power to manage such a trade like any other family property which has descended from the ancestor. As pointed out by Sausse, C.J., in Ramlal v. Lakhmichand 1 B.H.C.R. App. 51 cited above: 'Were such a power not implied, property in a family trade which is recognized by Hindu Law to be a valuable inheritance would become practically valueless to the other members of an undivided family wherever an infant was concerned, for no one would deal with a manager, if the minor were to be at liberty on coming of age to challenge as against third parties the trade transactions which took place during his minority. The general benefit of the undivided family is considered by Hindu Law to be paramount to any individual interest, and the recognition of trade, as inheritable property, renders it necessary for the general benefit of the family that the protection which the Hindu Law generally extends to the interests of a minor should be so far trenched upon as to bind him by acts of the family manager necessary for the carrying on and consequent preservation of that family property: but that in-fringomont in not to he carried beyond the actual necessity of the case.' Can the same principle be applied where a new trade is started by the manager of the family after the death of the ancestor? The manager may embark on a new and a speculative trade on behalf of the joint family which in one event may be highly beneficial to the family, bat may also result in ruin to the family, and to hold a minor member of the family liable for debts incurred in carrying on such a trade would be to place the interests of minors at the mercy of the Karta, In the present case the father left two profitable Karbars, viz., the Munshigunge and the Kalibazir Karbars, and the starting of the Orphangunge business cannot, therefore, possibly be justified on the ground of necessity, assuming that the starting of a Karbar can be justified on such a ground in any case.

9. The Court below relied upon the cases of Makhun Lall Butt v. Ram Lall Shaw (7) and McLaren Morrison v. Verschoyle (8) in support of the proposition that the manager of a joint family has no power to start a new business so as to bind the infant members. It is contended on behalf of the appellant that those cases, far from supporting the proposition for which they are cited by the Court below, really support the opposite contention. It is pointed out that in the first case, the father left a gold and silver business, and the two elder sons started a new business in rice in partnership with others, and the profits of the new business were appropriated exclusively by the eldest brother (and the other partners who were strangers to the family). The learned Judge in that case observed:--'it is difficult to see what power the elder brother had to start this new business so as to bind the infants, for it is not suggested that the eldest brother did so as Karta of the family or that there has been any subsequent ratification by the minors.' Reliance is placed upon the observation that there was no suggestion that the eldest brother started the new business as Karta as indicating that a Karta has the power, and also upon the fast that the new business was a new line of business. In the second case Mc. Laren Morrison v. Verschoyle 6 C. W. N. 429 Stanley, J. after referring to the case of Ramlal v. Lakhmichand 1 B.H.C.R. App. 51 observed:--'The business, however, which Bepin embarked on was not the ancestral business but an entirely new business. The advances made by the plaintiffs to Bepin were not made in the course of the ordinary transactions of the ancestral business, and were not, so far as I have been able to discover, made for the benefit of the joint family. Therefore, I am unable to hold that the other members of the family are bound by his acts or responsible to the plaintiffs for the advances made to him.' We are of opinion that the observations in the first case that there was no suggestion that the eldest brother started the new business as Karta, and in the second that the transactions entered into by Bepin were not made for the benefit of the joint family, were additional grounds for holding that the other members were not bound by the acts of the eldest brother and in any case were obiter. As for the fact that the new business in the two cases was a new line of business, we do not think that that makes any difference in principle. Suppose the father leaves a small business in rice (say worth one thousand rupees) and the eldest son as Karta starts a new business in rice on an extensive scale dealing with lacs of rupees, would the minor brother be bound by debts incurred for carrying on such trade on the ground that it is in the same line of business? We think the distinction is to be drawn between an ancestral trade and a new trade started after the death of the ancestor by the manager of the family, and not one between the same line of business and a new line of business.

10. It is contended that the new rice business was started for the benefit of the family, and was for a time a very lucrative one, and that the minor, therefore, should be held bound by debts incurred in carrying on such business. In the recent case of Palaniappa Chetty v. Beivasikamony Pandara 39 Ind. Cas. 722 ; 44 I.A. 147 ; 26 C.L.J. 153 at p. 162 ; 21 C.W.N. 729 ; 15 A.L.J. 485 ; 1 P.L.W. 697 ; 33 M.L.J.I; 19 Bom.L.R. 567 ; 22 M.L.T. 1; (1917) M.W.N. 477 & 507; 40 M. 709 ; 6 L.w. 222 (P.C.) Lord Atkinson held that the phrase 'benefit of the estate', as used in the decisions with regard to the circumstances justifying an alienation by the manager for an infant heir or by the trustee of a religious endowment, cannot be precisely defined, but includes the preservation of the estate from extinction, its defence against hostile litigation, its protection from innundation, and similar circumstances, and we think that the embarking on a new and speculative trade by the Karta of a family cannot be said to be for the benefit of the estate.

11. But whatever the powers of a Karta may be, the powers of a guardian are more limited. Nilratan, as already stated, was appointed guardian of the minor Sanyasi Charan under Act VIII of 1890, and his powers as guardian are governed by the provisions of that Act. If the Karta of a joint Hindu family chooses to apply under Act VIII of 1890 for being appointed a guardian of a minor and has been appointed as such guardian, he comes under the control of the Court and can no longer exercise the powers of a Karta. We were referred to the case of Gharibullah v. Khalak Singh 25 A. 407 (P.C.); 30 I.A. 165 ; 5 Bom. L.R. 478; 7 C.W.H. 681; 8 Sar. P.C.J. 483 where one of the three brothers constituting a joint family was a minor in respect of whom his mother was appointed guardian. In a suit upon certain mortgages executed by the Karta, the adult brother and mother of the minor, it was held by the Judicial Committee that the mortgages must be considered to be mortgages by the family entered into by the Karta of the family with the concurrence of the other adult member of the family, and could, so far as they were found to have been made for the benefit of the family and for legal necessity, be enforced against all the members, and the objection raised that the guardian of the minor had not obtained sanction of the Court for the mortgage was overruled. But that was a ease of a Mitakshara family, and it was pointed out by their Lordships that a guardian of the property of an infant cannot properly be appointed in respect of the infant's interest in the property of an undivided Mitakshara family, such interest not being individual property, and, therefore, not property with which a guardian, if appointed, would have anything to do. Moreover, that case had nothing to do with the powers of a Karta to start a new trade.

12. In the present case the family is governed by the Dayabhaga, and the minor had a definite share in the ancestral property in respect of which a guardian could be appointed. Section 27 of the Guardians and Wards Act (VIII of 1890) provides that a 'guardian of the property of a ward is bound to deal therewith as carefully as a man of ordinary prudence would deal with it if it were his own; and subject to the provisions of this chapter, be may do all acts which are reasonable and proper for the realization, protection or benefit of the property.' That section deals with the powers of a guardian with respect to the property of the minor, viz., the property of which the guardian assumes charge and it cannot be said that the starting of a new trade is reasonable and-proper for the benefit of the property. The position of the guardian is that of a trustee in relation to the ward; be cannot embark on a new trade, at any rate without the sanction of the Court; and it is not possible for the Court to keep control over the doings of a certificated guardian if he is allowed to carry on a trade. On the whole we are of opinion that a certificated guardian cannot start a new trade for the benefit of his ward, at any rate, without the sanction of the Court,

13. The last contention is that the defendant, having received certain properties acquired from the funds of the Orphangunge business, on partition with his brothers, is liable for the debts of the firm, at any rate, to the extent of the properties so received. It appears from the account-books of the Orphangunge firm, Exhibit (i) that certain properties [74, 74 (1) and 75, Mansatola Lane] were purchased with the funds of that firm, part of the purchase-money having been borrowed. It also appears from Exhibit (4) and the evidence of Shib Chandra Banerjee, witness No. 5 for the plaintiff, that a sum of Rs. 50 was paid from the Orphangunge firm to a creditor of the ancestral business. Exhibits 5 (3), 5(6) and 5(9) show that certain monies were borrowed from Hirendra Nath Mondal (son of Nilratan Mondal) for the Orphangunge firm, and the identical currency note was paid for purchasing another property 27, Gurbari Road, which was also partitioned by the arbitrator.

14. The decree in the partition suit (No, 136 of 1912), dated the 7th January 1913 (Exhibit 41), brought by the Receiver to the estate of the insolvent brothers (Nilratan and others) against the defendant by his certificated guardian, Motilal Roy, shows that No. 75, Mansatola Lane, along with other properties were allotted to the share of the defendant, and Nos. 74 and 74 (1) together with Other properties were allotted to the share of the insolvents. The defendant was a minor then, but it is contended that after attaining majority he did not repudiate the act of his guardian, but elected to ratify it by retaining such properties, and that having done so, he is liable for the debts of the firm. Section 217 of the Contract Act provides that a minor may be admitted to the benefits of a partnership, and though he cannot be made personally liable for any obligation of the firm, the share of such minor in the property of the firm is liable for the obligations of the firm.

15. In the case of Mohori Bibee v. Dharmodas Ghose 30 C. 539; 30 I.A. 114 ; 7 C.W.N. 441 ; 5 Bom. L.R. 421 ; 8 Sar. P.C.J. 374 (P. C) it was settled by the Judicial Committee that a minor cannot make any contract at all. In view of that decision a minor cannot really enter into a contract of partnership. But Section 247 lays down that a minor can be admitted to the benefits of partnership and though he shall not be personally liable, the 'share of such minor in the property of the firm is liable for the obligations of the firm.' This statutory provision is not the less imperative by reason of the now established interpretation of Section 11 and that interpretation cannot take away the force of Section 247. The Judicial Committee itself, referring to Sections 247 and 248 in support of the proposition that a minor is incapable of entering into a contract, observed: 'Again under Sections 247 and 248, although a person under majority may be admitted to the benefits of a partnership, he cannot be made personally liable for any of its obligations although he may on attaining majority accept those obligations if he thinks fit to do so.'

16. Several contentions have been raised on behalf of the respondent against the applicability of the provisions of Section 247 to the present cafe. The first is that a ease under Section 217 of the Contract Act was not made in the plaint nor was any issue raised upon the point. It is true that the plaintiff alleged that all the Karbars were ancestral, but it was distinctly alleged in the plaint that the 'Karbars were carried on for the benefit of the defendant and the defendant has been benefited therefrom, and from the assets of the said Karbars considerable, moveable and immoveable, properties have been acquired. The said defendant has been enjoying the same as partner thereto and his ancestral debts have also been paid off and he has thus got his share in ancestral properties free from incumbrance.' So that although Section 247 of the Contract Act was not referred to, the fact of the defendant having been admitted to the benefits of the Karbars was alleged in the plaint. The defendant denied the allegations and asserted that he had nothing to do with the Karbar. The fourth issue raised the question: 'is the defendant liable for the debts sought to be recovered? If so, what would be the extent of his liability?' and it was wide enough to cover a case under Section 217. The question was gone into by the Court below, and we are not satisfied that the defendant has been prejudiced by the omission to frame a specific issue on the point.

17. The next contention is, that a minor cannot be said to be 'admitted to the benefits of partnership' unless there is some consentient act on his part, in other words, that he must enter into an agreement, although such an agreement is invalid according to law. We were referred to certain observations of Sale, J., in the case of Lutchumanen Chetty v. Siva Prokasa Modeliar 26 C. 349; 3 C.W.N. 190; 13 Ind. Dec. (N.S.) 826, viz. that a Hindu infant can only become a member of the partnership by a consentient act on the part of himself and partners,' and similar observations in the judgments of some of the learned Judges in the case of Official Assignee of Madras v. Falaniapfa Chetty 49 Ind Cas. 220 41 M. 824 ; 24 M.L.T. 216 ; 35 M.L.J. 473 ; 8 L.W. 530 ; (1918) M.W.N., 721. No doubt, it is necessary that there should be some consentient act on the part of the adult partners but it is difficult to see how a minor, who is incompetent to contract, can enter into an agreement or give his content to an agreement. In the Calcutta case, however, what was actually decided was that a minor member of a joint Mitakshara family need not be joined as a co-plaintiff in a suit by the father to recover a trade debt and that decrees obtained in such suits by or against the managers of the business are presumed to have been obtained by or against them in their representative capacity and are binding on the whole joint family. In the Madras case, Spencer, J., observed a definite and conscious act on the part of other partners is needed for admitting a minor to the benefits of partnership. I do not find that it has been anywhere defined what are the acts which would constitute admission to the benefits of partnership. Mr. Justice Abdur Rahim considers that it implies some definite act such as the allotment of a share or the distribution of a part of the profits or something of an analogous character.... I am clearly of opinion that admission to the benefits of partnership means something mere than the mere incident of birth in a particular family.' Sadasiva Aiyar, J., on the other hand, was of opinion that partnership in a family business does not depend upon the consent of the partners in many oases, but upon the family being a trading family and the business being conducted for the benefit of the family, persons born into the family from time to time becoming partners as a matter of course.

18. In the present case the Karbar was started long after the birth of the minor, and we are of opinion that the defendant was admitted to the benefits of the partnership. The Karbar was started and carried on as a joint family business. So long as the family is joint, no specific allotment or distribution of profits is made among the members, but the accounts show that family expenses and even litigation expenses of the joint family of which the defendant was a member were met from the funds of the Karbar, the miner was joined as co plaintiff in suits for recovery of money due to the Karbar, and lastly the decree in the partition suit (already referred to) shows that properties acquired from the funds of the Karbar were allotted to the minor. It does not appear that the minor stood on a different footing from the adult members of the family for the benefit of which the Karbar was started and carried on. All these go to show that the minor was admitted to the benefits of the partnership, and this disposes of another contention raised on behalf of the respondent that he was not admitted to all the benefits of the partnership.

19. It is farther contended on behalf of the respondent that even if Section 247 of the Contract Act applies to this case, the debts due to the plaintiffs are not shown to be the debts of the partnership because the hand-note sued upon was executed by the adult brothers not in the name of the firm, nor was it shewn that the loan was necessary for the purposes of the firm. But each partner is an agent for the others, and it is not necessary that the name of the firm should be used in order to make it a partnership debt, provided it is shown that the debt was taken for, and appropriated to, the firm. The money on the hand-note is not credited in the account books produced, but interest on it was paid from the Orphangnuge firm. The plaintiff stated in his evidence that the loan was taken for the Karbars, and the Mohurir of the defendant himself admitted that loans were taken for the Orphangnnge businees though he did not refer specifically to the loan raised on the hand-note. The money raised on the hath chitta in the other cafe (Appeal No. 140) is oredited in the books of the Orphangunge firm. The controversy between the parties in the Court below was mainly with reference to the question whether the loans were taken for the Orphangunge Karbar or for the ancestral Karbars, and the Court below held: 'That they were taken for the Orphangunge firm can be accepted as established.' We agree with that finding of the Court below.

20. It is also contended that any property which might have been received by the defendant on partition ceased to be partnership property after partition and is, there fore, not liable for any partnership debt. We were referred to Lindley on Partnership (pages 397, 398) where it is stated: 'it is competent for partners by agreement amongst themselves to convert that which was partnership property into the separate property of an individual partner or nice versa. And the nature of the property may be thus altered by any agreement to that effect.'

21. The partnership properties in the present case, however, were partitioned after the business had failed and the shares of the adult partners had vested in the Receiver, There were debts due by the firm. In these circumstances the partners could not by the mere expedient of dividing the properties among themselves prevent the creditors from following the partnership properties. It is said that the fact that the Receiver in insolvency was himself the plaintiff in the partition suit precludes any suggestion of fraud. But the partition took place pending the appeal preferred by the defendant against the Receiver and the appeal by certain creditors against the defendants: see Sonyasi Charan Mandal v. Asutosh Ghosh 26 Ind. Cas. 836 ; 42 C. 225. In that case it was held upon the objection of the defendant that the Receiver could not deal with the share of the defendant, and that the creditor also may, if so advised, pursue his remedy, if any, against the infant in a suit properly framed for the purpose.' The appellant in Appeal No. 140, a creditor, was a party to the said appeals, In these circumstances we think that the mere fact that there was a partition of the partnership properties does not absolve the properties received by the defendant from liability for the debts of the firm. This brings us to the question whether any particular creditor can follow the properties received by the defendant as the properties of the partnership. It was contended before the lower Court, as well as in this Court, that such, properties, if considered as partnership properties, are liable to the whole body of the creditors of the firm represented by the Receiver in insolvency and not to any particular creditor. This contention was upheld by the Court below and we were inclined to accept that view before these appeals ware re-argued. It appears, however, from the insolvency proceedings that the District Judge in those proceedings, on the objection of the defendant, then an infant, dismissed the application of the creditors for adjudication of the infant as an insolvent, but granted it, with regard to the four other partners, and appointed a Receiver of all the four businesses and of all the properties purchased since the death of Bhuban, and four-fifths only of the other properties alleged to have been inherited by all the brothers from their father. Two appeals were preferred against the said order, one by the infant and the other by the creditors. The infant objected to the validity of the order on the ground that the Receiver was not competent to realize the assets of the Karbars and of the properties acquired since the death of his father, as the property of his four insolvent brothers alone had vested in the Receiver who was consequently competent to realise a four fifths share only of the assets of the partnership business as also of the after-acquired properties. The objections urged by the creditors were that the infant should have been adjudged an insolvent, and that in any view the Receiver was entitled to realise the whole of the properties inherited by the five brothers from their father.

22. This Court, accepting the contention of the infant, held that the Receiver merely replaced the insolvent partners in respect of the business of the firm, and that he could not deal with assets other than those belonging to the persons who bad been adjudicated insolvents. The learned Judges further observed:--'The essence of the matter is that the share of the infant has not vested in him, and he is consequently not entitled to deal with it. The Receiver may, if so advised, institute a suit for dissolution of the partnership in which appropriate proceedings may be taken for realization of the assets. The creditor also may, if so advised, pursue his remedy, if any, against the infant in a suit properly framed for enforcement of his claim. But whatever remedies may be available hereafter to the Receiver or to the creditor, it is clear that the properties of the infant cannot be dealt with by either of them in these proceedings,' In the result the creditors' appeal was dismissed and the infant's appeal allowed. The Receiver, who was examined in. the present ease, says that the minor's one-fifth share of the after-acquired properties had to be given up to him under the orders of the High Court.

23. The position thus taken up by the minor in those proceedings was that the Receiver could not deal with his share, and he cannot now contend that, it is only the Receiver (and not any individual creditor) who can deal with his share of the partnership properties, it is urged, however, that according to the observations made by the learned Judges in that case, it is open to the Receiver as representing the insolvent partners to apply for dissolution of the partnership and then to get the assets realizad, and to insist upon payment of the partnership debts, and that the Receiver as trustee for the body of the creditors can distribute the assets. The Receiver has not up to date taken any steps for dissolution of partnership and the debts due to the firm have been barred by limitation. Had not the defendant opposed the Receiver in those proceedings, the Receiver could have realised and distributed the entire assets. The learned Judges in these proceedings (to which one of the creditors, the appellant in Appeal No. 140, was a party) observed:--The creditor also may, if so advised. pursue his remedy, if any, against the infant in a suit properly framed for enforcement of his claim.' We think that in these circumstances the plaintiffs can follow the minor's share of the partnership properties. Then it is said that in any case the minor alone cannot be sued, and that the Receiver also must be joined in a suit relating to the partnership. But although a minor who has been admitted to the benefits of a partnership does not stand on the same footing as an ordinary partner, his share of the partnership property is liable for the obligations of the firm. That being so, he becomes jointly and severally liable like adult partners, though that liability is limited to his share of the partnership property. The Receiver, therefore, is not a necessary party to the suit.

24. It is also contended that in order that a partnership property may be made liable, the suit must be brought against the firm, and reliance is placed upon the provisions of Order XXI, Rule 49(1), which provides that property belonging to a partnership shall not be attached or sold in execution of a decree other than a decree passed against the firm or against the partners in the firm as such. But the rule is subject to the proviso: 'Save as otherwise provided by this rule,' and Clause (2) of the rule lays down that the Court may on the application of 'the bolder of a decree against a partner' charge the interest of a partner in the partnership property with payment of the decretal amount, appoint a Receiver of such share, direct accounts and enquiries and order a sale of such interests. So that a decree against an individual partner is clearly contemplated by the rule.

25. It is impossible, however, to say whether the properties acquired from the funds of the Orphangunge business allotted to the defendant on partition represented his share in that business, or represented his share generally in the ancestral properties and the properties acquired from the funds of the ancestral business, without taking a general account of the estate left by Bhuban Mohan and the Karbars. There is no prayer in the plaint for taking such accounts, but there is the general prayer, and in the case of Joyhisto Gowar v. Nittyanund Nundy 3 C. 738 (F.B.); 2 C.L.R. 440 ; 3 Ind. Jur. 117; 1 Ind. Dec. (N.S.) 1053 accounts were directed to be taken though there was no claim for accounts. We think that in the circumstances of the case, and for the ends of justice, the accounts should be gone into for determining the said questions.

26. We ought to have noticed another contention raised on behalf of the respondent, viz., that once it is found that the Karta or guardian had no power, there is no liability of the minor even to the extent of his share of the partnership properties under Section 247, nor is he personally liable under Section 248 of the Contract Act. But the liability of a minor under Section 247 does not depend upon the powers of the Karta or guardian, but depends upon the question whether the minor was admitted to the benefits of the partnership, and his liability under? the section is limited to his share of the partnership properties. The liability under Section 248 depends upon the fact of his having been admitted to the benefits of partnership and his not having repudiated the partnership on attaining the age of majority.

27. Then the question arises whether the defendant is personally liable for the debts of the firm having regard to the provisions of Section 248 of the Contract Act. It is contended on behalf of the appellant that the defendant, having been admitted to the benefits of partnership during his minority, became liable for all obligations incurred by the partnership, as he did not give public notice of his repudiation of the partnership. As stated above, the guardian of the defendant did take some properties acquired out of the funds of the Orphangunge Karbar under the partition decree, When the present suit was brought the defendant was still a minor, and his guardian in the written statement repudiated all connection with the Orphangunge Karbar. The defendant on attaining majority accepted the said written statement. But it is contended on behalf of the appellant that there was no public notice given by the defendant of his repudiation of the partnership, that the defendant retained some properties acquired out of the funds of the Orpbangunge Karbar, and there could be no repudiation of the partnership so long as the benefit obtained was not given up by the defendant, and that the defendant so long as he retained the properties could not be said to have repudiated by merely asserting in the written statement that he had no concern with the Karbar. The defendant, on the other hand, contends, first, that at the time when he attained majority the firm had ceased doing any business, secondly, that by accepting the written statement filed by his guardian he had repudiated the partnership and that it was not necessary to give up what had been already received by his guardian in order that the repudiation might be complete, and lastly, that there is nothing to snow that the defendant retained any such property with full knowledge of the facts, so that it might be said that he had exercised the option of accepting a personal liability by retaining such property.

27. As regards the first point, viz., that the firm had ceased to do any business at the time when the defendant attained majority, there is no doubt that the Karbars had failed at that time and business was stopped. But, although the Karbars had failed, they had not been wound up, and the partnership, therefore, cannot be said to have come to an end. With regard to the second point, we think that the defendant cannot be said to have repudiated the partnership merely by saying so, unless he relinquished the properties received for him by his guardian. The last ground, however, appears to be one entitled to consideration. We have already seen that it is not clear whether the properties acquired out of the funds of the Orphangunge Karbar and allotted to the defendant were so allotted as his share of the said Karbar, or as part of his share generally of the ancestral properties, and that question will have to be gone into. But even if it be found that the properties were obtained by his guardian as the minor's share of the Qrphangunge Karbar, it does not follow that the defendant retained them with the knowledge that it was his share of the Orphangunge Karbar.

28. It is to be borne in mind that the plaintiff's case in the present suit was that all the Karbars were ancestral. Even now an enquiry is necessary and accounts will have to be gone into in order to determine whether some of the properties allotted to the defendant under the partition decree were allotted to him as his share of the Orphangunge Karbar or as part of his share in the ancestral properties generally. The defendant was a minor even when the written statement was filed in the present suit by his guardian and he accepted that written statement shortly after attaining majority. The question in whether the defendant had knowledge of all the facts and retained the benefit with knowledge that it was on account of the Orphangunge Karbar, was not gone into the Court below, as the question was not specifically raised in the pleadings. It would be inequitable to hold that the defendant made himself personally liable for all the obligations of the firm merely because he retained some property acquired out of it, without finding whether he elected to affirm the partnership with knowledge of the facts. In all these circumstances, we think that for the ends of justice an enquiry ought to be made as to whether the defendant retained the properties with the knowledge that it was on account of the Orphangunge Karbar, and not on account of the ancestral Karbars and properties.

29. In the result we direct a general account to be taken by the Court below with respect to the Karbars and the properties left by Bhuban Mohan. The Court will determine on taking such accounts whether any property was allotted to the defendant as his share of the Orphangunge Karbar or as part of his share of the ancestral properties and properties acquired out of the funds of the ancestral Karbars generally. In the first case any such property received on behalf of the defendant will be liable for the claim of the plaintiffs. In the latter case the plaintiffs' claim will have to be dismissed. If the finding on the above point is in the plaintiffs' favour, the Court below will have also to find whether the defendant on his attaining the age of majority retained any such property with full knowledge of the facts and with the knowledge that such property wan received by his guardian on his behalf as his share of the Orphangunge Karbar, in which event only the defendant will be liable personally for the plaintiffs' claim.

30. It appears that the issues other than the 4th issue were not dealt with by the Court below, as the decision on the 4th issue alone was sufficient for the disposal of the cases. The Court below will, therefore, try all those other issues.

31. The decrees of the Court below are set aside and the suits remanded for disposal in accordance with the remarks made above. Costs to abide the result.


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