RAMAMURTHI AYYAR Vs. KUPPUSWAMI AYYAR

JUDGEMENT

(1.) The main question in these appeals is whether a son is liable to discharge the liability of his father in regard to a covenant of indemnity given by him. Defendants 1, 2 and 3 are the sons of one Venkatarama Iyer. Venkatarama Iyer for himself and acting as guardian of his minor sons, defendants 2 and 3, and defendant 1 as a major executed a sale-deed in favour of the plaintiff's father, Ramaswami Iyer on 12th August 1937 in respect of their joint family properties for a sum of Rs. 21,000. Out of the said amount, Ramaswami Iyer paid Rs. 9.000 for discharge of antecedent debts. Of the balance of the price, Ramaswami Iyer executed a promissory note in favour of Venkatarama Iyer for a sum of Rs. 5,250 with an understanding that out of the said amount Rs. 2,'250 was to be paid within one year and the balance of Rs. 3,000 to be paid on defendant 3 attaining majority and giving a release deed. The balance of the sum of RS. 6,000 was agreed to be paid to defendants 2 and 3 in equal moieties on their attaining majority and executing releases to the plaintiff's father. The sale-deed also contained a covenant that defendant l and his father would indemnify the plaintiff's father against any loss if any dispute arose in respect of the property conveyed and thereby the vendees sustained any loss. As per the terms of the sale-deed, defendant 2 received a sum of Rs. 3,000 on his executing a release deed but defendant 3 after he became a major instituted O. S. No. 42 of 1943 on the file of the Court of the Subordinate Judge of Tanjore for a declaration that the sale was not binding in regard to his share, and to recover the same. The suit was decreed but he was directed to pay a sum of RS. 2,146-4-0 being his share of the binding debts discharged. The vendee Ramaswami Aiyar died and his son the plaintiff having lost 1/4th share of the properties purchased by his father as a result of the aforesaid decree filed O. S. No. 19 of 1945 on the file of the Court of the Subordinate Judge of Tanjore for damages for a breach of the covenant of indemnity contained in the sale-deed. He assessed damages on the basis that the value of the share of the property lost by him by reason of the decree obtained by defendant 3 was a sum of Rs. 13,500. He added to that the coats decreed to defendant 3 and the coats incurred by him in that litigation and arrived at a total figure of the loss incurred by him at a sum of Rs. 13,260-6-0. He gave credit to the sum of Rs. 6,000 unpaid purchase money still left with him and also the sum of Rs. 2,146- 4-0 deposited by defendant 3 in his suit. In the result he made a claim for a sum of Rs. 5,114-2-0 to be recovered from defendant 1 personally and from the family properties of the defendants.

(2.) The defendants contend inter alia that the claim for damages in respect of a liability to indemnify was not a debt and it was also not binding on them as it was a avyavaharik debt. They also pleaded that the quantum of damages claimed was excessive and in addition they set-up a counter claim for the recovery of a sum of Rs. 3000 with arrears of interest thereon being the unpaid purchase money. The learned Sub. ordmate Judge held that the covenant to indemnify the vendee contained in the sale deed was in the circumstances of the case a avyavaharika debt and therefore not binding on the defendants. He further decreed the counter claim of the defendants in part. In the result he gave a preliminary charge decree in favour of the defendants. The plaintiff filed A. S. No. 371 of 1946 against the judgment of the lower Court denying his right for damages on the covenant of indemnity whereas the defendants preferred A. S. No. 411 of 1946 against the decree of the lower Court claiming the full amount of their counter claims. For convenience of reference we shall refer to the parties in accordance to the rank assigned to them in the suit.

(3.) Two questions arise in the appeals. One is whether there is a clause of indemnity in the sale deed. The other is whether the liability to indemnify is a avyavaharika, debt as understood in Hindu law. The first question depends upon the construction of the relevant clauses in the sale deed, Ex.P-1. Exhibit P-1 is dated 12th August 1937 whereunder Venkatarama Iyer for himself and as guardian of his two minor sons, and Ramamoorthi Iyer as major sold the joint family properties in Kilakottagam village to the plaintiff's father. After describing the circumstances of the family which necessitated the sale, details of the debts to be discharged from and out of the consideration amount and the manner and the time in which the balance of consideration should be paid to the vendor it contains the following covenants: