NAGINDAS GOKULDAS SHET Vs. BHIMRAO DAMU PATIL

JUDGEMENT

(1.) THIS is a plaintiff's appeal in a suit to recover Rs. 2,071 on a promissory note passed on June 8, 1934, in favour of the plaintiff by defendant No.2 who held a power-of-attorney from the paternal grandmother of defendant No.1 whose estate was managed by her during his minority. The promissory note was the last in a series of notes the first of which for Rs. 1,000 was passed by Damu, the father of defendant No.1, in plaintiff's favour on July 29, 1923. On February 19, 1926, Damu passed to the plaintiff a fresh note for Rs. 1,300 in renewal of the first note. Thereafter in January, 1928, Damu died and the estate of his son was managed, though without any certificate as a guardian, by Bahinabai, the mother of Damu. On March 17, 1928, Bahinabai executed a power-of-attorney in favour of defendant No.2 for doing all acts on her behalf for the management of defendant No.1's estate. On January 17, 1929, defendant No.2, acting under the power-of-attorney, executed a promissory note for Rs. 1,700 in renewal of the last promissory note passed by Damu. Then on April 12, 1931, defendant No.2 passed to the plaintiff another promissory note for Rs. 2,050 in renewal of the former note. There was a repayment under this note to the extent of about Rs. 370 in 1932 and 1933. Thereafter on June 8, 1934, defendant No.2 passed the suit promissory note to the plaintiff for Rs. 2,300 in renewal of the last note. The present suit was brought by the plaintiff to enforce this promissory note on June 8, 1937. The defendant being an agriculturist, and therefore entitled to ask for past accounts, the plaintiff limited his claim to Rs. 1,093 as principal and Rs. 978 as interest from the date of the first promissory note of 1923. The defence was that Bahinabai, who was only in de facto management of the minor's property, had no power to execute the promissory note either by herself or through defendant No.2, that the note was not binding on defendant No.1, and that the suit was barred by limitation.

(2.) THE trial Court held that Bahinabai acted as guardian of defendant No.1's property and she had, therefore, power to pass the promissory notes during the course of her management, that the note was, therefore, binding on defendant No.1 and that the suit was in time. It was held that the plaintiff was entitled on taking accounts to Rs. 544 for principal and the same amount for interest. A decree was accordingly passed for Rs. 1,088 in plaintiff's favour.

(3.) IT is contended by Mr. Dixit on behalf of the plaintiff-appellant that the decisions relied upon by the lower Court against the plaintiff could be distinguished from the facts of the present case. Those decisions are Waghela Rajsanji v. Shekh Masludin (1887) I.L.R. 11 Bom. 551, p.c., Maharana Shri Ramalsingji v. Vadilal Vakhatchand (1894) I.L.R. 20 Bom. 61, Keshav v. Balaji (1932) 34 Bom. L.R. 996, and Shankar v. Nathu (1932) 34 Bom. L.R. 1001. They are all to the effect that a minor is not personally bound by a contract, nor is his estate liable for a promissory note by his guardian, even though he may be a certificated guardian. The ground on which those decisions are sought to be distinguished is that in all those cases the promissory notes were passed by the guardians during the course of their management for the first time; and were not, as in the present case, in renewal of former notes executed by the minor's father which would, under the Hindu law, be binding on his estate. IT is further contended that Rangnekar J., who decided the case of Keshav v. Balaji, was of the opinion in a later decision in Vishwanath v. Raghunath (1937) 40 Bom. L.R. 458 that in certain circumstances the estate of a minor would be liable under a promissory note passed by his guardian. In that case the guardian was appointed by a person under his will and was authorised to carry on the business of the testator. The guardian executed a promissory note for the purpose of the business, and it was held that although the minor was not personally liable on the debts incurred by his guardian in the course of business and although the creditors of the business had no right of direct recourse against the minor, the guardian would be entitled to indemnity for liability properly incurred out of the assets of the business, and the creditors of the business could therefore proceed directly against such assets for liability properly incurred by the guardian. The guardian in that case was a lawful guardian and the promissory note was passed for the purpose of the management of the ancestral business which was authorised by the testator. IT was for those reasons held that the assets of the business were liable although the minor was not personally liable on the promissory note. That decision, in our opinion, does not affect the former decisions which were distinguished by Rangnekar J. on the ground that in those cases there was no question of the passing of the promissory note by the guardian for the purpose of any business which he was authorised by the testator to carry on. As a result of the previous decisions the law on this point summarised by him in Keshav v. Balaji is that "although a guardian can under certain circumstances sell or charge his ward's estate or property, he cannot bind him personally by a simple contract debt, nor can he bind his estate except by a document purporting to bind it." A promissory note is not a document creating a charge on the minor's estate and it would not therefore be binding either on the person or the property of the minor. IT is true that in none of those cases was there a pre-existing liability. Mr. Dixit has pressed upon us this difference and relied upon several decisions of the Madras High Court in which the promissory notes were passed for a pre-existing liability which would be binding on the minor under his personal law. The decisions relied upon by him are Subramania Ayyar v. Arumuga Chetty (1902) I.L.R. 26 Mad. 330, Ramajogayya v. Jagannadhan (1918) I.L.R. 42 Mad. 185, F.B., and Satyanarayana v. Mallaya (1934) I.L.R. 58 Mad. 735, F.B. In the first of these cases the promissory note was passed by the mother as the minor's guardian for a debt for which the son's share in the ancestral estate was liable at that time, and it was held that the minor was liable on the note to the extent of his share in the ancestral estate on the ground that the guardian's contract was to keep alive a liability to which, at the date of the contract, the minor's share of the ancestral estate was already subject. In the second case also the promissory note was passed by the mother of the minor acting as his natural guardian. The majority of the full bench held that on a contract entered into on behalf of a minor by his guardian under which the latter borrowed money but no charge was created on the minor's estate, no decree can be passed against the minor on his attaining majority or his estate except in cases in which the minor's estate would have been liable for the obligation incurred by the guardian under the personal law to which he is subject, and that a decree can be passed against the estate of a Hindu minor for a debt contracted by his guardian for the marriage of his sister. Wallis C.J. dissented from the majority and held that a decree cannot be passed against a minor on his attaining majority or against his estate on a covenant entered into on his behalf by a guardian for his benefit. One of the circumstances mentioned in the majority judgment was the case of a guardian in management giving a bond in renewal of debt binding on the minor, and it was held that in such a case the estate could be proceeded against as the act of the guardian might be regarded as keeping alive by acknowledgment a pre-existing liability. IT is important to note that in that case the capacity to acknowledge a debt was placed on the same footing as the power to pass a promissory note binding on the minor's estate. In the third case a promissory note was passed by the mother as the natural guardian of the minors in renewal of a note passed by the father, and it was held that in such cases the Court has to look into the surrounding circumstances to find out whether the maker of the promissory note intended to exclude her personal liability as guardian but to make the wards liable and that such intention could be inferred if the promissory note was in renewal of earlier promissory notes ultimately leading up to the liability of the father of the minors. IT was further held that in a proper case it was within the competency of a guardian by executing promissory notes to make a minor liable to the extent of the joint family property in his hands.