YESHVANT DATTATRAYA Vs. SHRIPAD SADASHIV

JUDGEMENT

(1.) THE suit from which this appeal arises was filed by the plaintiff on. a promissory note for Rs. 1,391-12-0 passed by defendant No.1. Defendants Nos. 2 to 7 were made party-defendants as members of a joint and undivided Hindu family along with defendant No.1, and on the allegation that) the money was borrowed for the purpose of a joint family business. THE trial Court held that a certain cloth shop was a joint family business, that the debt was incurred for that business and that the shares of the defendants in that business were liable for the satisfaction of that debt; but in the case of defendants Nos. 1, 5 and 6, the trial Court held that as they were taking an active part in the conduct of the business, they were personally liable. From that decision defendant No.6 preferred an appeal to the lower appellate Court. THE lower appellate Court confirmed the decree of the trial Court. From that order an appeal was preferred to this Court. THE appeal came up before Mr. Justice Lokur,. and on March 1, 1943, that learned Judge sent down two issues to the trial Court for trial. THEse two issues were: (1) Whether, though the promissory note in suit was passed by defendant No.1 alone,, defendant No.6 also was in reality a contracting party or whether he can be treated as being a contracting party by reason of his conduct ? or (2) Whether he subsequently ratified it ? THEse issues were tried, and there was an appeal from the findings before the learned District Judge; and the learned District Judge answered both the issues in the negative; but with regard to the second part of issue No.1, he made his finding subject to certain reservations and it is these reservations which have been the subject of controversy before us. THE learned District Judge held that defendant No.6 had taken, part in the working of the cloth shop which was a joint family business and he considered a decision of our Court in Gokal Kastur v. Amarchand (1907) 9 Bom. L. R. 1289, and came to the conclusion that in view of that decision, if defendant No.6 took part in the working, of the cloth shop, then the second part of issue No.1 framed by Mr. Justice Lokur would be in the affirmative; or, in other words, according to the learned District Judge,, the mere fact that defendant No. & had taken part in the working of the cloth shop-was sufficient to warrant his being treated as being a contracting party by reason of that particular conduct of his, namely, taking part in the working of the cloth shop.

(2.) THE principle of Hindu law on this particular question has been enunciated by Sir Dinshah Mulla in his well-known treatise on Hindu Law: THE manager is liable not only to the extent of his share in the joint family property, but, being a party to the contract, he is liable personally, that is to say, his separate property is also liable. But as regards, the other co-parceners, they are liable only to the extent of their interest in the family property, unless, in the case of adult co-parceners, the contract sued upon, though purporting to have been entered into by the manager alone, is in reality one to which they are actual contracting parties, or one to which they can be treated as being; contracting parties by reason of their conduct, or one which they have subsequently ratified.

(3.) TURNING now to the decision of our Court in Gokal Kastur v. Amarchand (1907) 9 Bom. L. R. 1289 which seems to have caused some difficulty in the mind of the learned District Judge, it is important to note that as the facts set out at p. 1289 clearly show, the firm in that case, in respect of which the decision was given, was a partnership firm; and even in the judgment itself Mr. Justice Chandavarkar at p, 1291 begins his judgment by saying that the debts in dispute were contracted by Kastur as the manager of a joint Hindu family of which he and the defendants were coparceners for the purposes of a partnership business of that family. Later on, Mr. Justice Chandavarkar considers the judgment of the Madras High Court in Chalamayya v. Varadayya (1898) I. L. R. 22 Mad. 166 which laid down that a creditor of a joint Hindu family was not entitled to a personal decree against any coparcener other than the manager who contracted the debt on behalf, of the family, and considers that proposition as not sound; then he proceeds to hold that the coparceners other than Kastur the manager were personally liable inasmuch as they must be treated as having acquiesced in the course of the dealings of the joint family concern. Now with great respect to the learned Judge, once he found as a fact that the business was a partnership business, it was unnecessary to consider the question of Hindu law. If the firm was a partnership business, undoubtedly all the members of that partnership were personally liable to the creditor. The question could only arise for determination if it was a joint family firm. In our opinion, therefore, this particular observation of Mr. Justice Chandavarkar is an obiter and not binding on us; but even assuming that this statement of the law is binding on us, it must be read in its own context. Mr. Justice Chandavarkar first cites with approval a dictum from the same decision of the Madras High Court to which I have just referred, Chalamayya v. Vatttdayya, which lays down that the acquiescence on the part of a coparcener in the business must be such as to warrant his being treated in the matter as a contracting party. Having expressed his approval of this statement of the law, the learned Judge then proceeds to enunciate the proposition to which I have just referred. Therefore it is clear in our opinion that the acquiescence referred to by Mr. Justice Chandavarkar is not any acquiescence by a coparcener in the joint family business but such an acquiescence as would warrant his being treated as a contracting party; or, in other words, his conduct quae the joint family business must be such as to entitle the Court to draw a legitimate inference that he could be regarded or considered as a contracting party along with the manager.