HANUMAYYA Vs. R V N APPA RAO BAHADUR

JUDGEMENT

(1.) Appeal No. 217 of 1961 arisec out of O.S. No. 25 of 1956 and Appeal No. 258 of 1961 out of O.S. No. 11 of 1956 on (the file of the District Judge. West Godavari. Both the appeals though arising out of different suits, raise common points of law and fact. Both the suits are based on pro-notes executed by 1st defendant, the father of defendants 2 and 3. The fisrst defendant had borrowed Rs.25,000 from Mothey Oangaraju and executed Exhibit A-1 on 9th October, 1937. That note was renewed by him from time to time. The first renewal was in 1140 (Exhibit A-2) and there after in 1943 and 1946 (Exhibits A-3 and A-4). The amount was payable with compound interest at 7 1/2 per cent per annum. It may be noted at this very stage that the joint family of which the first defendant was the karta became divided even prior to the date of Exhibit A-3. But the promise rested content with getting renewals from the first defendant alone.

(2.) These renewals augmented both the principal and interest. After Exhibit A-3, Mothey Gangarafu died. The pro.note was renewed in favour o his minor adopted son who is the plaintiff in O.S. No. 11 of 1956. Some payments were made thereafter by the first defendant. He paid a sum ef Rs 5,000 on 15th November, 146, and a further sum of Us. 4,000 on 14th July, 1947 at evidenced by Exhibit A-6. After a further renewal for a sum of Rs. 40,286-8-5 ia 1959 (Exhibit A-7) and payment of Rs. 3,000 as borne out by Exhibit A-8 dated 1st November, 1951, the suit pronote was executed on 22nd September, 1952, for a sum of Rs. 46,846. Interest stipulated this time was at the rate of 12 percent per annum compound, as against the previous usual rate of 7 1/2 per cent per annum compound. However on 1st March, 1953, the first defendant persuaded the plaintiff into an agreement to the effect that on payment of the amount due under the suit pro-note With interest at 9 per cent on or before 1st March, 1953, the entire debt shall stand discharged. The condition stipulated could not however be fulfilled. Then, on 19th September, 1955, the first defendant paid a sum of Rs. 5 towards interest and give a letter to the plaintiff acknowledging his liability under the pixy-note. As no further payment was made, the suit was brought against him in 1956. By this time, the status of the first defendant's family has already undergone a thorough change. At the time of the original debt the first defendant was the karta of the joint Hindu family of which defendants 1, 2 and 3 wen members. Defendant No. 2 got a registered notice issued on 30th June, 1941 to the first defendant indicating his unequivocal intention to separate himself from the joint Hindu family. He demanded partition of the joint family properties forthwith. The important items of family properties were in fact divided and with the help of a lawyer a registered partition deed was executed on 18th July, 1942. This partition deed embodies the entire arrangement wfth regard to the allotment of various' propertied making a provision as well for discharge of the family debts. In addition to the properties which duly fell to his share, the father was allotted further properties mentioned in Part II of Schedule 'A' properties earmarked for discharging the family debts. The total extent of family debts shown was Rs. 5,70,000.

(3.) The properties earmarked for the purpose comprised valuable land, in Krishna, West Godavari and Visakhapatnam districts. The 2nd defendant, after a second thought, came to the conclusion that the properties earmarked actually exceeded for in value the total extent of the family debts; He further found that the provision made for the unmarried daughter in the partition deed as also that made for certain alienations, prejudically affected his interest He therefore brought a suit, in O. S No. 210 of 1942, for reopening the partition on the Original Side of the Madras High Court, alleging inter alie that the properties allotted to the father and earmarked for payment of debts were not less than Rs. 9 lakhs in value and thus exceeded considerably the extent of debts' due. The suit was eventually decreed. A preliminary decree was drawn. Both 2nd defendant and defendants 1 and 3 preferred their appeals O. S.A. Nos. 2,and 11 of 1944. These appeals finally ended in a compromise decree. Exhibit B-20 is a copy of the compromise decree. The effect of the compromise decree inter alia was that the debts mentioned in the list Exhibit B,21 aggregating to Rs. 5,70,000 were confirmed as debts payable by the joint family at the time of its partition and defendants 1 to 3 were declared entitled in Part 11 ot Schedule 'A' of the partition deed to equal shares in what was found to be over and aoove the value of Rs. 5,70,009 and the floatingcharge in Sobhanachela Pictures. The share of the 2nd defendant in the excess so determined in fact was found to be of the value of Rs. 1,50,000. Towards this excess hare, he was given certain propeities from out of Part II of 'A' Schedule to the partition deed. The orginal partitino of all the partible properties as provided in the partition deed was given effect to immediately after the deed and prior to the suit of 2nd defendant itself. In puuate of that partition, the villages were separately registered in the names of the father and sons under the sanction of the District Collectors of Krishna and Weit Go davari, etc, Thereafter all the defendants started separately managing their properties. Such a partition made under a formal registered deed and implemeated wherever necessary under the authority of the District Collector could not remain a secret. Similarly, the arrangement with regard to payment of preparation debts as made in the deed could not remain a seale book to the creditors who must be anxious to get their money. The plaintiff even after this was content with obtaining renewals from 1st defendant only in 1946, 1949 and 1952. After abolition of estates, the Government had deposited some amounts in the Estates Abolition Tribunal towards compensation in rsepect of certain villages, the plaintiff filed a claim petition in O,P, No, 607 of 1953. Of course, his application wan in relation to the shares of all the defendants. But he pressed his claim only against the share of the first defendant. He got a sum of Rs. 25,792-10-7. Thereafter the was content with endorsement on the suit pronote made by the first defendant alone which was made on 15th Septemper, 1954. Even the suit that be brought was against the first defendant only. Defendant 2 and 3 were added under the order of the High Court dated 26th February, 1960 in C. R. P. No. 1194 of 1958. The suit was for recovery of a sum of Rs. 39,000 even though the orginal debt was only Rs. 25,000 and a total sum of Rs. 37,792-10 7 was paid towards it. This wa due to the fact that interest charged was compound interest and at sufficiently high rate.