HINDUSTAN COMMERCIAL BANK Vs. SOHANLAL GAGU MAL

JUDGEMENT

(1.) THIS case has been referred to a larger Bench by my Lord, the Chief Justice and Pandit J. , to determine, whether or not a Hindu son is bound to discharge his father's debts not incurred for necessity or to discharge his antecedent debts, the same being not raised for illegal or immoral purposes? The debt in question was incurred by the father by standing surety for one of his sons. It has also been argued that the son is not bound to discharge his father's surety debts by reason of his pious obligation to do so, when the father stands surety for the debts of a stranger. The reference was necessitated because the learned counsel for the appellant as well as the respondents relied on the decision in Faqir Chand v. Sardarni Harnam Kaur, AIR 1967 S. C. 727. This decision reversed the Full Bench decision of this Court in Faqir Chand v. Sardarni Harnam Kaur, AIR 1961 Punj. 138.

(2.) IN order to resolve this controversy and to provide the necessary background, it will be necessary to state the relevant facts, Mohan Lal was the sole proprietor of messrs. Gagoomal Mohanlal and Company (hereinafter referred to as the Firm), this Firm had dealings with the Hindustan Commercial Bank Limited, Amritsar (hereinafter referred to as the Bank ). The Bank had given cash credit facilities to the Firm to the extent of Rs. 85,000/ -. On 26th January, 1945, Gagoomal, father of Mohanlal, gave a letter of guarantee to the Bank for "the payment of all moneys which are now or shall, at any time, hereafter, during the continuance of this guarantee, be due from the principal to you on the general balance of the said account with you and of all other Bank's charges and all costs and expenses which you may incur in enforcing or obtaining payment of any such outstandings. " The guarantee was a continuing guarantee and the only other clauses, that need be noticed in the same, are Clauses 7 and 8, which are reproduced below:-

(3.) IN May, 1948, the Bank filed a suit to recover the aforesaid amount against gagoomal and the Firm on the basis of the equitable mortgage. A preliminary decree was passed in favour of the Bank on the 26th of January, 1949. The amount sued for was made recoverable by the sale of the mortgaged properties in terms of Order 34, Rule 4 of the Code of Civil Procedure. It was also provided that if the defendants did not pay the decretal amount by the 25th of April, 1949, the mortgaged property or a sufficient part thereof would be sold by auction. And if the sale proceeds were not sufficient to meet the obligation, it would be open to the Bank to apply for a personal decree against the defendants. The preliminary decree was made final on the 18th of August, 1949. The Bank then made an application for execution of the final decree.