TADI BULLI TAMMIREDDI Vs. TADI BULLI GANGIREDDI

JUDGEMENT

(1.) This appeal arises out of a suit for partition tiled by the respondent against the appellants. One Gangi Reddi died in May 1917 leaving a widow Subbamma (the 3 defendant). He had two sons, Thammayya, and Bulli Tammireddi, the 1 defendant. The plaintiff is the son of Thammayya and the 2nd defendant is the son of the 1 defendant. Plaintiff's father died in 1902. The plaintiff who attained majority in 1916 lived with the 1 defendant till about July 1919. The Subordinate fudge passed a decree for partition directing the 1 defendant to account for his management of the family properties from six months prior to the death of Gangi Reddi, i.e. from October 1916. He held that the business in opium carried on by the 1st defendant was his exclusive business and not joint family business and that the plaintiff was not bound to bear any part of the loss incurred in that business. As regards the choultry founded by Gangi Reddi, he held that there was no endowment in respect of the usufructuary mortgage in favour of Gangi Reddi relating to Chengondapalli estate. He held that the 1st defendant did not make out his case that the jewels in his possession were his wife's jewels. As regards the 2nd defendant and his sister, he allowed a sum of Rs. 2,000 and Rs. 1,000 mentioned in the will for the purpose of making jewels on the occasion of their marriages but did not fix the amount to be spent for their marriages. The appeal relates to the above point and it is contended for the appellants that the decision of the Subordinate Judge is incorrect: As regards the accountability of the 1 defendant, the Subordinate Judge bases his decision on the ground that the 1 defendant had not been maintaining proper accounts for sometime prior to Gangi Reddi's death and that the plaintiff is consequently entitled to claim an account from October 1916. The case for the plaintiff as laid in the plaint is that the 1 defendant with the object of defrauding the plaintiff "showed differences in the accounts, reduced considerable amounts, and in order to deprive the plaintiff of a share, he converted a considerable amount as jewels worn by women and showed under stridhanam, and even though profit was derived in some transactions, he concealed the same and showed heavy loss, concealed some account books and has been conducting himself in such a way as to cause loss to this plaintiff in all ways", that the 1 defendant misappropriated the properties and that he has a right to demand the 1 defendant to furnish an account from the year 1902 when his father died. The Subordinate Judge has found that the charge as regards the jewels has not been made out and that the 1 defendant was not guilty of secreting any accounts. He, however, is of opinion that the proper accounts were not maintained. As regards the accounts, it is admitted that the 1 defendant filed a criminal complaint against one Subbarayudu on the 24 of April, 1917, of misappropriation of a sum of about Rs. 6,000. Exhibit R is the judgment of the Magistrate in that case. In connection with that complaint a warrant was issued by the Magistrate and the account books of the family were seized and taken to the Police Court, The books were not returned till about October, 1918, The plaintiff filed his plaint in December 1918 and a commissioner was appointed who made an inventory of all the account books in the family, After the seizure of the account books by the Police the 1 defendant did not open regular account books but, according to the evidence, he was making entries on loose sheets of paper which were subsequently entered in the account books, Exhibits III, IV and V filed in the suit. Exhibit V is the rough day book, Exhibit III is the fair day book and Exhibit IV is the ledger. These account books were not kept in the regular course of business from day to day, and so far as the proof of any of the entries in these books is concerned, it is clear that these account books cannot have the same effect as account books kept from day to day in the regular course of business. The question, however, is whether the 1 defendant's not keeping the books from day to day can be said to be such misconduct as would make him accountable during the period that the accounts run. it is not shown that any of the entries in these account books are wrong or that there has been any suppression of entries, It is explained for the 1 appellant that he expected the books in the Magistrate's Court to be returned soon, that he therefore thought he could continue the accounts in those books when they were returned and that during the interval he did not open regular account books. We do not think the mere fact that regular books were not kept would, in the absence of any evidence to show that the accounts now produced are false in any particular, render the 1 defendant accountable especially as the most serious charges made in the plaint as regards the suppression of account books, making of false entries in the account books and misappropriation of jewels, have not been made out. It is now well settled that, when an account has to be taken with a view to make a partition of joint family properties, the account is merely an enquiry into the existing assets and that the head of the family cannot in general be called upon to defend the propriety of his past transactions of the family except in cases of fraud, misappropriation or gross reckless waste. We need only refer to Balakrishna Ayyar V/s. Muthuswami Aiyyar (1908) I.L.R. 32 Mad. 271 : 19 M.L.J. 70 Narayan Bin Babaji V/s. Nathaji Durgaji, (1904) I.L.R. 28 Bom. 201 Parmesh-war Dube V/s. Govind Dube (1916) I.L.R. 43 Cal. 459, Bhowani Prasad V/s. Jagarnath Shaha, 4 and Kristnayya V/s. Guravayya (1909) 9 Cal. L.J. 133. All that a coparcener seeking partition is entitled to is an account of the properties which exist at the date of partition or at the date when, owing to a demand for partition, there has been a severance of status and accounts will have to be taken in so far as they relate to the ascertainment of what the properties in existence are. The manager of a joint family being the accounting party has to file an account as to the properties available for partition but, as pointed out in Parameshwar Dube V/s. Govind Dube and Kristnayya v. Guravayya (1916) I.L.R. 43 Cal. 459 the other members of the family are not bound to accept the statement of the manager as to what the properties consist of and the enquiry directed by the Court should be conducted in the manner usually adopted to discover what in fact the property consists of and not what the manager says it is. In such a case it is open to the members of the family to show that expenditure which the manager says has been incurred has not been incurred or that the savings out of joint family funds have not been entered in the accounts. We are therefore of opinion that the direction of the Subordinate Judge that the 1 defendant is to account for the management from October 1916 cannot be supported. The direction ought to be that the 1 defendant should file an account of the properties existing and available for partition at the date of the plaint, the plaintiff being entitled to surcharge the accounts and to show that items of expenditure said to have been incurred were not, as a matter of fact, incurred or were not incurred to the extent mentioned in the accounts filed by the 1 defendant or that more properties are available for partition than those mentioned in 1 defendant's accounts.

(2.) As regards the opium business which the 1 defendant carried on, it appears from the evidence that he entered into partnerships with those who got licenses from Government to vend opium and that large amounts were sent by him for financing the business. Gangi Reddi, the grandfather of the plaintiff, died in 1917 and the case for the defendant and the evidence adduced by him is to the effect that, though he was bed-ridden for about six months before his death, he was giving instructions for the management of the family affairs and that the 1st defendant was transacting business after informing Gangi Reddi and getting his directions. An attempt was made by the 1 defendant to show that this opium business which he carried on was carried on with the consent and under the directions of Gangi Reddi: but this evidence has been rightly discredited by the Subordinate Judge. The evidence is that in 1901 and 1902 Gangi Reddi did business in opium but that he stopped that business and that, although he subsequently carried on extensive business in other directions, he did not do any business in opium. It is suggested that it was because he thought it was morally wrong to do so, but the probabilities are that he stopped business because, as the plaintiff's vakil contends, the business ended in a loss,

(3.) It is argued by Mr. Rangachari for the appellants that the business in opium was being carried on by the relations of the plaintiff and the 1 defendant, that the 1 defendant as managing member of the family after making enquiries was satisfied that it was a profitable business and that he did the opium business bona fide and for the benefit of the family. The contention for the plaintiff is that the managing member of a family while he is entitled to carry on an ancestral business has no right to embark on a new and speculative venture, that the business would not bind the other members of the family, that in the present case the business which the 1 defendant entered into, was illegal as it contravened the provisions of the Opium Act and that the managing member who enters into unlawful transactions has no right to saddle the family with the losses incurred therein. The business was commenced by the 1 defendant on the 26 of March 1917 as evidenced by Exhibit A, the deed of partnership between the 1 defendant and others. Gangi Reddi died in May 1917. The plaintiff had at that time attained majority and it is not suggested that he was taking any part in the management of the family affairs. He was a student before and, although he was living with the 1 defendant and his grand-father Gangi Reddi, it is not shown that he was aware of the business that was being carried on in opium. The 1 defendant in his evidence admits that he did not consult the plaintiff before he began the business. The finding of the Subordinate Judge is that the 1 defendant was managing the family affairs for at least 6 months prior to the death of Gangi Reddi though the case for the 1 defendant is that Gangi Reddi was himself managing the family affairs till the date of his death. Even assuming that the 1st defendant was managing the family affairs at the date when the opium business began, we do not think he had power to commence a new business without the concurrence of the plaintiff who was an adult member of the family and living with him at the time. As between the members of a joint family inter se, whatever may be the powers of the manager as regards the minor members of the family, there is no authority for holding that he can start a new venture without the concurrence of the adult co-parceners. His position cannot be better than that of a partner and whatever may be the rights of third persons dealing with the family, as between the members of the family inter se a new trade or business commenced by one member, even though he is the managing member, without consulting the adult co-parceners would not bind them in the absence of evidence of acquiescence. It is argued by Mr. Rangachari that no new business can be carried on by the managing member unless he was given a discretion in the matter : but it seems to us that the remedy is obvious. He should get the consent of the adult co-parceners. In the case of minor members, the position of the Kartha is that while he has power to carry on an ancestral trade that has devolved on the joint family he cannot bind the minors by embarking on new ventures. In D. McLaren Morrison v. Verschoyle (1901) 6 C.W.N. 429, it was held that the Kartha of a joint family possessing an ancestral business has an implied power to pledge the credit and property of the family but only for the ordinary business of the family and that he cannot do so for the purpose of embarking on a business which is not the ancestral business. The power of the manager to bind the family by embarking on a new business was considered by Abdur Rahim and Spencer, JJ. in Kadiri Kanakkappillantapath Abdur Rahiman Kuttti Haji V/s. Kochipalli Hussain Kunhi Haji and it was held that the junior members of a Malabar Tarwad are not liable for the debts contracted by the karnavan in the course of a trade carried on by him unless it is shown either that the trade was a family business or that it was carried on by the karnavan with the consent of the junior members. So far as trading families are concerned, there is not much difference between the position of a karnavan in his relations with the junior members and that of a manager of a joint family under Mitakshara with his co-parceners. We do not think that in the present case the trade carried on in opium by the 1 defendant is binding on the plaintiff who was an adult member at the time when it was commenced and who admittedly was not consulted about it and who, on the evidence, is not shown to have acquiesced in the business or to have known that it was being carried on. The business was of a highly speculative character, the 1 defendant financing the various renters of opium in consideration of a share of the profits. According to the ledger, Exhibit IV, between February a December, 1917 over Rs. 55, 442 were advanced out of the family funds in respect of the opium business of 1917--1918.