BENARES BANK LTD Vs. KRISHNA DAS

JUDGEMENT

(1.) These two appeals arise out of two suits instituted by the Bhagalpur branch of the Bank of Banares the first for the value of certain hundis drawn by the firm of Gobardhan Das Krishna Das on Gobardhan Lal which were duly cashed by the Bank bat dishonoured on the due dates, and the second for the amount due from the firm on an overdrawn current account. Gobardhan Lal, who had guaranteed the overdrafts, was joined as a defendant in both the suite, while the other defendants were Gobardhan Das and his sons. Gobardhan Lal attempted to deny his liability for the overdrafts but on this point the Subordinate Judge decided in favour of the plaintiffs and we are no longer concerned with the question of his liability. The plaintiffs alleged that the firm of Gobardhan Das Krishna Das with which they dealt consisted of Gobardhan Das and his sons and they prayed for a decree against the whole family. The learned Subordinate Judge found that the business of the firm was a family business in which the son Krishna Das had taken active part when he came of age, and that a new firm established later under the name of Krishna Das Raghunath Das, two of the sons of Gobardhan Das, was merely a branch of the original firm and was also a family trading concern. But when he came to discuss the question of whether the sons of Gobardhan Das were also liable for the debts, he did not consider it as a question of the liability of partners in a trading firm, but merely as that of the liability of members of a joint family whose managing member had incurred debts on their behalf. He solved the difficulty by pointing out that it was the pious duty of the Bona to pay debts incurred by their father, and he, therefore, pronounced judgment against all the defendants; but he observed that the sons were liable not personally but only to the extent of their undivided interest in the co parcenary property. The Bank appeals from that decision, claiming that the sons should be held personally liable.

(2.) Mr. Shiveshwar Dayal on behalf of the appellants argues in the first place that those sons of Gobardhan Das who were of age at the date of the institution of the suit ought to have been held liable, not merely as members of a joint family benefited by the loan or as sons under the pious duty of meeting their father's debts, but as partners in the firm, responsible for its liabilities, and so to be treated as the actual borrowers of the money. He points out that the learned Subordinate Judge has found that the business is a family business and that after Krishna Das came of age he took part in that business, and he argues that on that finding Krishna Das ought to have been held personally liable for the debts of the firm. He relies upon the principle laid down in the case of 118 Ind. Cas. 494 Somasundaram Chettiar V/s. Raja Kanngo Chettiar 118 Ind. Cas. 494; (1929) M.W.N. 262 : A.I.E. 1929 Mad. 573 : Ind. Rul. (1929) Mad. 814. wherein it was pointed out that when the members of a joint Hindu family trade together as partners of a firm, they are all personally liable for the debts of that firm. Mr. Jafar Imam on behalf of the respondents argues that the plaintiffs are not entitled to a personal decree against any member of the family except the managing member, relying on the decision in Chalamayya V/s. Varadayya 22 M. 166, but the learned Judges in that case definitely pointed out that parsons who are found by their conduct to have constituted themselves partners in a family business would be personally liable. In the case of Jwala Prasad V/s. Buda Ram 134 Ind. Cas. 420 : 12 P.L.T. 707 : 10 Pat. 503 : A.I.R. 1931 Pat. 328 : Ind. Rul. (1931) Pat. 452 which is also cited by Mr. Jafar Imam, a minor member of a Hindu family having a joint family business was held not to be personally liable, but it was there expressly pointed out that the minor was exempted from personal liability because he was not of age when the suit was instituted and there was nothing to show that he had ratified the contract on attaining majority. A minor member of a joint family trading partnership is not personally liable for the debts of the partnership if on attaining majority he dissociates himself from the business of the family, but if on attaining majority he expressly ratifies the contracts of the firm or if he proceeds to take an active part in its business, then he is personally liable as a partner for the debts of the firm. Mr. Shiveshwar Dayal argues reasonably that a man when he becomes an active member of trading partnership must be presumed to take it as it stands, that is to say, he becomes liable for the debts of the him and entitled to his share in the assets, and he cannot repudiate the liabilities while canying on the business as a going concern. The question here is principally one of fact, of whether those members of the family who were suit juris at the time of the institution of the suit had by taking an active part in the business rendered themselves liable for its debts. Only three of the sons, Krishna Das, Baldeo Das and Raghunath Das were of age at the time of the institution of the suit. The rest of the sons of Gobardhan Das were minors up to the date of the decree and, so far as we know, they are minors still. It matters little for the purposes of this appeal whether they have come of age or not, because in the circumstances there is necessarily nothing on the record to indicate whether they have proceeded to take an active part in the partnership or whether they have otherwise ratified the contracts. We are concerned here, therefore, only with Krishna Das, Baldeo Das and Raghunath Das.

(3.) The learned Subordinate Judge has found that when Krishna Das came of age he began to take part in the business of this firm, and he definitely does not believe the story of Krishna Das that when he transacted business on behalf of the firm with the Benares Bank, he was acting merely as a messenger. The new firm which the learned Subordinate Judge finds to have been a branch of the original firm and equally a family trading partnership bears the name of Krishna Das Raghunath Das. It is proved by the evidence of Jugal Kishore Lal, a Mukhtar of Bhagalpur, that in 1923 Krishna Das himself wrote an account of this firm to be inserted in Thacker's Directory wherein he described Gobardhan Das as one of the partners and himself Krishna Das as the managing proprietor. Moreover Krishna Das, who was then bf age, himself cashed several of the cheques which form the subject matter of one of the suits. Gobardhan Das Krishna Das endeavoured to make out that Krishna Das or the other sons had no concern with the firm of Gobardhan Das Krishna Das, that all the family was maintained by the maternal grandmother of Krishna Das and that Krishna Das himself traded separately from his father. A relation of the family name Manik Lal gave evidence to the same effect and another shop-keeper said that he never saw Krishna Das doing any work in the shop of Gobardhan Das Krishna Das. But the learned Subordinate Judge did not believe this evidence, and it is clear that Krishna Das at least was an active partner in the firm. Badri Lal who, is of the same caste as the defendants, says that all the members of the family are jointly interested in the shops, which he infers from the fact that he has seen them all sitting and working in them, and Muni Lal, another Agarwala, gives evidence to the same effect. Mr. Jafar Imam on behalf of the respondents suggests that the mere fact that the sons sit in the shop does not justify a finding that they have definitely accepted that position as partners in the firm, but the evidence goes farther than that, and is to the effect that the sons do the work of the shops. Of Raghunath Das in particular, it must be held that when he does the work of the shop for a firm which actually bears his name as one of the partners, he has definitely accepted his position as a partner in the joint family business, and indeed the same inference may fairly be drawn with regard to Baldeo Das, who must be held to have also accepted his position as partner in the family business when he continued to do the work of it after coming of age. I would, therefore, modify the decision of the learned Subordinate Judge to this extent that Krishna Das, Baldeo Das and Raghunath Das should be held personally liable under the decree.