OFFICIAL ASSIGNEE OF MADRAS Vs. NRAJABADAR PILLAI (MINOR)

JUDGEMENT

(1.) This is an appeal from the judgment of Krishnan, J. in a partition suit--from so much of his decree as directed that the first defendant should account for a sum of Rs. 6,500 shown to have come into his hands as part of the joint family assets. The 1 defendant was the manager of a joint Hindu family governed by the Mitakshara Law, the other persons interested being a minor brother, and their mother and sister who were entitled to rights of maintenance. The 1 defendant has become an insolvent and the Official Assignee of Madras on behalf of his creditors represents his interest. The facts so far as they are relevant are that Rs. 6,500 which formed part of the ancestral property were deposited in a Bank, and, some years ago, drawn out by the 1 defendant. Of that amount Rs. 2,500 were deposited with Messrs Beardsell & Co., as security for the honesty of the 1 defendant who was entering the service of that firm as cash-keeper. The balance has disappeared. There was a suggestion that it was used by the 1 defendant for purpose of his own marriage or other legitimate family expenses. But this was negatived by his mother who stated that she had found the necessary money for the marriage and by the fact that the sums were drawn out sometime after the marriage, and no evidence was forthcoming of any other necessary family expenditure which could not be met out of the income. The 1 defendant was not called as a witness. .It was suggested that he was helping his relations as against his creditors which might account for the Official Assignee not calling him as a witness. But all his affairs were in the hands of the Official Assignee who had every opportunity of examining the insolvent and ascertaining the true facts. The money was drawn by the 1 defendant in 1914. In 1918 he was found to have committed defalcations in his office of Cash-keeper to Messrs Beardsell & Co., amounting to Rs. 15,000. It is possible that the balance of the money so drawn out by the 1 defendant was invested in some other manner. At the time, he told his mother that he was lending a large part of it to a Muhammadan, a business man; but there is no evidence that this loan is still outstanding, and it is much more probable that it was ultimately used to meet the defalcations in Messrs Beardsell & Co., or to meet the 1 defendant's losses in some unfortunate speculations which led to his making away with this large amount of Beardsell's money.

(2.) The learned Judge has held that the 1 defendant has received these moneys and has not accounted for them except as to the Rs. 2,500 mentioned. He has held further that it is a rule of Hindu Law that a co-parcener upon partition is not entitled to call upon the managing member to render an account of his past management so as to debit him with any loss caused to the joint property by his management but can only get his share in the properties available for division at the time of the partition, and for this proposition he quotes Balakrishna Aiyar v. Muthuswami Aiyar (1908) ILR 32 M 271 and Krishnayya V/s. Guruvayya . He points out that there is an exception to this rule, when a person is able to establish misappropriation on the part of the manager. He also holds that there is another exception, namely, that if a co- parcener is a minor, the manager can be made to account generally in respect of the corpus of the estate, at any rate where there are no adult members except the manager; and as the plaintiff in this case was at all material times a minor, he holds that the first defendant must bring into account this sum of Rs. 6,500.

(3.) I agree to the result arrived at, but I do not agree with the reasons given. That a managing member is not bound to give a general account of his dealings, that, in the absence of fraud or misappropriation, the managing member cannot be called upon to justify his past transactions, that the manager is not bound to keep general accounts and that co-parceners cannot complain if the manager in his discretion favours in his expenditure one of the co- parceners at the expense of the others are matters, I think, beyond controversy; nor do I find any authority in support of the proposition that in this matter there is any difference between the position of an infant co-parcener and another. In fact, on an examination of the cases establishing these propositions, it will be found that in most of them there were persons who were minors at the date of the partition or had been minors at the time of the expenditure by the manager. But in respect of assets proved to have come into the hands of the manager, in my judgment,, he has to account. It is not enough for him to say that he has no longer got those assets; nor do I think it right to say, once it had been proved that the assets came into his hands, that the co-parcener has also to prove that they remained in his hands at the date of the partition. In my judgment, capital monies proved to have come into the hands of a manager must be considered as available for partition, in the absence of some evidence showing what has happened to them. It is not necessary in this case to discuss what would be sufficient evidence. It may be that the proof of family necessities which would involve an expenditure greater than the income would lead to the presumption that the assets have been properly expended on behalf of the family. But, in this case, there is nothing of the sort, and I think that the proper inference to be drawn is that these monies have been misappropriated by the managing member. In this connection I think that misappropriation means nothing more than the expenditure of the money on other than justifiable family expenses. Rs. 2,500 were clearly misappropriated. It was a legitimate family purpose to place that money with Messrs Beardsell & Co., as security for the good behaviour of the managing member. But it remained joint family property and, when he caused the loss of that money to the family by his misconduct as an employee of Messrs Beardsell & Co., in my judgment, he clearly misappropriated the money. As regards the balance of Rs. 4,000 it was traced into his hands. It was proved that it was deposited in a Bank and that he drew it out. There is no evidence that he spent it on a family necessity, or that there was any family necessity for which such a sum of money would have been required, and, in my judgment, under those circumstances, when the assets are traced into the hands of the managing member, he is bound to account for them on a partition, whether his co-parceners are minors or majors, and in this case the first defendant and the Official Assignee representing him have entirely failed to do so. If authority were required for these propositions, I think, it is to be found in the account that was ordered in Balakrishna Aiyar V/s. Muthuswami Aiyar (1908) ILR 32 M 271 : 19 MLJ 70, and in the clear judgment on the point of Phillips and Krishnan, JJ. in Krishnayya V/s. Guruvayya , particularly of Krishnan, J. at page 509 where he states the law correctly. It was suggested that Tami Reddi V/s. Gangu Reddi (1921) ILR 45 M 281 : 42 MLJ 570 was an authority to the contrary, but as I read the judgment, particularly on page 287, it supports the view expressed above.