OFFICIAL ASSIGNEE Vs. NEELAMBAL AMMAL

JUDGEMENT

(1.) This is an appeal against the decision of Stone, J. in an insolvency matter. On the application of some creditors, three brothers, Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar, were adjudged insolvents by this Court in February, 1929. They were described in the order as "of C. K. Narayana Ayyar & Sons". The petitioning creditors did not mention, and the learned Judge who made the adjudication order was obviously unaware, that Ramanatha Ayyar had died five years earlier. There is no suggestion that any application was made to the Court for the administration of his estate under Section 108 of the Presidency Towns Insolvency Act. Ramanatha Ayyar had left a minor son, Subrahmanya Ayyar. In May, 1929, the minor's mother, Meenakshi Ammal, sent a notice to the Official Assignee that Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar had carried on business not as members of a joint family, but as partners under a partnership deed of the 26 May, 1913, that the minor was entitled to a third share of the immoveable property which the partners had bought out of profits of their business and that the Official Assignee had no right to claim that third share of the property. Apparently in consequence of that notice the Official Assignee in August, 1929, gave notice of a motion for a declaration "that the business carried on by C.K. Sundaresa Ayyar and C.K. Viswanatha Ayyar under the name and style of G.K. Narayana Ayyar and Sons was a joint family business carried on for the benefit of the joint family consisting of themselves and C.K. Rule Subrahmanya Ayyar, son of C.K. Ramanatha Ayyar, a deceased son of the said C.K. Narayana Ayyar, and that the assets of the said family, including the shares therein of the said Subrahmanya Ayyar, are liable for the payment of the debts incurred in the said business." And in support of that motion the Official Assignee put in a report to the effect that the business was started by Narayana Ayyar, the father of Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar, that Narayana Ayyar retired from active business in 1911 or 1912, leaving Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar, to manage the business on behalf of their family, that after Ramanatha Ayyar's death Sundaresa Ayyar and Viswanatha Ayyar, who were the only adult members of the family, carried on the business as before, that the business was a joint family business and all the assets of the family were liable for the firm's debts, and that there had been no partition amongst the sons of Narayana Ayyar, who had always continued as a joint undivided family. In answer to that report a clerk of Meenakshi Ammal put in an affidavit to the following effect : Narayana Ayyar had not only three sons, namely, Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar, but also another son, his eldest son, Krishnaswami Ayyar : Narayana Ayyar started business in 1895 as his own separate and exclusive business; about 1909 he took his three younger sons, Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar, as partners and carried on the business under the style of "C.K. Narayana Ayyar & Sons" : Narayana Ayyar : retired in 1912, and that partnership was then dissolved. : Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar carried on business as partners under the same style and executed a deed of partnership on the 26th May, 1913 : Krishnaswami Ayyar never had any interest in the business of his father nor in the business of his father and his brothers nor in the business of his brothers: on the death of Ramanatha Ayyar in 1924 the partnership of the three brothers was dissolved : Ramanatha Ayyar as co-owner with his brothers Sundaresa Ayyar and Viswanatha Ayyar had a third share in the property bought by the three partner-brothers out of the profits of their business; on his death Subrahmanya Ayyar, his minor son, succeeded to that share as co-owner and also had a third share in the property afterwards bought by Sundaresa Ayyar and Viswanatha Ayyar out of the profits of their business, the accounts, of Ramanatha Ayyar's share never having been made up. Before this motion came on for hearing before Stone., J. in September, 1931, the minor Subrahmanya Ayyar had died, and first his mother, Meenakshi Animal, and on her death his sister, Neelambal Animal, had been broughton record as his legal representative.

(2.) It is an odd feature of this case that the existence of Narayana Ayyar's eldest son, Krishnaswami Ayyar, was never mentioned in the Official Assignee's report to the Court which represented Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar as the only sons of Narayana Ayyar. That Krishnaswami Ayyar was the eldest son of Narayana Ayyar and was alive at the date of the Official Assignee's report and is now alive is not disputed. Stone, J. was naturally very surprised at the defective and misleading character of the Official Assignee's report in this respect, and I must say I share his surprise. The omission of the Official Assignee to mention Krishnaswami Ayyar by amending his report or bringing Krishnaswami Ayyar's existence to the notice of the Court in some other way is the more remarkable when we are told that the Official Assignee's solicitors took a proof of Krishnaswami Ayyar's evidence a year and a half before the motion came on for hearing. If I may say so with respect, there are one or two passages in Stone, J.'s judgment which I find a little difficult to follow; but I think the learned Judge was obviously embarrassed by the way the case was put before him, and I agree with him that this case, involving some elaborate and rather difficult questions, was one which should not have been dealt with on motion. The learned Judge says he himself would not have dealt with it on motion if he had had the facts properly stated to him by the Official Assignee in the first instance. However, when the case came on for hearing, what appears to have been contended for the Official Assignee before the learned Judge was that Krishnaswami Ayyar was indeed a son of Narayana Ayyar and his eldest son and had been a member of an undivided family with his father and his three younger brothers, but that Krishnaswami Ayyar had divided from his brothers in 1915, after the death of Narayana Ayyar in 1914, and that from the date of that partition Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar and their sons formed a complete joint family; and it was in respect of that complete joint family, cut short, as alleged, by the separation of Krishnaswami Ayyar from it, that the Official Assignee pressed for the declaration he had prayed for. Stone, J. found as a fact that Krishnaswami Ayyar was never divided from his brothers but that at the time when the motion was heard he was still an undivided member of the joint family with his surviving brothers, Sundaresa Ayyar, Viswanatha Ayyar and Ramanatha Ayyar's minor son, Subrahmanya Ayyar, and further and consequently that there never had been a joint family consisting only of Sundaresa Ayyar, Viswanatha Ayyar and Ramanatha Ayyar's son, Subrahmanya Ayyar, as alleged by the Official Assignee, and therefore the declaration for which the Official Assignee prayed could not be made. The learned Judge therefore dismissed the application of the Official Assignee, and against that dismissal this appeal has been preferred.

(3.) It has been contended before us by Mr. Varadachari for the Official Assignee that, even if, as found, Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar by themselves never formed a complete undivided family without their brother Krishnaswami Ayyar, nevertheless they could form among themselves, to the exclusion of Krishnaswami Ayyar, a joint family firm, and that therefore, assuming that Stone, J.'s finding that the complete joint family, which still existed at the time of the hearing, included Krishnaswami Ayyar is correct, yet the business conducted by his three younger brothers under the style of "C.K. Narayana Ayyar & Sons" may have been a joint family business as alleged by the Official Assignee. The theory put forward is that a joint family business need not necessarily be the business of a whole joint family or a whole branch of a joint family, but it may be the business of some group of members of a joint family or members of a branch of a joint family less than the whole joint family or the whole branch. I am unable to agree with that contention. As I understand the matter, a Hindu joint family firm is a special form of partnership, the members of which must be either the whole of a joint family or the whole of a branch of a joint family. The members concerned in such a joint family firm, including the minor members, have certain rights and liabilities by virtue of their membership of the joint family or of the branch. Those rights cannot be conferred nor liabilities imposed by contract, subject to the possible exception that, if a joint family consists of adult members only or a branch consists of adult members only, then a joint family firm may be started by the members of that joint family or branch with the consent, express or implied, of all of them. But how could some only of the members of a joint family or a branch of a joint family create, for themselves and their sons and grandsons and great-grandsons alone to the exclusion of other members of their joint family or branch, a joint family firm in which their future sons and grandsons and great- grandsons would have an interest by birth and that interest would always be liable for the debts of the firm? If we examine the matter, I think it will be seen that the characteristics of a Hindu joint family firm are the effects of a joint family with its peculiar constitution trading as a unit, a joint body of a particular kind, and, as every one knows, such a joint family cannot be created by contract. There are plenty of cases to show that all the members of a joint family or some of the members of a joint family may trade together and put the profits of their trade or property acquired with those profits into the common stock of their joint family so as to make it joint family property. Rampershad Tewarry V/s. Sheochurn Doss (1866) 10 M.I.A. 490, which has been referred to, appears to me to be one of those cases. But that is very different from what is suggested by Mr. Varadachari here. He has been able to show, what is indeed unquestionable now, that some only of the members of a joint family may hold property in joint tenancy with rights of survivorship. That Was decided in the case of daughter's sons, who are members of a joint family, succeeding to their maternal grandfather's property in Venkayyamma Garu V/s. Venkaiaramanayyamma Bahadur Garu (1902) L.R. 29 I.A. 156 : I.L.R. 25 Mad. 678 : 12 M.L.J. 299 (P.C.); and this Court; has held in Vythinatha Aiyar V/s. Yeggia Narayana Aiyar (1903) I.L.R. 27 Mad. 382 that daughter's sons in those circumstances would hold such property not only in joint tenancy but with the incident of joint family property, that their sons would acquire an interest in it by birth. But to show that some members of a joint family can succeed to property which has the characteristics of joint family property to the exclusion of other undivided members of their own family is very different from showing that some members of a joint family can create among themselves a joint family firm with all its legal incidents. Mr. Varadachari has also referred to Sham Narain V/s. Court of Wards (1873) 20 W.R. 197, a decision of the Calcutta High Court in 1873. In that case some property had been given by a Raja to two out of three undivided brothers for services rendered. The learned Judges found that those two brothers had so held the property as to make, it their joint property with right of survivorship, but not the joint property of all their brothers. That was not, it will be seen, a case of inheritance; but the learned Judges held that those incidents were impressed upon the property by the way the two brothers dealt with it. With great respect I find it difficult to follow the reasoning of the learned Judges in that case. They appear to proceed on the ground that the three brothers might legally have divided among themselves and so have no longer been a joint family: then two of them might have re-united and so formed among themselves a joint family: and into the common stock of that smaller joint family so formed they might have thrown this property acquired by gift from the Raja. With great respect I cannot see how those possibilities lead to the conclusion at which the learned Judges arrived in the case. In Sudarsanam Maistri V/s. Narasimhulu Maistri (1901) I.L.R. 25 Mad. 149 : 11 M.L.J. 353 Bhashyam Aiyangar, J. expressed dissent from that case; and, if it were necessary for the purposes of the present case, I may say that I should with great respect follow that learned Judge in his dissent. But that Calcutta case again is not sufficient for Mr. Varadachari's purpose. Even if it were possible for two members of an undivided family themselves to deal with property so acquired in such a way as to impress upon it the incidents of joint family property for themselves and their descendants alone to the exclusion of other members of the undivided family, that would not show that some members of a joint family or some of the members of a branch of a family for themselves and their descendants alone could create a joint family firm. There is no case, it is admitted, in which it has been so decided; and in my opinion we must reject the contention that Ramanatha Ayyar, Sundaresa Ayyar and Viswanatha Ayyar could have created a joint family business to the exclusion of Krishnaswami Ayyar while they were members of a joint undivided family with Krishnaswami Ayyar.