JOHARMAL LADHOORAM Vs. CHETRAM HARISING

JUDGEMENT

(1.) The plaintiffs sue the five defendants as members of a joint Hindu family, trading for the purposes of these contracts in the name of Harising Chetram, for a sum of Rs. 6625-9-6, the differences due to the plaintiffs for sales of linseed. The contracts sued upon were entered into by the 4th defendant, Hakamchand, on account, as contended by the plaintiffs, of the other defendants in the month of September 1911 for the September settlement. Defendants 1 and 2, Chetram Harising and Beniram Harising, resist the plaintiffs claim on the ground that the family was divided shortly before these contracts were made in September 1911 and that they, the said defendants 1 and 2, are the only partners in the firm of Harising Chetram. They deny that the defendant 4, Hakamchand had any authority to enter into contracts on their behalf or that they are bound by any contracts so entered into by the said Hakamchand. They further deny liability on the ground of their constituting a joint Hindu family with the other two defendants, Khubchand and Hakamchand, although they admit that the 5th defendant Kapurchand is the son of the first defendant Chetram and a partner in the firm of Harising Chetram. It is further admitted that Chetram, Beniram and Kapurchand now constitute a joint Hindu family as they reunited after the partition of 1911. The defendants further contend that Hakamchand was a minor at the date these contracts were made with the plaintiffs and as such he was not competent to represent the joint family even assuming that it had then been a joint undivided Hindu family, nor had he received any express authorisation from the managing members of the firm of Harising Chetram & Co. to act as their agent in Bombay. Lastly, the defendants contend that the contracts sued upon are wagering contracts unenforceable at law.

(2.) It is not altogether easy perhaps to define with precision what is usually meant in these Courts by a joint Hindu family firm. It appears to me that a firm must be regarded like any other joint family asset if it, in fact, belongs to the joint family; and nothing is really gained by insisting upon the peculiar character of the property and then introducing many legal notions which are appropriate rather to partnerships in the common sense than to the special concept of the joint Hindu family. It may be, and very often is, the case that a business is carried on by the members of a joint Hindu family for the benefit of the entire family. In such cases there may be many members who do not actively participate in the conduct of the business; there may be many members who are minors; and it is only by a confusion of ideas that these can be associated with those who are actively carrying on business us partners in the ordinary commercial sense. Nevertheless, if it be found, as a fact, that such a business was being carried on by any one or more members of a joint Hindu family for the benefit of the other members, particularly if such business had been originally established to the detriment of the family property and handed down hereditarily, then the resultant liability of all the members of the family would be referable, I think, to the notion of managership by one or more members for the benefit of the rest in the usual sense in which the relations of the manager and other members of the family have often been accepted and defined in all the Courts, Again, it may be, and often is, the case that one or more members of a joint Hindu family start a business of their own, not at the expense of the joint Hindu family nor with the intention of sharing its profits and losses with the other members. Here it becomes clear at once that the position of the members so carrying on a joint family business and their liabilities to the other members have to be regulated with reference to the extent to which the conduct of such a firm and the resulting profits fall within the legal notion of self-acquisition. Great difficulties would likely be here introduced by the nucleus doctrine but with those I am not now concerned. Assuming that a joint Hindu family carries on a business by one or more of its members for the benefit of the rest of the family, which is the common case, then the liability of the other members not actively concerned in the conduct of the business would, I take it, be referable, as I have just said, to the theory of managership and would probably be restricted to the share of each such member in the joint Hindu family property. It might be doubted whether any personal liability beyond that can be attached to members of the family not actively carrying on the business, not in the commercial sense partners and, therefore, not parties to any contracts made with the firm as a firm. That is one point in which a distinction might well be drawn between what is commonly called a joint Hindu family firm and a firm in the true commercial sense. The difficulty in all cases of the kind, with which I am now dealing, arises where firms so called are started by members of a numerous joint Hindu family, many of whom afterwards repudiate liability, although if the concern turns out successful they would probably be willing enough to share in the profits. In all such cases it becomes difficult to define with precision the limits of liability attaching to members of a joint Hindu family who may not themselves have had any connection with the business carried on by the other members in other parts of the country in a name which is afterwards assigned by creditors to a joint family firm. And there is this distinction too, no doubt, that these family firms are very often handed down, as long as they continue to be profitable, from father to son and are really regarded in much the same light as any other joint family ancestral property.

(3.) In the present case it is not denied that the firm was established, say, thirty years ago, or thereabouts, and was carried on as a joint family concern up to the, year 1911. Whether every member of the family, then alive, was actively associated with the conduct of the business, might be difficult to prove; and assuming that some were not, then the question would arise whether they were personally liable as partners in the ordinary sense, or whether taking them to be members of the family represented in the conduct of the business by the managers, they would not at least be bound by the acts of such managers to the extent of their share of this and all other joint family property in which as co- parceners they had a share. I do not think that it is necessary in the present case to pursue this process of analysis further because there does not appear to me to be any practical difficulty to be surmounted. There can be no question but that defendants 1 and 2 used at any rate to manage the business while it was admittedly a joint ancestral family business and are still carrying it on and managing it as a firm in the same name. If, then, it can be shown, that the defendant 4, Hakamchand, represented themin Bombay for the purposes of making these contracts with the plaintiff firm, it would necessarily follow, waiving, for a moment, the question of Hakamchand s minority, that they would be answerable to the plaintiffs for the moneys now claimed. I understand that the first defendant is really the only substantial member of the family. Therefore, if his liability were made out, it would not matter much, I apprehend, to the plaintiffs whether or not Khubchand or Hakamchand were also made liable. Nor does the question raised of the fourth defendant s minority affect the case, viewed in this light, in the slightest degree; for, assuming that he was a minor in September 1911, yet, if he were authorised by the firm of Harising Chetram to act for them in Bombay as their agent for the purpose of making these contracts and did so act, they would be equally bound and the minority of their agent would be immaterial. It is only on the assumption that Hakamchand was not authorised by and on behalf of defendants 1 and 2, and that his acts were not afterwards ratified by them, that, on the footing of being a member of the joint Hindu family to which this firm belonged, it might be material to determine whether he was a minor or not at the time he made the contracts which are now sought to be enforced against all his co-parceners on the ground of their collective responsibility for the acts of any member of the joint family assuming to act in that capacity. It would, then, doubtless, have to be shown that the acts were done for the benefit of the family as a whole and that Hakamchand, in so acting, had legally assumed a character of manager with authority to bind all his co-parceners. Notwithstanding a passage in Trevelyan on Minors at page 18, I confess, I should feel some doubt in holding that a minor member of a joint Hindu family could possibly act as manager for adult members or that contracts entered into by him in that capacity for the benefit of the family as a whole would necessarily be binding upon all the other members. If, again, it were the case of a joint Hindu family, all the members of whom were minors, then it would be less difficult to hold that the oldest minor was managing for the rest; still it appears to me his minority would remain an insuperable difficulty in the way of holding that he was either competent to contract for himself or for other minors, as incompetent in their turn to enter into contracts. If, however, there be no joint family, existing in the present case, and if the 4th defendant, Hakamchand, be held not to have been acting as the agent of defendants 1 and 2 s firm, his minority would have little bearing upon the liability of these defendants one way or the other. It might, no doubt, serve to protect him but beyond that I do not think that the question would have any material bearing upon what is substantially in controversy in this case. All this, however, may be very briefly dismissed, upon a simple finding of fact, for I have not the very least doubt, but that in September 1911, the defendant 4, Hakamchand, was not a minor. The evidence taken on commission is, speaking generally, of little value, but I cannot neglect the deposition of the School Master, Ramchand Rao Balaji, who was a master at the school at which Hakamchand, defendant 4, received his education. That witness swears that he was a Master from 1886 to 1899 and that the defendant 4, Hakamchand, came to School, as shown by the school register, in the year 1897. Now, I cannot bring myself to believe that Hakamchand could have gone to School before he was at the Very least five years of age. Nor can I entertain any serious doubt, notwithstanding the many defects appearing on these registers, that the entry, showing that Hakamchand was admitted into the School, in 1897, is entirely trustworthy. If, in that year, Hakamchand was five years, it is clear that he would be nineteen when these contracts were made. I think it much more probable that he was two or three years older and that the plaintiffs are right in saying that he was at least twenty-one when he made these contracts ostensibly on behalf of the firm of Harising Chetram.