YESHVANT DATTATRAYA Vs. SHRIPAD SADASHIV

JUDGEMENT

(1.) The suit from which this appeal arises was filed by the plaintiff on. a promissory note for Rs. 1,391-12-0 passed by defendant No. 1. Defendants Nos. 2 to 7 were made party- defendants as members of a joint and undivided Hindu family along with defendant No. 1, and on the allegation that) the money was borrowed for the purpose of a joint family business. The trial Court held that a certain cloth shop was a joint family business, that the debt was incurred for that business and that the shares of the defendants in that business were liable for the satisfaction of that debt; but in the case of defendants Nos. 1, 5 and 6, the trial Court held that as they were taking an active part in the conduct of the business, they were personally liable. From that decision defendant No. 6 preferred an appeal to the lower appellate Court. The lower appellate Court confirmed the decree of the trial Court. From that order an appeal was preferred to this Court. The appeal came up before Mr. Justice Lokur,. and on March 1, 1943, that learned Judge sent down two issues to the trial Court for trial. These two issues were:- (1) Whether, though the promissory note in suit was passed by defendant No. 1 alone,, defendant No. 6 also was in reality a contracting party or whether he can be treated as being a contracting party by reason of his conduct ? or (2) Whether he subsequently ratified it? These issues were tried, and there was an appeal from the findings before the learned District Judge; and the learned District Judge answered both the issues in the negative; but with regard to the second part of issue No. 1, he made his finding subject to certain reservations and it is these reservations which have been the subject of controversy before us. The learned District Judge held that defendant No. 6 had taken, part in the working of the cloth shop which was a joint family business and he considered a decision of our Court in Gokal Kastur V/s. Amarchand , and came to the conclusion that in view of that decision, if defendant No. 6 took part in the working, of the cloth shop, then the second part of issue No. 1 framed by Mr. Justice Lokur would be in the affirmative; or, in other words, according to the learned District Judge,, the mere fact that defendant No. & had taken part in the working of the cloth shop-was sufficient to warrant his being treated as being a contracting party by reason of that particular conduct of his, namely, taking part in the working of the cloth shop.

(2.) The principle of Hindu law on this particular question has been enunciated by Sir Dinshah Mulla in his well-known treatise on Hindu Law: The manager is liable not only to the extent of his share in the joint family property, but, being a party to the contract, he is liable personally, that is to say, his separate property is also liable. But as regards, the other co-parceners, they are liable only to the extent of their interest in the family property, unless, in the case of adult co-parceners, the contract sued upon, though purporting to have been entered into by the manager alone, is in reality one to which they are actual contracting parties, or one to which they can be treated as being; contracting parties by reason of their conduct, or one which they have subsequently ratified.

(3.) Therefore the ordinary rule of Hindu law is that it is only the manager or the managing member of the joint family business who is personally liable with regard to-the debt contracted for that particular joint Hindu family business. The other co-parcerners are only liable when they are contracting parties along with the manager,, or when their conduct is such from which it can be legitimately inferred that they can be regarded as contracting parties or by some act or conduct they have subsequently ratified the loan borrowed by the managing member for the purpose of the business.