V K NATARAJA IYER Vs. SLLAKSHMAN IYER

JUDGEMENT

(1.) This is an appeal by defendants 2 to 4 in a suit brought to enforce a security bond executed by defendant 1 in favour of the plaintiff in July 1918, (Ex. C). Defendants 2 to 4 are the sons of defendant 1, and they were all minors at the date of Ex. C. Ex. C itself does not refer to any particular debt but provides that defendant 1 wished to have debit and credit transactions with the plaintiff for a period of five years from that day to the limit of Rs. 5,000 both separately and jointly with other persona on promissory notes and on account. The properties specified in the schedule were offered as security for any sum of principal and interest that might become due to the plaintiff as a result of such transactions. The suit has been laid for recovery of the amounts remaining due on foot of the two promissory notes, Exs. A and B, dated respectively 28 September 1920 and 31 May 1921; and it is claimed that in respect of the amounts due under these two documents plaintiff is entitled to enforce, the security under Ex. C.

(2.) In the plaint it was alleged that the moneys claimed were borrowed to discharge antecedent debts and for other necessary purposes binding on the family. It was also added that defendant 1 was conducting a rice mill business "for which also the sums borrowed appear to have been utilized." Defendants 2 to 4 contended that the security created by Ex. C should not be held to be binding on their shares in the property because they are admittedly joint family properties and there was no antecedent debt or family necessity. The question of the availability of Ex. C as against defendants 2 to 4 was raised by issue 2a in the case, though the issue is not strictly correct in form in throwing the onus on the defendants. The learned Subordinate Judge did not adopt the suggestion in the plaint that Ex. C was executed for the discharge of any antecedent debts; following the decision of this Court in Venkatasami Naicker V/s. Palaniappa Chettiar AIR 1929 Mad 153, he held that the rice mill business started by defendant 1 was a family business and that securities created for the repayment of moneys borrowed in connexion with that business by the father would be binding on the sons shares in the joint family property.

(3.) There was no definite evidence to connect the suit debts with the rice mill business nor any very clear evidence as to the profitableness or otherwise of that business; but as defendant 1 who must presumably be in possession of the accounts relating to that business did not produce them in spite of notice to do so given by the plaintiff, the learned Judge drew the inference that the moneys were likely to have been used for that business and the business must have been a profitable one. He also observed that having regard to the evidence that in the ordinary course the family lands would have yielded only an income of about Rs. 1,000 per annum, defendant 1 was justified in starting the mill to increase the family income so that its members may live in comfort. For these reasons, he held that the security bond was enforceable against the shares of defendants 2 to 4 as well. He also adverted to the fact that when in 1928 some items of family properties were sold for paying off a portion of the amount due to the plaintiff under Ex. C as well as another transaction between the parties, viz., Ex. F, defendant 2 who had attained majority by that time joined in the sales and from this circumstance, the learned Judge drew the inference that defendant 2 had ratified his father's transactions.