RAJARAM SINGH Vs. PANCHA DEOGI

JUDGEMENT

(1.) This appeal arises out of a suit brought by the plaintiffs for recovery of a certain sum of money borrowed by the guardian appointed by the Court for the minor defendant. The plaintiffs case is that the minor had a business for supplying labour for certain works done under the Port Commissioners of Calcutta. The money was required for carrying on that business and the guardian of the minor entered into an agreement with the plaintiffs for the advance of money from time to time for the purposes of the business and for repayment in certain ways. It was also stipulated that the guardian should pay interest at the rate of 3 per cent, per month on the amount taken from the plaintiffs. The plaintiffs case is that the amount of the claim made in this suit was found due to them in December 1923, but as the defendant did not pay the amount, they ceased to make any further advance and the plaintiffs now sue for the amount of Bs. 5,846 odd for principal and interest at the rate of 3 per annum till the date of realisation. The suit was brought on the 13 March 1924. Various objections were taken in the defence which it is needless now to state in detail. The minor was represented by the same person as his guardian who borrowed the money from the plaintiffs. It is undisputed that that guardian carried on the business in which the minor was engaged from a time previous to the transactions entered into with the plaintiffs. It is also clear from the evidence that unless the guardian was able to find any money by borrowing from some person or other he would not have been able to carry on the business on behalf of the minor, and it is also admitted that the business was a profitable one so far as the minor was concerned although it might not have been so profitable as the learned Subordinate Judge has found it to be. The Subordinate Judge has made a decree in favour of the plaintiffs for Rs. 5,836 to carry interest at the rate of 6 per cent, per annum from the date of the decree and the decretal amount was to be realized from the estate of the minor which is confined to his contract business under the Port Commissioners for the purpose of which the money was borrowed. Prom this decree the defendant has appealed.

(2.) The first contention raised on behalf of the appellant is that the minor cannot be made personally liable for the money that the certificated guardian borrowed for him. That proposition cannot be contested. The proposition is well settled by the case : see Waghela v. Masludin [1887] 11 Bom. 551; Ma Hnit V/s. Hashim A.I.R. 1919 P.C. 129. But in this case the Subordinate Judge has not made a decree making the minor personally liable; or in other words, he has not made a decree by which the plaintiffs can pursue any property of the minor other than the assets of the business with the Port Commissioners. The broader contention that was sought to be raised, namely, that in the circumstances of this case plaintiffs are not entitled to any decree as against the minor cannot at all be supported. It is no doubt true, as I have already said, that the minor cannot be personally made liable for any debt incurred by his guardian on his own personal liability. But, it has been settled that if a guardian incurs a debt for the purpose of carrying on a business of a minor which was continuing from before the date of the debt incurred by the guardian, the creditor cannot make the minor directly liable for the money borrowed. He can, however, recover the money from the guardian. The guardian in his turn is entitled to indemnify himself for the money properly borrowed by him for the purpose of carrying on the business of the minor. According to the rule which has been enforced in the Court in India the creditor is, as it were, subrogated to the position of the guardian and it has been held that the creditor under such circumstances can reimburse himself of the money which the guardian borrowed for the purpose of carrying on the business of the infant. The case in our Court, which has been followed in numerous cases is that of Joykisto Cowar V/s. Nittyanuned Nundy [1878] 3 Cal. 738. Following that case the law has been laid down, if I may say so, very clearly in the case of Sanka Krishnamurthi V/s. Bank of Burma [1911] 35 Mad. 692, where Mr. Justice Wallis, as he then was, in delivering the judgment of the Court, stated the rule thus: Creditors of the business have, therefore, no right of direct recourse against the minor or his estate, but, as the guardian is entitled to indemnity for liabilities properly incurred out of the assets of the minor embarked in the business, creditors of the business, it has been held, are entitled to proceed directly against such assets. Where however the guardian has no right to indemnity against the assets in the business as where he has acted improperly neither have his creditors, as held by Sir George Jesselin In re Johnson [1880] 15 Ch. D. 548 which was followed in In re Evans [1887] 34 Ch. D. 597.

(3.) In the present case as there is no question that the liabilities were properly incurred by the guardian for the purpose of conducting the business of the minor the creditor is entitled to recover the sum claimed. The same principle has been again stated in the case of Batchu Bamajogayya V/s. Vajjula Jagannadhan [1919] 42 Mad. 185. There is no evidence on the side of the defendant from which it can be argued that the liability was not properly incurred by the guardian on behalf of the minor for the purpose of carrying on the business. It has been contended on behalf of the appellant that the plaintiffs are only entitled to recover the money out of the money which the defendant recovered from the Port Commissioners during the period during which the plaintiffs continued to advance money to the defendant. That argument does not appeal itself to me. It is quite probable, and there is evidence on the record to show, that it is a fact that certain sums which were due to the defendant from the Port Commissioners for work done during the period referred" to by the appellant were not paid immediately within that period. It cannot be argued that the plaintiffs cannot recover their dues out of the sums so outstanding in the hands of the Port Commissioners.