BAIJ NATH PRASAD Vs. RAM GOPAL LACHHMI NARAYAN

JUDGEMENT

(1.) This is an appeal against a judgment of Lort-Williams J., dated 9 April 1936, given in favour of the plaintiffs with costs against each and all the defendants but limited as regards the minor defendants to their share in the family assets. The suit was filed on 11 February 1935 for the recovery of the sum Rs. 31,983-5-0, being the balance of the amount said to be due and owing to the plaintiff in respect of loans made in the year 1934. There was no real dispute about the loans or the amount outstanding at the time the suit was brought. The pleadings in the case are not very explicit or even clearly drawn and they do not fully or satisfactorily set out the points in controversy between the parties. A number of issues were however raised and settled at the hearing and these are to be found at p. 39 of the paper book. The learned Judge dealt with the matter in his judgment upon the footing that it was only necessary to consider three of these issues, namely : Was the business, which had originally been a joint family business, being carried on by the defendants as a partnership business at the time when the loans were made? Were the loans taken in the ordinary course of business and for the benefit of the business so carried on? Did the defendants hold out the managers of that branch, or part of the business carried on under the firm name of Kishori Lal Mukundi Lal as accredited agents and managers of the business carried on by the defendants? The main question, if not indeed the only question, which the learned Judge had to decide at the trial, was whether all or some only of the defendants were liable for the debt due to the plaintiffs.

(2.) The defendants were members of a joint Hindu trading family governed by the Mitakshara law. They are all descendants of a man named Lala Earn Dayal, who was the founder of a number of businesses carried on by and on behalf of the family in various parts of India. The head office was at Jhusi in the District of Allahabad. Lala Ram Dayal had two sons, the elder of whom Lala Madho Prasad died without issue. The other son Lala Dwarka Prasad had five sons, named Lala Harnam Das, Lala Mohan Lal, Lala Kishori Lal, Lala Kanhaya Lal and Lala Mukundi Lal, and each of these sons had sons and other descendants, who formed five branches or parts of the joint family, which were referred to both in the trial Court and at the hearing of the appeal as groups I, II, III, IV and V. They are set out in detail in the genealogical table annexed to the plaint (as Ex. A). It is not disputed that originally each group carried on and was responsible for a part of the joint family business on behalf of and in the interest of all the members of the joint family; each of the parts consisted of a single business or a number of associated businesses operated in various places or districts in India and under a variety of firm names. The descendants of Lala Kishori Lal, who died on 16 October 1924, are group III and they carried on a part (or section) of the joint family business at Calcutta and Jhusi (Allahabad). Group IV consisting of the descendants of Lala Kanhaya Lal, who died in 1929, similarly carried on another part of the joint family business under the firm name of Mohan Lal Kanhaya Lal at Madras and Naini (Allahabad) and under another firm name (Beni Prasad Kedar Nath) at Bombay. Group IV contended however that the business at Bombay was not at the time of the suit, and never had been, any part of the joint family business. The plaintiffs claim was not disputed by indeed it was actually supported by-some of the members of group III and the whole of that group, including the members who are minors, contend that all the defendants are jointly liable for the debt. This was denied by the members of the other groups, but the "only serious defence was made by group IV, though counsel on behalf of groups I, II and V were allowed to address the Court at the hearing. It was admitted that all the businesses mentioned above (except that at Bombay) originally belonged to and were carried on by the various groups on behalf of the joint family. The position at the trial really was that group III was in effect in the same side as the plaintiffs, whereas the claim was resisted by the defendants who were members of groups I, II, IV and V on the ground that the joint family had ceased to exist as such prior to the time when the loans were made and that after the break up of the joint family no member or group of members of the former joint family had any right or authority to act for or on behalf of or to pledge the credit of any other members of groups.

(3.) The dividing line, if it may be so described, came into existence in the year 1926, in that there is no dispute that up to that time the family was joint and all the businesses were joint family business. The plaintiffs had had dealings with the firm of Kishori Lal Mukundi Lal, that is to say, with group 3, even as long ago as some years before 1920 (paper-book I, p. 58, Qs. 9- 11). The primary matter, which had to be considered at the trial, was a suit for partition instituted on 2 January, 1926, in the Court of the Subordinate Judge of Allahabad by Pratap Chand, a grandson of Madan Lal against Kanhaya Lal, his grandfather, and the only surviving representative of that generation, and others, i.e. the sons and descendants of Kanhaya Lal and his brothers. In that suit, on 20 April 1926, a joint written statement was put in on behalf of the members of groups III, IV and V, on 5 May 1926, a written statement was put in on behalf of Suraj Prasad of group II and on 14 May 1926, there was a written statement on behalf of Basdeo Prasad of group II, and some months later, viz. on 14 September 1926, a supplementary written statement was put in on behalf of groups III, IV and V. On 21st February 1927 judgment was given by the Subordinate Judge (Ex. A, at p. 96 of the paper, book), and on 9 March 1927 there was a decree. On 13 March 1927 there was an appeal by groups III, IV and V and others: see Ex. A, p. 3, and on 11 November 1928, group IV filed a reply in the Court of the Subordinate Judge regarding the Bombay business. On 13th January 1931, when the appeal was before the High Court, an order was made by consent embodying a settlement between the parties on certain terms. These are set out in part 2 of the paper-book, pp. 259 to 263, and on 13 January 1931, that is to say on the same day there was an order of the High Court embodying the terms of settlement. That is to be found in paper-book 2, at p. 264. The learned Judge has stated that there can be no doubt-and indeed it was not seriously disputed at the trial that the effect of the proceedings in the Court in Allahabad was to cause a partial disruption of the joint family. The mere filing of the partition suit by Pratap Chand would operate to cause an immediate severance of the joint status. It is indeed clear law that, the institution of a suit for partition by a I member of the joint family is an unequivocal intimation of his intention to separate and that there is consequently a severance of his joint status from the date when the suit is instituted. A decree may be necessary for working out the results of the severance and for allotting definite shares, but the status of the plaintiff as separate in estate is brought about by assertion of his right to separate whether he obtains a consequential decree or not : Girja Bai V/s. Sadashiv Dhundiraj (1916) 3 A.I.R. P.C. 104 : see also the opinion of Sir George Lowndes in Bal Krishna V/s. Ram Krishna , where his Lordship says this: It is now settled law that a separation may be effected by a clear and unequivocal intimation on the part of one member of a joint Hindu family to his cosharers of his desire to sever himself from the joint family. This was laid down in Suraj Narain V/s. Iqbal Nariain (1913) 35 All. 80. The question was further examined in Girja Bai V/s. Sadashiv Dhundiraj (1916) 3 A.I.R. P.C. 104 and the principle was reaffirmed and the last mentioned case was followed in Kawal Nain V/s. Budh Singh (1917) 4 A.I.R. P.C. 39 at p. 161, where Lord Haldane says : "The status of the plaintiff as separate in estate is brought about by his assertion of his right to separate".