SIRIKANT LAL Vs. SIDHESWARI PRASAD NARAIN SINGH

JUDGEMENT

(1.) This is an appeal from a decree passed by the Subordinate Judge of Gay a in a suit brought by the plaintiff to recover a sum of Rs. 26,795-11-8 from defendants Nos. 1 to 3. Defendants Nos.1 and 2 are full brothers and defendant No. 3 is the son of defendant No. 1. These three defendants were admittedly members of a joint family of which defendant No. 1 was the manager or karta till 1932 (1339 F.). The case of the plaintiff is that defendant No. 1 as karta of the family borrowed (1) Rs. 4,869 on December 5, 1929, (2) Rs. 7,200 on March 22, 1931, (3) Rs. 10,034-7-0 on September 27, 1931, and executed a promissory note in favour of the plaintiff for the particular sum borrowed on each occasion. The trial Court decreed the suit against all three defendants holding that the hand-notes were genuine and that defendant No. 1 h#d borrowed the sums mentioned in them for family necessity. This appeal has been preferred by defendants Nos. 2 and 3 (defendant No. 1 not appealing) and the only questions which are raised by them are; (1) that the plaintiff's action being based upon promissory notes, no decree should have been passed against defendants Nos. 2 and 3 who had not signed them, and (2) that the finding of the trial Court as to the existence of legal necessity for the loans taken by defendant No. 1 was not correct. In arguing the first" point the learned Advocate for the appellant greatly relied on Sadasukh Jankidas V/s. Sir Kishan Prasad 46 IA 33 : 50 Ind. Cas. 216 : AIR 1918 PC 146 : 46 C 663 : 29 CLJ 340 : 17 ALJ 405 : 25 MLT 258 : 36 MLJ 429 : 21 Bom. LR 605 : 1 UPLR (PC) 37 : (1919) MWN 310 : 23 CW N 837 : 10 LW 143 : 12 Bur. LT 160 (PC). In that case a question arose whether a person whose name did not appear on certain hundis (which are negotiable instruments) could be. made liable under them on the ground that the person who had drawn the hundis was his agent. Their Lordships of the Judicial Committee answered the question in the negative and observed as follows: It is not sufficient that the principal's name should be in some way disclosed: it must be disclosed in such a way that on any fair interpretation of the instrument his name is the real name of the person liable upon the bills. Their Lordships attention was directed to Secs.26, 27 and 28, Negotiable Instruments Act, 1881, and the terms of these sections were contrasted with the corresponding provisions of the English Statute. It is unnecessary in this connection to decide whether their effect is identical. It is sufficient to say that these sections contain nothing inconsistent with the principles already enunciated, and nothing to support the contention, which is contrary to all established rules, that in an action on a bill of. exchange or promissory note against a person whose name properly appears as party to the instrument, it is open either by way of claim or defence to show that the signatory was in reality acting for an undisclosed principal.

(2.) In view of these observations it has been held in a number of recent cases that the karta of a joint Hindu family cannot by executing a promissory note in his own name bind the other members of the family, no other names appearing on the document as those of persons to be charged: see Sreelal Mangtulal V/s. Lister Antiseptic Dressing Co., Ltd. 52 C 802 : 89 Ind. Cas. 328 : AIR 1925 Cal. 1062 :29 CWN 828, Hari Mohan Ghose V/s. Sourendra Nath Mitter 41 CLJ 535 : 88 Ind. Cas. 1025 : AIR 1925 Cal. 1153, Kutti Ammu V/s. Purushotam Doss 21 MLJ 526 : 8 Ind. Cas. 851 : (1911) 1 MWN 45 : 9 MLT 120, Jibach Mahto V/s. Shib Shankar Chaudhary 15 PLT 100 : 147 Ind. Cas. 1065 : AIR 1933 Pat 687 : 6 RP 396 and Birkeshwar Raut V/s. Ram Lochan Pandey 16 PLT 117 : 154 Ind. Cas. 95 : AIR 1934 Pat 629 :7 RP 417. The Allahabad High Court has, however, taken a different view in Krishnanand Nath Khare V/s. Raja Ram Singh 44 A 393 : 66 Ind. Cas. 150 : AIR 1922 All. 116 : 20 ALJ 233 and held that there is no inherent reason why the managing member of a joint Hindu family cannot in that capacity execute in his sole name a promissory note which should be binding on the family as a whole and the property owned by it The learned Judges who decided that case have explained the decision of the Privy Council by pointing out that the position of the head of the joint Hindu family is not the same as that of an ordinary business agent and that a joint Hindu family, being a legal person according to Hindu Law lawfully represented by and acting through the managing member r head thereof, is included ordinarily in term a person . A similar view had been expressed by two eminent Judges of the Madras High Court in Krishna Ayyar V/s. Krishnasami Ayyar 23 M 597 and both these decisions have been followed by the Lahore High Court in Bhaguran Singh & Co. V/s. Bakshi Ram AIR 1933 Lah. 494 : 149 Ind. Cas. 556 : 6 RL 705 and by a Single Judge of this Court in Tikam Chand Chaudhury V/s. Sudarsan Trigunait 14 PLT 623 : 144 Ind. Cas. 325 : AIR 1933 Pat 263 : Ind. Rul. (1933) Pat. 230. It may also be stated that before the decision of the Judicial Committee in Sadasukh Janki Das V/s. Sir Kishan Prasad 46 IA 33 : 50 Ind. Cas. 216 : AIR 1918 PC 146 : 46 C 663 : 29 CLJ 340 : 17 ALJ 405 : 25 MLT 258 : 36 MLJ 429 : 21 Bom. LR 605 : 1 UPLR (PC) 37 : (1919) MWN 310 : 23 CW N 837 : 10 LW 143 : 12 Bur. LT 160 (PC) the High Court of Calcutta had also held in several cases that the karta of a joint Hindu family could bind the other members of the family by signing a promissory note for family purposes: see Nagendra Chandra Dey v. Amar Chandra Kundu 7 CWN 725 and Baisnab Chandra De V/s. Ramdhon Dhor 11 CW N 139.

(3.) Now the view expressed in these cases has this advantage that it enables the Court to grant the same relief in a suit based on a promissory note as in suit for debt and therefore makes it unnecessary for it to decide whether the suit belongs to one category or the other. The distinction between these two classes of suits is too well recognized to be overlooked, but so far as this country is concerned, the line of distinction becomes highly artificial in many cases, firstly because except in a few mercantile towns a promissory note is not popularly regarded as a negotiable instrument: and, secondly, because the distinction depends largely on the view one takes of the pleadings, and the pleading in the mofussil Courts are generally defective and badly drafted. Besides, so far as the Hindu Law goes, it does not recognize any distinction between the liability of the joint family when the debt is contracted by its karta under a promissory note and its liability when the debt is contracted otherwise. Under that law all that is necessary to make every member of the family liable is that the debt should have been contracted for legal necessity of\tfor tho, benefit of the family. Where, therefore, the benefit is proved, the Court will not be justified in refusing to grant the appropriate relief to the creditor, unless it is compelled to do so by something to be found in the Negotiable Instruments Act or the principles underlying it.