OFFICIAL ASSIGNEE OF MADRAS AND AS SUCH THE ASSIGNEE OF THE PROPERTY AND CREDITS OF V P L R M PALANIAPPA CHETTY, THE 2ND INSOLVENT Vs. VPLRMPALANIAPPA CHETTY

JUDGEMENT

(1.) I agree with my learned brothers that on the facts of this case the business must be taken to have been started by the 1st defendant as the joint family business of himself and his minor son, the 2nd defendant who subsequently attained majority before the date of the insolvency. This raises the important question whether the 2nd defendant was liable to be adjudicated an insolvent in respect of debts incurred for the purposes of the business during his minority and after he attained majority. As regards debts incurred during his minority the first question is, can he be made liable under Section 248 of the Indian Contract Act which makes a minor who has been admitted to the benefits of a partnership within the meaning of Section 247 liable on attaining majority for all obligations incurred by the partnership since he was so admitted unless he gives public notice within a reasonable time of his repudiation of the partnership. It has often been pointed out that this section goes much further than the English Law which does not make a partner admitted during minority personally liable after attaining majority except for obligations incurred after that date, but I have not come across any discussion of the reasons which actuated the legislature in enacting this more stringent rule All the minor members of the family who are in existence when a joint family business is started and all minors who are subsequently bora into it may in one sense be said to be admitted to the benefits of the partnership; and if this ia the sense in which these words are used in the Act then on attaining majority they all become personally liable for all the outstanding obligations of the partnership incurred since the foundation of the business or dates of their birth as the case may be. The words " admitted to the Benefits of a partnership " appear to have been used owing to the incapacity of minors under the Contract Act to enter into the agreement of partnership described in Section 239. On a careful examination of the authorities I do not find any case in which they have been held applicable to the minor members of a Hindu trading family. In Samalbhai Nathubhai v. Someshwar (1880) I.L.R. 5 Bom. 38 the learned Judges observed in a somewhat similar case that it was not a case of an ordinary partnership arising out of contract, but a case of joint ownership in a trading business, created through the operation of Hindu Law between members of an undivided Hindu family, and that the rights and obligations arising out of such a relationship could not be determined by exclusive reference to the Indian Contract Act. They, also, observed that the partnership created by the descent of an ancestral trade upon the members of a Hindu undivided family has many but not all of the elements existing in an ordinary partnership, and they considered it unnecessary to determine " whether a Hindu who becomes entitled to a share in a trading business is ipso facto and without his own consent involved in all the liabilities of a partner.",

(2.) Instead of resting their decision on the provisions of Sections 247 and 248 of the Contract Act they decided, as I read their judgment, independently of those provisions that an adult member of a Hindu trading family who left the business to be managed by his elder brother and never repudiated his interest in it must be held personally liable for the debts properly incurred by the brother in the course of the business. The debts so far as appears were incurred after the appellant had attained majority. In In the matter of Haroon Mahomed (1890) I.L.B. 14 Bom. 189, Sir Charles Sargent C, J. and Scott, J. decided that an adult Hindu who had taken some part in a joint family business and allowed it to be carried on without repudiating his interest in it was a partner and personally liable. No reference was made to the Indian Contract Act. In Vadilal v. Shah Khushal (1902) I.L.R. 27 Bom. 157, 159, Chandavarkar, J, observed that " from the mere fact that certain persons are members of a joint family, it does not necessarily follow that they are partners in a form which only one of them says is his, unless it was set up with the help of family funds." But in Gokal Kastur v.. Amarchand (1907) 9 Bom.L.R 1289 at p. l290, the same learned Judge is reported to have observed during the course of the argument that it had been held in Smalbhai Nathu-bhai v. Someshwar (1890) I.L.R 5 Bom. 38, that the Indian Contract Act does not apply to Hindu family business debts; but, as already observed, the learned Judges do not appear to have gone quite so far though they no doubt preferred to dispose of the case independently of the Contract Act. In the course of his judgment Chanda-varkar, J., who delivered the judgment of the court dealt with the question how far the managing member s contracts make the other adult members personally liable, and decided that they did on grounds altogether independently of the provisions of Sections 247 and 248 which were apparently held to be inapplicable. He also questioned the decision in Chalainayya v. Varaiayya (1898) I.L.R. 22 Mad. 166 : 9 M.L.J.3 which will be referred to later. Again in Raghunathji Tarachand v. The Bank of Bombay (1909) I.L.R. 34 Bom. 72, Chandavarkar, J., in holding that the minor s share in a joint family business was liable for a debt incurred for the purposes of the business, rested his decision on the principles of Hindu Law, and stated that it was unnecessary to rely on Section 247 of the Contract Act. Batchelor, J., in his judgment in the same case no doubt was disposed to regard Section 247 as applicable, but he was only dealing with the question whether the minor s share was liable, and had not to consider the question whether, if Section 247 were held applicable, the minor would not necessarily be made liable under Section 248 on attaining majority for all the outstanding obligations of the firm contracted since he acquired an interest by birth.

(3.) As regards Calcutta, Johurra Bibee v. Sreegopal Misser (1876) I.L.R. 1 Cal. 470 was decided without reference to the Contract Act. In Joykisto Cowar v. Nittyanund Nundy (1878) I.L.R. 3 Cal. 738 a bench of three Judges consisting of Garth,C.J., Mark by, J., and Mitter, J., decided that the minor s share was liable on the analogy of Section 247 of the Indian Contract Act, but did not apparently consider that the minor had by birth been "admitted to the benefits of the partnership," within the meaning of Section 247 so as to make that section and Section 248 applicable. In Bemola Dossee v. Mohun Dossee (1880) I.L.R. 5 Cal, 792., the question was, whether a mortgage of joint family property for the purposes of the joint family business was binding on the joint family, and it was held that it was without reference to the Contract Act.