LAKSHMIAH Vs. OFFICIAL ASSIGNEE OF MADRAS

JUDGEMENT

(1.) The question for decision in this appeal is whether the mortgage executed by one Narayanaswami in favour of one Chinnarappa Reddi is binding on the appellant so as So affect his interest in the property of the joint family of which he is a member. Narayanaswami, the mortgagor, was adjudicated as an insolvent in December 1920 for debts incurred inter alia in a groundnut business. He had two brothers: Subbiah who died in 1909, and Virupakshappa who died in 1917. The father of these three brothers was Kamisetti Subbiah who died in 1906. Subbiah left a son called Subbiah, and Virupakshappa left a son called Lakshmiah. Radhakrishna is the son of the insolvent Narayanaswami. The following table shows the relationship of the members of the insolvent's family which Is an undivided one.

(2.) Subbiah, the son of the insolvent's deceased brother Subbiah, is now a major; Lakshmiah and Radakrishna are both minors. The ancestor of the family, Kamisetti Subbiah, carried on money-lending business. Virupakshappa, when he became the manager, started She groundnut trade by becoming a partner with another in such a trade about four years before his death, namely in 1913. Narayanaswami continued that trade when he became the manager of the family on his brother's death, and in the course of carrying on this business executed the mortgage which has become the subject of these proceedings. After the adjudication of Narayanaswami as an insolvent the Official Assignee filed an application for a declaration that the mortgage debt Incurred by Narayanaswami is binding upon the interests of Subbiah, Lakshmiah and Radhakrishna, all of whom opposed the application. The evidence was taken on commission. As the learned Judge points out he had not the advantage of seeing the witnesses, nor bad he the opportunity of examining the account books referred to in the evidence of the witnesses. On a consideration of the evidence he held that the mortgage executed by Narayanaswami is binding upon Lakshmiah and Radhakrishna but not upon Subbiah. This appeal has been preferred by Lakshmiah.

(3.) It is admitted that the trade in connexion with which this debt was incurred was not an ancestral trade. The argument of the Official Assignee is that, though the trade is not an ancestral one, it was a joint family business carried on in the interests of the joint family and therefore it is binding on the interests of the appellant though he is a minor. The appellant argues contra and says that in the circumstances of the case the trade cannot be considered to be a joint family trade, that it was started by his father in his individual capacity and continued in the same capacity by his uncle Narayanaswami.