P E R M ANNAMALAI CHETTY, JOINT FIRM, PALNI, THROUGH ITS PARTNER P E RAMA PERIYA KARUPPAN CHETTIAR Vs. SATYAVADIVEL MUTHUSWAMI MANIAGARAN

JUDGEMENT

(1.) This is an appeal under the Letters Patent against the judgment of Venkataramana Rao, J., in S.A. No. 492 of 1934. By that judgment he has reversed the decree of both the lower Courts and dismissed the suit with costs throughout.

(2.) The appeal raises a question of importance involving a decision as to the limits within which a natural guardian under Hindu law can incur a simple contract debt so as to bind the minor's estate. That such a guardian has the power to borrow by charging, mortgaging or even by selling the estate or a sufficient portion of it, for purposes termed necessary or beneficial according to that law, cannot at this time of the day be questioned. It is also settled that even in the absence of a proved necessity or benefit, an honest creditor can still recover the debt from the estate if he can show that in advancing the money he acted in the bona fide belief after due enquiry, that the guardian was acting for such a purpose in incurring the debt. These principles which are based as much on Hindu law as on general considerations of equity, have been held to afford a test of the validity of similar transactions by other persons also who occupy an analogous position. The manager of a joint family governed by the Mitakshara, female owners in possession of inherited property, the head of a Mutt, and the Dharmakartha of a temple are among the class of persons whose powers are so limited. Indeed it can be truly said that what the Judicial Committee said with regard to a guardian in Hunoomanpersaud's case (1856) 6 M.I.A. 393, has become an integral part of the branch of the law relating to the borrowing powers of all qualified owners. In the case of all such persons there exists in fact, no difference in the test to be applied whether the money is obtained by pledge or sale of the property, or by way of a simple loan.

(3.) The decision of Venkataramana Rao, J., if we understand it aright, appears to introduce into this branch of the law a distinction between simple loans and loans borrowed on the security of property and to lay down with respect to the former a stricter rule than that which obtains in the latter. We are ho doubt in this case concerned with the powers of a mother and natural guardian but it is none the lesss necessary to bear in mind that any interference with a rule so general in its application as that laid down in Hunoomanpersaud's Case (1856) 6 M.I.A. 393 may tend to create uncertainty in the administration of the law as regards also the other persons, who belong to the same group and are governed by the same principles. We should therefore hesitate to sanction a departure from what appears to be a well-established principle unless we are satisfied that there is clear authority to the contrary.