IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD
JAGANNADHA RAO, J.
Pamidi Suryanarayana and others - Appellants
Versus
Pinnamaneni Veerayya - Respondent
A.S. No. 1438 of 1980
Decided on : 7-12-1984

In the case of a debt owed by or incurred for the benefit of a Hindu joint family, consisting of an individual, his wife and minor children, the unit consisting of the father, his wife and minor children as per the definition of the word ‘family’ in Sec. 3(1) of Act has to be taken and the property held by the ‘family’ as a ‘small farmer’ under Section 3(t) has to be considered in as much as the word (person in Section 3(p)) also includes a family.

Headnote:

ANDHRA PRADESH AGRICULTURAL INDEBTEDNESS (RELIEF) ACT, 1977 - SECTION 3(1), 3(D), 3(P), 3(T) - JOINT FAMILY DEBT - SMALL FARMER - INTERPRETATION - FAMILY UNIT - AGGREGATION OF PROPERTY - EXTINGUISHMENT OF DEBT - APPLICABILITY OF ACT - BENAMI TRANSACTION - NEGOTIABLE INSTRUMENT.

Fact of the Case:

The suit was filed for the recovery of a sum of Rs. 15,161-46 with interest against 15 defendants, on the basis of a promissory note, Ex. A-1, dated 9-10-1973 and executed by defendants 1, 2 and 3. The other defendants are the family members of one or the other of defendants 1, 2, and 3. The defendants denied the execution of the promissory note and they also contended that the contract was knocked down by the Panchayat in favour of one G. Ranga Rao who along with one G. Appalaswamy was having fisheries business and that the defendants 1 to 3 were only employed by the above said persons, who were related to the 2nd defendant. The defendants engaged labourers and supervised the fishing operations as well as sale thereof. The above said Appalaswamy and Rangarao agreed to give a share to each of the defendants 1 to 3 but subsequently there was a quarrel between the sharers and the defendants 1 to 3 and it was contended that the latter were not paid anything by the above said Appalaswamy and Rangarao. It is further contended that, on account of the said dispute the said Appalaswamy colluded with the plaintiff and got the present suit filed. It is the case of the defendants that the members of their family viz., defendants 4 to 15 did not receive any benefit out of the transaction. They also pleaded that they were “small farmers” entitled to the benefits of Andhra Pradesh Agricultural Indebtedness (Relief) Act (A.P. Act 7 of 1977) (hereinafter called the Act).

Finding of the Court:

The court held that the suit promissory note was true and supported by consideration but that defendants 1 and 3 were small farmers entitled to the benefits of the Act and dismissed the suit against them. So far as this 2nd defendant and his sons defendants 9 to 12 are concerned, it held that among the alienations Exs. X-1, X-5 X-6, X-10 and X-14 set up by the 2nd defendant only Exs. X-6 and X-10 are to be accepted and not Exs. X-5 and X-14. On that basis, it came to the conclusion that the joint family of the 2nd defendant owned a balance extent of ac. 5.41 cents and that the plea of the 2nd defendants that two of his four sons were majors was not correct. It therefore held that, so far as the family of the 2nd defendant and his four minor sons are concerned, they owned an extent of ac. 5-41 cents and whether it was dry or wet, the family as a unit held land more than 5 acres which was beyond the limit prescribed by the Act and the it a decree should follow against the 2nd defendant and his minor sons.

Issues: 1. Whether for the purpose of applying consideration Andhra Pradesh Act 7 of 1977 in respect of a joint family debt incurred by the father, the shares of the minor coparceners have to be separated within the family unit or whether the family of the father, mother and minor sons should be treated as a separate unit and the property held by the family as such and its members is to be taken into account. 2. Whether the land held by a Hindu Joint family has to be split up between the father and the minor coparceners or whether the Hindu Joint family should itself be treated as a ‘small farmer’ for the purposes of the Andhra Pradesh Agricultural Indebtedness (Relief) Act, 1977.

Ratio Decidendi: 1. The court held that when a debt is owed by a joint family, the family will have to be split up into the different units of the major coparceners, in terms of the definition in S. 3(1) of the word ‘family’. The definition of ‘family’ was held to lead to the conclusion that, when a debt is owed by a joint family, each unit thereof (consisting of an individual, the wife or husband, as the case may be such individual and their unmarried minor children) should be taken as a ‘debtor’ within the meaning of the Act. 2. The court further held that if the ‘family’ was itself the ‘debtor’ it could be so aggregated and observed: “If, on the other hand, the creditor or the debtor is a family, the expression ‘person’ must be understood as meaning family. In other words, the definition of ‘person’ must be understood distributively ………If on the eiher hand it is a family which claims to be a small farmer, it is an aggregate of the lands held and cultivated by that family that has to be taken into consideration.”

Final Decision: The court dismissed the appeal and held that the family of the appellants is not a small farmer under the Act and is not entitled to the benefits under this Act.