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1994 Supreme(Raj) 577

RAJASTHAN HIGH COURT
N.C.Kochhar, J.
Gopi Ram and Ors. - Appellant
Versus
M/s. Ashok Kumar Murari Lal and Another - Respondent
S.B. Civil Regular First Appeal No. 12 of 1986.
Decided On : 11-01-1994

Members of a joint Hindu family firm are liable for the debts of the firm, but such liability must be established by evidence and cannot be presumed solely on the basis of membership in the family.

Headnote:

PARTNERSHIP - JOINT HINDU FAMILY FIRM - LIABILITY OF MEMBERS - PROOF - NECESSITY - DOCUMENTS SHOWING SEPARATION FROM JOINT FAMILY AND PROPRIETORSHIP OF DECEASED MEMBER - NO EVIDENCE OF JOINT BUSINESS - LIABILITY NOT FASTENED ON MEMBERS.

Fact of the Case:

Plaintiff firm sued defendant firm and its members (appellants) for recovery of dues on credit sales of cloth. Appellants claimed that the deceased member, Ram Niwas, was the sole proprietor of the defendant firm and that they had no involvement in the business.

Finding of the Court:

The court found that the appellants had produced documentary evidence, including a separation deed, a general power of attorney, and tax assessment orders, which supported their claim that Ram Niwas was the sole proprietor of the defendant firm and that they had no involvement in the business.

Issues: Whether the appellants were liable as members of a joint Hindu family firm for the debts of the defendant firm.

Ratio Decidendi: The court held that in the absence of evidence to contradict the appellants' documentary evidence and their testimony, the trial court erred in finding that the appellants were carrying on business as members of a joint Hindu family firm and were liable for the debts of the defendant firm.

Final Decision: The court allowed the appeal, set aside the trial court's judgment and decree against the appellants, and dismissed the plaintiff's suit against them.

JUDGMENT

1. - The appellants Gopi Ram, Shiv Prakash and Ashok Kumar have filed this appeal under section 96 of the Code of Civil Procedure against the judgment and decree dated 31-10-1985 passed by the learned District Judge, Jhunjhunu in Civil Suit No. 7/82. The brief facts are as under:

2. The plaintiff-respondent No. 1 M/s. Ashok Kumar Murari Lal (hereinafter to be referred as the plaintiff firm) had instituted a suit against M/s. Ram Niwas Shiv Prakash (hereinafter to be referred as the defendant firm) and against the appellants with the allegations that the defendant firm was a joint family firm of the appellants and of Ram Niwas, who was the son of the appellant No. 1 and the brother of the appellants No. 2 and 3. It was alleged that the defendant firm had taken cloth on credit basis from the plaintiff firm during the period from 2-7-1979 to 6-2-1980 and a sum of Rs. 25,869-30 p. was due from the defendant firm to the plaintiff firm, but the said amount had not been paid. It was alleged that the defendant firm as well as the appellants, who are the members of the joint family firm and were carrying on business in the name and style of the defends firm were liable to pay the suit amount to the plaintiff fine with interest and costs. The suit was contested by the appellants on the grounds, inter alia, that the defendant firm belonged to their late brother Ram Niwas, who was the sole proprietor thereof and that they had never carried business as joint family members of the family of Ram Niwas, who had separated from the joint family of the appellants in 1971. The learned trial court framed the necessary issues and after recording the evidence produced by the parties and hearing their learned counsel, decreed the suit filed by the plaintiff firm against the defendant fine and held that the appellants, being the members of the joint Hindu family, which was carrying on business in the name of the defendant Linn, were liable to pay the decretal amount to the plaintiff firm. Feeling aggrieved, the appellants have approached this court by filing this appeal.

3. I have heard the learned counsel for the parties and have also perused the record of the case.

4. The only contention raised on behalf of the appellants, by their learned-counsel, is that the finding of the learned trial court that the defendant firm was a joint Hindu family firm and the appellants were carrying on business as the members of the joint Hindu family in the name of the defendant firm is erroneous.

5. From the record I find that the appellants had produced on record a document dated 23-5-1973 '(Ex. A-9) showing that Ram Niwas had admitted that he had separated from the joint Hindu family of his father and had also mentioned that he had been carrying on the business as the proprietor and in the name and style of M/s. Ram Niwas Shiv Prakash-defendant firm since 1970 and that he had nothing to do with the joint family property and had surrendered his rights therein in favour of his father. Ex. A-10 is the registered general power of attorney dated 3-2-1975 executed by the deceased Ram Niwas in favour of his father Gopi Ram (appellant No. 1) and his brother Shiv Prakash (appellant No. 2) authorising them to conduct the business of the defendant firm on his behalf and to exercise his powers in relation thereto. Ex. A-11 is the certified 'copy of the assessment order dated 22-2-1974 made by the Income tax Officer, A-Ward, Jhunjhunu in respect of the assessment year 1972-73 which shows that the defendant firm was assessed as individual and Ex. A-12 shows that the said firm was assessed for the assessment year 1975-76 by the Assistant Commercial Taxes Officer on 20-12-1975 and the firm was assessed as the proprietary concern. Ex. A- 14 is the certificate issued by the Rajasthan Shop and Establishment Department showing that the defendant firm was registered as the proprietary concern of Rani Niwas son of Gopi Ram. Shiv Prakash (appellant No. 2) appeared in the witness box



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