The applicability of ancestral business principles to new business ventures and the extent of a minor's liabilities in such ventures.

Wadsworth, J.

1. The appellants in this case are the legal representatives of a mortgagee from the first and second defendants and from the first defendant as guardian of his minor brother, the plaintiff, who attacks the mortgage as not binding on his interest in the joint family property. The family of the plaintiff followed the ancestral occupation of dealing in oil seeds and working country oil mills. The father Dharmalingam started a. rice mill and ran it for some little time but for about a year before his death in 1916 the rice mill was not worked. After his death the two major sons, first and second defendants kept the rice mill idle. That at best is the finding of the Courts below. It is however contended that this finding ignores the evidence to the effect that the rice mill was worked for a short time after the death of the father; but it seems to me that I cannot go behind the findings of the Courts below on a question of fact. In 1922 this rice mill which had been lying idle for years was sold and the bulk of the sale proceeds appears to have been utilised for discharging family debts. Five years later in 1927, the first and second defendants decided to purchase a new rice mill and they borrowed money for that purpose, which borrowings have led up to the mortgage transaction now impugned by the minor brother, plaintiff. The question is whether the plaintiff is bound by the mortgage, the main basis of which was borrowings connected with the purchase and equipment of the new rice mill. The law on the subject is in my opinion fairly well settled, whatever may have been the difference of opinion in the past. The Privy Council in Sanyasi Charan Mandal v. Krishnadhan Banerji (1922) 43 M.L.J. 41 : L.R. 49 IndAp 108 : I.L.R. 49 Cal. 560 , had to deal with the case of a family which had two ancestral businesses in rice. The adult members of the family started a third business in rice which was held to be not ancestral or an extension of the ancestral business. The Judicial Committee held that the adult brothers were not entitled to bind the interest of their minor brother by borrowing for the purpose of this new business. Their Lordships point out that:

The distinction between an ancestral business and one started like the present after the death of the ancestor as a source of partnership relations is patent. In the one case these relations result by operation of law from succession on the death of an ancestor to an established business with its benefits and its obligations. In the other they rest ultimately on contractual arrangement between the parties.

2. Their Lordships go on to point out the inability of a karta to impose on a minor coparcener the risks and liabilities of a new business started by himself. This was a case under the Dayabhaga but the applicability of the principle to families tinder the Mitakshara system has been established in the decision of the Privy Council in Benares Bank, Ltd. v. Hari Narain (1932) 63 M.L.J. 92 : L.R. 59 IndAp 300 : I.L.R. 54 All. 564 , where the Judicial Committee point out that even a father as manager of a joint family cannot impose upon his minor sons the risk of a new and speculative business. This decision affects the decision of this Court in Venkatasami Naiker v. Palaniappa Chettiar (1928) 56 M.L.J. 380 : I.L.R. 52 Mad. 227, where it was held that a Hindu father governed by the Mitakshara law can starta new trade with the aid of family funds and make that a family business binding on his sons who would be bound by an alienation made by the father for raising funds for carrying on that business. The decision in Venkatasami Naiker v. Palaniappa Chettiar (1928) 56 M.L.J. 380 : I.L.R. 52 Mad. 227, rests largely on an earlier decision in Official Assignee of Madras v. Palaniappa Chetty (1918)35MLJ473 . Now it has been held in at least two recent decisions, Krishnaswami Aiyar v. Ramanadhan (1934) 68 M.L.J. 251 and Nataraja Aiyar v. Lakshman Aiyar (1936) M.W.N. 871, that the