IN THE HIGH COURT OF MADRAS
Varadachariar, J.
Chimakurthi Venkatarathnam
Versus
Nooney Sambasiva Rao and Ors.
Decided On : 24.03.1938
Joint Family Business - Ancestral Business - A.S. No. 8 of 1934, A.S. No. 222 of 1934 - Sections 6, 8, 20 of Hindu Succession Act - The court discussed the liability of the younger brother for the mortgage debt and the validity of the sale-deed in the partition suit. The main question revolved around whether the business conducted by the elder brother was an ancestral family business, influencing the liability of the younger brother for the debts incurred. The court concluded that the yarn business was not an ancestral business, and the younger brother could not be held liable for the debts incurred in connection with it.
Fact of the Case:
The appeals arose from suits related to mortgage enforcement and partition. The main question was the liability of the younger brother for the mortgage debt and the validity of the sale-deed in the partition suit. Different Judges came to opposite conclusions on the liability issue.
Finding of the Court:
The court found that the yarn business conducted by the elder brother was not an ancestral family business, and the younger brother could not be held liable for the debts incurred in connection with it. The court also dismissed the plea of ratification and modified the lower Court's decree in the partition suit.
Issues: The main issue was the liability of the younger brother for the mortgage debt and the validity of the sale-deed in the partition suit. The court also addressed the plea of ratification and the correctness of the lower Court's decree.
Ratio Decidendi: The court's decision was influenced by the determination of whether the business conducted by the elder brother was an ancestral family business. It concluded that the yarn business was not an ancestral business, and the younger brother could not be held liable for the debts incurred in connection with it. The court also found that no ratification by the younger brother had been made out.
Final Decision: A.S. No. 8 of 1934 was allowed, and the liability of the second defendant's share for the mortgage debt was further reduced. A.S. No. 222 of 1934 was dismissed, and the lower Court's decree was modified to avoid further litigation.
Varadachariar, J.
1. These two appeals may be conveniently dealt with together as the main question is common to both cases. It happened that the suits out of which these appeals arise were heard by different Judges who have come to opposite conclusions on that question. A.S. No. 8 of 1934 arises out of a suit (O.S. No. 11 of 1931) to enforce a mortgage for Rs. 10,000 executed on 21st December, 1923, by the first defendant for himself and as guardian of his minor younger brother the second defendant and his minor son the third defendant. The mortgagee being dead, the plaintiff, his son issuing to recover the balance due under the mortgage, some amounts having already been paid in part payment of the mortgage debt. A.S. No. 222 of 1934 arises out of a suit for partition instituted by the younger brother, who is the second defendant in the other case, against the elder brother who is the first defendant in the other case and against certain alienees from the elder brother.
2. The only question which arises for decision in A.S. No. 8 of 1934 relates to the liability of the second defendant, that is, the younger brother for the mortgage debt. The learned Subordinate Judge held that the second defendants share in the family property was liable only to the extent of Rs. 6,607-2-4. It is contended before us in the appeal that the liability of the second defendant-appellant should be further reduced and that he should not have been held liable for a sum of Rs. 1,100 with interest thereon from the date of the mortgage making a total of Rs. 2,964-11-9 up to the date of the filing of the appeal. In respect of the balance of the decree against the second defendant, no appeal has been preferred.
3. In A.S. No. 222 of 1934 one question has been raised by the fourth defendant-appellant, who is one of the alienees impleaded as a defendant and another question has been raised by the first defendant who has filed a memorandum of cross-objections. The fourth defendant-appellant purchased two items of the family property (houses) under Ex. VII on 10th July, 1922. The sale purports to have been made in satisfaction of the claim of the vendee under an earlier mortgage for Rs. 4,000 dated 6th September, 1921, and for a cash payment of Rs. 496-12-0. The younger brother--the plaintiff - contended that this sale-deed and the mortgage preceding it were not executed for purposes binding on the joint family and that he was therefore entitled to recover a half share in the property. The learned Subordinate Judge held that out of the consideration for Ex. VII, a sum of Rs. 1,800 was binding on the family and he accordingly directed the plaintiff to be put in possession of a half share in these properties subject to a charge for Rs. 900 in favour of the fourth defendant. He also gave directions for award of mesne profits in respect of the properties covered by Ex. VII. The fourth defendant has appealed against so much of the decree as has declared the sale under Ex. VII not binding on the plaintiff. The first defendant was directed to account to the plaintiff for a sum of Rs. 700 in connection with the katnam or dowry said to have been paid to the plaintiff at the time of his marriage. The correctness of this direction is challenged by the first defendant by the memorandum of cross-objections.
4. The validity of the sale-deed marked Ex. VII in the partition suit and the binding character as against the second defendant of the suit mortgage in A.S. No. 8 of 1934 to the extent of the sum of Rs. 1,100 depend on the determination of one and the same question, namely, whether a business in yarn which the first defendant conducted between 1917 and 1919 was an ancestral family business in connection with which it was open to the first defendant to contract debts binding upon his minor brothers share. Lakshmayya, the father of the two brothers, died in 1909 and the evidence shows that he was doing business, mainly as a commission agent, in various goods includin
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