IN THE HIGH COURT OF ALLAHABAD
Agarwala and P. L. Bhargava, JJ.
ANGNEY LAL NARAIN DAS - Appellant
Versus
ANGNEY LAL MUNNI LAL - Respondents
Second Appeal 2329 Of 1943
Decided On : 09/01/1950
MORTGAGE - SIMPLE MORTGAGE BOND - SUIT FOR RECOVERY OF MONEY - DEFENCE OF NO LEGAL NECESSITY - WHETHER MONEY BORROWED FOR ANCESTRAL BUSINESS - WHETHER SONS OF MORTGAGOR BOUND BY ALIENATION - WHETHER BUSINESS STARTED BY SOLE SURVIVING COPARCENER BECOMES FAMILY BUSINESS ON BIRTH OF SONS - WHETHER ALIENATION FOR NEW BUSINESS BINDING ON SONS - WHETHER TRANSACTION FOR BENEFIT OF FAMILY - LEGAL NECESSITY - INTERPRETATION OF VERSES 27 TO 29 OF CHAPTER I OF THE MITAKSHARA.
Fact of the Case:
Plaintiff-respondent sued for recovery of money due upon a simple mortgage bond executed by defendant-appellant 1, Angne Lal, and his two sons, defendants 2 and 3, Ram Rakshpal and Mool Chand. The defence was that the money was not borrowed for any legal necessity and, as such, the mortgage was not binding on them.
Finding of the Court:
The lower appellate Court held that the cloth business which was started by Baldeo Prasad on behalf of Angne Lal was a continuation of the old ancestral business of Narain Das and that the Kirana business was not a business of hazardous nature or a new venture. It further held that the family of Angne Lal was a trading family, and that he had entered into Kirana business in order to derive more income for the family. It, therefore, held that the money borrowed was for legal necessity and, as such, binding on the appellants.
Issues: 1. Whether the money borrowed was for an ancestral business? 2. Whether the sons of Angne Lal were bound by the alienation made by him for the purpose of such a business? 3. Whether the transaction was for the benefit of the family and, as such, binding on the defendants-appellants?
Ratio Decidendi: 1. The Court held that the cloth business started by Baldeo Prasad was a continuation of the old ancestral business of Narain Das, and that the Kirana business was not a new venture but a justifiable extension of the old business. 2. The Court held that the business started in 1916 was not a continuation of the old business carried on by Narain Das, but it was a new business started for the first time by Angne Lal or, on his behalf, by his guardian, but since it was started with ancestral funds, it became a family business when Ram Rakshpal and Mool Chand were born, and they became coparceners in the business. 3. The Court held that the alienation made for the purposes of a business started by Angne Lal before the birth of his sons was binding upon the sons, and that the transaction was for the benefit of the family as a whole and, as such, it was binding on the minors also.
Final Decision: The appeal was dismissed with costs.
( 1 ) THIS is a defendants appeal arising out of a suit for recovery of money on the basis of a simple mortgage bond. The facts found and not now in dispute are as follows: One Narain Das was possessed of considerable property. He died in 1910 leaving his widow Shrimati Chironja. Defendant-appellant l, Angne Lal, was Narain Dass posthumous son. During Ms minority, shrimati Chironja was appointed his guardian. In 1916 she died and then one Baldeo Prasad, maternal uncle of Narain Das, was appointed guardian. Narain Das in his life-time used to carry on money-lending, cloth and corn business. After his death, the said business could not be continued. When Baldeo Prasad was appointed guardian, in 1916, he started Kirana and cloth business on behalf of Angne Lal, minor. This business was carried on in one of the shops belonging to Narain Das after ejecting tenants from it. In 1927 Angne Lals first son Ram rakshpal, defendant 2 was born and then his second son Mool Chand was born. Angne Lal attained majority in 1931 and continued the said business which bad been started by Baldeo prasad. On 26-10-1931 he borrowed a sum of Rs. 1,000/- from the plaintiff-respondent by executing a simple mortgage bond hypothecating certain ancestral properties. The bond recited that the money was borrowed for purposes of investment in the cloth shop and continuation of the Kirana shop. It is in evidence that this sum was in fact utilised for the purposes of this business.
( 2 ) THE plaintiff-respondent sued for recovery of the money due upon the bond in 1941. The defendants to the suit were Angne Lal himself and his two sons Ram Rakshpal and Mool Chand. Their defence was that the money was not borrowed for any legal necessity and, as such, the mortgage was not binding on them. They raised several other defences also with which we are not concerned. The trial Court held that the business for which the money was borrowed was not ancestral and was a new business started by or on behalf of Angne Lal and that, therefore, the sons of Angne Lal were not bound by the alienation in dispute, and dismissed the suit. The lower appellate Court came to a contrary conclusion and held that the cloth business which was started by Baldeo Prasad on behalf of Angne Lal was a continuation of the old ancestral business of narain Das and that the Kirana business was not a business of hazardous nature or a new venture. It further held that the family of Angne Lal was a trading family, and that he had entered into Kirana business in order to derive more income for the family. It, therefore, held that the money borrowed was for legal necessity and, as such, binding on the appellants.
( 3 ) IN this second appeal the point urged on behalf of the defendants-appellants is that the finding of the Court below that the money was borrowed for an ancestral business is not correct and that, therefore, its finding that the money was borrowed for legal necessity cannot be maintained.
( 4 ) ON behalf of the respondent it has been urged, firstly, that the business started by Baldeo prasad was a continuation of the old business carried on by Narain Das, secondly, that, at any rate, since Ram Rakshpal and Mool Chand, sons of Angne Lal, were not in existence when the business was started in 1916, they cannot question the alienation made by Angne Lal for the purpose of such a business and that thirdly, in any case, the transaction was for the benefit of the family because the business was the only means of sustenance of the family, and was as such binding on the defendants-appellants.
( 5 ) WHETHER a business started by a member of a joint Hindu family is, or is not, a continuation of an ancestral business is essentially a question of fact, but help may be obtained from decided cases.
( 6 ) IN Ram Krishna v. Ratan Chand, 1931 A. l. J. 458: (A. I. R. (18) 1931 P. C. 136), a joint Hindu family consisting of two brothers, one of whom was a minor, was carrying on a business along with a
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