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1959 Supreme(MP) 200

High Court Of Madhya Pradesh
A. H. Khan and Shiv Dayal Shrivastava, JJ.
FIRM MAKHANLAL GIRWARLAL - Appellant
Versus
HARNARAIN - Respondents
First Appeal 11 Of 1955
Decided On : 07/31/1959

Advocates Appeared:
B.D.GUPTA, G.P.Patankar

A father cannot mortgage ancestral property for starting a new business without the consent of the other coparceners, and such a mortgage is void ab initio and cannot be enforced against the son's interest in the mortgaged property.

Headnote:

MORTGAGE - ANCESTRAL PROPERTY - LEGAL NECESSITY - NEW BUSINESS - PIOUS OBLIGATION - ENFORCEABILITY OF MORTGAGE - LIMITATION.

Fact of the Case:

Plaintiff firm filed a suit for recovery of Rs. 15,299/9/- from defendants, alleging that defendant No. 1 had mortgaged an ancestral house in favor of the plaintiff on 20-12-1952 for Rs. 8,000/- repayable within three years, with a subsequent charge created on 30-3-1933 for Rs. 3,000/- on the same terms. A part of the property was sold to one Mataprasad on 1-6-1942, and the latter paid Rs. 12,000/- to the mortgagee on 1-8-1942, leading to the release of the portion sold. Defendant No. 1 claimed that the amount paid on 1-8-1942 was in full and final satisfaction of the mortgage debt, while Defendant No. 2, the minor son, resisted the suit on the ground that his father had no right to mortgage the ancestral property without legal necessity.

Finding of the Court:

1. The mortgage was incurred for running a flour mill and other businesses, while the ancestral business was money-lending and letting of houses on rent. 2. The undertakings of Defendant No. 1 fell in the category of "new business." 3. The above could not be said to be either a legal necessity or a benefit of the estate within the meaning of the Mitakshra Hindu Law. 4. The mortgage was, therefore, void and inoperative. 5. The defendants were liable to pay the debt as a debt simpliciter, but the suit was barred by time.

Issues: 1. Whether the mortgage of ancestral property by the father for starting a new business was valid and enforceable? 2. Whether the son was liable to discharge his father's debt on the doctrine of pious obligation? 3. Whether the mortgage could be enforced against the son's interest in the mortgaged property? 4. Whether the suit for recovery of money was barred by limitation?

Ratio Decidendi: 1. The starting of a flour mill was not an extension of the old business of money lending and was, therefore, a "new business." 2. A father cannot mortgage ancestral property for starting a new business without the consent of the other coparceners. 3. The mortgage being void ab initio, it could not be enforced against the son's interest in the mortgaged property. 4. The suit for recovery of money was barred by limitation as it was filed beyond the prescribed period of six years under the Gwalior State Limitation Act.

Final Decision: The appeal was dismissed with costs.

SHIV DAYAL, J.

( 1 ) THIS is a first appeal by the plaintiff firm whose suit has been dismissed by the Additional District Judge, Gwalior.

( 2 ) THE facts are these. On 20-12-1952 Har Narain defendant No. 1, on behalf of himself and his minor son Ramjidas defendant No. 2, mortgaged a house in Janakganj, Lashkar for Rs. 8,000/-in favour of the plaintiff. The mortgage money was repayable within three years. There was a subsequent charge created by a deed of 30-3-1933 for Rs. 3,000/- on the same terms and conditions. On 1-6-1942 the mortgagors sold a part of the property to one Mataprasad and the latter paid to the mortgagee firm a sum of Rs. 12,000/- on 1-8-1942 when the portion sold to Mata Prasad was released by the mortgagee.

( 3 ) THE present suit was brought by the mortgagee on 19-12-1947 for Rs. 15,299/9/ -.

( 4 ) HAR Narain's defence was that the amount paid to the mortgagee on 1-81942 was in full and final satisfaction of the mortgage debt.

( 5 ) RAMJIDAS defendant No. 2 resisted the suit inter alia on the ground that his father had no right to mortgage the ancestral property as there was no legal necessity for the same.

( 6 ) THE trial Judge has held:

1. That the mortgage debt was incurred for running a flour mill and other business, while the ancestral business was money-lending and letting of houses on rent. 2. That the undertakings of Har Narain fell ia the category of "new business". 3. That the above could not be said to be either a legal necessity or a benefit of the estate within the meaning of the Mitakshra Hindu Law. 4. That the mortgage was, therefore, void and inoperative. 5. That the defendants were no doubt liable to pay the debt as a debt simpliciter, but for that liability the suit was barred b time.

( 7 ) SHRI Gupta learned counsel for the appellant has faintly contended that the mortgaged property was not an ancestral property and that it was only by way of abundant caution that the name of Ramjidas was included as one of the mortgagors. Apart from anything else, such a plea cannot be permitted to be raised at this stage when it was not the case pleaded in the plaint. It is a question of fact and would have required evidence of the parties.

( 8 ) NO other fact or finding of fact has been challenged before us.

( 9 ) SHRI Gupta, learned counsel for the appellant has then contended that as the ancestral business of the family was money-lending and that was a sort of trade the running of a flour mill was not a "new business" but was only another form of trade. As such the father's business was not a new business and a debt incurred for that business bound the son also.

( 10 ) IT is undoubted law that the father of a Joint Hindu Mitakshara family cannot alienate an ancestral property except for legal necessity or for benefit of the estate. And, although, the continuance or extension of the ancestral business is legal necessity, starting a new business is not so. In Jagmohan v. Ranchoddas, ILR 1945 Nag 892: (AIR 1946 Nag 84), it was held: "there is no presumption that a business carried on by a member of joint family, is joint family business. Nor is there any presumption that a business carried on by such a member with a stranger is joint family business. A debt incurred by a manager of a joint Hindu family for carrying on an ancestral or joint family business is binding on the other members of the family to the extent of their interest in the joint property. But a manager has no authority to impose upon a minor member the risk and liability of a new business. A son is, however, liable under the pious obligation rule for the debt of his father incurred in carrying on the new business. "

( 11 ) IN that case reliance was placed on Ramkrishna Muraji v. Ratan Chand, AIR 1931 PC 136; Benares Bank Ltd. v. Hari Narain, AIR 1932 PC 182; Chochalingam v. Muthu Karuppan, AIR 1938 Mad 849; Annamalai Chetty v. Subramanian Chetty, AIR 1929 PC 1; and Raghbir Singh v. Ramrattan, AIR 1943 PC 40.

( 12 ) THE law on the point is

















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