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1934 Supreme(Pesh) 14

HIGH COURT OF PESHAWAR
Almond, J.C
Lyallpur Bank Ltd & Anr. – Appellants
Versus
Mehr Chand & Anr. – Respondents
Decided On : 10-08-1934

JUDGMENT

Almond, J C - In this case the Lyallpur Bank obtained a decree against (1) Jhangiram & Sons, and (2) Kewalram. After the decree was obtained, Kewalram died leaving behind him two grandsons, namely Mehrchand and Chimanlal. In execution of their decree the-bank attached the property which is now in dispute and Mehrchand and Chimanlal brought objections that the property was not liable to sale in execution of the bank's decree. The objections were summarily dismissed by the executing Court and on appeal to this Court by order dated 12th August 1932 the case was remanded with the direction that the objections should be disposed of after giving the parties am opportunity of producing their evidence on the points at issue and coming to a definite finding on the points in dispute between the parties. Two issues were therefore framed: (1). Whether the objector is bound to pay the decree; therefore the property attached could be auctioned. (2) If they are not bound, then could they raise these objections. The lower Court found that the debt due from Kewalram was a debt in his capacity as surety and that his grandsons were, therefore, not liable to pay the debt in view of the rulings reported as Dwarka Das v. Kishan Das 1933 All. 587 and Narayan v. Venkatcharya (1904) 28 Bom. 408.

2. The decree-holders have appealed to this Court and the questions which are for decision, as admitted by learned Counsel for both sides, are as follows: (1) Whether the debt of Kewalram was a security debt. (2) If so, whether the defendants being grandsons of Kewalram are not liable for its payment. (3) If they are not exempted from liability in view of being grandsons, whether the partition effected between them and their grandfather during the latter's lifetime was a fraudulent one, and if it was not fraudulent but a genuine one, then are the grandsons liable for the debts of their grandfather contracted before partition of the property? On the first of these points it appears to me that the executing Court was correct in coming to the conclusion that the debt was a security debt. It is argued on this point by learned Counsel for the appellants that the bank's accounts do not show that, Kewalram was a surety for the debt of his nephew Jhangi Ram and that the objectors have not produced the accounts of either Kewalram or those of Jhangiram which would have shown whether any of the debts contracted had been for the benefit of Kewalram. Against this evidence learned Counsel for the objectors relies on the statement of Banbasi Lal, the liquidator of the bank, from his statement it appears, that the account commenced from 7th June 1920 in the name of Jhangiram and Gowardhandas, his brother. On 21st December 1921 there was a debit balance of Rs. 4,899 in this account. A fresh account was then opened and on that day a pronote for Rs. 5,000 was signed by Jhangiram for himself and his brother and also by Kewalram and Kokaram, another brother of Kewalram. The account was operated by Jhangiram alone. This account continued until 24th April 1925, on which date there was a debit balance of Rs. 3,176. On that day a fresh pronote for Rs. 5,000 was executed, the consideration for which was the old debt. This was signed toy Jhangiram for himself and his sons and by Kewalram and again was operated by Jhangiram alone. On this same date a letter was written to the bank by Jhangiram, of which a copy has been produced, to the following effect:

I am writing to L. Kokaram to send me a letter of responsibility on my debit due to you. On receipt of the said letter I shall forward it to you.

3. On 14th July 1925 a letter, a copy of which has also been produced, was written by Koka Ram Thukral to the bank to the following effect:

With reference to the cash credit account to the extent of Rs. 5,000 and pronote account Rs. 5,000 as existing in the name of Messrs. Jhangiram Gowardhandas and on the joint security of L. Kewalram and myself, I hereby undertake the responsibility an

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