Adaikalam Chetti vs Subban Chetty and Others

John Edward Power Wallis, Kt. Officiating C.J.

I have had the advantage of reading the judgment of my learned brother and shall only deal with the right of the plaintiff a member of a joint

family to maintain a suit to recover money belonging to the joint family advanced by him on mortgage to the defendants without joining the other

members of his family interested in the money.

According to the view we take of the facts and for reasons given in the judgment of my learned brother we hold that the money was advanced

to the mortgagees without disclosing that it belonged to the joint family, and at a time when the plaintiff was not the managing member of the family.

It was held in Adaikhalam Chetti v. Marimuthu ILR (1899) M. 326 and other cases that in the cases of a joint family where the contract was in the

name of the plaintiff he was entitled as the agent of an undisclosed principal to sue on it himself without joining the other members of the family. This

decision, it is true, was not approved of in Seshan Pattar v. Veeraraghavan Patter ILR (1909) M. 284. S.C. 19 M.L.J. 372 but appears to me to

be supported by the recent ruling of the Privy Council in Kishen Preshad v. Har Narayan Singh ILR (1911) A. 272 : 21 M.L.J. 378, where the

fact that the contract was properly entered into by the plaintiff, was, it seems to me, treated as one of the grounds entitling him to sue. I do not find

anything inconsistent, with the proposition in the judgment of Benson and Sundara Aiyar, JJ. in Sheik Ibrahim Tharagan v. Rama Aiyar (1911)

I.I.R. 35 M. 685. : S.C. 21 M.L.J. 508. The bond in that case had not been taken in the name of the managing member, who brought the suit, but

in the name of another member who was joined as the 16th defendant. Certain payments to 16th defendant were held bad on the ground that they

were fraudulent but there is no suggestion that in the absence of fraud he could not have sued himself. He had not done so, and the managing

member sued as such making him a defendant. The second question in the appeal was whether the managing member could maintain the suit

without joining all the members of the joint family in addition to the member who had taken the bond. It was held that he could, and the learned

Judges referred to the decision of the Privy Council in Kishen Pershad v. Har Narayan Singh ILR (1911) A. 272 : 21 M.L.J. 378 in support of

their view that in such a suit the managing member was entitled to represent the family. The observation at the ""bottom of p. 690, as I read it,

means no more than that their Lordships did not rest their decision solely on the ground that the contract sued on was in the name of the managing

member. In any case this point was not before the learned Judges for decision. I agree that the appeal must be allowed with costs and on the other

terms in the order of my learned brother.

Kumaraswami Sastri, J.

The plaintiff, who is the appellant, sues to recover Rs. 13,000 alleged to be due on a mortgage in his favour, dated 13th August 1895, and Rs.

4000 due to him and 2nd defendant on a subsequent mortgage dated 21st June 1888 executed by the 1st defendant in favour of the 2nd defendant

and two others and in respect of which the plaintiff got assigned to him two of the shares of the other two persons.

The case for the plaintiff was that he and the 2nd defendant were divided and that the money claimed belonged to him. Various defences were

raised by the defendants, but, for the purpose of this appeal, it is only necessary to consider a few of them. One defence was that the moneys

claimed were not due to the plaintiff alone but to the plaintiff and his brothers who were members of an undivided family and that the plaintiff was

not entitled to maintain the suit without joining all those who were interested in the mortgage money. Another defence was that the plaintiff was not

entitled to sue for his money by a sale of the properties as the mortgage was a usufructuary mortgage. It was also pleaded that the suit was barred

by limitation. The Subordinate Judge held that, though the mortgage for Rs. 13,000, was obtained by the plaintiff in his name, it was obtained by

him as a member of an undivided family and that the loan was advanced out of family funds.

As regards the claim for Rs. 4,000, he held that it was not proved that Rangan Chetty, one of the plaintiff''s assignors, received consideration for

the transfer and that consequently the transfer Exhibit B was not valid. He held that the suit was not barred by limitation, as the bond contained a

covenant to pay and was not a purely usufructuary mortgage. He dismissed the suit on the ground of non-joinder of the other persons interested in

the mortgage money.

As regards the finding of the Subordinate Judge on the 1st issue, I am of opinion that the plaintiff has not proved that the mortgage money was

his separate or self-acquired property. It is not denied that the plaintiff and his brothers were at one time joint members of a family owning

extensive properties. The plaintiff has not proved that on the date of Ex. A there was a partition between himself and his brothers and it is not

shewn how he acquired Rs. 13,000. The 2nd defendant no doubt admits that on the date of Ex. A, the plaintiff was living separately, but mere

separate living will not entitle the plaintiff to use properties, which were joint properties and which were not divided, so as to give him an absolute

title to the mortgage money lent by him out of such funds. The question however is whether the mere fact that others are entitled to an account of

the mortgage money and to a share therein would make them necessary parties to the suit. It appears from the document Ex. A, that it was taken in

the sole name of the plaintiff without reference to any other person and the Appellant''s Vakil argued that it was open to the plaintiff to sue in his

own name (1) because the contract was between himself and the 1st defendant without disclosing the fact that the plaintiff was acting for any body

else or using the funds of third parties and consequently he should be deemed to be in the position of an agent contracting for undisclosed principal

and (2) because the plaintiff who on the findings of the Subordinate Judge, must be taken to be the managing member of the family can maintain the

suit on the mortgage which was taken in his own name without joining the other members of the family who may be interested in the mortgage

money.

As regards the first point, the evidence on record shows that, though there was no actual partition by metes and bounds the plaintiff was living

separately from his brothers for several years. The separate living is spoken to by the plaintiff and his witnesses and the 2nd defendant in his

evidence admits that at the time of the execution of Ex. A (deed of mortgage for Rs. 13,000) the plaintiff was not living in the family but taking his

meals separately. It also appears from the evidence that there was an ineffectual attempt to effect a partition by metes and bounds. The position,

therefore, was that the plaintiff at the date of the mortgage Ex. A, was living separately and that he took the mortgage in his own name with funds in

which his brothers were interested, and had a share. The evidence of the plaintiff and his brothers leaves no room for supposing that, when he lent

the money, the plaintiff was acting as the managing member of an undivided family or was representing any interests but his own. Where a person

purporting to act for his sole benefit, uses funds in which his brothers have a share the fact that he may be accountable to his brothers affords no

ground for dismissing the suit on the mortgage for non-joinder. It is not the case of a member of an undivided family suing in respect of a mortgage

taken by the member of a family, and the mere fact that the plaintiff used family funds to obtain the benefit for himself will not entitle the mortgagor

to question the plaintiff''s rights to enforce the contract between the parties. The position of the plaintiff in such"" a case could not be worse than that

of a benamidar and it has''been held in Sachinanda Moha Patro v. Baloram Gosain ILR (1897) C. 644 that a benamidar can sue to recover his

dues on a mortgage taken in his name.

In Adaikhalam Chetti v. Mari Muthu ILR (1899) M. 326 it was held that the mortgagee can sue to recover the mortgage money due on a bond

taken in his sole name without joining the other members of the family even though he might be a member of an undivided Hindu family. The ground

of the decision was that the contract on which the suit was based was in his sole name and did not purport to have been obtained by him on behalf

of any others but himself. The recent decision of the Privy Council in Kishen Pershad Singh v. Har Narayan Singh ILR (1911) A. 272 supports the

view taken in the above case. It is argued that though living separately plaintiff who was dealing with family moneys must be treated as the agent for

the other members of the undivided family and that in such case the contract is really with all the members of the family. Even if plaintiff was the

agent I am of opinion that he can sue alone as he did not disclose that he was acting for the other members of the family. In Bungsee Singh v.

Soodit Lall ILR (1881)C. 739 the right of the mortgagee to sue on the mortgage was upheld on the ground that the plaintiff should be regarded as

contracting not only on behalf of himself but on behalf of ""undisclosed principals i.e. the other members of the family. As this case was cited with

approval in Adaikhalam Chetti v. Mari Muthu ILR (1899) M. 326 it must be taken that their Lordships approved of the principle on which the

decision was based. A similar view was taken in Gopal Das v. Badri Nath ILR (1904) A. 361. Having regard to the fact that the plaintiff while

living separately was using family funds to obtain a mortgage in his own name, it is hardly likely that he would have disclosed to the mortgagor the

fact that he was using family funds or was acting on behalf of any body except himself. The 1st defendant, who is the mortgagor does not state that

at the time of the mortgage the plaintiff disclosed the name of any other person as having an interest. He admits that the mortgage deed was

executed in plaintiffs name and simply states that the 2nd defendant, Rangan Chetti and Vydilingam Chetti referred to in the plaint are undivided. It

is not pleaded and there is no evidence on record to show that the plaintiff did at the time of making the contract disclose that he was contracting

not only on behalf of himself but also on behalf of the other members of the family. In Bungsee Singh v. Soodhit Lall ILR (1881) C. 739 and Gopal

Das v. Badri Nath (1901) ILR 27 A. 361 it was held that the onus of proving the plea is on the defendant. I am, therefore, of opinion that the

plaintiff is entitled to sue on a mortgage obtained by him in his sole name while he was living separately from his brothers and that the mere fact that

his brothers had an interest in the funds would afford no defence to the mortgagor in a suit filed on the mortgage. Even assuming that the plaintiff

was on the date of the mortgage in the position of the managing member of an undivided family, the decision of the Privy Council in Kishen

Pershad v. Har Narain Singh ILR (1911) A. 272. 21 M.L.J. 378 is a clear authority for holding that the managing member of an undivided family

can sue on a contract entered into by him in his own name without joining the other members of the family. The ground upon which their Lordships

based their decision is that it was competent for the managing member to enforce at law contracts which he was entitled to make or discharge in

his own name and that the defendant while entitled to insist that all persons with whom he expressly contracted should be made parties, is not

entitled to demand that persons who were merely interested in the profits of the transaction should be treated as parties necessary to its

enforcement.

It is argued for the Respondents that the right of the managing member to sue on contracts entered into by him in his own name ceases as soon

as disputes arise in the family or if any member begins to live separately. I am unable to find any authority for this broad proposition. The only

ground on which it can be supported is that the sole right to sue is based on the right of the managing member to represent the family in all

transactions affecting the family and that such right ceases on the other members of the family revoking the authority of the managing member to

bind them. There are no doubt observations in Sheik Ibrahim Tharagan v. Rama Aiyar ILR (1911) M. 685 : 21 M.L.J 508 to the effect that the

right of the managing member to sue on a contract entered into with him without joining the other members is based on the theory that he

completely represents the family in all transactions with other parties but their Lordships of the Privy Council rested the decision on broader

grounds. Their observations at pages 276 and 277 make this clear. If the right of the plaintiff to sue without Joining the other members of the family

rests on the general principle of law, that the person in whose name the contract is made can enforce it without joining persons simply interested in

it, the fact that there are disputes between the plaintiff and those interested would be no ground for holding that he has lost the sole right of suit. It

would of course be open to those who have an interest in the mortgage money to apply to be made parties to the suit and even if they do not do so

the Court has the power to safeguard their interests. There is no reason why the mortgagor whose contract was with one member of the family,

should take advantage of the disputes between the members and withhold a payment which under his contract, he was legally bound to make to

the person with whom he mortgaged the property. I am of opinion that the Subordinate Judge was wrong in dismissing the suit on the mortgage

Exhibit A. on the ground of non-joinder.

As regards the claim of Rs. 4000 it is difficult to see how the decision of the Subordinate Judge can be supported. The mortgage was in the

name of the 2nd defendant and two of his brothers, Rangan Chetti and Vythilingan Chetti. Exhibit B and B 1 are transfers by Rangan Chetti and

Vythilingan Chetty to the plaintiff of their interests in the mortgage. These documents which were duly executed on the 6th January 1906 and 28th

December 1905, were registered. The evidence that the consideration for Rangan Chetti''s assignment was not paid is very meagre. Even assuming

that the consideration was not paid it would not invalidate the transfer, as mere non-payment of consideration would be no ground for holding that

property did not pass. The question as to consideration is one between the transferor and the transferee and it is difficult to see how the mortgagor

can take advantage of the non-payment of consideration for the assignment.

The appellant''s Vakil states that the appellant is willing to give such security as the Court may direct to safeguard the interests of the 2nd

defendant and the other members of the family who might be interested in the mortgage money. I am of opinion that their interests will be

sufficiently safeguarded by requiring the appellant to give security to the satisfaction of the Subordinate Judge before he executes the decree.

I would therefore reverse the decree of the Subordinate Judge and pass a decree for the plaintiff as prayed with costs in this and in the lower

Court. There will be the usual mortgage decree. Time for redemption six months.