Govindji Mavji and Others vs Jadavji Valji and Another

Shah, C.J.—This is an appeal against the decree of the Assistant Judge, Porbandar, in a suit brought by the Respondent Plaintiffs to recover Rs. 7158/- together with costs and further interest from the Appellant Defendants due on a promissory note dated 22-9-43 executed by Appellant 5. Mavji Ravji lather of the remaining Appellants. The Respondent''s case was that the Appellants constitute a joint Hindu family and have a joint family business, and that Appellant 5 Mavji was the ''Karta'' and Manager of the family and had contracted the debt in that capacity. The Appellants did not dispute the debt but contended that the sons, viz., Appellants 1 to 4 were separate from their father Appellant 5, that Appellant 5 did not execute the promissory note as a ''Karta'' and Manager of a joint family but had done it in his personal capacity and that the promissory note was not binding on them and they were not liable under it. The learned Assistant Judge disbelieved this plea of the Appellants, and passed a decree against the person and property of Mavji Ravji and against his sons Appellants 1 to 4 to the extent of their interest in the joint family property.

After the institution of the appeal, the Appellants have been adjudicated insolvents by the Porbandar Court and so Mr. Joshi for the Respondents applied for steps being taken under Order 22, Rule 3, Code of Civil Procedure. A notice was thereupon issued to the receiver, appointed by the Court of the Appellants'' property, under Order 22 Rule 3(1), of the the receiver declined to continued the appeal. Mr. Joshi then prayed that the appeal may be dismiss ed under Sub-rule (2) of Rule 8 Mr. Oza for the Appellants has however contended that the provisions of Order 22, Rule 8(1) did not apply in the present case and there was no question of the appeal abating. Now Rule 8 contemplates that the suit or appeal should be such which the receiver might maintain for the benefit of his creditor, and the material question therefore is whether this appeal is one which the receiver might have maintained for the benefit of the Appellants'' creditors.

As pointed out in -- Chandrakant v. Narottam das AIR 1941 Bom. 293 the words "might maintain" mean has the power, or is entitled, to maintain, and for this one has to turn to the provisions of Section 59, Provincial Insolvency Act which is the same as Section 68, Presidency Towns Insolvency Act, which prescribes the duties and powers of the receiver. Under the section the receiver shall with all convenient speed, realise the property of the debtor and distribute dividends among the creditors entitled thereto, and for that purpose may, among other things, institute defend or continue any suit or other legal proceeding relating to the property of the insolvent. Thus a suit or appeal which the receiver is required to continue is one relating to the property of the insolvent, and inasmuch as the present appeal relates to a money decree passed against the insolvent, it does not amount to a suit relating to the property of the insolvent. As observed in -- Chandrakant''s case''.

a suit relating to the property of the insolvent'' in my opinion, means a suit which, if successful, will increase the assets distributable amongst the creditors, or the defence of which may prevent the assets being diminished. A right to institute an appeal which merely relates to a money claim against an insolvent, is not, in my view, a legal proceeding relating to the property of the insolvent, and does not fall within the powers given by Section 68 to the Official Assignee.

With respect I agree with this view. Reference may also be made in this connection to -- Subbarayar and BrOrs. v. Muniswami Iyer and Sons 50 Mad. 161. The Appellants are thus entitled to continue the appeal, and we have accordingly heard the appeal on the merits.

The main contention in the appeal is that the Appellants 1 to 4, sons of Mavji, are not liable for the suit claim for the reason that they were separate from their father. (His Lordship considered the evidence and held that the sons were not separate from their father. His Lordship then proceeded:)

4-7. The suit promissory note was executed in lieu of the outstandings due from the family by Mavji who, on his own admission, was the ''Karta'' and Manager of the family. It is alleged that he was not attending to the business since about ten years prior to his deposition, viz, since about 1939. But assuming that he was not taking a prominent part in the business on account of his advanced age, that does not mean that he had ceased to be the ''Karta'' or the Manager of the family. As it is, he admits in clear terms that he was the ''Karta'' and the Manager of the family, and these admissions also show that he executed the suit promissory note in that capacity. That being so, Appellants 1 to 4 are bound by the promissory note and their interest in the joint family property is liable for the debt. The lower Court''s decree is, therefore, correct and in confirmed, and the appeal is dismissed with costs.

Baxi, J.

I agree.