Rajagopal Pillai vs P. Veeraperumal Pillai and Others

Venkatasubba Rao, J.—In this suit a very large amount is involved but otherwise this is a typical case. In form the suit is for partition of

family property but in truth it is an attempt by a son with the aid of his father to recover for his family the properties alienated by the latter. The

following pedigree explains the relationship of the parties:

Veeraperumal Pillai

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__________________________________________________

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Thiruvengadathau Doraisani Kajagopal

Pillai Animal Pillai

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P. Appasami Pillai : |

Nagathammal |

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Muthusami Srinivasa P.M. Appa- Nagath-

| sami Pillai ammal

__________________________

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P. Veeraperumal P. Sethuram

Pillai (1st Deft.) Pillai.

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Rajagopal Pillai (Plff.).

The plaintiff Rajagopal Pillai is a minor who sues by his next friend. The 1st defendant, his father, became an insolvent and his estate is now

represented by the 5th defendant the Official Assignee of Madras. No relief is sought against the 2nd defendant who has not appeared to defend

the suit and the really contesting defendants are the 3rd and the 4th. The 3rd defendant holds a mortgage for Rs. 2,50,000 and the 4th defendant

for about Rs. 1,24,000. These two mortgages were executed by the 1st defendant and the primary object of the suit is to get rid of them.

On the 30th of March, 1915, there was a partition among the members of the plaintiff''s family who at that time were (1) P.M. Appasami Pillai,

(2) Veeraperumal Pillai (the 1st defendant), (3) Sethuram Pillai, and (4) the plaintiff, the son of Veeraperumal Pillai. By the partition Sethuram Pillai

and Nagathammal, the sister of Appasami Pillai, were given certain properties; some were allotted to P. M. Appasami Pillai and some to the 1st

defendant as representing himself and his son. Shortly after the partition, on the 11th of August 1915, Appasami Pillai made a will in effect

bequeathing his properties to the 1st defendant. On the 19th of October 1920 he made a codicil which however did not substantially alter the will.

Appasami Pillai died on the 4th of October 1921. As I have said the mortgage in favour of the 3rd defendant was executed on the 10th April

1923, and that in favour of the 4th defendant on the 31st of May 1924. It is the same set of properties that were comprised in both the mortgages.

Four properties were mortgaged, one of them being a property that fell to the share of the 1st defendant at the partition and the other three being

those that were allotted to Appasami but were bequeathed by him to the 1st defendant.

Mr. Venkataramana Rao for the plaintiff has advanced several contentions. The gist of them is that all the four properties mortgaged to the 3rd

and 4th defendants were joint family properties in which the plaintiff has an interest. These defendants do not admit that the plaintiff has any right in

the properties taken by the 1st defendant under the will of his uncle. Mr. Venkataramana Rao firstly urges that the partition of 1915 was intended

only to separate Sethuram Pillai but that as between Appasami and the 1st defendant it was a sham and a pretence. Secondly, he urges that if there

was a partition, there was an immediate re-union between the 1st defendant and his uncle. He thirdly contends that granting there was a real

partition, the 1st defendant should be taken to have thrown into the hotch-pot the properties taken by him under the will and that all the properties

thus became joint family properties in which the plaintiff has an interest. He fourthly urges that the devise in favour of the 1st defendant must be

taken to be in his character as the manager of the joint family consisting of himself and his son and that in this view again the plaintiff has an equal

right with his father.

I shall postpone the consideration of these interesting questions to a later part of my judgment; for, in my opinion, it is unnecessary to deal with

any of them as the case may be disposed of on the assumption that the properties jointly belonged to the 1st defendant and the plaintiff. So far as

the creditors the 3rd and the 4th defendants are concerned, their case rests on very firm foundation and from their point of view the questions that

have been raised can be only of academic interest. They have taken up this position. ""Let it be granted that the properties are joint family

properties but we are able to conclusively prove that the amounts we advanced were utilised for paying off the antecedent debts of the 1st

defendant the father. If this be so, the son is as much bound as the father by the mortgages in our favour."" This case has been proved to the hilt.

Every rupee advanced by these creditors was required for, and utilised in paying off, antecedent debts.

I shall first take the transaction with the 3rd defendant. He is receiver of a certain estate and obtained permission of the High Court to lend

monies to the 1st defendant. The recitals in the deed are very categorical. The 1st defendant represented to this creditor that he had pressing debts

to the extent of about 3 lakhs and 30,000. Though every point in this case has been contested, I must say that the evidence is so convincing that

only one conclusion is possible. The deed provides that the lender was to retain Rs. 3,250 as his commission which was to be credited to the

estate which he represented. The rest of the amount was advanced by three cheques. The 1st defendant has gone into the box and has admitted

the receipt of the cheques. ,

Next I shall deal with the application of the money. The 1st defendant handed to the 3rd a memorandum showing how the sum of 2 lakhs and

50,000 was really expended. That is marked Ex. 6. It contains complete particulars and every one of the items in that memorandum has been

proved,

I. Rs. 29,015-0-0 was paid to Sah Agarchand Manmal. There were four promissory notes in his favour outstanding. They are the following:

(1) Promissory note dated 11th July, 1921 executed by Appasami and the 1st defendant for Rs. 10,000.

(2) do. dated the 13th September, 1921 by do. for Rs. 1,000.

(3) do. dated 13th May, 1922 by 1st defendant alone for Rs. 10,000.

(4) do. dated 2nd March, 1923, by do. for Rs. 7,500.

All the four amounts had been borrowed on the security of a property at Guindy known as ""Winning Post"". At the partition there was merely the

site and the building had not been built. The site was treated as Appasami''s separate property at the division. The amount due on these four notes

was paid up from the money borrowed from the 3rd defendant and the notes which were returned to the 3rd defendant after being duly cancelled

are now produced by him. The ""Winning Post'''' which was thus redeemed is one of the properties included in the mortgages in question.

II. The next item shown in Ex. 6 is a payment of Rs. 5,000 to Aparanji Ammal. A legacy of Rs. 15,000 was given to this lady under the will of

Appasami and the Rs. 5 000 referred to was paid towards this legacy from the sum borrowed. There can be no question that this payment is

binding on the plaintiff.

III. The next payment referred to in Ex. 6 is of Rs. 38,773-14-6 to Messrs. Gillanders Arbuthnot & Co. The 1st defendant traded under the name

of Burrang and Company with this Firm in timber and became largely indebted to it. The firm filed several suits against the 1st defendant and one of

them was C. S. No. 393 of 1922 on the file of this Court. In that suit it obtained a decree against the 1st defendant for Rs. 37,435-14-9. On 17th

March 1923 execution was ordered to be taken out against the 1st defendant. It has been proved that from and out of the amount advanced by

the 3rd defendant the 1st defendant paid the decree amount and satisfied the decree.

IV. The next payment referred to in Ex. 6 is that of Rs 10,000 to Sethuram Pillai. This sum came to be paid in the following circumstances. After

the death of Appasami, Veeraperumal applied to this Court for probate of his will. Sethuram Pillai filed a Caveat but his objection was disallowed

and probate was ordered to be issued by the trial Judge. Sethuram Pillai filed an appeal. While the appeal was pending, Sethuram and the 1st

defendant entered into an agreement, which was to the effect that on the 1st defendant paying Rs. 50,000 to Sethuram he was to withdraw his

appeal. The payment of Rs. 10,000 was made towards this sum of Rs. 50,000 Sethuram is shown as a creditor for the balance of Rs. 40,000 in

the schedule of debts filed by the 1st defendant in the insolvency proceedings. This payment of course is clearly binding on the plaintiff.

V. The next payment shown in Ex. 6 is that of Rs. 80,000 to Kanniah Lal Mohan Lal. A sum of Rs. 1,05,000 was due to Mohan Lal Kanniah Lal

on a mortgage dated 2nd March, 1922 executed by the 1st defendant for himself and as guardian of the present plaintiff. Out of the amount

advanced by the 3rd defendant, the 1st defendant paid Rs. 85,000 to Mohan Lal Kanniah Lal and got one of the mortgaged properties, 74,

Varada Muthaiappan Street, released from the mortgage. 1 may mention that after giving credit for this sum of Rs. 75,000. Mohan Lal Kanniah

Lal filed C. S. No. 399 of 1925 on the file of this Court against the 1st defendant and the plaintiff. The present plaintiff, defendant in that action,

pleaded that the debt was not binding upon him as it was illegal and immoral. That plea was found against by a learned Judge of this Court and a

decree was passed on the 6th of August, 1926.

VI. The next payment shown in Ex. 6 is of Rs. 41,600 to Madan Mohanjee Temple. This amount was due on a mortgage executed by Appasami

Pillai himself over 1|72, Varada Muthaiappan Street, a property that fell to his share at the partition. The amount was repaid by the 1st defendant

from and out of the money advanced by the 3rd defendant and the plaintiff is clearly bound by this payment.

VII. The next payment shown in Ex. 6 is that to the Tata Bank amounting to Rs. 22,000 and odd. This debt arose in the following way. The 1st

defendant borrowed money from one Chokkalingam to pay off a debt due to Gillanders Arbuthnot & Co. For the sum borrowed, namely Rs.

25,000, the 1st defendant executed a promissory note in favour of Chokkalingam who in his turn endorsed it to the Tata Bank. When the latter

called on Chokkalingam to pay he made default. Demand was then made on the 1st defendant who as the maker of the promissory note was liable

and he had to pay up the debt. This sum of Rs. 22,000 was paid to the Tata Bank from the money raised from the 3rd defendant. This payment is

again binding on the plaintiff.

VIII. The next payment shown in Ex. 6 is to Murali Doss of Rs. 2,000. This has also been proved to be an antecedent debt and the plaintiff cannot

question it.

These exhaust the payments made to creditors. The rest of the amount is made up of stamp and registration charges (Rs. 2,661), commission

paid to the broker who negotiated the mortgage (Rs. 8,000) and the discount allowed to the lender (Rs. 3,250) . The facts I have set forth show

that not only was the representation on which the 3rd defendant acted was true, but that as a matter of fact the monies lent by him went in

discharge of antecedent debts.

I shall now turn to the case of Gillanders Arbuthnot and Company, the 4th defendant. The 1st defendant had, as I have said, dealings with them

in timber. In dealing with the 3rd defendant''s case I have already referred to a decree obtained by this firm against the 1st defendant. They

obtained two other decrees. On the 26th October 1922, they obtained a decree on a promissory note dated 10th November, 1921, for about Rs.

l,10,000. Another decree was obtained on 20th September 1923, in C. S. No. 498 of 1923 for about Rs. 55,000. Application was taken out

against the 1st defendant for execution and for the balance of the decree amount then due to this firm the suit mortgage in their favour was executed

the 1st defendant acting for himself and as the guardian of his minor son. Thus we find that the consideration for the mortgage represents wholly an

antecedent debt and the plaintiff is thus liable.

The facts which I have reviewed at some length establish (1) that the money paid by the 3rd defendant for his mortgage really went in

discharge of antecedent debts, and (2) that the consideration for the 4th defendant''s mortgage represents an antecedent debt due to himself. Mr.

Venkataramana Rao contends that a major portion of these antecedent debts is of the nature known as ""avyavaharika"" and that the plaintiff is not

therefore liable. The 1st defendant carried on a business in timber tinder the name of Burrang and Co., and incurred several debts. The money

advanced by the 3rd defendant was to some extent utilised in paying off these debts. The whole of the debt due to the 4th defendant was incurred

in the course of that trade. The contention is, that the 1st defendant''s family was not a trading family and that if debts are incurred in a trade which

is commenced by the father, the son is not liable for them under the pious obligation recognised by the Hindu Law. For this position he relies upon

the text of Gautama which is to the following effect:

Money due by a surety, a commercial debt, a fee due to the parents of the bride, debts contracted for spirituous liquor or in gambling and a line

shall not involve the sons of the debtor.

It is significant that of the several texts that bear on this question, the only text which gives the son exemption from payment of commercial

debts is the text of Gautama. In my judgment in Muthammal v. Sivagami Ammal (1925) 21 LW 606 1 set forth all the texts that deal with this

point. The word ""avyavaharika'' occurs in the text variously attributed to Vyasa and Usanas. That text is to the following effect:

The son has not to pay a fine or the balance of a fine or a tax (or toll) or its balance (due by the father) nor (avyavaharika or not vyavaharika) that

which is not proper.

The word ""avyavaharika"" has generally been rendered as illegal and immoral. Judges have from time to time attempted to define this word and

there has been some divergence of opinion and after reviewing several cases, 1 thus stated my view in the case to which I have made reference:

It is not every impropriety or every lapse from right conduct that stamps the debt as immoral. The son can claim immunity only when the father''s

conduct is utterly repugnant to good morals or is grossly unjust or flagrantly dishonest.

Judged by this text a trade debt is certainly not an ""avyavaharika"" debt.

There is a large body of case-law on the point, but there is not a single reported decision where a commercial debt has been treated as an

illegal or an immoral debt. In Achutharamaiya v. Ratnajee ILR (1925) M 211 : 1925 50 MLJ 208 the question was for the first time raised. The

Chief Justice and Viswanatha Sastri, J., regarded the text of Gautama as obsolete and refused to treat trade debts as avyavaharika debts. It is

impossible to believe that even in remote antiquity commercial debts were regarded as immoral debts. Trade is enjoined as a duty in the case of

one of the three higher castes and it is incompatible with that notion to regard commerce as degrading. The very fact that out of so many texts, the

solitary text of Gautama alone can be cited in support of this theory shows that the rule enunciated by him did not correctly reflect the prevalent

opinion even of his day. It is unnecessary to speculate further regarding this; for the law on this subject is after all judge-made law and no modern

Court would tolerate the proposition that to engage in trade is a sin and that a debt incurred in trade is an immoral debt.

In the present case it is unnecessary to base my judgment on any such general ground. The question may arise in two ways : the creditor may

seek to make the debt binding upon the son, because the father incurred it for family necessity or benefit. If the debt in such a case is a trade debt

the son may plead that the family not being a trading family the debt is not binding upon him. Though, in my opinion, such a plea is unsustainable,

the question does not pointedly arise at present. The case under consideration is not a case of this description. It belongs to the second category,

that is, the creditor may seek to show not that the debt was incurred for a family purpose but that the amount advanced went in discharge of an

antecedent trade debt. The son''s obligation comes into being owing to an entirely different rule. The test is not that the debt was incurred for a

family purpose but for discharging an antecedent liability. The only question then is, is the antecedent debt of an illegal or immoral nature? The fact

that it arose out of trade cannot bring it within the description of immoral and illegal debts. 1 therefore find on this point against the plaintiff. Before

concluding this part of my judgment 1 must point out that the cases that lay down that the manager of a Hindu family cannot start a new trade, are

for the present purpose beside the point. We are here concerned not with a manager but with a father and, moreover, as I have pointed out, we

are not concerned with the father raising money for the benefit of the family but with his paying off an antecedent debt.

I have up till now dealt with the case, making the assumption on behalf of the plaintiff that in spite of the partition, Appasami and Veeraperumal

held their properties as joint family properties. So far as the creditors are concerned, in the view I have taken, they are not interested in the other

questions that have been raised. But I shall now examine the soundness of the position taken up by the plaintiff, that in spite of the partition his

father and Appasami continued to remain-joint.

In an earlier part of this judgment I have indicated the main lines of Mr. Venkataramana Rao''s argument on this head. The oral evidence that

has been adduced for the plaintiff is most unsatisfactory. It is contended that the evidence establishes that the income from the two sets of

properties--those that fell to the share of Veeraperumal and those to the share of Appasami--was blended and that therefore it must be presumed

that all the properties were alike treated as joint family properties. Beyond the fact that one clerk was employed to collect rents from both the sets

nothing further has definitely been proved. It is noteworthy that this very clerk was subsequent to the partition also employed to collect rents from

Sethu-ram''s properties. Next it is argued that these rents were brought into a common account book. The plaintiff attempted to file some books

and I had to reject them and the ruling that I gave at the time is appended to this judgment. It is admitted that there were dealings inter se between

Appasami and Veeraperumal; and that each paid interest to and accounted for the monies received from the other. The fact that in the first instance

amounts were brought into the same account could be of no value if the ledgers that are withheld would show that the collections were carried into

the separate accounts of these two individuals.

Then it is contended that subsequent to the partition Appasami and Veeraperumal continued to live in the same house and had a common

mess. This part of the case also broke down. The partition took place in 1905. Appasami died in 1921. About 1918 he left the family house and

took up residence at the ""Winning Post"" in Guindy. It is undisputed that Veeraperumal did not live with Appasami in Guindy. The only possible

dispute narrows itself to the period between 1915 and 1918. The next friend of the plaintiff said that Appasami and Veeraperumal cooked and ate

separately. But the other witnesses examined for the plaintiff did not admit this fact. In any event it is impossible to infer that the uncle and nephew

continued as members of a joint family from the single circumstance that for a short time they lived and ate together. In this connection it is

important to bear in mind that the partition deed itself provides that Appasami and Veeraperumal should live together in the old family house. It

would be unreasonable to presume that in living in the same house they did not intend to carry out the terms of the partition deed itself. Further

Appasami had neither wile nor children and if he was willing to bear the common household expenses it would only show that he treated his

nephew with affection and not that there was an intention to re-unite.

The presumption in law is against re-union. Mayne, observes in para. 497 of his Hindu Law:

As the presumption is in favour of union until a partition is made out, so after a partition the presumption would be against re-union. To establish it,

it is necessary to show not only that the parties already divided, lived or traded together, but that they did so with the intention of thereby altering

their status, and to form a joint estate with all its usual incidents.

The evidence is clearly insufficient to show either that the partition was a mere sham or that there was a subsequent reunion. Indeed the facts

that have been elicited conclusively negative any such case. Subsequent to the partition Veera-perumal started, as I have said, a business in timber

under the name of Burrang and Co. The dealings were on a large scale and monies were borrowed from third parties. Appasami had no concern in

this trade, did not make himself liable for the debts and did not participate in its profits. Then again Appasami dealt with the properties that fell to

his share as if he was the sole owner. He sold ""Rutland Gate"" in 1920 for a very big price, 4 lakhs. In the sale deed he refers to the partition deed

and describes himself as the absolute owner. The purchaser paid Rs. 50,000 in cash and gave a mortgage over the same property for the balance

of the price. This was payable in instalments and as the purchaser made default Appasami filed C. S. No. 231 of 1921 for the recovery of the

amount. He filed the suit in his own right and not as a member of a joint family. Appasami died on the 4th October 1921 and Veeraperumal

brought himself on the record of that suit as Appasami''s legal representative, which fact is inconsistent with his treating himself as being joint with

his uncle. Throughout in dealing with such a large property as ""Rutland Gate"", Appasami acted upon the footing that the partition was a real and

genuine transaction without either objection or protest on the part of his nephew. I must observe that in regard to this property it was a sub-

mortgage that was created in favour of the 3rd and 4th defendants. The property had ceased to belong to Appasami in his lifetime and what he

held was merely a mortgage. In any event it cannot be disputed that in taking the mortgage Appasami acted for himself and not for his family.

1/72, Varada Muthaiappan Street, is another property included in the suit mortgages. It fell to Appasami''s share and subsequent to the

partition he mortgaged it to Madan Mohan Temple. Veeraperumal did not join in the mortgage. The amount that was borrowed, about 25 or 30

thousand, was utilised by the uncle and not the nephew. There is nothing to indicate that this was thrown into the common stock.

The third and the last property coming in this category included in the suit mortgages is the ""Winning Post"". Appasami held the site on which

this was built as his separate property even previous to the partition. After the building was constructed it yielded no rent. There has not been even

an attempt to point to any act on Appasami''s part to show that he threw it into the common stock and converted it into joint family property.

The plaintiff has completely failed to show that either the partition was not intended to be given effect to or that there was a subsequent re-

union.

The next contention of the plaintiff is that although the bequest is in terms to Veeraperumal only, it should be held to entire to the benefit also of

his undivided son the plaintiff. I cannot see my way to accept this contention. There has been a great diversity of opinion on the question whether

when a bequest is made by a father to his son such property is held by the latter as his separate or ancestral property. Then again there has been a

conflict of opinion as to whether a property bequeathed by a father to his sons is taken by them as joint tenants or tenants in common. The Judicial

Committee in Lal Ram Singh v. Deputy Commissioner of Partabgarh ILR (1923) A 596 review the decisions of the various High Courts and point

out that there has been divergence of opinion; but they do not state their own view and leave the question open.

In Nagalingam Pillai Vs. Ramachandra Tevar, it was laid down that if there were no words indicating a contrary intention, the inference should

be that the father intended his sons to take his property as their ancestral estate. The exact opposite of this was held in Yethirajulu Naidu Vs.

Mukunthu Naidu and Others, where the learned Judges observed that in the absence of expressed intention the sons take in severally and not as

joint tenants. I may point out that in Madras the weight of authority is in favour of the view taken in Nagalingam Pillai Vs. Ramachandra Tevar, but

it is necessary to remember that the question arises in this case in a different form. It is not a bequest by a father to his sons. It is, on the contrary, a

bequest by an uncle to his nephew.

In the case of a father''s separate property when the sons take it by inheritance they take it as ancestral property, that is to say, their male

issues acquire in it a right by birth. The law presumes that a Hindu who gifts or bequeaths his property does not intend to alter the incidents of the

property devised or gifted. If in the case of inheritance the property is taken as ancestral property, why should it be presumed that it is taken as

separate property merely because there is either a will or a gift? It is on this principle that the Courts have laid down that when the bequest or the

gift is in favour of the sons they should prima facie be held to hold the property as joint family-property.

I am not now concerned with the correctness of this rule. but I see no reason which would justify me in extending it. When the property is

taken by gift or will from a stranger or from a collateral relation, there is no warrant for making the presumption that it is taken with the incidents of

joint family property. On this point I agree with the decision of Kumaraswami Sastri, J., in Janakiram v. Nagamony ILR (1925) M 98 : 50 MLJ

Take the case of a collateral relation. If his property was taken by the father by inheritance, the son would have no right in it by birth. Why

should he have a higher right merely because the father takes it not by inheritance but under a gift deed or a will? This is the distinction pointed out

by Kumaraswami Sastri, J., and I am disposed to take the same view. In the present case, if Appasami Pillai had died intestate the property would

have been taken by Veeraperumal as well as Sethuram to the exclusion of the plaintiff. The very fact that by the will he alters the course of descent

shows that it was not. his intention that the property should be taken as joint family property. Turning to the will itself (for, in each case, it is, where

possible, a question of construction of the instrument) its recitals show that he intended that his nephew should take it as his absolute property.

There is no reference to the plaintiff and if the testator intended that he should have an interest, there was nothing to prevent him from clearly

expressing that intention. I therefore find this point also against the plaintiff.

On these findings it follows that the plaintiff can have a decree for partition only in respect of items in Part I of Schedule B to the plaint, and I

accordingly pass a preliminary decree to that effect. This right of the plaintiff is of course subject to the mortgage of No. 74, Varada Muthaiappan

Street, item 3 of Part I in favour of the 3rd and 4th defendants. The Official Assignee does not object to this decree being passed. In other

respects, the suit is dismissed.

For passing a final decree the case is adjourned till the administration of the estate by the Official Assignee is completed.

The plaintiff has really failed in the action. The minor relief he has obtained is really not the one for which he has filed the suit. I must direct him

to pay the costs of the 3rd and 4th defendants (two sets) . I do not think the Official Assignee is entitled to any costs.

The 3rd defendant is a receiver appointed by Court representing an estate and he is allowed to charge his estate with actual out-of-pocket

expenses including the fee paid to his vakils as between party and vakil. The fee for this purpose is fixed at Rs. 2,400 for the senior vakil and Rs.

800 for the junior. The fee for translating the partition deed, Rs. 32, shall be paid by the 3rd defendant and he may include the same in the costs to

be recovered against the plaintiff.