Andhra HC (Pre-Telangana)
Chakka Lakshminarayana vs Konnepati China Subbarao And Others on 28 April, 1989
Equivalent citations: AIR1990AP164, AIR 1990 ANDHRA PRADESH 164
Author: Syed Shah Mohammad Quadri
Bench: Syed Shah Mohammad Quadri
ORDER Amaraswari,J.
1. The 9th defendant (auction-purchaser) is the appellant.
2. The plaintiff, Chinna Subba Rao, and the 1st defendant, Gurulingeswara Rao, are brothers. They are the sons of Nagendram who died in the year 1955. Nagendram is the brother of Pullayya. After the death of Nagendram, Pullayya, the plaintiff and the 1st defendant continued as members of the joint family. Pullayya and Gurulingeswara Rao (1st defendant) borrowed some amount on a promissory note from one Hanumantha Rao. Hanumantha Rao filed O. S. No. 142 of 1968 against Pullayya and the 1st defendant, the executants of the promissory note and obtained a decree in 1969. In execution of the said decree, the joint family property was brought to sale. The appellant herein purchased the same in the court auction on 22-10-1970 for a sum of Rs. 12,500/- and is in possession ever since. The sale was sought to be set aside by the 1st defendant unsuccessfully land the application filed by him under Order 21, Rule 90, Civil P.C. was dismissed on 12-10-1976.
3. Then begins the present round of litigation. The plaintiff filed the present suit put of which this appeal arises, for partition and possession of his one-fourth share in the property sold in execution of the decree obtained against Pullayya and Gurulingeswara Rao, the other members of the joint family. The main contention of the plaintiff was that the decree in O.S. No. 142 of 1968 is, not binding oh him, that there was a division, in the family and that he had been living as a divided member for several years. The trial court found that the plaintiff is a member of the joint family and Pullayya was the manager of which, that there was no division, as alleged by the plaintiff and that the decree in O.S. No. 142 of 1968 and the sale in execution thereof are binding on him. On these findings, the trial court dismissed the suit.
4. On appeal filed by the plaintiff, the learned District Judge, while holding that there was no division in statuts and the family continued to be joint, held that the decree was not binding on the plaintiff as he was not a party to the suit and that liability on a negotiable instrument is a personal liability. He set aside the judgment and decree of the trial Court and decreed the suit.
5. Aggrieved by the judgment and decree of the learned District Judge, the 9th defendant (auction-purchaser) has preferred this second appeal. It is contended by Sri Veera-bhadrayya, learned Counsel for the appellant, that when there is no dispute that Pullayya is the manager of the joint family, a decree obtained against him binds all the members of the joint family. When the second appeal came up for hearing, the learned single Judge referred the matter to a Division Bench as there is a conflicting judicial opinion on this point.
6. The undisputed facts are that the promissory note was executed by Pullayya and the 1st defendant and O.S. No. 142 of 1968 was filed only against them. The decree does not say that it can be executed against the joint family property. We will now refer to the decisions cited on this point. In Viraragha-vamma v. Samudrala, (1885) 8 Mad 208, the facts were that there was a joint family consisting of two brothers. The younger of them was a minor. A creditor brought a suit against the elder brother on a promissory note executed by him and, having obtained judgment, attached the property belonging to the joint family. The promissory note was executed by the elder brother in renewal of the one executed by the father. The elder brother was not sued as the manager of the family and the decree was not drawn up as a decree to be executed against him in that character or to be satisfied out of family property. The younger brother brought a suit to set aside the attachment and the Court held that he was entitled under the circumstances to have it removed. In Gumvappa v. Thimma, (1887) ILR 10 Mad 316, an undivided family consisted of three brothers. The eldest brother mortgaged part of the property by way of conditional sale to secure a loan. The mortgagee sued the mortgagor personally for the amount due. The mortgagor admitted the mortgage and said that he would surrender the property in discharge of the decree. Accordingly a decree was passed against him on this basis. When the mortgagee came to take possession of the property, the other brothers objected. It was held that as the decree had not been passed against the joint family or its representative and did not describe the property which had been directed to be delivered to the plaintiff by way of absolute sale to be family property, it could not be executed against such property. The same principle was applied in Sethuvayyan v. Muthuswami, (1889) ILR 12 Mad 325, In Lakshmana Chettiar v. Muthu Cheeliah Goundan, 68 Mad 104 : (AIR 1935 Mad 145) also the same principle was applied, where a younger brother objected to his share, in the family property being sold in execution of a decree passed against his elder brother in respect of a promissory note executed by him Varadachariar, J. speaking for the Court, pointed out that where a suit is instituted on a promissory note, it is prima facie a personal claim.
7. Then comes the judgment of.the Full Bench of the Madras High Court in Venkatar narayana v. V. Somaraju, ILR (1937) Mad 880 : (AIR 1937 Mad 610) on which strong reliance is placed by the learned Counsel for the appellant. The Bench consisted of Ven-kata Subba Rao, Cornish and Venktarantana Rao, JJ. Venkata Subba Rao and Venkata-ramana Rao, JJ. held that when a suit has reference to property of the family and the defendant is either the father or the eldest member, it must be presumed that he was sued as a representative of his family and it was not necessary to describe him as such in the pleadings nor was it necessary for the decree to be against him specifically as such in order to pass the whole interest in the property. Cornish, J. based his judgment on S. 50, Civil P.C. The latter Full Bench decision was again considered by a Full Bench of five Judges in Chippagiri Nagireddi v. Ven-kadari Somappa, AIR 1943 Mad 1. The Full Bench distinguished the decision in Venkata-narayana Rao v. Venkata Somaraju (AIR 1937 Mad 610) supra on the ground that the claim therein was not a claim on a negotiable instrument and that the decision in Venkata-narayana Rao v. Venkata Somaraju, supra was right on its facts. This Full Bench of five Judges referred to several other cases which we will presently consider. In Daulat Ram v, Mehir Chand, (1888) ILR 15 Cal 70 the managing members of a joint trading family mortgaged the family estate in order to discharge a debt due by the business. The mortgagee sued the mortgagors upon the mortgage and having obtained a decree he purchased the property at the Court-auction. When he applied for possession, the other members of the family objected. This resulted in the mortgagee bringing a suit for a declaration that the interests of the other members of the family had also been validly mortgaged to him and that as the result of his purchase he had obtained an absolute right to the whole of the property. On that basis, he asked for a decree for possession. The defendants were the other members of the family and they averred that as they were not parties to the mortgage suit the decree passed therein did not affect their interests. At the trial, the defendants rested their defence solely on the ground that they had not been made parties to the mortgage suit. The Privy Council agreed with the Courts below that the mortgagors were the managers of an ancestral business belonging to afamily of which the defendants, who were minors when the mortgage was effected, were members, and that the mortgage was necessarily entered into in order to pay the debts of the business. Consequently, there was a valid mortgage of the entire property and it might also be assumed that the property brought to sale was the whole of the mortgaged property, and not merely the rights of the judgment-debtors therein. These assumptions were drawn because the plaintiff had proposed to lead the necessary evidence, but they were not allowed to do so because the defendants were content to rely on the fact that they had not been made parties to the suit. Before the Privy Council, the defendants sought a remand of the case on the question whether the mortgage had in fact been executed for the purpose of meeting debts due by the family business, but the Judicial Committee refused a remand because the defendants had stood upon the ground that they had not been made parties to the previous suit and objected to have the evidence gone into at the proper time. In Kishan Parshad v. Har-narain Singh, (1911) ILR 33 All 272 the joint family carried on a money lending business. There were three managing members who were entrusted with powers to do everything necessary to carry on the business. The managing members lent money to the defendants for the purpose of the family business and there was a settlement of account. The managing members instituted a suit to recover from the defendants the money which they owed, and the objection was taken by the defendants that the suit was not properly constituted, because the other members of the family had not been joined as parties. In order to remove this objection, although not agreeing with its validity, the managing members asked leave to add the other members of the family as plaintiffs. Leave was accordingly granted and the other members of the family were added as plaintiffs, but after the period of limitation for the suit had expired. The consequence was that the defendants contended that the whole suit was time-barred. The Privy Council held that the suit as originally brought was properly constituted because the non-managing members of the family were not necessary parties and therefore the law of limitation did not apply. In Sheo Sankar Ram v. Mt. Jaddo Kunwar, ILR 36 All 383 : (AIR 1914 PC 136) again the decision was in a mortgage suit. The plaintiffs sued to redeem a mortgage after foreclosure on the ground that they had not been made parties to the mortgage suit. It was held that in the mortgage suit they were properly and effectively represented by the managing members of the joint family of which the plaintiffs were members. Their Lordships saw no reason to dissent from the Indian decision that there were occasions, including foreclosure actions, when the managers of a joint Hindu family so effectively represented all the other members of the family that the whole family was bound. None of these cases of the Judicial Committee were cases relating to negotiable instruments. The Full Bench of the Madras High Court in Chippagiri Nagireddi v. Venkadari Sommappa (AIR 1943 Mad 1) (supra) therefore rightly held that the observations of. Venkata Subba Rao, J. that the decisions in Viraraghavamma v. Samudrala, (1885 ILR 8 Mad 208) supra and Guravappa v. Thimma, (1887 ILR 10 Mad 316) supra must be regarded as obsolete are unwanted.
8. In Maruthamurthu Naicker v. Kadir Baksha Rowther, ILR (1938) Mad 568: (AIR 1938 Mad 377) (FB) it was pointed out that it is a fundamental principle of the law relating to negotiable instruments that no one whose name does not appear on the instrument can be held liable on it. The observations of Varadachariar, J. in Lakshmanan Cherriar v. Muthu Chelliah Goundan, (AIR 1935 Mad 145) supra that where a suit is instituted on a promissory note, it is prima facie a, personal. claim were cited with approval by the-full Bench of the Madras High Court. The Full Bench held that where it is a perspnal claim, the defendant alone is liable to satisfy the decree unless it directs that it is to be paid out of the family property.
9. In the present case, the decree does not say that the money has to be paid from out of the joint family property. Here neither the manager of a joint family nor the father is sued on a negotiable instrument executed by him and the decree contains no directions that -it shall be executed out of the family property. Following the position of law stated in Vira-raghavamma v. Samudrala (1885 ILR Mad 208) supra Guruvappa v. Thirnma (1887 ILR 10 Mad 316) (supra) Sethuvayyan v. Muthu-swami (1889 ILR 12 Mad 325) (supra) Laksh- man Chettiar v. Muthu Chellaiah Goundan (AIR 1935 Mad 145) (supra), and Chippagiri .Nagireddi v. Venkatadari Somappa, (AIR 1943 Mad 1) (FB) (supra), we hold that the decree in O.S. No. 142 of 1968 is not binding on the plaintiff and only the defendant in that suit can be called upon to satisfy the decree. If a creditor merely sues the person who executed the instrument, he must content himself by proceeding against the executant. This is also the view taken by some of the other High Courts of India. In Phool Chand v. Lalit Kishore, it was held that the decree cannot be executed against the entire joint family property in the absence of a decree not indicating that the debt was incurred in the capacity of a manager and that if the creditor intends to make his claim against the entire family, he must not only implead the kartha but must make it clear that the entire claim is against the entire family and the family property and it should also be made clear in the decree so that the other members of the family may not be taken by surprise. The Allahabad High Court relied upon the Full Bench decision of the Madras High Court in Chippagiri Nagireddi v. Venkatadri Somappa (AIR 1943 Mad 1) (supra). In Lakshman Venkatesh v. Kasinath, (1887) ILR 11 Bom 700 and Lakshman Nilkant v. Vinayak Keshav, ILR 40 Bom 329 : (AIR 1916 Bom 262) the Bombay High Court took the same view. Learned Counsel, for the appellant also relied upon the decision in Amrit v. Sudesh, in which it is held that the suit by or against the manager may be deemed to be one brought by him or against him as representing the family if the circumstances of the case show that he is a manager of the family and the property involved in the suit is family property. This again is not a case of a liability on a negotiable instrument. The facts are that there was a dispute regarding title between the parties, each one claiming that the properties had been gifted to them. The dispute led to the filing of a suit and decision being rendered. Subsequently, heirs of one of the parties filed a suit for partition on the same ground, viz., that the properties were gifted to their joint family. In such circumstances, it was held that the decision in the earlier suit against the father who was representing the joint family operated as res judicata as the father was representing the joint family property. The Supreme Court held that in the earlier suit the family was well represented by the Kartha and the son's cannot claim that the decree was not binding on them. This case is easily distinguishable and it has no application to the facts of the present case. There is no quarrel with the principle that if the earlier suit was filed against the manager of a joint family as representing the family, the decree is binding on the members of the family. But in the case of a negotiable instrument, it is essentially a personal claim unless the contrary is proved. In the present case, the decree is a simple decree for money against Pullayya who, no doubt, was the manager of the family at the relevant point of time. But, there is no evidence to show that the money was borrowed for the benefit of the family so as to bind the other members of the family. The decree does not say that the money can be realised from the joint family property. Following the decision in Chippagiri Nagrireddi v. Venkatadari Somappa (AIR 1943 Mad 1) (FB) (supra), we confirm the decree and judgment of the appellate Court. The Special Appeal is accordingly dismissed but in the circumstances the party may bear their own costs throughout.
10. Appeal dismissed.