Madras High Court
K.R. Sathyanarayana Rao And Another vs K.R. Venkoba Rao And Six Others on 3 April, 1998
Equivalent citations: AIR1998MAD276, 1998(3)CTC703, (1998)IIIMLJ167, AIR 1998 MADRAS 276, (1998) 3 MAD LJ 167
ORDER
1. This appeal is against the judgment and decree of the learned III Additional Judge, City Civil Court, Madras, in A.S.No.117 of 1991, dated 18.3.1993, reversing the judgment and decree of the XII Assistant Judge, City Civil Court, Madras, dated 22.2.1990 in O.S.No. 5149 of 1983.
2. Defendants 2 and 8 are the appellants. The eighth defendant is the wife of the second defendant.
3. The first respondent filed the suit for declaration that the properties in Schedules A to D are joint family properties of the plaintiff and defendants 1 to 7 and the business mentioned in E to H Schedules belongs to the family and for partition and separate possession of 1/7th share to the plaintiff in them.
4. According to the first respondent/plaintiff, plaintiff and defendants 2 to 7 are sons and daughters of the deceased K.S. Ramachandra Rao. The first defendant is the mother. Ramachandra Rao came to Madras in the year 1920 and started a business in the year 1927 at No. 184 (Old No.272), NSC Bose Road, Madras-1, mentioned in the E Schedule. In the year 1945 he started the business in crackers. In the year 1955, he obtained licence for the said business in the name of the second defendant. In the year 1955 he converted the business as partnership business with the plaintiff and defendants 1 to 3, under the name and style of "K.S. Ramachandra Rao & Sons". It was a joint family business. He purchased the lands mentioned in 'A' Schedule and 'B' Schedule property in the name of the second defendant. He purchased the 'C' Schedule lands in the name of the second defendant from the joint family business income. K.S. Ramachandra Rao was also doing Pawn Broker business and Chit business. After the death of the father in the year 1971, the second defendant continued the joint family business as its manager. He continued the business mentioned in 'E' Schedule. In the year 1978, the second defendant started stationery business under the name and style of "Sathya Agencies". That business is also a joint family business. The same is mentioned in 'G' Schedule. In the year 1974, the second defendant started a Lottery business in the name of his wife, the eighth defendant and that is also a joint family business. It is shown in the 'H' schedule. Hence, the plaintiff is entitled to 1/7th share in all the properties and business mentioned in the Schedules 'A' to 'H'.
5. Defendants 1, 3 to 7 remained ex parte. The second defendant filed the written statement, which was adopted by the eighth defendant. According to them, there was no joint family. K.S. Ramachandra Rao started his individual business. The defendants were living with him as members of his family. 'F' schedule mentioned business is the exclusive business of the second defendant. 'E' schedule business was a partnership business. It was not a joint family business. 'A' schedule lands were purchased by Ramachandra Rao, in that the plaintiff and the second defendant have 1/7th share each. 'B' schedule house belongs to the second defendant. It is not a joint family property or purchased from the joint family business. Hence, the plaintiff has no share in it. 'C' schedule property is also the second defendant's exclusive property. Ramachandra Rao had no money lending business. The business at No. 184 NSC Bose Road, was Ramachandra Rao's business. 'D' schedule property is the exclusive property of the eighth defendant. The Lottery business was also the second defendant's business. There was no joint family of Ramachandra Rao.
6. In the Additional written statement, the second defendant has stated that after the death of the first defendant, the mother of the plaintiff and defendants 2 to 7, he is also entitled to a right in her share.
7. The trial Court framed five issues and one additional issue. After considering the evidence, both oral and documentary, the trial Court found that in 'A' and 'E' schedule mentioned property and business alone the plaintiff was entitled for declaration of 1/7th share and in other items, he has no right. But on appeal, the III Additional Judge, City Civil Court, Madras, considered three points as to whether the plaintiff was entitled for declaration and partition of 1/7th share and entitled for account. The lower appellate Court reversed the findings of the trial Court and found that A, B, C, E and F schedule properties were purchased from the joint family income and the business were joint family business. Hence, the plaintiff and defendants 2 to 7 were entitled to 1/7th share in A, B, C, E and F Schedule properties and business and the second defendant was liable to render account to the plaintiff from 23.8.1971 in respect of E and F schedule business. However, he dismissed the claim as against the D and G schedule property and business.
8. In the second appeal, it is mainly contended that there was no joint family at all and that there was no joint family business. The substantial question of law No.3 is to the said effect. The properties mentioned in A, B, C and D are immovable properties, while the E, F, G and H schedule mentioned items are business. The first defendant's mother died during the pendency of the suit. The defendants 3 to 7 remained ex parte. The defendants 2 and 8 alone contested the suit. As already stated the eighth defendant is the wife of the second defendant. The plaintiff examined himself and his uncle as P.Ws.1 and 2. He examined one M. Vasudeva Rao as P.W.3. P.W.2 is the younger brother of late K.S. Ramachandra Rao.
9. After considering the evidence, the lower appellate Court has also found in paragraph 14 that from the evidence of P.W.2, he has not established that Ramachandra Rao was having ancestral property at Venkatagiri Kotah. It has also found that there was no joint family nucleus. Therefore, the business started by Ramachandra Rao has to be taken only as his business. In that business his sons have taken part. Further, he has converted the business as the partnership business when he registered the business as K.S. Ramachandra Rao and Sons. There is also evidence that the business continued from 1937 to 1952 by K.S. Ramachandra Rao alone. Thereafter till 1971, the business at No. 184 NSC Bose Road, was also continued by him. From the evidence of P.W.3, it is seen that after 1971 the said business was continued by the second defendant. P.W.3 is the servant in the said business. He was appointed by K.S. Ramachandra Rao and after his death, he has continued with the second defendant till 1973 in the business at No. 184, NSC Bose Road. As far as the business at No. 184, NSC Bose Road is concerned, the trial Court has also given a decree in favour of the plaintiff. The lower appellate Court has also confirmed it. In the Second Appeal, also there is no dispute about it. Similarly, as regards the land mentioned in 'A' schedule is also concerned, there is no dispute.
10. In the Second Appeal, the learned senior counsel for the appellants Thiru. R. Singaravelan, contended that the business at No.2 Badrian Street, Madras-1 mentioned in 'F' Schedule and the business under the name and style of "Sathya Agencies" and the Lottery ticket business at No.27, Malyaperumal Street, Madras, mentioned as 'G' and 'H' schedule are the separate business of the second defendant. The lower appellate Court has also dismissed the suit with reference to D, G and H schedule property and business. 'D' schedule property is the house property at No. 65 (New No. 79), Tiruppalli Street, Peddunaickenpet, George Town, Madras. G and H schedule refer the two business mentioned above. Concurrently both the Courts have found that the two business mentioned in Schedule G and H are not the joint family business. Therefore, we are not concerned with the business mentioned in the Schedule G and H, namely, 'Sathya Agencies' and Lottery Ticket business. As 'D' schedule property has also been excluded by the lower appellate Court, that is also not the subject matter for consideration in this second appeal. Since, there is no cross-objection filed against the finding with reference to 'A' and 'E' schedule before the lower appellate Court by the respondents herein, they are also not the subject matter of the second appeal. Hence, out of A, B, C, D, E, F, G and H, the subject matter of this second appeal is concerned with reference to B, C and F schedule properties and business. Out of these, B, and C Schedule are immovable properties mentioned in B and C schedule.
11. In the Second appeal as we have stated above, we are mainly concerned with B, C, schedule properties and F schedule business. There is also no dispute by the appellants also with reference to the 'E' Schedule business.
12. The question that arises for consideration is whether the business in 'F' schedule is the business of the family of Ramachandra Rao and the sons having any share in it. As regards this 'F' schedule business, it is an admitted case that the partnership business of the family members of Ramachandra Rao. It is also admitted that the first appellant was a partner of the said firm. His capital is also mentioned in Ex.A.3. Plaintiff's case is that the said business is a partnership business, while the claim of the second defendant is that it is his exclusive business. Originally, the business was started by Ramachandra Rao at No.2 Badrian Street, Madras-1, in 1955. Defendants 1 to 3 were partners in the said business. This business was registered in 1965. The case of the second defendant is that he started the business in 1961 at No.2 Badrian Street, Madras-1. It is admitted that he was studying in S.S.L.C in 1958 and completed it in that year. Ex.A.3 is the account relating to the said business. The plaintiff's case is that the business was shifted to No.2 Badrian Street. D.W.1 has admitted that he did not take the said building on lease, on the other hand, the lease was in the name of the father Ramachandra Rao. He has admitted that receipts have been issued in the name of Ramachandra Rao. In Ex.A4. Ramachandra Rao is described as having business at No.2 Badrian Street. In Ex.A.12 entries have been made by the deceased Ramachandra Rao till 7.8.1971. Ex.A.10 also shows that K.S. Ramachandra Rao was the assessee of the business at No.2 Badrian Street, Madras-1. He has written the said letter to the Statistical Department on 25.6.1960. The said letter is the copy of the letter sent to the department. Ex.A.27 also shows that Ramachandra Rao was having the business at No.2 Badrian Street, Madras-1, i.e., dated 8.5.1958. In Ex.A.28 dated 31.8.1961 Ramachandra Rao is shown to be the assessee of the business. As per Ex.A 28, the business at No.2 Badrian Street and the branch at No. 278, China Bazaar, Ramachandra Rao is shown as the dealer in account books. In Ex.B.3 also, the first appellant himself has admitted that plaintiff and others were the partners at the instance of the father, in Ex.B.4, the plaintiff and another brother has clearly asserted that the business was started by the father and it was the business of the family of Ramachandra Rao. In the light of these documents it is very difficult to hold that the business belongs the second defendant/appellant alone as his exclusive business. No doubt, he was one of the partners and it is also admitted by the plaintiff.
13. The finding that the business at No.2 Badrian Street, Madras-1 is a partnership business does not mean that the first appellant could not have purchased the properties mentioned in B and C schedule with his own funds.
14. Ex.B.16 clearly shows that the account was in favour of the first appellant and he purchased the property for Rs. 6000 and 1/4th amount of Rs. 1500 was paid to the Amin of the District Munsif's Court, Poonamallee. Under Ex.B.18 the assessment of property tax relating to 104, Pidariar Koil Street, was changed to the name of the first appellant. In Ex.A.3, page 7, also this property is shown as the exclusive property of the first appellant. After finding that the property was purchased by the first appellant in his name, the lower appellate has itself assumed that it was purchased for the benefit of other partners also. This assumption cannot have any basis. If one of the partners of a business purchased the property in his name, the presumption is that it is his own property and even if the consideration was paid from the business. The further presumption would be that the consideration was from his share. The burden is heavily upon the person who claims that such a purchase was for the benefit of all the partners. But in this case that burden has not been discharged. Therefore, the finding of the lower appellate Court that the 'B' schedule property belongs to all partners is not correct.
15. Similarly, the 'C' schedule property purchased under Ex.A.4 must be presumed to be the absolute property of the first appellant. As we have seen above, the lower appellate Court itself has found in paragraph 27, that from the evidence produced by the plaintiff himself, it is clear that Ramachandra Rao was carrying on business and his sons joined in it and earned profits. Further, the lower appellate Court has also found with reference to 'G' schedule business relying upon Exs. B.3 to B.5. This property has been purchased under Ex.A.4 on 15.4.1964 itself. From the evidence, we are able to find that after completing the S.S.L.C. in 1958 he was carrying on some business. Further he has been a partner in the family business and has earned profits. As the eldest son, when the father died, he has continued the business. Ex.B.13 shows that the first appellant was an income tax assessee during 1962-63 itself. The lower appellate Court has found that there is no mention about this property in Exs. B.13. I do not find any reason for mentioning about this in Ex.B.13. As per Ex.B.14 his income has been fixed at Rs. 4500 as the taxable income. It is also mentioned in Ex.B.14, that the assessee has not accounted for the other transactions. For such an income tax assessee paying Rs. 2000 could not have been a huge amount to pay as consideration for the purchase. Further, the lower appellate Court has found that the first appellant has admitted that he has started the Lottery Ticket business in 1974. Further, the lower appellate Court has also accepted that 'E' schedule business is also the exclusive business of the first appellant. In the evidence, D.W.1 has stated that from 1961 he was doing Crackers business. He has started Sathya Agencies in 1978. In the cross-examination also he has asserted that from 1959 to 1961 in China Bazaar, opposite to the father's shop and he was doing business in the platform.
16. On a perusal of the evidence it can be safely concluded that the first appellant after completing his S.S.L.C. started to carry on the business along with his father and independently. After the death of the father, he carried on the family business also. Therefore, the purchase of the property mentioned in 'C' schedule cannot be said to be on behalf of all the members of the family.
17. In effect, it is not a Hindu joint family business, on the other hand, the business of the father and it was carried on in partnership with the sons, including the first appellant. If property is purchased individually in the name of a partner, the burden is heavily upon the other partners to show that such purchase was from the funds of the firm and the purchase was meant for the benefit of the family or all the partners. As we have seen above, the first appellant has been carrying on business from 19S8. He has become an income tax assessee also in 1961 itself. In such circumstances, the purchase in his name cannot be said to be for the benefit of the other partners also. The plaintiff has not discharged the burden of proving that the purchase has been made by the first appellant for the benefit of the other partners or members of the family. Therefore, the conclusion is that the purchase of B and C schedule properties were by the first appellant and they are his own.
18. In Krishnan v. Rengachari, a Bench of this Court has held as follows:
"The law is well settled that if members of a joint family who are joint in status and carry on business and acquire property by their joint labour and exertions without the aid of any ancestral nucleus the presumption is that the property so acquired by mem would be joint family property in which the sons of the acquirers would get a right by birth, unless it is proved that the acquirers intended to own the property as co-owners between themselves, in which case alone it will be joint property as distinguished from joint family property."
The principle laid down above squarely applies to this case.
19. In Santhalingam v. Meenakshi Ammal 1970 (II) MLJ, 85, a learned Single Judge has followed the decision reported in Krishan v. Rengachari, mentioned above and also some earlier cases.
20. The Apex Court in Srinivas v. Narayan, in paragraph 8, has held following the decision of the Supreme Court in Appalaswami v. Suryanarayanamurti, AIR 1947 PC 189 that the initial burden which lay on the plaintiff of establishing that the properties of which a division was claimed were joint family properties.
21. In Venkatasubramania v. Easwara Iyer, a Division Bench of this Court has held as follows:
"Where each branch of the joint family is distributed income for the maintenance of the branch from the joint family funds and if any acquisition is made from savings of such amounts, it would not be a joint family property of the family as a whole."
22. The Apex Court has also held in Mudigowda v. Ramachandra, as follows:
"The burden of proving that any particular property is joint family property, is, therefore, in the first instance upon the person who claims it as coparcenery property. But if the possession of a nucleus of the joint family property is either admitted or proved, any acquisition made by a member of the joint family is presumed to be joint family property. This is however subject to the limitation that the joint family property must be such as with its aid the property in question could have been acquired. It is only after the possession of an adequate nucleus is shown, that the onus shifts on to the person who claims the property as self-acquisition to affirmatively make out that the property was acquired without any aid from the family estate."
23. Similarly in Ranganayaki Ammal v. S.R. Srinivasan, 1978 (I) MLJ 56, another Bench of this Court has held that unless a strong link or nexus is established between the available surplus income and the alleged joint family properties, the properties who comes to Court with such bare allegations without any substantial proof to back it up should fail.
24. The Apex Court in K. Obul Reddy v. B. Venkata Narayana Reddy AIR 1984 S.C. 1171, has also held that there may be presumption that there is a Hindu Joint Family but there can be no presumption that the joint family possesses joint family properties.
25. From the aforesaid decisions, we find that only when there is a joint family nucleus the acquisition by a coparcener is with the income from such nucleus the property acquired by the coparcener can be said to be a joint family property.
26. As we have already seen, in this case, both the Courts have found that there is no joint family nucleus at all.
27. The learned counsel for the respondents contended that this Court sitting in Second Appeal cannot interfere in the finding of the lower appellate Court, which is the final Court of appeal on facts. Even if there was any mistake committed by it in appreciation of evidence this court should not interfere. He cited the Apex Court decision in Ramachandra v. Ramalingam, . In the said case, the High Court interfered with the finding of fact. The lower appellate Court is not elaborate as that of the trial Court and some of the reasons given by the trial Judge were not expressly reversed by the lower appellate Court. This case is not helpful for deciding the issue in this case.
28. The lower appellate Court has simply found that B and C schedule properties were the joint family properties of the first appellant and his brothers, even after admitting that there was no joint family nucleus and simply because the business were carried on jointly by the father and brothers. This is a mistake of law and it is contrary to the principles laid down in the above case.
29. Similarly in Ramanuja Naidu V. v. Kanniah Naidu, also, the Apex Court has indicated that in the Second Appeal concurrent finding of fact should not be interfered with on the face of it. This case is not at all helpful to the respondents.
30. In Navaneethammal v. Arjuna Chetty, AIR 1996, S.C. 3521 it has been held that if two views are possible, the High Court should not reappreciate the evidence to reach another view. In this case, we are not concerned with the finding of the lower appellate Court or any particular aspect. The conclusion reached by the lower appellate Court is wrong in the sense that it has not appreciated the law properly. This case is also not at all helpful to (he respondents.
31. In the result, the judgment and decree of the lower appellate Court is modified. As regards the B and C schedule properties are concerned, they are the properties of the first appellant and he need not render any account to the plaintiff and others. With reference to the finding regarding the business in F schedule, I find that the finding of the lower appellate Court is justified and no interference is called for. As a result, the plaintiff will not be entitled to a decree as regards B, C, D, G and H schedule properties and the lower appellate Court decree in respect of B and C schedule properties alone is set aside. For the foregoing reasons, the Second Appeal is partly allowed with proportionate costs. Consequently, C.M.P.Nos. 7095, 7096, 8208, 8437, 14476 to 14478 of 1993 are disposed of as unnecessary.