http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11  

PETITIONER: NANCHAND GANGARAM SHETJI

       Vs.

RESPONDENT: MALLAPPA MAHALINGAPPA SADALGE

DATE OF JUDGMENT30/01/1976

BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH FAZALALI, SYED MURTAZA

CITATION:  1976 AIR  835            1976 SCR  (3) 287  1976 SCC  (2) 429

ACT:      Joint Hindu  family If  duty cast  on members to inform creditors by  general notice  regarding disruption  of joint Hindu family  Creditor-Duty to inquire about the capacity of executant of a document.      Partnership Act, 1932-Sections 4 and 5-Difference.      Limitation Act,  1908-Section 21(3)(b)  "Manager of the family for  the rime  being"-Meaning  of-Erstwhile  karta-If could keep  an old  debt alive and extend limitation against all the members of joint Hindu family.

HEADNOTE:      The plaintiff-appellant  had business dealings with the joint family  of the  defendants. He  had instituted  a suit claiming a  certain sum of money from the defendants, one of the grounds  being that  even if  the defendants proved that there had  been a  partition in  the family,  the family was still liable  for  the  dues  pertaining  to  the  ancestral business carried  on by all the defendants either as members of the  joint  Hindu  family  or  as  partners  of  a  firm. Defendant 3 (respondent) stated that there was disruption of the joint family status on November 4, 1945. when defendants 1 and  2 and  his deceased  father  unequivocally  expressed their intention to separate and divided their movables.   He denied that defendants 1 and 2 had ever acted as managers of the joint family.      The trial  Court and  the High Court concurrently found that the  joint family  of the  defendants had  disrupted on November 4,  1945 and  that no  joint family business was in existence on the date when the last dealing of the plaintiff with the defendants took place.      On appeal  to this Court, it was contended that even if the joint family stood disrupted from November, 1945, in the absence of public notice by defendants 1 and 2 regarding the disruption of the joint family, the acknowledgements made by them as  karta of the joint Hindu family would be binding on the erstwhile  joint family  under s.  45 of the Partnership Act, 1932.      Dismissing the appeal, ^      HELD: (1)  It is  the duty of the creditor to ascertain whether the  person making  the acknowledgement  still holds

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11  

his representative  capacity as karta of the family. The law does not  cast any  duty upon  the members  of the family to inform  the   creditors  by   a  general  notice  about  the disruption of  the family.  If the creditor fails to make an enquiry and  satisfy  himself  about  the  capacity  of  the executant to  represent the family at the time of making the acknowledgement, he  does so at his own peril. Disruption of the joint  family status  puts an  end to the representative capacity of the karta and any acknowledgement of a debt made by him  after such  disruption cannot  save  the  creditor’s claim from   becoming time barred against the other members. [298B-C]      Pramod Kumar  Pati v.  Damodar Sahu,  ILR 1953  Cuttack 221; Rengaswami  Ayyangar v.  Sivprakasem Pillai,  ILR  1942 Mad.  251   (F.B.);  Mutayala   Ramachandrappa  v.  Mutayala Narayanappa, AIR 1940 Mad. 339, approved.      Kashiram Bhagshet  Shete v. Bhaga Bhanshet Redij A.I.R. 1945 Bom. 511 over ruled.      (2)(a) The  Legislature has  excluded the  joint  Hindu trading families  from the operation of the Partnership Act. Section 4  defines partnership as a relation between persons who have  agreed to  share the  profits of  a business,  and according to  s. 5  the Act  governs only  that relation  of partnership which  arises from  contract and not from status such as the one obtaining among the members of a joint Hindu family’ trading partnership, [297C-D] 288      (b)  The words "manager of a family for the time being" occurring in  s.  21(3)(b)  of  the  Limitation  Act.  1908. indicate that  at the time when the acknowledgement was made and signed,  the person  making and  signing it, must be the manager of  a subsisting  joint  Hindu  family.  If  at  the relevant time the joint Hindu family, as such, was no longer in existence,  any acknowledgement  made  by  the  erstwhile karta of  such family  cannot keep the debt alive and extend limitation as  against all  the members  of the  family, his representative capacity  as karta being co-terminus with the joint status of  the family. [297F-G]      (c) Coparceners  do not  derive their title through the karta of  the coparcenaty.  In the instant case defendants 1 and 2 did not fulfil the requirements of sub-s. (1) of s. 21 of the Limitation Act. [298A]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1896 of 1968.      (Appeal by  special leave  from the  judgment and order dated the  21st September, 1962, of the Mysore High Court in Regular Appeal (B) No. 287 of 1956).      H. B. Data and P. C. Bhartari for the appellant.      S. T. Desai and Naunit Lal for respondents 3 & 4.      The Judgment of the Court was delivered by      SARKARIA, J.-This  is a  plaintiff’s appeal  by special leave directed  against a  judgment of High Court of Mysore. The  following   pedigree   table   will   be   helpful   in understanding the facts leading up to this appeal:                         Mahalingappa                        (died in 1922) Mallappa Appa Saheb                   Neelkanth Def. No. I Def. No. 2             (died on 8-7-46) Chandrakant                        Smt. Balabi Def. No. 3                (wife of Neelkanth Def.No.4).      The respondents are Hindus governed by Mitakshra School

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11  

of Hindu  Law. Mahalingappa,  the prepositus  of  the  joint family  died  in  1922,  survived  by  three  sons,  namely, Malappa, Defendant 1, Appa saheb, Defendant 2, and Neelkanth (The sons  are hereafter  referred to  as ‘M’,‘A’  and ‘N’), Mahalingappa and  his sons constituted a joint Hindu family. The family  was trading in tobacco. Mahalingappa, J as Karta was managing the joint family business. After his death, his eldest son.  Neelkanth, father  of Chandrakant, Defendant 3, began to  look after  the management  of the family business ‘N’ also  started C.  N. Tennis  Bidi Factory in the name of his son,  Chandrakanth, in  1942 or  thereabout. ‘N’ died on July 8,  1946. Thereafter,  ‘A’ (Defendant  2) continued and managed the  joint family  business and  the family concerns with the  consent of  the other  members.  After  1951,  the family business was managed by ‘M’ (Defendant 1).      The appellant  had business  dealings  in  tobacco  and money dealings with the Defendants’ joint family. There used to   be    periodical   verification    of   accounts    and acknowledgements were made from time to 289 time by  the Manager of the family. The plaintiff’s accounts were burnt  in fire  on October  22,  1949  and  he  had  to reconstruct the  accounts from  available  information  and’ documents.      On April  15, 1953  accounts were taken, and the amount due from  the defendants  family to the plaintiff was worked out and  verified The accounts thus stated were acknowledged and signed by Defendant 1 and by Defendant 4, as guardian of her minor son, Defendant 3. A balance of Rs. 69,465/15/- was found due to the plaintiff from the defendants.      With  the   preceding  allegations,  the  plaintiff  on January 28, 1954 instituted the suit for the recovery of Rs. 75,000/-, comprising  of Rs. 69,465/15/-, as principal, plus interest at  12  per  cent  per  annum  Subsequently  by  an amendment of the plaint, he added an alternative ground that if the  Defendants proved that there had been a partition in the family,  they were  still liable for the dues pertaining to the  ancestral business  carried on by all the defendants either as  members of  the joint Hindu family or as partners of a firm.      Defendants 1  and 2  in their  joint written  statement admitted that there was an ancestral tobacco business of the family managed by ’N’ till his death in 1946; that after N’s death, the  family business  was managed by them (M & A) and that  all   the  defendants  were  jointly  liable  for  the plaintiff’s claim. The defendants denied that there was ever a partition  of the joint family. They however conceded that a deed  of partnership,  an agreement  and a partition award had been  brought into  existence from time to time with the sole object  of lessening the burden of income-tax, and they were not  intended to be acted upon. It was added that after the interim  attachment of the property, Defendant 3, taking advantage of  these bogus  documents, obtained  an ex  parte decree to  show that  there had  been division  of the joint family,  and  that  this  decree  was  not  opposed  by  the answering defendants because they were assured that it would not be  executed. They  admitted that  the appellant’s claim was partially  true, but  denied correctness  of  the  total balance claimed  as due.  They further averred that the suit was time-barred  as the  acknowledgement relied  on  by  the plaintiff was  not legal  and could  not extend  limitation, that interest  was  wrongly  calculated;  that,  if  they  ( Defendant 1  and 2) were held liable, they should be allowed to pay in easy instalments.      Defendant 3  filed a  separate  written  statement.  He

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11  

resisted the plaintiff’s claim, traversed the allegations in the plaint,  and denied  that there  was any  acknowledgment made on  his  behalf  on  April  15,  1953  by  his  mother, Defendant 4.  In the  alternative he pleaded that she had no authority to  acknowledge the  debt so  as to bind him as he was then  a minor. Defendant 3 further stated that there was a disruption  of the joint family status on November 4, 1945 when M,  A and  N unequivocally expressed their intention to separate, and divided the movables, and thereafter, a decree for partition  of the  immovable property  of the family was passed in  1949  on  the  basis  of  an  arbitration  award. Defendant 3 asserted that this decree had been acted upon by the parties.  He denied  that Defendants  1 and  2 had  ever acted manager  of the  joint family  with the consent of the other members, 290 and added that this question could not- arise because of the earlier division of the family.      Defendant  4   in  her  written  statement  denied  the plaintiffs’ claim  and supported  the contentions  raised in his written  statement  by  Defendant  3.  She  stated  that Defendants 1  and 2,  had taken  her  thumb  impressions  on certain papers  on the  representation that  they  had  been properly managing  the Tennis  Bidi Factory which had fallen to the  share of  her husband. She was never informed of the contents of  the documents by the Defendants, who took undue advantage of her illiteracy.      The  trial   court  held  that  the  joint  family  had disrupted in  1945 and the plaintiff was aware of this fact; that the  acknowledgements of  the debt  had  been  made  by Defendants 1  and 2  and not  by Defendant  3, and  on  that account the  suit was within time only as against Defendants 1  and  2;  that  Defendant  3  had  on  attaining  majority repudiated  his   liability  as  partner;  that  the  thumb- impressions of  Defendant 4  on the acknowledgement had been taken by  practising fraud; that in any case defendant 4 had no authority  to acknowledge the debt on behalf of her minor son. The  Court, however,  upheld the appellant’s contention that the  old accounts  had been  destroyed in fire and that the plaintiff  was entitled  to interest  at 12 per cent per annum. on  these  findings,  the  trial  court  decreed  the plaintiff’s claim  in toto  against Defendants  1 and  2 but dismissed it against Defendants 3 and 4.      Against that  judgment and  decree of  the trial court, the plaintiff  preferred an!  appeal to  the High Court. The High Court  has affirmed the findings of the trial court and dismissed the appeal.      Hence this second appeal by the plaintiff.      Defendants 1 and 2 did not appeal against the decree of the trial  court which had consequently become final against them.      It is common ground between the parties that during the life-time  of   Mahalingappa,  the   family  consisting   of Mahalingappa and  his sons, was a joint Hindu family trading in tobacco.  It is further not disputed that after the death of Mahalingappa,  the surviving co-parceners continued to be joint and Neelkanth, the eldest son of Mahalingappa, managed the family business as Karta till November 4, 1945.      The first matter in controversy is, whether on November 4, 1945,  on account  of an  unequivocal declaration  of  an intention  to   separate  made   by  the   three   sons   of Mahalingappa, there  was a  disruption of  the joint  family status ?  The courts  below have  concurrently answered this question in the affirmative.      Mr. Datar,  appearing for  the appellant  contends that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11  

this finding  of the  courts below that there was a division in the  family on  November 4,  1945, was  not based  on any evidence whatever and is consequently, unsustainable in law. 291      We are unable to accept this contention. The finding is based on   good  evidence which has been found credit worthy after due consideration by the two courts. Firstly, there is a recital  of the  fact of  division on November 4, 1945, in the partnership  deed, Ex. 197, dated October 25, 1946. This deed has  been written on a general stamp paper of the value of Rs.  30. The  date of  the purchase  of the  stamp  paper accords with  the date  of the  execution of  the deed. This document  therefore,   could  not  have  been  brought  into existence subsequently.  Secondly, there  was an endorsement on the  Income-tax Return  Ex. 309, relating to the previous year ending on November 4, 1945, that at the end of the year there has  been a  change  in  the  status  of  the  family. Thirdly, there  is the  Arbitration Award  (Ex.  294)  dated November 3,  1948, followed  by the  decree (Ex.  295). This award is  a registered  document. The  material recitals  in this document are as under:           "The  plaintiff  (Chandrakant  Nilkanth)  and  the      defendants Nos.  1, 2  and 3  (Mallappa, Appasaheb  and      Basawabai, widow of Mahalingappa) were members of joint      family. During  the lifetime of the plaintiff’s father,      he and the defendants Nos. 1, 2 and 3 were living joint      and all  the three  persons carried  on the business of      the joint  family.  Thereafter  as  the  minds  of  the      plaintiff’s father  and of  the defendants Nos. 1 and 2      were prejudiced  on account  of some  domestic reasons,      they  began  to  live  separately  in  the  year  1945.      Thereafter they took accounts of the transactions, with      desire to  get their  immovable and  movable properties      and other  business partitioned  and  got  the  capital      amount in  that business  partitioned on  4th  November      1945. So  also they  effected partitions  in the  other      movables and the ornaments etc., of the family           Now the  defendants Nos.  1 and  2  are  objecting      about the  maintenance to be given to the defendant No.      3 (widow of Mahalingappa) as per agreement deed           The contentions of the defendants Nos. 1 and 2 are      as follows:           We   and   our   deceased   eldest   brother   Sri      Nilkanthappa were  living joint. It is true that on 4th      November 1945  we all  three together  have  taken  the      accounts of the business and have made divisions in the      capital of the business. It is true that accordingly we      have  proportionately  divided  the  remaining  movable      articles and  the ornaments  etc. and  have  taken  the      same...."      The  award   bears  the   signatures   of   the   three arbitrators, and  on its  basis the court passed a decree on August 9, 1949. That suit was instituted by Chandrakant, and Basawwa, widow  of Mahalingappa,  Suryakant, an illegitimate son of Nilkanth, Mallappa Mahalingappa Sadalge and Appasaheb were impleaded as defendants. Under the award, provision was made for  the maintenance  of Smt. Basawwa and the residence of Suryakant, the illegitimate son of Nilkanth. 292      The conclusion  based on the above documentary evidence was reinforced  by the  courts below with admissions made by Defendants 1  and 2,  in cross-examination, and also with an inference drawn  against the  plaintiff and  Defendant 1  on account of  the non-production  of the account-books. In our opinion, the  court below  were  justified  in  drawing  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11  

inference because  Defendant 1,  as  is  apparent  from  his written statement,  is colluding with the plaintiff, and all circumstances suggest  that these account-books must be with defendant 1.      The case  of Defendant  3 is  that on November 4, 1945, the accounts of the joint family were worked out and closed. It was  found that  there  was  a  capital  balance  of  Rs. 64,023/11/-  which  was  equally  divided  among  the  three brothers and  the fact  of this  division was  noted in  the account books  which were  in the possession of Defendant 1. In the  witness-box, Defendants  1 and  2 admitted  that  on November 11,  1945, each  of the brothers got Rs. 21,340/3/9 and credit  entries to that effect were made in the khata of each brother in the account-books of the shop.      Defendant 3  by an  application (Ex.  169) called  upon Defendant 1  to produce  in court  the account-books, in his possession. Notice  of  this  application  was  received  by Defendant’s Counsel  on July  18, 1955.  Despite this notice defendant 1  did not  produce  the  account  books  when  he appeared in the witness-box on July 21, 1955. He made a lame excuse that  the account  books had  been  given  to  Javali pleader after  the service  of summons  in this  suit on him (defendant 1)  because that  pleader had  asked him to bring the books  containing  the  plaintiff’s  accounts.  But  the defendant gave  him the books of the Bidi Factory and not of M. B.  Sadalge  shop.  Defendant  1,  in  cross-examination, clearly admitted  that he  had given  to Javali pleader only those account  books which  contained the  plaintiff’s Khata "and not  of previous  years". By  any reckoning, this means that he  did not  hand over the account books relating prior to the  years 1949  to Javali Pleader. Admittedly, after the death of  Nilkanth. he  was managing the business upto 1950, and, as  such, was  supposed to  be  in  possession  of  the account-books. The  courts below  were there  fore, right in rejecting the explanation given by him for non-production of the  account-books.   The  explanation   regarding  the  non production of  the books,  given by  defendant  2,  who  had managed the  business after 1951, was equally unsatisfactory and was rightly discarded.      In the  light of what has been said above, it cannot be held that  there was  no legal  evidence before  the  courts below  to  base  the  finding  that  the  joint  family  had disrupted on November 4, 1945.      It is  next contended  by Mr.  Datar that even if there was some  declaration of separation in 1945 and subsequently a decree for partition based on an award was passed in 1949, then also,  such declaration,  award and  decree were  never acted upon. It is submitted that in holding to the contrary, the High  Court has  committed several  errors of record and misconstrued important documentary evidence. 293      According to Mr. Datar, the under-mentioned documentary evidence unmistakably  shows that  the declaration  of 1945, the award  of 1948 and the partition decree of 1949 were not acted upon:      (1). Affidavits  Exhts. 221,  247 and 248 sworn on July 20, 1946,  before a  Magistrate by  Defendants 2,  4  and  1 stating that  they are  members of  a joint Hindu family and Defendant 2  is the  manager of the family. In the affidavit Ex. 247,  Smt. Balabai gave her consent to the management of the affairs of the joint family by defendant 2.      (2). Application  dated August  13, 1946  (Ex. 182), by Defendant  1   to  Sales-tax   officer  for   transfer   and registration of  the licence, and application Ex. 208, dated September 30,  1946 made  by defendants  1 and  2  on  their

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11  

behalf and  on behalf  of Chandrakant  Defendant 3 informing the  City   Surveyor  about   the  death  of  Neelkanth  and requesting him  to enter  the Khata  in the names of all the three defendants 1 to 3.      (3) Income-tax returns Exhs. 309 to 314 filed after the death of Neelkanth.      (4). Resolution,  Ex.  335,  passed  by  the  Board  of Directors in  the meeting  held on  July 30, 1946 permitting defendant 2 to redeem, in the capacity of Karta of the joint family, goods  pledged with the Nipani Branch of the Bank by Neelkanth deceased.      (5). Ex.  147, statement,  dated September 26, 1953, by defendant 3  requesting the  City Surveyor,  Nipani that his joint share in Nipani Revision Survey Nos. 1254 and 1264 may be cancelled  and the  name of  defendant 1  may be  entered again for  both the  numbers. Emphasis  is on  a sentence in this statement  to the effect: "Two months have passed since the said partition".      In accordance  with this  statement. the  mutation  Ex. 263, was attested.      Both  the  courts  below  have  fully  considered  this evidence,  along  with  other  evidence,  and  come  to  the conclusion that these documents do not discount or alter the fact that  the joint  family had  disrupted on  November  4, 1945. The  High Court  has given  reasons why  the  evidence furnished by  the deed  of partnership  (Ex.  197)  and  the Arbitration Award, (Ex. 294) can be safely accepted.’      In regard  to Exs. 221, 247 and 248, the High Court has said that  there is no evidence as to for what purpose these affidavits were  sworn to and has rightly emphasised that in the absence  of such  evidence, it  is difficult to draw any inference  about   the  implications   of  their   contents. Regarding the  affidavit Ex.  247, purporting  to have  been sworn by Smt. Balabai, the High Court has said that she must have been mentally depressed being in mourning on account of the death  of  her  husband  which  occurred  only  12  days earlier; that  she was  an illiterate woman who thumb-marked whatever  documents   were   presented   to   her,   without understanding its  contents. In  this connection,  the  High Court referred  to the  statement of defendant 1, wherein he has admitted that during defendant 3’s minority, defendant 1 and defendant  2 were  the only persons who looked after the business and  defendant 4  never objected  to whatever  they did. and that they used 294 to take defendant 4’s thumb-impression whenever they thought it necessary  in connection  with  the  dealings  of  M.  B. Sadalge shop.      As regards  the applications Exs. 182 and 208, the High Court said,  there was  nothing inconsistent in the recitals of these  documents, to  show that there was no partition of the joint family. The recital in Ex. 208 was found to be too technical to  spell out  the full  legal implications of the words "in the joint family".      Referring to  the Income-tax  returns Exs. 310, 311 and 314, submitted  on March  15, 1948,  November 12,  1949  and February 13,  1954, respectively,  the High Court noted that these refer  to the accounts of the two concerns and contain somewhat different  description in  the management.  In  Ex. 310, relating  to the  year ending  October 24,  1946, it is stated that  N’ and  defendants 1  and 2  were Kartas of the family. In  Ex. 311, defendant 2 is mentioned as the manager of the  "old Hindu  Undivided Family".  Similarly, Ex.  314, purports to  have been  filed by  the H.U.F. relating to the year 1949-50  but this  was filed on Feb. 13, 1954 after the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11  

institution of this suit. The income-tax returns Ex. 312 and 313 relate  to the  previous years  ending on 12-11-1947 and 22-12-48. Ex. 312 was submitted on December 26, 1949 and Ex. 313 on December 22, 1953, both by defendant 2. The status of the assessee in these two returns is mentioned as "Firm".      Ex. 315,  is the  income-tax  return  relating  to  the income-tax year 1948-49, the previous year of which ended on November 12,  1947. It  was filed by defendant 4 as guardian of her  minor son,  defendant 3,  on December  22, 1949. The status of  the assessee therein is shown as ‘Individual’. It relates to  the business which was being run under the style of M/s.  M. B.  Sadalge. It is mentioned in this return that each of  the three  defendants .1,  2 and 3 has 1/3 share in the business  Ex. 316 is the order of the Income-tax officer passed on  June 20  1950 wherein it is stated that 1/3 share of defendant  1 in  the profits of this firm was assessed on that date.      Ex. 309  is  the  income-tax  return  relating  to  the previous year  ended on  November 4,  1945. It  was filed by defendant 2 in 1946, after Neelkanth’s death. The High Court has attached  great weight to an endorsement on this return, which is  to the effect, that there had been a change in the family status.  at the end of the year. This endorsement has been omitted from the printed copy of Ex. 309. Consequently, at one  stage, it  was maintained  by the  counsel  for  the appellant that  in repeatedly  referring to this endorsement the  High  Court  had  committed  an  error  of  record.  We therefore,  sent   for  the  original.  We  find  that  this endorsement  is  very  much  there  in  the  original.  This endorsement was  a valuable  piece of evidence to show that, in fact,  there had  been a  disruption of  the joint family status at the end of the previous year, 1944-45, on November 4, 1945.      Thus the  evidence furnished  by the income-tax returns was conflicting.  But the  aforesaid endorsement  on Ex. 309 was a clincher. It was a statement made ante litem motam. It confirmed the testing of 295 Defendant 2  that the  partition had taken place in 1945 and this tilted   the  balance against  the  contention  of  the plaintiff. In  such evidentiary  value,  it  out-weighs  the income-tax returns,  Ex. 310,  311 and  314,  in  which  the status of the assessee is shown as H.U.F. The High Court was therefore, not  wrong in  holding that  all these  documents taken  together   do  not  show  "that  the  family  of  the defendants had continued to be joint."      Discussing the  resolution (Ex.  335)of  the  Board  of Directors passed  on July 30, 1946, the High Court said that this resolution  was passed  only 22 days after the death of Neelkanth and  therefore, there  was nothing  unusual if all the members  authorised defendant  2 to  redeem the  pledged goods as manager of the joint family.      In our  opinion, it  was not’ unreasonable to hold that the recital  in this  resolution with  regard to defendant 2 being the  authorised manager  of the joint family, was made as a  matter of expediency, and did not discount the case of defendant 4  that the joint family had disrupted on November 4, 1945.      The High  Court found that the racital in Ex. 143, that the partition  had taken  place two  months  prior  to  this application, was  obviously a  mistake, as  it was  nobody’s case that  the partition  had  taken  place  in  1953.  This inference also  was not  implausible. This document contains other palpable  errors of  a similar  nature. For  instance, therein the age of defendant 3 is mentioned as twenty years,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11  

while he was hardly eighteen.      The High  Court found  that  the  documentary  evidence furnished by  the partnership  deed (Ex.  197) dated October 25, 1946,  the award  (Ex. 294)  dated October 30, 1948, and the decree (Ex. 295) dated September 15, 1949, passed on its basis was  entirely reliable.  It further  found that  these documents had  been acted upon. In this connection, the High Court, ’rightly relied upon the admissions of defendant 1 in cross-examination.  In  the  witness-box,  defendant  1  had conceded that  all the  immovable  property  that  had  been allotted to  defendant 2  under the award had been sold away by him, and that pursuant to the award, Rs. 7,000/- had been paid to Heerabai and her son, Suryakant. Defendant 1 further significantly admitted  that on October 25, 1946 Rs. 16000/- and odd  were to  the credit  of defendant  3 in the account books of  M. S.  Sadalge Shop. By virtue of the receipt, Ex. 167, dated  August 9,  1949, defendants 1 and 2 acknowledged the deposit  of  Rs.  16005-15-0  in  favour  of  the  minor Defendant 3,  payable with  interest at Rs. 6/- per cent per annum.  Defendant 1 admitted the correctness of the contents of  this   receipt.  It  is  undisputed  that  subsequently, defendant 3  has not  only obtained a decree on the basis of this receipt  against defendant  1, but  has taken  out  its execution.      The High  Court has  also dismissed  the effect  of the agreement (Ex.  99) which was executed between defendants 1, 2 and  defendant 4 as the guardian of the minor, defendant 3 on April  12, 1950. The main object of this agreement was to safeguard the  interests of  the minor  in the management of the two partnership businesses, namely, 296 M. B.  Sadalge Shop  and Tennis  Bidi Factory in the name of Chandrakant Neelkant  Sadalge. By this agreement, defendants 1 and  2 were called upon to credit to the business whatever amounts they  had spent  from out of the partnership assets. The  power   of  each  of  the  defendants  with  regard  to withdrawal of  funds from  partnership  chest  for  personal expenses, was also restricted. This arrangement continued to be in  force till  the partnership  was dissolved by another registered deed on April 20, 1951.      Reference has  already been  made to  Ex. 316, an order dated June  20, 1950, of the Income-tax officer showing that defendants 1,  2 and 3 were being assessed on the basis that each of  them had  1/3rd share  in the  business. In a joint Hindu family  business, no member of the family can say that he is  the owner  of one-half,  one-third or one-fourth. The essence of  joint Hindu  family property  is unity  of owner ship and  community of  interest,  and  the  shares  of  the members are  not defined.  Similarly,  the  pattern  of  the accounts of a joint Hindu  family business maintained by the Karta is  different from those of a partnership. In the case of the  former the  shares of  the individual members in the profits and losses are not worked out, while they have to be worked out in the case of partnership accounts.      In view  of all  that has  been said  above, we  are of opinion that  the concurrent  finding of the courts below to the effect,  that the  joint Hindu  family of the defendants had disrupted  on November 4, 1945, does not suffer from any legal infirmity  or gross  error  which  would  justify  our interference in  this appeal by special leave. We therefore, take it  that no  joint Hindu  family of the defendants, nor any joint  business of such a family was in existence either on October  15, 1949 when the last dealing (vide Ex. 394) of the plaintiff with defendants 1 and 2 took place, or when on April 15,  1953  the  accounts  were  stated  and  admitted.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11  

Indeed,  on-the   date,  April   15,  1953,   on  which  the plaintiff’s cause  of action arose, even the partnership was not in  existence, the  same having  stood  dissolved  since April 20, 1951.      Mr. Datar  next contends  that even if the joint status of the  family stood  disrupted from  November,  1945,  then also, on  the principle  of  s.  45,  Partnership  Act,  the acknowledgements made  by defendants  1 and  2, representing themselves, jointly  or severally,  as Karta  of  the  joint Hindu trading family, would, in the absence of public notice to the  traders in  general  or  particular  notice  to  the plaintiff, be  binding of  all the  erstwhile members of the joint family.  Reliance for  this contention has been placed on a  Single Bench  judgment of  the Bombay  High  Court  in Kashiram Bhagshet Shete v. Bhaga Bhanshet Redij(1).      As against this, Mr. Desai submits that Kashiram’s case (supra)  does  not  lay  down  the  law  correctly.  Counsel maintains that  the contrary  view taken  by the  other High Courts in  these cases  is sound  :  Pramod  Kumar  Pati  v. Damodar Sahu(2); Rengaswami Ayyanagar v.      (1) A.I.R. 1945 Bom. 511       (2) I.L. R. 1953 Cuttack                                                         221. 297      Sivyurakasam  Pillai(1);   Muthyala  Ramachandrappa  v. Muthyala  Narayanappa (2) .      Kashiram’s case  (supra) decided  by an  eminent single Judge certainly  supports the  proposition propounded by Mr. Datar. Applying  the principle  of s.  45 of the Partnership Act, 1932, the learned Judge  held that unless intimation of the severance  of joint  status between  the members  of the joint family  is given  to the  outside  creditors  who  had dealings with  the joint family through its karta, either by public notice or individual notice in that behalf, the karta would be  deemed to  continue to represent the family and to have power  to incur  debts for family necessity and to make acknowledgements or  part-payments in ‘s respect of the same so as to extend the period of limitation. With great respect to the learned Judge, we do not think that this is a correct enunciation  of   the  law   on  the   point.  Firstly,  the legislature has, in its wisdom, excluded joint Hindu trading families from  the operation of the Partnership Act. Section 4 of that Act defines ’partnership’ as "the relation between persons who  have agreed  to share the profits of a business carried on  by all or any of them acting for all". Section 5 further makes  it clear  that this  Act  governs  only  that relation of  partnership which  arises from contract and not from J status such as the one obtaining among the members of a joint  Hindu family  trading  partnership.  Secondly,  the question whether  an acknowledgement made by the karta of an erstwhile joint  Hindu family  after  its  severance,  would extend limitation  against all  the former  members of  that family, turns  primarily on  an interpretation of clause (b) of sub-section  (3) of  s  21    read  with  s.  19  of  the Limitation Act, 1908. Clause (b) of s. 21 (3) provides:           "Where a  liability has  been incurred  by  or  on      behalf  of   a  Hindu  undivided  family  as  such,  an      acknowledgement or  payment made  by  or  by  the  duly      authorised agent  of, the manager of the family for the      time-being, shall  be deemed  to   have  been  made  on      behalf of the whole family".      The key  words in  this clause  are the  manager of the family for  the time being’. These words unerringly indicate that at  the time  when  the  acknowledgement  is  made  and signed, the  person making  and  signing  it,  must  be  the manager of  a subsisting  joint  Hindu  family.  If  at  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11  

relevant time  the joint  Hindu family as such was no longer in existence because of division, or disruption of its joint status, any  acknowledgement made  by the erstwhile karta of such family cannot keep the debt alive and extend limitation as against all the members of the family, his representative capacity as karta being co-terminus with the joint status of the family.      Explanation (II)  to s.  19  lays  down  that  for  the purpose  of   this  section  "signed"  means  signed  either personally or  by an  agent duly  authorised in this behalf. Section 21(1)  provides  that  the  expression  "agent  duly authorised in  this behalf"  in ss.  19 and  20 shall in the case  of  a  person  under  disability  include  his  lawful guardian or  manager or  an agent  duly authorised  in  this behalf. It is well settled that      (1) I.L.R. 1942Mad. 251 (F.B.)     (2) A.I.R. 1940 Mad.                                                         339. 298 coparceners do  not derive  their title through the karta of the coparcenary.  Defendants 1  and  2  do  not  fulfil  the requirements of this sub-section.      It is  therefore the  duty of the creditor to ascertain after  due   enquiry   whether   the   person   making   the acknowledgement still  holds his  representative capacity as karta of the family. The law does not cast any duty upon the members of  the family  who do not figure in the endorsement or writing  admitting the  debt to  inform the creditor by a general notice  about the  disruption of  the family. If the creditor fails to make an enquiry and satisfy himself’ about the capacity of the executant to represent the family at the time of  making the  acknowledgement, he  does so at his own peril. Disruption  of the  joint family  status, as  already noticed, puts  an end  to the representative capacity of the karta and  any acknowledgement  of a  debt made by him after such  disruption  cannot  save  the  creditors’  claim  from becoming time barred against the other members.      The above  enunciation of the law is in accord with the view taken  by a  Full Bench  of the  Madras High  Court  in Rangaswamy Ayyangar  v. Sivprakasam  Pillai (supra) and by a Division Bench  consisting of Varadachariar and Abdur Rahman JJ.  in  Muthyala  Ramachandrappa  v.  Muthyala  Narayanappa (supra), and by a Division Bench of the Orissa High Court in Pramod Kumar Pati v. Damodar Sahu (supra).      We approve  of the  law enunciated  on the point by the High Courts in these cases.      No other point has been argued before us in this appeal which fails and is dismissed with costs. P.B.R.                                     Appeal dismissed. 299