O.C.J. Suit No. 563 of 1941. Case: Kashiram Bhagshet Shete Vs Bhaga Bhaushet Redij. High Court of Bombay (India)
| Case Number | O.C.J. Suit No. 563 of 1941 |
| Judges | Bhagwati, J. |
| Issue | Hindu Law |
| Judgement Date | November 09, 1944 |
| Court | High Court of Bombay (India) |
Judgment:
Bhagwati, J.
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His Lordship after stating the facts proceeded. The plaintiff gave-evidence on his behalf and stated that he had monetary dealings with the defendants' joint and undivided Hindu family for several years prior to the severance. of joint status between the various branches of that family, that he lent and advanced monies to the defendants' joint family, that defendant No. 15 was the managing member of the defendants joint family and that there was no change in the said status of defendant No. 15 to his knowledge up to the time when defendant No. 15 signed the promissory note dated February 6, 1938, in his favour. He was cross-examined by Mr. Banaji particularly on the state of his knowledge as to the severance of joint status between the various branches of the defendants' family and the information which he might have derived generally and in particular from defendant No. 15 as regards the same. He denied that on February 6, 1938, he knew that a partition had been effected between the members of the defendants' joint family on the previous day, i.e. February 5, 1938. He admitted that on February 6, 1938, he did not ask defendant No. 15 whether there was any change in his status as the managing member of the defendants' joint family, or whether there had been any change in the status of the said joint family. No evidence was led on behalf of defendants Nos. 1 to 4; and on this evidence on the record I am not prepared to hold that on February 6, 1938, the plaintiff knew or was aware that a partition had been effected between the members of the defendants' joint family on February 5, 1938, or that defendant No. 15, when he executed the promissory note on February 6, 1988, was not the managing member or karta of the defendants' joint family. I hold that neither defendant No. 15 nor any other member of the defendants' joint family gave any intimation to the plaintiff of the severance of joint status between the members of the defendants' joint family or of the fact that defendant No. 15 had ceased to enjoy the status of the managing member or karta of the defendants' joint family on and after February 5, 1938.
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On the facts recorded above, Mr. Banaji contended that the promissory note dated February 6, 1938, was not an acknowledgment within the meaning of Section 19 of the Indian Limitation Act, because (a) it was not made before the expiration of the period prescribed for a suit in respect of the monies due at the foot of the previous promissory note or the debt secured thereby, and (6) it was not signed by defendant No. 15 as the managing member or karta of the defendants' joint family or by any person duly authorised in that behalf by the defendants' joint family, the joint status having come to an end on February 5, 1938, as aforestated. Mr. Banaji contended that the previous promissory note had been executed by defendant No. 15 on February 6, 1935, and that therefore the three years period prescribed for a suit in respect of the said promissory note or the debt secured thereby expired on February 5, 1938, with the result that when the renewed promissory note was executed by defendant No. 15 on February 6, 1938, the period of limitation had already expired and the acknowledgment even though otherwise validly signed was of no avail to the plaintiff to start a fresh period of limitation. The contention of Mr. Banaji, however, did not take count of a 12 of the Indian Limitation Act which lays down that in computing the period of limitation prescribed for any suit the date from which such period is to be reckoned shall be excluded. A suits to recover the monies due at the foot of the previous promissory note or the debt secured thereby if filed on February 6, 1938, would thus have been well within time. There is, therefore, no substance in the contention of Mr. Banaji, and if the promissory note dated February 6, 1938, be held by me to have been signed by defendant No. 15 as the managing member or karta and therefore as the agent duly authorised in that behalf by the defendants' joint family, the same would be a valid acknowledgment within the meaning of Section 19 of the Indian Limitation Act.
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The question, however, whether the acknowledgment of liability in respect of the monies due at the foot of the promissory note or the debt secured thereby was signed by defendant No. 15 as the managing member or karta and therefore as the agent duly authorised in that behalf by or on behalf of the defendants' joint family presents considerable difficulty. There Is no doubt incorporated in Section 21 of the Indian Limitation Act by the amending Act I of 1927, Sub-section (3), which provides that where a liability has been incurred by or on behalf of a Hindu family as such, an acknowledgment 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 said sub-section, however, protects on the face of it only those acknowledgments or payments which have been made by or by the duly authorised agent of the manager of the joint family for the time being and would not cover a case like the present where the status of the joint family had been changed prior to the date of such acknowledgment or payment. Sub-section (3) of Section 21 of the Indian Limitation Act would apply in terms where the liability had been incurred by or on behalf of the joint family and the manager of the family for the time being made an acknowledgment or payment within the meaning of Sections 19 and 20 of the Indian Limitation Act. In such cases the acknowledgment or payment would be deemed to have been made by the manager of the family for the time being as one on behalf of the whole family and would be sufficient in law to start a fresh period of limitation against the whole family from the date of such acknowledgment or payment. It presupposes that the person who makes the acknowledgment or payment occupies the position of the manager of the family for the time being. If, however, 1 there has been a severance of joint status between the members of the family, Sub-section (3) of Section 21 of the Indian Limitation Act would not in terms apply, and even though the I debt or liability had been incurred by or on behalf of the joint family by its manager I for the time being, the person who was the manager of the family at the date when the said debt or liability had been incurred by him on behalf of the joint family, would not have the power to acknowledge the debt or make the part-payment so as to extend the period of limitation, as he would have ceased to be the manager of the family by the time he came to make the acknowledgment or payment. There is nothing, therefore, in Section 21, Sub-section (3), of the Indian Limitation Act, which would save the plaintiff's suit from the bar of limitation if a partition had been effected and there was a severance of joint status between the members of the defendants' joint family on February 5, 1938.
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Mr. Laud, however, pointed out that the position of a Hindu joint family trading firm was an exceptional one and the members of a Hindu joint family trading firm occupied, as regards the outside creditors of that business, the position of partners. He referred to the decision of our Appeal Court in Raghunath Tarachand v. The Bank of Bombay (1909) 11 Bom. L.R. 255 where Batchelor J. had observed that the Courts, in establishing the legal relations of a joint Hindu family firm, treat it as a kind of partnership and apply the principles of that law. He contended that if the principles of the law of partnership were applied in this case, there was an obligation on the members of the defendants' joint family on a severance, if any, of joint status between themselves on February 5, 1938, to inform the outside creditors of the family including the plaintiff of such severance of joint status and that in the absence of any such intimation having been given by them to the plaintiff the principle of the old Section 264 of the Indian Contract Act (re-enacted in Section 45 of the Indian Partnership Act), viz. that persons dealing with a firm would not be affected by a dissolution of which no public notice had been given unless they themselves had notice of such dissolution, would apply. He also pointed out that old Section 264 of the Indian Contract Act had been applied in similar circumstances by Mirza J. to the case of a joint Hindu family in Krishnabai v. Varjivandas (1929) 32 Bom. L.R. 201 and the Court would be justified in such cases in assuming the continuance of the joint family firm, where outside creditors had continued to deal with the firm, e.g. by obtaining acknowledgments of previously existing debts even after the severance of joint status between the members of the family. He further contended that the provisions of the old Section 264 of the Indian Contract Act had been re-enacted by the Legislature in Section 45 of the Indian Partnership Act (IX of 1932) which laid down that notwithstanding the dissolution of a firm the partners continued to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution until public notice was given of the dissolution. He therefore urged that the promissory note dated February 6, 1938, having been signed by defendant No. 15, who was to the knowledge of the plaintiff the managing member or karta of the defendants' joint family, (having dealt with the plaintiff as such in the matter of the borrowing of the monies and in the matter of the execution of the said promissory note to secure the repayment of the monies so borrowed by him for the purposes of the joint family business) and whose status as such managing member or karta of the defendants' joint family had not been altered to the knowledge of the plaintiff by any notice given in that behalf by the...
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