Case: Nanchand Gangaram Shetji Vs. Mallappa Mahalingappa Sadalge

1953, on which the plaintiffs cause of action arose, even the partnership was not in existence, the same having stood dissolved since April 20, 1951.39. Mr. Datar next contends that even if the joint status of the family stood disrupted from November, 1945, then also, on the principle of Section 45, Partnership Act, the acknowledgments made by defendants Nos. 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 on 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 Reddi (AIR 1945 Bom 511 : ILR 1945 Bom 976 : 47 Bom LR 470).40. As against this, Mr. Desai submitted that Kashirams case 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 (AIR 1953 Ori 179 : ILR 1953 Cut 221); Rengaswami Ayyangar v. Sivprakasam Pillai (AIR 1941 Mad 925 : ILR 1942 Mad 251 : (1941) 2 MLJ 383 (FB); Muthyala Ramachandrappa v. Muthyala Narayanappa (AIR 1940 Mad 339 : 1939 MWN 927).41. Kashirams case decided by an eminent Single Judge certainly supports the proposition propounded by Mr. Datar. Applying the principle of Section 45 of the Partnership Act, 1932 therein 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 acknowledgments or part payments in 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 asthe 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 status such as the one obtaining among the members of a joint Hindu family trading partnership. Secondly, the question whether an acknowledgment 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 Section 21, read with Section 19 of the Limitation Act, 1908. Clause (b) of Section 21(3) provides :"Where a liability has been incurred by or on behalf of a Hindu undivided 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."42. 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 acknowledgment is 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 because of division or disruption of its joint status, any acknowledgment 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 conterminous with the joint status of the family.43. Explanation II to Section 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 Sections 19 and 20 shall in the case of a person under disability include his lawful guardian or manager of an agent duly authorised in this behalf. It is well settled that coparceners do not derive their title through the karta of the coparcenary. Defendants Nos. 1 and 2 do not fulfil the requirements of this sub-section.44. It is therefore the duty of the creditor to ascertain after due enquiry whether the person making the acknowledgment 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 acknowledgment, 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 acknowledgment of a debt made by him after such disruption, cannot save the creditors claim from becoming time barred against the other members.45. The above enunciation of the law is in accord with the view taken by a Full Bench of the Madras High Court in Rengaswami 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).46. We approve of the law enunciated on the point by the High Courts in these cases.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]33. In our opinion, it was not unreasonable to hold that the recital in this resolution with regard to defendant No. 2 being the authorised manager of the joint family, was made as a matter of expediency, did not discount the case of defendant No. 4 that the joint family had disrupted on November 4, 1945.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 Nos. 1 and 2 took place, or when on April 15, 1953 the accounts were stated and admitted. Indeed, on the date, April 15, 1953, on which the plaintiffs cause of action arose, even the partnership was not in existence, the same having stood dissolved since April 20, 1951.It is therefore the duty of the creditor to ascertain after due enquiry whether the person making the acknowledgment 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 acknowledgment, 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 acknowledgment of a debt made by him after such disruption, cannot save the creditors claim from becoming time barred against the other members.45. The above enunciation of the law is in accord with the view taken by a Full Bench of the Madras High Court in Rengaswami 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).46. We approve of the law enunciated on the point by the High Courts in these cases.