Case: M.N. Aryamurthy and Anr Vs. M.D. Subbaraya Setty through L. R. and Ors

other had started their own new business and one had no concern with the other. It is true that, although the defendants did new business, that new business continued to have the old names. The books of account were freshly opened for the same and we feel no difficulty in agreeing with the concurrent findings of both the courts that the business carried on by the defendants from 11-7-1940 in the name of Lachiah Setty and Sons and Giri Coffee Works was a new business having no connection with the old family business which had come to an end. The directions given by the Arbitrators on 11-7-1940, to which the parties had agreed, were to the effect that, from 11-7-1940 onwards, the defendants shall be entitled to the profits made in the business and will be also liable for the losses in that business. In other words, the business was defendants own after 11-7-1940 and the plaintiff would have no concern with it. The High Court has held that the Arbitrators had intended to close the family business and divide the stock-in-trade leaving to the parties to carry on business, if they so chose, on their own exclusive responsibility.17. That being the position, the question arises whether the defendants would, in law, be liable to account to the plaintiff for the profits earned by the defendants in their own business or for the acquisition made by them in that business. We agree with the High Court that they were not so liable. On a partition by severance of the joint status, the members of the family become tenants-in-common of the family property. If one of the members remains in possession of the entire properties of the family, there is no presumption that the property, which is acquired by him after severance of the status, must be regarded as acquired for the family. Where rents and profits are received by the member in possession, he would be liable to account for the rents and profits received by him. But the funds in the hands of that member do not become impressed with any trust in favour of the other members. Therefore, if such a member acquired some property with the funds in his possession, the other members could claim on share in that property, Hence we agree with the High Court that the business carried on by the defendants on and after 11-7-1940 should be considered as the exclusive business of the defendants, and the plaintiffs would have no right to claim any share in the profits or the acquisitions made out of that business. What is true about this business carried on by the defendants is also true of the business carried on by the plaintiff. The defendants have not claimed and cannot claim any a share in the business run by the plaintiff after 11-7-1940 or in the profits and acquisitions made by him in that business. This finding, however, is not to be understood to mean that the securities and stock-in-trade already referred to are not to be taken into account as family assets for the purpose of partition, nor can the parties decline the liability to account to each other for the income derived by them from the family assets in their possession.18. We have dealt with all the points raised in the course of the arguments before us and, in our view, the findings of the High Court are quite unexceptionable. The appeals must, therefore, fail. It was, however, brought to our notice that the wording of the decree as passed by the High Court is likely to be mis-interpreted and misconstrued at the time of execution and, hence the same should be properly clarified, We, therefore, propose to substitute a decree, as under, for the decree passed by the High Court:"(1) It is declared that the original plaintiff Nagappa (now his heirs brought on record) was entitled to a 2/19th share in the joint family properties and liable for a similar share in the joint family liabilities.(2) The joint family properties, as mentioned in the suit, shall comprise all the movable and immovable properties including stocks, shares and valuable securities in the possession and control of the plaintiff and defendants 1 to 9 as on 11/07/1940. The family liabilities as on that date shall be ascertained with a view to determine the net assets. The plaintiff shall have 2/19th share in the same.(3) The parties are liable to account for the rents, income, profits and dividends received by them after 11-7-1940 till the date of final partition in respect of the joint family partition in respect of the joint family properties in their respective possession on and after 11-7-1940. If, on taking accounts, the plaintiffs are found to have received less for their 2/19th share in such rents, income, profits and dividends, the deficiency shall be made good by the defendants. IT is, however, clarified that the parties are not accountable for the profits or acquisitions made in the course of the separate business or businesses carried on by the parties after 11-7-140. The business carried on by the defendants in the name of "lachiah Setty and Sons" and "giri Coffee Works" is to be regarded, after 11-7-1940, as the separate business of the defendants.(4) The plaintiffs shall be put in separate possession of the properties coming to their share on partition by metes and bounds. The partition shall be effected by a Commissioner appointed by the Court in respect of all properties not required under the law to be partitioned by the Deputy Commissioner. In respect of properties, partition of which is required under the law to be effected by the Deputy Commissioner, the partition shall be effected by the Deputy Commissioner or his Subordinate Gazetted Officer. The present possession of the parties shall be respected as far as possible.(5) The order of costs made by the High Court is confirmed and the appellants shall pay the costs of the respondents in these appeals."19.

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

Explanation:
0[ds]8. On reading the document as a whole, there can be hardly any doubt that Lachiah was wanting to make a will. It was drafted by his family lawyer. The whole form of the document is of a will. It is attested by two witnesses. Executors are appointed and a number of bequests have been made which were to take effect after his death. In the beginning and at the end, Lachiah described the document as his Will which he was making in his old age, while in good mental state. The will shows his awareness that, if the family properties were regarded as joint family properties, he would not be in a position to make any disposition of the same by a will. So, although two of his the elder sons had contributed largely to the family acquisitions, all those acquisitions, he insisted, were hisproperties, over which, he claimed, he had absolute power of disposition. As a matter of fact, if the properties as claimed by him had beenthere is no doubt that the document would have absolutely operated as the last will and testament of Lechiah Setty. But unfortunately, Lachiah, though a father, could not, under the Hindu Law, dispose of, by will, joint family property or any part thereof and as a will, it was clearly inoperative on the various dispositions made by him. Subarami Reddi v. Ramamma. ILR 43 Mad 824   = (AIR 1920 Mad 637 ). This latter case has questioned the correctness of a previous decision of that Court in Appan Patra Chariar v. V. S. Srinivasa Chariar ILR 40 Mad 1122   = (AIR 1918 Mad 531   ). The decisions proceed on the principle which wasin Vital Putten v. Yamenamma (1874) 8 Mad HCR 6 and Lakshman Dada Naik v. Ramachandra Dada Naik, (1879) ILR 5 Bom 48 (PC) that a coparcener cannot devise joint family property by will, because, on the date of his death when the will takes effect, there is nothing for the will to operate on, as, at the moment of his death, his interest passes by survivorship to the otherWill here does not show that there was any occasion for making a family arrangement. The Will itself discloses that all the sons were on amicable terms, there were no distensions, no contrary claims and no reasonably anticipated disharmony. On the other hand, the father exhorts the sons to continue to remain joint and undivided for the greater glory of the family as one unit. It is true that in para 20 he states that all his children had solicited him to make suggestions with a view that no differences orshould arise amongst themselves. But that is only a manner of speaking, because such foreboding of differences andare inherent in every joint family. In the absence of any evidence of even a whisper of disharmony in the family, the statement that the children had solicited him to make suggestions is, to our minds, only a flourish. But what is important to note is that the father does not propose a partition or a servance of statute. On the contrary, he exhorts the sons to live united as members of a joint family on the same cordial terms which prevailed till then. A father in a Mitakhshara joint family has the undoubted right to divide the family property at any moment during his life. Whether his sons consent or do not consent to the division. The only limitation on his power is that the division directed by him must be a fair one in which he gives his son an equal share with himself. The will does not show that he wanted to exercise any such power and, since a partition was very far from his mind, he merely made his own "suggestions" as to what he would regard as proper if, in some remote future, as proper if, in some remote future, the members of the family thought about severance of status. These suggestions, if acted upon, would have given plaintiff Nagappa a 4 anna share defendant No 1 a 2 anna share and his wife Rukminiamma a 2 anna share, while the other eight sons would have got only an anna share each. This would have been a very unequal partition. Two of the sons would have got much more than they were entitled to on a partition and the mother, who was not entitled under the Hindu Law as it prevailed in Mysore in 1933 to any share on partition in the family, would have got 2 annawas suggested in the course of arguments that the will was acted upon and reference was made to certain payments alleged to have been made in pursuance of the fathers directions. Both the Courts have found that the will was not acted upon and we see no good reason to take a different view. In our opinion, the High Court was right in holding that the document Ext. AA was inoperative as a will and ineffective as a family arrangement.15. The learned trial Judge thought that the plaintiffs share in the family property was 1/9th, but the High Court, for reasons which are not challenged before us in the arguments has come to the conclusion that the plaintiffs correct share would be 2/19th. We agree with thatis true that, although the defendants did new business, that new business continued to have the old names. The books of account were freshly opened for the same and we feel no difficulty in agreeing with the concurrent findings of both the courts that the business carried on by the defendants fromin the name of Lachiah Setty and Sons and Giri Coffee Works was a new business having no connection with the old family business which had come to an end. The directions given by the Arbitrators onto which the parties had agreed, were to the effect that, fromonwards, the defendants shall be entitled to the profits made in the business and will be also liable for the losses in that business. In other words, the business was defendants own afterand the plaintiff would have no concern with it. The High Court has held that the Arbitrators had intended to close the family business and divide theleaving to the parties to carry on business, if they so chose, on their own exclusiveagree with the High Court that they were not so liable. On a partition by severance of the joint status, the members of the family becomeof the family property. If one of the members remains in possession of the entire properties of the family, there is no presumption that the property, which is acquired by him after severance of the status, must be regarded as acquired for the family. Where rents and profits are received by the member in possession, he would be liable to account for the rents and profits received by him. But the funds in the hands of that member do not become impressed with any trust in favour of the other members. Therefore, if such a member acquired some property with the funds in his possession, the other members could claim on share in that property, Hence we agree with the High Court that the business carried on by the defendants on and aftershould be considered as the exclusive business of the defendants, and the plaintiffs would have no right to claim any share in the profits or the acquisitions made out of that business. What is true about this business carried on by the defendants is also true of the business carried on by the plaintiff. The defendants have not claimed and cannot claim any a share in the business run by the plaintiff afteror in the profits and acquisitions made by him in that business. This finding, however, is not to be understood to mean that the securities andalready referred to are not to be taken into account as family assets for the purpose of partition, nor can the parties decline the liability to account to each other for the income derived by them from the family assets in their possession.18. We have dealt with all the points raised in the course of the arguments before us and, in our view, the findings of the High Court are quite unexceptionable. The appeals must, therefore, fail. It was, however, brought to our notice that the wording of the decree as passed by the High Court is likely to beand misconstrued at the time of execution and, hence the same should be properly clarified, We, therefore, propose to substitute a decree, as under, for the decree passed by the HighIt is declared that the original plaintiff Nagappa (now his heirs brought on record) was entitled to a 2/19th share in the joint family properties and liable for a similar share in the joint family liabilities.(2) The joint family properties, as mentioned in the suit, shall comprise all the movable and immovable properties including stocks, shares and valuable securities in the possession and control of the plaintiff and defendants 1 to 9 as on 11/07/1940. The family liabilities as on that date shall be ascertained with a view to determine the net assets. The plaintiff shall have 2/19th share in the same.(3) The parties are liable to account for the rents, income, profits and dividends received by them aftertill the date of final partition in respect of the joint family partition in respect of the joint family properties in their respective possession on and afterIf, on taking accounts, the plaintiffs are found to have received less for their 2/19th share in such rents, income, profits and dividends, the deficiency shall be made good by the defendants. IT is, however, clarified that the parties are not accountable for the profits or acquisitions made in the course of the separate business or businesses carried on by the parties afterThe business carried on by the defendants in the name of "lachiah Setty and Sons" and "giri Coffee Works" is to be regarded, afteras the separate business of the defendants.(4) The plaintiffs shall be put in separate possession of the properties coming to their share on partition by metes and bounds. The partition shall be effected by a Commissioner appointed by the Court in respect of all properties not required under the law to be partitioned by the Deputy Commissioner. In respect of properties, partition of which is required under the law to be effected by the Deputy Commissioner, the partition shall be effected by the Deputy Commissioner or his Subordinate Gazetted Officer. The present possession of the parties shall be respected as far as possible.(5) The order of costs made by the High Court is confirmed and the appellants shall pay the costs of the respondents in these appeals.