Case: K. V. Narayanan Vs. K. V. Ranganandhan &amp; Ors

Pathy was in the nature of remuneration for the services to be rendered by him. It will be useful in this connection to refer to the decision of this Court in Raj Kumar Singh Kukam Chandji v. Commissioner of Income-tax, Madhya Pradesh where on the question whether the managing directors remuneration received by the assessee was assessable in his individual hands or in the hands of the assessees Hindu undivided family, this Court expressed the view that the remuneration was assessable as the assessees individual income and not as the income of his Hindu undivided family. We are, therefore, of the view that Schedule D-1 properties were given absolutely to Kota Venkatachala Pathy as his separate properties.Let us now see as to whether the aforesaid arrangement entered between the members of the Hind u undivided family whereby properties mentioned in Schedule D-1 to the deed of partition were made over to Kota Venkatachala Pathy was valid according to Hindu Law. A reference to page 426 of Maynes Treatise on Hindu Law and Usage (11th Edition) makes it clear that while dividing the family estate, it is necessary for the joint family to take account of both the assets and the debts for which the undivided estate is liable and to make provision for discharge of the debts. It is al so well settled by the decisions of this Court in Sahu Madho Das v. Pandit, Mukand Ram Maturi Pullaian v. Maturi Narasimham and S. Shanmugam Pillai &Ors. v. K. Shanmugam Pillai Ors. that if family arrangements which are governed by a special equity peculiar to themselves or entered into bonafide to maintain peace or bring about harmony in the family and the terms thereof are fair taking into consideration the circumstances of the case, every effort must be made by the Court to recognise and sustain it. Examining the matter in the light of these principles, we find that by the aforesaid arrangement both Subramanyam Chettiar and the defendant-appellant were absolved of the responsibility to discharge the family debts and liability was cast on Kota Venkatachala Pathy alone to discharge the same irrespective of the fact whether the properties mentioned in Schedule D-1 to Exhibit A-1 ultimately turned out to be sufficient or insufficient to meet the burden. Thus the arrangement being bonafide and its terms being fair, we cannot but hold that it was valid and the properties detailed in Schedule D-1 to the deed of partition became separate properties of Kota Venkatachala Pathy from the date of the execution of the deed of partition and are not liable to partition.This takes us to the question as to whether there was, as contended by the appellant, any blending of the properties mentioned in Schedule D-1 to the deed of partition with the rest of the properties of the joint family consisting of Kota Venkatachala Pathy and the appellant. It is true that property separate or self-acquired of a member of a joint Hindu family may be impressed with the character of joint family property if it is voluntarily thrown by the owner into the common stock with intention of abandoning his separate claim therein but the question whether a coparcener has done so or not is entirely a question of fact to be decided in the light of all the circumstances of the case. It must be established that there was a clear intention on the part of the coparcener to waive his separate rights such an intention cannot be inferred merely from the physical mixing of the property with his joint family or from the fact that other members of the family are allowed to use the property jointly with himself or that the income of the separate property is utilised out of generosity or kindness to support persons whom the holder is not bound to support or from the failure to maintain separate accounts for an act of generosity or kindness cannot ordinarily be regarded as an admission of a legal obligation. (See Lakk ireddi Chinna Venkata Reddi &Ors. v. Lakkireddi Lakshmama and G. Narayana Ram v. G. Chamaraju &Ors..5. In the instant case we are unable to find that there was any intention on the part of Kota Venkatachala Pathy of abandoning his separate rights over the properties set out in Schedule D-1 to the deed of partition. The mere fact that these properties were not separately entered by Kota Venkatachala Pathy in the account books or that no separate account of the earning from these proper ties was maintained by him cannot rob the properties of their character of self acquired properties. We are accordingly of the view that there was no blending of the properties by Kota Venkatachala Pathy as contended by the appellant.The mere f act that some amount out of the joint family funds was used for discharge of the debts mentioned in Schedule to the deed of partition is also of no consequence. If any amount out of the joint family funds was used for the discharge of the outstandings payable to the outside debtors, the legal representatives of Kota Venkatachala Pathy would, as pointed out by the High Court be liable for them.6. There is also no substance in the last contention advanced on behalf of the appellant. The legal position is well settled that in the absence of proof of misappropriation or fraudulent or improper conversion by the manager of a joint family a coparcener seeking partition is not entitled to call upon the manager to account for his past dealing with the family property. The coparcener is entitled only to an account of the joint family property as it exists on the date he demands partition. In the instant case there being no evidence to establish any misappropriation or fraudulent conversion of the joint family property by Kota Venkatachala Pathy during the period he acted as karta of the family, we are unable to interfere with the direction issued by the High Court which is just and proper.7.

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

Explanation:
0[ds]In the instant case we are unable to find that there was any intention on the part of Kota Venkatachala Pathy of abandoning his separate rights over the properties set out in Schedule D-1 to the deed of partition. The mere fact that these properties were not separately entered by Kota Venkatachala Pathy in the account books or that no separate account of the earning from these proper ties was maintained by him cannot rob the properties of their character of self acquired properties. We are accordingly of the view that there was no blending of the properties by Kota Venkatachala Pathy as contended by the appellant.The mere f act that some amount out of the joint family funds was used for discharge of the debts mentioned in Schedule to the deed of partition is also of no consequence. If any amount out of the joint family funds was used for the discharge of the outstandings payable to the outside debtors, the legal representatives of Kota Venkatachala Pathy would, as pointed out by the High Court be liable foris also no substance in the last contention advanced on behalf of the appellant. The legal position is well settled that in the absence of proof of misappropriation or fraudulent or improper conversion by the manager of a joint family a coparcener seeking partition is not entitled to call upon the manager to account for his past dealing with the family property. The coparcener is entitled only to an account of the joint family property as it exists on the date he demands partition. In the instant case there being no evidence to establish any misappropriation or fraudulent conversion of the joint family property by Kota Venkatachala Pathy during the period he acted as karta of the family, we are unable to interfere with the direction issued by the High Court which is just and proper.