Case: Vriddhachalam Pillai Vs. Chaldean Syrian Bank Ltd., Ananother

1. This appeal is directed against the judgment of the High Court of Kerala and has been filed on the strength of a certificate of fitness granted by the High Court under Art. 133(1)(a) of the Constitution.2. The appeal arises out of a suit filed by the respondent - The Chaldean Syrian Bank Ltd. - which for shortness we shall refer to as the Bank for the recovery of certain sums due on a mortgage by deposit of title executed by Kalayanasundaram Pillai - the appellants father who was impleaded as the 1st defendant and is now the 2nd respondent before us.3. The mortgage on which the Bank laid this suit was evidenced by Ex. E a memorandum recording the deposit of title deeds of certain properties in the former Princely State of Cochin. The debt for which the said deposit was made was the principal and interest due on two promissory notes for Rs. 50,000/- and Rs. 30,000/- respectively which were marked as Exs. A and B in the case. It was not in dispute that the property which was the subject of mortgage belonged to the joint family composed of the 1st defendant and his son - the appellant. The appellant was a minor on the date of the suit transaction and even at the date of the suit. To the suit that it filed the bank impleaded not merely Kalyanasundaram and his minor son, but the latters sisters and mother and even the lessees of the mortgaged property. These were defendants 3 to 11. They, however, have dropped out of the proceedings at earlier stages and the only parties to the appeal whose rights we are called on to adjudicate are the Bank and the appellant. The Banks suit was decreed by the trial court against the father - 1st defendant and there was no appeal against it and that decree is no longer in challenge. The trial Judge however held that the Bank had no right to obtain a mortgage decree against the appellant and his half share in the family property, but on appeal by the Bank, the learned Judges allowed the appeal and modified the decree by passing a mortgage decree against the appellant qua his share as well. It is the correctness of this variation that is questioned in this appeal.4. The execution of the promissory notes and the receipt of consideration therefore as recited therein were admitted by the 1st defendant, as also the creation of the security by the deposit of the title deeds of properties and whatever contentions were raised in respect of these matters on behalf of the appellant have now been abandoned. Some point was made on behalf of the appellant regarding the suit debt being avyavaharika, but this also has been found against and given up. The only question that survives is whether the mortgage evidenced by Ex. E is binding on the appellant. Here again it is now common ground that the debt was a personal borrowing by the father, not for any purpose binding on the joint family.5. A few more facts have to be stated in order that the precise range of the controversy in this appeal might be properly understood. That Kalyanasundaram and the members of his family were permanent residents of Palghat in the then State of Madras, that he with the appellant formed members, of an undivided Hindu family and that the properties which were the subject of the mortgage were joint family properties, none of these were in dispute. The family possessed properties not merely in Cochin but also in Palghat.6. We shall now proceed to detail the circumstances in which the borrowings which has given rise to this litigation were made. In or about May 1945 Kalyanasundaram entered into a contract with the Government of India for the supply of 100 tons of black pepper and also into further contracts of the same type later in the year. He had apparently no ready cash to implement these contracts and approached the Bank for funds for financing the undertaking. For this purpose he executed three promissory notes in favour of the Bank for a total of Rs. 1,10,000/-. The Promissory notes marked Exhibits A and B for Rs. 50,000/- and Rs. 30,000/- respectively already referred to, were executed on November 14, 1945 and the debt evidenced by them was secured by a mortgage by deposit of title-deeds of properties in the Cochin State and this is the subject-matter of the proceedings giving rise to this appeal.

Reasoning: 8. Reverting to the proceedings giving rise to this appeal, to the mortgage suit filed by the Bank several defences were raised on behalf of the appellant. It is not necessary to set out all of them but it would be sufficient if those which have a bearing on the points urged before us are mentioned. Before dealing with the controversial issues we may state that there were a few to which it is sufficient to make a passing reference. There was a formal denial of the truth and validity of the promissory notes and the passing of consideration thereunder and also about the sufficiency or admissibility of the memorandum - Ex. E, to create a mortgage by deposit of title deeds. These do not appear to have been seriously pressed and have been found in favour of the plaintiff-bank. There was also an issue that the suit-debt was tainted with illegality and immorality, but on the facts it was such an untenable plea that it was easily foundlearned trial Judge recorded a finding that the debts sued on were not incurred for family necessity nor for the benefit of the family. These findings also which were not varied by the High Court were not questioned before us. Incidentally it should be mentioned that the learned trial Judge found, when dealing with issue No. 9 which was a general issue relating to the binding character of the debt on the appellant, that the mortgage was not for securing an antecedent debt, but this finding was reversed by the High Court, the learned Judges holding that to the extent of Rs. 59,000/- the mortgage loan went in discharge of antecedent debts and we shall have occasion to deal with this matter in detail later in thissee considerable force in the submission of the learned Counsel, particularly with the criticism of the second of the above reasons. The recital as to the character of the debt as against the son is a recital in a document to which the father and the son are parties and if between them the son repudiates the debt as binding on him, that is no reason be itself holding the partition to be malathese circumstances, unless the entirety of the debts payable by the father was taken into account and sufficient and adequate provision made for the discharge of the debts from and out of the share allotted to the father - either his original share or any added assets to enable him to do so - the partition cannot be held to be bona fide within the meaning of the decisions. We therefore agree with the High Court, though not for the same reasons, in its finding that the partition under Ex. VI is not such as to be binding against the Bank.In the present case on the concurrent finding of the two courts that the family of the defendants were permanent residents of and domiciled in Palghat it would follow that the binding character of the fathers alienation by way of mortgage quoad the son had to be judged in the light of the principles laid down from very early times by the Privy Council and accepted by the Full Bench decisions of the Madras High Court and finally authoritatively expounded in 51 Ind App 129: (AIR 1924 PC 50) which has received the approval of this Court. When the Bank dealt with the 1st defendant, it must be taken to have contracted with him on the basis of such a law being applicable to the transaction, so that there is no question of hard-ship arising from the application of the British Indian Law to determine the scope of the fathersdo not see any substance in this objection, because the respondent is entitled to canvass the correctness of findings against it in order to support the decree that has been passed against the appellant.Before concluding it is necessary to refer to a variation which the High Court made as regards the amount recoverable from the properties of the family in Cochin. This was because of the construction and effect of Ex. J which was the memorandum which evidenced the deposit of the title deeds of the Palghat properties and which was executed on April 23, 1946. Under Ex. J the property mortgaged was not merely the properties in Palghat but the equity of redemption of the Cochin Properties which had been the subject of mortgage under Ex. F for Rs. 80,000/-. In other words, Ex. E created also a second mortgage on the Cochin properties. On a construction of Ex. J, the High Court held that the 1st mortgage of the Palghat Properties was limited to the excess over Rs. 30,000/- in the overdraft account. It followed from this that the Bank could recover from the Chittur properties that excess and this was found to be, looking into the debits of the account of the 1st defendant, to amount to Rs. 3,792/2/1. The learned Judges of the High Court, therefore, granted in addition to the amounts covered by Exs. A and B a decree for Rs. 3,792/2/1 recoverable from the Cochin properties. In view of the fact that a suit had already been instituted in the Palghat Sub-Court for the entirety of the amount due to the extent of Rs. 30,000/- and interest due under Exs. G and F, the learned Judges added in their judgment a reservation which was incorporated in the decree that was drawn up in thesein the suit instituted by the plaintiff in the Palghat Sub-Court the plaintiff obtains a decree for the whole amount due under Ex. C and realises the same, the plaintiff will not be entitled to ignore the decree in this case in respect of the above sum - Rs. 3,792/2/1 and interestCounsel for the appellant faintly suggested that the learned Judges were in error in passing a decree for this further sum of Rs. 3,792/2/1 in this suit. It is, however, unnecessary for us to go into the merits as to whether the learned Judges were right in the construction of Ex. J and the legal results flowing therefrom as we are satisfied that the appellant is not entitled to raise this point. This was not one of the points raised in the grounds of appeal to this Court when an application was made for the grant of a certificate of fitness, nor is this objection to the decree to be found in the statement of the case file. In the circumstances, we need say no more about it.