Case: Vyankates Dhonddeo Deshpande Vs. Sou. Kusum Dattatraya Kulkarni &amp; Ors

Facts necessary for appreciating the point of law canvassed in these appeals lie within a narrow compass. One Dattatraya Govind Kulkarni, husband of plaintiff No. 1 and father of plaintiffs 2 to 6 had borrowed a Tagai loan o f Rs. 12, 000/- by making an application Exhibit 129 accompanied by prescribed form, Ext. 128 on 7th February, 1949. The loan was borrowed for constructing wells in Survey Nos. 167 and 170 and he offered as security the lands bearing Survey Nos. 165, 1 66, 167, 170 and 172. In the application Ext. 129 that accompanied the prescribed form it was stated that wells have to be sunk to bring barren land under cultivation. In other words, the loan was for improvement of the land. The loan was advanced and the borrower failed to repay the loan as per the stipulations. A revenue recovery proceeding was commenced and as by the sale of the land offered as security the Government could not reimburse itself the total amount outstanding, a proclamation of sale was issued and ultimately the suit land was auctioned and it was purchased by the defendant and the sale in his favour was confirmed and he was put in possession on 20th May, 1960. The plaintiff stated that prior to the date of auction there was a partition between the father and his sons on 6th July, 1956 evidenced by Ext. 53 and at this partition the suit land with its sub-divisions came to the share of the plaintiffs and therefore, the father had no saleable interest in the suit land and it could not have been sold at a revenue auction for recovering the personal debt of the father. So contending, the plaintiffs brought an action for a declaration that the sale is not binding upon them and possession may be restored to them.The trial Court held that the suit land was joint family property consisting of Dattatraya and his sons but as there was an effective partition prior to the revenue sale and the partition being a genuine one, t he subsequent sale is not binding upon the plaintiffs to whose share the suit land was allotted at the partition and, therefore, the sale was void and the plaintiffs are entitled to be put back in possessionThe High Court in appeal by t he present appellant examined the question of the validity of the revenue sale in the context of the provisions ofthe Land Improvement Loans Act, 1883 (Loans Act, for short) and held that the auction sale of the lands at the relevant time standing in the names of the plaintiffs, the land being not one in respect of which the Tagai loan was advanced, or which was offered as security for that loan, would not be binding upon the plaintiffs as the plaintiffs were not borrowers within the meaning of s. 7(1) of the Loans Act and the plaintiffs suit on this ground was rightly decreed. The submission on behalf of the defendant that Tagai loan was a debt and that it was incumbent on the sons of Dattatraya under the doctrine of pious obligation of the sons of a Hindu father to pay their fathers debts which were not tainted with immorality or illegality, was not accepted and the High Court held that this doctrine of pious obligation cannot be extended to the debts contracted under t he Loans Act as the Act applies to all citizens of India irrespective of their religion. With these findings the appeals were dismissed.

Reasoning:
In order to determine what property is available for partition, provision must first be made for joint family debts which are payable out of the joint family property, personal debts of the father not tainted with immorality, maintenance of dependent female members and of disqualified heirs, and for the marriage expenses of unmarried daughter. This must be so because partition is of joint family property and if joint family debts are repaid before the partition only the residue would be available for partition. Therefore, if partition is effected before paying the debts, provision to pay the debts should be made so as to determine the residue available for partition.Having cleared the ground in law, let us look at facts which have been found by the Courts on appreciation of evidence and which unless found to be utterly unconscionable this Court would not interfere with. The trial Court found that the suit property was joint family property and the High Court has not departed therefrom. In fact, in an earlier suit filed by these very plaintiffs being Special Suit No. 14 of 1958 it has been in terms stated that the lands described in para 1 of the plaint Ext. 37 which include the suit land, were originally owned by joint family of plaintiffs and Dattatraya. Therefo re, on plaintiffs own admission the suit land was joint family property of plaintiffs and DattatrayaWe would only look at uncontroverted salient features of the evidence. Prescribed form of application, Ext. 128 with application Ext. 129 would show that the loan was borrowed for constructing wells for improvement in the potentiality of the lands bearing Survey Nos. 167 and 170. It was submitted that these lands, for the improvement of which the loan was borrowed, were not joint family property. There again, a reference may be made to the admission of the plaintiffs in plaint Ext. 37 which also includes lands bearing Survey Nos. 167 and 170 being described by the plaintiffs themselves as joint family property. The High Court held that Dattatraya borrowed the loan for improvement of the land. Therefore, Dattatraya, the father, borrowed loan in his capacity as the father for improvement of joint family lands and for this purpose offered as security three other pieces of land which were joint family property. In the face of this unimpeachable evidence the statement in Ext. 128, the application for loan, that Dattatraya was the full owner of the lands therein mentioned would not convey the idea that it was his separate property. It is not necessary that Karta acting in his capacity as Karta to describe himself as Karta to affirm his representative capacity. Whether he has acted in his personal capacity or representative capacity can be gathered from all the surrounding circumstances and in this case they are eloquent, in that he mortgaged or gave as collateral security joint family property, to wit land, and it extends to whole of the interest of the family and is not confined to Kartas share, and therefore, he must be deemed to have acted in the transaction on behalf of the family (see Mullas Hindu Law, 14th Edn., page 313, Art. 251). It was, however, stated that agriculture was not the avocation of the joint family and, therefore, the father as the Karta did not have the implied authority to borrow loan so to be binding on the joint family property. One has merely to look at the content of the application for loan, Ext. 129 made by Dattatraya to the Mamlatdar, Taluka Vichitragad, for advancing loan to him, to dispel the contention. The application recites that applicant Dattatraya, the father had undertaken extensive work to bring barren land under cultivation to raise sufficient crops as well as to improve the quality of Land and for improving the quality of agriculture he had undertaken, loans should be advanced to him. Mr. Bal, however, pointed out that Dattatraya was carrying on some business which would be evident from Ext. 23, a copy of execution application No. 87/60 filed by Bhor State Bank Ltd., against one Pandurang Krishnaji Kamble and Dattatraya Govind Kulkarni in which the occupation of Dattatraya is shown as business; and Ext. 22 being a copy of Execution Application No. 92/57 in which his occupation is shown as general agent, and Ext. 120 a copy of the decree in Special Civil Suit No. 2/49 wherein the occupation of Dattatraya is shown as business and which further shows that Dattatraya had running account with one Raghunath Shridhar Phadke in which Dattatraya had withdrawn Rs. 56, 800/- and had credited Rs. 41, 000/- and after adding interest leaving a debit balance of Rs. 19, 238-14-00. It was urged that if all these aspects are taken into consideration, it would appear that agriculture was not the occupation of the joint family. Now, as against this, one may also refer to Ext. 24 a copy of the BADR Execution Application No. 294/56 for executing an Award made under the Bombay Agricultural Debtors Relief Act against Dattatraya which would show that Dattatraya was an agriculturist by occupation and his debts were adjusted by the Courts set up under the Bombay Agriculture Debtors Relief Act and this could have only been done if his principal occupation was agriculture. Therefore, mere description of Dattatrayas avocation in Exts. 22, 23 and 120 is hardly determinative of the occupation of Dattatraya or his family. It may be that over and above agriculture Dattatraya may have been carrying on some side business but if his application Ext. 129 shows that he had on his own showing 160 bighas of land most of which are admittedly shown to be joint family property, it cannot be denied that agriculture was on e of the occupations of Dattatraya and he was carrying on that avocation as Karta of the joint family consisting of himself and his minor sons. Now, if agriculture was one of the occupations of the joint family and if loan was borrowed for the purpose of improving the joint family lands, the loan would ipso facto be for legal necessity and it would be joint family debt for which all the joint family property would be liable.If thus the loan for the recovery of which the suit property was brought to auction was joint family debt and if the suit property was joint family property, certainly it would be liable to be sold for recovery of joint family debtThe partition is evidenced by a registered deed, Ext. 79 dated 6th July 1956. Partition is between father and his minor sons. There is no dispute that on that date the debt of Tagai loan was outstanding as well as there were certain other debts. In the partition deed Ext. 79 there is no express or implied provision for the repayment of joint family debts or even outstanding debts of Dattatraya, the father. There was some suggestion that the property which was allotted to Dattatraya was sufficient for discharging the debts outstanding on the date of partition. That at least is not borne out by the partition deed nor has Dattatraya gone into the witness box to say that such was the position. Therefore, taking into consideration the recitals in the partition deed as well as the relevant evidence on record the position is clear that no provision was made at the time of partition for the joint family debts or alternatively outstanding debts incurred by the father. It is not for a moment suggested that on this account the partition is bogus and sham , an argument which was put forward before the High Court and negatived. The substance of the matter is that if at a partition amongst the members of the joint family no provision is made for joint family debts, then despite the partition and allotment of shares to different coparceners the joint family property in their hands which they acquired by partition would still be liable for the joint family debts. The Judicial Committee in Sat Narain v. Das(1), pointed out that when the family estate is divided, it is necessary to take account of both the assets and the debts for which the undivided estate is liable. After affirming this ratio, this Court in Pannalal &Anr. v. Mst Naraini &Ors.(2) observed as. the right thing to do was to make provision for discharge of such liability when there was partition of the joint estate. If there is no such provision, "the debts are to be paid severally by all the sons according to their shares of inheritance", as enjoined by Vishnu (Vishnu, Chap. 6, verse 36). In our opinion, this is the proper view to take regarding the liability of the sons under Hindu law for the pre-partition debts of the father. The sons are liable to pay these debts even after partition unless there was an arrangement for payment of these debts at the time when the partition took place. This is substantially the view taken by the Allahabad High Court in the Full Bench case referred to above and it seems to us to be perfectly in accord with the principles of equity and justice"If thus the partition makes no provision for repayment of just debts payable out of the joint family property, the joint family property in the hands of coparceners acquired on partition as well as the pious obligation of the sons to pay the debts of the father will still remainThis position of law was reaffirmed in Vriddhachalam Pillai v. Shaldean Syriam Bank Ltd. &Anr.(1). The only effect of partition is that after the disruption of joint family status by partition the father has no right to deal with the property by sale or mortgage even to discharge an antecedent debt nor is the son under a legal obligation to discharge the post-partition debts of the fatherAssuming we are not right in holding that the debt, was for the benefit of the estate of the joint family and, therefore, a joint family debt, and assuming that Mr. Bal is right in contending that it was the personal debt of the father, yet the doctrine of pious obligation of the son to pay the fathers debt would still permit the creditor to bring the whole joint family property to auction for recovery of such debts. Where the sons are joint with their father and debt have been contracted by the father for his personal benefit, the sons are liable to pay the debts provided they were not incurred for an illegal or immoral purpose. This liability t o pay the debt has been described as pious obligation of the son to pay the fathers debt not tainted with illegality or immorality. It was once believed that the liability of the son to pay the debts contracted by the father, though for his own bene fit, arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara law to discharge the fathers debts, where the debts are not tainted with immorality, yet in course of time this liability has passed into the realm of law.In Anthonyswamy v. M. R. Chinnaswamy Koundan (dead) by l.r.s. &Ors.(1), following the decision in Muttayan v. Zamindar of Sivagiri(2), this Court held that this obligation of the son to pay the fathers debt not tained with illegality or immorality was not religious but a legal obligation and the rule would operate not only after the fathers death but even in the fathers life time and the pertinent observation is as under:"It is evident therefore that the doctrine of pious obligation is not merely a religious doctrine but has passed into the realm of law. The doctrine is a necessary and logical corollary to the doctrine of the right of the son by birth to a s hare of the ancestral property and both these conceptions are correlated. The liability imposed on the son to pay the debt of his father is not a gratuitous obligation thrust on him by Hindu law but is a salutary counter balance to the principle that the son from the moment of his birth acquires along with his father an interest in joint family property"It is not the case of the plaintiffs that the debt contracted by the father for which the property was sold was tainted with illegality or immorality or that it was ayyravaharik in the sense opposed to good morals. Therefore, even assuming that there was a partition, the debt being antecedent debt for which no provision was made in the partition and the debt having not been shown to be tainted with illegality or immorality, the sons were liable to pay this debt to the extent the joint family property came in their handsViewed from either angle, the property sold w as liable for the discharge of the debt of Dattatraya, the father, and even if it came in the hands of the sons on partition, the debt admittedly being a pre-partition debt not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons.Mr. Bal, however, raised an interesting contention that if the joint family property which came in the hands of the sons on partition was to be sold for recovery of the debt of the father after partition a suit would have to be filed by the creditor and if the property in the hands of the son was to be made liable for discharge of the debt, the sons ought to be joined as parties to the suit because only in such an event the sons could set up the defence of the debt being tainted with illegality or immorality. Where a revenue sale takes place, it was said, the sons would have no opportunity to contest the character of the debt, and, therefore, any sale in such circumstances, of the property that has fallen to the shares of the sons at a partition, subsequent to the partition would be void as against the sons. In support of the submission reliance was placed on an observation in Pannallals case (supra) that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allotted to the sons and that a separate and independent suit must be filed against the sons before their shares can be re ached. After observing that a son is liable even after partition for the pre-partition debts of his father which are not immoral or illegal, this Court proceeded to examine the question as to how this liability is to be enforced by the creditor, either during the life time of the father or after his death. After taking note of a large number of decisions in which it was held that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allocated to the sons on partition and a separate and independent suit must be instituted against the sons before their shares can be reached, it was held that the principle underlying these decisions is sound. This Court approved the decision in Jagnarayan v. Somaji (1). It may be noted that decree for the pre-partition debt was made after partition when in the suit father after partition could not represent the sons. This very question again came up before this Court in S. M. Jakati &Anr. v. S. M. Borkar &Ors.(2) In that case the Deputy Registrar of Co-operative Societies had made an order against Mr. Jakati for realisation of the amount and an item of property belonging to the joint family of Jakati was attached by the Collector and duly brought to sale under s. 155 of the Bombay Land Revenue Code. The sale was held on 2nd February, 1943 and confirmed on 23rd June, 1943. In the meantime. On January 15, 1943, one of the sons of Jakati inst ituted a suit for partition and separate possession of his share in the joint family property and contended inter alia that the sale in favour of the first respondent was not binding on the joint family. If the order of the Deputy Registrar was t o be treated as a decree, the sale under s. 155 of the Bombay Land Revenue Act being execution of that decree, was after the institution of the suit for partition and therefore it was contended that a partition after the decree but before the auction sale limited the efficacy of the sale to the share of the father even though the sale was of a whole estate including the interest of the sons, because after the partition the father no longer possessed the power to sell the shares of sons to discharge his debts. Negativing this contention it was held ast this contention ignores the doctrine of pious obligation of the sons. The right of the pre-partition creditor to seize the property of the erstwhile joi nt family in execution of his decree is not dependant upon the fathers power to alienate the share of his sons but on the principle of pious obligation on the part of the sons to discharge the debt of the father. The pious obligation continues to exist even though the power of the father to alienate may come to an end as a result of partition. The consequence is that as between the sons right to take a vested interest jointly with their father in their ancestral estate and the remedy of the fathers creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting up their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable for the debts of the father. Therefore where the joint ancestral property including the share of the sons has passed out of the family in execution of the decree on the fathers debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons attack, because even after the partition their share remains liable"The loan can be recovered from the borrower as if it were an arrear of land revenue due by him or from his surety by the same procedure or out of the land for the benefit of which the loan has been granted by following the same procedure or out of the property comprising as collateral security, if any, according to the procedure for realisation of land revenue by sale of immovable property or by the sale of immovable property other than the land on which the land revenue is due. Now the word borrower is not defined. Could it be said that a borrower for the purpose of s. 7 can be an individual and no other person ? The High Court observed that the Act is applicable to all communities in India and not merely to Hindus and there are many communities which do not have the system of joint family and if the legislature intended to include in the word borrower manager of a family, it should have said so in express terms. There is nothing in the language of s. 7 which would show that the borrower must always and of necessity be an individual. Even if the Act applies to other communities which do not have the system of joint family, that by itself would not exclude the manager of a joint Hindu family from becoming a borrower under s. 7. If the construction as suggested by the High Court is accepted it would put joint Hindu family at a disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer, nor could he take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family. We see no justification for restricting the word borrower to be an individual alone. In fact the Act itself contemplates joint borrowers. Section 9 provides for joint and several liability of joint borrowers. A Karta of a joint Hindu family therefore can be a borrower in his representative capacity. If the Karta of a joint Hindu family is considered eligible for becoming a borrower would it run counter to the position of other communities in which there is no concept of a joint family and joint family properties ? In t he absence of any such concept a borrower other than a Hindu can offer all the property at his disposal even if he has not sons, as security for the loan to be borrowed because in other communities governed by their personal laws the s on does not acquire interest in the ancestral properties in the hand of the father from the time of his birth. But in Hindu law there are two seemingly contrary but really complimentary principles, one the principle of independent coparcenary rights in the sons which is an incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their fathers debts not tainted with immorality or illegality, which lays open the whole estate to be seized for the payment of such debts (see Jakatis case) (Supra). Now, if the sons of a Hindu father take interest in the ancestral property in the hands of the father by the incident of birth, they also incur the corresponding obligation of discharging the debts incurred by the father either for his own benefit or for the benefit of the joint family from the property in which the sons take interest by birth. Such a concept being absent in communities not governed by Hindu law in this behalf, the father would be free to encumber the property and the sons in such communities would neither get interest by birth nor the liability to pay the fathers debt and would not be able to challenge the sale or property for discharge of the debt incurred by the father. Therefore, the expression borrower in s. 7 need not be given a restricted meaning merely because the Act applies to all communities. Hence a father who is the Karta of the joint family consisting of himself and his sons can become a borrower in his capacity as Karta and if the loan is for legal necessity or for the benefit of the joint family estate he would render the joint family property liable for such debt and if it is for his personal benefit the joint family property even in the hands of the sons would be liable if the debt is not tainted with illegality or immorality. The High Court said that such liability which arises from the obligation of religion and piety cannot be extended to the loans borrowed under the Loans Act because there is no such obligation in other communities to which the Act applies. In reaching this conclusion the High Court overlooked the principle that this doctrine of pious obligation is not merely a religious duty but has passed into the realm of law (see Anthonyswamy), (supra). On the facts of that case this principle was applied to parties belonging to Tamil Vannian Christians. Viewed from this angle, the High Court was in error in holding that Dharmashastras of Hindus never contemplated improvement loans being given by the Governments of the day which were usually monarchies and, therefore, a debt of the kind which is contemplated under the Loans Act could never have been under the contemplation of the writers like Brihaspati and Narada in whose texts the pious liability is imposed on the sons and others. It is not possible to subscribe to this view for the reasons hereinbefore mentioned. The decisions in Sankaran Nambudripad v. Ramaswami Ayyar, (1) and Chinnasami Mudaliar v. Tirumalai Pillai, (2) do not touch the question herein raised and are of no assistance in the matter.It, therefore, clearly transpires that Dattatraya ha d borrowed a loan from the Government under the Loans Act for the benefit of joint family property. It was being recovered as arrears of land revenue. The property which is the subject-matter of dispute in this proceeding was joint family property . It was sold at a revenue auction and the whole of the property was sold and the whole of it was purchased by the purchaser. The debt of Tagai loan for which the property was sold is not shown to be tainted with illegality or immorality or avyavaharik. Therefore, the suit property was liable to be sold at court auction for two reasons, one that the debt was joint family debt for the benefit of the joint family estate and, therefore, all segments of the joint family property were liable for the discharge of the debt, and secondly, under the doctrine of pious obligation of the sons to pay the fathers debt. In the present proceedings no attempt was made to establish that the debt was tainted with illegality or immorality. Therefore , the sale is valid and the purchaser acquired a full and complete title to the property. The sale is not voidPart of the property is acquired and the compensation is taken by the plaintiffs subject to the orders of the Court.