9911796707
TMI Blog1981 (12) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of his death his eldest son K. V. Purushotham was the only adult male member, the other son, K.V. Sriramulu being only 4-5 years old. Purushotham thus came into the sole management of the entire family affairs and he brought up his younger brother Sriramalu. Their ancestral family business (Kulachera) was that of tobacco and money lending. It appears that immediately after the second world war Purushotham started a new business of lungi. In connection with his new venture he borrowed money from others either on promissory notes or on the security of the family properties. He, however, suffered loss in that business. When his creditors began to press for immediate discharge of the debts, K. V. Purushotham and his brother K.V. Sriramalu on their behalf and on behalf of other minors in the family entered into an agreement on 7th July, 1955 with V. Govindaswami Mudaliar and V. Nataraja Mudaliar, sons of Vadinankuppam Venugopala Mudaliar. This agreement was evidenced by a writing, Ext. 4. Under the agreement K. V. Purushotham and K.V. Sriramulu were to sell their entire property, except one acre of land, and a house, to Mudaliar brothers for a sum of ₹ 14,000 to discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or partition after setting aside the sale deed dated 22nd of August, 1955, Ext. B-5 and the mortgage deed Ext. B-40 in favour of A.M. Vasudevan Mudaliar. The allegations in the plaint of the two suits are on the same pattern. It will, therefore, suffice to refer to the allegations made in suit No. 107 of 1958. It is alleged in the plaint that the ancestral property of the family consisted of 48 acres and 70 cents of land and three houses detailed in Schedules and to the plaint. The said land fell in two blocks, one consisting of 43 acres, 21 cents and the other of 5 acres 49 cents. There were two wells in the first block and one well in the second block. There were two pump-sets with electric motors installed in the two wells in the first block at a cost of ₹ 3000 each. The net cultivation yield from the land in any case would not be less than ₹ 6000 per year which was more than sufficient for the maintenance of the family leaving even some surplus. The father of the plaintiffs started a new business of lungi which was not the business 'Kulachara' of the family. In connection with the new venture he had to borrow large sums of money either on promissory notes or on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due on the promissory note executed by defendant No. I in favour of the 9th defendant was true, it was not binding on the plaintiffs to the extent of the cash consideration as it was not for necessity. Defendant No. 2 joined the execution of sale deed and the mortgage deed at the behest of the 1st defendant and on misrepresentations made by defendants Nos. 6 to 8 and in fact he had not derived any benefit from the borrowings. As M.V. Chinnappa Mudaliar had filed a petition against Purushotham, being insolvency petition No. 20 of 1955, and Purushotham was adjudged insolvent so the official Receiver was impleaded as a defendant in this case. The third suit being suit No. 4 of 1960 was filed by M.V. Chinnappa Mudaliar, a creditor of defendants K.V. Purushotham and K.V. Sriramulu against the vendees V. Govindaswami Mudaliar and his two brothers arrayed as defendants I to 3. He first filed an insolvency petition in which Purushotham was adjudged as insolvent. The said creditor had approached the official Receiver for filing a suit for the annulment of the said sale but as official Receive} demanded a lot of expenses he, therefore, sought the permission of the Insolvency Court to file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The plaintiffs in both the suits Nos. 107 and 108 of 1958, the sons of the vendors, were bound by the said alienation. The pleadings of the parties gave rise to a number of issues. Some of the issues were common in all the three suits. On the request of the parties all the three suits were jointly tried. Before the trial commenced a joint memo was filed in original suit No. 4 of 1960 whereby the parties agreed that the evidence in original suit No. 4 of 1960 regarding lack of consideration for the sale deed dated 22nd of August, l 955 and the value of the properties, be treated as evidence in original suit Nos. 107 and 108 of 1958. They also agreed that the evidence regarding the mortgage deed dated 2nd of March 1952 be treated as common evidence for original suit Nos. 107 and 108 of 1958 After this statement by the counsel for the parties, the original issues framed in the three suits were recast and additional issues were also framed. The Subordinate Judge came to the following conclusions in suit No. 4 of 1960: (1) At the time of execution of the sale deed. Ext. BS, the fourth defendant, that is Purushotham, owed some creditors in whose favour he had executed Exts. A-3, A-4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iramulu are concerned and to the extent of ₹ 2000 so far as the plaintiffs in original suit No. 107 of 1958 are concerned. (5) The alienness under the sale transaction dated 22nd of August 1955 are not entitled to any equities in this suit. But the alinee under Ext. B. 49 would be entitled to have his two items of house allotted to the share of K.V. Purushotham and K.V. Sriramulu to work out his equities but this will be easily done in the final decree proceedings in original suit No. 107 of 1958 A and 108 of 1958. (6) The plaintiffs would be entitled to past profits from the alienees of the sale transaction dated 22nd of August, 1955 from the year 1956-57 as it is in evidence that they entered possession in that year. B on these findings the Subordinate Judge passed a preliminary decree for partition and division of their respective shares in suit Nos. 107 of 1958 and 108 of 1958 which was 215th and 318th respectively in both the suits after setting aside the sale transaction dated 22nd of August, 1955 and directing the alienees to work out their remedies outside the scope of these suits and declaring that the alienation dated 2nd March, 1952 was binding only on the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 of 1955 but dismissed the appeal filed in suit No. 4 of 1960. The plaintiffs have now come in appeal to challenge the judgement of the High Court. The contention raised on behalf of the appellants is that the High Court has omitted to take into consideration various circumstances which had been taken into consideration by the trial court and as such the findings of the High Court on material issues are vitiated. The High Court further omitted to consider whether the impugned sale was an imprudent transaction, if not fictitious. The counsel for the respondents, on the other hand has contended that the findings recorded by the High Court are pure findings of fact based on appraisal of evidence and this Court cannot reverse the findings recorded by the last court of facts. We have to consider the findings of the High Court in the light of the contentions raised by the parties. The question for consideration in these appeals is about the genuineness of the sale deed Ext. B-5 dated 22nd of August, 1955 executed by Purushotham and Sriramulu in favour of respondents I to 3. As stated earlier the sale deed was challenged by the plaintiffs on grounds: (a) that it was executed only nomi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er brother both have to create some nominal bonds fixing up to some dates and then set up as though these bonds were cancelled on payments being made by those persons and that those items might be recited in the sale deed to be executed. For resorting to this, we all decided and fixed you up as one such (person) in whose favour bonds have to be drawn up to a fixed date. If such bonds are drawn up in favour of respectable persons like you and if all of us join together, then the other creditors cannot do anything. As you are a trusted person these could be done in your favour as stated. They have agreed to give us great help in this matter. Further he is a very good friend of us. If the amount to which they are entitled to, is paid back within 10 years, without , fail, then they will reconvey by way of deed of sale in " our favour. They will not fail in their words. All of us have decided that a bond should be executed in your favour nominally fixing up to a particular date for a sum of ₹ 2500. Thereafter on some other date you have to make an endorsement of payment on the bond and return the bond after cancelling the same. Further I and my younger brother have executed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the case; (7) there was no necessity for Purushotham and Sriramulu to bring into existence fictitious promissory notes in favour of D.W. 3, Deivasigamani and D.W. 12, Veeraswami Naidu, as they could have easily mentioned the other undisputed debts owed by them to support the recitals of consideration in the sale deed. The counsel for the respondents has reiterated the same reasons for discarding Ext. B-54. The first ground which weighed with the High Court for discarding the letter Ext. B-54 is that the author of this letter K.V. Purushotham did not appear in the witness box and the document does not come to court from a proper custody. No such objection was raised no behalf of the vendees in the trial court regarding the admissibility of the letter. The evidence of D.W. 13 and D.W. 18 have clearly proved the handwriting of K.V. Purushotham in Ext. B-54. The observation of the High Court that the letter might have been written subsequently is conjectural one. No such case was even set up by the vendees in the written statement or in the evidence, Exhibit B-54 is an inland letter bearing the postal stamps and it could not have been fabricated. A capita] has been made out of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken into consideration by the High Court before reversing the findings recorded by the trial court are as follows. Tn connection with the lungi business started by K.V. Purushotham he had to borrow money from various creditors. When the new business of lungi ended in loss there was pressure from the creditors for the discharge of the debts. k. V. Purushotham was thus in a tight corner. As a prudent man, he would have liked to save his property to the extent he possibly could and pay off the various debts incurred by him. Curiously enough Purushotham and his brother. Stiramulu sold away the entire landed property of about 47 acres and odd, leaving behind only an acre, and a house, owned by the joint family for a paltry sum of ₹ 16,500. out of n the total consideration of ₹ 16,500 the vendees were asked to discharge the various debts mentioned in Ext. B-5, the sale deed. On an examination of the sale deed, Ext. B-S as well as the deed of agreement Ext. B-4, it is a clear that all the debts incurred by Purushotham were not shown in those deeds. Ext. B-4 detailed only two mortgage debts while Ext. B-S specified five items of debts. Admittedly there were other debts als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was over. This can be the only reason why the vendors would agree to dispose of the entire joint family property for a paltry consideration of ₹ 16,500 out of which only ₹ 500 by way of advance and ₹ 250 at the time of execution of the sale went to the vendors according to the recital in the sale deed itself. The balance of the sale consideration is alleged to have been used by the vendees for paying off some of the creditors. The attempt on behalf of the vendees has been to show that they persuaded the creditors either to forgo the interest or to reduce the principal amount and thus they had cleared off the dues of the various creditors. In poof of this they tried to file the receipts and vouchers from the creditors most of which have been attested by the vendees' own kith and kin. Some of the documents which have been attested by these witnesses, have been belied by D.W. 12 at least in respect of Ext. B-13. He clearly admitted that Purushotham never borrowed any amount from him nor did he pay any amount towards any loan to him. He has given the full account of how Govindaswami Mudaliar and some other persons came to the mango thope of his son-in-law and met him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of Purushotham but the other evidence in the circumstances in our opinion warrant the conclusions drawn by the trial court and we choose to accept the findings of the trial court, This leads us to the other oral and documentary evidence. The vendees have produced seven witnesses besides one of them as D.W. 1. Govindaswami Mudaliar, D.W. 1, has substantiated the case set up by the vendees in their written statement He, however, for the first time deposed that the family business of the vendors has been weaving and lungi, although this was not their case even in the written statement. He deposed that after the sale the vendees took possessions of the land and the house and later on leased out the land to Deivasigamani vide Ext. B-37, on an annual rent of ₹ 1400 and the house on a monthly rent of ₹ 12 vide Ext. B-41 and that from the time of purchase the vendees have been paying the kists and taxes for the land and the house. The other Witnesses produced by the vendees are Ratna Mudaliar, D.W. 2. Deivasigamani Mudaliar, D.W. 3, G. Rajan D.W. 4, Govindappa Mudaliar, D.W. 2. Vasudevan Mudaliar, D.W. 6, Punyakoti Chettiar, D.W. 7 and V C. Manivannan, D.W. 8. Ratna Mudali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He in his cross-examination that there were other big money lenders viz., M.A. Govindaraju Chettiar, Managing Director of Rajeshwari Mills, Gudiyattam; Motiyappa Mudaliar was also equally well-to-do man and had got money lending business; Rajupatti Rajagopal Naidu and others. But K.V. Purushotham had not borrowed any money from any of those persons. He also admitted in the cross-examination that the value of the land within the radius of five miles of Gudiyattam had risen in the course of five or six years. He further deposed that his first cousin Vasudeva Mudaliar had purchased six acres for ₹ 24,000 within two years. He did not deny the suggestion that the transaction might be four years back. The statement was made on 8th of August, 1961 and about four years back would take ns to 1956-57. Punyakoti Chettiar, D.W. 7 deposed that Purushotham and his brother Sriramulu had borrowed ₹ 2500 from him and executed a bond Ext. B-12. They had also executed Ext. B-16 for ₹ 200. He further deposed that at the time of discharge of Exts. B-12 and B-16 three persons had come to his place. They were Raju Jaicker. E.A. Ponnusami Mudaliar and Venugopal Mudaliar. But in cross-e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be raised was worth ₹ 1500 per acre while the land in which dry crops could be raised was worth ₹ 300 to ₹ 400 per acre. According to him it would cost ₹ 2500 or more to construct each well and ₹ 1000 or so to construct the pumping set shed. There were about 300 and odd palmyrah trees each of which would fetch ₹ 5 or so. Besides there were tamarind and banian trees. One tamarind tree would fetch about ₹ 250 and are banian tree would fetch about ₹ 100. He further deposed that for about a year after the sale the vendors alone continued to be in possession and thereafter the vendees took forcible possession which resulted in a criminal complaint by K.V. Purushotham. This witness is a Village Munsif and there is no reason to doubt his veracity. He has got his own land near the land in suit. The evidence of D.W. 17 is also to the same effect. He is a fairly aged person and Karnam of Pichanur for the past 40 years. The Trial Court has observed in its judgment that it was very much impressed by the demeanour of this witness which impressed the court as a person speaking the truth. He substantially supported the evidence of D.W. 10. Kupayy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the trial court hold that the sale deed dated 22nd of August, 1955 is true and it is supported by consideration but only in part and that even the recited consideration in the sale deed is thoroughly inadequate; that the sale deed was executed only nominally for a collateral purpose and with a view to stave off creditors with the express understanding that the properties sold would be reconveyed to the vendors after the pres sure of the creditors had subdued; that the debts under the promissory notes Ext. B-13 in favour of Veeraswami Naidu and Ext. B-14 in favour of Deivasigamani Mudaliar were fictitious. The contention of the counsel for the respondents that finding of fact cannot be interfered with by the Court has no force as the finding is being reversed on the ground that material circumstances have been ignored by the High Court. In view of the finding arrived at there is m) question of giving any equities to the vendees even if some of the amounts paid by the vendees to some of the creditors of Purushotham were genuine. If the transaction of sale is itself vitiated for the reasons given above, no relief in equity could be granted to the vendees. Now the question crops ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or private business of Purushotham In view or the factual position it could not be said that Sriramulu had alienated the joint family property in the capacity as a father of his sons for discharging any antecedent debt incurred by him merely because he has also joined Purushotham in executing the impugned sale. The share of the sons of Sriramulu could not have been alienated by Purushotham for discharging his antecedent debt. In Sidheshwar Mukherjee v. Bhubneshwar Prasad Narain Singh and ors.(l) this Court laid down the law in the following terms: "A person who has obtained a decree against a member of a joint Hindu family for a debt due to him is entitled to attach and sell the interest of his debtor in the joint family property, and if the debt was not immoral or illegal, the interest of the judgment debtor's sons also in the joint family property would pass to the purchaser by such sale even though the judgment-debtor was not the Karta of the family and the family did not consist of the father and sons only when the decree was obtained against the father and the properties were sold. It is not necessary that the sons should be made parties to the suit or the execution pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the son for father's debts was limited to assets and to joint family property. The true basis of the obligation therefore is the relationship of father and son and not the accident of the father being the manager of the joint Hindu family." There is, however, another condition which must be satisfied before the son could be held liable, i.e., that the father or the manager acted like a prudent man and did not sacrifice the property for an inadequate consideration. In Dudh Nath v. Sat Narain Ram a Full Bench of the Allahabad High Court observed: "In order to uphold an alienation of a joint Hindu family property by the father or the manager it is not only necessary to prove that there was legal necessity but also that the father or the father or the manager acted like a prudent men and did not sacrifice the property for an inadequate consideration. A Hindu father or a manager of a joint Hindu family is expected to act prudently. However great the necessity may be, in the joint family property is sacrificed for an inadequate consideration it would be highly imprudent transaction and it would be a case where, though for necessity, the father or the guardian has not acted fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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