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Lingbhat Tippanbhat Joshi And Others v. Parappa Mallappa Ganiger And Others
Structured Summary of the Opinion (Bhagwati, J.)
Factual and Procedural Background
This pair of appeals concerns whether sons are liable, by reason of the Hindu doctrine of pious obligation, to pay a father's debt incurred by the father acting as surety for repayment of money, out of the sons' interest in joint family properties.
In the underlying facts: defendant 4 (the father of plaintiffs 1 and 2) stood surety for a debt of defendant 3 (the principal debtor) owed to defendant 2 (the creditor) and executed a surety bond. Defendant 3 defaulted; defendant 2 sued (Suit No. 223 of 1938) both defendant 3 and defendant 4 and obtained a decree against defendant 4. In execution of that decree the joint family properties (belonging to defendant 4 and plaintiffs 1 and 2) were attached and sold at auction on 19-2-1943; defendant 2 purchased the suit lands and took possession on 31-3-1945.
Subsequently, two suits were filed and tried together: Suit No. 244 of 1945 by defendant 2 (and his tenant) for perpetual injunction against plaintiffs 1 and 2 to protect possession, and Suit No. 309 of 1945 by plaintiffs 1 and 2 for perpetual injunction against defendant 2 (and others) to protect their possession. The trial Court granted an injunction in favour of the sons (plaintiffs 1 and 2), but the Appellate Court reversed, holding the auction sale binding on the sons and dismissing their suit.
Plaintiffs 1 and 2 appealed to this Court (S.A. Nos. 776 & 847 of 1948), raising the central question whether the sons' pious obligation bound their shares in ancestral property when the father had stood surety. A referral was made to a Division Bench after single-judge hearing because of the Privy Council observations in Kesar Chand v. Uttamchand (72 I.A. 165 : A.I.R. 1945 P.C. 91).
Legal Issues Presented
- Whether sons are liable, by reason of the Hindu doctrine of pious obligation, to pay their father's debt arising from the father's standing as surety for repayment of a loan, out of the sons' share, right, title and interest in joint family properties.
- Whether the observations of their Lordships of the Privy Council in Kesar Chand v. Uttamchand (72 I.A. 165 : A.I.R. 1945 P.C. 91) altered the previously understood position of Hindu law on sons' liability for a father's surety-debts.
Arguments of the Parties
Appellants' Arguments
- Mr. Gumaste, for the appellants (the sons), argued that the observations of the Privy Council in Kesar Chand v. Uttamchand should be applied here to hold that there was no debt due by the father personally — the surety bond was executed for payment of a debt due from third parties only — and therefore the joint family lands could not validly be attached and sold in execution of the decree against the father.
No detailed statement of the respondents' arguments is set out in the opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kesar Chand v. Uttamchand, 72 I.A. 165 : A.I.R. 1945 P.C. 91 | Construction of a surety/security bond which limited the surety's obligation to specific properties (i.e., a charge on specified immovable property), excluding personal liability; held that where no personal liability of the surety is shown, the doctrine of pious obligation (sons' liability) does not arise. | The Court held that the Privy Council's decision turned on the particular construction that the surety had not undertaken personal liability. Bhagwati, J. read Kesar Chand as consistent with prior law: where the surety bond imposes only a charge on specific properties and no personal liability, sons are not liable; but Kesar Chand does not displace the rule that when the father incurs personal liability as surety (including liability for any deficit after realization of security), sons are liable to the extent of their interest in ancestral property. |
| Rudragouda Nemangouda v. Gudnaya, S.A. No. 645 of 1945 (D/- 3-4-1947) (unreported) | Re-affirmation by the appellate Court of the traditional Hindu law position that sons are liable for father's debts incurred as surety where the father has undertaken personal liability; interpreted Kesar Chand as being limited to cases where the father had not undertaken personal liability. | The Court relied on this appellate decision as corroborating that the Privy Council's reasoning in Kesar Chand was confined to bonds that excluded personal liability, and did not alter the general rule that ancestral property may be made liable when father has assumed personal liability as surety. |
| Tukarambhat v. Gangaram, 23 Bom. 454 (1898) | Early precedent holding that ancestral property in the hands of the sons was liable for a father's debt incurred as surety. | The Court cited this decision as an early enunciation of the position that ancestral property is liable for a father's surety-debt and used it to support the conclusion that the law has remained unchanged by Kesar Chand. |
Court's Reasoning and Analysis
The Court outlined the pre-existing rule of Hindu law (as summarized in Sir Dinshah Mulla's Hindu Law) that sons are generally liable to pay debts contracted by the father, but that certain classes of suretyship were treated differently under classical sources (Vrihaspati): notably, sureties for appearance or honesty may not render sons liable unless the father received consideration; by contrast, surety for repayment of a loan was taken to make the son liable.
The Court identified the decisive legal criterion as the terms of the surety bond: whether the father has rendered himself personally liable or whether the instrument merely creates a charge on specified properties and excludes personal liability.
Applying that criterion, the Court examined Kesar Chand and explained that the Privy Council construed the surety bond there as limiting liability to specified properties (creating only a charge) and thereby excluding personal liability of the surety. Because no personal liability of the father existed on that construction, the Privy Council concluded that the doctrine of pious obligation did not operate to fasten liability on sons.
The Court emphasised that Kesar Chand proceeded on the specific factual and contractual construction there: had the father undertaken personal liability, the doctrine of pious obligation would have applied. The appellate decision in Rudragouda's case was cited as having drawn the same distinction and as not regarding Kesar Chand as altering the established rule where the father has undertaken personal liability.
Therefore, the proper legal test is: if the surety bond (whether an ordinary personal bond, or a mortgage/pledge that expressly imports personal liability for any deficit after realization of security) imposes personal liability on the father, the sons are liable to the extent of their shares in the joint family properties; if the instrument confines liability to specified properties only and excludes personal liability, sons are not liable.
The Court concluded that the Privy Council's observations in Kesar Chand did not effect a departure from the prior law; rather, they were confined to their facts and the particular construction of the bond there.
Holding and Implications
Holding: Both appeals are DISMISSED.
Consequences and immediate effects:
- The appeals filed by plaintiffs 1 and 2 against the Appellate Court's decision (S.A. Nos. 776 & 847 of 1948) fail; the Appellate Court's finding that the auction sale was binding on the sons and that they were not in possession stands.
- The respondents did not appear before this Court; accordingly, no order as to the respondents' costs was made.
- The appellants (the sons) will bear and pay their own costs of the appeals.
Broader implications for the law:
The Court held that the decision does not create any new departure from pre-existing Hindu law: Kesar Chand is confined to cases where the surety has not undertaken personal liability. The ruling affirms that where the father has rendered himself personally liable as surety (including an express obligation to make good any deficit after realization of security), the sons' pious obligation will render their shares in ancestral property liable. The Court thus did not purport to lay down any novel principle; it reaffirmed and applied existing doctrine.
V.R.B
Appeals dismissed.
Bhagwati, J.:— An interesting question of Hindu law arises in these two appeals, whether the sons are liable by reason of their pious obligation to pay the father's debt incurred as a surety for payment of money, out of their interest in the joint family properties.
2. Defendant 4 is the father of plaintiffs 1 and 2. He had stood surety for the repayment of the debt due by defendant 3, the debtor, to defendant 2, the creditor. He had executed a surety bond for repayment of the debt due by defendant 3 to defendant 2. Defendant 3 failed and neglected to pay the debt due by him to defendant 2 and defendant 2 filed a suit, being suit No. 223 of 1938 against defendant 3, the principal debtor, and defendant 4, the surety. A decree was obtained by defendant 2 in that suit and he applied for execution of the decree against defendant 4 by darkhast No. 383 of 1941. In execution of that decree, the suit lands being the joint family properties belonging to the joint Hindu family constituted by plaintiffs 1 and 2 and defendant 4 were attached. The auction sale was held on 19-2-1943, and defendant 2 purchased the suit lands. Defendant 2 obtained possession of the suit lands on 31-3-1945. Two suits were filed by the parties, each against the other. Suit No. 244 of 1945 was filed by defendant 2 and his tenant to obtain a perpetual injunction restraining plaintiffs 1 and 2 from interfering with their possession and enjoyment of the suit lands. Suit No. 309 of 1945 was filed by plaintiffs 1 and 2 against defendant 2 and his tenant, their father defendant 4, and the debtor defendant 3, for a perpetual injunction restraining defendants 1 and 2 from interfering with their possession and enjoyment of the suit lands. Both these suits were tried together, a common question of law and fact arising therein, and the trial Court came to the conclusion that the auction sale was not binding on plaintiffs 1 and 2, that plaintiffs 1 and 2 were in possession of the suit lands and granted an injunction against defendants 1 and 2. The appeal Court reversed this decision holding that the auction sale was binding on plaintiffs 1 and 2 and that they were not in possession of the suit lands. The appeal Court thus dismissed the suit of plaintiffs 1 and 2. An appeal was filed by plaintiffs 1 and 2 against this decision of the appeal Court. The appeal which was filed from the decision of the appeal Court in suit No. 309 of 1945 was S.A No. 776 of 1948 and the appeal which was filed from the decision of the appeal Court in Suit No. 244 of 1945 was S.A No. 847 of 1948. Both these second appeals were heard together again for the same reason that a common question of law and fact arose in both of them.
3. These second appeals came on for hearing before Dixit J. sitting singly and in so far as he thought that certain observations of their Lordships of the Privy Council in Kesar Chand v. Uttamchand, 72 I.A 165 at pp. 173, 174 : (A.I.R (32) 1945 P.C 91) were too wide and were calculated to effect a departure from what had thitherto been known to be the true position in law, he referred these appeals to a Division Bench. These appeals have now come on for hearing before us.
4. Up to the time that the decision in Kesar Chand v. Uttam Chand, 72 I.A 165 : (A.I.R (32) 1945 P.C 91) was pronounced by their Lordships of the Privy Council the law in regard to the surety's debts due by the father had been well settled. The position in law has been summarised in Sir Dinshah Mulla's Hindu Law, 10th Edn., p. 382, S. 298. It was laid down that:
“Sons, grandsons and great-grandsons are bound to pay all debts contracted by the father, grandfather or great-grandfather except the following debts:—….
(5) debts for being surety for the appearance or for the honesty of another.”
5. There is at p. 383 of the book a paragraph in small type under the heading “Surety” in which the various types of surety debts incurred by the father are discussed. The following passage occurring there may be noted:
“According to Vrihaspati, there are four different classes of sureties, namely, sureties (1) for appearance, (2) for honesty, (3) for payment of rent; and (4) for delivery of goods. In respect of the first two kinds, the sons are not liable unless the father received consideration for accepting the suretyship. In respect of the last two kinds the sons are liable, but the grandsons are not liable unless the grandfather received consideration for accepting the suretyship. It has thus been held that when the father is surety for repayment of a loan the son is clearly liable but the grandson is not, unless consideration was received by the grandfather for accepting the suretyship.”
6. The case with which we are concerned here is the case of the sons, and according to the position as it has been enunciated above, the sons would be liable when the father stood surety for repayment of a loan. It is well known that in the matter of the father having rendered himself personally liable as a surety for the repayment of a loan, it would be open to the creditor to sue the father on the surety bond, obtain a decree against him and in execution of that decree attach the joint family properties not only to the extent of the share, right, title and interest of the father therein but also including the share, right, title and interest of the sons in those properties. This is what was done by defendant 2 in execution of the decree which he obtained against defendant 4 in Suit No. 223 of 1938 and he was declared the auction-purchaser at the sale held on 19-2-1943, of the whole of the suit lands belonging to the joint family inclusive of the share, right, title and interest of the sons therein.
7. The question, however, which arose was whether by reason of the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand, 72 I.A 165 : (A.I.R (32) 1945 P.C 91) there was any difference created in the position as it thitherto obtained in the matter of the sons' liability under the pious obligation to pay the father's debt where the father had stood surety for the repayment of a loan. The case before their Lordships of the Privy Council was the case of the father Uttam Chand having stood surety for the judgment-debtor in an application by the judgment-debtor for stay of execution proceedings. The High Court before whom the appeal against the decree was pending had ordered that security should be furnished in the form of a charge on immovable property and a security bond was thereupon executed by the father which provided:
“I hereby stand as surety for the minors and agree that in the event of the appellate Court's decision being against the judgment-debtors, my movable and immovable properties detailed hereinafter, shall be liable for making good the deficiency if the amount under the decree was not recovered in full.”
8. The mortgage debt was not paid in time and the decree-holder had the mortgaged property sold in execution and the decretal debt nob being thereby realised in full, four items of ancestral immovable property belonging to the guardian the father, only one of which was covered by the surety bond, were sold in execution. The two sons and the grandsons of the surety who constituted with him a joint Hindu family claimed to set aside the sale as nob binding on them and for possession of the ancestral properties so sold. Their Lordships of the Privy Council held on the construction of the surety bond that the scope of the liability of the surety was limited to proceedings against the properties specified only, thus creating a charge on them excluding all personal liability. They held that the obligation undertaken by Uttam Chand was merely confined to the extent of the properties charged by him for the satisfaction of the amount. On this construction of the surety bond, their Lordships further proceeded to observe that there being no debt due by Uttam Chand but the security bond having been executed by him only for payment of a debt which was due from third parties, there was no question of the doctrine of the pious obligation of the sons to pay their father's debt making the transaction binding on the ancestral property. They also observed that as it was not shown that Uttam Chand had made himself personally liable for the amount that remained due to the decree-holder there was no debt due from him, and it followed, therefore, that the unsecured property in question could not be validly sold in enforcement of the security bond. They therefore eschewed the liability in regard to both these properties, secured as well as unsecured ones, by reason of the pious obligation on the sons to pay the father's debt and passed the decree accordingly in favour of the sons and the grandson.
9. Mr. Gumaste for the appellants contended before us that having regard to these observations of their Lordships of the Privy Council, we should also hold that there was no debt due by the father but that the surety bond was executed by the father for payment of the debt which was due from third parties and that therefore the suit lands which were the joint family properties could not be attached and sold in execution of the decree which had been obtained by defendant 2 against defendant 4 the father.
10. He was confronted with an unreported decision of our appellate Court consisting of the learned Chief Justice and Gajendragadkar J. delivered in Rudragouda Nemangouda v. Gudnaya, S.A No. 645 of 1945, D/- 3-4-1947. There the father of the plaintiffs had stood surety for payment of certain costs and had executed two bonds, one a personal surety bond, and the other a mortgage bond in favour of the Registrar of the High Court. These bonds had been assigned by the Registrar of the High Court in favour of the respondents and the respondents had sought to enforce the liability against the father. The plaintiffs, who were the two minor sons of defendant 2 the father, thereupon filed a suit for a declaration that their two-thirds share in the ancestral property was not liable for the payment of this debt of their father. Both the lower Courts dismissed the plaintiffs' suit and the plaintiffs then came before this Court in second appeal. The learned Judges of the appellate Court reiterated the principles of Hindu law which we have referred to above and in regard to the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand, (72 I.A 165 : A.I.R (32) 1945 P.C 91) said that the Privy Council had considered the effect of the bond executed by the father and come to the conclusion that on the terms of the bond the father had not undertaken any personal liability and therefore the Privy Council held that as there was no personal liability undertaken by the father, there was no obligation on the sons and the ancestral property could not be sold in satisfaction of what was claimed by the mortgagee on that surety bond. It was emphasised that the decision of the Privy Council proceeded on the assumption that but for the father not having undertaken a personal liability, the sons would have been liable on the principle of pious obligation. The only ground why the Privy Council came to the conclusion that the sons were not liable was that the father had not undertaken a personal liability. These observations of their Lordships of the Privy Council were therefore not taken by our appeal Court as militating in any manner whatever against the position which had been enunciated thithertofore in regard to the sons' liability under the pious obligation to pay the father's debt due on a surety bond for the repayment of a loan, out of their share, right, title and interest in the joint family properties.
11. The whole question, in our opinion, turns on the terms of the surety bond. If under the terms of the surety bond the father has rendered himself personally liable, be it an ordinary personal bond or even a mortgage or a pledge importing personal liability for the deficit if any on the realisation of the security, the sons are certainly liable to pay the father's personal debt incurred in this manner to the extent of their right title and interest in the joint family properties. If it is a pure personal bond, the question can never arise of the nature which has been mooted before us. If it is a mortgage bond or a pledge, as and by way of security, even there the question would have to be considered whether in the event of a deficit arising on the realisation of the mortgage or the pledge by the creditor there would remain over a personal liability of the father to the extent of the deficit if any. If the surety bond was of the nature which obtained before their Lordships of the Privy Council in Kesar Chand v. Uttam Chand, 72 I.A 165 : A.I.R (32) 1945 P.C 91, there would be no question of the sons being liable for any debt due by the father by reason of their pious obligation, because there would be no personal liability of the father and consequently there would be no debt due by the father as such. In such a case there would not arise any question of the sons being liable to pay the father's debt by reason of the pious obligation because there would be no debt due by the father. In those cases, however, where the father has rendered himself personally liable even in the case of a mortgage bond or a hypothecation or pledge of goods to pay the balance over or the deficit, if any, after the realisation of the security, the sons' obligation to pay the father's debt by reason of the pious obligation would arise and the debt to the extent that it has not been satisfied by the realisation of the security would be recoverable by the creditor from the father as well as the sons out of the joint family properties inclusive of the sons' share, right, title and interest therein.
12. This being the true position in law, the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand, (72 I.A 165 : A.I.R (32) 1945 P.C 91) do not make any departure from the true position as it had been enunciated before 1945 and the observations of our appeal Court in Rudragouda's case, S.A No. 645 of 1945 D/- 3-4-1947 also are to the same effect. This position in law was enunciated by our appeal Court as early as 1898 in the decision which is reported in Tukarambhat v. Gangaram, 23 Bom. 454, where it was held that the ancestral property in the hands of the sons was liable for the father's debt incurred as a surety. No change has been made in this position which has obtained ever since by the observations of their Lordships of the Privy Council in Kesar Chand v. Uttam Chand, (72 I.A 165 : A.I.R (32) 1945 P.C 91) and the position continues to be as it has been enunciated herebefore and has been understood all along at the Bench as well as the bar.
13. The result, therefore, is that both the appeals will be dismissed. The respondents have not appeared before us and therefore there will be no order as to their costs. The appellants will bear and pay their own costs of the appeals.
V.R.B
Appeals dismissed.
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