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  • Section 25(3) of the Contract Act,
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  • Section 25(3) of the Contract Act,

    Champaklal Rupchand v. Rayachand Thakorbhai

    1. Mr. Parulekar for the appellants has raised two interesting points in this appeal. The facts are: The plaintiff brought a suit to recover a sum of Rs. 1,262 against the appellants on a promissory note dated 14th October 1926, passed by one Dalichand their grandfather. It is common ground that Dalichand had executed this promissory note in respect of a debt which on that day was time barred. A decree was passed against the appellants, and as Mr. Parulekar relies upon it, I shall set forth the material portion of the decree. On the day the suit came on for hearing, when the pleader for the plaintiff was present and the pleader for the defendant was absent, it was decreed as follows:

    “The plaintiff shall recover out of the estate of the deceased Dalichand Nanchand a sum of Rs. 1,264-14-0, the costs of this suit and interest, etc.”

    2. This decree was sought to be executed by the judgment-creditor, and two contentions were raised on behalf of the appellants. The contentions then raised and now supported by Mr. Parulekar are (1) that on the construction of the decree it was not a decree against the appellants as legal representatives of Dalichand and therefore the decree can only be executed against the separate estate of Dalichand and not against any joint family property in the hands of the appellants. The learned advocate relies upon Sections 52 and 53 of the CPC. The effect of S. 52 is that where a decree is passed against a legal representative of a deceased person and is for the payment of money out of the property of the deceased, it may be executed by attachment and sale of any such property. Stopping here, it is clear that the decree has to be passed against a person as the legal representative of a deceased person, and it is only then that it can be executed, if it is a decree for payment of money, against the property of the deceased person in the hands of the defendant. This rule in the case of Hindu sons and grandsons is extended by S. 53 to include the joint family property, which under the Hindu law would be liable for the satisfaction of debts of their father or grandfather respectively, and it is clear that this section is intended to settle a question of procedure with regard to ancestral property which under the Hindu law can never be considered to be the property of the deceased father or grandfather of the Hindu family. Mr. Parulekar argues that as the decree stands it is only against the estate of Dalichand. That argument seems to me to have no substance in support of it. A decree when made can only be made against a defendant. The only question is whether the defendant is personally liable or whether his separate property is liable or whether as in the case of a Hindu son or grandson the joint family property is liable.

    3. It may at once be conceded that the proper decree to pass in this case would have been a decree against the defendants for the sum claimed to the extent of the assets of the deceased or the joint family estate coming into the hands of the defendants. It is not disputed that the family was joint and undivided, and having regard to the fact that the appellants were the defendants in the case in which the decree was passed, it is clear that the decree was against them as legal representatives of Dalichand and limited to the joint family estate in their hands.

    4. Mr. Parulekar's second point is that a Hindu son or grandson is not liable in respect of a debt which was time barred, but renewed by a fresh promissory note passed by the father or the grandfather. There is no decision of this Court with regard to the point taken by Mr. Parulekar.

    5. But the question has come up for consideration in the Allahabad and Madras High Courts, and the latest case in the Allahabad High Court is Gajadhar v. Jagannath (1), which, as Mr. Parulekar very fairly admits, is against his contention. Now I do not think any authority is necessary for the proposition that under Hindu law as such there is no rule of limitation for recovering a debt, and as far as that law goes, a Hindu is bound to pay a debt due by him even though it is barred by the statute of limitation. It is equally clear that if he dies, his son or grandson is under a moral and pious obligation to discharge the debt. Since the enactment of the statutes of limitation in this country however, a Hindu is not bound to pay a time-barred debt. In my opinion therefore it is open to a Hindu father or grandfather to pass a promissory note for a time-barred debt, and such a note constitutes a binding contract under Section 25(3) of the Contract Act, which can be enforced against him, and after his death against his sons or grand sons. But of course the sons or grandsons would only be liable to the extent of the estate whether joint family or self acquired, of the deceased ancestor coming to their hands. It is on this reasoning that the Allahabad High Court has taken the view to which I have referred, and if I may say so with respect I agree with that view.

    6. The appeal must therefore be dismissed with costs.

    P.N/R.K

    7. Appeal dismissed.

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    Champaklal Rupchand v. Rayachand Thakorbhai
    (Feb 25, 1932)