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Case Number

Appeals Nos. 259 and 260 of 1942.

Advocates

Messrs. K. Rajah Ayyar and K. Srinivasan for Appts.
Messrs. T.V Muthukrishna Ayyar and R. Gopalaswami Ayyangar for Respts.

Judges

Leach, C.J
Lakshmana Rao, J.

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Smart Summary

Structured Summary of the Opinion (Delivered by The Chief Justice)

Factual and Procedural Background

The opinion concerns two appeals (Appeal No. 259 of 1942 and Appeal No. 260 of 1942) that raise the question left open in Ganesh Rao v. Tuljaram Rao: how far the acts of a managing member of an undivided Hindu family may affect a party to a suit who is represented in that suit by another person as next friend or guardian ad litem.

The material facts as stated in the opinion: Udayappa Chettiar had three sons — Raman, Kasi Viswanathan and Chellappa. Raman (husband of the appellant in Appeal No. 260, Alagamma Achi) pre-deceased Udayappa. Kasi Viswanathan married Umayal Achi (first respondent in Appeal No. 259 and sole respondent in Appeal No. 260). Chellappa became of unsound mind and was represented in execution proceedings by his wife Unnamalai Achi as guardian ad litem.

Umayal Achi's stridhanam had been invested in the family firm. She sued (O.S. No. 1693 of 1931 in the Chief Court of Pudukottah) various family members and obtained a decree on 29 April 1933 for Rs. 45,795-1-0. The decree was transferred for execution to the District Court of West Tanjore. Execution proceedings (E.P. No. 61 of 1934) involved attachment of a mortgage held by the family. Vellayya (son of Raman) later released his one-third interest, leaving the interests of Kasi Viswanathan and Chellappa.

The mortgage sale was initially fixed for 16 March 1936 but was postponed to 19 March 1936 at Kasi Viswanathan's request. On 19 March 1936 partial satisfaction of the decree was entered after Kasi Viswanathan assigned his one-third interest to his wife and, on 18 March, assigned Chellappa's one-third interest as the manager of the family. It was acknowledged in the opinion that these acts assisted Umayal Achi and tended to avoid rateable distribution among creditors.

Separately, Alagammai Achi (Raman's widow) sued (O.S. No. 537 of 1933) to recover her stridhanam and obtained a decree for Rs. 1,70,000 on 11 July 1936. Another creditor, Udayammai Achi, obtained a decree in O.S. No. 1450 of 1933 for about Rs. 27,000 on 20 January 1936; that decree also led to attachment of the same mortgage rights.

Several procedural steps and contests followed: applications to remove attachments, suits in the District Court of West Tanjore (O.S. No. 10 of 1940 arising into these appeals), and objections by various parties. The courts below rejected allegations that Umayal Achi's original decree was obtained by fraud or collusion, and rejected contentions that the assignments were made to defraud creditors. The sole question raised in this Court by the appellants was whether Kasi Viswanathan, acting as manager of the family, was entitled in law to transfer Chellappa's interest in the mortgage without the sanction of the Court.

Legal Issues Presented

Whether the act of a managing member of an undivided Hindu family (here, Kasi Viswanathan) can lawfully transfer the interest of a co-parcener who is a person of unsound mind (here, Chellappa) in execution proceedings without obtaining the leave/sanction of the Court when that co-parcener is represented in proceedings by a guardian ad litem.
Whether Order 32, Rule 7 (Civil Procedure Code) and Rule 15 (as applied to persons of unsound mind) restrict the powers of a father or manager who is not the guardian ad litem or next friend of a minor or lunatic to dispose of that member's interests for the payment of family debts.
Whether the decisions in Ramalingam Chetti v. Radhakrishna Chettiar and other precedents bind the Court to hold that a father or manager not acting as guardian ad litem may receive decree moneys or dispose of joint-family interests without the leave of Court.

Arguments of the Parties

Appellants' Arguments

It was contended that Kasi Viswanathan, as manager of the family, was not entitled to transfer Chellappa's one-third interest in the mortgage without the sanction of the Court because Chellappa was represented in execution by a guardian ad litem (Unnamalai Achi).
The appellants raised general objections based on alleged impropriety of the assignments (suggesting they were made to avoid rateable distribution), although the courts below found no fraud or collusion.

Respondents' Arguments (and factual positions relied on)

It was accepted that the assignment of Kasi Viswanathan's one-third interest and the assignment made by him as manager of Chellappa's interest passed a valid title to Umayal Achi to the extent of those transfers.
Respondents (and the court below) maintained there was no fraud or collusion in obtaining the decree or in making the assignments; the guardian of the lunatic (Unnamalai Achi) did not object in the execution proceedings.
They relied on earlier decisions (in particular Ramalingam Chetti v. Radhakrishna Chettiar) that Rrs. 6 and 7 of Order 32 do not restrict a father or manager who is not the next friend or guardian ad litem from receiving decree money or giving discharge binding the minor or other family members.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ganesh Rao v. Tuljaram Rao (Privy Council)	Holds that when a father or managing member is also the next friend or guardian ad litem of a minor, his powers are controlled by statute and he cannot do acts in that capacity without leave of the Court.	The Court treated Ganesh Rao as establishing the principle that a father/manager who is also guardian ad litem is subject to Court leave; but the Court read Ganesh Rao as not deciding (and leaving open) the question whether a manager who is not guardian ad litem is similarly restricted. The present decision distinguishes that situation and does not import the restriction where the manager is not the guardian ad litem.
Ramalingam Chetti v. Radhakrishna Chettiar (Bench of this Court)	Holds that Rules 6 and 7 of Order 32 contain no restriction on the power of a father or manager of a joint Hindu family to receive decree money and give discharge binding a minor member who is a party to the suit, where the father/manager is not the next friend or guardian; leave of Court is not required.	The Court treated this Bench decision as directly in point and binding. It applied the principle to hold that Kasi Viswanathan, not being Chellappa's guardian ad litem, had the legal right to transfer Chellappa's interest in the mortgage; the decision was followed.
Marwadi Vannaji v. Ranga Rao	Applied/relied upon the principle in Ramalingam Chetti (Varadachariar J. relied on Ramalingam Chetti in his judgment).	The Court cited Marwadi Vannaji as an instance in which Varadachariar J. relied on Ramalingam Chetti. The opinion uses it to reinforce that Ramalingam Chetti's principle has been followed in subsequent decisions and supports the view that Rule 7 applies only where the father is guardian ad litem.
Vijaya Ramayya v. Venkatasubba Rao	Concerned compromise decrees and the capacity of a father to bind minors where the father acted as guardian ad litem in trial but allowed another to act for appeal; dealt with the validity of a compromise entered into without leave of Court.	The Court distinguished Vijaya Ramayya on its facts (which involved a compromise and a situation where the father had acted as guardian ad litem in one stage but not throughout). It held the facts were materially different and therefore did not treat Vijaya Ramayya as conflicting with Ramalingam Chetti.
Gur Mallappa v. Mallappa Martandappa	Macleod C.J. observed that Order 32, Rule 7 applies to execution proceedings but suggested a distinction between cases where the minor's liability had already been determined by a decree and cases where liability was still in dispute; Heaton, J. dissented taking a stricter view.	The Court cited Gur Mallappa for the view that there can be a distinction between cases where a decree has already fixed liability and where liability is in dispute. The opinion noted the differing judicial views but ultimately held that Rule 7 applies to guardians/next friends in the suit and does not restrict a father/manager who is not guardian ad litem.

Court's Reasoning and Analysis

The Court proceeded by identifying and applying the relevant statutory rule (Order 32, Rule 7 of the Civil Procedure Code and Rule 15 where a person is of unsound mind) and by examining prior authorities.

The Court began with the point left open in Ganesh Rao v. Tuljaram Rao, namely how far the acts of a managing member affect a party represented by another as next friend or guardian ad litem. Ganesh Rao was read as establishing that a father/manager who himself acts as the guardian ad litem is bound by the statutory provision requiring leave of Court to enter into agreements or compromises on behalf of a minor.
The Court then analysed whether that restriction extends to a father or manager who is not the guardian or next friend. It observed the manager's canonical duty to pay family debts out of family assets and noted that for that purpose the manager can dispose of the interests of co-parceners (including minors).
The Court relied heavily on Ramalingam Chetti v. Radhakrishna Chettiar, in which a Bench held that Rules 6 and 7 of Order 32 do not restrict the power of a father or manager (who is not the next friend or guardian ad litem) to receive decree money and give a discharge that will bind a minor member. That case, being a Bench decision, is binding and directly in point.
The Court rejected suggestions that Ramalingam Chetti conflicted with Vijaya Ramayya v. Venkatasubba Rao, distinguishing the latter on its facts (it involved a compromise in a partition suit where the father had acted as guardian ad litem at trial and different arrangements at the appeal stage, and the Court there passed a decree pursuant to a compromise without leave). Thus Vijaya Ramayya was not treated as a conflicting authority.
The Court considered the observations in Gur Mallappa v. Mallappa Martandappa (both the majority view of Macleod C.J. and the dissent of Heaton, J.) and noted that those views do not displace the binding Bench precedent in Ramalingam Chetti.
The Court emphasised that the statutory rule (Order 32, Rule 7) applies to the guardian or next friend in the suit. When the father or manager is not the guardian or next friend, his powers to dispose of family assets to satisfy family debts remain unaffected by Rule 7. The Court added that fraud or collusion would raise different considerations, but here fraud or collusion was admitted not to exist.
The Court also relied on the practical fact that the guardian of the lunatic (Unnamalai Achi) raised no objection; the objections came from creditors. The absence of objection by the guardian reinforced the Court’s conclusion that the transfers were lawful.

Holding and Implications

Holding: The Court held that the transfer by Kasi Viswanathan of Chellappa's share was lawful and therefore the appeals are dismissed.

Disposition and Costs: The appeals are dismissed with costs awarded to the first respondent in Appeal No. 259 of 1942 and to the respondent in Appeal No. 260 of 1942.

Implications:

The direct effect on the parties is that the transfers made by Kasi Viswanathan are upheld and the appellants' challenges fail.
The Court applied and reaffirmed existing Bench authority (Ramalingam Chetti v. Radhakrishna Chettiar) that Order 32, Rule 7 does not restrict the powers of a father or manager who is not the guardian ad litem or next friend; thus no new rule of law was announced beyond the application and reaffirmation of those authorities.
The Court made clear that if there were fraud or collusion, or if the father/manager acted as guardian ad litem, different consequences could follow; but because neither fraud nor guardian objection existed here, the transfer was lawful.

N.R.R

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Udayammai Achi And Another v. Umayal Achi And Others

(Delivered by The Chief Justice.)

These appeals raise the question which was left open by the Privy Council in Ganesh Rao v. Tuljaram Rao (1), namely how far the act of a managing member of an undivided Hindu family may affect a party to a suit represented by another person as his next friend or guardian ad litem.

A Nattukottai Chettiar named Udayappa Chettiar had three sons, Raman, Kasi Viswanathan and Chellappa. Raman married Alagamma Achi, the appellant in Appeal No. 260 of 1942. He pre-deceased his father. Kasi Viswanathan married Umayal Achi, the first respondent in Appeal No. 259 of 1942 and the only respondent in Appeal No. 260 of 1942. Chellappa married one Unnamalai Achi. He became of unsound mind and was represented in certain execution proceedings to which reference will be made in a moment by Unnamalai Achi as his guardian ad litem. On Umayal Achi's marriage with Kasi Viswanathan her stridhanam was invested in her father-in-law's firm. In O.S No. 1693 of 1931 of the Chief Court of Pudukottah, Umayal Achi sued her father-in-law, her husband, her brother-in-law Chellappa and Vellayya (the son of Raman) to recover her stridhanam moneys. Udayappa Chettiar died during the pendency of this suit. On the 29th April 1933 a decree was passed in favour of Umayal Achi for Rs. 45,795-1-0. The decree was subsequently transferred for the purpose of execution to the District Court of West Tanjore. In E.P No. 61 of 1934 Umayal Achi attached a mortgage held by the family. Subsequently Vellayyan's one-third interest in the mortgage was released, leaving the interests of her husband and Chellappa. By this time Chellappa had become insane and it was in these proceedings that his wife Unnamalai Achi was appointed his guardian ad litem. The sale of their interests in this mortgage was fixed for the 16th March 1936, but Kasi Viswanathan obtained a postponement until the 19th March 1936. The next day he assigned his own one-third interest to his wife in part satisfaction of her decree and on the 18th March he assigned, as the manager of the family, Chellappa's one-third interest. These mortgage interests were not sufficient to satisfy Umayal Achi's decree in full and on the 19th March 1936 partial satisfaction was entered up. There can be no doubt that in arranging for the postponement of the sale and in making these assignments in partial satisfaction of the decree Kasi Viswanathan was helping his wife to avoid any claim for rateable distribution by other creditors.

In O.S No. 537 of 1933 of the Chief Court of Pudukottah Alagammai Achi, Raman's widow, filed a suit against the members of the joint family to recover her stridhanam, which had also been invested in the family business. On the 11th July 1936 she obtained a decree for Rs. 1,70,000.

In O.S No. 1450 of 1933 of the same Court Udayammai Achi, a creditor of the family, sued to recover what was due to her and on the 20th January 1936 she obtained a decree for some Rs. 27,000. This decree was likewise transferred for execution to the District Court of West Tanjore and on the 16th March 1936 she obtained an order for attachment of the same mortgage rights. The attachment was effected on the 17th April 1936. In the meantime the assignment to Umayal Achi had taken place.

In E.A No. 303 of 1936 Umayal Achi applied for the removal of the attachment which Udayammai Achi had obtained. This application was successful and consequently led to Udayammai Achi filing O.S No. 10 of 1940 in the Court of the District Judge, West Tanjore, out of which Appeal No. 259 of 1942 arises. On the 10th November 1936 Alagammai Achi attached the mortgage rights and again Umayal objected with success. This resulted in Alagammai Achi filing O.S No. 10 of 1940, out of which Appeal No. 260 of 1942 arises. In both the suits it was alleged that the decree obtained by Umayal Achi in O.S No. 1693 of 1931 was obtained as the result of fraud and collusion, but the Court held that this was not so, and in this Court the validity of the decree has not been questioned. It was also alleged that the assignment of Kasi Viswanathan's interest and that of Chellappa's interest were effected for the purpose of defrauding creditors. That contention was also negatived and this decision goes unchallenged. In this Court the only question which has been raised by the appellants is whether Kasi Viswanathan as the manager of the family was entitled in law to transfer Chellappa's interest in the mortgage without the sanction of the Court. It has been accepted that the transfer of his one-third interest passed a valid title to his wife to that extent.

If Kasi Viswanathan had been the guardian ad litem of Chellappa, he could not have transferred Chellappa's interest in the mortgage without the consent of the Court. The decision of the Judicial Committee in Ganesh Rao v. Tuljaram Rao places this beyond doubt. In delivering the judgment of the Board in that case Mr. Ameer Ali said,

“How far the acts of a father or managing member may affect a minor, who is a party to the suit represented by another person as next friend or guardian ad litem, is a question which does not arise in the case, and their Lordships are not called upon to express an opinion on it. But they consider it to be clear that when be himself is the best friend or guardian of the minor his powers are controlled by the provisions of the law and he cannot do any act in his capacity of father or managing member which he is debarred from doing as next friend or guardian without leave of the Court. To hold otherwise would be to defeat the object of the enactment.”

Order 32, R. 7 Civil Procedure Code expressly prohibits a next friend or guardian entering into an agreement or compromise on behalf of the minor with reference to the suit without the leave of the Court. R. 15 applies the same provision to a person who acts as the guardian of one who is of unsound mind. But it does not follow from what their Lordships said in Ganesh Rao v. Tuljaram Rao that where the guardian is some other person than the father or manager the position is the same. It is the bounden duty of a manager of a joint family to pay the debts of the family out of the family assets and for that purpose he can, of course, also dispose of the interests of co-parceners who happen to be minors. Therefore unless R. 7 of O. 32, applies to a person in the position of Kasi Viswanathan, he had the right in law to transfer Chellappa's interest.

In Ramalingam Chetti v. Radhakrishna Chettiar (2) a Bench of this Court held that Rr. 6 and 7 of O. 32 contain no restriction on the power of a father or a manager of a joint Hindu family to receive the amount of a decree and to give a discharge which will bind a minor member of the family who is a party to the suit, where he is not the next friend or guardian of the minor. In such a case the leave of the Court is not required. This judgment was relied on by Varadachariar J. in his judgment in Marwadi Vannaji v. Ranga Rao (3) where the facts were these. A joint family consisted of a father and three sons, the third son being a minor. The adult members executed a deed of conditional sale which was also signed by the father as the guardian of his minor son. The deed was executed to discharge a liability due to the plaintiff under a previous mortgage. The mortgagee had sued on the mortgage and the Court had held that it was not binding on the second and third sons in respect of their shares in the ancestral property, as it had not been given to secure an antecedent debt, but that it was supported by consideration. The second deed was executed after this decision had been given and in due course the mortgagee sued to recover possession of the property by virtue of the deed of conditional sale. The Court treated that document as constituting a mortgage by conditional sale and gave a decree for foreclosure. The minor was represented in the previous suit by a guardian appointed by the Court. In the appeal which was filed against the mortgage decree it was contended that the minor's share was not affected by the deed of conditional sale, but the Court held that the decision in the mortgage suit did not exonerate the minor. The debt due to the plaintiff was neither illegal nor immoral and he was bound by the second mortgage. Varadachariar, J. held that R. 7 only applies to a father who is also the guardian ad litem of his minor son and added that there was no justification for extending the provisions of the rule by analogy or considerations of policy. These two decisions are directly in point and run directly counter to the case set up by the appellant.

Ramalingam Chetti v. Radhakrishna Chettiar was decided by a Bench and the decision is binding on us, unless there is a Bench decision which conflicts with it, in which case we shall have to decide the matter ourselves. Mr. Rajah Ayyar has suggested that Ramalingam Chetti v. Radhakrishna Chettiar , is in conflict with the decision of the Bench which decided Vijaya Ramayya v. Venkatasubba Rao (4). An examination of the judgment in the latter case however discloses a situation very different from the situation here. There the suit was brought by minors to set aside a compromise decree passed in a partition suit in which they had been defendants together with an undivided brother and their father. In the partition suit the father acted as their guardian ad litem. The questions in dispute were referred to arbitration without the leave of the Court and the award which was given was made a decree of the Court in spite of opposition. The brother, on behalf of himself and as the guardian of the minors, filed an appeal, in which the father also joined. While the appeal was pending, the father entered into a compromise without the sanction of the Court. The subsequent suit was filed to set aside the compromise decree. The suit was decreed and on appeal it was argued that as the compromise was entered into by the plaintiffs' father and not by their guardian ad litem no sanction of the Court was necessary. This contention was rejected on the short ground that the Court could not accept the suggestion that when the father had no responsibility for them and when their interests were entrusted to another person, he should have larger powers to bind them. There the father had acted as the guardian ad litem in the trial Court but he let his adult son fulfil that function for the purposes of the appeal. The facts are so different that we think that Vijaya Ramayya v. Venkatasubba Rao can be distinguished from Ramalinga Chetti v. Radhakrishna Chettiar . In the former case the Court actually passed a decree in accordance with the compromise without having sanctioned it. We consider that the principle stated in Ramalinga Chetti v. Radhakrishna Chettiar , should be applied here.

In Gur Mallappa v. Mallappa Martandappa , Macleod C.J said that though R. 7 of O. 32 applies to execution proceedings,

“there seems to me to be a distinction between a case where the minor's liability has already been determined by a decree in his father's lifetime, and a case where the minor's liability in the first instance is in dispute. For, in the former case there is a debt which the guardian is clearly entitled to pay off in full, and the fact that the judgment creditor has issued execution against the minor making an outsider his guardian ad litem, does not in my opinion alter the situation.”

Heaton, J. dissented from this opinion. He thought that the rule necessarily implied that during the continuance of proceedings in Court, the dispute between the minor and another party which the Court had to decide could not be compromised except by the guardian ad litem of the minor, and by him only with the leave of the Court.

In our judgment R. 7 merely applies to the guardian or next friend in the suit and when the father or manager of the family is not the guardian or next friend of the minor, his powers are unaffected. We agree with Varadachariar J. that analogy or considerations of policy cannot be called in aid for the purpose of whittling down powers of the father or manager. Of course, if there is fraud or collusion, different considerations will apply; but it is now admitted that there was no fraud or collusion in this case. Moreover, the guardian of the lunatic has raised no objection. The objection merely comes from creditors. Even if the guardian had objected, the position would not be different, but the fact that she has not objected makes the case for the contesting respondents all the stronger.

For the reasons indicated we hold that the transfer by Kasi Viswanathan of Chellappa's share was lawful. Consequently the appeals will be dismissed with the costs of the first respondent in Appeal No. 259 of 1942 and of the respondent in Appeal No. 260 of 1942.

N.R.R

Udayammai Achi And Another v. Umayal Achi And Others

Structured Summary of the Opinion (Delivered by The Chief Justice)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellants' Arguments

Respondents' Arguments (and factual positions relied on)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Udayammai Achi And Another v. Umayal Achi And Others

Comments