A decree was obtained against defendants 1 to 5 personally on a promissory note executed by them for a debt binding on the family. Because it was binding on the family, the other two members, defendants 6 and 7, were made liable to the extent of their share of the family property. Defendants 3 to 7 filed an application in the Court below for scaling down the debt. The debt was scaled down in accordance with S. 8 of the Madras Agriculturists Relief Act (Act IV of 1938); and a question arose in view of the allegations that defendants 1 and 2 were not entitled to the benefit of the Act (Defendant 1 being said to be an insolvent and defendant 2 to have no further interest in the family property) whether, under S. 14 of the Act, the creditor can proceed against each of the defendants only for his proportionate share of the debt. The lower Court held that S. 14 did not apply to the case of a contractual debt. Defendants 3 to 5 appeal.
Section 14 affects “a Hindu family……where some of the members liable in respect of a family debt are not agriculturists while others are agriculturists.” The case of the respondent, which has been accepted by the lower Court, is that this debt is not a family debt. It is argued that a debt can only be said to be a family debt when the debtors are made liable only because they are members of a family; for example, if the manager of a family contracts a debt legally binding on the family, it is a family debt as far as the other members of the family are concerned but not as far as the manager is concerned. It is difficult to appreciate this distinction; for it appears to me that if a debt is a family debt it must be a family debt with regard to every body. Morever, I think the wording of Cls. (a) and (b) of S. 14 indicates that this contention of the respondent cannot be correct; because it makes liable not only the debtors' shares of the family property but makes them liable personally for their proportionate share of debt; and they cannot be liable personally unless the debt is a contractual one. So I cannot agree with the lower Court that S. 14 has no application.
I do not, however, find any reason to suppose that because one or more members of a family are non-agriculturists, the family property has to be split up into individual shares and that each individual share is liable only for its own share of the family debt. That is not how the section reads. Using the words appropriate to the present case,
“the creditor shall…be liable to proceed (a) against the non-agriculturist……members and……their share of the family property to the extent only of……their proportionate share of the debt which shall be scaled down in accordance with the provisions of this Act, and (b) against the agriculturist……members and……their share of the family property, to the extent only of……their proportionate share of the debt.”
That would mean that, where as in the present case, there are two non-agriculturists and five agriculturists, the non-agriculturists are liable for 2/7 of the unseated debt while the agriculturists are liable for 5/7 of the scaled down debt. That is what one would expect the legislature in justice to have done in order to overcome the difficulty that arises in dealing with a Hindu family, some of whose members are agriculturists and some not. In some Malabar families, for example, there is an enormous number of members and if a creditor could only proceed against the individual small fractions of the family property or the individual share of that member, very great hardship indeed would be entailed, and I do not think the legislature intended by this section to throw that great burden on the creditor. Moreover, the word ‘share’ would be incorrect if the petitioners' contentions were correct. The correct word would be ‘shares’. It therefore follows that if the Act does not apply to the 1st and 2nd defendants, defendants 3 to 7 would be liable for 5/7 of the scaled down debt.
It is contended that S. 21 of the Act, which excludes certain insolvents from the scope of the Act, does not apply to this case; for there is no evidence whether a dividend has been declared or not. It is also argued that there is no evidence to show that the 2nd defendant has no longer any interest in the family property. In the view taken by the lower Court, it was not necessary to consider these questions. They will have to be considered in view of the above findings.
The petition is allowed and the interlocutory application remanded for disposal on the lines indicated above. The costs of this petition will be provided for in the order to be made by the lower Court when disposing of the application.
Petition allowed.
N.R.R