(Delivered by Krishnaswami Ayyangar, J.)

This appeal has been preferred against the decree of the Subordinate Judge of Devakottah passed a second time in a suit for contribution. The first decree was set aside on appeal by this Court and the suit was remanded for fresh disposal on a point which was held to be the main point in the suit between the parties. That point had unfortunately not been considered at the first trial on account of the defective character of the pleadings and the wrong emphasis laid on what was found to be an untenable ground of claim.

A short statement of the facts is necessary before we proceed to consider the contention raised by the appellant. In 1908 a loan of Rs. 20,000 was advanced by the Bank of Rangoon Limited, to two firms, namely the firm of M.P belonging to the family of the plaintiffs and the firm of S.A belonging to the family of the defendant on a joint and several promissory notes executed by their representatives. (In this judgment the term ‘firm’ is used not in the sense of a partnership arising by contract but in the Hindu Law sense of a joint family business). Both the firms were each separately carrying on a banking and money-lending business in Rangoon, a kind of business ordinarily carried on by members of the Nattukottai Chetti community to which the parties belong. The learned Judge has found, and we have seen no sufficient reason to dissent from his conclusion, that the S.A firm was an ancestral business belonging to the defendant's family founded long ago by an ancestor of his. To that business the defendant succeeded in 1906 when he was adopted while yet a minor by the widow of one S.A Subramania Chetty the previous owner who died in 1904. Subramania Chetty had left a will by which he had authorised his widow to adopt. During his life he was the sole owner not only of the S.A firm at Rangoon but also of several other businesses elsewhere. By his will he appointed two executors of whom one alone Chinniah Chetty took up the office and the management of his estate and effects inclusive of the S.A firm at Rangoon. In February 1913 he surrendered the properties to the defendant and obtained his discharge. Whether after the adoption of the defendant, Chinniah held the character of an executor pure and simple or whether he became thereafter his testamentary guardian with those duties and privileges which appertain to such a guardian is one of the matters in controversy.

At the date of the loan, the S.A firm was in charge of one Chockalingam Chetti, an agent who held a power of attorney from Chinniah, while the M.P firm was represented by one Palaniappa Chetti. The promissory note on which the loan of Rs. 20,000 was advanced by the Bank was signed by the two agents prefixing the letters ‘S.A’ and ‘M.P’ respectively to their signatures thereby indicating that they were acting in the particular transaction, not in their personal but in their representative capacity as agents of their respective principals. The money borrowed was divided as indeed it was intended to be divided, between the two firms in equal shares according to a practice which came into vogue by reason of the lending bank insisting for better security on the credit afforded by two signatures. Sometimes a firm would borrow for itself on the accommodation of another friendly firm in return for a similar accommodation by the former to the latter. Sometimes the two firms borrowed as in this case a single sum of money on one joint promissory note, dividing the money borrowed equally between themselves. Both species of transactions have not infrequently come before the Courts. It will be seen that the essence of the transaction when analysed comes to this, that in the former class, the actual borrower is the principal debtor, and the accommodating signatory, a surety; in the latter each of the two borrowers is a principal debtor in respect of the moiety taken by him, and a surety in respect of the other moiety taken by the other signatory. The lending bank however could realise the debt indifferently from either or both the debtors at its option. As between the debtors themselves there can be no doubt that the relationship is that which subsists in law between a principal debtor and a surety.

To come back to the narrative. Default was made in the repayment of the loan to the bank and the bank was consequently obliged to institute a suit for its recovery in C.R No. 55 of 1912 in the Chief Court of Lower Burma. The suit appears to have been framed following the special procedure of O. 30, Civil Procedure Code, which permits a suit by or against a partnership or even an individual in its or his business name, if such a name is assumed for the business carried on. On the 12th August 1912 a decree by consent was passed against the two firms in their names in terms of a compromise signed by the representatives of the firms. The decree remained unsatisfied till 19th February 1925, when the full amount of the decree with accrued interest amounting to Rs. 25,600 was collected by the Bank from the plaintiffs alone, the defendant having defaulted to contribute his quota. The present suit for contribution was therefore filed on 22nd March 1927 by the plaintiffs who are members of the M.P family against the defendant representing the S.A family for making him bear his share of the joint liability. The claim was for Rs. 12,800, being an exact half of the amount collected. Interest was also claimed on this sum at Re. 0-13-6, the average rate, current it was alleged, among the Nattukottai Chetties, at Rangoon. The defendant contested the suit mainly on the ground that the decree of the Chief Court, Lower Burma, was a nullity having been passed against the so-called S.A firm at a time when that firm had ceased to exist as a legal entity and when in fact no business at all was being carried on under that style either by the defendant or any other person on his behalf. According to his written statement, the firm came to an end with the death of Subramania Chetty in 1904; and consequently the decree passed against a firm which was no longer in existence was a nullity and could not bind him, as he could not be held to have been a party at all to the suit. The Subordinate Judge who tried the suit in the first instance overruled this defence, holding that the S.A firm did exist on the material dates, and that the defendant was in fact a party to the suit though nominally it was the S.A firm that had been impleaded. A decree was accordingly passed in terms of the prayer in the plaint.

Mention must now be made of an averment in the written statement to the effect that the

“S.A estate was in the hands of executors………during the minority of this defendant which expired with December 1912 and thereafter in February 1913, the estate was handed over to this defendant.”

No special notice was taken of this plea of minority, the plaintiff did not plead to it, and the Court did not raise any issue on it. But when the defendant preferred an appeal to this Court in Appeal No. 400 of 1928 this neglected averment assumed serious importance. It was contended in the appeal that whatever might be the position if the defendant had been a major at the time, the decree must be held to be a nullity inasmuch as he was in fact a minor at the time, and as no decree could bind a minor without his being represented and his interests protected in the manner provided by O. 32, Civil Procedure Code. This contention prevailed, but at the same time the learned Judges were unwilling to dismiss the suit for good, as in their view it was based not merely on the invalid decree, but also on the original debt. This was regarded by them as the main point for determination in the suit, though it had not been pleaded with sufficient particularity. They refused in the interests of justice to allow the claim to be defeated by a mere technicality, and accordingly remanded the suit for fresh disposal after allowing the plaintiff an opportunity to amend the plaint by supplying the necessary particulars as regards the nature and binding character of the original loan. The defendant was given liberty to plead to the amended plaint. The case then went back to the trial Court, the plaintiff carried out the necessary amendments to the plaint, the defendant put in an additional written statement and fresh issues numbered 7 to 11 were framed. At the new trial, fresh evidence was adduced, and the Court below has once again come to the conclusion that the plaintiffs are entitled to a decree as prayed for and has passed a decree accordingly. It is from this second decree that the present appeal has been preferred by the defendant.

In this connection, we may perhaps allude to another appeal. Appeal No. 449 of 1935, which was heard along with this appeal, and disposed of by us on 20th October, 1938. That appeal was preferred by the defendant, who was also the defendant in another later suit by the plaintiff who sought to set aside the remand order of this Court in Appeal No. 400 of 1928 on the ground that it had been procured by fraud. It is enough at present to say that we have found there was no fraud made out, of a nature sufficient in law to set aside a judgment of Court, and hence we had to reverse the decree of the Subordinate Judge who had held that the remand order had been vitiated by fraud practised on the Court. It becomes consequently necessary for us to consider the merits of the present appeal preferred against the fresh decree passed by the lower Court.

The learned Subordinate Judge has found as a fact that Chockalingam Chetty, the then representative of the S.A firm, did in fact receive a moiety of the loan of Rs. 20,000, borrowed from the Bank, and that he did so in the ordinary course of the S.A business and for the purpose of carrying it on in the ordinary way. This obvious and indisputable fact, we regret, was persistently and disingenuously denied by the defendant in the lower Court till finding it impossible satisfactorily to explain his omission to produce the account book of the firm almost conclusively traced into his possession, he finally took up the position that the loan had been borrowed by one who had no authority to borrow it on his behalf, and consequently he (the defendant) was under no obligation to recognise it. On his behalf it was urged before us that Chinnayya Chetty who was in fact at the date of the loan and as we have already noticed, till February, 1913, in actual management of all the property and businesses of the defendant, was wholly and purely an executor under the will of his adoptive father, and that he had no right as such to continue the S.A firm at Rangoon either in law or under the terms of the will. If in continuing the business, Chinnayya overstepped the limits of his authority, a debt borrowed in the course of such an unauthorised business cannot of course bind the defendant. But if on the contrary, the continuance of the business was not improper, we should be prepared to hold, on the principle of the ruling in Abdul Majid Khan v. Saraswathi Bai(1), that it was within the authority of Chinnayya and his agent to borrow the money.

It is therefore necessary to ascertain the exact legal relation in which Chinnayya stood towards the defendant. It is clear from the will, that he and another Chidambaram Chetty were in express terms appointed executors. Chidambaram Chetty declined to accept the office, but Chinnayya after a long and protracted contest succeeded in establishing the will and obtaining probate. There can be no doubt that Chinnayya at the outset took over the management of the business as an executor in accordance with the provisions of the will.

The will contained the following directions:

“I have appointed these two persons, namely, (1) S.R.M Ramaswami Chetty alias Chinnayya Chetty, residing at Karaikudi aforesaid, and (2) A.V.P.L Chidambaram Chetty of the said place as executors of this will for distributing and safeguarding my properties as detailed below. So the aforesaid persons shall after my death take possession of all my properties, distribute them as detailed below and manage them. As I have no male issue at present, my wife Sivakami shall, after my death, take any male child she may like, in adoption for the propagation of my family. Soon after the said adopted son becomes a major the aforesaid executors shall deliver to the said adopted son all my properties together with the accounts relating thereto. The executors shall properly safeguard and manage the above properties, maintain accounts properly in respect thereof, and conduct civil criminal and revenue and all proceedings, improve the properties, and incur expenses for charity………Of the firms which are carried on for me in foreign places, firms other than those four firms, namely, Rangoon, Madras, Bengal and Singapore, should be wound up, cash realised and the same be brought to the said four firms and the transactions should be had on the Chetty firms.”

Two things are clear from these provisions. The S.A business was one of the four businesses which were not to be closed down but to be continued, managed and improved for the benefit of the son to be adopted. As an executor bound to carry out the directions of the will, Chinnayya had accordingly a definite duty and it was certainly within his powers to carry on the business. At the same time, it is equally plain that after the adoption of a son, who would from that moment become the owner, Chinnayya's executorship must be held to have ceased and that he thereafter became the testamentary guardian of the son adopted, namely, the defendant, who was a minor at the time. In view of the direction that the executor should deliver the properties to the adopted son soon after he attained majority, we must hold, following the ruling in Jagannadha Rao By Guardun Vasanta Rao…Defendant, v. Ramayamma…(Plaintiff), .* that his position in relation to the management was that of a validly appointed testamentary guardian. It is on this footing that the question whether the loan taken from the Bank could bind the defendant has to be considered, though the argument at the Bar, covered a wider range.

Chinnayya was thus a testamentary guardian put in charge of an ancestral business and enjoined to preserve and improve it for the benefit of the adopted son. His powers of management are derived not only from the will but also from those principles of Hindu Law recognised in Hunooman Persaud's Case(2), Mayne on Hindu Law 10th Edition, S. 236 and in several other later cases. It is true that the incapacity of a minor under the Indian law, to bind himself or his estate by a contract is much more complete than under the English law, especially after the pronouncement of the Privy Council in Mohori Bibi v. Dharmodass Ghose(3). But the Hindu Law has conferred on the guardian, not of course in his interests, but in those of the minor ward, a comparatively larger power over even the immoveables of the latter under his management. Though indeed it is a limited and qualified power, to be exercised only in a case of need or for the benefit of the estate, yet it is wide enough to include an authority to charge, mortgage or even to sell a sufficient portion of it, if circumstances warrant its exercise (Mayne on Hindu Law, 10th Edition, S. 237). This was not denied, as indeed it could not be denied at this time of day, but the old argument, based, as it has been pointed out, on an imperfect understanding of certain decisions of the Privy Council, [Waghela Raj Sanji v. Shekh Masluddin(4), Indur Chunder Singh v. Radha Kishore Ghose(5), Mir Sarwarjan v. Fakhruddin Mohammad Chowdhury(6)] was repeated before us. It has been turned down more than once by this Court, [Ramajogayya v. Jagannadhan(7), Satyanarayana v. Mallayya(8), Ammalu Ammal v. Namagiri Ammal(9), Seetharamayya Garu v. Sathiah(10)] and it is unnecessary for us to embark upon a discussion of the soundness of the principle adopted. In view of these decisions, it has to be taken as established that a guardian can under Hindu Law, bind a Hindu minor's estate, by a personal contract if circumstances such as those pointed out in Hunooman Persaud's Case exist. We may observe that we find it difficult to appreciate an argument which denies to the guardian a power to contract a simple debt, while conceding to him in identical circumstances a power to charge or even sell the estate, in spite of the greater strictness with which the Hindu Law regards transactions affecting immoveable property.

It was however urged that the test laid down by the Privy Council in Hunooman Persaud's Case, is not applicable to a simple contract debt incurred by the guardian, which according to the appellant could be supported if at all not on the broad principles enunciated in that case, but only on the much more limited ground, viz., that it was incurred to pay or keep alive a binding debt already in existence. For this argument reliance was placed on a recent decision of a single Judge of this Court, Venkataramana Rao J. in Muthuswami Maniagaran v. Annamalai Chettiar. As we are informed that decision is now under appeal, it is not necessary for us to say anything more than that we are not satisfied that it is only in respect of a pre-existing liability under Hindu Law that a guardian can act so as to bind the minor. With all respect to the learned Judge, we think that once an exception based on the principles of Hindu Law is recognised, there appears to be no warrant for still further narrowing it by a limitation of the kind suggested. We feel that the sounder and more reasonable view to take of the decisions on the point is that if the guardian is found to have acted in circumstances regarded as sufficient to bind the minor according to the general principles of that law, then the estate of the minor should be held bound. A pre-existing liability is only one such circumstance, but that is by no means exhaustive of the class. We feel that the observations of the Judges in the cases referred to in the judgment of the learned Judge, ought not to be interpreted as enunciating a new head of necessity, or limiting the well-known ancient one, to which alone and to none other, we must resort in every case where a transaction of a representative is questioned. The rule laid down as early as the Hunooman Persaud's Case must therefore continue to guide the Courts, and it is not permissible to whittle down the generality of their Lordships' language, by dicta of Judges made with particular reference to the facts before them. We regret we are unable to agree that “the test is not a question of mere benefit, nor the mere fact that the debt was incured for necessary purposes” as the learned Judge seems to think. It is not in our opinion a pre-existing liability alone that enables a guardian to enter into a contract binding on behalf of the minor, but all those facts and circumstances, of necessity or benefit, which ordinarily justify an alienation under Hindu Law would support a contract as well. We must accordingly negative the contention that Chinnayya was incapacitated from borrowing for the purposes of the business entrusted to his care. In this connection it is well to remember that the Nattukottai Community to which the parties belong have, as we have already observed, adopted money-lending and banking as their main profession or kulachar, and such a business which is often the mainstay of the family has been known to descend from generation to generation in many Chetti families. The argument that it should be wound up, as it has to be wound up apparently under the English Law, takes little note of the peculiar incidents of a family business in the Hindu system. It is according to that system a heritable asset of the family, affording sustenance and employment to the members of the family; and to close down such a business may often amount to the destruction of a valuable item of family property. This aspect of the matter reinforces our conclusion that even apart from the directions contained in the will, Chinnayya was justified in continuing the business. It was not disputed that the appointment of an agent to manage the Rangoon business was anything but usual and proper in the ordinary course of the management of such a business. Chinnaya was only acting in the customary way in appointing Chockalingam as agent to conduct the business. We must therefore hold that the defendant is bound by the borrowing made by Chockalingam, which, as the learned Judge has found, was an act done for the legitimate purposes in his charge, and which must therefore be held to have been necessary or beneficial to it.

It was next urged that even if the loan is to be held to have been properly borrowed by Chinnayya through his agent, Chockalinga, it is not open to the creditor, or to the plaintiffs, who stand in his shoes, to enforce his claim directly against the family property in the hands of the defendant, and for this proposition reliance was placed on the cases, English and Indian, collected in Srishchandra Nandi v. Sudhirkrishna Banerji. A guardian does occupy a fiduciary position towards the ward, and is no doubt also a trustee for him. It seems to be equally clear that a lender has ordinarily no direct recourse against the estate or the beneficiary, where he has contracted with a trustee or an executor, even though as between the latter and the beneficiary, the debt might have been properly incurred (Ibid). There are however two answers to this contention. In the first place, it is to be observed that the objection to direct recourse is based on the availability intact of the remedy against the representative at the time when the beneficiary or the estate is sought to be proceeded against, without having been in any way meddled with or dissipated by the latter. Where however the representative has been completely and unreservedly discharged by the beneficiary himself, it is inconceivable that the creditor should still be obliged to pursue the futile circumlocution involved in the ordinary procedure of subrogation. For an acquittance by the beneficiary without disputing any of the acts of the guardian during his management is virtually tantamount to an affirmance of the propriety of those acts, and it would be hardly just to permit the ward to demur to those acts later. In the present case, it is quite clear both from the release, Ex. O, and from the evidence of the defendant himself in the witness box, that he took over from Chinnayya without demur the S.A firm along with the other properties which appertained to the estate, and his conduct then and since is only consistent with his having completely accepted all the liabilities to which the estate was subject at the time when he took it over. Now and in the face of this conduct to contend that it is Chinnayya who must be sued in the first instance is to contend for something which in all equity and good conscience the defendant should not be permitted to do. Even otherwise an exception is recognised to the rule in question where, for instance as in this case, the debt is incurred in a trade carried on in pursuance of directions validly given by a will or other instrument, Thirunavukkarasu v. Lakshmidas & Co. and Ammalu Ammal v. Namagiri Ammal. Lastly, we may observe that this case is free from the complication sometimes arising on account of the form of the promissory note. There is in this case no scope for the argument that the promissory note in favour of the Bank bound the executant personally and was not intended to bind the defendant. It was in fact executed by Chockalinga in the name of the vilasam thus identifying it as a transaction on behalf of the defendant, as we have already pointed out.

Objection was next taken by the appellant's learned Advocate to the grant of interest in the decree of the lower Court from the date of payment by the plaintiffs, till the date of decree at 13 annas 6 pies per cent per month. It is argued that in a claim for contribution no interest ought to be allowed till the liability and the amount are both ascertained and adjudged and further that the learned Judge erred in any event in decreeing interest at the nadappu rate. First, with reference to the liability for interest. The decree in this regard is sought to be supported not on S. 73 of the Indian Contract Act (IX of 1872) nor under the terms of the main clause in the Interest Act (XXXII of 1839). It is on the proviso to that clause, which expressly leaves untouched the liability for interest in all cases in which, at the date of the Act interest was payable by law, that reliance was placed by the respondents. The liability for interest independently of the provisions of the Act was, if we may say so with respect, most exhaustively considered by a Bench of this Court in Nandappa Goundan v. Ittichara Mannadiar and the position has been much clarified by the expressions of opinion contained in that judgment. It is now plain that though the Act speaks of interest payable by law, what is meant is that it may be payable either by common law or equity. In other words, the word ‘law’ is in the context used in the generic and not in the technical sense, and comprehends all those principles of law and equity which Courts enforce. It is to equitable principles accordingly that an appeal is made in this case to support the award of interest. Those principles have been enumerated in 21 Halsbury page 40, and among the instances there mentioned as giving rise to a liability for interest is the relationship of principal and surety. The claim for contribution has always been recognised as one which pre-eminently falls within the equitable jurisdiction of the Court, and on such a claim the Court of Equity appears to have always allowed interest without question. In Hitchman v. Stewart it was held that when one of several sureties had paid the principal debt, and some of the co-sureties are insolvent he was entitled as against the solvent sureties to be paid their numerical shares of what he had paid, with interest from the time of payment, although the instrument did not contain any express indemnity so as to carry interest as on a speciality. This decision was followed in two subsequent cases [In re Swan's Estate, Exparte Bishop In re Fox Walker and Co.] and in the latter Cotton L.J explained the principle as based on,

“the consideration that where there is a contract to indemnify, express or implied, the person to be indemnified ought to be put in the same position as if the act against which he is to be indemnified had been done by the person who is to indemnify him at the time when it ought to have been done.” The Italics are ours.

Interest chargeable by a surety on the amount of the contribution due to him is accordingly to run from the date or dates when his payment to the creditor becomes in excess of his share (Rowlatt on Principal and Surety, 3rd Edition, page 249). The claim for interest as from the date when the plaintiffs paid the amount to the Bank is thus well supported in equity and is therefore payable by ‘law’ within the meaning of that word in the statute, and the objection must therefore be overruled. We may also observe that it is wrong to regard a claim for contribution as arising out of a contract enforceable at law; such a claim is independent of contract and arises out of the necessity to do equity to a person who has been damnified by the default of the person liable in failing to fulfil an obligation which was essentially his own. The award of interest as from the date of payment by plaintiffs cannot therefore be objected to. But as regards the rate, however, the plaintiffs have no right to demand the same rate at which the interest on the original debt was payable or at any particular rate. We think it is for the Court to fix a reasonable rate, taking all the circumstances into account. In the present case, we think that the learned Judge erred in awarding interest at the rate claimed by the plaintiffs, which is in our view far too excessive. The learned Subordinate Judge has not given any reasons for the course he took and we can find none ourselves for departing from the usual rule adopted by Courts in cases not covered by the contract of parties. We hold that the ends of justice would be sufficiently met in this case by awarding interest at six per cent per annum instead of at the higher rate adopted by the lower Court, on the principal amount of Rs. 12,800. Subject to this modification, the decree of the lower Court will be confirmed and the appeal dismissed. The appellant will pay two-thirds of the total costs to the respondent in view of the reduced amount which the latter will recover under our judgment.

N.R.RDecree accordingly.