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TMI Blog1976 (1) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ily business. After his death, his eldest son. Neelkanth, father of Chandrakant, Defendant 3, began to look after the management of the family business `N' also started C. N. Tennis Bidi Factory in the name of his son, Chandrakanth, in 1942 or thereabout. `N' died on July 8, 1946. Thereafter, `A' (Defendant 2) continued and managed the joint family business and the family concerns with the consent of the other members. After 1951, the family business was managed by `M' (Defendant 1). The appellant had business dealings in tobacco and money dealings with the Defendants' joint family. There used to be periodical verification of accounts and acknowledgements were made from time to time by the Manager of the family. The plaintiff's accounts were burnt in fire on October 22, 1949 and he had to reconstruct the accounts from available information and' documents. On April 15, 1953 accounts were taken, and the amount due from the defendants family to the plaintiff was worked out and verified The accounts thus stated were acknowledged and signed by Defendant 1 and by Defendant 4, as guardian of her minor son, Defendant 3. A balance of ₹ 69,465/15/- was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int family status on November 4, 1945 when M, A and N unequivocally expressed their intention to separate, and divided the movables, and thereafter, a decree for partition of the immovable property of the family was passed in 1949 on the basis of an arbitration award. Defendant 3 asserted that this decree had been acted upon by the parties. He denied that Defendants 1 and 2 had ever acted manager of the joint family with the consent of the other members, and added that this question could not- arise because of the earlier division of the family. Defendant 4 in her written statement denied the plaintiffs' claim and supported the contentions raised in his written statement by Defendant 3. She stated that Defendants 1 and 2, had taken her thumb impressions on certain papers on the representation that they had been properly managing the Tennis Bidi Factory which had fallen to the share of her husband. She was never informed of the contents of the documents by the Defendants, who took undue advantage of her illiteracy. The trial court held that the joint family had disrupted in 1945 and the plaintiff was aware of this fact; that the acknowledgements of the debt had been made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 30. The date of the purchase of the stamp paper accords with the date of the execution of the deed. This document therefore, could not have been brought into existence subsequently. Secondly, there was an endorsement on the Income-tax Return Ex. 309, relating to the previous year ending on November 4, 1945, that at the end of the year there has been a change in the status of the family. Thirdly, there is the Arbitration Award (Ex. 294) dated November 3, 1948, followed by the decree (Ex. 295). This award is a registered document. The material recitals in this document are as under: The plaintiff (Chandrakant Nilkanth) and the defendants Nos. 1, 2 and 3 (Mallappa, Appasaheb and Basawabai, widow of Mahalingappa) were members of joint family. During the lifetime of the plaintiff's father, he and the defendants Nos. 1, 2 and 3 were living joint and all the three persons carried on the business of the joint family. Thereafter as the minds of the plaintiff's father and of the defendants Nos. 1 and 2 were prejudiced on account of some domestic reasons, they began to live separately in the year 1945. Thereafter they took accounts of the transactions, with desire to get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an application (Ex. 169) called upon Defendant 1 to produce in court the account-books, in his possession. Notice of this application was received by Defendant's Counsel on July 18, 1955. Despite this notice defendant 1 did not produce the account books when he appeared in the witness-box on July 21, 1955. He made a lame excuse that the account books had been given to Javali pleader after the service of summons in this suit on him (defendant 1) because that pleader had asked him to bring the books containing the plaintiff's accounts. But the defendant gave him the books of the Bidi Factory and not of M. B. Sadalge shop. Defendant 1, in cross-examination, clearly admitted that he had given to Javali pleader only those account books which contained the plaintiff's Khata and not of previous years . By any reckoning, this means that he did not hand over the account books relating prior to the years 1949 to Javali Pleader. Admittedly, after the death of Nilkanth. he was managing the business upto 1950, and, as such, was supposed to be in possession of the account-books. The courts below were there fore, right in rejecting the explanation given by him for non-production o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed since the said partition . In accordance with this statement. the mutation Ex. 263, was attested. Both the courts below have fully considered this evidence, along with other evidence, and come to the conclusion that these documents do not discount or alter the fact that the joint family had disrupted on November 4, 1945. The High Court has given reasons why the evidence furnished by the deed of partnership (Ex. 197) and the Arbitration Award, (Ex. 294) can be safely accepted.' In regard to Exs. 221, 247 and 248, the High Court has said that there is no evidence as to for what purpose these affidavits were sworn to and has rightly emphasised that in the absence of such evidence, it is difficult to draw any inference about the implications of their contents. Regarding the affidavit Ex. 247, purporting to have been sworn by Smt. Balabai, the High Court has said that she must have been mentally depressed being in mourning on account of the death of her husband which occurred only 12 days earlier; that she was an illiterate woman who thumb-marked whatever documents were presented to her, without understanding its contents. In this connection, the High Court referred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by defendant 2 in 1946, after Neelkanth's death. The High Court has attached great weight to an endorsement on this return, which is to the effect, that there had been a change in the family status. at the end of the year. This endorsement has been omitted from the printed copy of Ex. 309. Consequently, at one stage, it was maintained by the counsel for the appellant that in repeatedly referring to this endorsement the High Court had committed an error of record. We therefore, sent for the original. We find that this endorsement is very much there in the original. This endorsement was a valuable piece of evidence to show that, in fact, there had been a disruption of the joint family status at the end of the previous year, 1944-45, on November 4, 1945. Thus the evidence furnished by the income-tax returns was conflicting. But the aforesaid endorsement on Ex. 309 was a clincher. It was a statement made ante litem motam. It confirmed the testing of Defendant 2 that the partition had taken place in 1945 and this tilted the balance against the contention of the plaintiff. In such evidentiary value, it out-weighs the income-tax returns, Ex. 310, 311 and 314, in which the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this receipt. It is undisputed that subsequently, defendant 3 has not only obtained a decree on the basis of this receipt against defendant 1, but has taken out its execution. The High Court has also dismissed the effect of the agreement (Ex. 99) which was executed between defendants 1, 2 and defendant 4 as the guardian of the minor, defendant 3 on April 12, 1950. The main object of this agreement was to safeguard the interests of the minor in the management of the two partnership businesses, namely, M. B. Sadalge Shop and Tennis Bidi Factory in the name of Chandrakant Neelkant Sadalge. By this agreement, defendants 1 and 2 were called upon to credit to the business whatever amounts they had spent from out of the partnership assets. The power of each of the defendants with regard to withdrawal of funds from partnership chest for personal expenses, was also restricted. This arrangement continued to be in force till the partnership was dissolved by another registered deed on April 20, 1951. Reference has already been made to Ex. 316, an order dated June 20, 1950, of the Income-tax officer showing that defendants 1, 2 and 3 were being assessed on the basis that each of them h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Ramachandrappa v. Muthyala Narayanappa .Kashiram's case (supra) decided by an eminent single Judge certainly supports the proposition propounded by Mr. Datar. Applying the principle of s. 45 of the Partnership Act, 1932, the learned Judge held that unless intimation of the severance of joint status between the members of the joint family is given to the outside creditors who had dealings with the joint family through its karta, either by public notice or individual notice in that behalf, the karta would be deemed to continue to represent the family and to have power to incur debts for family necessity and to make acknowledgements or part-payments in `s respect of the same so as to extend the period of limitation. With great respect to the learned Judge, we do not think that this is a correct enunciation of the law on the point. Firstly, the legislature has, in its wisdom, excluded joint Hindu trading families from the operation of the Partnership Act. Section 4 of that Act defines 'partnership' as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all . Section 5 further makes it clear that thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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