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TMI Blog1969 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... mences from the date when the loan is made, this suit filed after a period of three years provided for the same, would be barred by limitation. On the other hand, it is said that the cause of action for a claim for money deposited with the firm under Article 60 of the Indian Limitation Act would commence from the date when the demand is made. On that basis the suit is within time - it having been filed within a period of three years from the demand period of three years from the demand made in the month of May, 1956. The other point raised by him is that the right and share in the ancestral Joint family properties of Chhotalal Lallybhai, with defendants Nos. 4 to 10 cannot be held to any way liable for the suit claim since the family had nothing to do with that firm, and its partners were only Ramprasad and Natwarlal. Natwarlal, according to him was taken as a partner in the firm in his individual capacity and not as manager or the eldest member in the family. In order to appreciate the contentions raised before us, as few facts may well be set out. One Atmaram Kalidas happened to have close connections with both Ramprasad and Chhotalal. He had deposited in the name of his a first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. The question however, is whether the amount due from the firm-defendant No. 1 was a deposit so as to be governed by Art. 60, or that it was a loan contemplated in Art. 57 or 59 of the Indian Limitation Act as urged by Mr. Mody before this Court. Mr. Mody's contention is that the onus of proving that the amount was deposited so as to entitle the plaintiff to claim it on demand with the firm would be on the plaintiff and she has failed to discharge the same. According to him, when a person hands over money to any person not being in the nature of a gift, even though payable when demanded would ordinarily mean a loan so as to say that money was lent to the other person. In order to show that it was in the nature of a deposit so as to have the claim brought under Art. 60 of the Limitation Act, it would be essential for the plaintiff to show that it was not merely a loan but was a deposit. In support thereof, he invited a reference to the observations made in a decision in the case of Govind Chintaman Bhat v. Kachubhai Gulabchand. The contention was of a similar character we have before us and while dealing with that contention it was observed as under:- it is not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount due to become a deposit must be given to a banker or that he must be in a fiduciary position. In order to apply Art. 60, it is no doubt required to be shown that the amount was deposited with the firm. The evidence in that regard can well appear from circumstances disclosed, leading to an inference that it was not a loan but kept as a deposit with the firm. Before we refer to som of the decisions referred to by Mr. Vakil, the learned advocate for the respondents we may observed, that it appears clear from the very decision relied upon by Mr. Mody that it cannot be said that there must exist fiduciary relationship between them though if that existed, it may help in determining the nature of the transaction. In the case of Bhimanna Kumaji v. Venichand Fattechand AIR1926Bom168 it was pointed out that under Art 60 of the Indian Limitation Act, it is not necessary to prove that the borrower is carrying on business only as a banker. It has been further observed that a man might become a banker, or place himself in the position of a banker, with regard to a particular customer, and if the dealings with the lender and the borrower are such that the Court is satisfied that it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an. The facts of the case were that the plaintiff handed over this money to the defendant who credited it in a bank in his own name, and credited it in his account-book to the plaintiff. That went on from time to time over a long period of time. A question having arisen whether the transaction was a loan or deposit for the purposes of the Indian Limitation Act, it was held that the transaction was not a loan falling within Arts. 57 and 59 of the Act because of the absence of any security for the alleged loans such as of any receipt in writing, or any promissory note or any agreement as to what rate of interest the loan was to carry. It further held that the course of dealing between the parties was that the defendant was acting very much as a banker for the plaintiff , he received for safety custody whatever moneys the plaintiff wished to hand over to him and he paid those moneys to the plaintiff only when the plaintiff asked for them and that there was nothing to show that the defendant was under any duty to seek out the plaintiff to repay him. In these circumstances, the transaction was that at a deposit and the suit was governed by Art. 60 of the Indian Limitation Act Applying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent places in the reply Ex. 111 given by defendants Nos. 1, 2 3 to the notice Ex 108 whereby this amount was demanded by the plaintiff from them. In the very first para thereof it has been stated that in about the S.Y. 1988 the amount was deposited in the name of Bai Reva with interest at the rate of 4 1/2 per cent. Teriklhe Vyajuka nana jama mukela (Original in Gujarati transliterated here - Ed.). Towards the end of the reply in para 10 thereof a similar reference has again been made by saying that the amount was deposited at the rate of 4 1/2 per cent by Atmaram in the name of his wife Bai Reva with the firm and that a Khata was maintained and that it continued for all the time. The words nan jama mukela (Original in Gujarati transliterated here - Ed,). Clearly indicated about her having deposited the same and not about the firm having borrowed the same or about the plaintiff having lent or advanced the same to the defendant No. 1. There is, therefore, hardly any substance in the contention now raised that the amount was in the nature of a loan and not as a deposit so as to come within the ambit of Article 57 or 59 of the Indian Limitation Act. In our view, therefore apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his sons as members of the joint family are bound to pay the debts to the extent of their interest in the coparcenary property. The second part thereof, however, is important and that relates to debts which have been contracted by the father for his own personal benefit while the sons are joint with him. When such is the case, as stated therein, the sons are liable to pay the debts provided they are not incurred for an illegal or immoral purpose. The liability to pay the debts contracted by the father, though for his own benefit, arises from an obligation of religion and piety which is placed upon the Mitakshara law to discharge the father's debts, where the debts are not tainted with immorality. The fact that the father was not that the family consisted of other coparceners besides the father and sons, does not affect the liability of the sons in any way. This pious obligation as set out in Cl (2) thereof, to pay the ancestor's debts to the extent of their interest in the joint family property is not abrogated by the Hindu Succession Act and then as stated in Cl (3) thereof, their liability is not a personal one, that is to say the father's creditor is not entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al with some points raised by Mr. Mody having reference to the claim being due on death of Chhotalal. In our view, the debt such as the one in this case continued to exist so far as the firm was concerned and that the cause of action in respect of that debt for recovering the same against the firm would only arise on the demand made thereof. The demand was made both from defendants Nos. 1, 2 and 3 as also from the members of the family of Chhotalal in May 1955 and the suit filed is in time. It was said that as soon as Chhotalal died, the partnership stood dissolved by reason of his death as contemplated under Section 42(c) of the Indian Partnership Act and, therefore, the debt became payable with effect from that date. On a perusal of the provisions of the Indian Partnership Act, we find no provision which says that the rights of the strangers to the partnership firm are affected thereby. Such a right continues in the creditor unless it is discharged by the firm or its partners, provided the claim is otherwise in time. Now in this connection we may state that it is no doubt true that the firm would be dissolved by the death of a partner, but that is always subject to the contract b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any money was required to be demanded on the dissolution of the firm. In fact the firm continued in the same name and the statements of account had thereafter continued to be sent to the plaintiff in the name of the firm in the same way as it was done before. No demand was at that time made and consequently the character of the amount of deposit lying with the defendant-firm cannot be said to have been lost so as to say that it was in the nature of a loan as is attempted to be said by Mr. Mody before us. 7. Mr. Mody also tried to suggest in that connection that even a receipt of some amount from the deposit amount lying with the firm would amount to a demand and that way he tried to show that the plaintiff had off and on recovered some amounts long before and the cause of action for the remaining amount had started from that date when some amount was withdrawn and that way the suit was time-barred. As we said above, the nature of the amount lying with the defendant-firm does not lose its character. It does not become a loan by reason of the fact that the partnership was taken to have been dissolved in the circumstances of the case, nor could it be said that even a receipt of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied, or must have released or discharged the late partner, or have accepted some fresh obligation in lieu of that which existed when the firm was dissolved. We may point out that certain arguments advanced by Mr. Mody would be amply met thereby. His first argument was that the original partnership which ran in the name of Ramprasad Chhotalal was between four persons as would appear from the partnership deed Ex. 114 dated 7th December 1931. The amount was deposited with the firm even before that. Now this document makes no reference whatever about the plaintiff's dues. But it appears from the statement of accounts as per Ex. 85 that it has come to be acknowledged by this partnership firm from the previous one. That firm can be taken to have taken over the liability to the plaintiff for her dues from the previous firm. It was not discharged at any time. It can hardly be said that the liability came to an end with the same firm taking over some other partners or releasing some therefrom. How it came to be so changed we have no material on record. Now we find that the partnership again continued in the name of M/s. Ramprasad Chhotalal as per the other partnership deed Ex. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e partners of the firm, and the character of the dues so far as the plaintiff is concerned may also remain unchanged in respect of the firm having two partners and later, on the death of Chhotalal, Natwarlal having been taken over on behalf of the family. Thus, by reason of the fact that Natwarlal happened to be the manager of the family of defendants Nos. 4 to 10, they would be liable, though not personally, to the extent of their interest and share in the joint family property. 9. Turning back to the doctrine of pious obligation even if Natwarlal was a partner of the firm in his individual capacity and not in his capacity as a head of the family representing all the members of the family, they would be liable to the extent of their share or interest in the joint family property by reason of the doctrine of pious obligation to discharge the debts of their father who was the partner of the firm till his death and in respect of which no demand was made till 1955. His liability as a partner continued in absence of the same having been discharged or taken over with the consent of the plaintiff by the new partners. That has not been so shown. As we said above, defendants Nos. 1, 2 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in India that the manager cannot impose even upon them the risk and liability of a new business started by him, unless the business is started or carried on with their consent express or implied or though started by the manager only, joint funds were afterwards utilised for the business to the advantage of the joint family or its continuance was found beneficial to the family or it was adopted as a family business by the other members who continued to enjoy the benefits of the same. Before applying any such principles, it has to be established that the debt was contracted for the purpose of entering into a new business by any individual member in the firm so as to bind other members in the family. In the present case, as already pointed out hereabove, we have no material on record to exactly know how and for what purpose the amount was accepted by the firm. The only thing that we are able to gather from the material on record is the statement of accounts sent to the plaintiff every year from time to time by the firm acknowledging the firm's liability to pay the same. What happened to the first partnership and in what manner it came to be dissolved we do not know. All that cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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