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TMI Blog1978 (9) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... the reference under s. 30 of the Land Acquisition Act was answered in favour of the plaintiffs-respondents and the defendant preferred First Appeal No. 173 of 1966 to the High Court. Both the appeals were heard together and by its judgment dated 10/11 October, 1974 a Division Bench of the High Court dismissed both the appeals with costs. Thereupon the appellant preferred the present two appeals. As both the appeals arise from a common judgment, they were heard together and are being disposed of by this common judgment. Facts necessary for appreciating the point of law canvassed in these appeals lie within a narrow compass. One Dattatraya Govind Kulkarni, husband of plaintiff No. 1 and father of plaintiffs 2 to 6 had borrowed a Tagai loan of ₹ 12,000/- by making an application Exhibit 129 accompanied by prescribed form, Ext. 128 on 7th February, 1949. The loan was borrowed for constructing wells in Survey Nos. 167 and 170 and he offered as security the lands bearing Survey Nos. 165, 166, 167, 170 and 172. In the application Ext. 129 that accompanied the prescribed form it was stated that wells have to be sunk to bring barren land under cultivation. In other words, the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court held that this doctrine of pious obligation cannot be extended to the debts contracted under the Loans Act as the Act applies to all citizens of India irrespective of their religion. With these findings the appeals were dismissed. Mr. U. R. Lalit, learned counsel for the appellant urged that Tagai loan was borrowed by Dattatraya, the father for improvement of lands bearing Survey Nos. 167 and 170 which were joint family property and the debt represented by Tagai loan would be joint family debt incurred by the manager for the benefit of the joint family or for the benefit of the estate of the joint family and, therefore, the joint family property, irrespective of the fact whether it was offered as security for the loan or whether it benefited by the loan, would be liable for the repayment of the loan notwithstanding the fact that a partition has taken place before the suit land, which again is a joint family property, was brought to revenue auction. It was also urged that the partition is not genuine and that it is a sham and bogus one and in fact there was no partition in the eye of law. It was further urged that the pious obligations of the sons of a Hindu father to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal benefit, the sons are liable to pay the debts provided they were not incurred for illegal or immoral purposes. This liability arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara Law to discharge the father's debts, where the debts are not tainted with immorality. This liability of the sons to pay the father's debts exists whether the father be alive or dead, (para 290, Mulla's Hindu Law, 14th Edn., p. 354). A further requirement is that for an effective partition of a Mitakshara joint Hindu family a provision for the joint family debts should be made. In order to determine what property is available for partition, provision must first be made for joint family debts which are payable out of the joint family property, personal debts of the father not tainted with immorality, maintenance of dependent female members and of disqualified heirs, and for the marriage expenses of unmarried daughter. This must be so because partition is of joint family property and if joint family debts are repaid before the partition only the residue would be available for partition. Therefore, if partition is effected before paying the debts, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces and in this case they are eloquent, in that he mortgaged or gave as collateral security joint family property, to wit land, and it extends to whole of the interest of the family and is not confined to Karta's share, and therefore, he must be deemed to have acted in the transaction on behalf of the family (see Mulla's Hindu Law, 14th Edn., page 313, Art. 251). It was, however, stated that agriculture was not the avocation of the joint family and, therefore, the father as the Karta did not have the implied authority to borrow loan so to be binding on the joint family property. One has merely to look at the content of the application for loan, Ext. 129 made by Dattatraya to the Mamlatdar, Taluka Vichitragad, for advancing loan to him, to dispel the contention. The application recites that applicant Dattatraya, the father had undertaken extensive work to bring barren land under cultivation to raise sufficient crops as well as to improve the quality of Land and for improving the quality of agriculture he had undertaken, loans should be advanced to him. Mr. Bal, however, pointed out that Dattatraya was carrying on some business which would be evident from Ext. 23, a copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question, however, is: does the subsequent partition make any difference in respect of the liability of the joint family property for the joint family debts ? That would necessitate examination of the circumstances in which the partition was brought about though we are not inclined to examine the question whether the partition was a sham or bogus transaction or was a motivated one with a view to defeating the creditors of the joint family. The partition is evidenced by a registered deed, Ext. 79 dated 6th July 1956. Partition is between father and his minor sons. There is no dispute that on that date the debt of Tagai loan was outstanding as well as there were certain other debts. In the partition deed Ext. 79 there is no express or implied provision for the repayment of joint family debts or even outstanding debts of Dattatraya, the father. There was some suggestion that the property which was allotted to Dattatraya was sufficient for discharging the debts outstanding on the date of partition. That at least is not borne out by the partition deed nor has Dattatraya gone into the witness box to say that such was the position. Therefore, taking into consideration the recitals in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge an antecedent debt nor is the son under a legal obligation to discharge the post-partition debts of the father. Assuming we are not right in holding that the debt, was for the benefit of the estate of the joint family and, therefore, a joint family debt, and assuming that Mr. Bal is right in contending that it was the personal debt of the father, yet the doctrine of pious obligation of the son to pay the father's debt would still permit the creditor to bring the whole joint family property to auction for recovery of such debts. Where the sons are joint with their father and debts have been contracted by the father for his personal benefit, the sons are liable to pay the debts provided they were not incurred for an illegal or immoral purpose. This liability to pay the debt has been described as pious obligation of the son to pay the father's debt not tainted with illegality or immorality. It was once believed that the liability of the son 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 sons under the Mitakshara law to discharge the father's debts, where the debts are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as parties to the suit because only in such an event the sons could set up the defence of the debt being tainted with illegality or immorality. Where a revenue sale takes place, it was said, the sons would have no opportunity to contest the character of the debt, and, therefore, any sale in such circumstances, of the property that has fallen to the shares of the sons at a partition, subsequent to the partition would be void as against the sons. In support of the submission reliance was placed on an observation in Pannallal's case (supra) that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allotted to the sons and that a separate and independent suit must be filed against the sons before their shares can be reached. After observing that a son is liable even after partition for the pre-partition debts of his father which are not immoral or illegal, this Court proceeded to examine the question as to how this liability is to be enforced by the creditor, either during the life time of the father or after his death. After taking note of a large number of decisions in which it was held that a decree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The consequence is that as between the sons' right to take a vested interest jointly with their father in their ancestral estate and the remedy of the father's creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting up their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable for the debts of the father. Therefore where the joint ancestral property including the share of the sons has passed out of the family in execution of the decree on the father's debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons' attack, because even after the partition their share remains liable . The High Court while examining the ratio in Jakati's (supra) case observed that even though Ganpatrao Vishwanathappa Barjibhe v. Bhimrao Sahibrao Patil(1), was referred to therein it was not specifically overruled and, therefore, the trial Court was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent mode of enjoyment of property without affecting its liability for discharge of pre- partition debts. In the present case the sons have filed the suit and in this suit issue No. 6 framed by the learned trial judge was whether the Tagai loan of ₹ 12,000/- was incurred by Dattatraya as manager of the family, for legal necessity and the family has benefited by it, and this issue was answered in the affirmative, meaning the debt is not shown to be tainted with illegality or immorality. No submission was made to us by Mr. Bal on behalf of the respondents that the debt was tainted with illegality or immorality. In such a situation unless in this suit the sons challenged the character of the debt and established to the satisfaction of the Court that the debt was tainted with illegality or immorality, they cannot obtain any relief against the purchaser who purchased the property at an auction held by the Civil Court or by the revenue authorities for recovering the debt of the father which the sons were under a pious obligation to pay. Therefore, even if the plaintiffs were not parties to the proceedings held by revenue authorities for sale of the land involved in this dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he whole of the property was put up for sale and was sold and purchased. It was concluded that where the right, title and interest of the judgment debtor are set up for sale as to what passed to the auction purchaser is a question of fact in each case dependent upon what was the estate put up for sale, what the Court intended to sell and what the purchaser intended to buy and did buy and what he paid for. There is not the slightest doubt that the whole of the property was sold in the instant case and that was intended to be sold and the purchaser purchased the whole of the property and the certificate was issued in respect of sale of the property and, therefore, it is futile to say that only the right, title and interest of Dattatraya was sold and that as he had no interest in the property sold on the date of auction sale, nothing passed to the purchaser. Assuming, for a moment that if the sale takes place after the partition, to such a proceeding the sons should be a party before the liability arising out of the doctrine of pious obligation to pay the father's debt is enforced against the joint family property in the hands of the sons, evidence reveals that the sons were fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiffs thereafter filed their first suit being Special Suit No. 14/58, certified copy of the plaint of which is Ext. 37, which would show that it was filed on 6th April, 1957. In this plaint they sought a declaration that the sale held on 26th May, 1955 and 6th April, 1957 be declared illegal. It was alleged in the plaint that Dattatraya was a drunkard and was in bad company and had borrowed the Tagai loan for his own vices and in collaboration with the concerned officers of the revenue department and the loan could never be said to be a Tagai loan. Amongst others, the State of Bombay was impleaded as party defendant. Subsequently this suit was withdrawn and the present suit was filed deleting State of Bombay as party. From this narration of facts it clearly emerges that the plaintiffs had the knowledge of the proclamation of sale and yet no attempt was made by them either to appear before the Collector who had issued the proclamation or as was now sought to be urged, offered to repay the loan. If after this specific knowledge that proceeding for recovery of Tagai loan had commenced and during its pendency the partition was brought about and yet on the subsequent sale the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the borrower, and of mortgages of, or persons having charges on, that interest, and where the loan is granted under section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest. (2) When any sum due on account of any such loan, interest or costs is paid to the Collector by a surety or an owner of property comprised in any collateral security, or is recovered under sub-section (1) by the Collector from a surety or out of any such property, the Collector shall, on the application of the surety or the owner of that property (as the case may be), recover that sum on his behalf from the borrower, or out of the land for the benefit of which the loan has been granted, in manner provided by sub-section (1). (3) It shall be in the discretion of a Collector acting under this section to determine the order in which he will resort to the various modes of recovery permitted by it. The loan can be recovered from the borrower as if it were an arrear of land revenue due by him or from his surety by the same procedure or out of the land for the benefit of which the loan has been granted by following the same pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two seemingly contrary but really complimentary principles, one the principle of independent coparcenary rights in the sons which is an incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their father's debts not tainted with immorality or illegality, which lays open the whole estate to be seized for the payment of such debts (see Jakati's case) (Supra). Now, if the sons of a Hindu father take interest in the ancestral property in the hands of the father by the incident of birth, they also incur the corresponding obligation of discharging the debts incurred by the father either for his own benefit or for the benefit of the joint family from the property in which the sons take interest by birth. Such a concept being absent in communities not governed by Hindu law in this behalf, the father would be free to encumber the property and the sons in such communities would neither get interest by birth nor the liability to pay the father's debt and would not be able to challenge the sale or property for discharge of the debt incurred by the father. Therefore, the expression 'borrower' in s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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