# S. Khat/er S/tn'il v. \funnruwami Gounder and others

- **Citation:** [1955] 2 S.C.R. 477
- **Court:** Supreme Court of India
- **Decided:** 1954-11-15
- **Case number:** Civil Appeal No. 21 of 1955
- **Bench:** V1v1AN BnsE, Venkatarama Ayyar, B. P. Sinha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/s-khat-er-s-tn-il-v-funnruwami-gounder-and-others-1503
- **Pages:** 7

## Headnote

Election Dispute-Returned candidate alleged to be disqualified
for being chosen as a member-Hindu fathe1· entering into Government
contt·act, if does so en behalf of the undivided family-Presumption
ef Hindu Law-Finding of benami, if liable to be intei'fered with in
Special appeal-Representation of the People Act (XL!Il of 1951),
SS. 7(d), 9(2}.
There is no presumption in Hindu Law that a business standing in the name of a member of the Hindu joint family is joint
family business, even when that member is the manager or the father.
There is this difference between the position of the father starting new business and a mere manager doing so that while the
debts r.ontracted by the father in such business are binding on the
sons on the theory of a son's pious obligation
to pay his father's
debt, those contracted by the latter are not binding on the other
1955
S. Khat/er S/tn'il
v.
,
.\funnruwami
Gounder and others
V enkatarama
AY,var J.
1955
S1ptemb11 19
1955
ChaJtanatha
Karoyalar
"•
Ramachandra
Iyer and another.
478
SUPREME COURT REPORTS,
[1955}
mcn1bers of the family unless, at least, it can be shown that the
starting of the business was necessary.
Ram Nath v. Chiranii Lal, ([1934] l.L.R. 57 AIL 605), Chhotey
Lal Chaudhury v. Dalip Narain Sing/,., ([1938] l.L.R. 17 Patna 386),
Hayat Alia Shah v. Nern Chand (A.LR. [1945] Lah. 169), referred to.
But this distinctive position of the father docs not by itself
make the new business started by him a joint business of the andivided family.
The question of benaru; is a question of fact and \Vhcrc there is.
evidence to support a finding that a person is a
bcnamidar for
another, the Supreme Court in a Special appeal will not interfere
with it.
Consequently, in a case where an election was challenged on the
ground
that
the candidate returned
was intcrt:sted in a contqct
entered into by his father, bcnami in the name of another, with the
Government for felling trees and transporting timber, and as such
disqualified to stand ior election under s. 7(d) read with s. 9(2) of
the Representation of the
People Act and the Tribunal found on
evidence that the father was the real contracting party but without
consid_cring the
evidence
on the other point which, if believed,.
might sustain a finding
that the father
was acting on behalf
of the fa.mily, presumed as a matter of law that the son had -interest
in the contract and declared the election void.
Held, that the Tribunal took an erroneous view of the law and
made a wrong presumption, so its decision must be set aside, and· as
the findings are not sufficient for disposal of the matter the case
must be remitted back for rehearing on the evidence on record.
CML
APPELLATE
Jua1soicnoN: Civil Appeal
No.
136 of 1955.
Appeal by Special Leave from
the Judgment and
Order dated the 15th November 1954
of
the Election
Tribunal,
Quilon,
Travancore-Cochin,
in
Election
Petition No. 18 of 1954.
S. Mohan Kumara Mangalam, H. /. Umrigar and
Ra;inder Narain, for the appellant.
T. R. Balakrishnan,
for respondent No.
1.
1955.
September
19.
The
Judgment of the
Court was delivered by
VENKATARAMA
AYYAR
J.-This
is an
appeal by
special leave against
the order of
the Election Tribunal, Quilon declaring the
election
of the appellant
to the Legislative Assembly oi the State of. Travancore-
2S.C.R.
SUPREME COURT REPORTS
479
Cochin from the Shencottah Constituency void on the
ground
that he was diSA.ualified to stand for election
under section 7(d) read with section 9(2) of Act No.
XLIII of 1951. .
Under section 7(d), a person is disqualified for being chosen as a member of the Legislative
Assembly
of a State, if he is interested in any contract for the
supply of goods
or for the execution of any works for
the Government of that State.
Section 9(2) declares
that if any such contract has been entered into by or
on behalf of a Hindu undivided family, every member
thereof shall be subject to the disqualification mentioned in section 7(d);
but that
if
the contract has
been entered

## Text

2S.C.R.
SUPREME COURT RE.l'ORTS
477
91. The question whether a party to an election pet~
tion is entitled to a notice under the proviso in respect
of the very charges w!Hch were the subject-matter of
enquiry in the petition itself, has been considered by
this Court in Civil Appeal No. 21 of 1955, and it has
been held therein that if the party had opportunity
given to him in the hearing of the petition to meet the
very charge in respect of which a finding is to be re-
-corded under section 99( 1) (a), then he is not entitled
to a further notice in respect of
the same matter,
under
the proviso.
In the
present case,
the finding
under section
99(1)(a) relates
to the very payments
which were the subject-matter of enquiry in the election petition,
and therefore no notice was required to
be given to the appellant under
the pro·1iso. This
objection also fails, and the appeal must accordingly
be dismissed.
The respondent has stated through his counsel Shri
Naunit Lal that he does not propose to contest the
appeal.
There will accordingly be
no order as to
costs.
Appeal dismissed.
CHATTANATHA KARAYALAR
"·
RAMACf{A.NDRA
IYER
AND
ANOTHER.
{V1v1AN BnsE, VENKATARAMA AYYAR and B. P. SINHA JJ.]
Election Dispute-Returned candidate alleged to be disqualified
for being chosen as a member-Hindu fathe1· entering into Government
contt·act, if does so en behalf of the undivided family-Presumption
ef Hindu Law-Finding of benami, if liable to be intei'fered with in
Special appeal-Representation of the People Act (XL!Il of 1951),
SS. 7(d), 9(2}.
There is no presumption in Hindu Law that a business standing in the name of a member of the Hindu joint family is joint
family business, even when that member is the manager or the father.
There is this difference between the position of the father starting new business and a mere manager doing so that while the
debts r.ontracted by the father in such business are binding on the
sons on the theory of a son's pious obligation
to pay his father's
debt, those contracted by the latter are not binding on the other
1955
S. Khat/er S/tn'il
v.
,
.\funnruwami
Gounder and others
V enkatarama
AY,var J.
1955
S1ptemb11 19
1955
ChaJtanatha
Karoyalar
"•
Ramachandra
Iyer and another.
478
SUPREME COURT REPORTS,
[1955}
mcn1bers of the family unless, at least, it can be shown that the
starting of the business was necessary.
Ram Nath v. Chiranii Lal, ([1934] l.L.R. 57 AIL 605), Chhotey
Lal Chaudhury v. Dalip Narain Sing/,., ([1938] l.L.R. 17 Patna 386),
Hayat Alia Shah v. Nern Chand (A.LR. [1945] Lah. 169), referred to.
But this distinctive position of the father docs not by itself
make the new business started by him a joint business of the andivided family.
The question of benaru; is a question of fact and \Vhcrc there is.
evidence to support a finding that a person is a
bcnamidar for
another, the Supreme Court in a Special appeal will not interfere
with it.
Consequently, in a case where an election was challenged on the
ground
that
the candidate returned
was intcrt:sted in a contqct
entered into by his father, bcnami in the name of another, with the
Government for felling trees and transporting timber, and as such
disqualified to stand ior election under s. 7(d) read with s. 9(2) of
the Representation of the
People Act and the Tribunal found on
evidence that the father was the real contracting party but without
consid_cring the
evidence
on the other point which, if believed,.
might sustain a finding
that the father
was acting on behalf
of the fa.mily, presumed as a matter of law that the son had -interest
in the contract and declared the election void.
Held, that the Tribunal took an erroneous view of the law and
made a wrong presumption, so its decision must be set aside, and· as
the findings are not sufficient for disposal of the matter the case
must be remitted back for rehearing on the evidence on record.
CML
APPELLATE
Jua1soicnoN: Civil Appeal
No.
136 of 1955.
Appeal by Special Leave from
the Judgment and
Order dated the 15th November 1954
of
the Election
Tribunal,
Quilon,
Travancore-Cochin,
in
Election
Petition No. 18 of 1954.
S. Mohan Kumara Mangalam, H. /. Umrigar and
Ra;inder Narain, for the appellant.
T. R. Balakrishnan,
for respondent No.
1.
1955.
September
19.
The
Judgment of the
Court was delivered by
VENKATARAMA
AYYAR
J.-This
is an
appeal by
special leave against
the order of
the Election Tribunal, Quilon declaring the
election
of the appellant
to the Legislative Assembly oi the State of. Travancore-
2S.C.R.
SUPREME COURT REPORTS
479
Cochin from the Shencottah Constituency void on the
ground
that he was diSA.ualified to stand for election
under section 7(d) read with section 9(2) of Act No.
XLIII of 1951. .
Under section 7(d), a person is disqualified for being chosen as a member of the Legislative
Assembly
of a State, if he is interested in any contract for the
supply of goods
or for the execution of any works for
the Government of that State.
Section 9(2) declares
that if any such contract has been entered into by or
on behalf of a Hindu undivided family, every member
thereof shall be subject to the disqualification mentioned in section 7(d);
but that
if
the contract has
been entered into by a member of an undivided family
carrying on a separate business in the course of such
business, other members of the family h2ving no share
or interest in
that business shall not
be disqualified
under section 7 ( d).
The contract in the present case
was for felling
trees in a Government
forest and transporting them
for delivery at the places specified therein.
There is
now
no
dispute that this contract is one that falls
within section 7 ( d) of the Act.
The point in controversy is simply whether the contract with the Government was entered into on behalf
of the joint
family,
of
which the appellant is a member.
The
ap;reement stands in the name of one Kuppuswami
Karayalar, and the allegations
in the petition are that
he is
a mere
name-lender for
one - Krishnaswami
Karayalar, who is the manager of a joint family consisting of himself and his sons,
the appellant being
one of them, and that he entered into the contract in
question on behalf of and for the benefit of the joint
family.
The case of the appellant, on the other hand,
is that Kuppuswami whose name appears in the contract was
the person solely entitled
to
the benefits
thereof, that he was
not a name-lender 'for Krishnaswami Karayalar, and that further neither he nor the
joint family had any interest in the contract. Certain
other pleas were also put forward by him, but they
are not now material.
1955
Chaltanatlia
Earayalar
v.
RamJJ<handra
ljer and anothl'
V enkalarama
A»ar ].
1955
C/rJJU-tq
Eulf10/•
v.
R~ltatlra
l.Jtr ""'1 nPl/itr
Ymk•,.,•m•
..i_,_,., ].
480
SUPREME COURT REPORTS
[1955]
The following issues were framed on the above contentions:
"(2) Is the said
1omt
family the owner of the
right and benefits of the contract for the felling and
removal
of timber from Coupe No. 4, Nedumangad
Taluq, entered
into
with
the
Forest Department,
Travancore-Cochin
State?
Has the joint family any
interest in the said contract ?
(3) Is Mr. Kuppuswami Karayalar
whose
name
appears as the contractor
only a name-lender
for the
joint Hindu
family of
which
the respondent is a
member?"
'
On issue 3,
the Tribunal
found that
Krishnaswami
Karayalar
was
the real contracting party,
and that
Kuppuswami was
a benamidar for him, and on issue
2, that the contract was entered into on behalf of the
iomt
family, of which the
appellant was a member.
On these findings, it held that the appellant was disqualified under section 7(d) read with section 9(2),
and declared his election void.
The appellant questions the correctness of this order firstly on the ground
that the finding that Kuppuswarni is a benamidar for
Krishnaswami Karayalar
is
not
warranted
by the
evidence, and secondly on the ground that the finding
that Krishnaswami entered into the ·contract on behalf of the joint family is based on a mistake of law,
and is unsustainable.
On the first question, Mr . Kumaramangalam for the
appellant
ad~its that there .is evidence in support of
the conclusion
that Kuppuswami
was a benamidar
for Krishnaswami,
but contends
that it is meagre and
worthless.
The question
whether a person is a benamidar
or
not, is purely
one of fact, and a finding
thereon cannot be interfered with
in special appeal,
if there is evidence on which it could be based.
We
must, therefore, accept
the finding of the Tribunal
that it was Krishnaswami,
the father of the appellant,
who was
the real contracting party to the agreement
with the Government.
The next question is whether Krishnaswami entered
into the contract in h.is
own personal capacity or
as manager
of the joint family.
The Tnbunal found
2 S.C.R.
SUPREME COURT REPORTS
481
as a fact that the business started by
Krishnaswami
~arayalar was a new venture, and instead of _proceedmg next
to consider on
the
evidence whether in
·entering into the contract he acted for himself or for
the joint family, it entered into a discussion whether
under the Hindu law there was a presumption
that a
business started by a coparcener was joint
family
business.
After observing
that there
was no such
presumption "in the case of an ordinary manager", it
held that "the law is
different when the
manager
happens
to be also the father".
It
then referred to
-certain decisions in which it had been held that the
sons
were liable for the debts incurred by the father
for a new business started by him, and
held "on the
.ibove
authorities
that the joint family of ~he respondent is the owner
or the right and benefit of the preiCnt contract".
The appellant contends that tJie statement of law
by the Tribunal that
there is a presumption that a
new business started by
the father is
joint
family
business is erroneous, and
that its finding that the
joint family of which the appellant was a member had
an interest
in
the contract of Krishnaswami could
not be supported,
as
it was based
solely on. the view
which it took of the law.
This criticism is, in our
?Pinion,
well founded.
Under the Hindu law, there
1s
no presumption
that a business standing in
the
name of any member is a joint family one even when
that member is the manager
of the family,
and
it
makes no difference in this respect that the manager
is the father of the coparceners.
It is no doubt true
that with
reference
to a trade newly started there is
this difference between the position of a father and a
manager, that while the debts contracted therefor by
the former would be binding on the sons on the theory
of pious
obligation,
those incurred
by
a manager
would not be binding on the members, unless at least
there was necessity for the starting of the trade, as to
which see Ram Nath v. Chiranji Lal(t ), Chotey Lal v.
Dt1lip Narain(') and Ha}'at Ali v. Nem Chand( 8 ). But
(') [1934] I.L.R. 57 All. 605.
(1) [1938] I.L.R. 17 Patna 386.
(')A.LR. 1945 Lah. 169.
1955
Chauanalha
Karayalar
v.
Ramochantlra
Jy" and another
Venkafarama
.1'Jar J.
1955
Ckallll1Ullha
Karaya/M
y,
Ramaehandra
Jyar and another
Vmkatorama
~.,,., J.
482
SUPREME COURT REPORTS
[1955]
it is one thing to say that the sons are liable for the
debts contracted by the father in the trade newly
started by him, and quite another thing to treat the
trade itself as a joint family concern.
We arc therefore unable to accept the finding of the Tribunal that
the contract of Krishnaswami Karayalar should, as a
matter of law, be held to be a joint family business' of
himself and his sons.
This conclusion,
however, is not sufficient to dis-·
pose of the matter.
The case of the respondent that
Krishnaswami
entered
into
the contract with the
Government of Travancore-Cochin
on
behalf of
thejoint family rests not merely on a presumption of law
but on evidence as to facts and circumstances which,
if accepted,
would be sufficient to sustain a finding in.
his favour:
In the view it took of the law on the
question, the Tribunal did not discuss the evidence
bearing
on this point or record a finding thereon. It.
is therefore necessary that there should be a remittal
of the case for a consideration of this question on the
evidence.
The appellant contends that there is· only the evi-·
dence of the respondent in rnpport of the plea that
the contract was
entered
into by
Krishnaswami
on
behalf of the joint family, and
that this Court could
itself record a finding thereon.
But
it is
argued
by the respondent that there are in the judgment of
the Tribunal several observations which would
support the conclusion that the contract was entered into
on behalf of the joint family.
Thus, it is. pointed outthat in para 5 of the judgment the Tribunal observes
that Krishnaswami Karayalar started this new
bu,iness
with
a view
to discharge
the family debts.
It further
observes
in para 6 that
the business required an initial investment of about Rs. 25,000 to Rs.
30,000, and that while there is evidence that about Rs.
7,000 had been borrowed by Krishnaswami
Karayalar,.
there is no evidence how the balance
was made
up.
The contention of the respondent is that this must
have proceeded from the joint family funds, and that
this is implicit in the finding of the Tribunal.
It is
also mentioned in the judgment of the Tribunal that'
2 S.C.R.
SUPREME COURT REPORTS
483
K.rishnaswami was
anxious to support his
son,
the
present
appellant,
and
that
many of the witnesses
whom the respondent was obliged to examine;,
were
really
anxious to help the appellant. (Vide para 12).
We do not, however, desire to express any opinion on
these contentions, as we propose to leave them to the
decision of the Tribunal.
We accordingly set aside the order ~f the Tribunal,
and direct that the Election
Commission do reconstitute the Tribunal to hear and decide
the question
whether
Krishnaswami Karayalar entered
into
the
contract with
the Government of
Travancore-Cochin
on behalf of
the joint family · or for his own personal
benefit, on a consideration of the evidence on record.
It is made
clear
that
no further evidence will be
allowed. The parties will bear their own costs in this
Court.
Appeal allowed.
Case remitted for hearing.
M/S. RAM NARAIN SONS LTD.
"·
ASST. COMMISSIONER OF SALES TAX
AND OTHERS
(and other cases)
(S. R. DAS, ACTING c. J., BHAGWATI, JAGANNADHADAS, JAFER IMAM and CHANDRASEKHARA AIYAR JJ. l
Constitution of India-Article 286(2)-Pro11iso thereto-Whether the proviso is meant to lift the ban only under Article 286(2) an4
no other-And thus does not lift the ban under Article 286{1)(a)
read with the Explanation-Assessment consisting of a single undi11idetl
sum in respect of totality of property-Wrongful inclusion therein of
certain item of property expressly
exempted from
taxation-Legnl
effect thereof-Central Pro11inces and Berar Act 1947 (XXI of J.947)
-Explanation II to Section 2(g) as
originally enacted-before its
amendment by Madhya Pradesh' Act IV of 1951-Whether offended
Article 286(1)(a) read with the Explanation-Whether the Presidents
order issued under the proviso to Article 286(2) protected the same.
Held,
per S. R. DAs
ACTING CHIEF
JusTICE,
BHAGWa\TI,
JAFER IMAM and
CHANDRASEKHARA
AIYAR JJ.
(JAGANNADHADAS J.
1953
Chattanlllho.
Karo,>alar
, ..
R(JtnJJ(;handra
l)'ar and another
Venkatarama
/glr].
1955
~20