# VRIDDHACHALAM PILLAI v. CHALDEAN SYRIAN BANK LTD., ANOTHER - **Citation:** [1964] 5 S.C.R. 647 - **Court:** Supreme Court of India - **Decided:** 1964 - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vriddhachalam-pillai-v-chaldean-syrian-bank-ltd-another-3042 - **Pages:** 36 ## Headnote ' ,, ., - 5 S.C.R. SUPREME COURT REPORTS VRIDDHACHALAM PILLAI v. CHALDEAN SYRIAN BANK LTD., ANOTHER 647 AND (P.B. GAJENDRAGADKAR, K. SUBBA RAO, K.N. WANCHOO AND N. RAJAGOPALA AYYANGAR, JJ.) Hindu Law-Partition-If bonafide-Onus of proof-Father's debt-Liability of joint family property for antecedent debt-Personal law and lex situs-Which applicable ? Kalayanasundaram and the ll.lembers of his family were permanent residents of Palghat in the then State of Madras. He and his son, the appellant, formed members of an undivided Hindu family. The family had properties not only in Palghat but also in Cochin. In 1945, Kalayanasundaram entered into many contracts with the Government of India for the supply of black pepper. As he had no ready money to implement those contracts, he approached the Respondent Bank for funds to finance those contracts. For that purpose, he executed three promissory notes in favour of the bank for a total sum of Rs. 1,10,000. He also deposited title deeds of his properties with the Bank as security. As Kalayanasundaram did not pay the borrowed amount, the Bank filed a suit against him on June 17, 1948. But even before that date, a deed of partition was executed on June 3, 1948 between Kalayanasundaram and the appellant, his son, by which the properties of the family in the Cochin State were divided into two equal parts, the father taking over himself the liability to pay the amount due to the Bank. It was stated in the deed of partition that the debt due to the Bank was a personal debt of the father and hence was not binding on the son. To the mortgage suit filed by the Bank, several defences were raised. However, the trial court decreed the suit against the father and there was no appeal against that. Against the decision of the trial Judge that the Bank had no right to obtain a mortgage decree against the appellant and his half share in the family property, an appeal was filed by the Bank which was accepted by the High Court which modified the decree by passing a mortgage decree agninst the appellant qua his share as well. The appellant came to this court in appeal after obtaining a certificate of fitness. The contentions raised by the appellant in this Court were that the finding of the High Court that the partition of the family properties effected between the appellant and his father was not bonafide was not justified on the admitted facts and was based on 1963 December 3 \ 648 SUPREME COURT REPORTS [1964] 1963 erroneous reasoning, that the High Court erred in holding that the Hindu Law as understood and applied by the Courts in the preVriddhachalam vious Cochin State could determine the liability of the appellant Pillai who was a resident of Palghat and that the High Court erred in holding that the mortgage evidenced by Ex. 'E' was to any extent v. S . for the discharge of antecedent debts. Dismissing the appeals, Chaldean ynan Bank Ltd. and Held: (i) The finding of the High Court that the partition of another family properties effected between the appellant and his father was not bona fide, was correct. The partition deed did not set apart sufficient property for the share of the father to enable him to discharge all his" debts. Moreover, onus should have been placed on the appellant to establish that the nature of the arrangement under the partition was such as made proper and .adequate provision for the discharge of the debt, but actually the onus was wrongly placed on the Bank. . (ii) The view of the High Court that when the transactions took place, British India and Cochin State were independent sovereign states and according to Private International Law, it was the law of the situs of the property that should govern the contracts relating to it, was not correct. The rule was not any statutory law which was binding on parties who had dealings in regard to land in that State. Taking the Cochin State itself, the power of a person to dispose of property or to encumber it depends upon whether he is a H ## Text _Characters 0–39,977 of 78,728. This is a partial read: ask again with offset=39977 for what follows._ ' ,, ., - 5 S.C.R. SUPREME COURT REPORTS VRIDDHACHALAM PILLAI v. CHALDEAN SYRIAN BANK LTD., ANOTHER 647 AND (P.B. GAJENDRAGADKAR, K. SUBBA RAO, K.N. WANCHOO AND N. RAJAGOPALA AYYANGAR, JJ.) Hindu Law-Partition-If bonafide-Onus of proof-Father's debt-Liability of joint family property for antecedent debt-Personal law and lex situs-Which applicable ? Kalayanasundaram and the ll.lembers of his family were permanent residents of Palghat in the then State of Madras. He and his son, the appellant, formed members of an undivided Hindu family. The family had properties not only in Palghat but also in Cochin. In 1945, Kalayanasundaram entered into many contracts with the Government of India for the supply of black pepper. As he had no ready money to implement those contracts, he approached the Respondent Bank for funds to finance those contracts. For that purpose, he executed three promissory notes in favour of the bank for a total sum of Rs. 1,10,000. He also deposited title deeds of his properties with the Bank as security. As Kalayanasundaram did not pay the borrowed amount, the Bank filed a suit against him on June 17, 1948. But even before that date, a deed of partition was executed on June 3, 1948 between Kalayanasundaram and the appellant, his son, by which the properties of the family in the Cochin State were divided into two equal parts, the father taking over himself the liability to pay the amount due to the Bank. It was stated in the deed of partition that the debt due to the Bank was a personal debt of the father and hence was not binding on the son. To the mortgage suit filed by the Bank, several defences were raised. However, the trial court decreed the suit against the father and there was no appeal against that. Against the decision of the trial Judge that the Bank had no right to obtain a mortgage decree against the appellant and his half share in the family property, an appeal was filed by the Bank which was accepted by the High Court which modified the decree by passing a mortgage decree agninst the appellant qua his share as well. The appellant came to this court in appeal after obtaining a certificate of fitness. The contentions raised by the appellant in this Court were that the finding of the High Court that the partition of the family properties effected between the appellant and his father was not bonafide was not justified on the admitted facts and was based on 1963 December 3 \ 648 SUPREME COURT REPORTS [1964] 1963 erroneous reasoning, that the High Court erred in holding that the Hindu Law as understood and applied by the Courts in the preVriddhachalam vious Cochin State could determine the liability of the appellant Pillai who was a resident of Palghat and that the High Court erred in holding that the mortgage evidenced by Ex. 'E' was to any extent v. S . for the discharge of antecedent debts. Dismissing the appeals, Chaldean ynan Bank Ltd. and Held: (i) The finding of the High Court that the partition of another family properties effected between the appellant and his father was not bona fide, was correct. The partition deed did not set apart sufficient property for the share of the father to enable him to discharge all his" debts. Moreover, onus should have been placed on the appellant to establish that the nature of the arrangement under the partition was such as made proper and .adequate provision for the discharge of the debt, but actually the onus was wrongly placed on the Bank. . (ii) The view of the High Court that when the transactions took place, British India and Cochin State were independent sovereign states and according to Private International Law, it was the law of the situs of the property that should govern the contracts relating to it, was not correct. The rule was not any statutory law which was binding on parties who had dealings in regard to land in that State. Taking the Cochin State itself, the power of a person to dispose of property or to encumber it depends upon whether he is a Hindu, Muslim or Christian and in each case the right of the owner to dispose of the property depends upon his personal law as modified by any statute applicable to that community to which he belongs. There is no situs which can be applied irrespective of the personal law governing the owner. In the present case, Kalayanasundaram and his family were permanent residents of Palghat. The law applicable was the law laid down by the Privy Council and accepted by the Full Bench decisions of the Madras High Court and finally laid down by the Supreme Court. When the Bank dealt with Kalayanasundaram, it must be taken to have contracted with him on the basis of such a law being applicable to the transaction. (iii) There was a real and factual antecedency between the loan of Rs. 80,000 for which the draft was given on November 16, 1945, and the previously existing indebtedness of Rs. 1,09,000, and odd in the over drafts account No. 1 and 2 of Kalayanasundaram to the Bank which was discharged thereby. A father can by incurring a debt, even though the same be not for any purpose necessary or beneficial to the family, so long as it is not for illegal or immoral purposes, lay the entire joint family property including the interests of his sons open to betaken in execution proceedings upon a decree for the payment of debt. The father can, so long as the family continues undivided, alienate the entirety of the family property for the discharge of bis antece1 . ( - ' ·. .. 5 S.C.R. SUPREME COURT REPORTS 649 dent personal debts subject to their not being illegal or immoral. 1963 In other words, the power of the father to alienate for satisfying his debts is co-extensive with the right of the creditors to obtain Vriddhachalam satisfaction out of family property including the share of the sons Pillai in such property. Where a father purports to burden the estate v by a mortgage for purposes not necessary and beneficial to the · . family, the mortgage qua mortgage would not be binding on the Chaldean Synan sons unless the same was for the discharge of an antecedent debt. Bank Ltd. and Where there is no antecedency, a mortgage by the father would another stand in the same position as an out and out sale by the father of family property for a purpose not binding on the family under which he receives the sale price which is utilised for his personal needs. After the joint status of the family is disrupted by a partition, the father has no right to deal with the family property by sale or mortgage even to discharge an antecedent debt, nor is the son under any legal or moral obligation to discharge the post-partition debt of the father. Antecedent debt in this context means a debt antecedent in fact as well as in time. The debt must be truly independent and not part of the mortgage which is impeached. The prior debt must be independent of the debt for which the mortgage is created and the two transactions must be dissociated in fact so that they cannot be regarded as part of the same transaction. Brij Narain v. Mangal Prasad, 51 I.A. 129, Panna Lal v. Mst. Naraini, [1952] S.C.R. 544, Chidambara Mudaliar v. Rootha Peruma/, I.L.R. 27 Mad. 326 and Vankataramayya v. Vankataramana, 29 Mad. 200, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No· 547 of1961. Appeal from the judgment and decree dated October 16, 1956 of the Kerala High Court in Appeal Suit No. 135 of 1953 . T.N. Subramania Iyer, M.S. Narasimhan and M.S. Sastri, for the appellant. A. V. Viswanatha Sastri, T.S. Venkateswara Iyer, K. Jayaram and R. Ganapathy Iyer, for respondent No. I. December 3, 1963. The Judgment of the ·court was delivered by AYYANGAR J.-This appeal is directed against Ayyangar J. :.· the judgment of the High Court of Kerala and has been filed on the strength of a certificate of fitness 650 SUPREME COURT REPORTS (1964) 1963 granted by the High Court under Art. !33(1)(a) of the Constitution. Vriddhachalam Pillai The appeal arises out of a suit filed by the responv. dent-The Chaldean Syrian Bank Ltd.-which for Chaldean Syrian shortness we shall refer to as the Bank for the re- , Bank Ltd. and covery of certain sums due on a mortgage by deposit another of title deeds executed by Kalayanasundaram Pillai-- the appellant's father who was imp leaded as the 1st Ayyangar J. defendant and is now the 2nd respondent before us. The mortgage on which the Bank laid this suit was evidenced by Ex. 'E'-a memorandum recording the deposit of title deeds of certain properties in the former princely State of Cochin. The debt for which the said deposit was made was the principal and interest due on two promissory notes for Rs. 50,000 and Rs. 30,000 respectively which were marked as Exs. A & B in the case. It was not in dispute that the property ,which was the subject of mortgage belonged to the joint family composed of the I st defendan·t and his son-the appellant. The appellant was a minor on the date of the suit-transaction and even at the date of the suit. To the suit that it filed the Bank impleaded not merely Kalyanasundaram and his minor son, but the latter's sisters and mother and even the lessees of the mortgaged property. These were defendants 3 to 11. They, however, have dropped out of the proceedings at earlier stages and the only parties to the appeal whose rights we are called on to adjudicate are the Bank and the appellant. The Bank's suit was decreed by the trial court against the father-1st defendant and there was no appeal against it and that decree is no longer in challenge. The trial Judge however held that the Bank had no right to obtain a mortgage decree against the appellant and his half share in the family property, but on appeal by the Bank, the learned Judges allowed the appeal. and modified the decree by passing a mortgage decree against the appellant qua his share as well. It is the correctness of this variation that is questioned in this appeal. .. .-. .... • - 5 S.C.R. SUPREME COURT REPORTS 651 The execution of the promissory notes and the 1963 receipt of consideration therefore as recited therein were admitted by the 1st defendant, as also the creation Vriddhachalani of the security by the deposit of the title deeds of proPillai perties and whatever contentions were raised in respect v. of these matters on behalf of the appellant have now Chaldean Syrian been abandoned. Some point was made on behalf Bank Ltd. and of the appellant regarding the suit debt being avyavaharanother ika, but this also has been found against and given up. The only question that survives is whether the Ayyangar 1· mortgage evidenced by Ex. 'E' is binding on the appellant. Here again it is now common ground, that the debt was a personal borrowing by the father, not for any purpose binding on the joint family. A few more facts have to be stated in order that the precise range of the controversy in this appeal might be properly understood. That Kalyanasundaram and the members of his family were permanent residents of Palghat in the then State of Madras, that he with the appellant formed members of an undivided Hindu family and that the properties which were the subject of the motgage were joint family properties, none of these were in dispute. The family possessed properties not merely in Cochin but also in Palghat. We shall now proceed to detail the circumstances in which the borrowings which has given rise to this litigation were made. In or about May 1945 Kalyanasunclaram entered into a contract with the Government of India for the supply of 100 tons of black pepper ~nd also into further contracts of th~ same type later m the year. He had apparently no ready cash to implement .these contracts and approached the Bank for funds for financing the undertaking. For this purpose he 1~xecuted three promissory notes in favour of the Bank for a total of Rs. 1,10,000. The promissory notes marked Exhibits A and B for Rs. 50,000 and Rs. 30,000 respectively already referred to, were executed on November 14, 1945 and the debt evidenced by them was secured by a mortgage by deposit of 652 SUPREME COURT REPORTS [1964] 1963 title-deeds of properties in the Cochin State and this . -- is the subject-matter of the proceedings giving ri~e Vrzddh.achalam to this appeal. A few months later, on February Pillai 20, 1946 he executed another promissory note which v. . is marked as Ex. 'C' for Rs. 30,000. That also was Chaldean Synan accompanied by a further deposit of title deedsBank Ltd. and which is recorded in Ex. 'F' , but that was in part in another relation to the family properties in Palghat in the State of Madras. As the amount due under these Ayyangar J. notes was not repaid at the time promised, the Bank filed the suit out of which the present appeal arises, in the Court of the Subordinate Judge, Chittur, which is in the Cochin State, for a mortgage decree in its favour for the amount of all the three promissory notes with the interest due thereon, though a mortgage decree was sought only against the properties in Cochin ·which were set out in the Schedule to the plaint. This suit was filed on June 17, 1948 but before the filing of the suit certain events happened to which it would be convenient to refer at this stage, because they figure largely in the defences that were raised in the suit on behalf of the appellant who was represented by his mother as guardian ad !item. On March 23, 1948 a petition for permission to file a suit in Jonna pauperis was filed in the court of the Subordinate Judge at Palghat on behalf of the appellant by his uncle as his next friend. To that suit were implea- ·ded as defendants Kalyanasundaram, the father, as well as the mother and as many as 31 other creditors of Kalyanasundaram including the respondent Bank. The relief sought in the suit was the effecting of a Partition of the family properties situated in Palghat and for the delivery of the half-share therein to the minor plaintiff. With this was coupled a prayer for the setting aside of certain decrees which had been obtained by certain of the creditors who were impleaded as defendants, on the ground either that the promissory notes or other documents on which the decrees had been passed were not supported by consideration, or that these debts were tainted with illegality or immorality, the allegation being that t • - 5 S.C.R. SUPREME COURT REPORTS 653 the father was leading a reckless and immoral life 1963 and was addicted to women. So far as the debt due to the Bank was concerned, the allegation was, though Vriddhachalam not expressed very clearly, that it was a borrowing Pillai for a personal business newly started by the father v. . and would not, therefore, bind the minor's share Chaldean Synan in the family properties. As already stated, the Bank Ltd. and relief for partition in that suit was confined to the another properties at Palghat in Madras. While this application for leave to sue in forma pauperis was pending, · Ayyangar 1· a notice was issued on May 27, 1948 through a lawyer purporting to act on behalf of the appellant, addressed to his father, in which the partition of the properties of the family situated in the Cochin State was demanded. This notice was followed, by a deed of partition dated June 3, 1948 by which the properties of the family in the Cochin State were purported to be divided into two equal parts, the father being directed to pay the debts borrowed by him out of the share allotted to him, the deed reciting an agreement with the father that the minor should be free from any obligation to discharge those debts. The debt due to the Bank which is the subject of the present proceedings, was among those the discharge of which the father undertook under this deed marked as Ex. VI. The deed recited that this debt was a personal debt of the father and was therefore not binding on the son and this was assigned as the reason for the provision made for its discharge by the father without any obligation being laid upon the son in that behalf. One of the questions arising in the appeal is as regards the effect of this partition on the rights of the Bank to realise the moneys due to it from the share allotted to the son in the Cochin properties which were mortgaged under Ex. 'E.' Reverting to the proceedings giving rise to this appeal, to the mortgage suit filed by the Bank several defences were raised on behalf of the appellant. Tt is not necessary to set out all of them but it would be sufficient if those which have a bearing on the points urged before us are mentioned. Before dealing with 654 SUPREME COURT REPORTS · [1964] 1963 the controversial issues we may state that there were a few to which it is sufhcient to make a passing referVriddhachalam ence. There was a formal denial of the truth and Pillai validity of the promissory notes and the passing of v. consideration thereunder and also about the suffiCha!dean Syrian ciency or admissibility of the memorandum Ex. 'E' Bank Ltd. and to create a mortgage by deposit of title deeds. These another do not appear to have been seriously pressed and have been found in favour of the plaintiff-bank. Ayyangar J. There was also an issue that the suit-debt was tainted with illegality and immorality, but on the facts it was such an untenable plea that it was easily found against. Issue no. 2 ran: "Whether the trade mentioned in the plaint was a new trade started by the 1st defendant or an ancestral trade and are not the debts contracted by the father-the 1st defendant-for purposes of the trade binding on defendant no. 2 even if the said trade be not ancestral?" This issue, at least the first part of it has been found in favour of the appellant that the trade viz., the supply of black pepper to the Government was a new trade started by the 1st defendant and was not an ancestral trade and that finding has not been disturbed by the High Court and being a concurrent finding on a question of fact was not naturally challenged before us. Closely related to this is issue no. 14 which ran: "Are the debts sued on incurred for family necessity and binding upon the 2nd defendant?" The learned trial Judge recorded a finding that the debts sued on were not incurred for family necessity nor for the benefit of the family. These findings also which were not varied by the . High Court were not questioned before us. Incidentally it should be mentioned that the learned trial Judge found, when dealing with issue no. 9 which was a general issue relating I ,; 1· 5 S.C.R. SUPREME COURT REPORTS 655 to the binding character of the debt on the appellant, 1963 that the mortgage was not for securing an antecedent debt, but this finding was reversed by the High Vriddhachalam Court, the learned Judges holding that to the extent of Pillai Rs. 59,000 the mortgage loan went in discharge of v. antecedent debts and we shall have occasion to deal Chaldean Syrian with this matter in detail later in this judgment. Baiik Ltd. and The 13th issue ran: "Is the partition set up by the defendants true and bona fide and binding upon the family?" This was answered in the affirmative and in favour of the appellant by the learned trial Judge but that finding has been reversed and the partition has been found not to be bona fide by the High Court and that is one of the points in controversy in. the appeal before us. Issue no. 10 was in these terms: "Are the Defendants Cochin domiciles? Are they not governed by the law of the Indian Union being permanent residents of the Indian Union?" An issue in this form arose because of the different views entertained of the Hindu law as regards the scope of the pious obligation of a son to discharge the debts of the father which are not illegal or immoral. Jn the view of Hindu lawyers the repayment of a debt was conceived of not merely as a legal obligation which had been undertaken when the debt was incurred but non-repayment was considered a sin. The duty of relieving the debtor from this sin was fastened on his male descendents to the third degree. The duty being thus religious, it was held not attracted if in its nature it was illegal, or immoral i.e., avyavaharika. Whatever might have been the extent of the son's liability according to the Hindu law givers, under the Mitakshara law as administered in all the States, the liability of the son, grandson, great grand son etc., was not treated as a personal liability but as dependent on his becoming entitled to anather Ayyangar J. 656 SUPREME C'OURT REPORTS [1964] 1963 family assets and that it extended to the entirety of -- his interest therein, but no more. . Vriddhachalam . . . Pillai The authorities to which it 1s wholly unnecessary v to refer, have firmly established the following and the Chaldea~ Syrian position is not in doubt: Bank Ltd. and (I) A father can by incurring a debt, even though another the same be not for any purpose necessary or beneficial to the family so long as it is not for illegal or immoral Ayyangar J. purposes, lay the entire joint family property inducting the interests of his sons open to be taken in execution proceedings upon a decree for the payment of that debt. (2) The father can, so long as the family continues undivided alienate the entirety of the family property for the discharge of his antecedent personal debts subject to their not being illegal or immoral. In other words, the power of the father to alienate for satisfying his debts, is co-extensive with the right of the creditors to obtain satisfaction out of family property including the share of the sons in such property. (3) Where a father purports to burden the estate by a mortgage for purposes not necessary and beneficial to the family, the mortgage qua mortgage would not be binding on the sons unless the same was for the discharge of an antecedent debt. Where there is no antecedency, a mortgage by the father would stand in the same position as an out and out sale by the father of family property for a purpose ' not binding on the family under which he receives the sale price which is utilised for his personal needs. It need hardly be added that after the joint status of the family is disrupted by a partition, the father has no right to deal with the family property by sale or mortgage even to discharge an antecedent debt, nor is the son under any legal or moral obligation to discharge the post-partition debts of the father. · (4) Antecedent debt in this context means a debt antecedent in fact as well as in time, i.e., the • • 5 S.C.R. SUPREME COURT REPORTS 657 1963 debt must be truly independent and not part of the mortgage which is impeached. In other words, the prior debt must be independent of the debt for which Vridhachalam the mortgage is created and the two transactions Pillai must be dissociated in fact so that they cannot be v. regarded as part of the same transaction. Chaldean Syrian The latest of the rulings of the Privy Council in which the law as stated above was expounded is reported as Brij Narain v. Mang/a Prasad(!). and this Court in Panna Lal v. Mst. Naraini