Decided on January 25,1955



- (1.) The plaintiff who failed in his attempt in the court below to set aside the decree in O.S. 1554 of 1104 obtained by the second defendant against the first on foot of a deed of hypothecation for securing future subscriptions to a chitty executed by the latter to the former appeals to this Court and his complaint is that there was no consideration or necessity so far as the tarwad is concerned for the bond sought to be enforced. The first defendant is the karnavan of a Warrier tarwad competent as such to represent it in transactions in and outside court. The plaintiff is the first defendants son in a marriage in the kudiveppu form which under the custom applicable to the parties renders children members of their fathers tarwad. The court below appears to have approached the question from a wrong standpoint. In fact issue 4 asked with reference to the chitty hypothecation bond Is it supported by consideration and family necessity. But questions as regards consideration and necessity which arise in connection with obligations incurred by karnavans under a bond, promissory note or otherwise when the creditor seeks to make the tarwad liable are foreign to chitty transactions. A chitty foreman is bound to pay the prize money to the subscriber on security being furnished for future subscriptions. He is not competent to enquire whether the prize money to be received is necessary for the family whose karnavan is the subscriber. In fact, the foreman in respect of the prize money is a debtor of the subscriber. (See 28 Cochin 652 and 1943 TLR 902 at 908). The view that the relationship that existed between a kuri foreman and a subscriber prize winner is of the above description has not been canvassed before us. What learned counsel for the appellant endeavoured to make out was that the prize money was not paid to the first defendant in cash and that a portion of it was adjusted towards arrears of subscription in the same chitty and the balance utilised by the karnavan for purchase of shares in a company in which one of the clerks of the foreman bank was interested. The circumstances of the aforesaid adjustment or application of the money does not in the least affect the validity of the security bond given in respect of the future subscriptions payable by the first defendant.
(2.) The decree of the court below dismissing the suit is, therefore, correct and the appeal fails and is dismissed with costs.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.