CT AL VR ALAGAPPA CHETTIAR Vs. BANK OF CHETTINAD, LTD, KANADUKATHAN THROUGH ITS DIRECTOR AND GENERAL MANAGER PRALKASI CHETTIAR

JUDGEMENT

(1.) This appeal arises out of a suit for the recovery of money due under a promissory note (Ex. J), executed by the first defendant in favour of the plaintiff on 4 May, 1932. The first defendant is the eldest son of one CT. AL. VR. Veerappa Chettiar who died in October, 1927. The fifth and sixth defendants are the minor sons of the first defendant; the second defendant is the younger brother of the first defendant and the seventh defendant is the minor son of the second defendant. Defendants 3 and 4 are the stepbrothers of defendants 1 and 2. The plaint asked for a personal decree against defendants 1, 2 and 3 and for a decree against all the defendants to the extent of the family assets in their hands. The learned Subordinate Judge dismissed the suit as against defendants 3 and 4 and gave the plaintiff a personal decree as against defendants 1 and 2 and a decree against the family assets in the hands of defendants 1, 2 and 5 to 7. Against this decree this appeal has been preferred by defendants 2 and 7.

(2.) In the lower Court defendants 2 and 7 contended that the suit should be dismissed as against them. Before us, this extreme contention has not been pressed on behalf of the appellants. Their learned Counsel admitted that the plaintiff was entitled to a decree even as against the appellants to the extent of the joint family assets in their hands. The only question for decision in this appeal therefore is whether the second defendant was personally liable for the suit claim, so as to entitle the plaintiff to proceed against properties in his hands not forming part of the joint family assets.

(3.) The following is the history of the events that led up to-the execution of the suit promissory note. In September, 1922, Veerappa opened a money-lending business in Mandalay with the vilasam of CT. AL. VR. and for the conduct thereof appointed one Somasundara, agent. After Somasundara's term, one Ramasami Chetti was appointed agent. For the financing of that business, Veerappa entered into an arrangement with D.W. 1 for moneys being lent to the Mandalay firm from D.W. l's firm at Rangoon. The Rangoon firm was known by the vilasam of S.R.M.M.A. We however find that moneys have also been borrowed under this arrangement from the S.R.M.M.R.M. firm at Rangoon. The result of the transactions between the CT. AL. VR. firm at Mandalay and the two lending firms at Rangoon was that on 14 January, 1927, a promissory note for Rs. 10,000 was executed by Ramasami Chetti, the Mandalay agent, in favour of the S.R.M.M.A. firm and another note for Rs. 10,000 was executed in favour of the S.R.M.M.R.M. firm on 28 January, 1927, by the same agent. Veerappa died during the term of Ramasami's agency, but before Somasundara's accounts had been finally settled. At that time, the first defendant was at Penang serving as the agent of some other Chetti firm there. The correspondence that passed between the first and second defendants about this period will be referred to later on it shows that the third defendant who had then attained majority was anxious to have a partition effected soon but that the second defendant preferred its being postponed till after the first anniversary of Veerappa's death. The first defendant returned to his native village in India in October, 1928, and soon after the celebration of the first anniversary of their father's death, the parties referred the question of partition to certain arbitrators - vide Ex. D dated 3 December, 1928. There was an award (Ex. E) on the 8 of January, 1929, the substance of which was that shares were separately allotted to the four brothers in the house and in certain movable properties, as regards the business in Mandalay, the award directed that defendants 1 and 2 should take over its assets and liabilities. It appears from the award itself that the liabilities exceeded the outstandings; a more detailed reference to the terms of the award will be made in due course, when dealing with the arguments advanced by the parties on these terms. One provision may however be mentioned here; the award directed the assets of the Mandalay firm to be collected by the first defendant as theretofore and it also directed defendants 1 and 2 to wind up the whole shop within three years and gave them the option to do new business at Mandalay under a different vilasam. In December, 1929, an additional sum of Rs. 5,000 was borrowed from the S.R.M.M.A. firm by the first defendant. Beyond a statement in the evidence of the first defendant that this was borrowed to pay off a creditor, the wife of Vakil Mukerjee who was pressing, for payment, we have little or no information on the record as to the necessity for this loan or its utilisation. On the 9 of January, 1930, a promissory note Ex. H was executed by the first defendant in respect of this sum of Rs. 5,000 and two promissory notes Exs. G and F were also executed by the first defendant renewing the Rs. 10,000 loans of 14 January, 1927 and 28 January, 1927. These three notes were signed by him as "managing partner" of the CT. AL. VR. firm. These notes were endorsed by the payees in favour of the plaintiff bank; and the suit promissory note was executed by the first defendant directly in favour of the plaintiff bank, for the amounts due under the endorsed notes Exs. H, G and F.