- (1.) THIS is a Civil Second Appeal in a money suit.
(2.) KALU Plaintiff, who is Respondent No. 1 in this appeal, brought a suit for the recovery of Rs. 2,000/- against Chunnilal defendant appellant and his two brothers Lahrilal and Mohanlal defendant-respondent Nos. 2 and 3 respectively. The case of the plaintiff is that the defendants were members of a joint Hindu family and they in Smt. 2006 carried on business at Charbhuja Road under the name and style of Shah Lahrilal Mangilal and thereafter they carried on business in the name and style of Chunnilal Lehrilal in the town of Charbhuja. The case of the plaintiff further is that the defendants took a loan of Rs. 10,000/- pledging 166 tins of ghee and it was stipulated that the ghee will be sold through the agency of the plaintiff and the price credited in their account. The ghee was accordingly sold and after crediting the price thereof in the account of the defendants, a sum of Rs. 2,067. 75 remained outstanding against the defendants. Thereafter, the letter (Ex. 1) signed by Lahrilal on behalf of Chunnilal Lehrilal was received by the plaintiff by which he acknowledged the liability of the Firm Chunnilal Lahrilal for the amount due and promised to pay the money at an early date. After crediting some payment which need not be detailed, the plaintiff filed a suit for the recovery of Rs. 2,000/ -. The suit was contested by Chunnilal defendant. He denied that the letter was sent on behalf of the Firm or was even signed by his brother Lahrial. He further pleaded that he being the eldest brother, was the Karta of the joint Hindu family and Lahrilal had no authority to enter into any agreement to pay any amount or to acknowledge liability of Firm Chunnilal Lahrilal therefor. Both the lower courts have decreed the suit holding on all points in favour of the plaintiff. In this appeal on behalf of Chunnilal, the only contention is whether Chunnilal is bound by the terms and conditions of the letter (Ex. 1) or not. It is not in dispute that the defendants' Firm carried on joint family business and this business was under the name and style of Lahrilal Mangilal when it was carried on at Charbhuja Road and in the name and style of Chunnilal Lahrilal in the town of Charbhuja. The lower appellate court has given the finding that all the defendants as co-parceners were actually participating in the joint family business. There is also the evidence of Chunnilal himself that Lahrilal carried on the business of the shop in his absence. He also admitted that mostly he went outside Charbhuja town to make purchases for the shop. Thus, not only Lahrilal participated in the business of the shop, but in the absence of Chunnilal he also carried on the business of his shop. The question now arises: whether under the facts and circumstances of the case, the courts were wrong in decreeing the suit against the two brothers Chunnilal defendant-appellant and Mohanlal defendant-respondent. Learned counsel for the appellants has argued that the lower appellate court has wrongly invoked the principles of the Law of Partnership in this case, and to a joint Hindu family business, the law of Partnership did not apply. There is no doubt that the members of Hindu undivided family carrying on a family business are not partners in such business. But to a. joint family business co-parcenary rules apply 'as modified by the incidents and exigencies of trade. ' Hindu Code by Gaur, 4th Ed. sec. 138. The learned author has further observed as follows in Art. 1225: - "cl. (2) Manager: In an ordinary joint family, the office of the manager is determined by his age and hereditary rights and not necessarily by his competency. In a trading family, such a course, if permitted, might lead to disastrous results. Consequently it is settled that the mana ger of a trading family may be such a person as the family appoints or holds out as its accredited representative. He need not be the conventional Karta of the Hindu household. " The principle of Hindu Law is that the Karta is entitled to take all steps for the preservation of the family and if it is necessary to carry on joint family business for the preservation of the family, the Karta can take all necessary steps to carry it efficiently. Sometimes a business cannot be managed by the Karta personally and other members of the family participate and manage the business with the express or implied consent of the Karta. That such participation and management is with the consent of the Karta may be inferred from the facts and circumstances of a case. In this case, three brothers were participating in the business and it is the statement of Chunnilal himself that Lahrilal was authorised to carry on the business in his absence. It will be proper to infer that Lahrilal's participation in the business was not in any limited and he as much participated in the management of a joint Hindu family business as Chunnilal himself. If, in the management of a joint Hindu family business there may be more than one manager the acts of each of them are binding on the joint family. The law has been elucidated in Mayne on Hindu Law and Usage, at Pages 379-80, as follows: - "in the case of a family trade or business, as in respect of other family properties, it is only the managing member that can ordinarily act on behalf of the family and bind by his acts his co-parceners. Sometimes for the convenience of the trade or business there is not one manager only but by arrangement amongst the members, several with equal powers. In such a case, the act of any one will bind all the co-parceners. Where several persons take an active part in the conduct of the business, they may well be regarded as managing members or as persons entrusted with the conduct of the business and they can, not only bind each other but also other members of the family including minor co-parceners. " This same law is enunciated in the following observations made at Page 278 in the Introduction to Modern Hindu Law by Derrett: - "if a junior member is held out by the manager as de facto manager, the family firm is bound by such debts as he may have incurred properly, with consequent liability on the part of the coparceners. Every contract entered into in those circumstances will bind all members of the family to the extent of their interests of joint family property. Moreover all junior adult members actively participating in the management of the business (as contrasted with those who merely serve in a capacity that might be expected but without any directing responsibi lity) may bind themselves and one another per sonally, that is to say to the extent of their separate assets as well. Unless this ancient rule were kept it would not be practicable for strangers to do regular business with co-parcenars representing joint family firms. Although, since 1932 it is evident that a joint family firm is not a partnership, in this context their participation is thought of as a manager at Hindu Law or a partner in a partnership. " In my humble opinion, the aforesaid observations do not in any way modify the ancient rule of Hindu Law that junior members of the joint family are only bound by the acts of the manager and not of other members. It only extends the principle ingrained in that law that the manager has the authority to take all necessary steps for the sake of preservation of family. He may permit if necessary junior members of the family to participate and manage the business and all the members of the joint Hindu family are bound by the acts of such junior members. Such an exemption of old rule of Hindu Law is within permissible limits, looking to the modern conditions of conducting the business. If Hindu Law is to survive, such an extension of the doctrine must meet the approval of courts of law, otherwise the strangers will find difficulty in conducting business with the joint Hindu family. Taking a rigid view of the matter will only hamper the development of Hindu Law in the modern conditions. Ancient sages while formulating the principles of Hindu Law never contemplated any rigidity in the matter. In this connection, I may quote the following passage from the Introduction to the Principles of Hindu Law by D. F. Mulla, 12th Edn. P. 63: "the slow and steady process of development of Hindu Law was the result of innovations often imperceptible as happened when old and obsolete rules because gredually displaced by growing usages and customs. In a large measure impetus was given to that progress by the standard works of these leading commentators and nibhandakars who did not permit themselves to be fettered by orthodox prejudices and showed liberal readiness to move with the times. But as the Hindu Law Committee very appropriately observed we have no longer Smritikars and commentators of the old type; we have the Legislature and the Courts of Law. " In my opinion, the appeal has got no force and is dismissed with costs. . ;