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Saturday, August 17, 2013

Hindu joint family-Hotch Potch-self acquisition when acquires characteristics of joint family property -concurrent finding that business is separate--Supreme Court will not interfere under Art. 133. HEADNOTE: There is no presumption under Hindu law that a business standing in the name of any member of the joint family is a joint family business even if that member is the manager of the joint family. Unless it could be shown that the business in the hands of the coparcener grew up with the assistance of the joint family property or joint family funds or that the earnings of the business were blended with the joint family estate, the business remains free and separate. [466 F-H] Bhuru Mal v. Jagannath, A.I.R. 1943 P.C. 40, Pearey Lai v. Nanak Chand, A.I.R. 1948 P.C. 108, Chattanatha Karayalar v. Ramachandra Iyer, A.I.R. 1955 S.C. 799, referred to. The separate property of a Hindu coparcener ceases to be his separate property and acquires the characteristics of his joint family or ancestral property, not by mere act of physical mixing with his joint family or ancestral property but by his own volition and intention, by his waiving or surrendering his special right in it as separate property. Mere recitals in deeds dealing with self acquisitions as ancestral joint family property is not by itself sufficient; but it must be established that there was a clear intention on the part of the coparcener to waive his separate property.[470 B-c] Hurpurshad v. Sheo Dyal, 3 I.A. 219. Lal Bahadur v. Kanhaiya Lai, 34. I.A. 65, Lola Muddun Gopal v. Khikhinda Koeri 18 I.A. 9, Naina Pilla v. Daiyanai Ammal, A.I.R. 1936 Mad. 177, referred to. where there is a concurrent finding of both the lower courts that the business is a separate business and it is neither a joint family business nor treated as joint family business, it is not open to further scrutiny by this Court under Art. 133 of the, Constitution. [467 A-B]

published in http://judis.nic.in/supremecourt/imgst.aspx?filename=2121
PETITIONER:
G. NARAYANA RAJU

Vs.

RESPONDENT:
G. CHAMARAJU & OTHERS

DATE OF JUDGMENT:
19/03/1968

BENCH:
RAMASWAMI, V.
BENCH:
RAMASWAMI, V.
SHAH, J.C.
MITTER, G.K.

CITATION:
 1968 AIR 1276  1968 SCR  (3) 464
 CITATOR INFO :
 F    1976 SC1715 (13)


ACT:
Hindu joint  family-Hotch  Potch-self acquisition when
acquires   characteristics   of  joint  family    property
-concurrent finding that business is separate--Supreme Court
will not interfere under Art. 133.



HEADNOTE:
There  is  no presumption under Hindu law  that a  business
standing in the name of any member of the joint family is  a
joint family business even if that member is the manager  of
the  joint  family.   Unless  it could be  shown  that the
business  in  the hands of the coparcener grew up  with the
assistance  of the joint family property  or  joint  family
funds or that the earnings of the business were blended with
the  joint  family  estate, the business  remains  free and
separate. [466 F-H]
Bhuru  Mal v. Jagannath, A.I.R. 1943 P.C. 40, Pearey Lai  v.
Nanak Chand, A.I.R. 1948 P.C. 108, Chattanatha Karayalar  v.
Ramachandra Iyer, A.I.R. 1955 S.C. 799, referred to.
The separate property of a Hindu coparcener ceases to be his
separate  property and acquires the characteristics  of his
joint  family  or  ancestral property, not by  mere  act  of
physical mixing with his joint family or ancestral  property
but  by his own volition and intention, by his waiving  or
surrendering  his special right in it as separate  property.
Mere  recitals in deeds dealing with self  acquisitions  as
ancestral joint family property is not by itself sufficient;
but it must be established that there was a clear  intention
on  the part  of  the coparcener  to waive  his  separate
property.[470  B-c]
Hurpurshad  v. Sheo  Dyal,  3 I.A.  219.   Lal Bahadur  v.
Kanhaiya  Lai, 34. I.A. 65, Lola Muddun Gopal  v.  Khikhinda
Koeri 18 I.A. 9, Naina Pilla v. Daiyanai Ammal, A.I.R. 1936
Mad. 177, referred to.
where there is a concurrent finding of both the lower courts
that the business is a separate business and it is neither a
joint family business nor treated as joint family  business,
it is not open to further scrutiny by this Court under Art.
133 of the, Constitution. [467 A-B]



JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 613 of 1965.
Appeal from the judgment and decree dated March 25, 1960  of
the Mysore High Court in Regular Appeal No. 155 of 1953.
V. Krishnamurthy and R. Gopdlakrishnan, for the appellant.
H.   R. Gokhale,  B.  Subbiah and  R. Thiagaraian, for,
respondents Nos. 2 and 4.
The Judgment of the Court was delivered by
Ramaswami,  J. The plaintiff G. Narayana Raju filed O.S.  34
of  1951-52  in the Court of  District Judge, Mysore for
partition   and separate  possession  of  suit  properties
mentioned in the various schedules of the plaint.  The first
defendant is the brother
465
of  the plaintiff.  The second defendant is  the  widow  of
Muniswami  Raju, the eldest brother of the  plaintiff. The
third defendant  is  the  legal  representative   of the
plaintiffs  mother.  She is now the, appellant having been
brought on  record  as the  legal  representative  of the
deceased  plaintiff. The case of the original plaintiff was
that he, the first defendant and Muniswami Raju (husband  of
the  second defendant) were the sons of one Gopala Raju and
were all members of the joint family Gopalaraju died in May
1931  and  after his death the plaintiff  and  his  brothers
continued  to  be members of the joint family.  The  joint
status of  the,  family  was severed  by  the issue  of  a
registered notice by the first defendant to the plaintiff in
July 1951.  An ancestral house in Nazar bad belonging to the
family was acquired by the City IuprovementTrust Board in or
about the year 1909.  Out of the compensation paid for that
house and supplemented by the earnings of the members of the
joint  family, the house item No. I of Schedule 'A'  to the
plaint was  purchased by Gopalaraju in or  about  the year
1910. Subsequently  item No. 2 of Schedule  'A'  was also
purchased by Gopalaraju from the income of item No. I supple
mented by the earnings of the members of the  family. All
the other items of properties mentioned in Schedule 'A' and
other Schedules attached to the plaint were acquired out  of
the  income  from  items 1 and 2 of  Schedule  'A',  It was
further alleged that the business known as "Ambika  Stores"
was  also the joint family business and all  the  properties
mentioned in the Schedules except items I and 2 of  Schedule
'A'  were acquired out of the income of the members  of the
family including  the income from the business  of  Ambika
Stores.  The plaintiff accordingly claimed that he and the
first defendant would each be entitled to get 5/14ths  share
and  the second and third defendants would each be  entitled
to  get 2/14ths. share.  In the alternative  the  plaintiff
pleaded that  if  for any reason the Court  held  that the
properties stand in the name of Muniswami Raju and were not
acquired with the aidof the joint familv nucleus, he and the
second defendant were entitled to equal shares as  co-owners
of the joint family business.  The suit was mainly contested
by  the second defendant who asserted that  the  properties
mentioned  in  all the Schedules of the plaint were  self-
acquisitions of Miiniswami Raju and constituted his separate
properties.  It was alleged that Muniswami Raju was the only
carniiig member of the family at the time of the acquisition
of items 1 and 2 of Schedule operties and the plaintiff and
the  first defendant were emploved,in petty jobs  in  Wesley
Press. Muniswami Raju later on employed the  plaintiff  in
his  -shop  as a salaried servant and the  latter  had  no
proprietary  right in the business of Ambika Stores.   After
consideration  of  the oral and  documentary  evidence the
District Judge held that the plaintiff, first defendant and
Muniswami  Raju were not divided and that the only  property
which was divisible was item No. I of Schedule
466
'A'  and  there was not sufficient  ancestral nucleus for
acquisition of the other properties and that all  properties
except item No. 1 of Schedule 'A were the self acquisitions
of  Muniswami Raju, that Muniswami I Raju never blended his
properties with that of the joint family that the  plaintiff
was  only an employee under Muniswami Raju and therefore  he
was not entitled to the alternativ ' relief claimed by him.
Accordingly, the District Judge granted a preliminary decree
holding that the plaintiff was entitled to 2/7ths share  in
item  No. I of Schedule 'A'.  The plaintiff took the  matter
in  appeal to the Mysore High Court.  By its judgment  dated
March  25,  1960 the High Court affirmed the decree  of the
trial court with the modification that besides item No. I of
Schedule  'A'  item No. 2 also should be hold  to  be  joint
family property and the plaintiff was entitled to  partition
of  his share in this item also.  The High  Court  cancelled
the  I direction of the District Judge that  the  plaintiff
should account for the moneys and properties  of  Muniswami
Raju  -in  his hands before he is given possession  of his
share.
This  appeal  is  brought by certificate on  behalf  of the
plaintiff  from the judgment of the Mysore High Court  dated
March 25, 1960 in R.A. No. 155 of 1953.
The  first  question  to be considered in  this  appeal  is
whether the  business of  Ambika  Stores  was really the
business  of the joint family and whether the plaintiff was
entitled. to a partition of his share in the assets of that
business.: It was contended on behalf of the appellant that
the  business of Ambika Stores grew out of a nucleus of the
joint family funds of at least by the efforts of the members
of  the joint family include the appellant.  The  contention
of the appellant has been negatived by both the lower courts
and there is a concurrent finding that the Ambika Stores was
the  separate business of Muniswami Raju and it was  neither
the  joint  family  business nor  treated  as  joint  family
business, It is wellestablished that there is no presumption
under Hindu law that a business standing in the name of any
member of the joint family is a joint family business even
if that member is the manager, of the joint family.  Unless,
it  could  be shown that the business in the  hands  of the
coparcener  grew up with the assistance of the joint  family
property  or joint family funds or that the earnings of the
business  were blended with the joint family estate, the
business remains free and separate.  The question  therefore
whether the  business was begun or  carried  on  with the
assistance of joint family property or joint family funds or
as  a  -family business is a  question of  fact.-(See the
decisions of the Judicial Committee in Bhwu Mal v. Jagannath
(1)  and in Pearey Lal v. Nanak Chand (1) and of this  Court
in Chattahatha Karayalar v. Ramachandra
(1)   A.T.R 1943 P.C 40.
(2)   A.T.R. 1948 P.C  108.
467
lyer)  (1).   In  the present, case there  is  a  concurrent
finding of both the lower courts that the business of Ambika
Stores was a separate, business of Muniswami Raju  and it,
was  neither  a joint family business nor treated  as  joint
family business.  The concurrent finding of the lower courts
on  this issue is upon a finding of fact and  following the
usual practice of this Court, it is not now open to  further
scrutiny by this Court under Art. 133 of the Constitution.
It  was, however, contended on behalf of the appellant that
the finding of the lower. courts is vitiated in, law because
of  the circumstance that they have not taken  into  account
three important documents, Ex. D, Ex. E and Ex.  DDD.  We
are  unable  to accept this argument  as  correct.   It  is
manifest on a perusal of the judgment of the High Court that
all  the documents have been examined, regarding  the  issue
whether the  business of Ambika Stores was a  joint  family
business  or whether it was p. separate, business  of  Muni-
swami  Raju.  As regards Ex.  D, the High-,Court has,  after
examining the evidence adduced, remarked that the, mere fact
that  item No. 2 of Schedule 'A was given as a security  by
Muniswami Raju did not result in any detriment to the  joint
family property and, it cannot therefore be held  that the
business of Ambika Stores grew out of the joint family funds
or with the aid of the joint family funds.  On behalf of the
appellant  reliance was placed on the recitals in Ex.  E,  a
deed of mortgage dated July 26, 1928 executed by Gopalaraju,
Muniswamiraju  and  the appellant in favour  of the  Mysore
Bank. The  property  that had been  mortgaged under this
document is item No. 2 of Schedule 'A'. The recital is that
the  borrowing from the Bank was for the business and  trade
of  the executants and -for the benefit and  use  of  their
family.  There is also a recital in an earlier portion  of
the document that the business, was being carried on for the
benefit of  the  family, but it is not quite  clear  as  to
whether this related to the business carried on by  Narayana
Raju  or whether it was intended to relate to some  business
carried on by all the three executants. It is possible that
the  appellant had other business of his own carried on -on
his own. account at that time and it cannot be, assumed that
the borrowing under Ex. E must have been for the purpose of
Ambika Stores. It should be noticed that  Muniswarni Raju
has  been  described in the document as the  proprietor  of
Ambika Stores which description is. not consistent with the
contention  of the appellant that the business, was a  joint
family business.  The High Court has, in  this connection,
referred  to Ex.  I an application dated February 14,  1929,
by  the appellant  to the City Co-operative  Bank,  Mysore
wherein, the appellant has said that he was getting a decent
earning by  doing;  out-of-door  commercial  business with
Ambika Stores. There is also the, recital in Ex.   I that
Muniswami Raju was the proprietor of Ambika Stores.   Having
regard to this recital in I it is not-
(1)  A.I.R. 1955 S.C. 799.
468
unlikely that the appellant had some business of his own  at
the  material time and it cannot be assumed  that  borrowing
under Ex.  E, was for the purpose of Ambika Stores  business
only.  The High Court has also dealt with the effect of Ex.
DDD, mortgage deed produced on behalf of the appellant.  It
is  true that in this document the appellant  and  Muniswami
Raju  have been described as proprietors of  Ambika  Stores.
The finding of the High Court is that this recital was made
in the document for the purposes of borrowing from the Bank.
Reference was made in this context to a letter dated May  5,
1931,  Ex.  75 written by Muniswami Raju  as  proprietor  of
Ambika Stores to the Bank of Mysore.  In' this letter,  he
has requested the Bank to take note of the fact that he has
authorised the appellant to accept drafts, and sign  letters
etc. on behalf of the firm' There is another Letter, Ex. 76,
dated  April 14, 1934 written by Muniswami Raju to the Bank
of  Mysore wherein Muniswami Raju has been described as the
proprietor  of Ambika Stores and there is an  intimation  to
the Bank, that the appellant Narayana Raju was authorised to
sign  for the firm.  In the context and background of  these
circumstances  it is evident that though both the  appellant
and  Muniswami Raju were described as proprietors of  Ambika
Stores the description was only for the purpose of borrowing
money  from the Bank, as contended for by  the respondents.
In  this  connection  the High Court  has  also taken into
account Ex. 7 5 (b), a letter written by Muniswami Raju.  In
this  letter  Muniswami Raju has described  himself  as the
proprietor of Ambika Stores and has instructed the Bank that
he  has cancelled the authority given to the  appellant  to
operate one  his  Current Account with the  Bank.   It  is
therefore  not possible for us to accept the  contention  of
the  appellant that the finding of the High Court  that the
business  of  Ambika Stores was the  exclusive business  of
Muniswami Raju is vitiated in law.
On the other hand, it was contended on behalf of the respon-
dents  that  the finding of the High Court is  supported  by
proper evidence.  The business of Ambika Stores was  started
by  Muniswamiraju as the proprietor thereof at a  time when
Muniswamiraju himself was comparatively well-off as a result
of  his partnership with Krishnaswamy Chetty & Co.  In the
year  1925 the partnership of Krishnaswamy Chetty & Co. was
dissolved by a document Ex. D. The entire business with 'all
the  assets ad liabilities was taken over by Muniswami Raju
while the widow and son of Krishnaswamy Chetty were given  a
house estimated by the appellant himself at Rs. 3,000/- and
furniture worth Rs. 400/-.  Muniswami Raju changed the name
of  the 'shop after taking it over into Ambika Stores and
continued the business as is apparent from Exs. XVIII, XXVI
and XXVI(A).  There- is also evidence that at the time when
Ambika Stores was started other members of the family  we're
not in a financial position to make any contribution to pur-
469
such a business.  The appellant joined Wesley Press in 1912
on a salary of Rs. 8 or Rs. 9 p.m. and he was drawing Rs. 27
p.m.  in  1927 when he resigned from the Press.  The  first
defendant  joined Wesle Press in 1910 on a salary of Rs.  10
p.m.   and  he was  continuing to  work  there  till the
institution of the present suit.  'Me income of the property
item  No. 2 of' Schedule 'A' was Rs. 15 p.m. and the  income
from  pounding rice  for which there is  no satisfactory
evidence  was also negligible. Therefore, the earnings  of
the  members  of the family other than Muniswami  Raju were
hardly sufficiently to maintain the family at the time when
the  business of Ambika Stores was started.  The High  Court
has  found that the family did not have sufficient  nucleus
and  that Muniswami Raju was not a partner  of Krishnaswamy
Chetty &  Co. on behalf of the family but that  he  was  a
partner in his own right.  The High Court has observed that
there  is no evidence to show that the family  supplied the
money or that the family had enough means or that  Muniswami
Raju  was  representing the  family  when  he started the
business  of  Ambika Stores.  As we have already  said, the
finding of  the High Court and of the District Judge  is  a
concurrent  finding  on a question of fact  and Counsel  on
behalf of  the appellant has been unable to make  good his
argument that the finding is vitiated in law on any account.
We pass on to consider the alternative argument put  forward
on  behalf  of the  appellant, namely, that  even  if the
business  of  Ambika  Stores  was  started  as, a  separate
business  of  Muniswami Raju, it  became  converted  at  a
subsequent stage into joint family business.  It was  argued
on  behalf  of the appellant that the business  of  Ambika
Stores was thrown by Muniswami Raju into the  common  stock
with  the intention of abandoning all separate claims to  it
and  therefore the  business  of  Ambika  Stores  lost its
character of a separate property and was impressed with the
character   of joint  family  property.   It  is  a   well-
established  doctrine of Hindu law that property  which was
originally self-acquired may become joint property if it has
been  voluntarily  thrown by the coparcener into  the  joint
stock  with the intention of abandoning all separate  claims
upon it.  The doctrine has been repeatedly recognized by the
Judicial Committee [See Hurpurshad v. Shea Dayal(1) and Lal
Bahadur v. 'Kanhaiya Lal(-).  But the question whether the
coparcener has done so or not is entirely a question of fact
to  be decided in the light of all the circumstances of the
case. It  must  be  established that there  was  a  clear
intention  on  the  part  of the  copareener  to  waive his
separate  rights and such an intention will not be  inferred
merely from acts which may have been done, from kindness  or
affection  [See the  decision in  Lata  Muddun  Gopat  v.
Khikhinda  Koer (3). For instance,  in  Naina  Piltal  v.
Daiyanai
(1) 3 I.A. 259.       (2) 34 I. A. 65.
(3) 18 I. A. 9.
470
Ammal, (1)  where in a series of  documents,  self-acouired
property  was  described and dealt with as  ancestral-joint
family it was held by the Madras High Court that the mere
dealing with self-acquisitions as joint family property was
not  sufficient but an intention of the coparcener  must  be
shown  to waive his claims with full knowledge of his  right
to it as his separate property. The important point to keep
in mind, is that the separate property of a Hindu coparcener
ceases to  be his  separate  property and  -acquires the
characteristics of his joint family or ancestral  property,
not by mere act of physical mixing with his joint family  or
ancestral  property, but by his own volition and  intention,
by  his waiving  or surrendering his special  right  it  as
separate  prop".  A man's intention can be  discovered only
from-  his words or from his acts I and conduct.   When his
inention  with regard to  his separate  property  is not
expressed  in  words, we must seek for it in  his  acts and
conduct.  But it is the intention that we must seek in every
case, I the acts and conduct being no more than evidence  of
the  intention. - In the present case, the High  Court has
examined the evidence adduced by the parties and has reached
the  conclusion that there was no intention on the  part  of
Muniswami  Raju to throw the separate business  of  Ambika
Stores into the common stock, nor was it his  intention  to
treat  it as a joint family business.  Counsel on behalf  of
the appellant referred to the recital, in Ex.  E  describing
the  properties being those of the executants and  that the
borrowings  was for trade and benefit of the family  and  it
was argued that there was a clear intention on the part of.
Muniswaini  Raju  to  treat the business  as  joint  family
business.   We have already referred to this  document and
indicated  that the  recitals were probably  made  for the
-purpose  of  securing a loan and cannot  be  construed  as
consent on the part of the members of the joint  family  to
treat  the business as the joint family business.   Further,
there is ample evidence to show that in all succeeding years
before his death Muniswami Raju had always described himself
and  conducted himself as the sole  proprietor  of  Ambika
Stores, Such an attitude on the part of Muniswami Raju was
not  consistent with any intention on his  part  either  to
abandon his exclusive right to the business or to allow the
business' to be treated as joint family business.   Exhibits
XXXV to XLVI are all documents executed by third parties  in
favour of Muniswami Raju in which Muniswami Raju  has been
described as the proprietor of Ambika Stores.  Exhibits III,
XXIII, XXIV, 51, 52, 56, 58, ZZ, AAA series and BBB -are all
communications addressed by institutions like Banks etc., in
which Muniswwni Raju has been described as the proprietor of
Ambika Stores. It may be stated that the appellant  himself
has  admitted  in his evidence that he was not drawing any
moneys from the business of Ambika Stores and that  whenever
he wanted any_money, he would ask Muniswami Raju and obtain
(1)  A.I.R. 1936 Mad .177.
471
from him.  If really the appellant had considered himself to
be  I co-owner equally with Muniswami Raju, such conduct  on
his  part is not explicable. it was urged on behalf  of the
appellant  that there was no documentary evidence  to show
that  the  appellant was being paid  any  salary  'Muniswami
Raju,  and that prior to Muniswami Raju's death, it was the
appellant who was in the entire management of Ambike  stores
when Muniswami Raju was ill and after the death of Muniswami
Raju  also it was the appellant who had been in management.
Al,  the books of account and other documents pertaining  to
the business of Ambika Stores had been admittedly  entrusted
to the appellant.  But it is not explained on behalf of the
appellant  as to why the documents were not produced on his
behalf to disprove the Case of the respondents that he was a
salaried servant.  It is therefore not unreasonable to draw
an  inference  from the conduct of the appellant  that the
Account Books, if  produced  in  court,  would  not have
supported  his case.  We accordingly reject the argument  of
the  appellant that the business of  Ambika  Stores  became
converted into joint family business at any subsequent stage
by  the conduct of Muniswami Raju in throwing  the  business
into  the  common stock or in blending the earnings  of the
business with the joint family income.
it was finally contended on behalf of the appellant that, in
any  event, the appellant became a co-owner of the  business
along  with Muniswami Raju by reason of contribution of his
own labour towards the development of the business.  In our
opinion,  there is no substance in this  argument.   It  is
evident that the appellant gave up his job in Wesley  Press
and  joined Ambika Stores about 9 or 10 months after it was
started by Muniswami Raju.  The appellant does not state  in
his  evidence that he was a co-owner when he  joined  Ambika
Stores.  On  the  other  hand, in  Ex.  68  which  is  an
application  dated  March 20, 1928 by the appellant  to the
City Co-operative Bank, the appellant has described  himself
as  a  clerk in Ambika Stores and Muniswami  Raju  has been
described  as  his  proprietor. There is  no satisfactory
evidence  on behalf of the appellant to show as to when and
under -which circumstances his status of a clerk changed  to
that of a co-owner.  In another application, Ex.  I which is
of the year 1929 the appellant has described Muniswami Raju
as  the Proprietor of Ambika Stores and  he  has  described
himself as doing out-door commercial business with  Ambika
Stores.  Again, in Ex. C which is a loan application made
in  1932  by  both the brothers,  Muniswami  Raju  has been
described  as  the  proprietor of Ambika  Stores  while the
appellant  has been  described as  a  General Merchant  of
Mysore.  Reference was made on behalf of the  appellant  to
recitals in Ex. DDD, a mortgage deed dated June 20, 1934 in
which  Muniswami Raju and the appellant have been  described
as proprietors of Ambika Stores.  We have already dealt with
this, document and for the reasons already mentioned we hold
that the description of the
472
executants was only given for the purpose of borrowing from
the  Bank  and it had not the legal effect  of making the
appellant . co-owner of the partnership business.  There  is
no  evidence  of  any  assertion  by  the  appellant  during
Muniswami  Raju's life-time of his being a co-owner  of the
partnership   business, nor  is  there any   evidence  of
recognition  by Muniswami  Raju of any such  right  of the
appellant.  On the other hand, there is sufficient  evidence
to  show that whatever the appellant did in connection with
the  business  was only done with the Authority conferd  by
Muniswami  Raju.  In our opinion the High Court has  rightly
rejected  the claim of the appellant that he was a  co-owner
of the partnership business.
For  the  reason expressed we hold that this appeal  has  no
merit and it must be dismissed with costs.
R.K.P.S.       Appeal dismissed.
473



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