LexVRIDDHACHALAM PILLAI versus CHALDEAN SYRIAN BANK LTD., ANOTHER
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
' ,, ., - 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 per- manent 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 app- roached 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 Kalayanasun- daram 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 parti- tion 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 pro- perties effected between the appellant and his father was not bona- fide 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 pre- Vriddhachalam 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 su- fficient property for the share of the father to enable him to discharge all his" debts. Moreover, onus should have been placed on the ap- pellant 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 commu- nity to which he belongs. There is no situs which can be applied irres- pective of the personal law governing the owner. In the present case, Kalayanasundaram and his family were permanent residents of Palghat. The
Excerpt shown. Read the full judgment & AI analysis in Lexace.