Devidas And Others vs Shrishailappa And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 112 of 1957

Decision Date: 21 February 1961

Coram: J.C. Shah, S.K. Das, M. Hidayatullah

In the case titled Devidas And Others versus Shrishailappa And Others, the judgment was delivered on 21 February 1961 by a bench consisting of Justices J.C. Shah, S.K. Das and M. Hidayatullah. The citation of the decision is 1961 AIR 1277 and 1961 SCR (3) 896. The dispute involved a suit for recovery of money due under a mortgage that was claimed to belong to an undivided Hindu joint family composed of the manager, his brother and their step‑mother. The manager, who was the first plaintiff, instituted the suit on behalf of the family but did not describe himself in the plaint as the manager. The step‑mother, who also had an interest in the mortgage, was not initially joined as a party to the suit. No objection to the non‑joinder was raised in the trial court; however, while the appeal was pending before the High Court, the step‑mother was added as a party on her own application. The defendants contended that because every person having an interest in the mortgage security had not been joined within the period prescribed by the limitation law, and because the plaintiff had not expressly claimed to sue in his capacity as manager, the suit should be dismissed. The Court held that the failure to join a person who is a proper but not a necessary party does not affect the maintainability of the suit and does not trigger the operation of Section 22 of the Indian Limitation Act, 1908. The Court further held that determining whether a suit is brought by a manager in his personal capacity or on behalf of the family depends on the facts of each case, and the plaintiff’s omission to label himself as manager in the plaint was not decisive. Relying on the precedent Guruvayya Gowda and Others v. Dattatraya Anant and Others (1904) I.L.R. 28 Bom. 11, the Court concluded that the step‑mother was not a necessary party and that the facts showed the first plaintiff was acting as the family’s manager; consequently, the suit was maintainable. The civil appeal, numbered 112 of 1957, was taken on special leave from a judgment and decree dated 28 January 1954 of the Bombay High Court in First Appeal No. 69 of 1950. Counsel for the appellants were Purshottam Trikamdas and Naunit Lal; for the respondents numbered 1 and 2, the representatives were C. K. Daphtary, Solicitor‑General of India, S. N. Andley, J. B. Dadachanji and P. L. Vohra.

Counsel for respondents Nos. 6 to 9 appeared on 21 February 1961. The judgment was delivered by Justice Shah. The Court set out a family tree to explain the relations among the principal parties. Mallappa had four sons named Balappa, Shivappa, Basavanappa and Chanamalappa, who together formed a joint Hindu family. In 1909 Chanamalappa chose to leave the joint family, while his three brothers continued as members of the joint family. After Mallappa’s death, Shivappa became the manager of the joint family. Shivappa died in 1928 and the managerial responsibilities passed to Rachappa.

The joint family owned lands in seventeen villages and numerous houses in Khanapur, and it also carried on a substantial money‑lending business. Bashettappa Neeli, hereinafter referred to as Bashettappa, was married to the sister of Rachappa. On 29 July 1929 Bashettappa executed a simple mortgage deed in favour of Rachappa, charging certain parcels of land and houses that belonged to Bashettappa. The purpose of the mortgage was to secure repayment of a debt of Rs 1,73,000. Of this amount Rs 76,700 was received in cash, and the balance represented sums that Rachappa promised to pay to Bashettappa’s creditors. Bashettappa also owed an unsecured debt of Rs 8,000 to a creditor named Gurappa, and Rachappa undertook to discharge that debt as well.

Bashettappa was declared insolvent in Insolvency Application No. 22 of 1929 before the First Class Subordinate Judge, Dharwad, and receivers were appointed to administer his estate. The receivers applied to the court for a declaration that the mortgage deed in favour of Rachappa was fraudulent and therefore void. In Appeal No. 25 of 1934, the Assistant Judge, Dharwad, reversed the insolvency court’s order and held that Rachappa was entitled to recover Rs 45,700 as a secured debt and Rs 31,000 as an unsecured debt from the mortgage proceeds.

During the pendency of these proceedings, Gurappa, the creditor of Bashettappa, filed Suit No. 84 of 1932 in the First Class Subordinate Court, Dharwad, seeking a decree for Rs 8,000. Gurappa claimed that Rachappa, acting as manager of the joint family, had undertaken under the mortgage deed to pay the amount and that Gurappa had accepted that undertaking. The Court passed an ex parte decree against Rachappa on 28 February 1933; the claim against the other members of the family was either withdrawn or rejected.

On 23 July 1939 the three branches of the joint family mutually agreed to sever the joint status of the family. Accordingly, the movable and immovable properties belonging to the family were divided among the branches. Pursuant to this division, the lands and houses that fell to each branch were allocated to the respective members.

The three branches of the joint family partitioned their property by mutual agreement, and the shares belonging to each branch were recorded in the Revenue and Municipal records in the names of the respective branch managers. Movable assets were also divided among the branches. The mortgage amount that could be recovered from Bashettappa, together with a claim against one Desai, was kept as a joint asset of the plaintiff in the suit from which this appeal arose. After making several unsuccessful attempts to enforce the decree, Gurappa filed execution petition No. 176 of 1940 seeking to recover Rs 11,061‑6‑9 and prayed for an order of attachment and sale of Rachappa’s rights under the mortgage bond dated 29 July 1929. At the court‑auction, Ganpatrao N. Madiman offered the highest bid and the mortgage bond was sold to him for Rs 20,000. Rachappa’s application to set aside the sale on the ground that it was affected by material irregularities and fraud in its publication and conduct was rejected. The executing court delivered the mortgage bond to Madiman and issued orders prohibiting Bashettappa and the receivers of his estate from making any payments of the mortgage dues or interest to anyone except the purchaser, Madiman.

Subsequently, in Miscellaneous Application No. 57 of 1944, Madiman applied to the Insolvency Court for recognition as an unsecured creditor for Rs 31,000, and the application was granted on the basis that he had purchased the entire interest under the mortgage bond. The receivers appointed by the Insolvency Court later offered for sale the equity of redemption in the mortgaged properties, and Madiman purchased this equity for Rs 15,500. The sale deed was executed by the receivers in favour of Madiman on 28 January 1947, making Madiman the owner of the equity of redemption and leading him to claim entitlement to the whole mortgagee right as the purchaser of Rachappa’s right, title, and interest. Basalingappa, the natural brother of Rachappa who had been adopted by his uncle Basavanappa, died in 1946, leaving his widow Parvatewa and two sons, Shrishailappa and Shivappa. The sons of Basalingappa, who are hereinafter referred to as the plaintiffs, filed Suit No. 253 of 1947 seeking a decree for Rs 123,400 by enforcing the mortgage deed executed by Bashettappa. The plaintiffs asserted that Madiman, at the court auction, had acquired only Rachappa’s one‑third share of the mortgagee right, while the plaintiffs—who were the sons of Shivappa—continued to hold the remaining two‑thirds share. They prayed for a decree that the amount due under the mortgage be awarded to them and, in case of default, that the amount be realised by sale of the mortgaged property. The suit impleaded Bashettappa as defendant No. 1, the receivers of his estate as defendants Nos. 2 and 3, Madiman as defendant No. 4, the sons of Shivappa as defendants Nos. 5 to 8, and Rachappa and his son as defendants Nos. 9 and 10.

Rachappa’s son was listed as defendants No 9 and 10. After the suit had been instituted, Madiman died and his sons were impleaded as defendants No 4A to 4C, while his widow was impleaded as defendant No 4D. The sons of Madiman were the principal contested defendants, and they raised three main contentions. First, they asserted that the mortgagee right was the separate property of Rachappa and that it never formed part of the joint family of Rachappa, defendants 5 to 8 and the plaintiffs. Second, they contended that, even if the mortgagee right had been part of the joint family, it had at the partition of the three branches fallen to Rachappa’s share and therefore had not been kept undivided as the plaintiffs claimed. Third, they argued that in Execution Petition No 176 of 1940 the entire interest of the joint family had been sold and that Madiman had purchased that whole interest, so that the plaintiffs could not enforce the mortgage. The trial court rejected all of the contentions raised by the sons of Madiman. It held that only a one‑third share in the mortgagee right had been purchased at the court auction by Madiman. Accordingly, the court passed a decree against defendants No 4A to 4D directing them to pay Rs 60,933‑5‑4 together with proportionate costs and, with future interest at six per cent per annum on Rs 30,466‑10‑8 from the date of the suit to the plaintiffs and defendants 5 to 8, to be paid within six months; in default of payment, the mortgaged property was to be sold. Defendants 4A to 4C, hereinafter referred to as the appellants, appealed the decree to the High Court at Bombay. The High Court held that the mortgagee right belonged to the joint family and that the agreement to pay Rs 8,000 to Gurappa was not binding on that family; consequently, in executing the decree in favour of Gurappa, only the right, title and interest of Rachappa had been purchased by Madiman. The High Court also observed that a severance of the joint‑family status had occurred in 1939 between the members of Rachappa’s family, the plaintiffs and others. However, the record did not allow a finding on whether the mortgage debt had been kept undivided, and therefore the case was remanded for a determination of the specific issue: whether it was proved that the mortgage debt dated 29 July 1929 had fallen to the share of defendant No 9 at the family partition of July 1939. The High Court directed the trial court to permit both parties to lead evidence on that issue and to certify its findings. On remand, the trial court recorded a negative finding, holding that the mortgage claim had been kept undivided at the partition. The High Court confirmed this finding and dismissed the appeal filed by the appellants, making only a slight modification to the rate of interest awarded by the trial court. With special leave under Article 136 of the Constitution, the present appeal is preferred. No serious argument was advanced before this Court on the further matters.

The parties argued that the sum owed under the mortgage created by Bashettappa did not belong to the joint family. At the time the mortgage deed was executed, Bashettappa’s brother Rachappa served as the manager of that joint family. In Suit No. 84 of 1932, filed by Gurappa, it was alleged that Rachappa managed a joint family comprising himself and the branches of Shivappa and Basavanappa, that the mortgage transaction was undertaken for the benefit of the joint family, and that Rachappa entered into the transaction on behalf of the family. That suit also held that Rachappa alone was liable to pay Rs 8,000. The partition that took place in 1930 was supported by evidence that has never been contested. Notices were issued to the village and municipal authorities following the partition so that the names of the various branches could be altered to reflect the allotted shares. The testimony of both Rachappa and Mallappa confirming that the partition occurred has likewise remained unchallenged.

The question before the Court was whether, at the time of the partition, the mortgagee’s right under the deed executed by Bashettappa was kept undivided. Mallappa, identified as defendant No. 5, testified after the case was remanded that “an equal division was made of the lands according to the income and that Rachappa was not given a smaller share in the lands.” He further stated that the houses were divided equally and that all outstanding money‑lending obligations, except for two bonds—the mortgage bond executed by Bashettappa and one Desai bond—were kept undivided. Mallappa expressly denied the suggestion that the mortgage debt owed by Bashettappa had been allocated solely to Rachappa.

Rachappa also testified that the mortgage bond was kept undivided among the three branches and that it was not true that the bond had been allotted to his share at the partition. Devidas, identified as defendant No. 4, admitted that he had no personal knowledge of the partition or its terms. He claimed that Rachappa had told him, when Madiman offered his bid at a court auction, that the mortgage bond was allotted exclusively to Rachappa’s share. The Court found that, in the circumstances, this statement could not be true and correctly accepted the view of both the trial court and the High Court that the assertion was unreliable.

On examining the various entries in the record of rights relating to the lands held by the three branches, the trial judge concluded that the plaintiff’s father had, at the partition, received lands measuring 203 acres and 18 gunthas, assessed at Rs 233‑10, while defendants numbered 5 to 8 had received a total of 127 acres. This analysis formed the basis for the Court’s final determination on the division of the mortgagee’s right.