Subba Rao, J.-The main question in these appeals is whether a son is liable to discharge the liability of his father in regard to a covenant of indemnity given by him. Defendants 1, 2 and 3 are the sons of one Venkatarama Iyer. Venkatarama Iyer for himself and acting as guardian of his minor sons, defendants 2 and 3 and defendant 1 as major, executed a sale deed in favour of the plaintiff’s father, Ramaswami Iyer on 12th August, 1937, in respect of their joint family properties for a sum of Rs. 21,000. Out of the said amount Ramaswami Iyer paid Rs. 9,000 for discharge of antecedent debts. For the balance of the price Ramaswami Iyer executed a promissory note in favour of Venkatarama Iyer for a sum of Rs.5,250 with an understanding that out of the said amount, Rs. 2,250 was to be paid within one year and the balance of Rs. 3,000 to be paid on the 3rd defendant attaining majority and giving a release deed. The balance of the sum of Rs. 6,000 was agreed to be paid to defendants 2 and 3 in equal moieties on their attaining majority and executing releases to the plaintiff’s father. The sale deed also contained a covenant that the 1st defendant and his father would indemnify the plaintiff’s father against any loss if any dispute arose in respect of the property conveyed and thereby the vendees sustained any loss. As per the terms of the sale deed the and defendant received a sum of Rs. 3,000 on his executing a release deed but the 3rd defendant after he became a major instituted O. S. No. 42 of 1943 on the file of the Court of the Subordinate Judge of Tanjore for a declaration that the sale was not binding in regard to his share, and to recover the same. The suit was decreed but he was directed to pay a sum of Rs. 2,146-4-0 being his share of the binding debts discharged. The vendee Ramaswami Iyer died and his son the plaintiff having lost ¼th share of the properties purchased by his father as a result of the aforesaid decree filed O. S. No. 19 of 1945 on the file of the Court of the Subordinate Judge of Tanjore for damages for a breach of covenant of indemnity contained in the sale deed.
He assessed damages on the basis of the value of the share of the property lost by him by reason of the decree obtained by the 3rd defendant as a sum of Rs. 12,500. He added to that the costs decreed to the 3rd defendant and the costs incurred by him in that litigation and arrived at a total figure of the loss incurred by him at a sum of Rs. 13,260-6-0. He gave credit to the sum of Rs. 6,000 unpaid purchase money still left with him and also the sum of Rs. 2,146-4-0 deposited by the 3rd defendant in his suit. In the result he made a claim for a sum of Rs. 5,114-2-0 to be recovered from the 1st defendant personally and from the family properties of the defendants. The defendants contended inter alia that the claim for damages in respect of a liability to indemnify was not a debt and it was also not binding on them as it was an avyavaharika debt. They also pleaded that the quantum of damages claimed was excessive and in addition they set up a counter-claim for the recovery of a sum of Rs. 3,000 with arrears of interest thereon being the unpaid purchase money. The learned Subordinate Judge held that the covenant to indemnify the vendee contained in the sale deed was in the circumstances of the case an avyavaharika debt and therefore not binding on the defendants. He further decreed the counter claim of the defendants in part. In the result he gave a preliminary charge decree in favour of the defendants. The plaintiff filed A. S. No. 371 of 1946 against the judgment of the lower Court denying his right for damages on the covenanr of indemnity whereas the defendants preferred A. S. No. 411 of 1946 against the decree of the lower Court claiming the full amount of their counter-claim. For convenience of reference we shall refer to the parties in accordance to the rank assigned to them in the suit. Two questions arise in the appeals One is whether there is a clause of indemnity in the sale deed. The other is whether the liability to indemnify is an avyavaharika debt as understood in Hindu Law. The first question depends upon the construction of the relevant clauses in the sale deed, Exhibit P.1.
Two questions arise in the appeals One is whether there is a clause of indemnity in the sale deed. The other is whether the liability to indemnify is an avyavaharika debt as understood in Hindu Law. The first question depends upon the construction of the relevant clauses in the sale deed, Exhibit P.1. Exhibit P.1 is dated 12th August, 1937 whereunder Venkatarama Ayyar for himself and as guardian of his two minor sons, and Ramamurthi Iyer as major sold the joint family properties in Kilakottagam village to the plaintiff’s father. After describing the circumstances of the family which necessitated the sale, details of the debts to be discharged from and out of the consideration amount and the manner and the time in which the balance of consideration should be paid to the vendor it contains the following covenants: “After having declared so as to be believed by you, that there is no encumbrance whatever, such as usufructuary mortgage, hypothecation and prior registration in respect of the above property excepting the debts, which are mentioned above and which have been directed to be paid by you, we have executed this deed of absolute sale. Should any dispute arise in respect of the above property, and should you thereby sustain any loss, we shall make good the loss on the liability of our family properties, and on our personal liability”. The learned counsel for the plaintiff in A. S. No. 371 of 1946 contended that the ‘latter covenant is absolute in terms and it provides against every possible contingency of the vendee sustaining loss in case of any dispute in respect of the property, whereas the learned counsel for the defendants argued that the said covenant is limited in scope and should only be read in connection with the earlier covenant and the Joss provided against is the loss incurred on account of any of the encumbrances, etc., found to be subsisting on the properties so conveyed. To our mind the contention of the learned counsel for the defendants gives a very narrow construction to the covenant and does not give full effect to the wide words used by the parties. The first covenant is an usual covenant which will be found in every sale deed whereunder the vendor declares that the property that being sold is not subject to any encumbrances other than these that are disclosed in the sale deed.
The first covenant is an usual covenant which will be found in every sale deed whereunder the vendor declares that the property that being sold is not subject to any encumbrances other than these that are disclosed in the sale deed. The second covenant would be redundant if it was intended only as consequential to the first covenant as even without that the vendee would be able to recover any loss incurred by him in case any mortgage or hypothecation was found to exist which was not disclosed. The argument of the learned counsel for the defendants becomes possible because in the earlier covenant the words used are “encumbrance or similar kalan” and in the later covenant the word kalan is used to denote dispute. It is argued that because kalan means encumbrance the word kalan in the second clause also means the encumbrance mentioned in the earlier covenant. As the learned Judge points out if that was the intention, in the second covenant the words ‘if any such kalan’ would have been found. Apart from that the word kalan is used to denote different meanings in different contexts. It is used ordinarily to mean ‘encumbrance’ but is also used in appropriate context to connote dispute. But having regard to the circumstances pointed out by us we are definitely of opinion that the second covenant is not confined to the encumbrance mentioned in the earlier covenant but is intended to cover every dispute which caused loss to the vendee. We therefore, agree with the lower Court that the sale deed contains a specific covenant to indemnify the vendee in case he sustained loss on account of any dispute arising in respect of the property. If so the loss now caused to the plaintiff in view of the decree obtained by the 3rd defendant is a loss covered by the said covenant. The next question argued at some length by the learned counsel is whether the liability arising out of the said covenant is an avyavaharika debt in Hindu Law. The law on the subject is well settled and it is not necessary to consider the original texts as they have been fully and authoritatively construed by various decisions of this Court and of the Judicial Committee. The English word ‘debt’ does not accurately express the content of the Sanskrit word rina.
The law on the subject is well settled and it is not necessary to consider the original texts as they have been fully and authoritatively construed by various decisions of this Court and of the Judicial Committee. The English word ‘debt’ does not accurately express the content of the Sanskrit word rina. In Nachimuthu Goundan v. Balasubramania Goundan1, Krishnaswami Ayyangar, J., considered the meaning of the word rina having regard to the original texts. In that case one of the questions was whether the unascertained liability in a partnership was a debt according to Hindu Law. After pointing out that the word rina had a wider connotation than the word debt the learned Judge held that such an unascertained liability to account is rina as understood in Hindu Law. In Muthammal v. Sivakami Ammal2, Venkatasubba Rao, J. and Madhavan Nair,J., have elaborately considered the meaning of the words avyavaharika debt having regard to Hindu Law texts and the previous case-law on the subject. The question in that case was whether the shares of the sons in the joint family property was liable to attachment and sale for realizing the decree for mesne profits obtained against the father. At page 613 the learned Judges lay down the following propositions: “(1) If the debt is in its inception not immoral, subsequent dishonesty of the father does not exempt the son. (2) It is not every impropriety or every lapse from right conduct that stamps the debt as immoral. The son can claim immunity only, when the father’s conduct is utterly repugnant to good morals, or is grossly unjust or flagrantly dishonest.” The same question was considered by the Judicial Committee in a decision reported in Hemraj v. Khem Chand1. The Judicial Committee approved the conclusion arrived at by the learned Judges in Muthammal v. Sivakami Ammal2, in regard to the interpretation of the words avyavaharika debt and enunciated the principle in the following words at page 737: “This also makes clear the connection between the nature of the debt and the liability to pay it. That the duty cast upon the son being religious or moral, the character of the debt should be examined from the standpoint of justice and morality appears to be fairly clear from the decisions.
That the duty cast upon the son being religious or moral, the character of the debt should be examined from the standpoint of justice and morality appears to be fairly clear from the decisions. In this connection regard may also be had to the debts mentioned in the texts which the son need not pay, most of which are of an objectionable character. It also appears to be clear on principle, and on authority, that examination of the nature or character of the debt should be made with reference to the time when it originated, in other words, when the liability was first incurred by the father. If on such examination it is found that at its inception the debt was not tarnished or tainted with immorality or illegality, then it must be held that it would be binding on the son.” Further discussion of the rule is found in Lingayya v. Punnayya3. In that case the sons of a Hindu father filed a suit after the father’s death to set aside a sale by him of the joint family property and in that suit it was found that the sale was not made for family necessity and therefore it was set aside to the extent of the sons’ interest in the property. The vendee subsequently filed a suit against the sons for the recovery of a proportionate part of the purchase price paid by him. The learned Judges held that the sons could be compelled by reason of the rule of pious obligation to discharge a liability incurred by the father to refund a proportionate share of the purchase consideration. The following principles may be gathered from that judgment; (1) the fact that the father has abused his powers does not taint his obligation to an extent which would justify the Court in holding that it is not avyavaharika; (2) the rule is not confined to a debt known to the English common law but applies to other financial obligations incurred by the father; and (3) it also applies where the father’s liability is contingent and that the contingency arises only after his death as when the event has happened the liability becomes a present one. Applying the aforesaid principles we shall now proceed to consider the finding of the lower Court and the facts of this case.
Applying the aforesaid principles we shall now proceed to consider the finding of the lower Court and the facts of this case. The learned Judge came to the conclusion that a promise by a Hindu father to indemnify a vendee under an unauthorised sale of ancestral property against loss on his undivided sons repudiating the sale is, vis a vis such sons, an idle promise, and one made contrary to his duty and therefore avyavaharika. This conclusion was based upon his finding that what Venkatarama Iyer did was not only to sell for an under-value ancestral property in which his sons had interest by birth but he also gave a promise to the vendee that his sons would not exercise their right of repudiating the unauthorised sale on pain not only of losing their share of the free (unspent) portion of the price but on paying damages to the vendee if they dared to question their father’s act in selling their property. Relying upon this finding he argued that a promise made by a father which was so much at variance with his duty and which, in any event, must be enforced only against the sons’ share in the family properties, as the sale for consideration of the father’s own share could not be disturbed, should be regarded as an idle promise in regard to the family estate and also as avyavaharika. The learned Advocate for the defendants supported the conclusion of the learned Judge and also the reasoning on which he arrived at that conclusion. He did not dispute any of the principles stated: above but argued that we should hold that the liability to indemnify incurred by the father was in the circumstances of the case grossly unjust or flagrantly dishonest.
He did not dispute any of the principles stated: above but argued that we should hold that the liability to indemnify incurred by the father was in the circumstances of the case grossly unjust or flagrantly dishonest. This contention he based upon the following facts: (1) the Court in O. S. No. 42 of 1943 set aside the sale on the ground that it was neither supported by necessity nor was it for the benefit of the estate and also that the properties were undervalued; (2) by agreeing to indemnify the vendee against any possible loss by reason of any dispute raised in regard to the property the father bound over the sons not to question the alienation or in the event of their questioning the alienation, to pay the vendee in the shape of damages what the son or sons so questioning would gain by filing the suit to recover his or their share of the joint family property; and (3) the result of the earlier litigation was not prejudicial to the plaintiff as he would be in possession of 3/4 share of the lands valued at Rs. 26,450 and also a sum of Rs. 2,146-4-0 paid by the 3rd defendant against payments totalling only Rs. 15,000. The finding of the learned Subordinate Judge and also the argument of the learned counsel ignore the distinction between the nature of the debt and the mode of its realisation. To ascertain whether the debt of a father is tainted with immorality or illegality the extent of the burden cast on the son is not a relevant consideration at all. Most of the debts of a father held to be binding on his son are certainly oppressive and clearly detrimental to his interests. Surety debts incurred by the father to help a third party whatever may be its magnitude is held to be binding ‘on the son, Thangathamma v. Arunachalam Chettiar1. The amounts received by him as an agent or a trustee and later misappropriated by him are equally binding on the son-see Natesayyan v. Ponnuswami2, Venugopala Naidu v. Ramanadhan Chetty3, Thirumalayappa Mudaliar v. Veerabhadra4, Kanemar Venkappayya v. Krishnachariya5 and Gurunathan Chetty v. Raghavalu Chetty6.
The amounts received by him as an agent or a trustee and later misappropriated by him are equally binding on the son-see Natesayyan v. Ponnuswami2, Venugopala Naidu v. Ramanadhan Chetty3, Thirumalayappa Mudaliar v. Veerabhadra4, Kanemar Venkappayya v. Krishnachariya5 and Gurunathan Chetty v. Raghavalu Chetty6. In either case a son’s share in joint family property though he is not benefitted by the debt is held to be liable even though the result is that his share of the joint family property is exhausted in discharging the debt. The son is made liable for a decree for damages against the father for injury done to the crops of a third party-see Chhakauri Mahton v. Ganga Prasad7. He would be liable for damages obtained against his father for cutting trees and demolishing a tank-see Chandrika Ram Tiwari v. Narain Prasad Rai8. In none of these cases the argument based on handship availed the son. The only workable proposition and an easily ascertainable test is to find whether the liability of the father is tainted at the source. We will have to examine the nature and the character of the debt with reference to the time it originated, in other words when the liability was first incurred by the father. So tested can it be said that the liability of the father is tainted by immorality or illegality or the incurring of the liability is grossly unjust or flagrantly dishonest. We must assume for the purposes of this case as the question was finally decided in the prior litigation between the parties that the sale was neither for necessity nor for the benefit of the family and therefore in excess of his powers. The transaction may be imprudent and it may be even in abuse of his powers. But it cannot be said that that fact in itself makes a debt an avyavaharika debt. If in the circumstances it was an avyavaharika debt the Full Bench decision in Lingayya v. Punnayya9 should have been the other way. It cannot also be presumed that when the father gave an indemnity he was doing either a grossly unjust act or a flagrantly dishonest act. Indeed he was trying to be honest and straightforward in his dealings with the vendee. He was selling a property in the circumstances he thought it was necessary to sell, to salvage the family estate.
It cannot also be presumed that when the father gave an indemnity he was doing either a grossly unjust act or a flagrantly dishonest act. Indeed he was trying to be honest and straightforward in his dealings with the vendee. He was selling a property in the circumstances he thought it was necessary to sell, to salvage the family estate. He intended to be honest by the vendee and gave an assurance to protect him against possible disputes in future. The covenant he gave was only personal to him. It is an accident in this case that the father had no self-acquired property or a share in joint family property other than the property conveyed to the plaintiff’s father. If not, the creditor could have proceeded against the self-acquired property of the father or his share in other joint family property as the liability of the father at its inception was not vitiated by any of the reasons mentioned in the decided cases. The fact that the said liability if worked out would affect the interest of the other members of the family cannot be taken, in our view, as a relevant consideration and therefore we hold that the debt is not an avyavaharika debt. The plaintiff would therefore be entitled to recover damages for breach of covenant of indemnity against the interests of the defendants in the joint family property. The learned Judge found that the plaintiff would be entitled to recover a sunt of Rs. 3,600 towards damages from and out of their ancestral and joint family properties. This finding is not attacked before us by the defendants. It was argued by the learned counsel for the plaintiff that the finding of the lower Court that the 1st defendant was a minor when he executed Exhibit P-1 was not correct in law. If he was a minor he could not be made liable personally on the covenant. Both the counsel accepted the finding of the Court below that he was a minor at the time when he executed the document but became a major before it was registered. The learned counsel for the plaintiff contended that as he became a major by the date of registration, the date when he admitted execution and got the document registered must be deemed to be the date when he executed the document.
The learned counsel for the plaintiff contended that as he became a major by the date of registration, the date when he admitted execution and got the document registered must be deemed to be the date when he executed the document. In support of his contention he relied upon paragraphs 274 and 275 of Halsbury’s Laws of England. The statement of law in those paragraphs relates to deeds required to be signed, sealed and delivered and they are governed by the laws obtaining in that country. The said paragraphs are not helpful for deciding the present case. There is an essential distinction between execution and registration. The admission of execution before the Registrar cannot in any sense of the term be equivalent or substitution for the signing of the document. We therefore hold that when the document was executed the 1st defendant was a minor and therefore he could not be personally made liable for the covenant on the indemnity. In view of our findings the other questions raised by the parties would not arise for consideration. In the result A. S. No. 371 of 1946 is allowed in part with proportionate costs here and in the Court below and A. S. No. 411 of 1946 is dismissed with costs. K.S. ----- Appeal No. 371 of 1946 allowed in part and Appeal No. 411 of 1946 dismissed.