AS/176/1998 of SPL DY COLLECTOR LA. TGP. NANDYAL Vs ARIKATLA CHINNA VENKATA REDDY on 30 November 1998

COMMON JUDGMENT:

Both the suits arise out of a common judgment inO.S.No.268 of 1986 on the file of the II-Additional Senior CivilJudge, at Vijayawada.

2. The suit was filed for enforcement of a mortgage deedalleging that the 1[st] defendant is a registered firm of whichdefendants Nos.2 to 4 are partners. The 2[nd] defendant is themanaging partner and he is said to have borrowed severalamounts from the plaintiff and executed promissory notes and alsocreated an equitable mortgage of the schedule property includingthe share of his minor children, who are defendant Nos. 5 and 6.Defendant Nos. 2 to 4 did not seriously dispute about theborrowings and also the payments pleaded by the defendants.Defendant Nos.5 and 6 contended that they are not aware of thepartners of the 1[st] defendant firm and they have nothing to do with the businessand they have got 2/3[rd] share in the plaint schedule property andcreation of equitable mortgage by the 2[nd] defendant does not bindthem. There is no legal necessity or benefit of estate by theminors. Consequently, they pleaded that their share can not beproceeded with.

3. After framing necessary issues, the Court below haspassed a preliminary decree for a sum of Rs.1,91,031-75 ps withfuture interest on the principal sum of Rs.1,47,056-25 ps againstall the defendants.

4. Aggrieved by the said judgment, defendant Nos.5 and 6 have preferred A.S.No.1289 of 1998 and the plaintiff has preferredA.S.1476 of 1998 questioning the quantum of interest which hasbeen granted by the Court below after the decree.

The points that arise for consideration are:-

i)Whether defendant Nos.5 and 6 can be heldliable for the suit amount? Andliable for the suit amount? And

ii)Whether the plaintiff is entitled for a higher rateof interest from the date of suit?of interest from the date of suit?

POINTS:

5. Evidently, as can be seen from the findings of the Courtbelow under issue Nos.1 to 3 in the paragraph No.22 of thejudgment, a special finding has been given that defendant Nos.5and 6 are in no way are concerned with the borrowing of the 1[st] defendant firm or his business. It was also further found thatthe personal borrowings made by the 2[nd] defendant for the 1[st] defendant firm will never extend to defendant Nos.5 and 6. There was also a positive finding recorded by the Court below that the debt is not contracted by the 2[nd] defendant for the benefit ofthe alleged joint family and consequently, defendant Nos.5 and 6cannot be made liable in such circumstances. But, however,taking into consideration the general principles of law that thenatural guardian has got power to create a mortgage over theshare of the minor sons, the Court below has fastened the liabilityto defendant Nos.5 and 6. The liability of defendant Nos.5 and 6can only be extended when the natural guardian i.e., the father hascontracted any debt for the benefit of the family or they contractedany debt to discharge any liability of the joint family debts or forthe benefit of the joint family. It is also not the plea of the plaintiff that the business done by the 2[nd] defendant as a partner of the 1[st] defendant is a joint family business. Therefore, in the absenceof any such finding by the Court below and the plea made by theplaintiff and in view of the positive findings of the Court belowabout the nature of the transaction, even if the 2[nd] defendant hasgot a right to deal with the properties of the minor as a naturalguardian, still so far as this transaction is concerned, his dealingsdoes not bind defendant Nos.5 and 6 and consequently there cannot be a valid decree against the share of defendants 5 and 6and the appeal filed by defendant Nos.5 and 6 has to be allowedand the mortgage decree shall be enforceable only against the1/3[rd] share of the 2[nd] defendant in the schedule properties.

6. So far as the other claim of the plaintiff for enhancementof the interest is concerned, as can be seen from the plaintallegations, the interest was claimed at 15% p.a., and it wasgranted by the Court prior to filing of the suit. In fact, granting ofthe subsequent interest is discretion of the Court and there issufficient security for the loan and prior to the suit, interest wasgranted as per the contract rate. I, therefore, find no reason tointerfere with the discretion expressed by the Court below ingranting interest at 6% p.a.

7. Accordingly, A.S.No.1476 of 1998 is dismissed andA.S.No.1289 of 1998 is allowed. Miscellaneous petitions, if any,in these Appeal Suits shall stand closed. Each party do bear theirown costs.

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