Kumbakonam Bank, Limited, … vs K.R.M.P. Shanmugham Pillai

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Kumbakonam Bank, Limited, … vs K.R.M.P. Shanmugham Pillai

FACTS OF THE CASE

The first defendant is the manager of the joint Hindu family that includes defendants 1 through 4. Their kulachara is a grocery business, and they were a trading family. The first defendant in this family business has borrowed money from the plaintiff, Kumbakonam Bank, Limited, through overdrafts and promissory notes, as well as through the execution of security bonds, totaling the amount sought in the lawsuit, which is Rs. 12,275-14-7. The plaintiff bank brought the lawsuit to recover the aforementioned sum and sought to enjoin the first defendant personally from recovering it as well as the shares in the joint family properties that had been pledged as security by the defendants 2 through 4. There was no dispute about the amount for which the suit was filed, the execution of the security bonds and promissory notes, the passing of consideration, or anything else. In the lower court, the only question that was brought up was whether the suit debt was also binding on defendants 2 through 4 and whether their shares in the family properties will be responsible for paying off the suit debt.

ISSUE RAISED

• Whether this business can be styled as the ancestral trade of defendants
• whether the arecanut business was an admissible extension or change of the family ancestral business.

Contention of the Petitioner

• The amount sought to be recovered from the first defendant personally as well as from defendants 2 through 4 regarding their shares in the joint family properties that had been pledged as security to the bank.

Contention of the Respondent

• The contracting company for these debts was a new, speculative trade in arecanuts with other nations, not the traditional grocery business.

JUDGEMENT

• The validity of the security bonds shown in Exhibits A-1 through A-3 does not bind defendants 2 through 4. With costs, this appeal is allowed.
• The lower court’s decree is modified in accordance, and the plaintiff will receive the requested decree. Three months for payment.

CONCLUSION

 In the case of a hereditary trading family where there has been an extension or change in the ancestral business, the only criterion is whether the particular business challenged is a bona fide extension or reconstruction of the business or whether it is of such speculative character entailing unusual hazards against which the interests of the minors and the other categories of persons have got to be protected by law.

REFERENCE

• https://indiankanoon.org/doc/1343364/

written by Rohini Tondare intern under legal vidhiya.

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