This appeal raises two questions. One is whether the minor members of a trading family can be held liable to the extent of their interests in the family properties for debts incurred in a business carried on by the father in partnership with strangers. The other question is whether a decree passed by consent in a partition suit puts an end to the joint status, notwithstanding that the terms of the decree are never carried into effect and the members of the family continue to live together and regard themselves, as still being joint.

The appellant is the son of one Narayanan, a Nattukottai Chettiar, who died in 1927. Narayanan had two wives, Unnamalai and Alamelu. By Unnamalai he had three sons, A.M.A.N. Annamalai Chettiar (the 3rd respondent), A.M.A.N. Natesan alias Chidambaram Chettiar (the 5th respondent) and A.M.A.N. Sambandam Chettiar (the 6th respondent). By Alamelu he had four sons. The eldest, Annamalai, predeceased his father and the youngest Yoganandam was given in adoption. The other two sons are the appellant, and A.M.A.N. Subbayya Chettiar (the 7th respondent). Many years ago Narayanan founded a money-lending business with his brother at Kaula Lampur in the Federated Malay States. Afterwards they separated and on the partition of the family properties the Kaula Lampur business fell to the share of Narayanan, who carried it on until his death for the benefit of himself and his sons. This business was continued after his death and it is not disputed that it must be regarded as a family business. In 1907 there was a disagreement between the two wives of Narayanan with regard to their stridhanam moneys and it would appear that Unnamalai wished to make certain that her sons would not be prejudiced so far as their shares in the family properties were concerned as the result of other sons being born to Alamelu. At this time the only son born to Alamelu was Annamalai. As the result of the differences between the two wives a suit for partition was filed in the Court of the Subordinate Judge, Madura East, by the sons of Unnamalai, who were represented by their maternal grandfather Chidambaram Chettiar. This suit was numbered as O.S. No. 28 of 1907. The defendants were Narayanan, Unnamalai, Unnamalais daughter Unnamalai, Alamelus son Annamalai and Alamelu. There does not appear to be any doubt that this suit was of a friendly nature. Narayanan, his wives and children were all living together at the time and continued to live together until his death. In fact the sons have always lived in the family house. On the 30th September 1908 a decree was passed by consent in the partition suit. It declared inter alia that the sons of the first wife were to have a half share of the family properties, and the sons of the second wife, including the sons to be born thereafter, the other half. The decree did not, however, result in the division of the family properties and can only be regarded as embodying arrangements to be carried into effect, if and when a partition did in fact take place. In the course of his evidence the 3rd respondent stated that the moveable properties were divided, but as it is clear that he was untruthful on other points we are not prepared to attach any weight to his testimony, and it was not accepted by the learned trial Judge. I will return to this compromise decree later.

After the partition suit had been settled Narayanan entered into a partnership with the second and fourth respondents for the purpose of carrying on a money-lending business at Maubin in Burma under the vilasam of M.P.N. The capital contributed by Narayanan to this partnership must be deemed to have come from the common fund of the family. What the amount of the capital is does not appear. The books have not been produced and the appellant must share the responsibility for this. It is common ground that the business was a very successful one for many years and that Narayanan took part in its management during his life. On his death it was not wound up, but continued exactly as before, except that the 3rd respondent as the eldest son took his fathers place in the partnership. It was not until the rebellion broke out in Burma in 1930 that the business ceased to prosper.

In the course of its business the M.P.N. firm accepted deposits from customers and paid interest on the amounts so received. During the lifetime of Narayanan and in the ordinary course of business the 1st respondent deposited a sum of money with the firm. On the 27th April 1930 it was calculated that there was due by the firm in respect of this deposit, Rs. 10,126-9-6, for which a promissory note was executed by the firms agent and handed over to the 1st respondent. When he demanded payment the firm failed to comply and the 1st respondent was compelled to file the suit out of which this appeal arises. The defendants were Narayanans partners and his sons. The 2nd and the 4th respondents who with Narayanan founded the firm, pleaded that the firms agent had no power to accept the deposit. The 3rd, 5th and 6th respondents, Narayanans sons by Unnamalai, denied that they ever had any interest in the business. Their case was that their father merely represented himself and his sons by Alamelu. The appellant and the 7th respondent contended that they had no interest in the business and that their father entered the partnership on behalf of himself and his sons by the first wife. These defences all failed and the suit was decreed with costs, the liability of the appellant and the 5th, 6th and 7th respondents being limited to their shares in the family properties.

The decision of the trial Judge is challenged by the appellant alone. He contends that the business of the M.P.N. firm cannot be regarded as being part of an ancestral business and says that unless it can be so regarded, he is under no liability to the 1st respondent. He asks the Court to hold that the family became divided as the result of the partition suit and that Narayanan did not enter into the M.P.N. partnership on behalf of himself and all his sons, but only on behalf of himself and his sons by Unnamalai. He says that even if Narayanan did enter into the partnership on behalf of all, the partnership was dissolved on his death and it could not be continued so as to make him liable. For the 1st respondent it is denied that the effect of the partition suit was to divide the family. It is contended that the interest in the M.P.N. firm must be regarded as being part of an ancestral business; but if it cannot be so regarded, it is said that the family being a trading family the M.P.N. business must be deemed to be part of the family business, which renders the minor members of the family liable to the extent of their interests in the family properties. It is also contended that the appellant is liable under the pious obligation rule of Hindu Law.