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What are the Suretyship Debts according to Vrihaspati?

(4) For delivery of goods or articles of the debtor.

Yajnavalkya recognises the first three suretyship debts alone. It is not settled that the obligation in regard to the first two classes of the above debts is purely personal to the sureties and sons are liable. Further distinction is recognised that while a son is liable to pay a debt contracted by the father as a surety for payment of money, the grand-son is not liable to pay unless his grandfather in accepting his liability of the suretyship receives some consideration for it.

The Patna High Court has accepted the liability of the sons to pay the suretyship debt, in case they are in the possession of joint Hindu family property. The Madras High Court in a case has held that where a Hindu father executed a surety-bond stating that he would make the debtor pay within two months the amount due on a promissory note already executed by the latter and that in default of payment by the debtor he would pay, the sons of the surety were liable under Hindu Law for payment.

This view was accepted by Andhra Pradesh High Court also. The Madhya Pradesh High Court in Smt. Chhabirani v. Girdhari Lai has laid down that the sons are under a pious obligation to pay the debt of the father arising out of the surety-bond executed by him to pay a third person’s debt. This liability is, however, only to the extent of their interest in the joint family property.

Where the father stood surety to get the property of the third persons released from attachment before judgment and on the strength of the surety-bond executed by the father, the decree-holder proceeded to execute the decree by attachment of immovable property belonging to the joint family, the interest of the sons in the property was liable to be attached and sold for realisation of surety-debts incurred by their father.

According to the above discussion there is always an element of immorality in Avyavaharik debt, but where the debt is afflicted by some element of undue influence or it is unreasonable or it is unjustified or it is unjust or is not in consonance with the good conduct, the debt on account of these factors, does not become Avyavaharik.

According to the decisions of the Courts in recent times, now it is well settled that the debts for spirituous liquor, debts due for losses at play, debts for satisfaction of lust, unpaid-fines, unpaid tolls, debts arising out of promises without consideration, suretyship debts, etc. are Avyavaharik.

So far liability of the son to pay the debt, which is Vyavaharik may be classified as under:—

There is no liability on the sons to pay the debt contracted by the father after partition. But where the debt was contracted before partition, the liability of the sons would be confined to the extent of their share in joint family property, provided the debt was not for an immoral purpose. Where the creditor has instituted a suit and obtained a decree before partition, the sons would be liable for the payment of the amount of the decree even after partition.

But if the creditor files the suit after partition and the father, who had taken the debt, dies later on then too the sons can be impleaded in the suit in the capacity of legal heirs and they can be made liable to pay the amount of the debt to the extent of their share in joint property.

Liability for the debt contracted before partition:

The liability for the debt contracted before partition may be sub-divided as shown in the above diagram into the following two classes:

(a) Debts incurred by the father as manager or Karta of the joint family for family purposes;

(b) Debts incurred by the father for his personal benefit.

(a) Under this sub-classification the father, grand-father or great grand-father as Karta of Joint Hindu Family enjoys the power to contract debts for necessity or benefit of the family and whole joint family property including the interests of the sons, grand-sons and great grand-sons is liable for payment of that debt.

In Virdhachalam Pillai v. Chaldian Syrian Bank Limited, the Supreme Court held that a father can by incurring a debt, even though the same be not for any purpose necessary or beneficial to the family, so long as it is not for illegal or immoral purposes, lay the entire joint family property including the interests of his sons open to be taken in execution proceedings upon a decree for the payment of that debt.

The power of the father to alienate for satisfying his debts is ñî-extensive with the right of the creditors to obtain satisfaction out of family property including the share of the sons in such property. Where a father purports to burden the estate by a mortgage for purposes not necessary and beneficial to the family, the mortgage, qua mortgage would not be binding on the sons unless the same was for the discharge of an antecedent debt.

The Madras High Court in Bardumal v. Ambalal Vyas has held that the power of Karta to alienate a family property for discharge of family debts so as to bind the interest of other coparceners subsists only so long as family continues joint. Once there is severance in status, the right of Karta to effect such alienation comes to an end.

(b) Where the debt is incurred by the father for his personal benefit, the son on the basis of the doctrine of pious obligation will be liable for the payment of the debt, provided the debt is not tainted with illegality or immorality. This liability is limited to the son’s interest in the coparcenary property and the whole family property is not liable for the payment of personal debts.

Where the Karta of a joint family starts a personal business which is not related with the joint family in any way, and he contracts debt for the purpose of that business, the shares of the coparceners in the joint family property are not liable.

Where the father has contracted debt after partition, the creditor cannot recover his debt from the share allotted to the sons on partition. The sons would not be liable to pay the pre-partition debts so long the arrangement for the payment of those debts made at the partition was not reasonable and proper.

In a partition between father and son, the son’s share at partition is liable for discharge of pre-partition family debts, which are binding on the son, even though the father’s power to alienate family properties to discharge such debts has come to an end with the severance of the status.

The following points are notable in this connection:—

1. A decree against the father passed alone when he was joint with the son, is binding on the son even after partition, though it is open to him to challenge it either in execution proceedings or in a separate suit on the ground that it was incurred for illegal or immoral purposes.

2. If such decree is to be executed after the son has separated from the father, the son must be made a party to the execution proceedings, if his separated share is binding on the son.

3. A decree passed after partition against the father alone for his pre-partition debts, though not immoral, is not binding on the separated son. After partition a decree must be obtained against the son if his share is to be held liable.

4. To obtain such a decree, the creditor must join the son as a party to the suit against the father, or if he has already obtained a decree against the father alone after the partition, he must file a separate suit against the son for the original debt, if it is in time.

If it is not within time then he should bring a suit for declaration that the son’s separated share in the joint family property is liable to be attached and sold in the execution of the decree against the father for the satisfaction of the entire decretal amount or such portion of it, as may be found binding on the son.

5. Where there has been a decree against the father on the debt binding on his sons as not being illegal or immoral and a partition takes place between him and his sons after the decree, the decree can be executed by attachment and sale of the properties which have come to the son’s share. It is not necessary for the decree-holder to bring a separate suit for the purpose.