What is ‘Antecedent Debts’ under the Hindu Law?
(a) The debt must be prior in time, and
(b) The debt must be prior in fact.
The Supreme Court re-affirmed that the “antecedent debt” means antecedent in fact as well as in time, that is to say, that the debt must be truly independent of and not part of the transaction impeached. The debt may be incurred in connection with a trade started by the father. The previlege of alienating the whole of joint family property for payment of an antecedent debt is the privilege only of the father, the grand-father and great grand-father qua the son or grand-son only.
Where the father executed a simple mortgage and total consideration of Rs. 10,000/- was received by the mortgagor in which Rs. 7,000/- was received in instalments and Rs. 3,000/- at the time of mortgage. Rs. 7,000/- was advanced on express condition that a mortgage would be executed later. In this case it was held, that the amount of Rs. 7,000/- was not an antecedent debt so as to fasten the liability on sons of mortgagor.
Thus, it is now well settled that the father of Hindu joint family enjoys full right to sell or mortgage the joint family property including the son’s interest therein to discharge antecedent debt. A sale of joint family property, which is made to discharge a debt taken at that very time or as a part of the sale transaction, is not valid because the debt in this case is not an antecedent debt.
Thus, the father has got the power to sell or mortgage the joint family property for the payment of the debt, may it be for his personal benefit. It would be binding on sons, provided—(a) the debt was antecedent to the alienation, and (b) It was not contracted for an immoral purpose. In Brij Narain v. Mangala Pd. the Privy Council laid down the following propositions:—
1. The Karta of a joint family except for legal necessity cannot alienate the joint property nor can mortgage it.
2. If a decree has been passed for the payment of the debt it can be executed against the entire estate, provided the son and the father living jointly.
3. He cannot mortgage the joint family property unless the mortgage was done for the payment of some antecedent debt.
4. “Antecedent debt” means a debt which is prior in time as well as in fact.
5. The fact that the father is alive or dead does not affect the liability.
1. Alienation by Father:
The father of a joint family may sell or mortgage joint family property including the son’s interest in the property to discharge a debt contracted by him for his personal benefit, provided the following two conditions are satisfied:—
(a) The debt, for which alienation is made, must be antecedent in time.
(b) The debt must not have been taken for an illegal or immoral purpose.
The Kerala High Court has held that in absence of a plea that the debt, for the discharge of which a Hindu father has alienated the ancestral property was vitiated by illegality or immorality, the sale is not liable to be challenged, if it is shown that it has been executed for the discharge of the antecedent debt of the father.
If the alienation has been shown to have been made by the father for the payment of an antecedent debt, the son can still get rid of it, provided he is able to prove that the debt was tainted with illegality or immorality. The burden of proving both these facts is not on the alienee but on the son himself.
2. Moral Obligation:
It is also a moral duty of the sons to pay the debt of the father as they inherit the property from him. One, who inherits the estate of another, must pay such other’s debt. A Hindu heir is, therefore, liable to pay the debts of the deceased out of the assets; he has inherited from the deceased. The liability is moral and therefore absolute irrespective of the fact that the debt was incurred for moral or immoral purposes. The successor is bound to pay his ancestor’s immoral debts out of such property.
3. Legal Obligation:
Besides religious and moral duties, there is also a legal obligation to pay back the debt secured by the father. With respect to a money debt of the father, sons may be bound by proper proceedings taken in a Court of law by a creditor against the father, although the sons are not made parties to the suit. The whole family property is liable for debts, incurred for the benefit of the family, by the father as manager. Reasonable interest on such debt is also payable by the family.
Suit by the Creditor:
The creditor may bring a suit to recover the debt either—
(i) In the lifetime of the father, or
(ii) After the death of the father.
Suit in the Life Time of the Father:
The suit may be instituted against the father alone or both against the father and son and in execution of the decree the entire family property including the interests of the sons may be attached and sold. The creditor is not bound to join the sons as parties to the suit against the father. But during the lifetime of the father the suit cannot be brought against the sons only, as the liability has arisen on them only along with the father.
After the joint family is attached towards the payment of the debt in execution proceeding but before its sale in execution, the sons have got the right to challenge the attachment and the sale. They could challenge the attachment under Order 21 Rule 58 of the Civil Procedure Code on the ground of its being contracted for immoral purposes.
Further, they cannot file a fresh suit for a declaration to the effect that the decree was not binding upon them and also for an injunction so that the decree holder may not acquire the entire joint family property. When the coparcenary property has been sold out in the execution of a debt decree, the sons would not be entitled to recover the same unless they establish the fact that the debt was contracted for an immoral or illegal purpose within the knowledge of the creditor and he was kept posted with the purpose of the debt.
The onus is on the sons to prove that the debt was contracted for some immoral or illegal purposes. This burden is not discharged by showing that the father lived an immoral extravagent life. A distinction between the debt and the alleged immorality must be proved.
Suit after the Death of the Father:
In cases where the father dies before the decree against him has been fully satisfied it may be executed by attachment and sale of the entire joint family property in the hands of the sons, unless the debt was incurred for an illegal or immoral purpose. (Section 53 of the Civil Procedure Code). The objections on the ground of immorality or illegality of the debt should be determined in execution and not by a separate suit. But where the sons allege that no debt was really contracted a fresh suit to this effect should be instituted.
Time-Barred Debts and Son’s Liability to Pay:
Hindu law does not recognise any rule of limitation for the recovery of debts. According to it every Hindu is bound to pay the debts notwithstanding that it was time-barred because he is under a religious and moral obligation to pay the same. But under the Indian Limitation Act, 1963, if the debt was barred against the father, the sons are no longer under a pious obligation to pay such debts.
But a Hindu father may pass a promissory note for a time-barred debt. Such a note would constitute a binding contract in the context of Section 25(3) of the Indian Contract Act, 1872 and it may be enforced against him, and after his death, against the sons. The sons, however, would be liable to the extent of their shares in the coparcenary or self acquired property which has come to their hands on the father’s death.
A time barred debt is not Ayavaharika and therefore it has been held that when the father alienated joint family property in consideration of a debt that is barred by the law of limitation, the alienation is binding on the sons.