HINDU LAW RELATING TO

DEBTS UNDER
MITHAKSHARA LAW
 DEBTS
 Concept of Debts:
 Debt is an amount of money borrowed by one party from another.
 Debt is as a method of making large purchases that they could not afford
under normal circumstances.
 An obligation that requires one party, the debtor, agree to repay the
money to another party, the creditor.
 Examples:
 Loan, bonds, promissory notes, mortgages, etc.
 The pious obligation of son to pay his father’s debt.
 Father, grandfather – son, grandson
 Debt ordinarily means a liquidated or
ascertained sum of money as distinguished from
unliquidated damages for breach of contract or
breach of torts.
 Generally a Hindu is liable to discharge his own
debt, which is contracted by him.
 But he is not liable to discharge the debt
contracted by another person. Some time, a
person is liable to discharge the debt contracted
by another person.
In the following circumstances, a person is liable to
discharge the debts contracted by another person:
1. A person is liable to discharge the debts contracted by
another person as the agent of the former person. It is said
to be legal duty.
2. A person is liable to discharge the debts contracted by
another person from whom he acquire or succeed property
after his death or during his life time. It is said to be moral
duty.
3. A person is liable to discharge the debts contracted by
his father in order to rescue the father from the sin arising
out of non-payment of debts. It is said to be religious duty.
Who can contract debts?

 Under Mitakshara law, the following three

persons can contract debts:
1. Karta of the Hindu joint-family
2. Father
3. Individual Coparcener
1. Karta of the Hindu joint-family:-
 If the Karta contracted debts with concurrence of
all the adult coparceners or without concurrence
of the co-parceners, but for the benefit of the
estate or family or legal necessity, the entire
coparcenary property is liable to discharge the
debt contracted by Karta.
 Some times, the separate property of the Karta is
also liable to discharge the debt contracted by
Karta for family purposes.
2. Debt contracted by Father:-
 The separate property of the father is liable to
discharge his private debt.
 If the father contracted debt for his private
purpose, not for joint-family purposes, the entire
coparcenary property including his son’s interest
in that property is liable to discharge his private
debt provided that such debt had not been
incurred for illegal or immoral purposes.
3.Debt contracted by Individual coparcener:-
 Under Hindu law, an individual coparcener is
entitled to borrow money for his own purpose or
family purpose.
 He may have separate property or he may have an
undivided interest in the coparcenary property.
 If an individual coparcener contracted debts for his
private purposes, whether or not his undivided
interest in the coparcenary property is divided by
partition, his separate property is always liable to
discharge the debt contracted by him, both during
his life time or after his death.
 KINDS OF DEBTS UNDER MITAKSHARA LAW
 The Hindu law classified the debts into two categories,
namely,
➢ Vyavaharika debt.
➢ Avyavaharika debt.
1. Vyavaharika debt:
 If the karta contracted debt for family purpose or legal
purpose or moral purpose, it is said to be Vyavaharika
debt.
2. Avyavaharika debt:
 If the Karta contracted debt not for family purpose, but
illegal purpose or immoral purpose, it is said to be
Avyavaharika debt.
 The word Avyavaharika debts does not cover
debts which are illegal or immoral, but also covers
all the debts which the court regards as
inequitable or unjust to make the son liable.
 The term Avyavaharika debts has been translated
as being that which is not lawful, or what is not
just, or what is not admissible under the law or
under normal conditions.
 Avyavaharika debts – which is not lawful, not
just and not admissible under Law.
The followings debts are some of the examples of Avyavaharika
debts:
1. Debt for spirituous liquor.
2. Debts contracted under the influence of lust and wrath.
3. Debts for gambling.
4. Unpaid tolls.
5. Unpaid fines.
6. Debts due for promises without consideration.
7. Debts for being surety for the appearance of another person.
8. Debts for being surety for honesty of another person.
9. Time barred debts.
10.Debt contracted by father or Karta for concubine‘s daughter‘s
marriage.
11. Debt incurred by the father for the commission of an
offence.
12. A decree for damages for malicious prosecution.
13. Debt incurred by a male Hindu for payment of money for
adoption.
 In State of Rajasthan vs. Mohan Lal, Mohan Lal’s father
illegally exported heroin (drugs – It is an offence under
NDPS – Narcotic Drugs and Psychotropic Substances Act,
1985) to other states. He was arrested by the State of
Rajasthan and govt. impose levy for imposing fine. Father
died before payment of fine. So the govt. takes action against
Mohan Lal on the ground of doctrine of pious obligation. The
court held that the plaintiff was not liable on the ground
that the debt contracted by his father was Avyavaharika
debt.
 Hindu Joint Family is based on Patriarchal System.
 In the Hindu Joint Family, male members are of priority when it
comes to carrying out the duties and obligations of the Karta.
 After the death of the Karta, next senior male person become as Karta.
 The Hindu Law says that whatever the father was unable to repay
during his lifetime shall be fulfilled by his sons equally and if they
were to separate, they shall still complete the duty according to their
respective divided shares (Joint Liability).
 DOCTRINE OF PIOUS OBLIGATION
 Pious means godly, religious and sacred.
 Obligation means duty or Karma of the Hindu Person.
 ‘Pious Obligation’ means a duty of a Hindu male
essentially, due to the deep devotion that he puts into
his religion.
 As said by the Brihaspati, “He who, received a sum lent
or the like, does not repay it to the owner or creditor,
will be born hereafter in his creditor’s house, a slave, a
servant, a woman or a animal.
 The doctrine of pious obligation is that doctrine under
which sons are made liable to discharge father’s debts.
 But the debts of the father must be Vyavaharika.
 If the debts are not Vyavaharika, the doctrine of pious obligation shall not apply
to the sons.
 In the case of Sidheswar V. Bhubaneshwar Prasad, the Supreme Court of India
delivered the judgement as, “the Doctrine of Pious Obligation has origin in the
conception of Smriti writer who considered non-payment of debts as sin, this is
considered as evil practice and is the purpose of rescuing the father from such
evil practice and his torments in the next world that an obligation is imposed on
son to pay their father’s debts.
 To understand the Doctrine of Pious Obligation a comparison on the doctrine
which was prevalent pre 2005 and post 2005 after the Hindu Succession
Amendment in 2005.
Doctrine of Pious obligation before the passing of
the Hindu succession (Amendment) Act, 2005:-

 Prior to Hindu Succession Act, 1956, the son‘s

obligation to discharge the father‘s debt is recognized by
Mitakshara law in the following manners:
1. It is well settled under the Mitakshara law that the
debts contracted by father as the manager of the joint-
family for legitimate family purposes binds his son,
grandson and great grandson to the extent of their
interest in the coparcenary property.
2. It is well settled under the Mitakshara law that the debts
contracted by father for his own personal benefit binds his
son, grandson and great grandson to the extent of their
interest in the coparcenary property provided that such debts
had not been incurred for illegal purpose or immoral purpose.
3. It is well settled under the Mitakshara law that the son is
liable to discharge the debts contracted by father, even though
it had not been incurred for legal necessity or the benefit of
the family.
4. Provided that the debts are not Avyavaharika debts in
order to rescue the father from sin arising out of non-
payment of debts.
 The doctrine of pious obligation is not affected by the
reason of the fact that the father had contracted debt
not for family purpose, but for his private purpose or by
the fact that the father was not the manager of the
family at the time when the debt was contracted or the
son was minor at the time when the debt was
contracted by father or he is born after the debt
contracted by father.
Son’s Defense in Doctrine of Pious obligation

 If the creditor filed a suit against the son for discharge

of debts contracted by father, the son is entitled to
defense the suit on the ground that the debt incurred by
father is Avyavaharika debt, that is, it is incurred for
illegal or immoral purposes.
 The burden of proving that the debt was Avyavaharika
or illegal or immoral debt lies upon the son.
 It is not necessary for the son to prove that the illegal or
immoral purpose was known by the creditors.
Doctrine of Pious obligation after the passing of
the Hindu succession (Amendment) Act, 2005

 After the commencement of the Hindu Succession

(Amendment) Act, 2005, the law relating to pious obligation is
governed by section 6(4) of Hindu Succession Act, 1956.
 Hindu Succession (Amendment) Act, 2005 - Section 6(4)
 According to Section 6(4) of Hindu Succession Act, 1956 no
court shall recognize any right to proceed against a son,
grandson or great-grandson for the recovery of any debt due
from his father, grandfather or great-grandfather solely on the
ground of the pious obligation under the Hindu law, of such
son, grandson or great-grandson to discharge any such debt.
 ANTECEDENT DEBT
 According to Mitakshara Hindu law, the father of joint-
family can sell or mortgage the co-parcenary including
his son‘s interest in that property to discharge his
antecedent debt which has been incurred for his private
uses and such alienation binds all the sons provided
that
1. The debt was antecedent to the alienation.
2. The debt had not been incurred by father for illegal or
immoral purposes.
 So, the doctrine of pious obligation invest the father with power to
alienate the coparcenary property including his son‘s interest in
that property for discharging his antecedent debt contracted by
him for his personal or private purposes, provided that the debt was
neither illegal nor immoral.
 The two transactions, namely the incurring of the debt and the
alienation, must be truly independent of each other and it will come
one by one transaction. So, the necessary conditions for antecedent
debt are:
1. The debt must be prior in time
2. The debt must be prior in fact
 Alinor and alinee relationship.
 Burden of proving immoral or illegal purposes

 Generally, it is for the alinee to prove that the antecedent

debt be exist at the time of alienation or prove that after due
enquiries, be believed in good faith, that it exist.
 Then the burden of proof is shifted upon the son to prove
that the debt has been contracted by father for illegal or
immoral purpose and the alinee had notice about.
 It is not necessary for the alinee to prove that he made
proper enquiry as to purpose of the debt borrowed by father.
 It is not necessary for the alinee to prove that the money was
borrowed for the benefit of the family.
 Issues
 Issues in fact and issues in law
 A and B agree to sell property – Sale agreement Deed
 Whether the plaintiff proves that the defendant entered into an agreement to sell this property to
him for Rs. 10 lakhs?
 Whether the plaintiff proves that he paid Rs. One lakh as earnest money deposit to the
defendant?
 Whether the plaintiff proves that he is ready and willing to perform his part of the contract?
 Whether the defendant proves that the case of the Plaintiff is false and got up?
 What relief the plaintiff is entitled to?
 What order and decree the plaintiff is entitled to?
 Essay type questions

 What is a Hindu Joint Family? Distinguish between Hindu

Joint Family and Hindu Coparcenary?
 “A coparcenary is purely a creature of Hindu law”-Discuss

 Explain the difference between joint family property and self-

acquired property.

 Who is a Karta? Explain the powers and functions of the

‘Karta’ under Hindu code.
 Short Notes
 State the differences between the  Obstructed heritage.
Mitakshara and the Dayabhaga schools
regarding Succession.  Avyavaharika debt.
 What is Survivorship? How far it is affected
by the Hindu succession act, 1956?
 Mitakshara Joint
 Who is a coparcener? Explain his rights
Family.
under Mitakshara Hindu law.  Dayabhaga school
 “The Hindu joint family is purely a creature  Co-parcener.
of Hindu Law”-Explain.  Women’s Estate.
 Who is Karta? Examine the powers of the
Karta to contract debts and to alienate the
 Ancestral property
joint family property.
 Coparcenary property.