To meet the necessity of the family the Manager need not alienate the property. He may raise a loan. The power to incur debts is thus conditioned by the existence of a legal necessity or benefit to the Estate. In Hanooman Persaud’s case, 6 MIA 393, the Privy Council pointed out that a bonafide lender is, protected even if the alleged necessity did not really exist.
A bonafide lender is one who enquires into the necessity for the loan and satisfies himself that the manager is, in the particular instance acting in the interests of the estate. He is not concerned with precedent mismanagement. If the bonafide lender reasonably believes that the manager is within his powers in borrowing money for the joint family, and has acted honestly and with due caution he is protected.
The debt will be binding on the joint family. For satisfying such a debt the Manager may alienate the joint family. Even after the death of the Manager, the debt can be enforced and for satisfaction of the decree the coparcenary property i.e., the interest of all the coparceners in the property, may be sold. The court-auction purchaser acquires the interest of all the coparceners in the property purchased by him.
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Suppose the debt is incurred for no binding purpose and the lender has not acted bonafide, then the lender can only sue the Manager personally for the debt. The other coparceners would not be bound in any event. If the manager dies, his self-acquired property in the hands of his heir would be bound to discharge the debt.
But the coparcenary property which survives to the other coparceners would not be bound unless it had become a decree debt and the share of the person who incurred the debt was attached in execution proceedings during his lifetime. In such a case the share of the deceased in the coparcenary would be bound.