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Dasari Jayachandra Prasad and ors. Vs. Dasari Venkata Subbaiah and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 370 of 1970
Judge
Reported inAIR1973AP214
ActsHindu Law
AppellantDasari Jayachandra Prasad and ors.
RespondentDasari Venkata Subbaiah and ors.
Appellant AdvocateN. Bhaskararao, Adv.
Respondent AdvocateB.V. Subbaiah, ;K. Amareswari and ;A.S.C. Bose, Advs.
Excerpt:
family - alienation of joint family property - hindu law - appellants sons of respondent contended that sale of joint family property made by respondent was not under necessity - respondent sold property and purchased new property in other village which was beneficial for family - held, appellant not entitled for any claim. - - 11,000/- on 2.2.1954 to narasimha rao the vendor of the 1st defendant and had those payments made by him endorsed on the agreement of sale. 13. as already adverted to the burden of course, is upon the alienees to show that they made bonafide enquiries and were satisfied with their enquiries that the 1st defendant alienated the properties in order to settle down in another village and that for purposes of settling down in another village from the consideration..........narain v. mathura das, ilr 50 all 969 = (air 1928 all 454 fb) considered whether alienation of family property by the managing member was for the benefit of the estate. the learned judges expressed the view that ;--'in order to sustain an alienation of joint family property made by the managing member of the family the transaction must one which is for the benefit of the estate and such as prudent owner would have carried out with the knowledge available to him at the time. transactions justifiable on the principle of ' benefit of to the estate ' are not limited to those transactions which are of a ' defensive nature. ' the transaction must be judged, not by its actual results, but by what might have been expected to be its results, at the time it was entered into. the decree of.....
Judgment:

Obul Reddi, J.

1. The result of this appeal will depend upon the answer we give to the question whether the alienations made by the 1st defendant, the father of the plaintiffs 1 to 4 ; 2, 3 & 4 being minors ; represented by the next friend, the 1st plaintiff, were intended to benefit the joint family of which the Ist defendant and the plaintiffs were undivided members.

2. In this appeal, we are only concerned with the alienations made by the 1st defendant under Ex.B-28 dated 10.2.1954 in favour of the 2nd defendant and under Ex.B-12 dated 7.2.1954 in favour of the 16th defendant, and the alienations covered by Ex. B-14 dated 22.2.1954 in favour of the 16th defendant and under Ex. B-32 dated 19.2.1954 in favour of the 15th defendant.

3. We may state at the outset that neither the 1st plaintiff the major son of the 1st defendant nor the 1st defendant nor the mother of the plaintiffs has gone into the witness box to rebut the evidence adduced by the defendants 2, 5, 6, 25 and 26.

4. The facts giving rise to this appeal are these :- The plaintiffs are the sons of the 1st defendant and they were residents of Pachala Tadiparru, a village in Bapatla Taluk. They owned dry and wet lands some houses a rice mill and other items of property as shown in Schedules A, B, and C. Their father the 1st defendant sold all the properties at Pachala Tadiparru either on the ground of discharging the debts incurred by his father, or on the ground of 'necessity'. So far as the items with which we are now concerned they were sold on the ground that those properties were not yielding enough income and that it would be profitable to sell those lands and migrate to another village Chevur in Kaikalur Taluk of Krishna District where lands of higher productivity could be purchased at a cheaper rate. The lands in question, as also the houses which are the subject matter of this appeal were sold by the 1st defendant for purchasing properties at Chevur for the benefit of the family. The alienations thus effected by the father, the 1st defendant, were questioned by the sons on the ground that those sales are not supported by consideration. They were nominally executed in favour of defendants Nos. 2, 5, 25 and 26. All these alienations were said to have been made in the course of two years, and by the end of 1954 there was not a single item of ancestral property left in the village of Pachala Tadiparru. In short, it is the case of the plaintiffs that they were made without any legal necessity, and without any benefit to the family.

5. The 2nd defendant resisted the action contending inter alia that he purchased under the sale deed Ex. B-28 dated 10.2.1954 Ac. 2-40 cents item 1 (a) of the plaint A schedule for Rupees 8,000/- and that sale was preceded by an agreement and that that agreement would show that the 1st defendant sold the properties to purchase some other properties from Narasimha Rao of Chevur and that before the sale deed was executed by the 1st defendant he had paid Rs.3,000 on 11.9.1953 and Rs.5,000 on 2.2.1954 to the vendor of the 1st defendant at Chevur and the 1st defendant himself had made the endorsement on the agreement of sale executed by Narasimha Rao in favour of the 1st defendant.

6. The defence set up by the 16th defendant who purchased Ac. 4-52 cents covered by items 1, 4 and 5 of the plaint schedule is also on similar lines. He paid Rs.6000/- on 11.9.1953 and Rs.11,000/- on 2.2.1954 to Narasimha Rao the vendor of the 1st defendant and had those payments made by him endorsed on the agreement of sale.

7. Defendants 5 and 6 have similarly contended that the 1st defendant sold tiled houses to them at the market value for Rs.5,000/- on 19,2,1954 and that that amount was applied by the 1st defendant for purchasing houses at Chevur.

8. What was sold to the 15th defendants, whose legal representatives are brought on record after his death was Item 3 of the plaint A schedule a tiled cattle-shed for Rs.1,500/- The sale consideration according to this defendant was also applied by the 1st defendant for purchasing similar property at Chevur.

9. The main issues that came to be considered on these pleadings were issues 1 and 7. Issues 4.4 (a) and 5 and 5(a) and 5 (b) relate to the sale of tiled houses and cattle - sheds. We may here mention that after the death of defendant No. 15 defendants Nos. 25 and 26 were brought on record as his legal representative.

10. Issues Nos. 1 and 7 relate to the sale of land under Exs. B-28 and B-12 and it was answered by the learned Subordinate Judge that the alienations were for the benefit of the estate, and so was the finding as regards the other issues referred to above.

11. Mr. N.Bhaskar Rao, the learned counsel appearing for the appellants strenuously contended that there was absolutely no need for the 1st defendant to sell any of the items or to migrate to a village in another district and the alienations were all nominally made by the 1st defendant to defeat the rights and interests of the other members of the coparcenary and as such the alienations are not binding upon the appellants.

12. What is to be considered in the first instance is whether the transactions are supported by consideration and if so whether the sale proceeds were applied by the 1st defendant for purchasing properties at Chevur and if so the purchases are for the benefit of the family.

13. As already adverted to the burden of course, is upon the alienees to show that they made bonafide enquiries and were satisfied with their enquiries that the 1st defendant alienated the properties in order to settle down in another village and that for purposes of settling down in another village from the consideration paid by them the 1st defendant purchased properties at the other village.

14. What exactly is meant by 'benefit', and in what circumstances it could be said that the alienations would be for the advantage or benefit of the family has been explained in a catena of decisions. In this connections it has also to be borne in mind that a Hindu father has special powers of alienating coparcenary property which no other coparcener has. It would be open to him to make a gift of the ancestral immovable property and he may sell or mortgage ancestral property including the interest of his sons, grandsons and great grandsons for the payment of his own debt provided the debt was an antecedent debt and was not tainted by immorality or vice. But so far as other alienations are concerned he stands on no better footing than any other manager or karta of a Hindu joint family and he cannot alienate coparcenary property except for legal necessity or for the benefit of the family.

15. As early as in Hunoomanpersaud v. Mt. Babooee. (1856) 6 Moo Ind App 393 (PC) the Privy Council said:

'It (the power) can only be exercised rightly in a case of need, or for the benefit of the estate. But where in the particular instance the charge is one which a prudent owner would make in order to benefit the estate the bonafide lender is not affected by the precedent mismanagement of the estate:

16. A manager should act as a prudent person while exercising his rights as manager in the matter of alienation of coparcenary property. As has been stated by the Privy Council in the same case, the benefit that he seeks to bestow on the family should be something real and not speculative or imaginary.

17. The Privy Council considered the powers of a 'Shebait' in the management of the property entrusted to him: Palaniappa Chetty v. Sreemath Devasikamony Pandara Sannadhi, AIR 1917 PC 33. It was held that a Shebait can alienate endowed property only for necessity or benefit of the estate such as preservation of the estate or a part of it. They however, expressed difficulty in giving precise definition of the expression 'of benefit to the estate' or 'necessity' Therefore, their Lordships said that:-

'the preservation however, of the estate from extinction the defence against hostile litigation affecting it the protection of it or portions from injury or deterioration by inundation these and such like things would obviously benefits'

18. The illustrations given by them are not exhaustive as the expression 'such like things' may also be of benefit to the estate.

19. In Sri Kishan Das v. Nathu Ram, AIR 1927 PC 37, their Lordships dealing with the case of 'legal necessity'. Observed:-

'where the purchaser acts in good faith and after due enquiry and is able to show that the sale itself was justified by legal necessity he is under no obligation to enquire into the application of any surplus and is, therefore not bound to make repayment of such surplus to the members of the family challenging the sale'

20. The principle laid down in this case was followed by a Division Bench of the Calcutta High Court in Durga Prasad v. Jewdhari Singh, ILR 62 Dal 733 = (AIR 1936 Cal 116). According to the learned Judges the purchaser of property owned by a joint Hindu family governed by the Mitakshara law from the karta or the manager of the said family is under no obligation to enquire into the application of the surplus money on the co-existence of two conditions namely (I) that the said purchaser has made bonafide enquiry as to the existence of legal necessity and also (ii) that the sale is justified by legal necessity.

21. Here we are concerned with a case of benefit to the family and it is not enough if the purchaser had made bonafide esquires about the sale of the properties by the vendor in order to migrate to another village and purchase lands which are more productive but that the sale proceeds have also been applied for purchasing properties in the other village.

22. A full Bench of the Allahabad High Court in Jagar Narain v. Mathura Das, ILR 50 All 969 = (AIR 1928 All 454 FB) considered whether alienation of family property by the managing member was for the benefit of the estate. The learned Judges expressed the view that ;--

'In order to sustain an alienation of Joint family property made by the managing member of the family the transaction must one which is for the benefit of the estate and such as prudent owner would have carried out with the knowledge available to him at the time. Transactions justifiable on the principle of ' benefit of to the estate ' are not limited to those transactions which are of a ' defensive nature. ' The transaction must be judged, not by its actual results, but by what might have been expected to be its results, at the time it was entered into. The decree of prudence which might fairly be required by a person who was not the sole owner of the property might naturally be somewhat greater than that which might be expected in the case of a sole owner and might well be held to be that which would be demanded in ordinary cases from a trustee. '

23. In our opinion, the opinion of the Full Bench represents the correct position that the Karta of a joint family must exercise utmost care and caution which he enters into transactions of the kind which we are now concerned, on the ground of benefit to the estate. If at the time of the alienations in order to purchase property elsewhere with the sale proceeds. It could be shown by the alieness that the alienor acted as a prudent man ought to, and took every precaution in seeking that there was no risk involved, and the alienations were not the detriment of the other members of the family, then the alienations made by him, could be said to be to the advantage and benefit to the family.

24. Justice Venkatasubba Rao sitting with Justice Gornish in Sellappa Chettiar v. Suppan Chettiar, ( 1937 ) 1 Mad LJ 422 = ( AIR 1937 Mad 496 ) considered the question of ' benefit to the estate '. That was a case where that the holder of an impartible estate and his son mortgaged some of their impartible properties and borrowed two sums of money for meeting the expenses of the marriage of the daughter of the late Zamindar, and the question arose how far the above debts could bind the impartible estate. The learned Judges, after considering the cases cited before them, held :--

'That if the original purchase of the house could be justified, it would follow that that part of the debt should be held binding. Naturally it led to the question, what was the extent of the manager's power in regard to buying property. To hold that the rule of benefit should be confined only to cases where both need and benefit co-existed would be to disregard ' benefit ' as affording a distinct ground of justification. The transaction need not be of a ' defensive nature '. The pronouncements of the Judicial Committee would not justify the narrower view being taken of the expression ' for the benefit of the estate '.

25. In Sital Prasad Singh v. Ajablal Mander, AIR 1939 Pat 370, the adult members of the joint family executed a mortgage of the ancestral property. The consideration of the mortgage was to be applied towards the part payment of the purchase price of a certain property which the family had purchased. The property was purchased in the village in which the family already owned other properties. From the financial point of view the purchase was a profitable transaction and its approximate profits were more than sufficient to cover the amount of interest on the mortgage amount. It was, therefore, held :--

'that the purchase transaction was for the benefit of the estate and family. The mortgage which was therefore executed to pay the purchase price was one for legal necessity and hence it could not be challenged by the non-executant minor members of the family. '

26. Yahya Ali, J. in The Matter of A. T. Vasudevan, AIR 1949 Mad 260, said :--

'The manager of a joint Hindu family is competent to alienate joint family property if it is clearly beneficial to the estate even though there is no legal necessity justifying the transaction. '

27 .This decision was quoted with approval by the Supreme Court in Balmukand v. Kamla Wati, : [1964]6SCR321 . Sales may not be for ' legal necessity ' but if they are for the benefit to the family, then such sales could be sustained against the challenge of non-executant members of the family, whether minors or majors.

28. Mudholkar, J. In : [1964]6SCR321 ( Supra ) said that :--

'For a transaction to be regarded as of benefit to the family it need not be defensive character so as to be binding on the family. In each case the Court must be satisfied from the material before it that it was in fact such as conferred or was reasonably expected to confer benefit on the family at the time it was entered into. Where adult members are in existence the judgment is to be not that of the Manager of the family alone but that of all the adult members of he family, including the manager. '

29. Rajamannar, C. J. In Sengoda Goundan v. Muthu Vellappa Goundan, : AIR1955Mad531 held :--

'The sale of unproductive family property at an advantageous price for the purpose of buying other land could be supported on the ground of benefit of the family. But where the sales were for an adequate price and for a town planning scheme the properties ( dry lands ) would have no appreciable market value and were not fetching any income to the family, in the absence of proof of utilisation of the sale proceeds in the purchase of other property for the family the alienations cannot be held to be for the benefit of the family. '

30. Chandra Reddy, J. ( as he then was ) in Medikenduri v. Venkatayya, : AIR1953Mad210 , similarly observed :--

'In order to validate a sale on ancestral land by the father, the benefit need not purely of a defensive or protective character. To hold so should be to miss the significance of the expression ' benefit to the estate '. if the transaction is not a speculative or risky one but is beneficial or advantageous from the financial point of view and is calculated to confer a benefit on the estate the sale must be held to be a valid one binding on the members of the estate. '

31. Justice Seshachalapathi in Subba Rao v. Narasimha Rao, ( 1963 ) 1 Andh LT 329 and 335, explained the meaning of the expression ' benefit to the estate ' after referring to the several cases cited before him from ( 1856 ) 6 Moo Ind App 393 ( PC ) onwards. In the words of the learned Justice :--

'The expression ' benefit to the estate ' comprehends also a transaction by the manager which is neither risky, nor speculative, but is calculated to confer a positive advantage on the family. Where a Kartha of a Hindu joint family sells the ancestral property and applies the proceeds of the sale for the purchase of better land, it cannot be said that the family has not been benefited : In such a situation, the sale would certainly be binding upon the other members of the family, adult or minor. It must, however, be further established first, that the proceeds of the sale were actually applied to the purchase of other land, and secondly, that the purchaser made bona fide enquiries that the kartha was selling the property for the purchase of other lands. '

32. The defence in this case is based exactly on what has been explained by Justice Seshachalapathi.

33. Under Ex. B-12, defendant No. 16 purchased Ac. 4-37 1/2 cents for Rs. 18,000 /- and under Ex. B-28, the 2nd defendant purchased Ac. 2-40 cents for Rs. 8,000 /-. There is an agreement of sale. Ex. B-13 dated 16-8-1953, preceding the sale under Ex. B-12. In this agreement, it is recited that the land covered by it is being sold to purchase other properties. The consideration was paid in instalments to Narasimha Rao, the vendor who sold the land to the Ist defendant at Chevur village. The Ist defendant himself has endorsed on the agreement, the receipt of the sale consideration. The amount of Rs. 8,000 /- was paid in two instalments to Narasimha Rao, by the vendee the 2nd defendant Rs. 3,000 /- once and Rs. 5,000 /- on another occasion, and the scribe has been examined to prove the payments and the endorsements on Ex. B-25 the agreement of sale. The attestor, D. W. 5 also has been examined. The fact that the vendee paid the sale consideration under Ex. B-28 to Narasimha Rao, the vendor of the Ist defendant, goes to show that the 2nd defendant made necessary enquiries and was satisfied that the Ist defendant who entered into an agreement with him to sell the property sold the land covered by the sale deed in order to purchase lands in Chevur village, to which place, Narasimha Rao, the vendor of the Ist defendant belonged. That the Ist defendant purchased Narasimha Rao's land is borne out by the sale deed, Ex. B-39 dated 4-10-1954. The sale deed is taken by the Ist defendant in favour of himself and his two sons.

34. Similarly, the 16th defendant purchased Ac. 4-37 1/2 cents of B schedule property from the Ist defendant . D. W. 6 and the scribe D. W. 5 went to Chevur village along with the 2nd defendant and the 16th defendant to meet Narasimha Rao. The 16th defendant similarly paid Rs. 6,000 /- and Rs. 11,000 /- on two occasions to Narasimha Rao. There is an agreement of sale executed by Narasimha Rao in favour of the Ist defendant dated 27-8-1953 for the sale of his lands to the Ist defendant. It is after satisfying themselves of the agreement of sale by Narasimha Rao that defendants 2 and 16 paid the sale consideration payable by them to the Ist defendant, to Narasimha Rao and obtained the endorsement of the Ist defendant on the arrangements of sale obtained by them.

35. The Ist defendant remained ex parte. It would have been easy for the plaintiffs to have examined their father to show that the transactions were either nominal, or that no consideration passed under the transactions, or that the consideration paid was not adequate. Not even the first plaintiff, who is admittedly a major has chosen to come into the witness box to rebut the evidence adduced on behalf of defendants 2 and 16. Defendants 2 and 16 apart from examining themselves, have also examined the scribe and the attestors of all the agreements of sale and the sale deeds, evidencing sale of property at the ancestral village of the Ist defendant, and the purchase of land at Chevur in Krishna District.

36. It would appear from the evidence of D. W. 16 that from the sale consideration paid by him for the purchase of Ac. 4-37 1/2 cents of B schedule property, the Ist defendant purchased property under Ex. B-40 dated 14-7-1955 in the name of his wife, Vanajalaya Devi.

37. From the evidence adduced we find that all that was given to the wife of the Ist defendant at the time of marriage was one acre of land, and little or no jewellery. The Ist plaintiff nor his mother has chosen to come into the witness box to say that the property purchased by the Ist defendant under Ex. B-40 was with the monies of the plaintiff's mother, and very discreetly the Ist defendant has not chosen to contest the suit or examine himself, and the plaintiffs also, for the reasons best known to themselves, have not chosen to rebut the large volume of evidence, oral and documentary, produced by the defendants. The learned Subordinate Judge, therefore, was right in holding that the lands covered by Ex. B-40 were purchased with the sale proceeds realised by the sale of Ac. 4-37 1/2 cents, to the 16th defendant who examined himself as D. W. 8. His evidence goes to show that he made bona fide enquiries and he was satisfied that not only the Ist defendant wanted to sell his properties to migrate to village where he wanted to purchase properties, but in fact applied those monies and purchased properties at Chevur. It is also to be noted that the total acreage under Exs. B-39 and B-40 come to about 24 acres, while what was sold by the Ist defendant is little over Ac. 6-70 cents. There is also evidence to show that the yield from the lands per acre at Chevur is more than the yield per acre at Pachala Tadiparru. There is no evidence contra to show that the yield from the lands at Pachala Tadiparru per acre was more than the yield per acre from the lands at Chevur. The Ist plaintiff, at least could have examined himself to show that the sale of the property at Pachala Tadiparru was not in the interests of the family and that they derived no advantage in his father ( D-1 ) purchasing the lands at Chevur.

38. So far as the sale of tiled house under Ex. B-14 is concerned, Rs 2,000 /- out of the total consideration of Rs.5,000 /- went in discharge of an ancestral debt, and the balance of Rupees 3,000 /- was deposited by the 5th defendant in an inter pleader suit in the Court.

39. The cattle-shed was sold for Rs. 1,500 /- under Ex. B-32, as the Ist defendant was winding up his establishment at Pachala Tadiparru.

40. Therefore, the defendants, with which we are now concerned, have made bona fide enquiries and were satisfied that the Ist defendant not only intended to sell his properties and migrate to Chevur village but, in fact, with the sale proceeds realised from out of the sale of the times with which we are now concerned in this appeal, he purchased properties at Chevur which proved to the profitable and beneficial to the joint family.

41. In the result we confirm the judgment and decree of the lower Court in so far as this appeal is concerned, and dismiss the same with costs. C. F. to be recovered from the appellants.

42. Order accordingly.


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