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A. Pattammal Alias Pachaiyammal Vs. Nagarajan and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtChennai High Court
Decided On
Reported in(1977)2MLJ286
AppellantA. Pattammal Alias Pachaiyammal
RespondentNagarajan and ors.
Excerpt:
.....that he was selling the property not only to discharge the subsisting encumbrances on the family property but also to start a new business and purchase other properties as well. on this ground, the first defendant resists the suit for partition and separate possession filed by the plaintiff's as regards their alleged 4/5th share in the first item of a schedule property as well. 3. whether the 1st defendant is a purchaser in good faith after due enquiry? the bona fides of the purchaser in cases like this have to be tested not in the barometer of facts appearing on record but on an overall appreciation of such other facts and circumstances surrounding the events as also the conduct of the parties. strong and compelling circumstances are required, so as to establish that such a..........to be paid over to the two daughters of thandavaraya in full quit of their claims against the family property. after effecting a mortgage under exhibit b-15 on 5th september, 1960, it appears that the second defendant was paying interest regularly to the mortgagee. but a few months thereafter, the second defendant thought it wise to sell the property which was a shop whose dimensions were 13' 27' so that the mortgage which is in the nature of an antecedent debt could be paid off, interest avoided and the balance of consideration utilised for the purpose of purchasing a house and for starting a business. with this object in view, the second defendant sought for a purchaser and finding that the mortgagee's wife, namely, the first defendant was interested in purchasing the shop, which.....
Judgment:

T. Ramaprasada Rao, J.

1. The first Defend ant in O.S. No. 80 of 1968 on the file of the Subordinate Judge of Vellore is the appellant.

2. The second defendant and the four minor plaintiffs constituted a Hindu undivided family. The second defendant is the son of one Thandavaraya Mudaliar who besides his only son, namely, the second defendant, had two daughters. He died in 1958 leaving behind him Schedule A properties which are the only properties available in the family. After Thandavaraya's death, under the Hindu Succession Act, the two daughters also had a right in the properties so left by their father. It appears that the daughters wanted their share in their father's property. Though for the purpose of enumeration, there are two items in the A Schedule, it is conceded that the second item in the A-Schedule is neither valuable nor useful property. In fact, the parties went to trial as if the one property which was available for partition and which was Valuable indeed was item 1 of the A Schedule. When the daughters of Thandavaraya demanded from the second defendant their legitimate share in accordance with the Hindu Succession Act, the second defendant had no option except to raise a loan on the only available valuable property of the family, namely item 1 of Schedule A with which we are concerned in the suit. Consequently, after obtaining a release from the sisters under Exhibit B-14 dated 4th September 1960, the second defendant as father-manager of the joint family consisting of himself and his four minor sons who are the plaintiffs in the action mortgaged the said property in favour of the husband of the first defendant under Exhibit B-15 and borrowed a sum of Rs. 3,250. It is common ground that this amount was intended to be paid over to the two daughters of Thandavaraya in full quit of their claims against the family property. After effecting a mortgage under Exhibit B-15 on 5th September, 1960, it appears that the second defendant was paying interest regularly to the mortgagee. But a few months thereafter, the second defendant thought it wise to sell the property which was a shop whose dimensions were 13' 27' so that the mortgage which is in the nature of an antecedent debt could be paid off, interest avoided and the balance of consideration utilised for the purpose of purchasing a house and for starting a business. With this object in view, the second defendant sought for a purchaser and finding that the mortgagee's wife, namely, the first defendant was interested in purchasing the shop, which is obviously a small one, negotiated and agreed to sell the same for a sum and consideration of Rs. 10,000. Under Exhibit B-1 dated 24th February, 1961 the suit property was sold and the first defendant as purchaser reserved with, herself the necessary funds to pay off the daughters of Thandavaraya and paid the balance of Rs. 6,000 in cash before the Sub-Registrar of Assurances. It is not in dispute that the recitals in Exhibit B-15 were : (a) Rs. 3,250 was reserved with the first defendant for discharge of the mortgage debt under Exhibit B-15; and (b) a sum of Rs. 750 was paid to the second defendant by the first defendant for family expenses and the balance sum of Rs. 6,000 was paid to the second defendant by the first defendant in the presence of the Sub-Registrar for purchasing a house and for starting business.

3. The plaintiffs as minors have come up to this Court questioning the sale made by their father and in this action, they are represented by their mother. The plaintiffs' case is that there was no legal necessity for the sale of the property so urgently and in indecent haste by their father when the interest was being regularly paid to the mortgagee and when there was no pressure from the mortgagee in the matter of the discharge of the same. The plaintiffs would also say that the sale was not for family benefit and that the consideration paid thereunder was grossly inadequate. As usual in such cases, the second defendant (the father of the plaintiffs) remained ex parte.

4. The first defendant's case is that she is a bona fide purchaser for value and she discharged an antecedent debt under Exhibit B-15 and promptly assured herself that the balance of the sale consideration would be utilised for the benefit of the family, inasmuch as the father represented that he Was selling the property not only to discharge the subsisting encumbrances on the family property but also to start a new business and purchase other properties as well. In this sense, the defence is that the sale was after due enquiry and that she was a bona fide purchaser for value. The specific allegation is that the family is a trading family, in that the great-grand father was selling bread, bun and biscuits and the father continued the same business and thereafter dealt with in piece goods and, therefore, it could normally be expected that the kulachara of the family was business and, therefore, she believed the representation made by the second defendant that he was selling the property in order to improve the condition of the family and to enable him to do business. On this ground, the first defendant resists the suit for partition and separate possession filed by the plaintiff's as regards their alleged 4/5th share in the first item of A Schedule property as well. Of course, there is no clear case regarding the second item of A Schedule properties. But there appears to be no controversy about its existence or its availability for division. We are not, therefore, discussing about that item of the property and to that extent, therefore, the preliminary decree passed by the Court, below has to be upheld and is upheld.

5. In the light of the above pleadings the following issues were framed:

1. Whether the sale by the 2nd defendant to the 1st defendant was for discharge of antecedent debt and for benefit or necessity and is binding on the plaintiffs?

2. Whether in any event 2/6th share of the suit properties is the self acquisition of the 2nd defendant and whether the plaintiffs cannot question the sale to that extent?

3. Whether the 1st defendant is a purchaser in good faith after due enquiry?

4. Whether the plaintiffs are entitled to partition as prayed for and if so, to what share?

5. Whether the plaintiffs are not en-titled to question the sale deed in favour of 1st defendant for the reasons pleaded in paragraph 20 of the written statement of the 1st defendant?

6. To what relief are the parties entitled to?

Additional issue:

Whether the 1st plaintiff had not been born on the date of Exhibit B-1?

6. The learned trial Judge found as a fact that the mortgage is binding on the plaintiffs and came to the conclusion that the 1st defendant is not a bona fide purchaser for value and that the plaintiffs are entitled to attack Exhibit B-1 as having been made for a grossly inadequate consideration. In that light, he upheld the antecedent debt to the tune of Rs. 3,250 as is seen from Exhibit B-15 but would not uphold the sale in favour of the first defendant. Aggrieved by this, the first defendant has come up to this Court.

7. Mr. T.R. Ramachandran, the learned Counsel for the appellant after taking us through the pleadings and the relevant evidence urges that this is a case in which the father-manager exercised his discretion and acted for the benefit of the family, in that there was no other property worth the name which was available and which could be utilised for the purpose of paying off the admitted and binding mortgage debt under Exhibit B-15. He would also say that even on the admissions made by P.W. 1, the kulachara of the family was business and, therefore, the recitals in the deed have to be taken as having been proved and accepted by the plaintiffs themselves and that the conspicuous absence of the second defendant from the witness box shows that it was he who engineered the entire suit and he is at the top of the show. As regards the alleged inadequacy of price, he refers to the evidence of the witnesses examined on the side of the plaintiffs and would contend that there was no satisfactory proof that the shop 13' 27' was sold for an inadequate price in 1961.

8. Mr. Alagar contending contra appearing for the respondents would solely rely upon the contention that the transaction cannot be upheld since the price paid is inadequate. He relies upon the self-serving evidence of P.W.1 and to some extent on the evidence of P.W. 3. He has no doubt to concede that the sale was for paying oft an antecedent debt. Nevertheless, be would say that there was no legal necessity to sell the entirety of the property and that the first defendant is not a bona fide purchaser for value.

9. We are unable to agree with the learned Counsel for the respondents. The bona fides of the purchaser in cases like this have to be tested not in the barometer of facts appearing on record but on an overall appreciation of such other facts and circumstances surrounding the events as also the conduct of the parties. In order to establish that a transaction by a father-manager in a Hindu family lacks bona fides, it is essential for the complainant-coparcener or member to prove beyond doubt that the father-manager was capriciously indulging in the sale of the family property to serve his own tastes and comforts and that such an activity reflects an avyavaharika course of conduct on the part of such father-manager. It is not every activity of a father-manager which could come up for scrutiny and complaint. It is only such of those acts of his which are deliberately motivated and designed, so as to gain advantage for himself and cause prejudice to the other members of the family that can be considered and adjudicated upon. In a case where the father-manager whose powers are still those of the father in a Roman family and which were characterised as the powers of a patria potestas, they cannot be whittled down by bickerings and complaints...made by the other members, so as to improve their position to the disadvantage of third party alienees. Strong and compelling circumstances are required, so as to establish that such a conduct or activity of the manager was intended and deliberately intended to prejudice the other members and to cause wrongful loss to them. It is in the light of such events and circumstances that the bona fides of a particular transaction could be judged.

10. On the facts and circumstances of this case, it is not in dispute that the father had to mortgage the property in order to pay off the aunts of the plaintiff who were clamouring for their share in the father's property. It is common ground that there was no property or any other means by and under which the aunts could be paid off. It is, therefore, reason-able to conclude that when the father, the second defendant mortgaged the property under Exhibit B-15 in order to pay off his sisters, be had to do it and be was necessarily compelled to do it. In this sense, therefore, the debt has been rightly found by the lower Court to be binding on the plaintiffs as well. In order to pay off such a debt which is popularly known as antecedent debt, the father sells the property a few months later. The complaint is that there was no pressure from the mortgagee. It is not always such pressure from the creditor which might compel a debtor to sell a property in order to pay off a mortgage debt on it. There are myriad ways which might prompt a debtor to sell away the property in order to pay off the mortgage debt. One purpose is to avoid paying interest and secondly, there may be circumstances, such as in the instant case wherein there were no other means by which the mortgage debt could be paid off. We are not enumerating all such circumstances. Suffice it, however, to say that if one or more of such circumstances could prompt a reasonable person to sell a property in order to pay off an antecedent debt, then obviously, there is legal necessity for such sale. It is in such circumstances that the second defendant thought of selling the property. We are unable to agree with Mr. Alagar that there was no legal necessity to sell the entirety of the property. It is a small shop of an extent of 13' 27'. It cannot be truncated for any purpose or divided so as to sell it piecemeal in order to discharge an antecedent debt. It is an indivisible property subject to a mortgage and in the absence of other means by which the mortgage could be paid off, we are of the view that the only way in which such a debt could be discharged was by the sale of the property. This was thought of by the father and therefore, cannot be questioned by the sons.

11. We now refer to the surrounding circumstances and not the barometer of facts of a particular case which in certain cases would decide whether a transaction has been bona fide entered into or not. Apart from the fact that the second defendant kept himself out from the witness box, we shall now see whether the contention of Mr. Ramachandran that he engineered the entire case is true. P.W. 1, when she was in the witness box, admitted that she signed blank sheets of paper and she did not know whether she signed the plaint after acquainting herself with the facts. She is not sure whether she issued any notice or gave instructions for it. These two statements of the mother who claimed to be the next friend of the minor plaintiffs are sufficient to accept the contention of the learned Counsel for the appellant that it is the father, as usual, who is behind this litigation and he is the person who set up his minor sons after a few years taking advantage, probably of the increase in prices of the property in the surroundings.

12. We shall now come to the question whether we should accept the recitals in Exhibit B-1 as true. Apart from the recital that the sale was to pay off an antecedent debt, the father asserts that the sale was for purposes of setting up a business and for purchase of property. There is evidence, which is not controverted before us, to the effect that the second defendant who was relying solely upon the rental earnings, immediately after the sale found an employment for himself as a clerk in an arecanut mundy. Thereafter, he became a partner in a like business with one Jayavelu. He then dissociated with him and started a business of his own in arecanut. It could be reasonably presumed that when he became a partner with some one, he had to invest and a fortiori when he came out of the partnership, be had to invest moneys. There is no evidence in this case to the effect that the second defendant had other means and that he could have secured moneys of his own for starting a business. It is, therefore, clear that the recitals made in Exhibit B-1 are not only true but have been proved to be true by the conduct of the Second defendant himself. Mr. Alagar, however, would faintly argue that arecanut business is a new business and the father-manager could not think of a new venture. It has been repeatedly pointed out that a. father-manager should not indulge himself in adventures or Venture into avyavaharika activities or immoral activities, but nothing prevents a father-manager from starting a business for the purpose of improving the conditions of the family and himself. It is not the newness of the business which comes into computation for the purpose of finding out whether the father is doing some activity for the benefit of the family, but the intention behind the starting of such a new venture. If the new venture is not in any way tainted and if it has been started bona fide by the father for the benefit of the family himself, then it cannot be said to be a prohibited business or an undertaking which he ought not to have thought of. We have already said that if the father-manager by selling joint family property thinks or is advised to start or involve himself in dangerous commercial activities, which are harmful prima facie, then such an involvement cannot be said to be for the benefit of the family or in the interests of the family. But in this case, we have the evidence of P.W. 1 who would say that the kulachara of the family is trade. We have already referred to the grandfather's bread business and the father's javuli business and, therefore, the second defendant's arecanut business cannot be said to be a strange or illegal or immoral activity, Therefore, the recitals in Exhibit B-1 mace by the second defendant and which have not been controverted by him in any manner whatsoever are rightly relied on by the learned Counsel for the appellant to sustain the case that the second defendant after getting the know-how to do arecanut business, started it on his own for the benefit of the family and, therefore, the balance of the consideration also has been utilised in the interests of the family and for the progress of the minor children.

13. It is seen from, the testimony of P.W. 2 that the father is even now protecting his wife and the minor plaintiffs. It is not as if he has torn himself away from the family. He is very much in it and as already stated, he is responsible for this litigation. Yet, he would not risk the box for he was sure that the foundation laid by him through his sons would miserably fall to the ground if he were to be confronted with actual facts. We held, therefore, that the sale was not only for the purpose of discharging the antecedent debt but also for the purpose of legal necessity and ultimately for the benefit of the family as well.

14. The last contention of Mr. Alagar is that the property has been sold for an inadequate price. Inadequacy is a relative expression and there is no yardstick by which it could be easily judged as to what is adequate and what is in-adequate in a given ease. The suit property which is about 13' 27' is no doubt situate in a commercial locality and it was sold for Rs. 10,000 in 1961. The evidence shows that it was fetching only a rent of Rs. 50. A shop next to it and belonging to one other sharer in the ancient family was sold for Rs. 12,000. Reliance is strongly placed upon this piece of evidence to contend that the sum of Rs. 10,000 paid under Exhibit B-1 ought to be characterised as an inadequate price. It is also said that the shop which was the subject-matter of sale and which was spoken to by P.W. 3 was a titled shop whilst the suit shop was a terraced one. Though P.W. 3 and D.W. 1 world say that both the shops i.e., the shop sold for Rs. 12,000 and the suit shop sold for Rs. 10,000 were similar in all respects, yet, we have no convincing proof of it with reference to plans or dimensions. Even assuming that they were similar, it is for the father-manager to decide the fair price. Simply because a shop-in the neighbourhood was sold for Rs. 12,000, and the suit shop was sold for Rs. 10,000, it cannot be said that the father-manager acted to the prejudice of his sons and got up the transaction for a grossly inadequate price and consideration.

15. Another circumstance relied upon is that another shop was sold in 1965 in the neighbourhood for a sum of Rs. 20,450. Here again; we have no data for comparison. But assuming it is true, the sale price which a shop in the locality fetched in 1965 cannot be the ruling price of that shop in 1961 in the same locality. Having regard to the fact that the rent which the suit shop was fetching was only Rs. 50 and its dimensions were 13' 27' and as there was no other property which could be dealt with or sold for the purpose of clearing an antecedent debt, we hold that even the price fetched and for which the suit shop was sold cannot, in the circumstances, be stated to be grossly inadequate. The lower Court was wrong on a priori considerations in holding that the sale under Exhibit B-1 should not be upheld. But on the other hand, there is ample authority for the proposition that if the debt is antecedent to the alienation, the alienation is valid in its entirety, and it will pass not only the father's but also the sons' interest in the property and thus, if the alienation is a sale of joint family property, the whole property will pass to the purchaser, vide Mulla's Hindu Law--Fourteenth Edition--page 376. Unless there is acceptable evidence to hold that the alienation made by the father was in the nature of a sacrifice of family property for a grossly inadequate price, the Courts are very slow in not accepting such alienations made by the father-manager. Again, to quote Mulla's Hindu Law, page 308, cases frequently arise in which joint family property is sold by the manger of the family for legal necessity, but the whole of the price is not proved to have been applied to purposes of necessity, and the sale is challenged on that ground by the other members of the family. In such cases if the sale itself is justified by legal necessity, and the purchaser pays a fair price for the property sold, and acts in good faith and after due inquiry as to the necessity for the sale, the mere fact that part of the price is not proved to have been applied to purposes of necessity would not invalidate the sale, the purchaser not being bound to see to the application of the price.

16. For all the reasons above stated, We reverse the decision of the learned Subordinate Judge and hold that the alienation under Exhibit B-1 is binding on the plaintiffs and the sale effected by the second defendant in favour of the first defendant has to be upheld. Whatever properties remained after the above sale of the family property would be susceptible to division and it is in this respect only that we have upheld the preliminary decree for partition made by the trial Court. The appeal is allowed. There will be no order as to costs.


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