The Supreme Court of India, in a significant ruling on Hindu Undivided Family (HUF) law, has held that the sale of joint family property by a Karta to meet debts incurred for a daughter’s marriage constitutes a valid ‘legal necessity’. A bench of Justices Sandeep Mehta and Joymalya Bagchi set aside a Karnataka High Court judgment, thereby upholding the alienation of property and dismissing a suit for partition filed by a coparcener.
The apex court was hearing an appeal against a High Court decision that had reversed a trial court’s order and decreed a suit in favour of a son who challenged the sale of ancestral land by his father.
Background of the Case
The dispute involved a parcel of land measuring 9 acres and 1 gunta in Bablad Village, Gulbarga, Karnataka, belonging to a Hindu Undivided Family. The plaintiff, Kashiraya, filed a suit against his father, Sharanappa (1st defendant and Karta of the HUF), his brothers (defendants 2, 3, and 4), and the purchaser of the land, Dastagirsab (5th defendant).
The plaintiff alleged that his father, the Karta, was “addicted to alcohol and indulged in bad habits” and had sold the suit land on July 26, 1995, to the 5th defendant without any family necessity and for a meagre consideration. He contended that he was unaware of the sale until December 1999, as possession had not been transferred. He sought a declaration that the sale deed was null and void and prayed for partition and separate possession of his share.
In response, the 5th defendant (the purchaser) contested the suit, asserting he was a bona fide purchaser for valuable consideration. He stated that the 1st defendant had executed an agreement for sale on June 18, 1994, and received Rs. 1,00,000 as part of the consideration. This transaction, he argued, was signed by the Karta’s wife, daughter, and one of the coparceners (4th defendant). The final sale deed was executed on July 26, 1995, after the remaining consideration was paid, and this document was signed by defendants 3 and 4. The purchaser’s primary defence was that the sale was executed for a “legal necessity, owing to the marriage of his daughter Kashibai.” He further submitted that he was in possession of the land, a fact evidenced by mutation certificates and land revenue records.
Trial Court and High Court Rulings
The Principal Civil Judge (Senior Division), Gulbarga, framed eleven issues, including whether the plaintiff was entitled to a share and whether the 5th defendant was a bona fide purchaser. The Trial Court found that the suit land was indeed sold by the Karta to meet the expenses of his daughter Kashibai’s marriage, which qualified as a legal necessity. Consequently, the suit was dismissed.
However, the High Court of Karnataka reversed this finding. It held that the purchaser had not made a due enquiry into how the Karta utilized the sale consideration. The High Court reasoned that the plea of the sale being for the daughter’s marriage was “not well founded as she had been married earlier” (in 1991, prior to the sale). The High Court allowed the plaintiff’s suit and decreed partition.
Supreme Court’s Analysis and Decision
The Supreme Court, in its judgment authored by Justice Joymalya Bagchi, identified the central issue as: “Whether the suit land was sold to 5th defendant for legal necessity i.e. the marriage of daughter Kashibai?”
The Court began by reiterating the settled principles of Hindu law regarding the powers of a Karta. Citing its previous decision in Beereddy Dasaratharami Reddy vs. V. Manjunath & Anr., the bench observed that a Karta enjoys wide discretion over the existence of legal necessity and that marriage expenses of daughters are a recognized necessity.
The Supreme Court found critical flaws in the High Court’s reasoning. It highlighted that during cross-examination in the trial court, the plaintiff had admitted that his father had informed him the property was sold to meet family needs. The judgment states, “High Court completely glossed over this fact.”
Addressing the High Court’s point that the marriage had occurred a few years before the sale, the Supreme Court noted, “It is common knowledge families incur heavy debts to perform marriages of their daughters and such debts have a cascading effect on family finances down the years.”
The bench found compelling evidence in the fact that the money receipts for the sale were signed by two coparceners, the Karta’s wife, and the daughter Kashibai herself. “These circumstances demonstrate expenses borne by the coparceners in respect of Kashibai’s marriage created financial stress on the family leading to the sale of the suit land,” the Court concluded.
On the question of the purchaser’s duty, the Court acknowledged that the onus to prove legal necessity lies on the alienee. However, it held that the 5th defendant-purchaser had “established a clear nexus between the sale transaction and the expenses undertaken for Kashibai’s marriage and has thereby discharged the onus.” The Court further remarked that the burden of proof cannot be used to “saddle him with the liability to prove facts which are within the special knowledge of the coparceners of the HUF,” invoking Section 106 of the Evidence Act, 1872.
Finally, the Court questioned the plaintiff’s conduct, noting that the five-year delay in challenging the sale “raises grave doubt regarding his bona fides.” It dismissed his explanation for the delay as “wholly facetious,” given the ample documentary evidence, such as mutation certificates, proving the purchaser’s possession.
In its concluding remarks, the bench stated, “we are of the view the High Court erred in holding the sale in favour of 5th defendant was not for legal necessity and the latter was not a bona fide purchaser for valuable consideration.”
The Supreme Court allowed the appeal, setting aside the judgment and decree of the High Court and restoring the Trial Court’s judgment, which had dismissed the suit.
