Dastagirsab (Appellants) v. Sharanappa @ Shivasharanappa Police Patil (D) by LRs. & Ors. (Respondents)

Civil Appeal No. 5340 of 2017

(SANDEEP MEHTA and JOYMALYA BAGCHI, JJ)

The Supreme Court of India considered the validity of a sale by the Karta of joint Hindu family property and explained the principles of legal necessity and rights of bona fide purchasers. The case was a litigant dispute involving agricultural land of 9 acres 1 gunta, Bablad Village, District Gulbarga, Karnataka, admittedly forming part of a Hindu Undivided Family (HUF). The head of the family was Sharanappa, who was also the Karta, and his four sons—the plaintiff and defendants 2 to 4.

The plaintiff stated that his father had a weakness for alcohol and spending habits and had already sold a number of parcels of HUF land at below market prices to finance his lifestyle. In order to appease his sons, the father had vowed that he would not sell the suit land and would rather share it between the plaintiff and the 2nd defendant. Contrary to this promise, he conspired with the 3rd and 4th defendants and sold the property to the 5th defendant, Dastagirsab, on 26th July 1995. The plaintiff had alleged that the sale was without consideration and without legal necessity and also alleged that he remained in ignorance of the sale until 1999, as possession had not been transferred to the buyer. When his repeated pleas to cancel the deed were not heeded, he instituted a suit in 2000 for a declaration that the sale was void and also prayed for partition and separate possession.

The 5th defendant vindicated the sale as one made for legal necessity and sufficient consideration. In his opinion, an agreement to sell had been entered into in June 1994 for Rs.1,00,000/- and subsequent final deed in July 1995 for full consideration. He vindicated that the sale was made to arrange for marriage expenses of Karta’s daughter, Kashibai.

The Trial Court scrutinized the facts and held that the property was of the HUF but the Karta had the right to sell it for legal necessity. It held that the previous alienations of the HUF property by the father were also for family necessities and not for his claimed bad habits, as none of the transactions had ever been challenged. Importantly, it found that the 1995 sale was to meet family obligations, particularly the expenses of Kashibai’s marriage. Consequently, the Trial Court dismissed the plaintiff’s suit.

On appeal, however, the Karnataka High Court reversed the decree. It held that the purchaser had not properly denied the plaintiff’s case, nor had he established legal necessity. The High Court reasoned that as Kashibai’s marriage had already taken place in 1991, the plea that the property was sold for marriage expenses was untenable. It also criticized the purchaser for not conducting due enquiries into how the sale consideration was spent. On this basis, the High Court decreed partition and granted the plaintiff half share in the suit property.

Analyzing the evidence, the Supreme Court observed that the plaintiff himself had testified under cross-examination that his father had informed him that the sale had been conducted for family expenses. The receipts of sale consideration had been signed by two coparceners, the wife of the Karta, and Kashibai herself, hence leaving no doubt that there was a direct connection between the sale and wedding costs. The Court noted that although the marriage had occurred in 1991, families tend to sell property subsequently to settle debts incurred towards such ceremonies, and this is also within the meaning of legal necessity. The High Court, in the view of the Supreme Court, had neglected these pertinent facts and arrived at a wrong conclusion.

On burden of proof, the Court reaffirmed that although the alienee should prove that the sale was for necessity, he is not required to establish facts in the special knowledge of the coparceners. Section 106 of the Evidence Act imposes that responsibility on persons who possess such knowledge. Here, the buyer had adequately proved that the sale proceeds were linked with marriage expenditures, and thus had discharged his onus. The Court also held that the buyer was reasonable in his approach, considering that the property was held in the Karta’s name, family members gave acknowledgement of the sale consideration, and revenue entries established the transfer.

The plaintiff’s conduct also undermined his claim. His five-month delay in questioning the transaction, in spite of the presence of mutation and revenue records in the name of the purchaser, cast doubt on his bona fides. His claim that he continued to be unaware of the sale having been made proved to be unsatisfactory and repugnant to document evidence. The High Court’s reliance on such a plea, and its conclusion that the purchaser was not a bona fide buyer, was thus unsustainable.

The Supreme Court held that the sale of the suit property in favor of the 5th defendant was one for legal necessity and that he was a bona fide purchaser for value. The High Court had wrongly reversed the findings of the Trial Court. The Court accordingly set aside the judgment of the High Court dated 12th January 2007, upheld the dismissal of the suit by the Trial Court, and granted the appeal.