RSA No. 1537 of 1993 (1) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No. 1537 of 1993 Date of Decision: December 21, 2007 Padmawati and others ....Appellants Versus Kulwant Rai and others ....Respondents Coram: Hon'ble Mr. Justice Hemant Gupta. Present: Shri V.K. Jain, Senior Advocate, with Shri P.L. Singla and Shri Amanpriya Jain, Advocates, for the appellants. Shri R.S. Mittal, Senior Advocate, with Sarv Shri C.B. Goel, Nitin Jain and Manoj Sharma, Advocates, for respondent Nos. 1 and 2. -.- 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? HEMANT GUPTA, J. Defendant Nos. 2, 3 and 4 and some of the legal heirs of defendant No. 1 are in second appeal aggrieved against the judgment and decree passed by the learned first Appellate Court granting decree of specific performance of the agreement of sale dated 12.6.1979. It is alleged by the plaintiffs that firm of the plaintiff M/s Kanshi Nath and Sons is a tenant under defendant No.1 Amar Nath. The property in dispute has fallen to the share of defendant No.1 on the basis of partition effected amongst three brothers, namely, Amar Nath, Bal Kishan RSA No. 1537 of 1993 (2) Dass (defendant No. 4) and Ram Nath by way of registered partition deed dated 11.6.1948. Amar Nath entered into an agreement of sale with respect to the property fallen to his share with the plaintiff and received a sum of Rs.5,000/- as an earnest money. The total sale consideration was fixed at Rs.46,000/-. The sale deed was to be executed on or before 31.12.1979 when the balance sale consideration of Rs.41,000/- was to be paid before the Sub Registrar. It is pointed out that Bal Kishan Dass (defendant No.4) filed a false and frivolous suit on 6.10.1979 (Exhibit P.13) against Amar Nath and the present plaintiffs claiming prohibitory injunction restraining Amar Nath (defendant No.1) from transferring or managing any portion of the property in dispute. Amar Nath claimed his ownership with respect to the property in dispute. The said suit was decreed on 27.2.1980 (Exhibit P15/1) to the effect that defendant No.1 shall sell or transfer the proprietary rights in respect of the suit property as per the partition deed dated 11.6.1948. Bal Kishan filed another suit for declaration (Exhibit P.11) on 15.4.1980 claiming ownership over the suit property and also claimed a relief of permanent injunction restraining Amar Nath from selling or in any way disposing of any portion of the suit property. The said suit was dismissed on 28.1.1982 (Exhibit P.12). The learned trial Court in the aforesaid suit had granted an exparte injunction order on 18.4.1980 restraining Amar Nath from selling any portion of the suit property as mentioned in para No. 1 of the plaint till further orders. It is also admitted fact that Amar Nath executed sale deed dated 27.11.1981 (Exhibit P.18) for a sale consideration of Rs.48,000/- in favour of defendant Nos. 2 and 3 i.e. sons of Bal Kishan defendant No.4 and RSA No. 1537 of 1993 (3) brother of Amar Nath. After the aforesaid suit for declaration was dismissed on 28.1.1982, the plaintiff filed the present suit for specific performance on 24.3.1982. Amar Nath defendant No. 1 died on 30.10.1983 without filing the written statement. The written statement on behalf of the vendor was filed by his legal representatives alone. The other undisputed fact is that writing dated 12.6.1979 though titled as the receipt, gives the detail terms and conditions of the sale and also the fact that the sale deed is to be executed on or before 31.12.1979. One of the witnesses of the aforesaid writing is Rajinder Mittal, Advocate and son of Amar Nath. After filing of the suit by defendant No.4 on 6.10.1979, Amar Nath communicated to plaintiffs on 24.10.1979 vide letter Exhibit P.10, after receipt of an exparte order issued by the Court, asking the plaintiffs to send the copies of certain documents to enable his son Shri Rajinder Mittal to prepare the reply and written statement and send directly to the Advocate engaged by the defendants. It is mentioned in the said letter that whole case of Bal Kishan is that he should not sell the portion of the property. Exhibit P.9 is another letter written by Amar Nath to plaintiff-Kulwant Rai. Exhibit P.3 dated 6.12.1979 is the letter written by the plaintiff Kulwant Rai to defendant Amar Nath. In the said letter, the plaintiffs have sought the original instrument of partition with its original plan and sought the presence of the defendant-Amar Nath in the Court. In the said letter, the plaintiff-Kulwant Rai has communicated that he was always ready and willing to perform his part of the contract and get the sale deed registered in his favour according to the terms of the agreement, if Amar Nath is in a position to perform his part of the contract. The said letter was responded by Amar Nath on 11.12.1979 vide Exhibit P.6, pointing out RSA No. 1537 of 1993 (4) that it will not be possible for him to visit Ambala in the month of December, 1979 as he is to attend some cases in Delhi and in the month of January, 1980, he will visit Ambala and take necessary steps. Exhibit P.9 is another letter written to the plaintiff by Amar Nath requesting him to deal with the house tax assessment matters of the property in dispute. Exhibit P.1 is the partition deed dated 11.6.1948 on record, whereas the writing, the basis of the suit titled receipt dated 12.6.1979 is Exhibit P.2 on record. There is no dispute between the parties in respect of the aforesaid facts. At this stage, the issues over which the parties went to trial, need to be reproduced:- 1. Whether the deceased Amar Nath entered into an agreement to sell the property in dispute as alleged? OPP 2. Whether deceased Amar Nath received Rs.5000/- as earnest money as alleged? OPP 3. Whether according to the judgment dated 27.2.80 deceased Amar Nath was authorised to sell his share as alleged? OPP 4. Whether the plaintiffs were always ready and willing to perform their part of the contract as alleged? OPP 5. Whether the deed in favour of the defendant No.2 was obtained by collusion as alleged? OPP 6. Whether the agreement in between the plaintiff and deceased Amar Nath was in the knowledge of defendants No. 2 and 3 at the time of sale deed in their favour as alleged? OPP RSA No. 1537 of 1993 (5) 7. Whether the property in dispute was joint Hindu family property of Amar Nath and his LRs as alleged? OPD 8. Whether deceased Amar Nath was in possession of the property in dispute as being Karta of the Joint Hindu Family as alleged? OPD 9. Whether the deceased Amar Nath was not competent to enter into an agreement with the plaintiff as alleged? OPD 10.Whether no cause of action has accrued to the plaintiffs to file this suit as alleged? OPD 11.Whether the defendants No. 2 and 3 are bona-fide purchasers as alleged? OPD 12.Whether the plaintiffs have not come with clean hands to the Court if so its effect? OPD 13.Whether the deceased Amar Nath entered into an agreement in the year 1978 to sell the property in dispute as alleged? OPD 14.Whether the suit is not maintainable in the present form as alleged OPD 15.Whether the suit is bad for misjoinder of the necessary parties as alleged? OPD 16.Relief. Learned trial Court returned a finding that document Exhibit P.2 is an agreement and that the plaintiffs were always ready to perform their part of the contract and it was defendant No.1, who did not execute the RSA No. 1537 of 1993 (6) sale deed. It was also found that Amar Nath was not competent to enter into an agreement with the plaintiff for sale of the property as it was a Joint Hindu Family Property and he was only a Karta of the same and that the plaintiffs have not averred that the agreement was for the benefit of the legal heirs of defendant No.1 or that Amar Nath had a legal necessity to dispose of the property and thus, issue Nos. 7, 8 and 9 were decided in favour of the defendants and against the plaintiffs. It was also found that defendant Nos.2 and 3 had no knowledge of the agreement Exhibit P.2. The learned trial Court thus, found that defendant Nos. 2 and 3 are bona-fide purchasers. In view of the findings on the aforesaid issues, the suit was decreed to the extent of recovery of Rs.5,000/- against the legal heirs of defendant No.1 along with interest @ 12% p.a. It is also an admitted fact that Amar Nath defendant No.1 died leaving behind Smt. Padmawati his widow, six sons and a daughter. All the 8 successors of deceased Amar Nath were impleaded as his legal heirs. However, the judgment and decree passed by the learned trial Court reflected his widow, 3 sons and a daughter as the legal heirs of the deceased. An appeal against the judgment and decree passed by the learned trial Court was filed against those legal representatives, who were reflected in the judgment and decree passed by the learned trial Court and not against all the 8 legal heirs, who were ordered to be impleaded as legal heirs of the deceased-Amar Nath. In appeal, the learned first Appellate Court reversed the finding on issue Nos. 5 and 6 holding that the sale deed in favour of defendant Nos. 2 and 3 was obtained in collusion with defendant No.1 so as to deprive the plaintiff the fruit of the agreement of sale executed. The learned first RSA No. 1537 of 1993 (7) Appellate Court also set aside the finding of trial Court on issue No.11 holding that defendant Nos. 2 and 3 were not the bona-fide purchasers of the suit property without notice to the agreement of sale. The finding on issue Nos. 5, 6 and 11 were not disputed by the learned counsel for the appellant in the present appeal. On the other hand, the learned counsel for the plaintiff-respondents did not dispute the findings recorded on issues No. 7 and 8. Thus, the issues which are, inter-alia, in dispute are issues No. 4, 8, and 9. I have heard the learned counsel for the parties on the following substantial questions of law:- i) Whether the deceased Amar Nath was competent to enter into an agreement with the plaintiff as a Karta of his Hindu Undivided Family? ii)Whether deceased Amar Nath was required to recite in the agreement of sale that he is entering into an agreement of sale as Karta of the Hindu Undivided Family and whether such an agreement binds the other coparcernars? iii)Whether the plaintiff was required to plead and prove that the agreement to sell regarding the Joint Hindu Family Property by Amar Nath is for the benefit of the family and on account of legal necessity and an act of good management? iv)Whether the plaintiff has pleaded and proved that he was ready and willing to perform his part of the contract from the date of the agreement till the RSA No. 1537 of 1993 (8) date of institution of the suit? v) Whether the plaintiff's first appeal could be allowed when the decree against some of the legal heirs of deceased Amar Nath for recovery of earnest money has attained finality? The agreement to sell is in the form of receipt (ExhibitP.2). One of the witnesses to the said receipt is Rajinder Mittal, Advocate and son of Amar Nath. It has also come on record that the said agreement is in fact, scribed by Rajinder Mittal, as deposed by PW2 Kulwant Rai, plaintiff and PW3- Mangat Ram, the other attesting witness. Still further in letter dated 24.10.1979 (Exhibit P.10), Amar Nath, has communicated to the plaintiff that his son Rajinder Mittal would prepare the reply and written statement in the suit filed by Bal Kishan. The powers of Karta have been described in 16th Edition of Principles of Hindu Law by Mulla to the following effect:- “General powers of manager of joint family business:- Besides the power to contract debts for the family business, the manager has the power of making contract, giving receipts, and compromising or discharging claims ordinarily incidental to the business. Without a general power of that kind, it would be impossible for the business to be carried on at all. Alienation by manager of coparcenary property for legal necessity. (1) The power of the manager of joint Hindu family to alienate joint family property is analogous to that of a manager for an infant heir as defined by the Judicial RSA No. 1537 of 1993 (9) Committee in Hanuooman Persaud v. Musummat Babooee (1856) 6 Moo I.A. 393. (2) The manager of a joint Hindu family has power to alienate for value joint family property, so as to bind the interest of both adult and minor co-parcerners in the property, provided that the alienation is made for legal necessity, or for the benefit of the estate. A manager (not being the father) can alienate even the share of a minor coparcener to satisfy an antecedent debt of the minor's father (or grandfather) when there is no other reasonable course open to him. It is not necessary to validate the alienation that the express consent of the adult members should have been obtained. (2a) Where a joint family consists of adults and minors, the mere fact that all the adults members including the manager have consented to the alienation is not proof of legal necessity. Such consent, however, many supply and lacuna that may exist in the evidence of legal necessity. (3) When an alienation is made by the manager without legal necessity, but with the consent of all other coparceners, they being all adults, the alienation is valid in its entirety. If it is made without the consent of all, it would in Bombay and Madras, bind the shares of the consenting members. In West Bengal and Uttar Pradesh, where a coparcener cannot alienate even his own interest without the consent of all other coparceners, the RSA No. 1537 of 1993 (10) alienation would not bind the shares either of the alienor or of the consenting members. (4) An alienation by the manager of a joint family made without legal necessity is not void, but voidable, at the option of the other coparceners. They may affirm it or they may repudiate it, but a creditor cannot repudiate it, there being no suggestion that it was a fraud of creditors.” Apart from such interpretation, the powers of Karta were delineated by the Hon'ble Supreme Court in Sunil Kumar and another v. Ram Parkash and others AIR 1988 Supreme Court 576. The relevant extracts from the judgment read as under:- “21. In a Hindu family, the Karta or manager occupied a unique position. It is not as if anybody could become manager of a joint Hindu family. “As a general rule, the father of a family, if alive, and in his absence the senior member of the family, is alone entitled to manage the joint family property.” the manager occupies a position superior to other members. He has greater rights and duties. He must look after the family interests. He is entitled to possession of the entire joint estate. He is also entitled to manage the family properties. In other words, the actual possession and management of the joint family property must vest in him. He may consult the members of the family and if necessary take their consent to his action but he is not answerable to every one of them. RSA No. 1537 of 1993 (11) xx xx xx 23. The managing member or karta has not only the power to manage but also power to alienate joint family property. The alienation may be either for family necessity or for the benefit of the estate. Such alienation would bind the interests of all the undivided members of the family whether they are adults or minors. The oft quoted decision in this aspect is that of the Privy Council in Hanuman Parshad v. Mt. Babooee, (1856) 6 Moo Ind. App 393. There it was observed at p. 423: (1) “ The power of the manager for an infant heir to charge an estate not his own is, under the Hindu Law, a limited and qualified power. It can only be exercised rightly in case of need, or for the benefit of the estate.” This case was that of a mother, managing as guardian for an infant heir. A father who happens to be the manager of an undivided Hindu family certainly has greater powers to which I will refer a little later. Any other manager however, is not having anything less than those stated in the said case. Therefore, it has been repeatedly held that the principles laid down in that case apply equally to a father or other coparcener who manages the joint family estate.” In Sital Prasad and others v. Ajablal Mander and others, AIR 1939 Patna 370, it was found that there are certain limitations upon Karta of a joint Hindu family to alienate the property, which is owned by joint family. The reasonable limit which can be imposed on the Karta is that he must act RSA No. 1537 of 1993 (12) with prudence and prudence implies caution as well as foresight excluding hasty, reckless and arbitrary conduct. In Muraka Properties (P) Ltd. v. Beharilal Murarka, AIR 1978 SC 300, the Hon'ble Supreme Court recognised the power of the Manager of a Joint Hindu Family to alienate for value Joint Hindu Family Property so as to bind the interest of both adult and minor members of the family, provided such alienation is made for the benefit of the estate. In Sri Narayan Bal and Others V. Sridhar Sutar and Others (1996) 8 SCC 54, an argument was raised before the Hon'le Supreme Court that sale of undivided interest of the minor in the Joint Hindu Family Property is void for the lack of permission from the Guardian Court. It was held that for sale of the share of a minor in the Joint Hindu Family Property, the permission of the Court is not required in terms of Sections 6 and 12 of the Hindu Minority and Guardianship Act, 1956. Having found that no guardian is required to be appointed in respect of undivided interest of minor in the Joint Hindu Family Property as provided under Sections 6 and 12 of the Act, the permission of the Court is not required. It was held to the following effect:- “But since there need be no natural guardian for the minor's undivided interest in the joint family property, as provided under Sections 6 and 12 of the Act, the previous permission of the Court under Section 8 of disposing of the undivided interest of the minor in the joint family property is not required. The joint Hindu family by itself is a legal entity capable of acting through its Karta and other adult members of the family in management of the RSA No. 1537 of 1993 (13) joint Hindu family property. Thus Section 8 in view of the express terms of Sections 6 and 12, would not be applicable where a joint Hindu family property is sold/disposed of by the Karta involving an undivided interest of the minor in the said joint Hindu family property The question posed at the outset therefore is so answered.” In view of the aforesaid judgment, it is apparent that permission for sale of a minor's undivided share in the Joint Hindu Family Property is not required as the Karta is authorised to act on his behalf. Therefore, the Karta is authorised to sell the share of an adult member of the Joint Hindu Family. Thus, Amar Nath as a Karta of Joint Hindu Family, was competent to enter into an agreement with the plaintiff. Therefore, in respect of the first Substantial question of law, it is held that a Karta of a Hindu Undivided Family has a right to alienate the Joint Hindu Family Property for the benefit of the estate and/or legal necessity. Such alienation is binding on all the coparceners including the minors. Learned counsel for the appellant has argued with vehemance that receipt Exhibit P.2 is an agreement entered upon by Amar Nath in his individual capacity and not as Karta of Joint Hindu Family and the said agreement is not binding on the other coparceners. It is contended that reading of the agreement does not show that it was intended to bind other coparceners nor there is any recital that it is in respect of the Hindu Undivided Family. Reliance is placed upon Khali Panigrahi v. Kamala Devi, AIR 1967 Orissa 100. It is correct that in the agreement Exhibit P.2, there is no RSA No. 1537 of 1993 (14) reference that the said agreement is in respect of a Joint Hindu Family Property or that it is on behalf of a Karta. However, it is not necessary that in respect of a Joint Hindu Family Property, it is required to be recited in the agreement itself that the agreement is in respect of Joint Hindu Family Property or that it is being executed by Karta. In Mt. Jasodar Dusadhin v. Mt. Sukurmani Mehtrani and another, AIR 1937 Patna 353, it was held that as in between members of a joint Hindu family the fact that the name of one member rather than that of another or of all the members is used in acquisition of property, does not amount to holding out of that member as the ostensible owner. Admittedly, the property fell to the share of Amar Nath in family partition in the year 1948. On account of partition of the Joint Hindu Family Property, the property falling to the share of Amar Nath would be deemed to be a Joint Hindu Family Property. A Karta of a Joint Hindu Family Property is not required to be appointed by the coparceners. By fiction of law and his status in the family, the oldest male member acts as a Karta. The duties, responsibilities and the obligations of the Karta have been expressed by the Authoritative Commentators on Hindu Law and in judicial precedents. The revenue record is not determinative of the fact whether the property is a Joint Hindu Family Property or not. As and when any question arises whether a particular property is Joint Hindu Family Property, the same is required to be examined keeping in view the origin of the same and how it devolved upon lineal male descendants. Once, the sequence of devolution is proved, the property is deemed to be Joint Hindu Family Property in the hands of a male holder. All acts of a Manager or a Karta are on behalf of the coparceners. It is not required to be recited in the RSA No. 1537 of 1993 (15) agreement or the document that such Karta is to act on behalf of the coparceners. It is the source of power in the Karta, which is relevant and not the form in which the agreement is moulded. Therefore, it is not necessary to recite in the agreement that the agreement is on behalf of coparceners of the Joint Hindu Family. The finding of the Orissa High Court is without any discussion and consideration of any precedent. Therefore, such judgment does not lay down any precedent that it is required to be recited in the agreement itself that it is on behalf of the Hindu Undivided Family. In State of Karnataka v. Muniyalla AIR 1985 Supreme Court 470, the Hon'ble Supreme Court held that the recitation of a wrong provision under