JUPUDI VENKATA VIJAYA BHASKAR

JUPUDI KESA VA RAO (D) AND ORS.

SEPTEMBER 19, 2003

[Y.K. SABHARWAL AND B.N. AGARWAL, JJ.]

Hindu Adoption and Maintenance Act, 1956-Sections 17, 4 and 1 O(iv )-Appellant adopted under an ante-adoption agreement by respondent and his wife-Certain properties settled between the appellant and the C niece of the respondents' wife, who was later married to him as per the agreement-Agreement also stated that appellant shall have no further claim over other properties of the respondent-Appellant filed a suit challenging the agreement contending that such concession amounted to a payment or reward in consideration of adoption-Trial Court dismissed D the suit-Decision upheld by High Court-On appeal Held, provision enacted with the object to prevent trafficking of children-Such anteadoption agreement not prohibited-Agreement does not show that any payment was made or agreed to be made-An agreement by which an adopted son agrees not to set up any claim on certain items belonging to the adoptive family not covered-£ very kind of agreement between a major E adopted and would-be adoptive father not prohibited

Section 4-0verriding effect of the Act-Position prior to enforcement of the Act-Major adopted son by an agreement could consent to a /imitation of his right in the property of his adoptive father or any other F condition-Such an agreement was legal and binding on the adoptive son.

The respondent and his wife brought the appellant to their house in May 1957. He was brought up along with the niece of the respondent's wife. An ante-adoption agreement was entered into between the respondent and the appellant on 14.3.1962 after he attained majority.

G The respondents' wife had already settled certain properties by separate settlement deeds in favour of her niece and the appellant. The appellant and the niece of the respondent's wife married each other, as per the adoption agreement, on 24.3.1962, which was also the date of adoption. The adoption agreement had further stated that in respect H of the properties shown in the schedule therein, the appellant had

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J. V. V. BHASKAR v. J.K. RAO 949

agreed not to advance any claim or raise any dispute and that the A respondent would have absolute right to those properties without any limitation. The appellant later on instituted a suit challenging the validity of the said ante-adoption agreement on the ground that the same was hit by Section 17 (1) of the Hindu Adoption and Maintenance Act, 1956. The suit was dismissed and the High Court upheld the B decision. Hence this appeal.

The appellant contended that the ante-adoption agreement was prohibited as he had given up his rights in the respondent's properties to which he would have been entitled after adoption and the same amounted to a payment or reward in consideration of the adoption hit C by Section 17(1) of the Act; that the legal position had changed after the enactment of the Act and it was no longer permissible to enter into such an ante-adoption agreement; and that Section 4 of the Act clarified that principles of Hindu Law or interpretation thereof prevailing prior to the commencement of the Act ceased to have any D effect.

Dismissing the appeals, the Court

HELD : 1. Prior to enforcement of the Hindu Adoption and Maintenance Act, Section 500 of Principles of Hindu Law stipulated E that where the adopted son was a major at the time of adoption, he may by an agreement with the adoptive father or the adopting widow made before the adoption, consent to a limitation of his rights in the property of his adoptive father. The settled law before the commencement of the Act was that when a person of full age at the time of F . adoption agrees or assents to the condition under agreement entered into with the adoptive father, such agreement was legal and binding on the adoptive son. [952-D-E]

Kashibai Ramchandra Ghatge v. Tatya Genu Pawar & Ors., AIR G

(1916) Bom. 312; Pandurang Sakharam Thakur v. Narmadabai Ramkishna Keluskar, AIR (1932) Dom. 571 and Kanduru Venkata Soma/ah v.

Kanduru Ramasubbamma, AIR (1984) A.P. 313, referred to.

2. Section 17 of the Hindu Adoption and Maintenance Act, 1956 has been enacted with a view to prevent trafficking of children. The H

A ante-adoption agreement does not show any payment was either made or agreed to be made by the appellant to the respondent. It cannot be construed as an agreement whereby any payment was made or agreed to be made by the appellant to the respondent. It is difficult to construe the agreement wherein the appellant gave or agreed to give to his B adoptive father any other reward. The appellant before adoption had no interest of any kind in the properties, subject matter of the anteadoption agreement. Various properties had already been settled in favour of the appellant and his would-be wife by separate settlement deeds and both ultimately got married on the date of adoption. Section C 17 enacted to prevent trafficking of children is not intended to cover cases of the present nature, where a major agrees not to set up any claim with regard to certain items belonging to the adoptive family.

It cannot have an overriding effect so as to change the legal proposition prevalent prior to the commencement of the Act and in these D circumstances it has no applicability. [953-D-H)

Commissioner o/Gift-Tax, A.P. v. Smt. Gollapudi Santhamma, (1979) 116 ITR 930, distinguished.

3. In the present case there is no question of adoptive father giving E any payment or reward to the appellant as consideration for the adoption nor was any question of any payment or agreement to make payment by the appellant to his would be adoptive father. Such a question would arise only if the appellant had any right in the properties. Prior to adoption the appellant had no such right and, F therefore, the question of his giving anything to the respondent does not arise. The appellant had merely agreed not to claim any interest in some of the properties of the adoptive father and the agreement did not cover all properties of the respondent. Such an agreement is not prohibited as under the circumstances of the case there was no question G of any trafficking in children. Section 17 does not prohibit every kind of agreement between a major adoptee and the would-be adoptive father. [957-B-C, 957-E)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14870 of

H 1996.

From the Judgment and Order dated 18. i .94 of the Andhra Pradesh A High Court in A.No. 1233 of 1988.

WITH

C.A. No. 14871 of 1996.

Sunil Gupta, P. Krishnamoorthy, A.D.N. Rao, Mrs. RevathyRaghavan, Mrs. K. Sarda Devi, Ms. B. Sunita Rao, M.D. Babu, Sushi! K. Pathak and V.G. Pragasam for the appearing parties.

The Judgment of the Court was delivered by

Y.K. SABHARWAL, J. : The question for determination in these appeals is about the validity of an ante-adoption agreement entered into prior to adoption between to be adopted son and the would be adoptive father after coming into force of the Hindu Adoption and Maintenance Act, D 1956 (for short 'the Act').

The question has arisen in a suit instituted by the appellant for partition in respect of properties mentioned in the Schedule to the anteadoption agreement. Defendant No. I is the adoptive father of the appellant and defendat No. 2 is a formal party being son of the appellant supporting E his father. The appellant, in May 1957, was brought by defendant No. I and his wife to their house from the house of his natural parents. Since then, he was brought up by defendant No. I and his wife. The wife of defendant No. I also brought up her niece. Undisputedly, the ante-adoption agreement (Exhibit B-16) dated 14th March, 1962 entered into between the appellant F

(plaintiff) and defendant No. I was executed when the appellant was a major. The execution and genuineness of Exhibit B-16 is not under challenge. The challenge is about the validity of Exhibit B-16 on the ground that it is hit by Section 17(1) of the Act. The concurrent findings of fact that have not been challenged are that the appellant was adopted G by defendant No. I and his wife in the morning hours on 24th March, 1962; On the same date, in the evening marriage between the appellant and niece of wife of defendant No. I took place.

The suit instituted by the plain tiff was dismissed by the trial court.

The judgment and decree of the trial court has been upheld by the High H

A Court in the first appeal. Exhibit B-16 has been held to be valid and not hit by Section 17 of the Act. In these appeals, challenging the impugned judgment of the High Court, the only point canvassed by Mr. Sunil Gupta, senior advocate for the appellant, is about Exhibit B-16, being invalid in view of prohibition contained in Section 17 of the Act. To consider this B question, we would assume as correct the conclusion of the High Court that the appellant on adoption on 24th March, 1962 became a coparcener and the first defendant ceased to be a sole surviving coparcener. Learned counsel for the respondents has not raised the invalidity of adoption under clause (iv) of Section I 0 of the Act on the ground that the appellant was C more than 15 years of age. Finding of the High Court on the said aspect is that in view of the custom in the Yaish community to which the parties belong adoption after the age of 15 years is permissible. this finding is also not under challenge.

Prior to enforcement of the Act, Section 500 of Principles of Hindu D Law stipulated that where the adopted son was a major at the time of the adoption, he may by an agreement with the adoptive father or the adopting widow made before the adoption, consent to a limitation of his rights in the property of his adoptive father. The settled law before the commencement of the Act was that when a person of full age at the time of adoption agrees E or assents to the condition under agreement entered into with the adoptive father limiting his right in the properties of the adoptive father, such agreement was legal and binding on the adoptive son (See Kashibai RamchandraGhatgev. TatyaGenuPawar& Ors., AIR(l916)Bom.312; Pandurang Sakharam Thakur v. Narmadabai Ramkrishna Keluskar, AIR f

(1932) Born. 571 and Kanduru Venkata Somaiah v. Kanduru Ramasubbamma, AIR (1984) Andhra Pradesh 313).

Learned counsel for the appellant has, fairly and rightly, not disputed the legal proposition that prior to the enforcement of the Act, it was G permissible in law to enter into an ante-adoption agreement. Mr. Gupta, however, strenuously contends that after the enforcement of the Act, such an agreement is clearly hit by Section 17 and, therefore, the legal position prevailing prior to the enforcement of the Act is of no relevance. The question, therefore, is whether the ante-adoption agreement Exhibit B-16 dated 14th March, 1962 is hit by Section 17 of the Act. Section 17 of the H Act reads as tinder :

17. Prohibition of certain payments. - (I) No person shall receive A or agree to receive any payment or other reward in consideration of the adoption of any person, and no person shall make or give or agree to make or give to any other person any payment or reward the receipt of which is prohibited by this section.

(2) If any person contravenes the provisions of sub-section (I), he shall be punishable with imprisonment which may extend to six months, or with fine, or with both.

(3) No prosecution under this section shall be instituted without C the previous sanction of the State Government or an officer authorized by the State Government in this behalf."

Exhibit B-16 mentions that it is an ante-adoption agreement executed before the adoption. It is recited therein that the first defendant and his wife, for 5 years have been fostering the plaintiff with an intention to take him D in adoption. It also mentions that wife of defendant No. I at the instance of her husband, namely, defendant No. 1 had settled certain properties detailed therein in favour of the plaintiff under two settlement deeds dated I 0th September 57 (Exhibit A-42) and dated 12th September, 1957 (Exhibit A-19). She had also conveyed with absolute right certain properties E detailed therein in favour of the wife of the plaintiff under two settlement deeds dated 31st July, 1957 (Exhibit B-49) and 15th August, 1957 (Exhibit B-50). The document further mentions that it is already agreed that the plaintiff would marry niece of wife of defendant No. I to whom the aforesaid properties were settled. The document shows that the plaintiff F agreed, in respect of the properties shown i~ the Schedule to Exhibit B-16, not to advance any claim or raise any dispute. The plaintiff further agreed that the first defendant shall have absolute right without any limitation and he shall have no right or interest in the said properties which are now subject matter of partition suit.

Mr. Gupta places strong reliance on Section 4 of the Act in support of the contention that the principles of Hindu Law shall cease to have any effect. Tho contention is that sincP, in the matter in issue, provision has been made in the Act by enacting Section 17, the principles of Hindu law

or interpretation thereof prio_r to commencement of the Act will have no H

SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.

A relevance. Regarding the legal status and rights and interest of the appellant before and after adoption, it cannot be doubted that before adoption on 24th March, 1962, appellant had no interest in the properties in question. With effect from the date of adoption, the plaintiff by legal fiction served all the ties with the natural parents and became the child of defendant No. I and B his wife. The question, however, is the validity of agreement, Exhibit B-16, entered into before adoption. Would it amount, in the facts and circumstances of the case, to defendant No. I receiving or agreeing to receive any payment or reward in consideration of the adoption?

The contention urged is that giving up of right in the properties of defendant No. I to which the appellant would have been otherwise C entitled on and after adoption but for Exhibit B-16, would amount to payment or reward or the appellant agreeing to make payment or reward to his would be adoptive father in consideration of the adoption. It is argued that such an agreement is prohibited by sub-section (I) of Section 17 of the Act.

Section 17 of the Act has been enacted with a view to prevent trafficking of children. The contravention of sub-section (I) is punishable with imprisonment which may exter.d to six months or fine or both as provided for in sub-section (2) of section 17. The question is whether the E agreement Exhibit B-16 comes within the purview of Section 17(1) of the Act. The recital in Exhibit B-16 does not show any payment was either made or agreed to be made by the appellant/plaintiff to the first defendant. it cannot be construed as an agreement whereby any payment was made or agreed to be made by the appellant/plaintiff to defendant No. I. It also F seems difficult to construe this agreement whereby the plaintiff gave or agreed to give to his adoptive father any 'other reward'. The plaintiff before adoption had no interest of any kind in the properties, subject matter of Exhibit B-16. As earlier noticed, various properties had been settled prior to Exhibit B-16 in favour of the plaintiff and the girl with whom he had to marry and which marriage ultimately took place on the date of adoption.

G In our view, Section 17 enacted to prevent trafficking of children is not intended to cover cases of the present nature where a major person agrees not to set up any claim with regard to certain items belonging to the adoptive family. Section 17 cannot be held to have an overriding effect so as to change the legal proposition prevalent prior to the commencement H of the Act. Section 17, under the circumstances, has no applicability.

Learned counsel for the appellant, however, places strong reliance on A a Division Bench decision of Andhra Pradesh High Court in Commissioner of Gift-Tax, A.P. v. Smt. Go/apudi Santhamma, (1979) 116 ITR 930. In this case, the High Court has held that the ante-adoption agreement attracted the vice of Section 17. It has to be borne in mind that the High Court was not considering any dispute between the adoptive son or B adoptive father or natural heirs or members of the adoptive father but was considering the question whether property of 'P' was to be subjected to estate duty or not. In that case, the dispute between the Controller of Estate Duty and the estate of one late the 'P' arose under these circumstances ; On 14th June, I963 'P' adopted on 'R' his brother's grandson. Earlier to that on I Ith June, I 963 'P' executed gift deeds in respect of certain lands C in favour of his daughter, grand daughter and a great grandson. On 20th July, 1963, deed of adoption was registered. On the same date he executed a settlement deed in favour of 'R' whereby the properties in question were settled upon him. 'P' died on 20th January, 1965. At the time of adoption 'R' was a major but in accordance with the customs prevailing in Vysya D community to which the parties belonged, such adoption was permissible.

After the death of 'P', the accountable person, viz. his daughter, filed the estate duty return. One of the questions arose relating to the inclusion of properties covered by the settlement deed dated 20th July, 1963 which had been executed by 'P' in favour of 'R'. The properties covered by the E settlement deed were included for the purpose of determination of the estate duty by the Assistant Controller. Aggrieved by the decision of the Assistant Estate Controller, the matter was carried in appeal where a new ground was taken by the accountable person that the deed though described as settlement deed, was not merely a settlement deed operating as a gift F but as one executed in consideration of the ante-adoption agreement entered into between the adopted son and the deceased. The Appellate Controller held that even if there was such an ante-adoption agreement in existenct:; that would be invalid in view of the prohibition contained in Section 17 of the Act. The tribunal on appeal reversed the finding of the Appellate Controller and inter alia held that there was an ante-adotion G agreement entered into between 'P' and 'R' and the same was valid and not hit by Section 17 of the Act. In the reference at the instance of the Controller of Estate Duty before the High Court it was contended that the ante-adoption agreement was not valid under the Act and even assuming it is valid, the tribunal committed an error in law in holding that oral H

A antecedent agreement conferred antecedent rights upon the adopted son.

The High Court noticing that the tribunal has recorded a finding in favour of the accountable person that there was in fact an oral ante-adoption agreement between the parties proceeded to consider the question whether such an agreement is valid in view of Section 17 B of the Act. It was noticed that nowhere in the deed of settlement there was any mention of an oral agreement between the adopted son and his adoptive father as to the manner in which the property should be settled in the event of his being adopted. The relevant portion of the settlement deed quoted in the judgment of the High Court is as c follows:

"It has been already arranged between your natural parents and ourselves prior to the adoption, that you cannot exercise right over any other property except those that are specifically set out in the deed. If at any time you were to deal with them, then this D settlement deed will not be operative and my properties are to be vested in my legal heirs. This was also agreed to by us before the adoption."

U oder the aforesaid circumstances, noticing that it is manifest that the E natural parents of the adopted son were parties to the agreement and rightly observing that Section 17 lays down a public policy so that there may be no trafficking in children, on facts, the High Court came to the conclusion that the ante-adoption agreement in that case attracted the vice of section 17.

F What in fact the ante-adoption agreement was in that case is not clear at all. If there was an agreement between natural parents of 'R' and 'P' that prior to adoption 'P' must transfer certain properties in favour of 'R' as a consideration for adoption it would, of course, be hit by section 17.

The oral agreement was set up at the appeal stage with a view to exclude G the properties from payment of the estate duty. An agreement had been entered into between the natural parents and the adoptive father whereby the latter agreed to transfer the properties in favour of the adoptive son prior to adoption as a consideration of adoption. The High Court did not lay down any proposition that every ante-adoption agreement would attract the H vice of Section 17. An agreement which violates Section 17 alone would

come within the vice of said provision. Further, the High Court did not A analyse the provisions of Section 17 of the Act. Under Section 17 one has to receive or agree to receive any payment or reward for consideration of adoption. Both recipient and giver come within the purview of Section 17.

In the present case there is no question of adoptive father giving any B payment or reward to the plaintiff as a consideration for the adoption. As already noticed, the:re was no question of any payment or agreement to make payment by plaintiff to his would be adoptive father. Regarding giving of reward by plaintiff or agreement to give any reward to his would be adoptive father for consideration of adoption, that question would arise only if the plaintiff had any right in the properties. Prior to adoption C plaintiff had no such right and, therefore, the question of his giving anything to defendant No. I does not arise. On facts earlier noticed, the plaintiff was being fostered by adoptive father and his wife for five years prior to adoption. The wife of adoptive father had transferred various properties in favour of the plaintiff about five years earlier to adoption. At D the same time she had also settled certain properties in favour of the girl with w:10m the plaintiff was to marry and in fact married. By agreement Exhibit B-16, the appellant/plaintiff agreed not to claim any interest in some of the properties of his adoptive father. It did not cover all the properties of defendant No. I. Such an agreement is not prohibited by E Section 17. Under the circumstances of the case, there was no question of any trafficking in children. Section 17 does not prohibit every kind of agreement between a major adoptee and the would be adoptive father.

Exhibit B-16 does not suffer from the vice of Section 17 of the Act.

For the aforesaid reasons, we find no infirmity in the impugned F judgment of High Court. Resultantly, the appeals are dismissed leaving the parties to bear their own cost.

A.Q.

Appeals dismissed.