816

A ARVIND @ ABASAHEB GANESH KULKARNI & ORS.

v.

ANNA @ DHANPAL PARISA CHOUGULE & ORS.

January 22, 1980

B (N. L. UNTAWALIA AND 0. CHINNAPPA REDDY, JJ.J

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Mortgage-Minor brothers alleged that mortgage was not for legtil necrssity

and that the sale was for inadequate consideration-Elder brother discharged'

family

debts-Small part of consideration not accounted for-Sale-Validity of.

A mortgagor executed two-deeds of n1ortgage in favour of the faU1er of

the appellants for Rs.

1600 and Rs. 1000 in respect of certain lands. Both

the mortgages were possessory mortgages but the land was leased back

to

the mortgagor for a stipulated rent. The mortgagor died leaving behind

him three sons, one adult and two minors. The adult son borrowed a

further sum of

Rs. 131 by executing a simple mortgage and purporting to act

as the

~fanager of the joint family and the guardian of his minor brothers,

executed a deed of sale in favour

of the father of the appellants in respect

of four out of ten items of land previously mortgaged. The consideration

for the sale was Rs.

3050 which was made up of Rs. 1600. Rs. 1000 and

Rs. 131 due under three previous mortgages respectively and Rs. 200 received

in cash

on the date of sale.

The minor sons on becoming major filed a suii out of which this appeal

arises. for a declaration that the sale deed e.xecuted was not for legal neces­

sity, nor for the benefit

of the estate and, therefore, not binding on them.

They also prayed for joint possession of their 2/3rd share. The trial conrt

found that there was legal necessity for the sale to the extent of Rs.

2600

only, the consideration of Rs. 3050 for the sale was inadequate as the lands

were worth about Rs. 400 and that there was no compelling pressure on

the estate

to justify the sa.le and therefor'e the sale was not for the benefit of

the family and hence not binding on the plaintiffs. A decree was granted in

their favour for joint

possession of 2 /3rd share of the lands subject to certain

payment to the second defendant.

On appeal by the second defendant, the

Assistant Judge held the suit of the first plaintiff to be barred by time and

therefore modified the decree in favour of the second plaintiff.

On appeal

by the first plaintiff and second defendant, the High Court allowed the appent

by the first plaintiff and dismissed the appeal filed by the second defen­

dant. -

Accepting the appeal of the legal representatives

of the second defendant,

HELD :

Out of the sale consideralion of Rs. 3050 there was undoubted'

legal necessity

to the extent of Rs.

2600 the total amount due under the tv»o

deeds of mortgage executed by the father of the plaintiffs. Out of the ten

items which were mortgaged, only four were sold and the remaining six items

were released from the burden

of the mortgages. The f.amily was also relievecf

from one

burden of paying rent to the

mortgagee· under the lease. All this.

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ARVIND v. ANNA (Chinnappa Reddy, !.) 817

was for the benefit of the family, The value of the land svld under the deed

of sale was found by the Courts below to be Rs. 4000. Even if that be so

it cannot possibly be said that the price of Rs. 3000 was grossly inadequate.

Further there were continuous

dealings between the family of the

plaint~1s and

the fan1ily of the second defendant over a long course of years. In thi!SO

circumstances it is impossible to say that the sale was not binding on the

plaintiffs. The Courts below appeared to think that notwithstanding the cir­

cumstanc'e that there

was

legal necessity to a large extent it was incumbent on

the second defendant to establish that he made enquiry to satisfy himself that

there

was sufficient pressure on the estate which justified the sale. When the

mortgagee

was himself

the· purchaser and when the greater portion of the

consideration went

in discharge of the

mor~gages no question of enquiry re­

garding pressure on the estate would arise at all. Where ancestral property

is sold for the purpose of discharging debts incurred by the father and th&

bulk of the proceeds of the sale is so accounted, the fact that a small part

of the consideration it not accounted for will not invalidate the sale. [819 A-E]

Gauri Shankar & Ors. v. Jiwan Singh & Ors. A.I.R. 1927 P.C. 246

/Viamat Rai & Ors. v. Din Dayal & Ors. 1927 A·.I.R. P.C. 121, Ram Sunder

Lnl & another v. Lachhmi Narain and anothet' A.I.R. 1929 P.C. 143; HanoonJan

Persaud Pondey v. Mt. Babooee Munrai Koonweree [1955] 6 M.I.A. 393;

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Radhakrishendas and another v. Kaluram A.I.R. 1967 S.C. 574, referred to. D,...

Ba/mukand v. Kam/a Wati & Or!. A.I.R. 1964 S.C. 1385 held inapplicable.

CIVIL APPELATE JURISDICTION : Civil Appeal Nos. 216-217 of

1970.

Appeals by special )eave from the Judgment and Order dated

3-12-1968 of the Bombay High Court in Second Appeal Nos. 1232

and 1214/1961.

V. S. Desai, R. B. Datar and Lalit Bhardwaj and Naveen Sinha

'-for the Appellants.

S. V. Tambwaker for the Respondent.

The Judgment

of the Court was delivered by

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CH!NNAPPA REDDY, J.-On April 15, 1930 Parisa Chougule,

executed Exhibit

93, a deed of mortgage in favour of Ganesh,

Datto­

traya Kulkarni (father of the appellants) for a sum of Rs. 1600 in

respect of single item

of land.

On August 25, 1933, Parisa

Chougule executed Exhibit 92 another deed of mortgage in favour of G­

the same mortgagee for a sum of Rs. 1,000 in respect of ten ite<ns

of land including the land previously mortgaged under Exhibit 93.

Both the mortgages were possesso1y mortgages but it appears from

evidence that the land

was leased back to the mortgagor for a

5tipu­

lated rent. Parisa Chougule died on June 15 1934 ieavino behind

, b

him three sons, Bhupal an adult and Anna and Dhanpal, minors. On fl

July 11, 1934, Bhupal borrowed a further sum of Rs. 131 and

executed a simple mortgage Exhibit

91 in respect of the very ten

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SUPREME COURT REPORTS [1980] 2 S.C.R.

items of land covered by Exhibit 92. On May 1, 1935, Bhupal pur­

porting to act

as the Manager of the joint family and the guardian

of

his minor brother executed a deed of sale Exhibit

90 in favour of

Ganesh Dattatraya Kulkarni

in respect of four out of the ten items of

land mortgaged under Exhibits 93, 92 and 91. The consideration for the sale was Rs. 3050 and was made up of the amounts of Rs. 1600

Rs. 1000 and Rs. 131/-due under three mortgages Exhibits 93, 92

and

91 respectively and a sum of Rs.

200 received in cash by Bhu;ml

on the date of sale. Six of the items which were mortgaged were

released from the burden

of the mortgage_s.

On September 23,

1946, Anna second son

of

Parisa became a major. On August 31,

1951, Dhanpal third son

of

Parisa became a major. On August 27,

1953 Anna and Dhanpal

filed the suit out of which this appeal arises

for a declaration that the sale deed dated May

1, 1935 was not for

legal necessity and not for

the benefit

of the estate and therefore, not

binding on them. They also prayed that joint possession

of their two

third share may be

given to them. The Trial Court found that there

was

legal necessity for the sale to the extent of Rs. 2600 only, that

the consideration of Rs. 3050 for the sale was inadequate as the

lands were worth about Rs. 4000, that there was no such compel-

ling pressure on the estate as to justify the sale and therefore, the sale

was not for the benefit of the family a_nd hence not binding on the

two plaintiffs. A decree was granted in favour of t_he two plaintiffs .,

for joint possession of two third share of the lands ~ubject to their

paying a sum

of Rs. 133/5 ans/4 ps. to the second defendant.

On

appeal by the second defendant the Assistant Judge, Kolhapur affirm-

ed the finding

of the Trial Court that there was legal necessity to the

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extent of Rs. 2600 only, that the value of the land was Rs. 4,006

and that there was no pressure on the estate justifying the sale. The

Assistant Judge found that there

was no evidence to show that the

.defendant made any bonafide enquiry to satisfy himself that

there.

was sufficient pressure on the family justifying the sale. He how­

ever, held that the suit of the

first plaintiff was liable to be dismissed

as it was barred by limitation. He, therefore, modified the decree

of the Trial Court by granting a decree in favour of the second plain-

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tiff only for possession of a one third share in the lands subject to /""-

payment of a sum of Rs. 866.66 ps. to the second defendant. The

first plaintiff as well as the second defendant preferred second appeals

to the High Court. The High Court allowed

the appeal filed by the

first plaintiff and dismissed the appeal

filed by the second

defenilant.

The legal representatives of the second defendant have preferred

these appeals after obtaining special leave from this Court under -f

Arfclc J 36 of the Constitution.

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ARVIND v. ANNA (Chinnappa Reddy, /.) 819

It is clear that these appeals have to be allowed. The facts

narrated above show that out of the consideration of Rs. 30.50 for

the sale there

was undoubted legal necessity to the extent of Rs.

2600

the total amount due under the two deeds of mortgage executed by

the father of the plaintiffs. Out of the ten items of land which were

mortgaged, only four were sold and the remaining six items were

released from the burden of the mortgages. The family

was also

relieved from the burden of paying rent to the mortgagee under

the

lease deed. Surely all this was for the benefit of the family. The.

value of the land sold under the deed of sale was found by the Conrts

below to be Rs. 4000. Even if that be so it cannot possibly be said

that

the price of Rs.

3000 was grossly inadequate. It has further

to be remembered that there were continuous dealings between the

family of the plaintiffs and the family of the second defendant, over

a long course of years. In those circumstances it

is i,mpossible to

agree with

the conclusion of the courts below that the sale

was not

binding on the plaintiffs. The conrts below appeared to think that

notwithstanding the circumstance that there was legal necessity to a

large extent it

was incumbent on the second defendant to establish

that he made enquiry to satisfy himself that there

was sufficient pres­

sure on the estate which justified the sale.

We are unable to see any

substance in the

view taken by the courts below. When the

mort­

gagee is himself the purchaser and when the greater portion of the

consideration went in discharge of the mortgagors,

we do not see how

any question of enquiry regarding pressure on the

esta\e would arise

at all. Where ancestral property is sold for !he purpose of discharg­

ing debts incurred by the father and the bulk of the proceeds of the

s_aJe is so accounted, the fact that a small part o_f the consideration is

-not accounted for will not invalidate the sale. In Gauri Shankar &

Ors. v. liwan Singh Ors.(') it was found that Rs. 500 out of the price

of Rs. 4000 was not fully accounted for and that there was legal DICes­

sity for the balance of Rs. 3500. The Privy Council held that' if the

purchaser had acted honestly, if the existence of a family necessity for

a

sale. was made out and the price was not unreasonably low, the

pur­

chaser was not bound to account for the application of the whole of

the price. The sale

was upheld. In Niamat Rai and

Ors. v. Din Dayal

and Ors.(') the manager of a joint family sold family property for

Rs. 34,500 to saisfy pre-existing debts of the extent of Rs. 38,000. It

was held that it was sufficient to sustain the sale without show­

ing how the balance had b~n applied.

(!) A.LR. 1227 P.C. 246.

(2) A.I.R. 1927 P.C. 121.

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In Ram Sunder Lal & Anr. v. Lachhmi Narain and Anr.(') .,

the vendee the sale in whose favour was questioned fourteen years after

the

sale, was able to prove legal necessity to the extent of Rs. 7744

out of a total price

of Rs.

10, 767. The Privy Council after quoting a

passage

from the well-known case of Hanoomanpersaud

Pandey v.

Mt. Babooee Munrai Koonweree,(') upheld the sale.

The principle of these decisions has been approved by this Court

in Radhak;ishandas and Anr. v. Kaluram. (').

The learned counsel for the respondents relied upon the decision

of this Court

in

Balmukand v. Kam/a Wati & Ors.(') That was a

suit for specific performance of an agreement of sale executed by the

manager of the family without even consulting the other adult mem­

bers of the

family. The object of the sale was not to discharge any

antecedent debts

of the family nor was it for the purpose of securing

any benefit to the

family. The only reason for the sale of the land

was that the plaintiff wanted to consolidate bis own holding. The

Court naturally found that there

was neither legal necessity nor

benefit to

the estate by the proposed sale and the agreement there­

fore, could not be enforced. We do not see what relevance this case

has to the facts

of the present case. We

a~ordingly allow the

appeals and dismiss the suit with cost throughout.

N.K.A.

(1) A.I.R.1929 P.C.143

(2) (1955) 6 M.I.A. 393.

(3) A.I.R.

1967

S.C. 574.

(4) A.LR. 1964 S.C. 1385.

Appeals allawed.

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