Case Summary
| Citation | Balmukand v. KamlaWati(1964) 6 SCR 321, AIR 1964 SC 1385 |
| Keywords | benefit of estate, karta, coparceners, alienation of property |
| Facts | A Hindu joint family owned a small portion of a big plot of land owned by the alienee, who approached the Karta for the purchase of the joint family land, and offered him a higher consideration than the market value. Initially, accepting his offer, the Karta accepted the earnest money, but he later failed to execute the sale deed. The alienee filed a suit for specific performance of the contract and the Karta contended that he was not empowered to sell the land as it was neither for legal necessity nor for benefit of estate. The family was in affluent circumstances and there was nothing in evidence to show that the Karta was having any difficulty in managing the property or that the family was incurring a loss in retaining that property. Nor was there any suggestion that he wanted to invest the sale proceeds in a profitable manner. |
| Issues | Whether specific performance should be allowed in the present appeal? |
| Contentions | The Brothers of Pindidas (the other 3 defendants) denied the existence of any contract and pleaded that even if Pindidas was proved to be the Karta of the joint family and had agreed to sell the land in suit, the transaction was not binding upon them because the sale was not for the benefit of the family nor was there any necessity for that sale. |
| Law Points | Supreme Court observed that there was nothing to suggest that any sale was being contemplated by any consideration of prudence. The Court therefore, held that the contract and the proposed sale was not for benefit of estate and no suit for specific performance of the contract could be decreed. Since the expression ‘benefit of estate’ was not found in the Dharmashastras and is of later origin, the early judicial views were influenced by Mitakshara’s ‘Apatkale’ with respect to the property, and permitted transfers that were purely defensive or protective in nature and with the dilution of the concept of Apatkale, ‘benefit of estate’ also gradually included not only defensive transactions, but also alienations that an ordinary prudent man would view as appropriate in the given set of situations. The degree of prudence required from the Karta is higher than the level that is expected of a person when he deals with his exclusive property. It is solely the prerogative of the Karta, which he has to exercise with due care and diligence, whether to alienate the joint family property or not. Since the utilisation of the amount received on alienation is an important test of whether a transaction would amount to benefit of estate or not. A mere contract to sell the property at a higher rate by the Karta, cannot be enforced in a court of law by the alienee, on the ground that it would be of monetary advantage to the family. ➢ In each case, the court must be satisfied from the material before it, that it was in fact such as conferred or was reasonably expected to confer benefit on the family at the time it was entered into. Where adult members are in existence, the judgment is not to be of the manager of the family alone, but of all the adult members of the family including the manager. |
| Judgement | Mudholkar, J., held that no part of the joint family property could be parted with or agreed to be parted with by the manager on the grounds of alleged benefit to the family when the transaction is opposed by the adult members of the family. And the suit for specific performance was accordingly dismissed. |
| Ratio Decidendi & Case Authority |
Full Case Details
J. B. MUDHOLKAR, J. – This is a plaintiff’s appeal from the dismissal of his suit for specific
performance of a contract for the sale of 3/20th share of land in certain fields situate in Mauza
Faizpur of Batala in the State of Punjab. He had instituted the suit in the Court of Sub-Judge, First
Class, Batala, who dismissed it in its entirety. Upon appeal the High Court of Punjab, while
upholding the dismissal of the plaintiff’s claim for specific performance, modified the decree of
the trial court in regard to one matter. By that modification the High Court ordered the defendants
to repay to the plaintiff the earnest money which he had paid when the contract of sale was
entered into by him with Pindidas. It may be mentioned that Pindidas died during the pendency of
the appeal before the High Court and his legal representatives were, therefore, substituted in his
place. Aggrieved by the dismissal of his claim for specific performance the plaintiff has come up
to this Court by a certificate granted by the High Court under Article 133 of the Constitution.
2. The plaintiff owned 79/120th share in Khasra Nos. 494, 495, 496, 497, 1800/501,
1801/501, and 529 shown in the zamabandi of 1943-44, situate at Mauza Faizpur of Batala. In
October 1943 he purchased 23/120th share in this land belonging to one Devisahai. He thus
became owner of 17/20th share in this land. The remaining 3/20th share belongs to the joint
Hindu family of which Pindidas was the Manager and his brother Haveliram, Khemchand and
Satyapal were the members. According to the plaintiff he paid Rs 175 per marla for the land
which he purchased from Devisahai. In order to consolidate his holding, the plaintiff desired to
acquire the 3/20th share held by the joint family of Pindidas and his brothers. He, therefore,
approached Pindidas in the matter and the latter agreed to sell the 3/20th share belonging to the
family at the rate of Rs 250 per marla. The contract in this regard was entered into on October 1,
1945 with Pindidas and Rs 100 was paid to him as earnest money. As the Manager of the family
failed to execute the sale deed in his favour, the plaintiff instituted the suit and made Pindidas and
his brothers defendants thereto.
3. The suit was resisted by all the defendants. Pindidas admitted having entered into a
contract of sale of some land to the plaintiff on October 1, 1945 and of having received Rs 100 as
earnest money. According to him, however, that contract pertained not to the land in suit but to
another piece of land. He further pleaded that he had no right to enter into a contract on behalf of
his brothers who are Defendants 2 to 4 to the suit and are now Respondents 13 to 15 before us.
The Defendants 2 to 4 denied the existence of any contract and further pleaded that even if
Pindidas was proved to be the Karta of the joint family and had agreed to sell the land in suit the
transaction was not binding upon them because the sale was not for the benefit of the family nor
was there any necessity for that sale. The courts below have found in the plaintiff’s favour that
Pindidas did enter into a contract with him for the sale of 3/20th share of the family land in suit
and received Rs 100 as earnest money. But they held that the contract was not binding on the
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family because there was no necessity for the sale and the contract was not for the benefit of the
family.
4. It is not disputed before us by Mr N.C. Chatterjee for the plaintiff that the defendants are
persons in affluent circumstances and that there was no necessity for the sale. But according to
him, the intended sale was beneficial to the family inasmuch as it was not a practical proposition
for the defendants to make any use of their fractional share in the land and, therefore, by
converting it into money the family stood to gain. He further pointed out that whereas the value of
the land at the date of the transaction wasRs 175 per marla only, the plaintiff had agreed under the
contract to purchase it at Rs 250 per marla the family stood to make an additional gain by the
transaction. The substance of his argument was that the Manager of a joint Hindu family has
power to sell the family property not only for a defensive purpose but also where circumstances
are such that a prudent owner of property would alienate it for a consideration which he regards
to be adequate.
5. In support of his contention he has placed reliance on three decisions. The first of these is
Jagatnarain v. Mathura Das[ILR 50 All 969]. That is a decision of the Full Bench of that High
Court in which the meaning and implication of the term “benefit of the estate” is used with
reference to transfers made by a Manager of a joint Hindu family. The learned Judges examined a
large number of decisions, including that in HunoomanPersaud Pandey v.
BabooeeMunrajKoonweree[(1856) 6 Moo IA 393]; Sahu Ram Chandra v. Bhup Singh, [ILR
39 All 437] andPalaniappa Chetty v. SreemathDawasikamonyPandaraSannadhi[44 IA 147]
and held that transactions justifiable on the principle of benefit to the estate are not limited to
those which are of a defensive nature. According to the High Court, if the transaction is such as a
prudent owner of property would, in the light of circumstances which were within his knowledge
at that time, have entered into, though the degree of prudence required from the Manager would
be a little greater than that expected of a sole owner of property. The facts of that case as found
by the High Court were:
“(T)he adult mambers of the family found it very inconvenient and to the prejudice of the
family’s interests to retain property, 18 or 19 miles away from Bijnor, to the management
of which neither of them could possibly give proper attention, that they considered it to
the advantage of the estate to sell that property and purchase other property more
accessible with the proceeds, that they did in fact sell that property on very advantageous
terms, that there is nothing to indicate that the transaction would not have reached a
profitable conclusion….”
We have no doubt that for a transaction to be regarded as one which is of benefit to the family it
need not necessarily be only of a defensive character. But what transaction would be for the
benefit of the family must necessarily depend upon the facts of such case. In the case before the
Full Bench the two members of family found it difficult to manage the property at all with the
result, apparently, that the family was incurring losses. To sell such property, and that too on
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advantageous terms, and to invest the sale proceeds in a profitable way could certainly be
regarded as beneficial to the family. In the present case there is unfortunately nothing in the plaint
to suggest that Pindidas agreed to sell the property because he found it difficult to manage it or
because he found that the family was incurring loss by retaining the property. Nor again is there
anything to suggest that the idea was to invest the sale proceeds in some profitable manner.
Indeed there are no allegations in the plaint to the effect that the sale was being contemplated by
any considerations of prudence. All that is said is that the fraction of the family’s share of the
land owned by the family bore a very small proportion to the land which the plaintiff held at the
date of the transaction. But that was indeed the case even before the purchase by the plaintiff of
the 23/120th share from Devisahai. There is nothing to indicate that the position of the family visa-vis their share in the land had in any way been altered by reason of the circumstance that the
remaining 17/20th interest in the land came to be owned by the plaintiff alone. Therefore, even
upon the view taken in the Allahabad case the plaintiff cannot hope to succeed in this suit.
6. The next case is Sital Prasad Singh v. AjablalMander[ILR 18 Pat 306]. That was a case in
which one of the questions which arose for consideration was the power of a manager to alienate
part of the joint family property for the acquisition of new property. In that case also the test
applied to the transaction entered into by a manager of a joint Hindu family was held to be the
same, that is, whether the transaction was one into which a prudent owner would enter in the
ordinary course of management in order to benefit the estate. Following the view taken in the
Allahabad case the learned Judges also held that the expression “benefit of the estate” has a wider
meaning than mere compelling necessity and is not limited to transactions of a purely defensive
nature. In the course of his judgment Harries, C.J. observed:
“(T)he kartaof a joint Hindu family being merely a manager and not an absolute owner,
the Hindu Law has, like other systems of law, placed certain limitations upon his power
to alientate property which is owned by the joint family. The Hindu law-givers, however,
could not have intended to impose any such restriction on his power as would virtually
disqualify him from doing anything to improve the conditions of the family. The only
reasonable limitation which can be imposed on the karta is that he must act with
prudence, and prudence implies caution as well as foresight and excludes hasty, reckless
and arbitrary conduct.”
After observing that the transaction entered into by a manager should not be of a speculative
nature the learned Chief Justice observed:-
“In exceptional circumstances, however, the court will uphold the alienation of a part of
the joint family property by a karta for the acquisition of new property as, for example,
where all the adult members of the joint family with the knowledge available to them and
possessing all the necessary information about the means and requirement of the family
are convinced that the proposed purchase of the new property is for the benefit of the
estate.”
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These observations make it clear that where adult members are in existence the judgment is to be
not that of the Manager of the family alone but that of all the adult members of the family,
including the manager. In the case before us all the brothers of Pindidas were adults when the
contract was entered into. There is no suggestion that they agreed to the transaction or were
consulted about it or even knew of the transaction. Even, therefore, if we hold that the view
expressed by the learned Chief Justice is right it does not help the plaintiff because the facts here
are different from those contemplated by the learned Chief Justice. The other Judge who was a
party to that decision, Manohar lal J., took more or less the same view.
7. The third case relied on is A.T. Vasudevan [AIR 1949 Mad 260]. There a Single Judge of
the High Court held that the manager of joint .Hindu family is competent to alienate joint family
property if it is clearly beneficial to the estate even though there is no legal necessity justifying
the transaction. This view was expressed while dealing with an application under clause 17 of
Letters Patent by one ThiruvengadaMudaliar for being appointed guardian of the joint family
property belonging to, inter alia to his five minor sons and for sanction of the sale of that property
as being beneficial to the interests of the minor sons. The petitioner who was karta of the family
had, besides the five minor sons, two adult sons, his wife and unmarried daughter who had rights
of maintenance. It was thus in connection with his application that the learned Judge considered
the matter and from that point of view the decision is distinguishable. However, it is a fact that
the learned Judge has clearly expressed the opinion that the Manager has power to sell joint
family property if he is satisfied that the transaction would be for the benefit of the family. In
coming to this conclusion he has based himself mainly upon the view taken by V. Subba Rao, J.,
in Selleppa v. Suppan[AIR 1937 Mad 496]. That was a case in which the question which arose
for consideration was whether borrowing money on the mortgage of joint family property for the
purchase of a house could be held to be binding on the family because the transaction was of
benefit to the family. While holding that a transaction to be for the benefit of the family need not
be of a defensive character the learned Judges, upon the evidence before them, held that this
particular transaction was not established by evidence to be one for the benefit of the family.
8. Thus, as we have already stated that for a transaction to be regarded as of benefit to the
family it need not be of defensive character so as to be binding on the family. In each case the
court must be satisfied from the material before it that it was in fact such as conferred or was
reasonably expected to confer benefit on the family at the time it was entered into. We have
pointed out that there is not even an allegation in the plaint that the transaction was such as was
regarded as beneficial to the family when it was entered into by Pindidas. Apart from that we
have the fact that here the adult members of the family have stoutly resisted the plaintiff’s claim
for specific performance and we have no doubt that they would not have done so if they were
satisfied that the transaction was of benefit to the family. It may be possible that the land which
was intended to be sold had risen in value by the time the present suit was instituted and that is
why the other members of the family are contesting the plaintiff’s claim. Apart from that the adult
members of the family are well within their rights in saying that no part of the family property
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could be parted with or agreed to be parted with by the Manager on the ground of alleged benefit
to the family without consulting them. Here, as already stated, there is no allegation of any such
consultation.
9. In these circumstances we must hold that the courts below were right in dismissing the suit
for specific performance. We may add that granting specific performance is always in the
discretion of the court and in our view in a case of this kind the court would be exercising its
discretion right by refusing specific performance.
10. No doubt Pindidas himself was bound by the contract which he has entered into and the
plaintiff would have been entitled to the benefit of Section 15 of the Specific Relief Act which
runs thus:
“Where a party to a contract is unable to perform the whole of his part of it, and the
part which must be left unperformed forms a considerable portion of the whole, or does
not admit of compensation in money, he is not entitled to obtain a decree for specific
performance. But the court may, at the suit of the other party, direct the party in default
to perform specifically so much of his part of the contract as he can perform, provided
that the plaintiff relinquishes all claim to further performance, and all right to
compensation either for the deficiency, or for the loss or damage sustained by him
through the default of the defendant.”
However, in the case before us there is no claim on behalf of the plaintiff that he is willing to pay
the entire consideration for obtaining a decree against the interest of Pindidas alone in the
property. In the result the appeal fails and is dismissed with costs.
