Research › Browse › Judgment

Gujarat High Court · body

1973 DIGILAW 104 (GUJ)

SHIVDATT TUKARAM SONI v. DOLATSINGH BALUBHAI

1973-09-17

A.A.DAVE, D.P.DESAI

body1973
A. A. DAVE, J. ( 1 ) IT is not disputed before us that the property in question was an ancestral property and that defendants Nos. 1 to 6 viz. present respondents Nos. 1 to 6 had interest therein. It is also not disputed that on the day of the suit contract the respondents Nos. 5 and 6 were minors and that Monghiben as the mother and guardian of the minors had executed an agreement of sale in favour of the plaintiff. It is also not disputed that respondent No. 1 being the eldest male member of the joint Hindu family was managing the same as a Karta of the said family. The pertinent question therefore which arises for our consideration is-whether the suit contract of sale could be specifically enforced against the defendants and particularly against minor defendants. In the instant case defendant No. 1 Dolatsinh Balubhai Ex. 53 had admitted in his cross-examination that from the amount received by sale of the suit property they had spent for the marriage of his brother Ramesh that they had also spent some amount to pay of the debt incurred for marriage of Dinesh which had taken place in 1964. He had also admitted that he had no other source to meet these liabilities except the sale of the suit property. It has also come in his evidence that in his sisters daughters marriage they had performed Mosara ceremony in which also Rs. 200. 00 were spent. It will thus be seen that if the defendants Nos. 1 to 6 had no other property from which they could meet family liabilities and if money was required for meeting the expenses of marriages of defendant No. 4 Ramesh and defendant No. 3 Dinesh it cannot be said that the contract of sale in favour of the present appellant was not for legal necessity. In fact it is not submitted before us by the learned advocates for the respondents that there was no legal necessity for the transaction entered into by defendant No. 1 and Bai Monghi in favour of the present appellant. We therefore need not dilate on the question whether there was any legal necessity or Dot. In fact it is not submitted before us by the learned advocates for the respondents that there was no legal necessity for the transaction entered into by defendant No. 1 and Bai Monghi in favour of the present appellant. We therefore need not dilate on the question whether there was any legal necessity or Dot. Thus if the legal necessity for the said transaction is held provide a further question which would prop up for consideration is whether defendant No. 1 and Bai Monghi could be said to be competent to alienate the minors interest by entering into the said agreement in other words whether the suit agreement was legally enforceable in a court of law and lastly whether in such a suit for specific performance the court should exercise its discretion by refusing to pass a decree for specific performance in case it was found that the property was already sold for higher value in favour of defendant No. 7. ( 2 ) IN the case of Sri Kakulam Subramanyam v. Kurra Subba Rao 50 B. L. R. 646 it was observed by the Privy Council that -"the position of a guardian under the Hindu Law was considered by their Lordships Board in the case of Hunnomanpersaud Panday v. Mussamat Babooee Munraj Koonweree and the following passage is to be found at page 412- they consider that the acts of the Ranee cannot be reasonably viewed otherwise than as acts done on behalf of another whatever description she 8ave to herself or others gave to her. thus the act of the mother and guardian in entering into the contract of sale in the present case was an act done on behalf of the minor appellant. The position of the minor under such a contract is discussed in the following passage with which their Lordships agree in Pollock and Mullas Indian Contract and Specific Relief Acts 7 Edn. p. 70- a minors agreement being now decided to be void it is clear that there is no agreement to be specifically enforced and it is unnecessary to refer to former decisions and distinctions following English authorities which were applicable only on the view now overruled by the Privy Council. It is however different with regard to contracts entered into on behalf of a minor by his guardian or by a manager of his estate. It is however different with regard to contracts entered into on behalf of a minor by his guardian or by a manager of his estate. In such a case it has been held by the High Courts of India in cases which arose subsequent to the governing decision of the Privy Council that the contract can be specifically enforced by or against the minor if the contract is one which it is within the competence of the guardian to enter into on his behalf so as to bind him by it and further if it is for the benefit of the minor. But if either of these two conditions is wanting the contract cannot be specifically enforced at all. "in the instant case as already observed earlier the contract in question was entered into by respondent No. 1 as a Karta of the family in which the mother as a guardian of the minors had joined. Thus it cannot be said that the parties were not competent to enter into an agreement of sale on behalf of the minors. As already stated earlier it is not disputed before us that the contract of sale vas entered into for legal necessity Defendant No. 1 himself admitted that in order to meet the marriage expenses of defendants Nos. 3 and 4 they had to sell the suit property and except the suit property they had no other source to meet the same. In our opinion therefore the contract which was entered into by the competent persons viz. present respondent No. 1 and the mother as a guardian of the minors and which was for legal necessity could be specifically enforced. Both the conditions laid down by the Privy Council viz. that the contract should be one which it was within the competence of the guardian to enter into on behalf of the minor so as to bind him and that it was for the benefit of the minor are fulfilled Mr. Acharya for the respondent No. 7 however urged that even if legal necessity was established it cannot be said that the contract was for the benefit of the minors. Acharya for the respondent No. 7 however urged that even if legal necessity was established it cannot be said that the contract was for the benefit of the minors. In this connection it may be noted that it is now established law in this land that a Karta of a joint Hindu family has got authority to alienate the joint family property including the share of a minor if the transaction is for legal necessity or for the benefit to the estate. This proposition of law is not disputed by the learned Advocates for the respondents. Thus if the Karta or a guardian of the minor is competent to enter into a transaction of sale for legal necessity we fail to understand how an agreement to sell the property for legal necessity could not be said to be for the benefit of the minors. It is true that the Privy Council in the case referred to above has not specifically referred to the legal necessity or benefit to the estate and has used the words benefit of the minors. But in our opinion that would not make any difference so far as the competency of the Karta of the joint family and the guardian of the minors to execute a contract of sale for legal necessity is concerned. This Privy Council case has been referred to and explained by the Patna High Court in the case of Nathuni Mishra and others v. Mahesh Misra and others A. I. R. 1963 Patna 147 wherein it was observed-" Where a manager and karta of a Hindu joint family enters into a contract for the sale of immovable property belonging to the family for a legal necessity the purchaser is entitled in law to obtain a decree for specific performance of contract though some of the members of the joint family are minors. If legal necessity for the contract of sale has been established it is enough to bind the minor coparceners also and it is not necessary in such a case to establish in addition to the legal necessity actual benefit to the minors. "at page 148 it was further observed-"it is true that in that case it has been mentioned that the contract must be within the competence of the guardian and further that it must be for the benefit of the minor. "at page 148 it was further observed-"it is true that in that case it has been mentioned that the contract must be within the competence of the guardian and further that it must be for the benefit of the minor. From this it cannot be argued that the contract though for legal necessity is invalid because no actual benefit accrued to the minors. The reason is obvious. This question was not pointedly raised before their Lordships of the Privy Council and therefore the decision in that case cannot be regarded as authority for the proposition that in order to bind the minors in respect of a contract of sale benefit to them must also be established in addition to the existence of legal necessity. "a single Judge of the Bombay High Court had in great details dealt with this aspect of the case in the case of Popot Namdeo Sodanvar v. Jagu Pandu Govekar 70 Bom. L. R. 456 wherein the learned Judge has fully agreed with the full bench view in the case of Ramalingam v. Bavanambal A. I. R. 1951 Madras 431 wherein the following principles were made out - (1) A minor has no legal competency to enter into a contract or authorise another to do so on his behalf. A guardian therefore steps in to supplement the minors defective capacity. (2) Capacity is the creation of taw whereas authority is derived from the act of parties; (3) The limit and extent of the guardians capacity are conditioned by Hindu law. They can only function within the doctrine of legal necessity or benefit. The validity of the transaction is judged with reference to the scope of his power to enter into a contract on behalf of the minor; (4) Even the personal liability arising out of the guardians contract is a liability of the minors estate only; (5) Since the guardian under the Hindu law has the legal competency to enter into a contract on behalf of the minor for necessity or for the benefit of the estate the contract is valid from the time of its inception and since either party can enforce the contract the test of mutuality is satisfied; (6) There cannot be any essential distinction- between a contract of sale and contract of purchases. The difference is only one of degree. The difference is only one of degree. There is no difference in principle between the case of purchase by a guardian and that of a case of a sale by guardian because both depend for their validity on the competency of the guardian acting within the scope of his power under Hindu law. (7) An agreement to convey or purchase is only a preliminary step in completing a transaction of sale or purchase as the case may be. Without negotiations and without any agreement oral or in writing rarely is a sale deed: executed and registered. To hold that a guardian can execute a sale deed in respect of a specific property but he cannot legally enter into an agreement to convey or purchase the same is incongruous and illogical; (8) Contracts to sell or purchase property are transactions closely connected with dealings in immovable property by a guardian giving rise to obligations annexed to that property. They cannot be equated with contracts of loans imposing personal obligations on the minor. (9) The court following the decision in Mir Sarwajans case had held that a contract of sale or purchase entered into by a guardian on behalf of a minor could not be enforced against the minor on the ground of mutuality. That view is no longer sound in law in view of the later Privy Council decision in Subrahmanyam v. Subba Rao which in clear and unambiguous terms rules otherwise. "with respect we entirely agree with the principle of law enunciated therein. Thus in order that a contract of sale entered into by the guardian on behalf of the minor could be enforced against him two conditions primarily are necessary- (i) that the guardian should be competent to negotiate the transaction and that (2) the transaction is either for legal necessity of the joint family of which the minor is a member or that the transaction is for the benefit of the estate in which the minor has a share. In our opinion therefore in order to bold such a contract to be valid and enforceable it is not necessary that over and above the two conditions referred to above a third condition viz. that the contract should be for the benefit of the minor should be annexed thereto. In our opinion therefore in order to bold such a contract to be valid and enforceable it is not necessary that over and above the two conditions referred to above a third condition viz. that the contract should be for the benefit of the minor should be annexed thereto. The question whether it would be for the benefit of the minor or not could be considered by the court while exercising its discretion in passing a decree for specific performance of the contract. Naturally when a party comes to the court for specific performance of the contract the court is bound to consider whether it would be equitable and just from the minors point of view that the contract should be enforced against him. We are supported in our view by the decision of the Andhra Pradesh High Court in the case of Vadakattu Suryaprakasam v. Gangaraju and others A. I. R. 1956 Andhra Pradesh 33 wherein at page 45 the following observations were made-" In all transactions affecting a minor a paramount duty rests upon a court not to put its scale on transaction effecting his interests. Therefore though the contract might be valid and otherwise enforceable if at the time the court was asked to enforce it transpires that the circumstances have so changed that it would obviously be unjust and detrimental to the interests of the minor to enforce it the court may well in the exercise of its discretion refuse to give a decree for specific performance. "in our view therefore the court has got to go into the question while exercising its discretion in a suit for specific performance of the contract- whether it is for the benefit of the minor to enforce the said contract of sale. In our opinion therefore it would be enough if the contract of sale was entered into by the competent guardian and that it was for the legal necessity or for the benefit to the estate. It would not be necessary to annex a further condition of benefit of the minor in order to hold that such a contract was valid. The validity of the transaction is judged with reference to the scope of power of the guardian to enter into a contract on his behalf. It would not be necessary to annex a further condition of benefit of the minor in order to hold that such a contract was valid. The validity of the transaction is judged with reference to the scope of power of the guardian to enter into a contract on his behalf. Once the competency of the guardian to act on behalf of the minor is established and legal necessity or benefit to the estate by the transaction in question is proved no further condition would be necessary in order to enforce the said contract. In our opinion therefore the learned Judge was clearly in error in relying on the decisions in Suresh Chandra Pradhan v. Ganesh Chandra De A. I. R. 1951 Orissa 351 and Rambilas Singh v. Lokenath Chaudhari A. I. R. 1949. Patna 405 Both these decisions are contrary to the decision of the Privy Council referred to above and therefore are no longer good law- In our opinion the guardian could validly enter into a contract of sale on behalf of the minor if the transaction in question is for legal necessity or for the benefit to the estate. We therefore do not agree with the following observations of the learned Judge" A contract for sale entered into on behalf of a minor by his guardian cannot be specifically enforced even though it may be for legal necessity or for the benefit of the minor. In respect of dealings by guardian on behalf of a minor the law has recognized the broad distinction between the binding character of a completed alienation by way of a sale or charge and executory contract which merely imposes an obligation to alienate. In the former the validity is recognized as much in the interest of the minor as in the interests of the bona fide purchaser for value. But in the latter if for any reason the guardian declines to complete the transaction by actual transfer there is no interest of a bona fide purchaser to be protected and the fact that the guardian has resiled from the executory arrangement is itself a reason why the court should not enforce it against the minors estate. "with respect to the learned Judge these observations do not lay down the correct law. "with respect to the learned Judge these observations do not lay down the correct law. As already stated earlier the Privy Council had taken a different view in the case referred to above wherein no distinction was made between a contract of sale and completed sale transaction. In our opinion it is immaterial whether there was a mere contract of sale entered into by a guardian on behalf of the minor or whether the guardian had executed a document of sale on behalf of the minor. Such a contract of sale entered into by the guardian on behalf of the minor could be specifically enforced against the minor provided it was entered into by a competent person and was for legal necessity or benefit to the estate. The learned Judge therefore was not right in refusing to pass a decree for specific performance on the above ground. Appeal allowed. .