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  • Section 5, Subsection 2 of the 1983 Income Tax Act (not mentioned in the excerpt, but included for completeness)
  • Section 100 of the Code of Civil Procedure
  • Section 8 of the Hindu Succession Act
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
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Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act (not mentioned in the excerpt, but included for completeness)
  • Section 100 of the Code of Civil Procedure
  • Section 8 of the Hindu Succession Act
Smart Summary

Factual and Procedural Background

Kulwant Singh (plaintiff–respondent) and Makhan Singh (defendant–appellant, now represented by legal representatives) are two of four brothers. Each brother owned a 1/4-share in land measuring 40-2/3 marlas at Rayya, Amritsar, and a corresponding share in an ice-factory building and machinery. On 3 May 1982 the defendant executed two agreements in favour of the plaintiff: (i) to sell his 1/4-share in the land and building for Rs 10,000 (Rs 5,000 earnest money paid) and (ii) to sell his 1/8-share in the machinery for Rs 16,000 (Rs 5,000 earnest money paid). Sale deeds were to be executed by 10 August 1982.

The defendant failed to complete the sale, prompting a notice on 19 December 1983 and, ultimately, a suit for specific performance filed on 17 January 1984.

The trial court found the agreements proved and the plaintiff ready and willing, but dismissed the suit, holding (a) the machinery agreement was not specifically enforceable and (b) the land and building were joint Hindu family (JHF) property, rendering the agreements unenforceable. The first appellate court affirmed.

In second appeal the High Court partly reversed, granting specific performance for the defendant’s 1/4-share in 29-2/3 marlas and in the machinery, but refusing relief concerning 11 marlas purchased in the father’s name.

Both sides sought special-leave appeals in the Supreme Court: Civil Appeal 4446/2005 by the defendant’s LRs, and Civil Appeal 4455/2005 by the plaintiff.

Legal Issues Presented

  1. Whether, under Section 100 of the Code of Civil Procedure, the High Court erred in interfering with concurrent findings of fact in second appeal.
  2. Who bore the onus of proving that the disputed property was joint Hindu family property funded by a joint family nucleus.
  3. Whether specific performance could be granted for agreements relating to: (a) the defendant’s share in 29-2/3 marlas, (b) the defendant’s share in 11 marlas purchased by the father, and (c) the defendant’s share in movable machinery.

Arguments of the Parties

Appellant (Makhan Singh’s LRs) – Civil Appeal 4446/2005

  • Section 100 CPC confines second-appeal jurisdiction to substantial questions of law; the High Court impermissibly re-appraised facts.
  • Entire property constituted joint Hindu family property: 11 marlas were purchased in 1954, an ice-factory was built, and income from that nucleus funded purchase of the remaining 29-2/3 marlas in 1962-63.
  • The plaintiff failed to prove any separate income source, supporting the inference of joint family status.

Respondent/ Cross-Appellant (Kulwant Singh) – Civil Appeal 4455/2005

  • The defendant’s initial denial of executing the agreements undermines his credibility; all courts found execution proved.
  • Document Exh. P-4 (defendant’s 10-Aug-1982 statement before the Sub-Registrar) asserted sole ownership, contradicting the JHF plea raised only after amendment.
  • Reliance on D.S. Lakshmaiah v. L. Balasubramanyam establishes that the burden to prove JHF status lies on the person asserting it.
  • No evidence shows purchase of 29-2/3 marlas from a family nucleus; similarly, 11 marlas purchased by the father were his self-acquired property and, on succession, do not automatically become JHF property (CWT v. Chander Sen; K.V. Narayanaswami Iyer v. K.V. Ramakrishna Iyer).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
D.S. Lakshmaiah v. L. Balasubramanyam (2003) 10 SCC 310 No presumption that property is JHF merely because a joint family exists; burden rests on the party asserting JHF status. Used to place the onus on the defendant to prove a joint family nucleus funding the purchase of 29-2/3 marlas.
K.V. Narayanaswami Iyer v. K.V. Ramakrishna Iyer, AIR 1965 SC 289; (1964) 7 SCR 490 No automatic presumption that property standing in the name of a family member is JHF property; proof of nucleus required. Reinforced the finding that defendant failed to establish JHF character of the land and building.
CWT v. Chander Sen (1986) 3 SCC 567 Property inherited by a son under s.8 of the Hindu Succession Act is received in his individual capacity, not as karta of a HUF. Formed the basis for decreeing specific performance even for the 11 marlas purchased by the father, negating JHF claim.

Court's Reasoning and Analysis

The Supreme Court acknowledged the limited scope of second-appeal interference under Section 100 CPC but held that the High Court’s intervention was justified because the courts below had misallocated the burden of proof regarding JHF property. Relying on D.S. Lakshmaiah, the Court affirmed that the defendant, as propounder of the JHF plea, had to prove (i) existence of a nucleus and (ii) purchase of the disputed land from that nucleus. Apart from a solitary, self-serving sentence by the defendant, no evidence supported this assertion.

The Court noted the defendant’s shifting stands: initial denial of the agreements, later admission; Exh. P-4 asserting individual ownership; and belated amendment introducing the JHF defence. These factors undermined credibility and reinforced the High Court’s conclusion that the property was not joint family property.

Turning to the 11 marlas acquired by the father, the Court invoked CWT v. Chander Sen to hold that, on succession, the sons inherited the property in their individual capacities; hence it did not acquire JHF character. Consequently, the High Court erred in denying specific performance for this portion.

Regarding machinery, the Supreme Court accepted the High Court’s decree for specific performance, implicitly overruling the trial court’s view that only damages lay for movables.

Holding and Implications

Civil Appeal 4446/2005 dismissed; Civil Appeal 4455/2005 allowed; the plaintiff’s suit for specific performance is decreed in its entirety.

Immediate consequence: Kulwant Singh is entitled to compel execution of sale deeds for the defendant’s 1/4-share in the entire 40-2/3 marlas (including the 11 marlas) and to obtain specific performance for the 1/8-share in the machinery, upon payment of the remaining sale consideration (Rs 5,000 for land/building and Rs 11,000 for machinery).

Broader implications: The judgment reiterates (a) that the burden to prove joint Hindu family status lies on the party asserting it, and (b) that property inherited under Section 8 of the Hindu Succession Act is received individually, not as HUF property. No new legal doctrine is created, but existing principles are reaffirmed.

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    Makhan Singh (Dead) By Lrs. v. Kulwant Singh .

    Harjit Singh Bedi, J.— These appeals by special leave arise out of the following facts:

    The respondent-plaintiff Kulwant Singh and appellant-defendant Makhan Singh (now through his LRs) herein were two of four brothers. As per the case set up, each brother owned 1/4th share in land measuring 40.2/3 marlas and in a building housing an ice factory situated at Rayya along with 1/8th share in the machinery installed therein. On 3-5-1982, the defendant entered into two agreements with the plaintiff, one for the sale of his share in the land measuring 40.2/3 marlas and the building on it for a consideration of Rs 10,000 with earnest money of Rs 5000, and a second pertaining to the sale of his share in the machinery installed in the ice factory for a consideration of Rs 16,000 out of which Rs 5000 was paid as earnest money. These agreements are Ext. P-1 and Ext. P-2 on the record. As per the terms of the agreements, the sale deeds were to be executed on or before 10-8-1982. It was pleaded that the defendant defaulted on which a notice was served on him on 19-12-1983 but as no result was forthcoming, a suit for specific performance was filed on 17-1-1984.

    2. The defendant contested the suit on several grounds, inter alia, that the agreements as well as the receipts with respect to the earnest money had not been executed by him and that the land in question and the building raised thereupon and the ice factory were joint Hindu family property and he being one of four coparceners was not competent to sell his share which made the agreement Ext. P-1 unenforceable and that no decree for specific performance could be claimed with respect to the machinery which was movable property and at best damages or compensation could be claimed for the breach of this agreement. On the pleadings of the parties, the trial court framed the following issues:

    1. Whether the defendant executed agreements to sell building and machinery as referred to in Paras 1 and 2 of the plaint? OPP
    2. Whether the plaintiff has been and continues to be ready and willing to in perform his part of the agreement? OPP
    3. Whether the defendant has committed breach of the agreement of sale? OPP
    4. Whether agreement regarding sale of building is not specifically enforceable? OPP
    4-A. Whether the suit property is ancestral and/or joint Hindu family property? If so to what effect? OPP
    4-B. Whether the agreement to sell is void or unenforceable for the reasons given in Paras 3 and 4 of additional pleas raised in the amended written statement? OPP
    4-C. Whether the suit for specific performance is not competent so far as it relates to agreement for sale of machinery? OPP
    4-D. Whether the suit property has been properly described? OPP

    3. The trial court held that the execution of the agreements Exts. P-1 and P-2 as well as the receipt of earnest money by the defendant had been proved. It further held that the defendant had not been ready and willing to perform his part of the contracts and had thereby committed a breach thereof. Contrarily, it was held that the plaintiff had always been ready and willing to perform his part of the contracts. The findings on Issues 1 to 3 were thus recorded in favour of the plaintiff. The trial court nevertheless dismissed the suit holding that the agreement to sell pertaining to 1/8th share in the machinery of the ice factory was not enforceable, as the remedy available to the plaintiff was to claim a refund of the earnest money with damages, if any. The court further held that the second agreement pertaining to the sale of 1/4th share in the land and building out of 40.2/3 marlas too was unenforceable as 11 marlas of land had been purchased by the father of the plaintiff and the defendant, Dula Singh, and the balance land measuring 29.2/3 marlas had been purchased by Dula Singh in the name of his four sons in equal shares by four different sale deeds from the income accruing from 11 marlas and the ice factory and as such the entire property having the character of joint Hindu family property in the hands of the four brothers (the defendant being one of four coparceners), could not have entered into an agreement to sell a share in the said property. The court further observed that the onus to prove that there was no joint family lay on the plaintiff, and that he had been unable to discharge this onus. The trial court accordingly dismissed the suit on this finding. The unsuccessful plaintiff thereafter filed a first appeal which too was dismissed by the Additional District Judge, Amritsar by judgment dated 26-5-1993. The matter was then taken up in second appeal by the plaintiff. The learned Single Judge in his judgment dated 27-11-2002 substantially reversed the findings of the courts below and partly decreed the suit in the following terms:

    “In view of the aforesaid discussion, the present appeal filed by the plaintiff is partly allowed. The suit for specific performance of the agreement Ext. P-1 regarding 1/4th share of the land measuring 29.2/3 marlas is hereby decreed on payment of the entire remaining sale consideration i.e Rs 5000 by the plaintiff. However, suit of the plaintiff regarding sale of 1/4th share by the defendant in the land measuring 11 marlas and the building constructed thereon, which is joint Hindu family property, is dismissed. The suit regarding specific performance of agreement Ext. P-2 pertaining to the sale of 1/8th share in the machinery installed in the ice factory is also decreed on payment of the remaining sale consideration of Rs 11,000 by the plaintiff.”

    4. These appeals have been filed against the judgment of the High Court, one at the instance of Makhan Singh, the original defendant (now represented by his legal representatives), and a second by Kulwant Singh, the plaintiff.

    5. Ms Kamini Jaiswal, the learned counsel for the appellants in Civil Appeal No. 4446 of 2005 filed by the LRs of Makhan Singh has first and foremost argued that under the provisions of Section 100 of the Code of Civil Procedure, the High Court's jurisdiction in second appeal was confined only to a substantial question of law and interference in a concurrent finding of fact recorded by the trial court and confirmed by the first appellate court was not envisaged even if the High Court believed that a view contrary to the one taken by the courts below was perhaps more appropriate on the evidence. She has, further, urged that Dula Singh had first purchased 11 marlas of land sometime in the year 1954 and an ice factory had been constructed thereon and it was from the income from the ice factory which formed the nucleus which had funded the purchase of 29.2/3 marlas of land by Dula Singh in the name of his sons sometime in the years 1962-1963 and the finding of the trial court and the first appellate court therefore that the entire property constituted joint Hindu family property was correct and could not be faulted, more particularly as the plaintiff had been unable to show any income in the hands of the family other than the income from the ice factory, leading to a clear inference about the status of the property.

    6. Mr Gulati, the learned counsel for Kulwant Singh, the respondent-plaintiff has, however, supported the judgment of the High Court and pointed out that the conduct of the defendant inasmuch as he had even denied the execution of the agreements at the initial stage clearly belied his story as all the courts had found that the agreements in question had been duly executed and that he had not been willing to execute the sale deeds. He has submitted that the document Ext. P-4 which is a copy of the application submitted by the defendant before the Sub-Registrar to mark his presence on 10-8-1992 and a statement recorded by the Sub-Registrar contemporaneously clearly showed that the property belonged to him and him alone without the slightest hint that it was joint Hindu family property, and it was after an amendment of the written statement that the plea that the property in question was joint Hindu family property had, for the first time, been taken. It has also been pleaded that there was no evidence whatsoever to show that the aforesaid property had been purchased from the income of the joint family so as to give it the character of a joint Hindu family property and that the onus which lay on the defendant as the propounder of the joint family, as envisaged by the judgment of this Court in D.S Lakshmaiah v. L. Balasubramanyam (2003) 10 SCC 310 had clearly not been discharged. It has, further, been argued that the finding of the High Court that a decree for 11 marlas of land could not be granted as this land had been purchased by Dula Singh during his lifetime and had passed on to his sons by succession after his death in 1966, was therefore joint Hindu family property in the hands of his sons too was wrong as observed in K.V Narayanaswami Iyer v. K.V Ramakrishna Iyer AIR 1965 SC 289, (1964) 7 SCR 490 as there was no presumption in law that a property purchased in the name of a member of a family had ipso facto the character of joint Hindu family property unless it could be shown that the family possessed a nucleus for the purchase of the same. It has, further, been pleaded that the finding of the High Court that 11 marlas purchased by Dula Singh in his own name which devolved on his sons after his death in 1966 too had the character of joint Hindu family property was also an erroneous assumption in the light of the judgment of this Court in CWT v. Chander Sen (1986) 3 SCC 567 in which it has been held that there could be no presumption that if the property purchased by a father fell to his son by inheritance it was deemed to be in his position as a karta of a Hindu undivided family.

    7. We have considered the arguments advanced by the learned counsel for the parties very carefully, and have also perused the evidence on record. There can be no doubt whatsoever with regard to the plea of Ms Kamini Jaiswal that the interference of the High Court in second appeal should be clearly minimal and would not extend to a mere reappraisal of the evidence. We are therefore clear that had the High Court on an appreciation of the evidence, taken a view different from that of the trial court and the first appellate court, the exercise would be clearly unjustified. We find, however, that the High Court differing with the courts below has proceeded on the basis (and we believe correctly) that the onus to prove that funds were available with the family with which 29.2/3 marlas of land had been purchased by Dula Singh in the name of his sons lay on the defendant and not on the plaintiff. We find no evidence in this respect save a self-serving and stray sentence in the statement of the defendant that the property had been purchased from the income of the joint Hindu family. It bears reiteration that the defendant had denied the execution of the two agreements Exts. P-1 and P-2 dated 3-5-1992 at the initial stage but faced with a difficult situation had later admitted that the agreements had been executed, leading to a finding by all three courts to that effect. There is also a clear recital by the defendant in Ext. P-4 that the property belonged to him and specific boundaries of the property were also given therein. The defendant's statement had also been recorded by the Sub-Registrar on Ext. P-4 wherein he stated that he was ready to execute the sale deeds but Kulwant Singh, plaintiff had not appeared to do so. Likewise, in the original written statement a case of denial of the execution of the agreements had been pleaded and it was only by way of an amendment that the plea that the property belonged to the joint Hindu family had been raised. In this connection the judgment in D.S Lakshmaiah case (2003) 10 SCC 310 becomes relevant. It had been observed that a property could not be presumed to be a joint Hindu family property merely because of the existence of a joint Hindu family and raised an ancillary question in the following terms:

    “7. The question to be determined in the present case is as to who is required to prove the nature of property whether it is joint Hindu family property or self-acquired property of the first appellant.”

    8. The query was answered in para 18 in the following terms:

    “18. The legal principle, therefore, is that there is no presumption of a property being joint family property only on account of existence of a joint Hindu family. The one who asserts has to prove that the property is a joint family property. If, however, the person so asserting proves that there was nucleus with which the joint family property could be acquired, there would be presumption of the property being joint and the onus would shift on the person who claims it to be self-acquired property to prove that he purchased the property with his own funds and not out of joint family nucleus that was available.”
    (emphasis supplied)

    9. The High Court has also rightly observed that there was no presumption that the property owned by the members of the joint Hindu family could a fortiori be deemed to be of the same character and to prove such a status it had to be established by the propounder that a nucleus of joint Hindu family income was available and that the said property had been purchased from the said nucleus and that the burden to prove such a situation lay on the party, who so asserted it. The ratio of K.V Narayanaswami Iyer case AIR 1965 SC 289, (1964) 7 SCR 490 is thus clearly applicable to the facts of the case. We are therefore in full agreement with the High Court on this aspect as well. From the above, it would be evident that the High Court has not made a simpliciter reappraisal of the evidence to arrive at conclusions different from those of the courts below, but has corrected an error as to the onus of proof on the existence or otherwise of a joint Hindu family property.

    10. We now take up the appeal filed by Kulwant Singh i.e Civil Appeal No. 4455 of 2005.

    11. As already mentioned above, the reason as to why the decree for specific performance to the extent of 11 marlas regarding the sale of 1/4th share in 11 marlas of land and the building constructed thereon has been denied even by the High Court now needs to be examined. In this connection, reference must be made to Chander Sen case (1986) 3 SCC 567 wherein it has been held that a son who inherits his father's assets under Section 8 of the Hindu Succession Act does so in his individual capacity and not as a karta of the Hindu undivided family. It is the admitted case before us that 11 marlas had been purchased by Dula Singh from his income as an employee of the Railways and it was therefore his self-acquired property. Such a property falling to his sons by succession could not be said to be the property of the joint Hindu family. We are, therefore, of the opinion that the appeal filed by Kulwant Singh must also be allowed and we accordingly so order. The suit filed by Kulwant Singh is accordingly decreed in toto. Civil Appeal No. 4455/2005 (Kulwant Singh v. Makhan Singh) is allowed and Civil Appeal No. 4446/2005 (Makhan Singh (D) by LRs. v. Kulwant Singh) is dismissed.

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    Makhan Singh (Dead) By Lrs. v. Kulwant Singh .
    (Mar 30, 2007)