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Case Number

Appeal Against Order No. 82 of 1937.

Advocates

Messrs. Y. Satyanarayana and D. Dharmasuri for the Appellants.
Mr. T.V Ramanatha Ayyar for the Respondent.

Judges

Leach, C.J
Varadachariar
Lakshmana Rao, JJ.

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Smart Summary

Full Bench — Summary of Opinion (Transfer of a Decree by Guardian / O.32 R.7)

Factual and Procedural Background

This appeal challenges an order of the learned District Judge of Ellore permitting execution to proceed at the instance of a transferee-decree-holder. The original suit (O.S. No. 27 of 1932 in the District Court of West Godawari) was instituted by two minors through their mother acting as next friend; a decree was passed in their favour. The mother, acting subsequently as guardian of the minors' property, transferred the decree to the respondent. The respondent applied to be substituted on the record in place of the decree-holders and to execute the decree; the District Judge allowed that application. The appellants appealed, arguing that because the original decree-holders were minors and the transfer was effected by their next friend/guardian without obtaining the Court's sanction under Order 32, Rule 7, the transfer ought not to be recognised and execution should not proceed. The District Judge had followed the Division Bench decision in M. Govindarajulu Naidu v. D.H. Ranga Rao. Because that decision conflicted with an opposite view in Kancherla Kanakayya v. Mulpuru Kotayya, the matter was placed before a Full Bench for resolution.

Legal Issues Presented

Whether a guardian of the property of a minor (who may also have acted as next friend in the suit) can transfer a decree obtained by the minor without first obtaining the leave/sanction of the Court under Order 32, Rule 7, Civil Procedure Code.
Whether the words added by the High Court in R.7 ("for taking any other action on behalf of a minor or other person under disability") (often referenced as R.7(1-A)) expand the scope of R.7 so as to include transfers of decrees effected by a guardian outside the suit.

Arguments of the Parties

Appellants' Arguments

The appellants argued that the words "for taking any other action on behalf of a minor or other person under disability" (R.7(1-A)) prohibit the guardian of a Hindu minor from transferring a decree obtained by the minor without the Court's sanction under O.32 R.7.
They also contended that allowing such transfers without Court sanction would enable a next friend or guardian to evade protections provided by O.32 R.6 and R.7 (for example, by receiving money or property on behalf of a minor without court leave) and thereby undermine procedural safeguards for minors.
The appellants submitted that, because the minors might later challenge the transfer on attaining majority, they (the appellants) faced the risk of being called upon to pay twice; they relied on this as a reason the transfer should not be recognised without court sanction.

Respondent / Transferee's Position (as reflected in the opinion)

The position relied upon by the respondent (and as earlier taken in M. Govindarajulu Naidu v. D.H. Ranga Rao) was that a decree is property, and the guardian of a Hindu minor has the same powers with respect to such property as in respect of other assets of the minor; consequently a transfer of a decree effected by the guardian does not fall within the plain language of O.32 R.7, which relates to agreements or compromises "with reference to the suit."
It was also maintained that transfers of a decree are transactions outside the suit and therefore do not require the leave of the Court under R.7; any challenge to an improper alienation could be made by the minor on attaining majority.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
M. Govindarajulu Naidu v. D.H. Ranga Rao	Held that a decree is property and that a transfer of a decree by a guardian/next friend does not fall within O.32 R.7; therefore court leave is not required for such a transfer.	The Full Bench endorsed this decision as correctly decided, applied its principle to the facts, and relied on it to hold that the mother (guardian) lawfully transferred the decree without court sanction.
Kancherla Kanakayya v. Mulpuru Kotayya	Dissenting Division Bench view that a transfer involves an agreement between transferor and transferee and therefore requires sanction of the Court under O.32 R.7; the word "suit" should not be confined to pre-decree matters.	The Full Bench expressly overruled this decision, regarding it as incorrect on the question whether R.7 applies to transfers of decrees effected outside the suit.
Shaik Davud Rowther v. Paramasami Pillai	Concerned an agreement adjusting a decree — an agreement between the parties to a suit that required to be recorded in Court.	The Full Bench held this case had no bearing on the present question, because it dealt with agreements between parties to a suit (matters in the suit) rather than transfers of a decree to a third party outside the suit.
Ganesha Row v. Tuljaram Row (Privy Council)	Established that to the extent the Code imposes limitations upon the powers of a guardian under Hindu Law, those powers must be exercised in conformity with the Code.	The Court cited this authority to stress that guardians retain their Hindu Law powers except where the Code expressly limits them; therefore, absent an express limitation in the Code, the guardian's power to alienate property (including a decree) is not curtailed.
Rhodes v. Swithenbank	Described the next friend as an officer of the Court, indicating the special responsibilities when acting as next friend in a suit.	The Court invoked this principle to distinguish when a person acts as next friend (requiring court leave for actions beyond normal conduct of the suit) and when the same person acts as guardian of the estate (where different rules apply).

Court's Reasoning and Analysis

The Full Bench proceeded by examining the language and purpose of O.32 R.7 and the Rule added by the High Court (R.7(1-A)). The decisive analytical steps were:

Textual and functional characterization of R.7: The Court read "agreement or compromise ... with reference to the suit" as naturally referring to agreements or compromises between parties to the suit — matters arising in the course of the suit (e.g., settlement or adjustment of the dispute) — rather than to transfers of property belonging to a decree-holder to a third party outside the suit.
Nature of a decree as property: Following M. Govindarajulu Naidu, the Court treated a decree as an item of property belonging to the decree-holder. As such, a guardian's powers of alienation under Hindu Law should, unless the Code expressly provides otherwise, extend to the transfer of a decree.
Effect of R.7(1-A): The Court analysed the clause added by the High Court and concluded that it prescribes procedures when an application is made for leave (including a certificate by counsel where represented) but does not, by its wording, expand R.7 to make every transfer of a decree subject to prior court leave. In other words, clause 1-A assumes that applications for leave may be required under some provisions, but it does not itself create a new substantive bar to transfers.
Distinction between capacities: The Court emphasised the functional distinction between acts done by a person as "next friend" (an officer of the Court acting in conduct of the suit) and acts done by the same person in the capacity of guardian of the minor's estate. R.7 regulates the conduct of a next friend in relation to the suit; an assignment of the decree by the guardian, being outside the suit and being a disposition of property, is properly viewed as an act in the guardian capacity.
Practical consequences acknowledged but not dispositive: The Court acknowledged the appellants' concern that a transfer could enable evasion of protections in R.6 and R.7 and that a minor on attaining majority might challenge an allegedly improper alienation. The Court held, however, that the correct remedy for any perceived lacuna is legislative change and that the Court's role is to interpret existing law. The Court further noted that a payment made in accordance with a Court order will protect the payer from being compelled to pay twice.
Statutory procedure on substitution and execution: The Court observed that when a transfer of a decree has been made in accordance with law, the transferee is to be brought on the record in place of the decree-holder (O.21 R.16), and thereafter may execute the decree in the same manner as the original decree-holder. Applying these provisions, the Court found the District Judge rightly recorded the respondent as transferee and allowed execution to proceed.
Resolution of precedential conflict: On comparing prior authorities, the Full Bench found no real conflict between Shaik Davud Rowther and M. Govindarajulu and concluded that the dissenting view in Kancherla Kanakayya was incorrect; consequently, Kancherla was overruled and M. Govindarajulu was affirmed.

Holding and Implications

Core Ruling: The Full Bench held that a guardian of the property of a minor may transfer a decree obtained by the minor without first obtaining the leave/sanction of the Court under Order 32, Rule 7, Civil Procedure Code; the order of the learned District Judge permitting the respondent to be placed on the record as transferee and allowing execution to proceed was correct.

Disposition: Appeal dismissed.

Direct consequences for the parties: The respondent (transferee) was properly substituted on the record in the place of the decree-holder and may execute the decree in the same manner as the original decree-holder. The appellants' objections based on potential post-majority challenges by the minors do not prevent substitution or execution; payments made pursuant to the Court's order will protect the payor against double liability.

Wider legal implications: By affirming M. Govindarajulu Naidu and expressly overruling the contrary Division Bench decision in Kancherla Kanakayya, the Full Bench settles the previously conflicting authorities on this point. The Court emphasised that if it is considered desirable to require court sanction for transfers of decrees by guardians, the appropriate forum to effect such a change is the Legislature; the current statutory scheme does not subject such transfers to R.7 leave.

Note: This summary is based exclusively on the content of the provided Full Bench opinion and does not include material beyond that text.

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Katneni Venkatakrishnayya And Another v. Garapati China Kanakayya

(By Burn and Venkataramana Rao, JJ.).

Delivered by Venkataramana Rao, J.

This is an appeal against the order of the learned District Judge of Ellore allowing execution to proceed at the instance of a transferee-decree-holder. One of the objections to the recognition of the transfer that was urged before him was that the original decree-holders in the case being two minors and the transfer having been taken from the next friend-of those minors without the sanction of the Court under O. 32, R. 7, Civil Procedure Code, the learned Judge ought not to recognise the transfer and allow execution. But the learned Judge overruled the objection following the decision of a Division Bench of this Court in M. Govindarajulu Naidu v. D.H. Ranga Rao(1). That was a decision of Abdur Rahim and Odgers, JJ. and the view taken by those learned Judges in that case was that a decree being property, any transfer of a decree by a next friend of a minor would not come within the plain language of O. 32, R. 7, which relates to an agreement or a compromise with reference to a suit. The learned Judges also considered the effect of the rule made by our High Court, namely, O. 32, R. 7-1(a) which added the words “for taking any other action on behalf of a minor.” These words were construed to refer to an action taken in the course of the suit in the nature of a compromise or withdrawal or any agreement of that nature in favour of a minor and do not relate to any transfer of a decree. This decision was expressly dissented from in Kancherla Kanakayya v. Mulpuru Kotayya by another Division Bench consisting of Spencer and Ramesam, JJ. The reason given by the learned Judges in that case was that a transfer involves an agreement between the transferor and the transferee and therefore sanction of the Court under O. 32, R. 7 Civil Procedure Code, must be obtained and the word “suit” should not be understood as meaning only a suit in which a decree has not been passed. As this is a matter of frequent recurrence, we think that this matter should be set at rest, in view of conflicting decisions, by the decision of a Full Bench. We accordingly direct that the papers be placed before the Hon'ble the Chief Justice for constituting a Full Bench.

This case coming on for final hearing, Full Bench delivered the following:

JUDGMENT

The Chief Justice.—The appellants were the defendants in O.S No. 27 of 1932 of the District Court of West Godawari instituted by two minors through their mother acting as their next friend. A decree was passed against them and this was subsequently transferred to the respondent by the mother, acting as the guardian of the property of the minors. The respondent then applied to be brought on the record in the place of the decree-holders and to be allowed to execute the decree. The learned District Judge allowed the application, and the appeal is from that order. The question for decision is whether a guardian of the property of a minor can transfer a decree passed in favour of the minor without first obtaining the sanction of the Court. In allowing the application the learned Judge relied on the decision in M. Govindarajulu Naidu v. D.H. Ranga Rao(2). The appeal has been placed before a Full Bench as that decision was dissented from in Kancherla Kanakayya v. Mulpuru Kotayya.

O. 32, R. 7 of the Code of Civil Procedure provides that no friend or guardian for the suit shall, without the leave of the Court, expressly recorded in the proceedings, enter into any agreement or compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian. The Rule Committee of this Court has added to R. 7 this further rule:

[“(1-A) where an application is made to the Court for leave to enter into an agreement or compromise or for withdrawal of a suit in pursuance of a compromise or for taking any other action on behalf of a minor or other person under disability and such minor or other person under disability is represented by Counsel or Pleader, the Counsel or Pleader shall file in Court with the application a certificate to the effect that the agreement or compromise or action proposed is in his opinion for the benefit of the minor or other person under disability. A decree or order for the compromise of a suit, appeal or matter to which a minor or other person under disability is a party, shall recite the sanction of the Court thereto and shall set out the terms of the compromise as in Form No. 24 in Appendix D to this schedule.”

It is said on behalf of the appellants that the words “for taking any other action on behalf of a minor or other person under disability” prohibit the lawful guardian of a Hindu minor transfering a decree obtained by the minor without the sanction of the Court. In M. Govindarajulu Naidu v. D.H. Ranga Rao Abdur Rahim and Odgers, JJ., held that these words did not take away the right of a guardian under Hindu Law to transfer a decree in favour of the minor, as the transfer did not constitute a proceeding in the suit. A decree is property and there is no reason why the guardian of a Hindu minor should not exercise the same powers with respect to it as he is allowed to do with regard to other assets of the minor. Hindu Law permits the guardian to alienate property under proper circumstances, but the minor can challenge the alienation on attaining majority if the power has been improperly exercised. It was on this reasoning that the learned Judges held that the sanction of the Court was not required to a transfer. The same question came before Ramesam and Spencer, JJ., in Kancherla Kanakayya v. Mulpuru Kotayya. The learned Judges expressed their dissent from the decision in M. Govindarajulu Naidu v. D.H. Ranga Rao and regarded the decision in Shaik Davud Rowther v. Paramasami Pillai(3) as being in conflict with M. Govindarajulu Naidu v. D.H. Ranga Rao. With great respect we can see no conflict. In our opinion Shaik Davud Rowther v. Paramasami Pillai has no bearing on the question. This was a case of an agreement adjusting a decree, the agreement which required to be recorded in Court being between the parties to the suit. We are here merely concerned with the transfer of a decree to a third party by a person who has in law the power to make the transfer. We consider that M. Govindarajulu Naidu v. D.H. Ranga Rao was rightly decided and consequently the decision in Kancherla Kanakayya v. Mulpuru Kotayya must be overruled.

When a transfer of a decree has been made in accordance with law the Court is required to bring the name of the transferee on the record in the place of the decree-holder. When this has been done the decree may be executed in the same manner and subject to the same conditions as if the application were made by the decree-holder (O. 21, R. 16). The appellants object to the order placing the respondent on the record as the transferee of the decree on the ground that the minors when they come of age may challenge the validity of the action of the guardian. It is possible that they may do so, but if they do, it does not mean that the appellants will be compelled to pay twice over. Payment made in accordance with the Court's order will protect them.

It is also said that the acceptance of the opinion expressed in M. Govindarajulu Naidu v. D.H. Ranga Rao will have the effect of allowing a next friend or guardian ad litem when he happens to be the guardian under Hindu Law to evade Rr. 6 and 7 of O. 32 which have been framed for the protection of the minor. R. 6 prohibits a next friend or guardian for the suit receiving without the leave of the Court any money or other moveable property on behalf of a minor by way of compromise before the decree or order, or under a decree or order in favour of the minor. This may be the effect of holding that R. 7(1-A) only applies to matters in a suit or proceeding, but this is not a matter with which the Court is now concerned. We are here to interpret the law and not to make it. If it is considered that a transfer of a decree of this nature should be subject to the sanction of the Court the Legislature may say so; but as the law stands at present it is not subject to such sanction. The transfer of this decree by the mother of the minors was something entirely outside the suit, and in our opinion she had full power to effect the transfer without the leave of the Court.

It follows that in our opinion the order of the learned District Judge is correct and the appeal consequently fails and must be dismissed with costs.

Varadachariar, J:—I agree that the leave of this Court is not necessary before a decree passed in favour of a minor plaintiff can be assigned; but I wish to add a few words indicating my reasons. In Kancherla Kanakayya v. Mulpuru Kotayya, it seems to have been assumed by the learned Judges that the decision in M. Govindarajulu Naidu v. D.H. Ranga Rao, proceeded on a distinction between what happened before decree and what happened after decree. With due respect, I do not so read the judgment in that case. I understand the learned Judges to have emphasised the distinction between matters in dispute between the parties and matters outside the scope of the suit. Cl. 1(b) of R. 6 of O. 32, makes it clear that the order as a whole is not restricted to proceedings prior to decree; and in view of the fact that the Code contemplates agreements or adjustments by the parties either under O. 23, R. 3, which applies to the stage prior to decree, or under O. 21, R. 2, which applies to the stage after decree, it does not seem to me right to read the decision in M. Govindarajulu Naidu v. D.H. Ranga Rao, as turning on that distinction.

The real question, as indicated in the opinion delivered by my lord, is whether there is sufficient in the provisions of O. 32, to interfere with the rights of a natural guardian or a legal guardian who also happens to be the next friend, in the matter of dealing with a decree as part of the property belonging to the minor. It does not seem to me that there is much force in the argument based upon Cl. 1(A) added to R. 7 by the rules made by this Court in 1910. That clause does not prescribe that the leave of the Court is necessary in any particular matter; it only prescribes the course to be adopted when an application is made to the Court for leave to do certain things. It assumes that under other provisions of O. 32 or of some other law, an application for leave has to be made. Such applications are contemplated by R. 6 as well as the proviso added to it by this Court and also by R. 7. It does not, therefore, seem to me right to infer from Cl. 1-A of R. 7 that the scope of R. 7 has been extended. As regards R. 7 itself, the natural construction of the words used there namely, “agreement or compromise”, appears to be that the agreement or compromise is one between the parties to the suit as contemplated by O. 23, R. 3, or O. 21, R. 2.

It is no doubt possible that this view restricting R. 7 in the above sense may enable a next friend to evade the restrictions imposed by R. 6, but, as pointed out by my Lord, this is not a matter which the Court can take into account in interpreting R. 7, R. 7 deals with the conduct of a “next friend” as such, who, as pointed out in Rhodes v. Swithenbank, is an officer of the Court to conduct the suit; and the principle underlying R. 7 is that whenever he proposes to do anything beyond the normal conduct of the suit, he has to obtain the leave of the Court to do so. But when a decree passed in favour of a minor is sought to be assigned, the person making the transfer acts not in the capacity of next friend but in his capacity as the guardian of the minor's estate. It is true that in Ganesha Row v. Tuljaram Row, the Privy Council have laid down that to the extent to which the Code has imposed limitations upon the powers of a guardian under the Hindu Law, those powers must be exercised in conformity with the provisions of the Code; but except to the extent to which the Code has expressly limited those powers, there is no reason to curtail them.

Lakshmana Rao, J:—I agree with my Lord the Chief Justice and have nothing to add.

Appeal dismissed.

N.R.R

Katneni Venkatakrishnayya And Another v. Garapati China Kanakayya

Full Bench — Summary of Opinion (Transfer of a Decree by Guardian / O.32 R.7)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellants' Arguments

Respondent / Transferee's Position (as reflected in the opinion)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Katneni Venkatakrishnayya And Another v. Garapati China Kanakayya

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