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Smart Summary

Factual and Procedural Background

This appeal arises from O.S No. 10 of 1996 filed in the Sub Court, Hosdurg, concerning a suit for setting aside a Sale Deed executed by the guardian of a minor (the plaintiff) and for partition of property. The plaintiff's father, late Kunhiraman Nair, held property jointly with his sister Karthiyayani. Upon his death, the plaintiff and his mother (the second defendant) inherited his half share. The plaintiff was a minor at the time. The plaintiff's mother, acting as guardian, sold the property to the first defendant by a Sale Deed dated 29.8.1980, purportedly on behalf of the minor plaintiff and herself. The plaintiff challenged this sale as wrongful and for inadequate consideration, seeking to set aside the sale deed and obtain partition of the property. The first defendant contested the suit, asserting bona fide purchase, payment of consideration, necessity of sale to clear debts, and limitation bar. The Sub-Court decreed the suit setting aside the sale deed as to the plaintiff's share and ordered partition and mesne profits, leaving the issue of value of improvements open for final decree. The first defendant appealed against this judgment and decree, and the plaintiff filed a cross-objection challenging the handling of compensation for improvements.

Legal Issues Presented

  1. Whether the Sale Deed executed by the natural guardian of the minor plaintiff without prior court permission under Section 8(1) and (2) of the Hindu Minority and Guardianship Act, 1956, is void or voidable.
  2. Whether the suit for setting aside the Sale Deed was filed within the prescribed limitation period under Article 60 of the Limitation Act.
  3. Whether the plaintiff is entitled to set aside the Sale Deed without restitution of benefits received by the minor under the transaction, including property purchased with the sale consideration.
  4. Whether the first defendant is entitled to compensation for improvements made on the property in the event the Sale Deed is set aside.
  5. Whether the prayer for partition filed by the plaintiff after amendment is barred by limitation.

Arguments of the Parties

Appellant's (First Defendant's) Arguments

  • The Sale Deed was executed for the benefit of the minor plaintiff and the consideration stated was correct and reasonable.
  • The first defendant is a bona fide purchaser and the plaintiff is in possession of a portion of the property purchased in his name.
  • The sale was necessary to clear debts of the plaintiff's father and in the best interest of the minor.
  • The suit is barred by limitation as the plaintiff was aware of the sale long ago.
  • The first defendant made valuable improvements in good faith and is entitled to the value of such improvements.
  • The plaintiff is liable to restore benefits received, including property purchased with the sale consideration, if the Sale Deed is set aside.
  • The suit was filed in collusion with the second defendant.

Respondents' (Plaintiff and Second Defendant's) Arguments

  • The alienation of the plaintiff's share by the mother was wrongful, injurious, and for meagre consideration.
  • The plaintiff was ignorant about the purchase of property in his name and is not in possession of it.
  • The Sale Deed executed by the guardian without court permission is void and liable to be set aside.
  • The suit was filed within three years from the date the plaintiff attained majority, thus within limitation.
  • The plaintiff prayed for setting aside the Sale Deed and for partition of the property.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Vishwambhar v. Laxminarayan ((2001) 6 SCC 163 : AIR 2001 SC 2607) Sale by guardian without court permission under Section 8(2) of Hindu Minority and Guardianship Act is voidable at the instance of the minor. The Court held that the Sale Deed without prior court permission is voidable and must be set aside if the minor so desires.
Nagappan v. Ammasai Gounder ((2004) 13 SCC 480) Sale by natural guardian in contravention of Section 8 is voidable and suit without prayer for setting aside alienation is not maintainable. Supported the principle that the Sale Deed is voidable and the plaintiff must seek to set it aside to claim possession.
Chacko v. Sreeja (1991 (1) KLT 191) Doctrine of restitution requires that the minor must surrender benefits received under the impugned transaction when it is set aside. The Court applied this equitable principle to require restitution by the minor before setting aside the Sale Deed.

Court's Reasoning and Analysis

The Court examined whether the Sale Deed executed by the guardian without prior court permission under Section 8 of the Hindu Minority and Guardianship Act is void or voidable. Relying on binding Supreme Court precedents, the Court confirmed that such a sale is voidable at the instance of the minor, who must seek to set aside the alienation to recover the property. The plaintiff filed the suit within three years from attaining majority, complying with the limitation period prescribed by Article 60 of the Limitation Act. The Court rejected the appellant’s contention that the partition prayer was barred by limitation, noting that no specific limitation period applies to partition relief among co-owners.

The Sale Deed's consideration was partly used to purchase another property in the plaintiff's name. Applying the doctrine of restitution under Section 33 of the Specific Relief Act and the equitable maxim "he who seeks equity must do equity," the Court held that the minor (plaintiff) cannot set aside the Sale Deed without restoring benefits received, including the property purchased with the sale proceeds. Since the plaintiff was unwilling to return the property bought in his name, the Court found that he was not entitled to set aside the Sale Deed or seek partition. Consequently, the Court concluded that the Sub-Court was not justified in decreeing the suit in favor of the plaintiff.

Holding and Implications

The appeal is allowed. The judgment and decree of the Sub-Court in O.S No. 10 of 1996 are set aside, and the suit is dismissed without cost. The plaintiff's cross-objection is also dismissed. The parties are directed to bear their own costs in the appeal.

The direct effect of this decision is the dismissal of the plaintiff’s suit to set aside the Sale Deed and for partition, due to the plaintiff’s failure to comply with the principle of restitution. No new legal precedent is established beyond affirming existing principles regarding voidable sales by guardians and the equitable requirement of restitution.

    Padinhare Veetil Madhavi v. Pachikaran Veetil Balakrishnan & Anr.

    This appeal is filed by the first defendant in O.S No. 10 of 1996 on the file of the Sub Court, Hosdurg. Respondents 1 and 2 are the plaintiff and the second defendant in that suit. It was a suit for setting aside the Sale Deed executed by the guardian of a minor and for partition.

    2. The case of the plaintiff is briefly as follows. The plaintiff's father, late Kunhiraman Nair, was holding properties jointly with his sister Karthiyayani. On his death, his half right over the said properties devolved upon the plaintiff and his mother, the second defendant, who are his only heirs and legal representatives. Plaintiff was a minor when his father died. Thereafter, in a suit for partition filed by the plaintiff's mother against Karthiyayani, the half share of the plaintiff and his mother was allotted to them jointly as per a partition decree in O.S No. 123 of 1978 of the Munsiff Court, Hosdurg. The plaintiff's mother was holding the said property for and on behalf of the plaintiff also since the plaintiff was a minor.

    3. The suit properties consisting of two items contain improvement and was more than sufficient to meet the need of the plaintiff and his mother, the 2nd defendant. The first defendant purchased the property from the plaintiff's mother on 29.8.1980 The plaintiff's mother had executed the document for herself and on behalf of the minor plaintiff. Plaintiff's right was purported to be transferred under the document. It was sold for a consideration of Rs. 6,000/- It is recited in the document that Rs. 4,000/- was received by her in advance, which was used for clearing the debts of the plaintiff's father and Rs. 2,000/- received at the time of execution of the document was paid towards consideration for purchasing another property in the name of the plaintiff.

    4. According to the plaintiff, the alienation by his mother was wrongful and injurious to him and for meagre consideration. The plaintiff's father had no debts and there was no necessity to sell the property. He also pleaded ignorance about the purchase of the property in his name and also stated that he is not in possession of the same. The alienation by the mother is void in law and liable to be set aside and the suit was filed within 3 years from 5.2.1992, when the plaintiff attained majority. The plaintiff therefore prayed for setting aside the sale deed No. 3527 of 1980 dated 29.8.1980 in favour of the first defendant in respect of the plaintiff's half right over the property and for surrender of possession of his share which relief on 6.11.1996 was got amended as one for partition of his share as per order in I.A No. 645 of 1996.

    5. The appellant/first defendant resisted the suit raising the following contentions. It is admitted that the first defendant had purchased the property from the 2nd defendant as per a registered Sale Deed dated 29.8.1980 But the sale deed was executed for the then minor plaintiff's benefit also and the consideration recited in the document is correct and reasonable. The first defendant is a bona fide purchaser. Out of the total consideration paid, an extent of 1.50 acres of property with improvements in R.S 370 of Periya Village at a place called Kannoth was purchased in the name of the plaintiff and the plaintiff is in possession of the same. It is incorrect to state that he has not seen the property. The alienation is not void and was in the better interest of the minor plaintiff. To clear of Kunhiraman Nair's debt the sale was necessary. Alternatively, it was also contended that the first defendant has effected valuable improvements in the property on the bona fide belief that she is the exclusive owner and is entitled to the value of the same. Besides, it was also contended that the suit is barred by limitation, since the plaintiff was aware of the sale long back and the plaintiff has filed the suit in collusion with the second defendant.

    6. After amendment of the plaint, an additional statement was filed to the effect that the plaintiff's right, if any, is barred by adverse possession and limitation. By way of an amendment to the written statement it was also contended that in case the court finds that the sale deed No. 3527/80 is voidable and liable to be set aside, the 1st defendant is entitled to the value of improvements in the plaintiff's share, since she was making improvements on the bona fide belief and that the property exclusively belongs to her. It was also contended that the first defendant is entitled to the property purchased as per Deed No. 3528/80 since the sale consideration for that was paid by the appellant and the plaintiff is liable to restore that benefit and to compensate the appellant in the event of a decree for setting aside the document. The first defendant, therefore, prayed for dismissal of the suit. The second defendant plaintiff's mother remained ex parte.

    7. In the Sub-Court, PWs-1 and 2 and DWs-1 to 4 were examined. Exts-A1 to A5 and B1 were marked. The learned Sub-Judge, on considering the evidence, decreed the suit and a preliminary decree for partition was passed in the following manner.

    “Ext. A1 sale is set aside as far as the plaintiff's half share is concerned. The plaint schedule property will be divided into two equal shares and the plaintiff and 1st defendant are entitled to one such share each. The 1st defendant has not paid court fee and if she pays court fee at the time of final decree, she will be allotted her share separately. The plaintiff is entitled to future profits from the date of the plaint till delivery of possession the quantum of which will be decided at the time of passing final decree. The first defendant is liable for such profits. The cost of sharers shall come out of the estate. The plaintiff is at liberty to move the court for passing final decree. Addl. Issue No. 6 with regard to value of improvements is left open for consideration at the time of passing final decree.”

    Against that judgment and decree the first defendant filed this appeal.

    8. The plaintiff filed cross-objection challenging the finding on Addl. Issue No. 6 to the effect that the question of compensation for the value of improvements made by the first defendant will be considered at the final decree stage.

    9. Heard the learned counsel for the appellant and the first respondent.

    10. The plaint schedule Item No. 1 property has an extent of 2.5 acres, comprised in Re-survey 103 of Beloor Village and the extent of plaint schedule Item No. 2 property is 45 cents, comprised in R.S 110/1 of the same Village. The plaintiff is the son of Kunhi-raman Nair and the second defendant. The plaint schedule properties originally belonged to Kunhiraman Nair and his sister Karthiyayani jointly. After his death, his half share devolved upon the plaintiff and his mother, who is the second defendant, Narayani. As per partition decree in O.S No. 123 of 1978 on the file of the Munsiff Court, Hosdurg the plaint schedule properties were allotted to the share of the plaintiff and second defendant. There is no dispute that the first defendant purchased that property as per Sale Deed No. 3527/80 of S.R.O Hosdurg dated 29.8.1980 The second defendant executed that Sale Deed for herself and also as the guardian of the plaintiff, who was then a minor, aged 7 years. Ext. A1 is the copy of that Sale Deed. It is also an admitted fact that the second defendant sold the share of the plaintiff over the plaint schedule properties without obtaining previous permission of the Court.

    11. The main prayer in the suit is to set aside the Sale Deed No. 3527/80 of S.R.O Hosdurg dated 29.8.80 in respect of the plaintiff's share over the plaint schedule properties. The second prayer in the plaint is to partition the plaint schedule properties into two equal shares and allot one such share to the plaintiff with mesne profits. The main question to be considered is whether the original of Ext. A1 Sale Deed is void or voidable. The Hon'ble Supreme Court in Vishwambhar v. Laxminarayan ((2001) 6 SCC 163 : (AIR 2001 SC 2607)) held that:

    “sale effected without taking permission of the court under Section 8(2) of the Hindu Minority and Guardianship Act, 1956 was voidable at the instance of the plaintiffs and the plaintiffs were required to get the alienation set aside if they wanted to avoid the transfer and recover the property from the purchasers. If a prayer for setting aside the alienation is not made, then the suit seeking possession would not be maintainable.”

    12. In Nagappan v. Ammasai Gounder ((2004) 13 SCC 480) the Hon'ble Supreme Court held that:

    “Reading Section 8 itself shows that the sale made by the natural guardian in contravention of sub-sections (1) and (2) is voidable at the instance of the minor. If the requirement of law is to have the alienation set aside before making any claim in respect of the property sold then a suit without such a prayer would be of no avail.”

    13. In view of that position of law, it is clear that the original of Ext. A1 Sale Deed is voidable at the instance of the plaintiff as it was executed by the natural guardian in contravention of sub-sections (1) and (2) of Section 8 of the Hindu Minority and Guardianship Act, 1956.

    14. Article 60 of the Limitation Act prescribes a period of 3 years for setting aside a transfer of property made by the guardian of a ward, by the ward, who has attained majority and the period is to be computed from the date when the ward attains majority. In the present case, the date of birth of the plaintiff is 5.2.1974, which is evident from Ext. A4, extract of admission register. The plaintiff attained majority on 5.2.1992 He gets three years’ period to file the suit from the date of his attaining majority, i.e on or before 5.2.1995 The present suit was originally filed on 5.4.1994 Therefore, the suit is not barred by limitation.

    15. The learned counsel for the appellant submitted that even though the suit for setting aside the Sale Deed was filed on 5.4.1994, the prayer for partition was incorporated only on 6.11.1996 and, therefore, that prayer is barred by limitation. That argument cannot be accepted in view of the fact that it is only an ancillary relief and no specific period is prescribed in the Limitation Act for the relief of partition by a co-owner.

    16. In Ext. A1, copy of Sale Deed No. 3527/80, dated 29.8.80, it is stated that the total consideration of the plaint schedule properties is Rs. 6,000/-. It is stated in the document that the first defendant purchaser already paid Rs. 4,000/- to the second defendant in order to discharge the debts of her husband, Kunhiraman Nair and for the expenses of the minor plaintiff and the balance of sale consideration of Rs. 2,000/- was paid by the first defendant for purchasing the property in R.S 370 in the name of minor plaintiff from Kuttiyan. Ext. B1 is the copy of the Sale Deed No. 3528/80, dated 29.8.80 executed by Kuttiyan in the name of minor plaintiff in respect of 1 acre 50 cents in R.S 370. In that document the second defendant is shown as guardian of minor plaintiff. In Ext. B1, the sale consideration shown is Rs. 2,000/- and it is stated in that document that the sale consideration was received from the sale consideration of Ext. A1. From Exts. A1 and B1 it is evident that originals of those documents were executed on the same day, one after the other. The learned counsel for the appellant submitted that if the original of Ext. A1 Sale Deed is set aside, the property covered by the original of Ext. B1 Sale Deed has to be returned to the first defendant.

    17. Under Section 33 of the Specific Relief Act, on adjudging the cancellation of an instrument, the court may require the party, to whom such relief is granted, to make any compensation to the other which justice may require. The learned counsel for the appellant invited my attention to the decision reported in Chacko v. Sreeja (1991 (1) KLT 191), in which it was held:

    “In cancelling the documents, the plaintiff need only surrender benefits received as justice may require. Such benefit required by the justice is the actual benefit received under the impugned transaction, which is avoided. It may not be conducive to justice to allow the minor to have double advantage by avoiding the transaction and at the same time retaining its benefits. “Benefit” or ‘advantage’ referred to in Ss. 64 and 65 of the Contract Act, do not relate to profit derived from the investment of the benefit. Sometimes the investment may result in loss also. In a given case, the benefit may be only the actual consideration and its interest. But, where the consideration for the impugned transaction itself is the purchase of another property in the name of the minor, that property must be taken as the benefit derived by the minor and it must be directed to be returned. Value of properties might have gone up and return of the consideration in money alone may work out injustice to the defendant-purchaser and undue gain to the minor.”

    18. Therefore, the legal position is that whether the Sale Deed is void or voidable, the minor seeking to set aside it cannot claim interference of a Court of law without making restitution. The law is clear that if a person sells or mortgages another's property having no legal or equitable right to do so and that other benefits by transaction the latter cannot have it set aside without making restitution to the person whose money has been applied for the benefit of the estate. The principle of restitution in such cases is based on the equitable maxim “he who seeks equity must do equity”. No person, who is entitled to avoid a transaction ought to be allowed to do so in such a manner as to enable him to recover the property which would be otherwise lost to him and at the same time to keep the money or other advantages which he has obtained under it. Therefore, if a transfer by a guardian is set aside, as having been made without previous permission of the Court, equity requires that the minor should restore to the transferee any benefit he may have received under the transfer before the minor can take the benefit of any decree in his favour.

    19. In the present case, the plaintiff is not prepared to give back the property covered by original of Ext. B1 Sale Deed, which was purchased in his name utilising the portion of sale consideration given by the first defendant while purchasing the plaint schedule properties as per the original of Ext. A1 Sale Deed. Therefore, the plaintiff is not entitled to get a decree to set aside the original of Ext. A1 Sale Deed and partition the plaintiff's half share. In view of the above aspects of the matter, I find that the learned Sub-Judge is not justified in decreeing the suit.

    20. In the result, this appeal is allowed. The judgment and decree in O.S No. 10 of 1996 on the file of the Sub-Court, Hosdurg is set aside and that suit is dismissed without cost. The cross-objection filed by the first respondent is also dismissed. The parties are directed to suffer their respective cost in this appeal.

    Order accordingly.

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    Padinhare Veetil Madhavi v. Pachikaran Veetil Balakrishnan & Anr.
    (Jun 10, 2009)