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PETITIONER: ARVIND @ ABASAHEB GANESH KULKARNI & ORS.

       Vs.

RESPONDENT: ANNA @ DHANPAL PARISA CHOUGULE & ORS.

DATE OF JUDGMENT22/01/1980

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) UNTWALIA, N.L.

CITATION:  1980 AIR  645            1980 SCR  (2) 816  1980 SCC  (2) 387

ACT:      Mortgage-Minor brothers  alleged that  mortgage was not for legal  necessity and  that the  sale was  for inadequate consideration-Elder brother  discharged  family  debts-Small part of consideration not accounted for-Sale-Validity of.

HEADNOTE:      A mortgagor executed two deeds of mortgage in favour of the father  of the  appellants for  Rs. 1600 and Rs. 1000 in respect of certain lands. Both the mortgages were possessory mortgages but  the land was leased back to the mortgagor for a stipulated  rent. The  mortgagor died  leaving behind  him three sons, one adult and two minors. The adult son borrowed a further  sum of Rs. 131 by executing a simple mortgage and purporting to act as the Manager of the joint family and the guardian of  his minor  brothers, executed a deed of sale in favour of  the father  of the  appellants in respect of four out  of   ten  items   of  land  previously  mortgaged.  The consideration for the sale was Rs. 3050 which was made up of Rs. 1600.  Rs. 1000  and Rs.  131 due  under three  previous mortgages respectively  and Rs.  200 received in cash on the date of sale.      The minor  sons on  becoming major  filed a suit out of which this  appeal arises,  for a  declaration that the sale deed executed  was not  for legal  necessity,  nor  for  the benefit of  the estate  and, therefore, not binding on them. They also  prayed for joint possession of their 2/3rd share. The trial court found that there was legal necessity for the sale to  the extent  of Rs.  2600 only, the consideration of Rs. 3050 for the sale was inadequate as the lands were worth about Rs.  400 and  that there was no compelling pressure on the estate  to justify  the sale  and therefore the sale was not for  the benefit  of the family and hence not binding on the plaintiffs.  A decree  was granted  in their  favour for joint possession  of 2/3rd  share of  the lands  subject  to certain payment  to the  second defendant.  On appeal by the second defendant,  the Assistant  Judge held the suit of the first plaintiff  to be barred by time and therefore modified the decree  in favour  of the second plaintiff. On appeal by the first  plaintiff and  second defendant,  the High  Court allowed the  appeal by the first plaintiff and dismissed the appeal filed by the second defendant.

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    Accepting the  appeal of  the legal  representatives of the second defendant. ^      HELD: Out  of the  sale consideration of Rs. 3050 there was undoubted  legal necessity to the extent of Rs. 2600 the total amount due under the two deeds of mortgage executed by the father  of the  plaintiffs. Out  of the  ten items which were mortgaged,  only four  were sold  and the remaining six items were  released from  the burden  of the mortgages. The family was  also relieved  from one burden of paying rent to the mortgagee under the lease. All this 817 was for  the benefit  of the  family. The  value of the land sold under the deed of sale was found by the Courts below to be Rs.  4000. Even  if that be so it cannot possibly be said that the  price of  Rs. 3000 was grossly inadequate. Further there were  continuous dealings  between the  family of  the plaintiffs and  the family  of the  second defendant  over a long  course   of  years.   In  these  circumstances  it  is impossible to  say that  the sale  was not  binding  on  the plaintiffs.  The   Courts  below   appeared  to  think  that notwithstanding  the   circumstance  that  there  was  legal necessity to  a large  extent it was incumbent on the second defendant to  establish that  he  made  enquiry  to  satisfy himself that  there was  sufficient pressure  on the  estate which justified the sale. When the mortgagee was himself the purchaser and  when the greater portion of the consideration went in  discharge of  the mortgages  no question of enquiry regarding pressure  on the  estate would arise at all. Where ancestral property  is sold  for the  purpose of discharging debts incurred by the father and the bulk of the proceeds of the sale  is so accounted, the fact that a small part of the consideration is  not accounted  for will not invalidate the sale. [819 A-E]      Gauri Shankar  & Ors. v. Jiwan Singh & Ors. A.I.R. 1927 P.C. 246  Niamat Rai  & Ors. v. Din Dayal & Ors. 1927 A.I.R. P.C. 121,  Ram Sunder  Lal &  another v.  Lacchmi Narain and another A.I.R. 1929 P.C. 143; Hanooman Persaud Pandey v. Mt. Babooee   Munrai    Koonweree   [1955]    6   M.I.A.    393; Radhakrishendas and another v. Kaluram A.I.R. 1967 S.C. 574, referred to. Balmukand v. Kamla Wati & Ors. A.I.R. 1964 S.C. 1385 held inapplicable.

JUDGMENT:      CIVIL APPELATE  JURISDICTION: Civil Appeal Nos. 216-217 of 1970.      Appeals by  special leave  from the  Judgment and Order dated 3-12-1968  of the  Bombay High  Court in Second Appeal Nos. 1232 and 1214/1961.      V. S.  Desai, R. B. Datar and Lalit Bhardwaj and Naveen Sinha for the Appellants.      S. V. Tambwaker for the Respondent.      The Judgment of the Court was delivered by      CHINNAPPA REDDY,  J.-On April 15, 1930 Parisa Chougule, executed Exhibit 93, a deed of mortgage in favour of Ganesh, Dattatraya Kulkarni  (father of the appellants) for a sum of Rs. 1600  in respect  of single  item of land. On August 25, 1933, Parisa  Chougule executed  Exhibit 92  another deed of mortgage in  favour of  the same  mortgagee for a sum of Rs. 1,000 in  respect of  ten items  of land  including the land previously mortgaged  under Exhibit  93. Both  the mortgages were possessory  mortgages but it appears from evidence that the land  was leased  back to the mortgagor for a stipulated

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rent. Parisa  Chougule died  on June 15, 1934 leaving behind him three  sons, Bhupal  an  adult  and  Anna  and  Dhanpal, minors. On  July 11,  1934, Bhupal borrowed a further sum of Rs. 131 and executed a simple mortgage Exhibit 91 in respect of the very ten 818 items of  land covered by Exhibit 92. On May 1, 1935, Bhupal purporting to act as the Manager of the joint family and the guardian of  his minor  brother  executed  a  deed  of  sale Exhibit 90  in  favour  of  Ganesh  Dattatraya  Kulkarni  in respect of four out of the ten items of land mortgaged under Exhibits 93,  92 and  91. The consideration for the sale was Rs. 3050 and was made up of the amounts of Rs. 1600 Rs. 1000 and Rs.  131/- due under three mortgages Exhibits 93, 92 and 91 respectively  and a  sum of  Rs. 200  received in cash by Bhupal on  the date  of sale.  Six of  the items  which were mortgaged were released from the burden of the mortgages. On September 23,  1946, Anna  second son  of  Parisa  became  a major. On  August 31,  1951, Dhanpal  third  son  of  Parisa became a  major. On  August 27,  1953 Anna and Dhanpal filed the suit  out of  which this appeal arises for a declaration that the  sale deed  dated May  1, 1935  was not  for  legal necessity  and  not  for  the  benefit  of  the  estate  and therefore, not  binding on them. They also prayed that joint possession of  their two  third share  may be given to them. The Trial Court found that there was legal necessity for the sale to  the extent of Rs. 2600 only, that the consideration of Rs.  3050 for  the sale  was inadequate as the lands were worth about  Rs. 4000,  that there  was no  such  compelling pressure on the estate as to justify the sale and therefore, the sale was not for the benefit of the family and hence not binding on  the two  plaintiffs. A  decree  was  granted  in favour of  the two  plaintiffs for  joint possession  of two third share  of the  lands subject  to their paying a sum of Rs. 133/5  ans/4 ps.  to the  second defendant. On appeal by the second  defendant the Assistant Judge, Kolhapur affirmed the  finding  of  the  Trial  Court  that  there  was  legal necessity to  the extent of Rs. 2600 only, that the value of the land was Rs. 4,000 and that there was no pressure on the estate justifying  the sale.  The Assistant Judge found that there was  no evidence  to show  that the defendant made any bonafide  enquiry   to  satisfy   himself  that   there  was sufficient pressure  on the  family justifying  the sale. He however, held  that the  suit of  the  first  plaintiff  was liable to  be dismissed  as it was barred by limitation. He, therefore,  modified  the  decree  of  the  Trial  Court  by granting a decree in favour of the second plaintiff only for possession of  a one  third share  in the  lands subject  to payment of  a sum of Rs. 866.66 ps. to the second defendant. The  first   plaintiff  as  well  as  the  second  defendant preferred second  appeals to  the High Court. The High Court allowed  the   appeal  filed  by  the  first  plaintiff  and dismissed the  appeal filed  by the  second  defendant.  The legal representatives of the second defendant have preferred these appeals  after obtaining special leave from this Court under Article 136 of the Constitution. 819      It is  clear that these appeals have to be allowed. The facts narrated  above show  that out of the consideration of Rs. 3050 for the sale there was undoubted legal necessity to the extent  of Rs.  2600 the  total amount due under the two deeds of  mortgage executed by the father of the plaintiffs. Out of the ten items of land which were mortgaged, only four were sold and the remaining six items were released from the burden of  the mortgages.  The family was also relieved from

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the burden  of paying  rent to the mortgagee under the lease deed. Surely all this was for the benefit of the family. The value of  the land  sold under the deed of sale was found by the Courts  below to  be Rs.  4000. Even  if that  be so  it cannot possibly  be said  that the  price of  Rs.  3000  was grossly inadequate.  It has  further to  be remembered  that there were  continuous dealings  between the  family of  the plaintiffs and  the family  of the  second defendant, over a long  course   of  years.   In  those  circumstances  it  is impossible to  agree with the conclusion of the courts below that the  sale was not binding on the plaintiffs. The courts below   appeared   to   think   that   notwithstanding   the circumstance that  there was  legal  necessity  to  a  large extent it was incumbent on the second defendant to establish that he  made enquiry  to satisfy  himself  that  there  was sufficient pressure  on the estate which justified the sale. We are  unable to see any substance in the view taken by the courts below.  When the  mortgagee is  himself the purchaser and when  the greater  portion of  the consideration went in discharge of  the mortgagors, we do not see how any question of enquiry  regarding pressure  on the estate would arise at all. Where  ancestral property  is sold  for the  purpose of discharging debts incurred by the father and the bulk of the proceeds of  the sale is so accounted, the fact that a small part of  the consideration  is not  accounted for  will  not invalidate the  sale. In Gauri Shankar & Ors. v. Jiwan Singh Ors.(1) it  was found  that Rs.  500 out of the price of Rs. 4000 was  not fully  accounted for  and that there was legal necessity for  the balance  of Rs.  3500. The  Privy Council held that  if the  purchaser  had  acted  honestly,  if  the existence of  a family necessity for a sale was made out and the price  was not  unreasonably low,  the purchaser was not bound to  account for  the application  of the  whole of the price. The  sale was  upheld. In  Niamat Rai and Ors. v. Din Dayal and  Ors.(2) the manager of a joint family sold family property for Rs. 34,500 to satisfy pre-existing debts of the extent of  Rs. 38,000. It was held that it was sufficient to sustain the  sale without  showing how  the balance had been applied. 820      In  Ram  Sunder  Lal  &  Anr.  v.  Lachhmi  Narain  and Anr.(1)., the vendee the sale in whose favour was questioned fourteen years  after the  sale, was  able  to  prove  legal necessity to  the extent of Rs. 7744 out of a total price of Rs. 10,767.  The Privy  Council after quoting a passage from the well-known case of Hanoomanpersaud Pandey v. Mt. Babooee Munrai Koonweree,(2) upheld the sale.      The principle  of these  decisions has been approved by this Court in Radhakrishandas and Anr. v. Kaluram.(3).      The learned counsel for the respondents relied upon the decision of  this Court in Balmukand v. Kamla Wati & Ors.(4) That was  a suit for specific performance of an agreement of sale executed  by the  manager of  the family  without  even consulting the other adult members of the family. The object of the sale was not to discharge any antecedent debts of the family nor was it for the purpose of securing any benefit to the family.  The only  reason for  the sale  of the land was that the  plaintiff wanted  to consolidate  his own holding. The Court  naturally found  that  there  was  neither  legal necessity nor benefit to the estate by the proposed sale and the agreement  therefore, could  not be  enforced. We do not see what relevance this case has to the facts of the present case. We  accordingly allow the appeals and dismiss the suit with cost throughout. N.K.A.                                      Appeals allowed.

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