27 January 1964
Supreme Court


Case number: Appeal (civil) 7 of 1962






DATE OF JUDGMENT: 27/01/1964


CITATION:  1964 AIR 1385            1964 SCR  (6) 321  CITATOR INFO :  E          1978 SC 300  (8)  D          1980 SC 645  (5)

ACT: Contract   by  manager  to  sell  joint   property--Specific Performance when ordered--Hindu Law--Joint family.

HEADNOTE: The appellant entered into a contract with the karta for the purchase  of  property belonging to a  joint  Hindu  family. This  property consisted of a fractional share belonging  to the family in a large plot of land.  Earnest money was  paid to  the karta.  As the karta did not execute the  sale  deed the  appellant instituted a suit for  specific  performance. The other members who are the brothers of the karta and  who were adults  (1) A.I.R. 1962 Raj 3.  (2) 1959 All. L.J. 340.  134--159 S.C.--21 322 at the time of the contract were also impleaded in the  suit as  defendants.   The suit was resisted on the  ground  that there was no legal necessity and that the contract for  sale was  not for the benefit of the family.  The trial court  as well as the High Court upheld these contentions. Before  this Court it was contended that even  though  there was  no legal necessity the transaction was for the  benefit of  the  family  which  the karta as  a  prudent  owner  was entitled to enter into for the benefit of the family. Held:(i) For a transaction to be regarded as one which is of benefit  to the family it need not necessarily be only of  a defensive character, but what transactions would be for  the benefit  of  the  family  would  depend  on  the  facts  and circumstances of each case.  In each case the Court must  be satisfied  from the material before it that it was  in  fact such  as  conferred or was necessarily  expected  to  confer benefit on the family at the time it was entered into. (ii) No  part of the joint family property could  be  parted with  or  agreed  to be parted with by the  manager  on  the ground of alleged benefit to the family when the transaction is opposed by the adult members of the family. (iii)In  the  present case the appropriate  pleas  were  not



raised by the plaintiff nor the necessary evidence led.  The granting of specific performance is always in the discretion of  the court.  In the facts and circumstances of  the  case the  courts  below  were  justified  in  refusing  to  order specific performance and the appeal is dismissed. Jagatnarain  v.  Mathura Das, I.L.R. 50 All.  969,  Honooman Prasad  Pandey  v. Babooee Munraj Koonwaree, (1856)  6  Moo. I.A. 393 Sahu Ram Chandra v. Bhup Singh, I.L.R. 39 All. 437, Palaniappa   Chetty   v.  Sreemath   Daiyasikamony   Pandara Sannadhi, 44 I.A. 147, Sital Prasad Singh v. Ajablal Mander, I.L.R.  18 Pat. 306 and In the matter of A. V.  Vasudevan  & Ors.  Minors.  A.I.R. 1949 Mad. 260. referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7 of 1962. Appeal  from the judgment and decree dated October 14,  1957 of the Punjab High Court in R.F.A. No. 219 of 1950. N.   C. Chatterjee, H. L. Mittal, S. S. Khanduja and  Ganpat Rai, for the appellant. Ram Lubhaya and S. D. Sekhri, for respondents Nos. 1-12. S.   K. Mehta and K. L. Mehta, for respondents Nos. 13-15.                             323 January 27, 1964.  The Judgment of the Court was delivered by MUDHOLKAR J.-This is a plaintiff’s appeal from the dismissal of  his suit for specific performance of a contract for  the sale  of 3/20th share of land in certain fields  situate  in Mauza  Faizpur  of Batala in the State of  Punjab.   He  had instituted the suit in the court of Sub-Judge, First  Class, Batala,  who dismissed it in its entirety.  Upon appeal  the High  Court of Punjab, while upholding the dismissal of  the plaintiff’s  claim  for specific performance,  modified  the decree of the trial court in regard to one matter.  By  that modification the High Court ordered the defendants to  repay to  the plaintiff the earnest money which he had  paid  when the contract of sale was entered into by him with  Pindidas. It  may be mentioned that Pindidas died during the  pendency of   the  appeal  before  the  High  Court  and  his   legal representatives  were, therefore, substituted in his  place. Aggrieved by the dismissal of his claim for specific perfor- mance  the plaintiff has come up to this Court by  a  certi- ficate  granted  by the High Court, under Art.  133  of  the Constitution. The relevant facts are these: The  plaintiff owned 79/120th share in Kasra Nos. 494,  495, 496, 497, 1800/501, 1801/501 and 529 shown in the  zamabandi of 1943-43, situate at Mauza Faizpur of Batala.  On  October 1,  1943 he purchased 23/120th share in this land  belonging to one Devisahai.  He thus became owner of 17/20th share  in this land.  The remaining 3/20th share belongs to the  joint Hindu  family  of  which Pindidas was the  Manager  and  his brother  Haveliram Khemchand and Satyapal were the  members. According to the plaintiff he paid Rs. 175 per marla for the land  which  he  purchased  from  Devisahai.   In  order  to consolidate  his holding, the plaintiff desired  to  acquire the  3/20th share held by the joint family of  Pindidas  and his  brothers.   He, therefore, approached Pindidas  in  the matter  and the latter agreed to sell the 3/20th  share  be- longing  to the family at the rate of Rs. 250 per  marla.The contract in this regard was entered into on October 1, 324 1945  with Pindidas and Rs. 100 were paid to him as  earnest money.   As the manager of the family failed to execute  the



sale  deed in his favour, the plaintiff instituted the  suit and made Pindidas and his brothers defendants thereto. The  suit  was  resisted by all  the  defendants.   Pindidas admitted having entered into a contract of sale of some land to  the plaintiff on October 1, 1945 and of having  received Rs.  100 as earnest money.  According to him, however,  that contract  pertained not to the land in suit but  to  another piece  of land.  He further pleaded that he had no right  to enter  into  a contract on behalf of his  brothers  who  are defendants 2 to 4 to the suit and are now respondents 13  to 15 before us.  The defendants 2 to 4 denied the existence of any  contract and further pleaded that even if Pindidas  was proved to be the karta of the joint family and had agreed to sell  the land in suit the transaction was not binding  upon them because the sale was not for the benefit of the  family nor was there any necessity for that sale.  The courts below have found in the plaintiff’s favour that Pindidas did enter into a contract with him for the sale of 3/20th share of the family  land in suit and received Rs. 100 as earnest  money. But  they  held  that the contract was not  binding  on  the family  because there was no necessity for the sale and  the contract was not for the benefit of the family. It is not disputed before us by Mr. N. C. Chatterjee for the plaintiff  that the defendants are persons in affluent  cir- cumstances  and  that there was no necessity for  the  sale. But  according to him, the intended sale was  beneficial  to the  family inasmuch as it was not a  practical  proposition for the defendants to make any use of their fractional share in the land and, therefore, by converting it into money  the family  stood to gain.  He further pointed out that  whereas the value of the land at the date of the transaction was Rs. 175  per  marla  only the plaintiff  had  agreed  under  the contract  to  purchase it at Rs. 250 per  marla  the  family stood  to make an additional gain by the  transaction.   The substance of his argument was that the Manager of a joint                             325 Hindu family has power to sell the family property not  only for  a  defensive purpose but also where  circumstances  are such that a prudent owner of property would alienate it  for a consideration which he regards to be adequate. In support of his contention he has placed reliance on three decisions.   The  first of these is Jagatnarain  v.  Mathura Das(1).   That is a decision of the Full Bench of that  High Court  in  which  the meaning and implication  of  the  term "benefit of the estate" is used with reference to  transfers made  by a Manager of a joint Hindu family  was  considered. The  learned  Judges examined a large number  of  decisions, including that in Hanooman Persaud Pandey v. Babooee  Munraj Koonweree(2);   Sahu  Ram  Chandra  v.  Bhup  Singh(3)   and Palaniappa   Chetty   v.   Sreemath   Daivasikamony   Pandra Sannadhi(4)  and held that transactions justifiable  on  the principle of benefit to the estate are not limited to  those which  are  of a defensive nature.  According  to  the  High Court  if  the  transaction is such as a  prudent  owner  of property  would,  in the light of circumstances  which  were within his knowledge at that time, have entered into, though the degree of prudence required from the manager would be  a little  greater  than  that  expected of  a  sole  owner  of property.  The facts of that case as found by the High Court were:               "........  the  adult managers of  the  family               found   it  very  inconvenient  and   to   the               prejudice of the family’s interests to  retain               property, 18 or 19 miles away from Bijnor,  to               the management of which neither of them  could



             possibly  give  proper  attention,  that  they               considered  it to the advantage of the  estate               to  sell  that  property  and  purchase  other               property  more accessible with  the  proceeds,               that  they did in fact sell that  property  on               very advantageous terms, that there is nothing               to  indicate  that the transaction  would  not               have  reached a profitable conclusion .  .  ."               (P. 979).      (1) I.L.R. 50 All. 969.       (2)(1816) 6 Moo. I.A.393.      (3) I.L.R. 39 All 437.        (4)44 I.A.147. 326 We  have no doubt that for a transaction to be  regarded  as one  which  is of benefit to the family it need  not  neces- sarily be only of a defensive character.  But what  transac- tion would be for the benefit of the family must necessarily depend upon the facts of each case.  In the case before  the Full Bench the two managers of the family found it difficult to man-age the property at all with the result,  apparently, that  the  family was incurring losses.  To sell  such  pro- perty, and that too on advantageous terms, and to invest the sale  proceeds  in a profitable way could certainly  be  re- garded  as  beneficial to the family.  In the  present  case there is unfortunately nothing in the plaint to suggest that Pindidas  agreed  to sell the property because he  found  it difficult  to manage it or because he found that the  family was incurring loss by retaining the property.  Nor again  is there  anything to suggest that the idea was to  invest  the sale  proceeds in some profitable manner.  Indeed there  are no allegations in the plaint to the effect that the sale was being  contemplated by any considerations of  prudence.   An that  is said is that the fraction of the family’s share  of the land owned by the family bore a very small proportion to the  land  which  the  plaintiff held at  the  date  of  the transaction.   But that was indeed the case even before  the purchase  by  the  plaintiff  of  the  23/120th  share  from Devisahai.   There is nothing to indicate that the  position of  the family vis-a-vis their share in the land had in  any way  been  altered by reason of the  circumstance  that  the remaining  17/20th interest in the land came to be owned  by the plaintiff alone.  Therefore, even upon the view taken in the  Allahabad case the plaintiff cannot hope to succeed  in this suit. The  next  case is Sital Prasad Singh v.  Ajablal  Mander(1) That  was a case in which one of the questions  which  arose for  consideration  was the power of a manager  to  alienate part of the joint family property for the acquisition of new property.   In  that  case  also the  test  applied  to  the transaction  entered  into  by a manager of  a  joint  Hindu family  was  held  to  be the same,  that  is,  whether  the transaction  was one into which a prudent owner would  enter in the ordinary (1)  I.L.R. 18 Pat. 306. 327 course  of  management  in  order  to  benefit  the  estate. Following  the view taken in the Allahabad case the  learned Judges also held that the expression "benefit of the estate" has  a wider meaning than mere compelling necessity  and  is not  limited to transactions of a purely  defensive  nature. In  the course of his judgment Harries C.J. observed  at  p. 311:               ".  . . . . the karta of a joint Hindu  family               being  merely  a manager and not  an  absolute               owner,  the Hindu law has, like other  systems               of  law, placed certain limitations  upon  his



             power  to alienate property which is owned  by               the  joint  family.   The  Hindu   law-givers,               however, could not have intended to impose any               such   restriction  on  his  power  as   would               virtually  disqualify him from doing  anything               to improve the conditions of the family.   The               only   reasonable  limitation  which  can   be               imposed on the karta is that he must act  with               prudence, and prudence implies caution as well               as foresight and excludes hasty, reckless  and               arbitrary conduct." After  observing  that  the transaction entered  into  by  a manager  should not be of a speculative nature  the  learned Chief Justice observed:               "In  exceptional circumstances,  however,  the               court will uphold the alienation of a part  of               the  joint family property by a karta for  the               acquisition  of new property as, for  example,               where  all  the  adult members  of  the  joint               family  with the knowledge available  to  them               and  possessing all the necessary  information               about the means and requirements of the family               are  convinced that the proposed  purchase  of               the  new  property is for the benefit  of  the               estate." These  observations make it clear that where  adult  members are  in  existence  the judgment is to be not  that  of  the manager  of the family alone but that of all the adult  mem- bers of the family, including the manager.  In the case  be- fore us all the brothers of Pindidas were adults when’ the 328 contract was entered into.  There is no suggestion that they agreed to the transaction or were consulted about it or even knew  of the transaction.  Even, therefore, if we hold  that the view expressed by the learned Chief Justice is right  it does  not  help  the plaintiff because the  facts  here  are different  from  those  contemplated by  the  learned  Chief Justice.  The other Judge who was a party to that  decision, Manokarlal J., took more or less the same view. The third case relied on is In the matter of A.T.  Vasudevan &  Ors., minors(1).  There a single Judge of the High  Court held that the manager of joint Hindu family is competent  to alienate  joint family property if it is clearly  beneficial to  the  estate  even though there  is  no  legal  necessity justifying the transaction.  This view was expressed  while, dealing  with an application under cl. 17 of Letters  Patent by one Thiruvengada Mudaliar for being appointed guardian of the  joint family property belonging to, inter alia, to  his five  minor sons and for sanction of the sale of  that  pro- perty  as  being beneficial to the interests  of  the  minor sons.   The  petitioner  who was karta of  the  family  had, besides  the five minor sons, two adult sons, his  wife  and unmarried  daughter who had rights of maintenance.   It  was thus  in  connection with his application that  the  learned Judge considered the matter and from that point of view  the decision is distinguishable.  However, it is a fact that the learned  Judge  has clearly expressed the opinion  that  the manager  has  power to sell joint family property if  he  is satisfied  that the transaction would be for the benefit  of the  family.   In  coming to this conclusion  he  has  based himself mainly upon the view taken by Venkata Subba Rao  J., in  Sellappa  v. Suppan(2).  That was a case  in  which  the question which arose for consideration was whether borrowing money  on  the  mortgage of joint family  property  for  the purchase  of  a  house could be held to be  binding  on  the



family because the transaction was of benefit to the family. While  holding that a transaction to be for the  benefit  of the family need not be of a defensive character the  learned Judges,  upon  the  evidence before  them,  held  that  this particular transac- (1) A.I.R. 1949 Mad. 260. (2) A.I.R. 1937 Mad. 496. 329 tion was not established by evidence to be one for the bene- fit of the family. Thus,  as we have already stated, that for a transaction  to be  regarded as of benefit to the family it need not  be  of defensive  character so as to be binding on the family.   In each case the court must be satisfied from the material  be- fore it that it was in fact such as conferred or was reason- ably expected to confer benefit on the family at the time it was  entered into,.  We have pointed out that there  is  not even  an allegation in the plaint that the  transaction  was such as was regarded as beneficial to the family when it was entered into by Pindidas.  Apart from that we have the  fact that  here the adult members of the family have stoutly  re- sisted the plaintiff’s claim for specific performance and we have no doubt that they would not have done so if they  were satisfied that the transaction was of benefit to the family. It  may be possible that the land which was intended  to  be sold  had  risen in value by the time the present  suit  was instituted  and that is why the other members of the  family are  contesting the plaintiff’s claim.  Apart from that  the adult members of the family are well within their rights  in saying  that no part of the family property could be  parted with  or  agreed  to be parted with by the  manager  on  the ground  of alleged benefit to the family without  consulting them.   Here, as already stated, there is no  allegation  of any such consultation. In  these circumstances we must hold that the  courts  below were right in dismissing the suit for specific  performance. We  may add that granting specific performance is always  in the  discretion  of the court and in our view in a  case  of this  kind  the court would be  exercising  its  discretion. right by refusing specific performance. No doubt Pindidas himself was bound by the contract which he has entered into and the plaintiff would have been  entitled to  the  benefit of s. 15 of the Specific Relief  Act  which runs thus:               "Where  a  party to a contract  is  unable  to               perform  the whole of his part of it, and  the               part which               330               must be left unperformed forms a  considerable               portion  of  the whole, or does not  admit  of               compensation  in money, he is not entitled  to               obtain a decree for specific performance.  But               the court may, at the suit of the other party,               direct   the  party  in  default  to   perform               specifically  so  much  of  his  part  of  the               contract as he can perform, provided that  the               plaintiff  relinquishes all claim  to  further               performance,  and  all right  to  compensation               either for the deficiency, or for the loss  or               damage sustained by him through the default of               the defendant." However,  in the case before us there is no claim on  behalf of  the  plaintiff  that he is willing  to  pay  the  entire consideration for obtaining a decree against the interest of Pindidas  alone in the property.  In the result  the  appeal



fails and is dismissed with costs. Appeal dismissed.