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PETITIONER: MURARKA PROPERTIES (P) LTD. & ANR.

       Vs.

RESPONDENT: BEHARILAL MURARKA AND OTHERS

DATE OF JUDGMENT30/11/1977

BENCH: KAILASAM, P.S. BENCH: KAILASAM, P.S. UNTWALIA, N.L.

CITATION:  1978 AIR  300            1978 SCR  (2) 261  1978 SCC  (1) 109

ACT: Hindu Law--Common ancestor left behind vast properties--Sons and  other  major  coparceners  conveyed  their  shares   of property   to   a  Company--Conveyances   whether   indicate disruption  of  joint  family--Conveyances  if  for   family benefit--Validity of.

HEADNOTE: The  plaintiffs  and defendants were the  descendants  of  a common  ancestor who left behind vast movable and  immovable properties  and several business assets.  On  9th  December, 1932, each of the eight sons of the common ancestor executed a document conveying his share of property to the  appellant Company stating that he was executing the document as  Karta of the joint family consisting of himself and his sons.  The suit by the plaintiffs (who were the son and wife of one  of the  sons) for setting aside all conveyances  and  transfers and  for a declaration that they were entitled  to  separate properties and funds was decreed by the trial Court. The High Court dismissed the appeal holding that the  family consisting  of the common ancestor and his sons was a  joint family until his death and thereafter his sons and grandsons continued  to be joint until the institution of  tile  suit. It rejected the plea that even if the family was joint,  the transfers  were  for  better  management  of  the  immovable property and so would bind the joint family members. In  appeal to this Court it was contended that the  original joint family became divided into eight different families on 9th December, 1932 and that even assuming that there was  no disruption   of  the  joint  family,  since   the   impugned alienations  were as a result of the unanimous  decision  of all  the  sons, they were valid because they  were  for  the benefit of the family. Allowing the appeal, HELD  : The family became divided in status sometime  before 1932.  In any event the division’ in status was effected  in 1932.  Even if there was a joint family in existence,  since the  transactions  were for the benefit of the  family,  the other coparceners cannot challenge its validity. [269A-B] (a)The  effect of the documents is that there  were  eight different joint families consisting of each of the sons  and his-sons  and  that  the properties,  which  were  owned  by

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several  sons, were transferred to a company  consisting  of themselves  alone.  Even if the recitals in the document  do not  prove  separation  of status before  the  date  of  the document,  they make it clear that the eight sons ’who  were acting   as  Kartas  of  their  sons  and   grandsons   were transferring  the  properties  to a  company  consisting  of themselves  alone.  Though it may not be in the nature of  a family  settlement,  this  transaction  had  the  effect  of bringing  about  a  separation in  status  and  the  members entered into the transaction as co-tenants. [265F-H] (b)It  is well-established that the power of a manager  of joint  Hindu  family to alienate joint  family  property  is analogous  to  that of a manager for an  infant  heir.   The manager  of a joint Hindu family has power to  alienate  for value  joint family property, so as to bind the interest  of both  adult and minor conarceners in the property,  provided that the alienation is made for legal necessity or     for the benefit of estate. [266E-F] Hunooman Persaud v. Musummat Baboose [1856] 6 Moo.  I.A. 393 referred to (c)  The transactions being for the benefit of  the  family, they   would  be  binding  on  all  the  coparceners.    The transactions while were entered into by all the 262 eight sons and adult coparceners of the eight branches  were clearly  the  result of joint  deliberations  and  unanimous decisions of all the adult members. [267D-E] (d)The  question whether an alienation is for the  benefit of the family Would depend upon the facts of each case.  One view  is that unless it is of a defensive nature  calculated to  protect  the  estate  from  some  threatened  danger  or destination, it cannot be said to be for the benefit of  the estate, the other is that it is sufficient if it is such  as a prudent owner, or trustee would have carried out with  the knowledge  available to him at the time of the  transaction. [266F-G] In the instant case, the purpose of the transactions wag  to protect the properties for the benefit of the members of the family, and to prevent any member of the family from selling away  any  share of the property by  transfer  or  mortgage. There was, therefore, no dissipation of the property. [267A- B] Bal  Mukand v. Kamla Vati and Others, [1964] 6  S.C.R.  321, referred to.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1350  of 1967. From the Judgment and order dated 18-5-1967 of the  Calcutta High Court in Appeal No. 14 of 1957. L.N.  Sinha,  J. B. Dadachanji and K. J. John and  P.  N. Chaterjee for the appellant. Shankar Ghosh and B. Dutta for respondents 1-3. P.K. Mukherjee for Respondent No. 5. P.C.  Bhartari for Respondents, 6, 8, 9, 16,  17,  21-23, 35-37, 39-41 and 47. S. M. Jain and S. K. Jain for respondents 20 and 42-44. Harbans Singh for respondent No. 19(a). P.   R. Mirdul, H. K. Puri and M. C. Dhingra for respondents 12   (a & b). D.   N. Mukherjee for respondents 13 and 14. B.   Parthasarthi for respondents 25-26. Rathin Das for respondents 10, 31 to 33.

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The Judgment of the Court was delivered by KAILASAM,  J.-This appeal is by certificate granted  by  the Calcutta  High  Court against its judgment dated  18th  May, 1967  in appeal No. 14 of 1957, upholding and affirming  the judgement  and  decree dated 13-9-1956 in suit No.  1607  of 1938.  are  defendants 12 and 13 in the suit. The  suit  was filed    by Beharilal and his mother  Ginni  praying amongst other  reliefs  for  a declaration that  the  respondent  is entitled  to  1/8th  share  in  the  assets  and  properties belonging  to  the  joint  family,  for  setting  aside  all conveyances  and  transfers  and  for  a  declaration   that Plaintiff  is entitled to separate properties and  funds  of Laloolal Murarka, the father of the plaintiff and husband of second plaintiff.  After written statements were filed,  the plaint was amended on 6-7-1939 whereby an alternative  claim for 1/8th share of the Company’s property was made if it was held that there was no joint family but only a company. 263 One  Ram  Niranjands  Muraraka died  on  29th  October  1930 leaving his widow Janki Devi, the 10th defendant and 8 sons- Hiralal  Murarka  defendant  No. 1.  Nandlal  Murarka  since deceased,  Radhelal  Murarka  defendant  No.  3,  Misri  Lal Murarka defendant No. 5, Chinni Lal Murarka defendant No. 7, Chotelal Murarka defendant No. 8, Kisedlal Murarka defendant No.  9,  and  vast movable  and  immovable,  properties  and several  business  assets  situate within  and  outside  the jurisdiction  of the Calcutta High Court.   Motilal  Murarka died  without  leaving any issue.  Amongst 8 sons,  in  this appeal,  we  are  concerned with the  families  of  3  sons. Laloolal’s wife Ginni is the second plaintiff and their  son is  Beharilal,  the  first plaintiff.   Radheylal’s  son  is Makhanlal and Makhanlal’s son is Murarilal respondent 12  in this  appeal.  Murarilal’s widow is Bimla and their  son  is Rahul.   Binla  and Rahul were brought on  record  as  legal representatives of Murarilal after his death pending  appeal in  this court and they are contesting the  present  appeal. Chinnilal’s  son is Ratanlal and he is respondent 20 who  Is also contesting this appeal.  The other sons and their  des- cedants  contested  the  plaintiff’s  plea  that  they  were members  of a joint family.  Their case was that family  was divided and the impugned alienations in favour of D. 12  and D.  13 were valid.  They have stuck to this plea  throughout and  as  they are in fact supporting the appellants,  it  is unnecessary to consider their case separately.  The suit was decreed and an appeal was preferred by defendants 12 and 13. Pending  appeal  the  plaintiffs  changed  their  front  and started supporting the present appellants, defendants 12 and 13,  stating that the impugned alienations were  binding  on them.   But  Bimla  and Rahul who  were  brought  on  record pending  the  appeal  in  this  Court  are  questioning  the validity  of  the  impugned  transaction  though   Murarilal opposed  the  plaintiffs’  claim during  the  suit  and  the appeal.  Though Chinnilal in his written statement supported the  case  of  the  present  appellants  that  the  impugned transactions  were  valid,  Chinnilal’s  son  Ratanlal,  who attained  majority in 1943, challenged the validity  of  the impugned transactions 3 years after attaining majority.  The position  therefore is that the plaintiffs who  belonged  to Laloolal’s  group (the widow and son of one of the  sons  of Laloolal)  who  were the only persons  that  questioned  the alienations  at the time of the suit later on supported  the case of the present appellants, while the descendants of two sons Radheylal and Chinnilal though they originally affirmed the  impugned transaction, are questioning the  validity  of transactions and contesting the appeal before us.

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The present litigation is about 39 years old.  The suit  was filed  on  22-8-1938.  The decree was passed  by  the  trial court  on 13-9-1956 and the appellate decree is dated  18-5- 1967.  It has now come up before us after 10 years since the passing  of the decree by the appellate court  in  Calcutta. The trial went on for 63 days. The  main contention that was raised in the appellate  court by  Defendant 12 and Defendant 13, the  present  appellants, was that the immovable properties which stood in the name of Ramniranjandas  were his self-acquired properties  and  they were brought into the assets of company of his 8 sons having defined shares in the said properties. 264 The  properties  were conveyed to the  appellant’s  company. The appellate court field that the family of  Ramniranjandas Murarka  consisted of himself and his sons and was  a  joint Hindu family governed by Mitakashara law until the death  of Ramniranjandas  and thereafter the families of his sons  and their  sons  and  grandsons continued to be  a  joint  Hindu family  until  the  institution  of  the  suit.   They  also rejected  the  plea that even if the family  was  joint  the transfers   of  the  impugned  property  were   for   better management of the immovable properties and as such for legal necessity  and  would  thus bind the members  of  the  joint family.   It  further held that there is  no  evidence  that immovable  properties were brought into the joint  stock  of the  firm by Ramniranjandas and that on the assumption  that the   said  properties  were  separate   and   self-acquired properties  of  Ramniranjandas,  the  said  properties  were inherited  by  his  8 sons from their father  and  upon  the father’s death they were ancestral properties in their hands and  the respective male descendants of the said 8  sons  of Ramniranjandas  also  acquired coparcenary interest  in  the said immovable properties.  In this view the appellate court dismissed the appeal preferred by defendants 12 and 13. In  this appeal before us Mr. Lal Narain Sinha, the  learned counsel for appellants, defendants 12 and 13, submitted that without  going into the correctness of the finding of  lower court that Ramniranjandas and his sons were members of joint Hindu  family,  he  would  confine  himself  to  a   limited submission that the impugned transactions showed that  there was  a partition earlier and in any event the family  became divided  in  status ’on 9-12-1932, and a disruption  of  the original joint family into 8 different families took  place. Secondly,  he submitted that even if this contention is  not accepted,  and  it is. found that 8 sons were members  of  a joint  family, as the impugned alienations were as a  result of joint deliberations and unanimous decision of all of  the eight sons and other adult members of the family, it must be presumed  to be a prudent transaction as the  entire  family properties  were  preserved  for 8 sons  though  it  was  by transferring  them  to a company, and that  the  alienations were for the benefit of the family and therefore for  family necessity.  Apart from the two main contentions, the learned counsel  also submitted that even if the  transactions  were not  binding on the members of the joint family as they  are only voidable they can be set aside only at the instance  of a  coparcener  to the extent of his interest  in  the  joint family  and as the only branch that questioned the  validity of  alienation has left the field, the  present  respondents who originally supported the alienations are not entitled to any- relief and in any event their claim, if any, is  barred by limitation. The  transction that are impugned are conveyances in  favour of the    appellants   ourarka   Properties   Limited    and

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Buckingham Court (P)     Ltd. by various conveyances, one of which  is Ex.  L. As the plea of Shri Lal Narain Sinha,  the learned  counsel  for the appellants, is that Ex.  L  itself proves  that at the date of the document there was no  joint family and that in any event the document itself effected  a separation,  it  is  necessary  to  refer  to  the  relevant recitals in the document.  The 265 document prefaces : "This indenture of conveyance dated  9th December,  1932  between  Hiralal  Murarka  eldest  son   of Ramniranjandas  Murarka  for himself and as the  father  and natural  guardian of his infant son Kunj Lal Murarka and  as the Karta of the joint family consisting of himself and  his son......... The same description is adopted in the cases of all sons, for instance in the case of second son the recital is  Nandlal Murarka son of the said  Ramniranjandas  Murarka deceased for self and as the father and natural guardian  of his infant sons Shankerlal Murarka and Purshottamlal Murarka and  as the Karta of joint family consisting of himself  and his  sons.   It  will  be seen that  all  the  8  sons  have described  themselves each one stating that he is acting  on behalf  of  himself and his sons.  The  recitals  show  that there were 8 different joint families consisting of each  of the sons with his sons etc.  The plea of the learned counsel that a reading of the document would show that the  brothers themselves  affirmed  that there were 8  joint  families  is sound.   The  reply  to this contention  on  behalf  of  the contesting  respondents  as put forward by Mr.  Mridul,  the learned counsel, is that the plea that there was  disruption of  joint  family in 1932 is a new point and should  not  be allowed  to be raised.  This plea cannot be  accepted.   The appellants denied the existence of a joint family consisting of  Ramniranjandas  and his sons and grandsons or  that  the joint  family continued after the death  of  Ramniranjandas. It  was  specifically  mentioned in para 2  of  the  written statement that there was disruption of coparcenary prior  to 1926  and  Ramniranjandas  and his 8  sons  carried  on  the company after they became separate and as such there was  no joint  family as alleged in the plaint.  This plea  is  very specific that there was disruption of the joint family prior to  1926.   The point at which the disruption  took  is  not stated  clearly but the plea of the appellants that  it  was prior  to 1926 would enable him to rely on the  document  of 1932  to  establish that there was a  separation  some  time before 1932.  In the Memorandum of appeal dated 24-1-1967 by the appellants in ground No. 26 it was clearly alleged  that the  learned Judge was wrong in holding that  Ramniranjandas and   other  sons  were  members  of  joint   family.    The contention’   of  Shri  Mridul,  the  learned  counsel   for respondents, that this plea is new and should not be allowed cannot  therefore  be sustained.  The second  contention  of Shri   Lal  Narain  Sinha,  the  learned  counsel  for   the appellants,  relying on the recitals in Ex.  L, is  that  in any  event  the’ document itself effected  a  separation  in status  at least from the date of the document.  The  effect of  the  documents L, M, N, 0 etc. is  that  the  properties which  were  owned  by several sons were  transferred  to  a company  consisting  of  themselves  alone.   Even  if   the recitals  in the document do not prove separation of  status before  the date of the document they make it clear  that  8 sons  who were acting as Kartas of their sons and  grandsons were transferring the properties to a company consisting  of themselves alone.  It is to be noted that the entire  family properties were transferred to the company  consisting of  8 brothers and their descendants alone.  The transaction  will

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have  the  effect of transferring the  properties  from  the families  to the company though it may not be in the  nature of  a family settlement.  Even if the joint family  of  Ram- niranjandas  Murarka  was in existence before  9-12-1932  by this  transaction  had  the  effect  of  bringing  about   a separation  in  status  and the  members  entered  into  the transactions as co-tenants.  We are satisfied 266 was  a  joint  family in existence before the  date  of  the document,  the  recitals  in the documents  would  have  the effect of disrupting the joint family. Mr. Lal Narain Sinha submitted that even if it is held  that there  was  a joint family is existence on the date  of  the impugned documents, the transactions are for the benefit  of the  family  and as such binding on all  the  members.   The facts  disclose that the transactions were entered into  not only  by  all  the  eight sons but also  by  all  the  adult coparceners of the eight branches.  It cannot be denied that the transections were the result of joint deliberations  and unanimous  decision of all the adult members.  The  evidence of  the Solicitor who prepared the documents is that it  was for  necessity  and  with  the  object  of  preserving   the property,   the  entire  properties  of  the   family   were transferred  to  the company consisting of  eight  sons  and their  families alone.  Eight branches secured equal  number of  shares  in  the transferee company.  On  the  facts  the question arises whether the transaction could be held to  be prudent and binding on the members of coparcenary.   Bearing in  mind  the fact that all the  adult  members  unanimously joined in the transaction after deliberations by all of them and  that  the entire properties were transferred  in  equal shares  to  the  company  of which  the  8  sons  were  only shareholders,  we  will proceed to examine the  validity  of transaction. Mulla  in his Principles of Hindu Law at p. 300  (14th  Ed.) states  the law thus : "The power of the manager of a  joint Hindu family to alienate joint family property is  analogous to  that of a manager for an infant heir as defined  by  the Judicial   Committee   in  Hunooman  persaud   v.   Musummat Baboose(1).   The manager of a joint Hindu family has  power to  alienate for value joint family property, so as to  bind the  interest  of both adult and minor  coparceners  in  the property,  provided  that the alienation is made  for  legal necessity,  or  for the benefit of estate.  As  to  what  is benefit  of these state there was conflict of opinion.   One view  was  that a transaction cannot be said to be  for  the benefit  of  an estate unless it is of  defensive  character calculated to protect the estate from some threatened danger or destruction.  Another view was that for a transaction  to be  for the benefit of the estate it is sufficient if it  is such  as  a prduent owner, or rather a trustee,  would  have carried out with the knowledge that was available to him  at the time of transaction.  The question whether it is for the benefit  of family would depend upon the facts of the  case. On  the facts of this case there could be no  difficulty  in coming  to the conclusion that the transaction was  for  the benefit of the estate.  The evidence of Mitra, the Solicitor who was instrumental in bringing about the transactions,  is that the purpose or the reason for these transactions is for protecting the properties for the members of the family  and that the idea was that the properties may not be partitioned and to prevent any member of the Murarka family from selling away any share of the (1) (1856) 6 Moo. L.A.393. 267

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property  by  transfer  or mortgage.  The  witness  was  not cross-examined.   It   is  clear  therefore  that   by   the transaction  there was no dissipation of the property.   The transaction  was  only  for the purpose  of  preserving  the properties  for all the members after due  deliberations  by all  the  adult members.  In Bal Mukand v.  Kamla  Vati  and Others("),  the  Court  held  that  any  transaction  to  be regarded  as one which is of benefit to the family 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.   The Court  must be satisfied on 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.   The  property in question in the  case  referred  to consisted of a fractional share belonging to the family in a large  plot of land.  Earnest money was paid to  Karta,  but the  Karta  did not execute the sale  deed.   The  appellant instituted  a  suit for specific  performance.   The,  other members  who were brothers of the Karta and who were  adults 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.  On the  facts,  the Court  held  that  to sell such property  and  that  too  on advantageous  terms  and to invest the sale  proceeds  in  a profitable way could certainly be regarded as beneficial  to the  family.  These observations apply with equal  force  to the  facts of the present case.  We have no,  hesitation  in holding  that  the transaction was for the  benefit  of  the family  and  as such even if it was found that there  was  a joint family, the transaction would be binding on all of the coparceners.   In  this view, it is unnecessary  for  us  to consider  whether  the transaction could be  regarded  as  a family arrangement as was contended by Mr. Lal Narain Sinha. The transaction may not strictly be a family arrangement  as there  is  a transfer of properties from the family  to  the company  in  which all the 8 brothers  were  allotted  equal shares. We  will now refer to certain documents and conduct  of  the parties relied on by the learned counsel for the  contesting respondents   in   support  of  his  contention   that   the transactions  entered into under Ex.  L were not  considered as  having effected division in status.  After the  date  of the impugned document in 1932, the parties entered into  two transactions one on 6-10-1935 and another on 19-10-1935.  By the document dated 6-10-1935 Ex. 000040. the eight  brothers put  on record that their mother gifted and distributed  all the ornaments, jewellery and silver wares to and amongst all the  eight brothers and nothing now  remained  undistributed and the said property so gifted and distributed remained the property of each individual concerned.  By the document  Ex. 000039  dated 10th October, 1935 the eight brothers  put  on record  that  they  have  divided  and  distributed  equally amongst  themselves all the household  furniture,  fittings, electrical  equipments musical instruments, beddings,  photo cameras, cutleries, radios and fieldglasses which were  with them  and  their sons in Calcutta and it remained  only  the exclusive  property  of  each individual and  was  in  their possession.  It was submitted by Mr. Mridul, counsel for the respondents, (1) [1964] (6) S. C. R. 321. 268 that these documents would indicate that the separation  was effected for the first time in October, 1935 or at any  rate

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the  immovable properties were divided about the  time  when these  transactions  were  entered into.   It  is  a  common knowledge  that  usually a division of  the  movables  takes place  after  immovable properties are divided.   These  two documents instead of supporting the plea of the  respondents probabalise  the case of the appellants that the  separation took place before the date of these documents.  The  learned counsel for the respondent relied on two affidavits filed by the  members  of  the family to the effect  that  the  joint family  continued.   In  Ex.  1  dated  9th  December,  1936 Mohanlal Murarka stated in a petition for bringing on record the legal representatives for executing a decree obtained by Ramniranjandas  Murarka  that  Ramniranjandas  Murarka  (the deponent’s  grandfather)  during his life’-time and  at  the time  of  his death along with the applicants named  in  the petition  constituted a Hindu joint family governed  by  the Mitakshara School of Hindu Law.  This affidavit though filed before  the  institution  of the suit  cannot  be  taken  as proving the existence of the joint family after the death of Ramniranjandas   Murarka.   All  that  it  states  is   that Ramniranjandas Murarka during his life-time and at the  time of  his death along with the applicants was member of  joint family.   The  affidavit  does not throw  any  light  as  to whether  the  joint status  continued  after  Ramniranjandas died.  In Ex.  UU a verified petition filed for bringing  on record  legal representatives of Ramniranjandas Murarka  for executing  a decree stated that the petitioners  were  legal representatives  as  Ramniranjandas  Murarka  was  a   Hindu governed by Mitksbara School of Law.  It is averred that the joint  family  continued after the death  of  Ramniranjandas Murarka.   These two affidavits do not advance the  case  of the respondents any further.  Reference was made to evidence of  Radeylal  and  that  of  Ganariwale  who  spoke  to  the existence  of  the  joint  family.   In  the  face  of   the documentary  evidence  on record, the oral evidence  is  not entitled to any weight. Though the conclusions arrived at by us would dispose of the appeal, we would shortly refer to the submission of Shri Lal Narain Sinha that the present respondents have no status  to oppose  this appeal, the plaintiff having retired  from  the contest.  While this plea may be sound as regards Bimla  and Rahul  son  of Murarilal the case of Ratanlal  stands  on  a different footing.  Radheylal son of Ramniranjandas and  his son  Makhanlal father of R. 12 contended that  the  impugned transactions  were  valid.   The  legal  representatives  of Murarilal,  Bimla  and Rahul who came on the record  in  the appeal  before the Supreme Court cannot be allowed to put  a different  care from that of Murarilal.  This  objection  is not  available  against Ratanlal, respondent 20.   In  1946, three  years  after the date of his attaining  majority,  he filed  the  statement challenging the validity  of  impugned transaction.   It was submitted on behalf of the  appellants that Ratanlal cannot be permitted to challenge the  validity of the transactions as the plea was taken 3 years after  his attaining  maiority.  It was also contended that the  plain- tiff  representing  one of the 8 brothers alone  prayed  for allotment  of  1/8th  share and  the  challenge  as  regards alienation  of share of others cannot be sustained.   We  do not think we are called upon to decide 269 this  question, but we may observe that one of  the  reliefs asked for is for setting aside the alienation and  therefore the failure of one of the, branches to question the validity of  the  alienation  would not bar the right  of  the  other branch for the said relief.

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On  a consideration of the entire evidence placed before  us and the contentions of the parties, we hold that the  family of  Ramniranjandas Murarka became divided in  status  before 1932 and that in any even- a division in status was effected from  the date of the document Ex. L etc. in 1932, and  that even  if  there  was  a joint family  in  existence  as  the transactions  were for the benefit of the family, the  other coparceners  cannot challenge its validity.  In  the  result the  appeal is allowed and the decree of the trial court  is set  aside  so  far  as the  appellants,  Defendant  12  and Defendant  13,  are concerned.  Costs will be  paid  by  the contesting  respondents who are legal representatives of  R- 12, Bimla and Rahul, and R-20 and his three sons R-42, R-43, R-44. P.B.R. Appeal allowed. 270