SUPREME COURT UPHOLDS RIGHT OF KARTA OF JOINT HINDU FAMILY TO SELL PROPERTY IN CASE OF LEGAL NECESSITY

The Hon’ble #SupremeCourt in the matter of Beereddy Dasrathrami Reddy versus V.Manjunath and Another arising out of Special Leave Petition (Civil No. 13853 of 2021) passed a Judgment dated 13-12-2021 and dismissed the impugned #Judgment dated 06-03-2021 of the Hon’ble High Court of Karnataka that held that the Agreement to Sell dated 08-12-2006 (#AgreementtoSell) executed by the Respondent 2, K. Veluswamy is unenforceable, as the #SuitProperty belongs to the #JointHinduFamily and, therefore, it could not have been executed without the #signatures of the Respondent 1, V. Manjunath, son of Respondent 1.

The Respondent 2, Mr. K. Veluswamy executed the Agreement to Sell of the Suit Property on 08-12-2006 as a Karta of the Joint Hindu Family and received Rs. 4 Lakhs advance from the Appellant, Mr. Beereddy Dasathrami Reddy. The Appellant filed a Civil Suit for Specific Performance of the Agreement to Sell before the Senior Civil Judge, Hiriyur on 26-11-2007. The Respondent 1 argued that the Agreement was a camouflage for a loan agreement as Respondent 2 was in need of money for construction of a farm house. The Civil Court passed a Judgment dated 22-01-2013 and rejected the Respondent 1’s argument and held that Respondent 2 being Karta of the Joint Hindu Family, he was entitled to execute the Agreement to Sell and thereby, decreed the Suit.

Aggrieved, Respondent 1 filed a First Appeal before the High Court of Karnataka at Bengaluru and challenged the Civil Court Judgment dated 22-01-2013. The High Court vide Judgment dated 06-03-2021 and held that the Agreement to Sell is unenforceable, as the Suit Property belongs to the Joint Hindu Family and, therefore, it could not have been executed without the signatures of the Respondent 1 and Respondent 2’s Wife, Mrs. V. Manimegala. Further, the legal necessity to sell the Joint Family Property was not established. Hence, the Appeal was allowed.

Aggrieved, the Appellant filed an Appeal before the Supreme Court. The Apex Court passed a Judgment dated 13-12-2021 and made the following observations:

1) That the Respondent No.2 being the Karta of the Joint Hindu Family, was entitled to execute the Agreement to Sell even though the family members had not agreed to sell the Joint Family Property. The Karta of the Joint Family has all rights to sell and alienate the Property.

2) Even from the written statements of the Respondent, it is shown that the family was in need of the funds which shows the legal necessity to sell the Joint Hindu Family Property.

3) The Karta enjoys wide discretion in his decision over existence of legal necessity and such necessity must be fulfilled. The exercise of powers, given the rights of the Karta, on fulfilling the requirement of legal necessity is binding on other coparceners.

Thus, the Supreme Court directed the Appellant to deposit the balance sale consideration of Rs. 25 Lakhs with the Civil Court, to be later handed over to the Respondent No. 2. Thereafter, physical possession of the Property would be handed over by the Respondents to the Appellant along with the execution of the Sale Deed. Hence, the Appeal was allowed.

Rakhi

Legal Associate

The Indian Lawyer