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In this blogpost, Sudhi Ranjan Bagri, Student, National Law Institute University, Bhopal, writes about different ways in which a property can be alienated by Karta under the Hindu Law in india

Introduction

The ownership in order to be complete needs the alienation of the property as a right. The alienation hence is one of the basic incidents of ownership. A coparcenary is a subset of Joint Family, and hence, all the coparceners have an equal right over the property among them. So no single coparcener can acquire the power to alienate the whole joint family property, unless and until the co-owners authorizes him to do so.

The position of Karta in a Joint Family is different from the other members of the family. He is entrusted with the management of the joint family property. But this doesn’t mean that he owns the property as a whole, but he also has an interest in it just like any other coparcener. With regards to the alienation aspect, if all the members consent to sell the property then such a transfer would absolutely be valid and will be binding on all the members, but if one of the members withholds his consent to this transfer then ordinarily the property cannot be transferred. This can however lead to a situation where such transfer is important for the benefit of the members but due to the absence of consent, the alienation cannot take place and hence the failure on the part of the Karta regarding maintenance of the members of the family.

So to avoid such a situation where actually because of the absence of consent of one of the coparceners, the remaining members might face difficult situations, the ancient texts regarding the Hindus have mentioned some situations where the alienation of the property can take place even without the consent of the coparceners.

Situation in Dharmashastras

In Dharmashastra there are 3 ways to alienate the property:

Apatkale

Kutumbarthe

Dharmarthe

Apatkale: It refers to a situation where the family as a whole or one of its members faces an emergency, or with respect to its property. This nature of this transaction is meant for averting the danger, or an attempt to avoid the calamity for which money has to be raised. When it refers to the property, it indicates the transfer as being necessary for its protection, or conservation, and for which immediate action is to be taken.

This is not a mere profitable transaction, but a transfer which if not effected may result in the loss to the family, to this property, or any other property owned by the family.

Kutumbarthe: Kutumbarthe means “benefit of Kutumb,” kutumb meaning the family members. It, therefore,  allowed as the proceeds of such transfer are utilized for the sustenance of the family members, such as for providing for their needs of food, clothing, shelter, education, medical expenses etc.

Dharmarthe :The term Dharmarthe means “for pious purposes” which is for the performance of religious and charitable purposes.

With the evolution of time and due to the colonial influence and their attempt to codify the Hindu laws, these terms were translated as a Legal necessity, Benefit of Estate, Religious and Charitable Purposes, respectively.

Legal Necessity

Legal necessity means any necessity which can be sustained by law or is justified by law. This concept has emerged as a combination of the Apatkale and Kutumbarthe. With respect to the joint family, it means a necessity with respect to its members and also with respect to its property, which can be justified in law.

The term “legal necessity” itself explains enough about the concept. The term “legal” here signifies its justification in law, “necessity” signifies the existence of a situation, need or a purpose that requires money and that the family does not have that kind of money or alternative resources, with which that need can be satisfied.

Conditions which need to be fulfilled for validating a transaction under legal necessity are:-

  1. Existence of need or purpose, i.e. a situation with respect to family members or its property which requires money,
  2. Such requirement is for a lawful purpose, i.e. it must not be for an immoral, illegal purpose.
  3. The family does not possess monetary or alternative resource which the requirement can be met with, and
  4. The course of action taken by the Karta is such as an ordinary prudent person will take with respect to his property.

However while such alienation, the consideration for the sale of coparcenary property must not be inadequate.

In Dev Kishan v Ram Kishan, the Karta affected a mortgage, a sub-mortgage and a sale of two houses belonging to the joint family worth around 8000 to 9000, for a consideration of Rs 400 to Rs 900, which according to him were to be utilized for the marriage of his 3 minor children. The court invalidated the transaction and stated that:

  • The transaction is void as it is opposed to the public policy, i.e. child marriage,
  • The members of the family had alternative incomes. And hence, no mortgage was needed,
  • The transfer of the property was grossly undervalued as the transfer should have been made inadequate consideration.

Benefit of Estate

This term has evolved with time and is not capable of precise definition. But if by the transfer of joint family property or by its sale proceeds, their property or any other family estate is benefited, the transaction would be for the benefit of the estate.

‘Benefit’ means an advantage, betterment or to profit, ‘Estate’ means landed property. Since here the expression is used in connection with joint family property, ‘estate’ would mean joint family landed property.

The term ‘benefit of estate’ to begin with covered cases purely of defensive nature, such as to protect it from a threatened danger or destruction, but gradually also included alienations that an ordinary prudent man would view as appropriate for the given set of situations.

Defensive Transaction

This type of transaction has been illustrated in the case of Hanooman Prasad Pandey v Mussammat Babooee. In this case, Hanooman was in a business of providing loans. He entered into a loan contract with Raja Singh. After taking a loan, he died leaving behind a minor son Lal Singh and his wife, Mussammat. There was an order of Malgoozaree which stated that there can be confiscation of property, so the wife entered into a transaction of the mortgage.

On attaining majority, Lal singh challenged the transaction on the grounds that:

  1. Mussammat was a pardanashee woman and, therefore, the transaction was a vitiated one.
  2. The transaction was with specific reference to ancestral property, and hence, she cannot deal with that kind of property and hence the transaction is void, and the appellant must return the property.

The court for the first time used the term ‘benefit of estate’ but did not explain it properly. But it laid down certain facts:

  1. Mussammat was de facto guardian whose guardianship with respect to the property matters are not in dispute, and the revenue is proof of that.
  2. The transaction entered into was for avoiding the danger which was impending on the shape of malgoozaree, which could have led to the confiscation of property.
  3. Mussammat was very much capable of entering into a contract for the reason that she didn’t enter into the unequal

Hence, the court concluded that the transaction entered into was validated in law as it was in the nature of averting a danger to the ancestral property.

Prudent/Imprudent Transactions

This type of transactions has been discussed by the court in the case of Balmukund v Kamlavati. In this case, a Hindu joint family owned a small portion of a big plot owned by the alienee, who approached the Karta for the purchase of the joint family land, and offered him a higher consideration than the market value. Initially accepting this offer, the Karta accepted the earnest money, but he later failed to execute the sale deed. The alienee, therefore, filed a suit for specific performance of the contract, but the other coparceners objected to it on the grounds of invalidity.

Court held that the doctrine of ‘benefit of estate’ emerged from the doctrine of ‘defensive transaction.’ However such transaction also requires a minimum degree of prudence on the part of the Karta. The idea of ‘benefit of estate’ doesn’t fit in this case as the family was in affluent circumstances and that there was no evidence to show that the Karta was finding it difficult to manage this property.

The courts have laid down some guidelines so as to check that validity of transaction under this doctrine:

  1. When the alienation is for defensive or protective purpose.
  2. When it brings any sort of advantage or improvement to the family estate.
  3. Where the Karta exercises his prudence suitable to family estate subject to:
  4. The degree of prudence is higher than the level expected in the case of exclusive property.
  5. How the sale proceeds are used; because it has to be used for the benefit of the family property.

Indispensable Duties

This term implies the performance of those acts which are religious, pious or charitable. Examples of indispensable duties are the obsequies of father, marriages, grihapravesham, it may also include many rituals and religious duties like sradha, upanayana, and performance of necessary Sanskara.

There is a difference in the powers of Karta while alienating properties for indispensable duties and gifts for charitable purposes. While discharging indispensable duties, the Karta has unlimited powers in the sense that he can alienate the entire property for that purpose, whereas in the case of gifts for charitable purposes, only a small portion of the property can be alienated.

The obligation to get the family members married would come under the purview of both legal necessity as well as a pious obligation as it is considered as the most essential sanskara.

Conclusion

The position of Karta is such which has a duty to maintain all the members and to take care of their needs and must act for their welfare. With such a duty, he needs to be entitled to some rights by which he can fulfill the duties he is expected to. The right to alienate is one such right given to him by the law so as to fulfill the duties of his office. However, there are certain loopholes which are present and needs to overcome by passing the requisite legislations.

The burden of proof of the alienee to prove that he took sufficient care to ascertain whether there was actual need should be lifted, instead in cases of invalid alienation it should be demanded of the transferor to prove that there was an actual condition which demanded instant redress. This should be so because the alienee being an outsider is not in a favorable position to ascertain it and such an obligation imposed on these transactions would make lenders unwilling to deal in joint property which would in turn adversely affect the rights of joint family members.

Another such loophole is the law according to which the purchaser loses all his interest in the joint property along with all the chance of getting back the purchasing amount is grossly unjust. It should be noted that the courts in their haste to safeguard the interest of the non-alienating coparceners, forget the interest of the innocent purchaser who has made a bona fide deal. Hence sufficient recourses should be made for this.

The concept of alienation has come a long journey, and the courts have also played a very important role in its development still the flaws are present in the present situation, and they also need to overcome, and hence to make much favorable laws keeping in mind the interests of all the individuals concerned.

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