Background:

In the scheme of the Hindu Succession Act, 1956, properties classified as ancestral or joint family property ("coparcenary property") are subject to the shares of the members of the family ("coparceners"). The head of the family known as the "Karta" can alienate the whole of coparcenary property either with the consent of all the coparceners or for the purposes of meeting legal necessities. However such alienation for legal necessities can potentially be called into question by family members claiming a share in the same by questioning the very existence of "Legal necessities".

Between the judgements in the case of Chacko Mathew v. Ayyappan Kuty1in which the court held that alienation for legal necessities being voidable and not void, it is for the coparceners to either affirm or repudiate the same and the judgement in the case of Smt. Rani and Anr. V. Smt. Santa Bala Debnath & Ors2., in which the burden of proving legal necessity was placed on the alienee, there is considerable ambiguity on the precise burden of the alienee of coparcenary properties sold for family necessities. In this article, we seek to reconcile and clarify the precise burden of the alienee of coparcenary properties to whom the coparcenary property is alienated to meet legal necessities in order to enable better title verification, assess the precise nature of the legal risks involved and ultimately manage litigations better.

Legal Necessity and Its Role in Effective Title Transfer

The existence of legal necessity to justify the alienation of coparcenary property is a subjective function of the facts involved in each case and transaction3. Across judgements which have held obligations for payment of government revenue to meeting expenses of marriage and funerals as legitimate "legal necessities"4, it is possible to illustrate some principles based on which legal necessity is determined, viz.,

  1. The nature of the necessity must be clear and defined.
  2. The necessity itself not be illegal or immoral. For example, sale of coparcenary property for conducting the marriage of a minor daughter, an object which is illegal, cannot qualify as legal necessity.
  3. There must be a nexus between the alienation of the coparcenary property and the slated necessity.
  4. The necessity must arise out of a prudent consideration of the need to preserve or advance the overall interests and value of the estate and the family or meet an obligation, which, if unmet, could bring losses to the estate or the family.
  5. The legal necessity does not arise on account of mismanagement by the karta

The Alienee's Burden

As the law sanctifies the alienation of coparcenary property by a karta only if there is existence of legal necessity for the same, the very transfer of title and ownership to the alienee remains suspect pending the answer to the question of legal necessity. Traditionally, the burden is on the alienee to demonstrate either the existence or the legal necessity or that he or she undertook an honest inquiry into the existence of legal necessity before purchasing the coparcenary property at the hands of the karta5.

However, as held in the case of Pandurang Mahadeo Kavade v. Annaji Balwant Bokil6, the alienee is discharged of the burden to prove existence of legal necessity, if the coparcener plaintiff fails to allege absence of legal necessity and no issue is framed in respect of the same during the trial. Furthermore, where the basis for assailing the alienation is on grounds of absence of legal necessity, the transaction is voidable and not void7. Since voidability implies that the alienation is not presumptively invalid, a plaintiff coparcener alleging absence of legal necessity will necessarily have to seek the relief of cancellation of the alienation under Section 31 of the Specific Relief Act, 19638 .

Once the voidability of the transaction involving sale of coparcenary property is established, it also impacts the valuation of the lawsuit, the court fee payable thereon and also the question of whether the suit is time barred, all of which are legitimate preliminary questions of law that can result in summary rejection of the plaint. With reference to the question of limitation especially, in cases where the alienation is registered, Section 17 of the Indian Registration Act, 1908 presumes that the coparceners, especially adults have notice thereof from the date of registration itself. In such a scenario, the suit for challenging the sale on grounds of absence of legal necessity must either be brought within

  1. 3 (three) years from the date of the alienation of the property in case where the coparceners/plaintiffs are adults9 or
  2. 3 (three) years from the date on which, the coparcener/plaintiffs turn the age of majority, in case they were minors at the time of alienation10
  3. 12 (twelve) years from the date on which alienee assumes possession of the coparcenary property, if the suit is brought by a hindu governed by mitakshara law to set aside father's alienation of such coparcenary property11.

Practice Notes and Conclusions

Analysis of the law around legal necessities in the case of coparcenary properties reveals several learnings relevant for real estate transactions as well as litigations involving questions of legal necessity.

Wherever a real estate transaction contemplates the alienation of coparcenary property at the hands of a karta as defined under the Hindu Succession Act, 1956, it is important and recommended that,

  1. The alienee secures a declaration from the alienor along with supporting details and documents regarding the existence of the necessity for alienation of the property, nature thereof and verify if such necessity is legal in the eye of law
  2. The alienor and the alienee exchange correspondences in writing to demonstrate that a reasonable inquiry was made as regards the existence of the legal necessity.
  3. Where the coparceners are adults, ensure that they ratify the terms of the alienation by attesting the instrument of alienation as consenting witnesses. If any of the coparceners are minors, then a declaration from the remaining adult coparceners that even if such minor were to successfully assail the alienation of the coparcenary property, the remaining coparceners will not be allowed to reopen the alienation in respect of their shares and that they will render harmless the alienee by confirming the legality of the transactions.
  4. The alienee secures indemnities from the alienor to the effect that should the question of legal necessity be decided against the alienee, the alienor will indemnify the alienee against all consequential losses.

As far as real estate disputes involving the adjudication of the question of legal necessity, plaintiffs in such suits have to carefully frame their pleadings and strategy to assist the court to arrive at a proper verdict. It is especially vital that the pleadings are properly framed and the court is appropriately assisted to incorporate the following

  1. In order to fix the burden of proving legal necessity on the alienee,
    1. A clear averment should be made in the plaint alleging that the transaction is illegal on account of there being no legal necessity.
    2. Cause an issue to be framed on the question of existence of legal necessity before the commencement of trial.
  2. A relief of declaration regarding the non binding nature of the alienation or relief of cancellation thereof is sought in the plaint.
  3. The suit, as far as possible is brought within 3 (three) years of the date of registration of the alienation transaction and where it is a case of a hindu governed by mitakshara law, the suit is filed within 12 (twelve) years from the date on which alienee has taken posession following the sale by the father of the plaintiff.

Footnotes

1. AIR 1962 Ker 164 (FB)

2. 1970 (3) SCC 722

3.Mukesh Kumar v. Harbans Waraiah AIR 2000 SC 172

4. Gharib_ulla v. Khalak Singh (1903) 25 ALL 407 and Sundara Bai v. Shivnarayaa, 1908 32 Bom 81

5. Kesar Singh V. Santokh Singh, (1936) 17 LAH.

6. AIR 1971 SC 2228

7. Raghubanchmani v. Ambica Prasad, AIR 1971 SC 776

8 . See paragraph 18 of Prem Singh v. Birbal (2006) 5 SCC 353

9. See Article 59 of the Limitation Act, 1961

10.10 See Article 60 of the Limitation Act, 1961

11. See Article 109 of the Limitation Act, 1961

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.