According to the Punjab High Court, where the sale consideration is intended to be held in reserve for the contemplated marriage to be performed after the family member becomes old enough for having the marriage solemnised, the alienation may be upheld. Rulia v. Jagdish, AIR 1973 P&H 335. A debt incurred for such a purpose is not an Avyavaharika debt. Parasram v. Naraini Devi, AIR 1972 All. 356.
(ii) Benefit to the Estate:
Under the rule in Hanooman Persaud’s case, 6 MIA 393, another ground of justification for an alienation by the manager is ‘benefit’ to the estate. In Palaniappa v. Devasikamony, 40 Mad. 709 (PC), the Privy Council pointed out that benefit to the estate is not susceptible or precise definition.
They pointed out; “The preservation of the estate from extinction, the defence against hostile litigation affecting it, the protection of it or portions thereof from injury or deterioration by inundation, these and such like things would obviously be benefits”.
From the benefits thus enumerated by the Privy Council it was argued in some cases that benefit should necessarily be of a defensive character. This argument, however, has not prevailed. In Jagat Narain v. Mathura Das, AIR 1950 All 969 (FB), the Manager found it inconvenient to retain certain property as it was in a remote place and could not be managed.
So he sold that property and purchased other property more easily accessible for management. It was held that though this benefit was not of a defensive character/the transaction was advantageous to the family and could be upheld.
This decision was approved by the Supreme Court in Balmukand v. Kamlawati, AIR 1964 SC 1385. In this case plaintiff was owner of a 17/20th share while a Hindu Joint Family owned the remaining 3/20th share. The plaintiff persuaded the Manger to enter into a contract for selling the 3/20th share to him. There were adult coparceners who were against this transaction.
The plaintiff brought the suit for specific performance. The Supreme Court held that while ‘benefit’ need not be defensive in character, in this case such benefit could not be postulated at all. Mudholkar, J., further pointed out that the dissent of the other adult coparceners is a strong indication that the transaction is not for the benefit of the family. The suit for specific performance was accordingly dismissed.
The benefit from the Karta’s alienation need not be merely defensive in character. Protecting the property from sale for nonpayment of taxes, for instance, is a defensive purpose. Selling the joint family property for purchasing other property is not a defensive purpose. Still if the Karta has acted prudently his alienation would be valid. Prasad v. Subbiah, AIR 1973 AP 214.
In Murarka Properties Pvt. Ltd. v. Beharilal, AIR 1978 SC 300: (1978) 1 SCC 109, the coparceners transferred the ancestral properties to a company consisting of themselves. It was held that this was for the benefit of the family as it would improve the management of the property.
The transaction was held to be binding upon the coparcener’s sons who had challenged it. The mortgage of a house by the manager for utilising the money to improve the building was held to be binding on the coparceners as the enhancement of the rental value constituted a legal benefit. Siva Kumari v. Indian Overseas Bank, AIR 1978 AP 37.
A gift of coparcenary property may be made by the Managing Member within reasonable limits for pious purpose. Thus on the occasion of the father’s funeral a gift of a small item of immovable property may be made to a temple. Ramalinga v. Sivachidambara, 42 Mad. 440.
The Supreme Court has held in Guramma v. Mallappa, AIR 1964 SC 510: 1964 (4) SCR 497, that a father may make a gift of a reasonable extent of family property to his daughter.
Joint Family Property:
In Kanna Gounder v. Arjuna Gounder, AIR 2003 Mad. 157, the court held the prohibition against making the gifts by coparcener of his undivided interests in the coparcenery property continues even after the enactment of the Hindu Succession Act. Where a coparcener made a gift from the joint family property without obtaining the consent of the other coparceners, the gift becomes invalid.
In Palliyatmariyomma v. Palliyatkidave, AIR 2005 Ker. 170, Gift of the property by Karnavathi in favour of her children was held to be legal. The court held that the tarvad property managed by the senior most family member acting as karnavathi shall not be treated as herself acquired property. As such transfer by way of Gift is not valid.