Back
1933 Supreme(SC) 79
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD MACMILLAN, SIR JOHN WALLIS, AND SIR GEORGE LOWNDES.
JAGANNATH - Appellant
Versus
SHRI NATH - Respondents
On appeal from the High Court at Allahabad.
Decided On : Dec. 18. 1933.
Solicitors for appellants: T. L. Wilson & Co.
Solicitors for respondents Nos. 1 to 11: Hy. S. L. Polak & Co.
A sale of joint family property is valid if the purchaser makes reasonable inquiries and acts in good faith. A suit to set aside such a sale may be deemed collusive if plaintiffs deliberately withhold testimony from key family members with direct knowledge of the transaction.
Headnote:(A) Joint Family Property - Alienation for legal necessity - Onus of proof on the purchaser to establish that the alienation was valid - If the purchaser acts in good faith and makes reasonable inquiries as to the necessity for the sale, the transaction is binding on the joint family, even if a portion of the consideration is later found to represent debts not binding upon all members.
(B) Collusive Suits - Withholding of evidence - Where the eldest members of a joint family, who witnessed the sale deed and were involved in the borrowings, are not called as witnesses and are instead impleaded as defendants, such conduct suggests a collusive suit and provides corroboration that the sale was effected for necessary family purposes.
Facts of the case:
A sale deed of joint family property was executed by the head of the family for a specific sum to discharge debts and provide for household necessities. The sale was witnessed by the head's son and grandson. Nearly twelve years later, other family members sued to set aside the sale, alleging lack of legal necessity and fraud. The lower court dismissed the suit, finding legal necessity and sufficient inquiry by the purchaser. However, the High Court reversed this, finding that a portion of the consideration was used for debts of members other than the vendor and that the purchaser had not made adequate inquiries.
Findings of Court:
The court found that the purchaser had taken precautions by stipulating that he would personally ensure the application of the consideration to the creditors and retain the vouchers. The fact that the eldest members of the family, who were the primary borrowers and witnesses to the deed, did not testify in support of the plaintiffs, despite their direct knowledge, indicated that the suit was collusive.
Issues: Whether the sale of joint family property was validly executed for legal necessity and whether the purchaser made sufficient inquiries; and whether the failure of key family members to provide evidence rendered the suit collusive.
Ratio Decidendi: The court held that the conduct of the eldest family members—witnessing the deed, borrowing the funds, and refusing to testify—corroborated the plea of legal necessity. A suit is likely collusive when those with the most knowledge of the facts are deliberately withheld from the witness box to avoid disclosing the true nature of the transaction.
Result: Appeal allowed; decree of the High Court reversed and decree of the Subordinate Judge restored.
Legal Category Hierarchy
-
family law
-
joint family property
- alienation
- legal necessity
-
joint family property
-
practice and procedure
-
evidence
- collusion
- limitation
-
evidence
Judgement
Appeal (No. 31 of 1932) from a decree of the High Court (November 18, 1929) reversing a decree of the Subordinate Judge of Allahabad (December 4, 1924).
On September 12, 1922, respondents Nos. 1 to 11, sons and grandsons of Mathura Prasad, who died in 1919, sued to set aside a sale deed of property of the joint family for Rs.6000, executed by Mathura Prasad on September 13, 1910. The defendants were the purchaser and his sons (appellants), and a son and a grandson (a son of a deceased son) of Mathura Prasad (respondents Nos. 12 and 13) who had witnessed the deed.
The facts appear from the judgment of the Judicial Committee.
Both Courts in India found that the deed had not been obtained by fraud or undue influence, also that Rs.6000 was a fair price. The Subordinate Judge dismissed the suit; he found that there was legal necessity to borrow the Rs.6000, and that defendant No. 1 had made sufficient inquiries. Upon appeal to the High Court the learned judges (Sulaiman and , Kendall JJ.) held that Rs.2600 out of the Rs.6000 represented , debts of members of the family other than Mathura Prasad, and that the discharge of them was not a legal necessity of the family ; they were not satisfied that defendant No. 1 had made sufficient inquiries on that point. They said that it was not disputed that before the plaintiffs could obtain possession they must make good to the vendor that part of the consideration which was found to be for necessity. The learned judges made a decree for possession on payment of Rs.3346, which included Rs.65, a proportionate amount of the expenses of executing and registering the deed.
On an application to the High Court for a certificate that the case was a fit one for appeal, the question of valuation was referred to the Subordinate Judge, who reported that at the date of the suit the value of the property was Rs. 11,500 and that on February 17, 1930, it was worth Rs.12,500.
1933. Nov. 16, 17, 19, 23. Wallach and W. Dutt for the appellants. The Subordinate Judge rightly dismissed the suit. The evidence shows that the purchaser acted in good faith and after proper inquiries as to the necessity for the sale. The whole Rs.6000 was required for family necessity; but even if part of it did not represent debts binding upon the family, the purchaser having made proper inquiries was entitled to have the suit dismissed Krishn Das v. Nathu Ram (( 1926) L. R. 54 I. A. 79.) ; Niamat Rai v. Din Dayal (Ibid. 211.); Gauri Shankar v. Jiwan Singh . (( 1927) 32 C. W. N. 257
(P. C).) Moreover the suit was instituted twelve years less one day after the date of the deed, and the evidence of members of the family who would have knowledge of the facts was withheld from the Court; the inference is that the suit was collusive Masit Ullah v. Damodar Prasad (( 1926) L. R. 53 I.
A. 204.) ; Ram Sunder Lal v. Lachhmi Narain . (( 1929) I. L. R. 51 A. 430 (P. C).) Parikh for the respondents Nos. 1 to 11. It being established that the family was joint the onus was upon the purchaser to prove that the alienation was valid. The evidence showed that part of the Rs.6000 represented debts which the plaintiffs were under no pious obligation to discharge. It was therefore not established that there was any legal necessity to sell the entire interest of the family in the property. It was not proved that the purchaser made adequate inquiry ; the evidence shows inquiry only as to the mortgage. The fact that the junior members were charging the senior members with being parties to an improper alienation accounts for the delay in bringing the suit, and for the senior members not being called. Wallach replied.
Dec. 18. The judgment of their Lordships was delivered by
SIR JOHN WALLIS. This is a suit of the usual character to set aside a sale of joint family property by one Mathura Prasad, from whom the plaintiffs and the fourth and fifth defendants are descended, as shown in the following pedigree —
Mathura Prasad (die d 1918).
|
| | |
Basd
