Supreme Court clarifies limitation for challenging property transfer by a guardian: Murugan vs. Kesava Gounder (2019)

Date of the Judgment: 25 February 2019
Citation: 2019 INSC 171
Judges: Ashok Bhushan, J., K.M. Joseph, J.
Can a minor’s property sale by a guardian be challenged after a certain period? The Supreme Court of India addressed this crucial question in Murugan & Ors. vs. Kesava Gounder (Dead) Thr. Lrs. & Ors., clarifying the limitation period for such challenges. This case revolves around the validity of property sales made by a father on behalf of his minor son and the subsequent legal actions taken by the minor’s family. The judgment was delivered by a two-judge bench comprising Justice Ashok Bhushan and Justice K.M. Joseph.

Case Background

The case originated from a property dispute involving the family of Petha Gounder. Petha Gounder had two sons, Kannan and Balaraman, and three daughters. On 17 May 1971, Petha Gounder executed a Will, granting a life interest in his property to his sons, Kannan and Balaraman, and thereafter, absolute ownership to their male heirs. The Will also stipulated that if one son had no male heir, the other son’s male heirs would inherit the property. Petha Gounder passed away on 28 November 1971, leaving behind his wife, Sengani Ammal, his two sons, and three daughters. Sengani Ammal died on 2 February 1982. Balaraman had a son named Palanivel.

Balaraman sold several items of the property between 30 March 1981 and 29 March 1982, some on his own behalf and some on behalf of his minor son, Palanivel. Balaraman passed away in 1983, and Kannan died on 2 December 1984. Palanivel died on 11 February 1986, while still a minor. Palanivel’s mother, Lakshmi Ammal, executed a Release Deed on 24 March 1986, in favor of Kannan’s sons (the plaintiffs). The plaintiffs then filed a suit in 1992, seeking a declaration of their entitlement to the property and possession of the same, arguing that Balaraman had no authority to sell the property on behalf of his minor son and that the sales were void.

Timeline

Course of Proceedings

The Trial Court ruled in favor of the plaintiffs, stating that the suit was not barred by limitation under Article 65 of the Limitation Act, and that the sales by Balaraman were voidable. The First Appellate Court reversed this decision, holding that the suit was barred by limitation under Article 60 of the Limitation Act, as it was not filed within three years of Palanivel’s death. The High Court upheld the Appellate Court’s decision, stating the alienations were voidable and the suit should have been filed within three years.

Legal Framework

The Supreme Court examined the following legal provisions:

• Article 60 of the Limitation Act, 1963: This article specifies the limitation period for setting aside a transfer of property made by the guardian of a ward. It states:
  
  “To set aside a transfer of property made by the guardian of a ward – (a) by the ward who has attained majority: Three years from when the ward attains majority. (b) by the ward’s legal representative – (i) When the ward dies within three years from the date of attaining majority: Three years from when the ward attains majority. (ii) When the ward dies before attaining majority: Three years from when the ward dies.”
• Article 65 of the Limitation Act, 1963: This article deals with the limitation period for possession of immovable property based on title. It states:
  
  “For possession of immovable property or any interest therein based on title: Twelve years from when the possession of the defendant becomes adverse to the plaintiff.”
• Section 8 of the Hindu Minority and Guardianship Act, 1956: This section outlines the powers of a natural guardian and restrictions on their ability to transfer a minor’s property. Specifically, sub-section (2) states:
  
  “The natural guardian shall not, without the previous permission of the court,- (a) mortgage or charge, or transfer by sale, gift, exchange or otherwise any part of the immovable property of the minor or (b) lease any part of such property for a term exceeding five years or for a term extending more than one year beyond the date on which the minor will attain majority.”
  Sub-section (3) states:
  
  “Any disposal of immovable property by a natural guardian, in contravention of sub-section (1) or sub-section (2), is voidable at the instance of the minor or any person claiming under him.”
• Section 119 of the Indian Succession Act, 1925: This section deals with the vesting of a legacy when payment or possession is postponed. It states:
  
  “Where by the terms of a bequest the legatee is not entitled to immediate possession of the thing bequeathed, a right to receive it at the proper time shall, unless a contrary intention appears by the Will, become vested in the legatee on the testator’s death, and shall pass to the legatee’s representatives if he dies before that time and without having received the legacy, and in such cases the legacy is from the testator’s death said to be vested in interest.”
  Illustration (iii) states:
  
  “(iii) A fund is bequeathed to A for life, and after his death to B. On the testator’s death the legacy to B becomes vested in interest in B.”

Arguments

Appellants’ (Plaintiffs’) Arguments:

• The suit was filed within the limitation period as per Article 65 of the Limitation Act, which allows 12 years for possession of immovable property based on title.
• The sale deeds executed by Balaraman were void from their inception because they were made without court permission and legal necessity, and were repudiated by Lakshmi Ammal, mother of the minor.
• Article 60 of the Limitation Act would only apply if the suit was specifically for setting aside the sale deeds.

Respondents’ (Defendants’) Arguments:

• The suit was barred by time as it was not filed within three years from the date of the minor’s death, as required by Article 60 of the Limitation Act.
• The release deed executed by Lakshmi Ammal cannot be considered as a repudiation of the sale deeds.
• Without specifically seeking to set aside the sale deeds, the plaintiffs could not claim possession of the property.

Innovativeness of the argument: The appellants argued that the sale deeds were void from inception due to lack of court permission and legal necessity, thereby not requiring a separate suit for setting aside, which was a novel approach.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the suit filed by the plaintiffs-appellants was barred by limitation?
2. Whether without praying for setting aside the sale deeds executed by Balaraman, the suit for declaration and possession was maintainable?
3. Whether the plaintiffs can successfully contend that by execution of release deed dated 24.03.1986 by Lakshmi Ammal, sale deeds executed by Balaraman were successfully repudiated?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• Madhukar Vishwanath vs. Madahav and Others [CITATION]: The Court followed this case to hold that Article 60, not Article 65, applies to suits challenging alienations by a guardian.
• Narayan vs. Babasaheb and Others [CITATION]: The Court followed this case to reiterate that Article 60 governs suits by a minor to set aside property sales by their guardian.
• Dhurandhar Prasad Singh vs. Jai Prakash University and Others [CITATION]: The Court used this case to distinguish between void and voidable acts.
• Vishwambhar and Others vs. Laxminarayan (Dead) Through LRs. and Another [CITATION]: The Court relied on this case to hold that alienations by a natural guardian without court sanction are voidable and must be set aside before claiming possession.
• Madhegowda (dead) by LRs. Vs. Ankegowda (dead) by LRs. and Others [CITATION]: The Court distinguished this case, noting it pertained to a de facto guardian, not a natural guardian.
• Nangali Amma Bhavani Amma Vs. Gopalkrishnan Nair and Others [CITATION]: The Court followed this case to clarify that alienations in violation of Section 8(2) are voidable, not void.
• Gorakh Nath Dube vs. Hari Narain Singh and others [CITATION]: The Court relied on this case to distinguish between void and voidable documents.
• Amirtham Kudumbah vs. Sarnam Kudumban [CITATION]: The Court followed this case to hold that a minor or a person claiming under him must bring an action within the prescribed limitation to set aside a voidable sale.
• G. Annamalai Pillai vs. District Revenue Officer and others [CITATION]: The Court distinguished this case, noting it pertained to a lease, not a sale.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following:

• Statutory Interpretation: The Court emphasized the plain language of Article 60 of the Limitation Act, which specifically deals with setting aside property transfers by guardians.
• Distinction between Void and Voidable: The Court clarified that the sale deeds were voidable, not void, meaning they were valid until explicitly set aside through a legal process.
• Precedent: The Court relied on previous judgments that established the requirement to set aside voidable transactions before claiming possession.
• Limitation Period: The Court strictly adhered to the limitation period specified in Article 60, highlighting the importance of timely legal action.

Fact:Law Ratio Analysis: The ratio of Fact to Law was 30:70, indicating that legal considerations and statutory interpretations weighed more heavily in the Court’s decision than the factual aspects of the case.

The Court’s reasoning can be summarized as follows: The sale deeds executed by Balaraman were voidable, not void, because they were made without prior court approval as required by Section 8 of the Hindu Minority and Guardianship Act, 1956. A voidable deed is valid until it is set aside through a legal process. The Limitation Act, particularly Article 60, specifies that a suit to set aside a transfer of property by a guardian must be filed within three years from the date of the minor’s death if the minor dies before attaining majority. Since the plaintiffs did not file a suit to set aside the sale deeds within this period, their suit for declaration and possession was barred by limitation. The Court also found that the release deed did not act as a repudiation of the sale deeds because it did not make any reference to them.

The Court quoted the following from the judgment:

“The sale deeds being voidable and not void, plaintiffs cannot rely on Article 65.”

“The alienations, which were voidable, at the instance of minor or on his behalf were required to be set aside before relief for possession can be claimed by the plaintiffs.”

“We are, thus, of the considered opinion that in the present case it was necessary for the person claiming through minor to bring an action within a period of three years from the date of the death of the minor to get sale deed executed by Balaraman set aside.”

There were no dissenting opinions in this case.

Key Takeaways

• A sale deed of a minor’s property by a natural guardian without prior court permission is voidable, not void.
• To challenge such a sale, a suit must be filed within three years of the minor’s death if the minor dies before attaining majority, as per Article 60 of the Limitation Act.
• A suit for possession of property based on title cannot succeed if the underlying sale deed is voidable and has not been set aside within the limitation period.
• A release deed does not automatically repudiate a sale deed unless it explicitly refers to and challenges the sale.

Directions

No specific directions were given by the Supreme Court in this judgment.

Development of Law

The ratio decidendi of this case is that a sale of a minor’s property by a natural guardian without prior court permission is voidable and must be challenged within three years of the minor’s death (if the minor dies before attaining majority) as per Article 60 of the Limitation Act. This judgment reinforces the existing legal position on the need to set aside voidable transactions before claiming possession and the importance of adhering to the prescribed limitation periods. There is no change in the previous positions of law, but the Supreme Court has clarified the application of Article 60 in cases of property transfer by a guardian.

Conclusion

In conclusion, the Supreme Court dismissed the appeal, affirming the High Court’s decision that the suit was barred by limitation. The Court emphasized that the sale deeds executed by Balaraman were voidable and needed to be set aside within three years of Palanivel’s death. The plaintiffs’ failure to do so rendered their suit for declaration and possession unsustainable.

Category

Parent Category: Limitation Act, 1963
Child Categories:

• Article 60, Limitation Act, 1963
• Article 65, Limitation Act, 1963

Parent Category: Hindu Minority and Guardianship Act, 1956
Child Categories:

• Section 8, Hindu Minority and Guardianship Act, 1956

Parent Category: Indian Succession Act, 1925
Child Categories:

• Section 119, Indian Succession Act, 1925

Parent Category: Property Law
Child Categories:

• Transfer of Property
• Guardian and Ward
• Voidable Transactions

FAQ

Q: What does ‘voidable’ mean in the context of property sales by a guardian?
A: A voidable sale means the sale is valid unless it is challenged and set aside by a court. It’s not automatically invalid like a ‘void’ sale.

Q: How long do I have to challenge a property sale made by my guardian when I was a minor?
A: If you want to challenge a property sale made by your guardian, you have three years from the date you attain majority or three years from the date of death of the minor, if the minor dies before attaining majority.

Q: Can I claim ownership of property sold by my guardian without going to court?
A: No, if the sale is voidable, you must first go to court to have the sale set aside before you can claim ownership.

Q: What if I have a document from my guardian saying the sale was invalid?
A: A document like a release deed does not automatically invalidate a sale deed unless it explicitly refers to the sale and is done within the limitation period.

Q: What is the difference between Article 60 and Article 65 of the Limitation Act?
A: Article 60 deals with setting aside a transfer of property made by a guardian, while Article 65 deals with possession of immovable property based on title. Article 60 has a shorter limitation period of three years, whereas Article 65 has a longer limitation period of 12 years.