Supreme Court Upholds Restriction on Karta’s Power to Gift Joint Family Property: K.C. Laxmana vs. K.C. Chandrappa Gowda (2022)

Introduction

Date of the Judgment: April 19, 2022

Citation: (2022) INSC 417

Judges: S. Abdul Nazeer, J. and Krishna Murari, J.

Can a Hindu father, acting as the Karta of a Hindu Undivided Family (HUF), gift ancestral property to someone who is not a coparcener, simply out of love and affection? This was the central question before the Supreme Court in the case of K.C. Laxmana vs. K.C. Chandrappa Gowda. The court examined the validity of such a gift under Hindu law, specifically focusing on the limitations of a Karta’s power to alienate joint family property. The judgment was delivered by a two-judge bench comprising Justice S. Abdul Nazeer and Justice Krishna Murari.

Case Background

The dispute arose from a suit filed by K.C. Chandrappa Gowda against his father, K.S. Chinne Gowda, and K.C. Laxmana. Chandrappa Gowda sought partition and separate possession of his one-third share in the joint family property. He also challenged a gift/settlement deed dated March 22, 1980, (Ex. P-1) executed by his father, K.S. Chinne Gowda, in favor of K.C. Laxmana, arguing it was null and void. Chandrappa Gowda contended that the property was joint family property belonging to himself, his father, and his brother, K.C. Subraya Gowda. He argued that his father had no right to transfer the property to K.C. Laxmana, who was not a coparcener or a family member, without his consent.

K.S. Chinne Gowda admitted that the property was joint family property but claimed that he had gifted it to K.C. Laxmana out of love and affection, as K.C. Laxmana was brought up by him. He also contended that a partition had already taken place on March 23, 1990, and Chandrappa Gowda had received his share. K.C. Laxmana adopted the written statement of K.S. Chinne Gowda.

Timeline:

Course of Proceedings

The Trial Court dismissed the suit. However, the Appellate Court reversed the Trial Court’s decision, holding that the Settlement Deed (Ex. P-1) was void and granted Chandrappa Gowda a one-third share in the property. K.C. Laxmana challenged this decision in the High Court of Karnataka, which dismissed his appeal, upholding the Appellate Court’s judgment.

Legal Framework

The Supreme Court considered the following legal provisions:

• Article 58 of the Limitation Act, 1963: This article provides a limitation period of three years to obtain any declaration, from the date when the right to sue first accrues.
• Article 109 of the Limitation Act, 1963: This article provides a limitation period of twelve years for a Hindu governed by Mitakshara law to set aside his father’s alienation of ancestral property, starting from when the alienee takes possession of the property.
  
  The article states:
  
  “By a Hindu governed by Mitakshara law to set aside his father’s alienation of ancestral property. Twelve years When the alienee takes possession of the property.”

The Court also considered the principles of Hindu law governing the alienation of joint family property by the Karta. It is established that a Karta can alienate joint family property only under three circumstances: (i) legal necessity, (ii) for the benefit of the estate, and (iii) with the consent of all coparceners.

Arguments

Appellant (K.C. Laxmana)’s Arguments:

• The suit was barred by limitation under Article 58 of the Limitation Act, 1963, which provides a three-year limitation period for declaratory suits.
• The transfer of property through the settlement deed was for a pious purpose, which is permissible under Hindu law.

Respondent (K.C. Chandrappa Gowda)’s Arguments:

• The alienation of joint family property by way of gift was void.
• The applicable limitation period is twelve years from the date the alienee takes possession, as per Article 109 of the Limitation Act, 1963.

The appellant argued that the gift was for a pious purpose, as he was raised by the first defendant, and the transfer was made out of love and affection. The respondent contended that the gift was not for a pious purpose, as it was not for charitable or religious purposes and was made to a non-coparcener without the consent of all coparceners.

[TABLE] of Submissions:

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the suit filed by the plaintiff was barred by limitation.
2. Whether the transfer of property made by the first defendant in favor of the second defendant under Ex.P-1 was for a pious purpose.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court relied on Thimmaiah and Ors. Vs. Ningamma and Anr. [(2000) 7 SCC 409]* to reiterate that the alienation of joint family property without the consent of all coparceners is voidable.
• The Court quoted Guramma Bhratar Chanbasappa Deshmukh and Ors. vs. Mallappa Chanbasappa and Anr. [AIR 1964 SC 510]* to emphasize that a manager can only gift joint family property for pious purposes, which are limited to charitable or religious purposes. A gift to a stranger is void.
• The Court cited Ammathayi @ Perumalakkal and Anr. Vs. Kumaresan @ Balakrishnan and Ors. [AIR 1967 SC 569]* to reiterate that a gift of ancestral property cannot be made on the ground of carrying out a father’s wishes and that a gift to a daughter-in-law is not considered a pious purpose.
• The Court held that Article 58 of the Limitation Act, 1963 is not applicable to the instant case.
• The Court held that Article 109 of the Limitation Act, 1963 is applicable to the instant case.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the established principles of Hindu law regarding the alienation of joint family property. The Court emphasized that a Karta’s power to gift ancestral property is limited to ‘pious purposes,’ which are strictly construed to mean charitable or religious purposes. The Court found that the gift in this case was not for such a purpose and was made without the consent of all coparceners. The Court also emphasized the applicability of Article 109 of the Limitation Act, 1963, which provides a specific limitation period for challenging such alienations.

Sentiment Analysis of Reasons:

Fact:Law Ratio:

Logical Reasoning:

The Court considered the alternative interpretation that the gift was made out of love and affection and thus for a pious purpose, but rejected it because the gift was not for a charitable or religious purpose. The court also considered the argument that the suit was barred by limitation under Article 58 of the Limitation Act, but rejected it in favour of Article 109.

The Court’s decision was based on the principle that a Karta’s power to alienate joint family property is limited, and such alienation must be for legal necessity, benefit of the estate, or with the consent of all coparceners. The Court held that the gift in this case did not meet these criteria and was therefore voidable.

The Court also emphasized that the term ‘pious purpose’ under Hindu law is restricted to charitable or religious purposes and does not include gifts made out of love and affection to non-coparceners. The Court reasoned that extending the scope of ‘pious purpose’ would undermine the strict limitations on a Karta’s power to alienate joint family property.

“It is well-settled that a Hindu father or any other managing member of a HUF has power to make a gift of ancestral property only for a ‘pious purpose’ and what is understood by the term ‘pious purpose’ is a gift for charitable and/or religious purpose.”

“Therefore, a deed of gift in regard to the ancestral property executed ‘out of love and affection’ does not come within the scope of the term ‘pious purpose’.”

“In the circumstances, we hold that a gift to a stranger of a joint family property by the manager of the family is void.”

Key Takeaways

• A Karta of a Hindu Undivided Family (HUF) cannot gift ancestral property to a non-coparcener out of love and affection.
• The term ‘pious purpose’ in Hindu law is strictly limited to charitable or religious purposes.
• Alienation of joint family property by a Karta requires the consent of all coparceners, except in cases of legal necessity or benefit of the estate.
• The limitation period for challenging a father’s alienation of ancestral property is twelve years from the date the alienee takes possession, as per Article 109 of the Limitation Act, 1963.

This judgment reinforces the limitations on a Karta’s power to alienate joint family property and clarifies the scope of ‘pious purpose’ under Hindu law. It will likely impact future cases involving similar issues, ensuring that the rights of coparceners are protected.

Directions

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

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that a gift of ancestral property by the Karta of a Hindu Undivided Family (HUF) to a non-coparcener, out of love and affection, is not considered a ‘pious purpose’ and is therefore voidable. This judgment reinforces the established position of law regarding the limitations on a Karta’s power to alienate joint family property. The court has not changed the previous position of law but has reiterated it.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision. The Court reaffirmed that a Karta’s power to gift ancestral property is limited to pious purposes, which do not include gifts made out of love and affection to non-coparceners. The Court also clarified that the limitation period for challenging such alienations is twelve years from the date the alienee takes possession. This judgment reinforces the protection of coparcenary rights and the strict limitations on a Karta’s power to alienate joint family property.

Category

Parent Category: Hindu Law

Child Categories:

• Joint Family Property
• Karta
• Alienation of Property
• Pious Purpose
• Coparcener Rights
• Limitation Act, 1963
• Article 109, Limitation Act, 1963

Parent Category: Limitation Act, 1963

Child Categories:

• Article 109, Limitation Act, 1963

FAQ

Q: Can a father gift ancestral property to his son-in-law out of love and affection?
A: No, a father, acting as Karta of a Hindu Undivided Family (HUF), cannot gift ancestral property to his son-in-law or any non-coparcener simply out of love and affection. Such gifts are not considered to be for a ‘pious purpose’ under Hindu law.

Q: What does ‘pious purpose’ mean in the context of gifting ancestral property?
A: ‘Pious purpose’ is strictly limited to charitable or religious purposes. Gifts made for any other reason, such as love and affection, are not considered valid under Hindu law.

Q: What happens if a Karta gifts ancestral property without the consent of all coparceners?
A: Such a gift is voidable at the instance of the coparceners whose consent was not obtained. They can challenge the transfer and seek to reclaim their share of the property.

Q: How long do I have to challenge a gift of ancestral property made by my father?
A: According to Article 109 of the Limitation Act, 1963, you have twelve years from the date the alienee (the person who received the property) takes possession of the property to challenge the gift.

Q: Does this judgment affect all Hindu families?
A: Yes, this judgment applies to all Hindu families governed by Mitakshara law, which is the most prevalent system of Hindu law in India.