Minors can repudiate unauthorised property sales by conduct, not just by filing lawsuits: SC
In an order delivered on October 7, the top court said minors can refuse the transfer of properties once they reach adulthood by making a clear and unequivocal act such as selling or transferring them independently.
The decision came in the case of KS Shivappa and Smt K Neelamma, comprising Justices Pankaj Mithal and Prasanna B Varale.
Justice Mithal, who wrote the judgment, said, “It may be inferred that a voidable act performed by the guardian of the minor child may be repudiated and disregarded in due course by the minor by filing a suit for annulment of the act by the minor or by denying the same by his definitive conduct.” he said.
The decision stated that the controversial issue is whether minors are required to file a lawsuit upon attaining majority within the stipulated time for the annulment of a sale deed previously signed by their natural guardians.
The question, it was stated, was whether such a contract of sale could be rejected within three years of attaining majority. To answer the questions, the bench referred to sections 7 and 8 of the Hindu Minority and Guardianship Act, 1956 and said: “A plain reading of the provisions makes it clear that the natural guardian of a minor has no authority in law to mortgage, sell, gift or otherwise transfer or even lease any part of the immovable property of the minor for a period exceeding five years.” or for a period exceeding one year from the date on which the minor attains majority without the prior permission of the court.” “Therefore, the prior permission of the court is a sine qua non for a minor’s guardian to transfer the property of a minor in any of the ways specified in clause (2) of Article 8 of the law,” he said.
The dispute revolved around two adjoining plots (Nos. 56 and 57) at Shamanur village in Davanagere of Karnataka, originally purchased by one Rudrappa in 1971 in the name of his three younger sons Maharudrappa, Basavaraj and Mungeshappa.
Rudrappa sold these lands to third parties without obtaining prior permission from the district court. Plot number 56 was sold to SI Bidari and later acquired by BT Jayadevamma in 1983.
After the surviving minors attained majority, they and their mother sold the same plot to KS Shivappa in 1989.
Jayadevamma’s civil suit claiming ownership was eventually dismissed by the Karnataka High Court, which upheld the minors’ right to reject their father’s sale through their own subsequent sale deed.
A similar transaction took place in plot number 57, which Rudrappa sold without the permission of the court to Krishnoji Rao, who in turn sold it to K Neelamma in 1993.
After the surviving minors attained majority, they sold the same plot to KS Shivappa, who then combined both the plots and built a house.
Neelamma then filed a suit before the additional civil judge in Davanagere, claiming ownership.
The trial court dismissed the case, stating that the sale effected by Rudrappa was invalid and was validly negated by the subsequent sale of the minors.
However, both the trial court of appeal in 2005 and the high court in 2013 reversed this finding, stating that the transaction was approved because the minors did not file a formal suit to set aside their father’s sale deed.
Shivappa then appealed to the Supreme Court.
Referring to the provisions, the high court reiterated that the natural guardian cannot transfer the immovable property of a minor without the prior permission of the court and any such transaction is voidable in the case of the minor.
However, the board explained that the law does not specify the method by which such a voidable transaction should be rejected.
Justice Mithal observed that a minor, on reaching adulthood, can avoid or refuse such a transaction, either expressly by filing a suit for cancellation of the contract of sale or implied by an express and unambiguous conduct such as effecting resale of the same property.
“However, the provision nowhere provides a definitive regulation on the manner in which the disposal of the minor’s property by the guardian without the permission of the court will be invalid. Such a transaction may be prevented or rejected by an express or implied action by the minor by filing a lawsuit for the annulment of such a transaction, that is, by transferring the property himself upon reaching adulthood within the stipulated period…” in question.
He added that avoiding such a transaction through conduct was permissible for two reasons.
In the decision, “Firstly, sometimes the minor may not be aware of such a transaction and therefore may not be in a position to file a lawsuit; secondly, if there is such a transaction, it may not have been concluded yet and the party entitled to the property may not have possession in a way that would give the impression that the property is in the hands of the minor, in which case the minor may not find it appropriate to file a lawsuit.” in question.
