Exploring the term ‘Benefit of estate’ as basis of alienation of property

Discerning the meaning of the term benefit of the estate as grounds for alienation of the property by Karta while looking at a myriad of cases stretching over a century and half. With the attempt being to assess whether a cogent, all-encompassing definition concerning for benefit of the estate can be achieved or not.

 

Introduction

The evolution of Hindu law concerning the Hindu family institution is an ardently unique position, to understand and appreciate which, its  pivotal to understand the functioning of the Hindu joint family system. To begin with, one must first explore the gamut of coparcenary relationships and the manner in which the devolution of property takes place ( Thus focusing on the previously established position of law under Mitakshara School).

A standard Hindu Joint family comprises of one common ancestor and all his lineal male descendants up to any generation along with the wives/widows and any unmarried daughters of the common ancestor. However the conception of rights of individuals finds its basis in the concept of coparcenary. A much a narrower concept, it  provides for rights in ancestral property o both male and female[1] members of the family, subsequent to them fulfilling certain conditions.

While the presence of the aspect of individual right is rife, in matters of legal and religious importance the cohesive structure of the family comes to the fore to take decisions on such aspects. Chief amongst them is the position holder of the Karta. The de facto head[2] of the family, the Karta holds myriad of portfolio’s in regard to his responsibilities and powers pertaining to the responsibility of managing the family and their property.

The standard conception entails the senior most member of the family being anointed with the position of the Karta, provided he doesn’t suffer from any mental physical ailments[3]. Additionally, while the senior most member is on principle deemed as the Karta, there can be multiple scenarios where other family members[4] can act in the position of the Karta, provided the requisite provisos are completed.

However it is nigh impossible to juxtapose or categorize the position of the Karta with that of a manager[5] of property or to establish a mere principal-agent relationship between the Karta and the family members. In addition to these, neither can the position of the Karta be understood as one of the trustees of the family property, thus by extension the Karta does not have an inherent responsibility of  having accountability to the rest of the family members. That responsibility emerging only upon being questioned so or when there is an element of fraud in regard to the family’s holdings.

The Karta thus posits oneself as the supreme head of the family while simultaneously serving as the custodian of family property, to be utilized in the interests of the family members[6]. The attempt in discerning the position of the Karta was to have  brief idea about the almost omnipotent/ autocratic position that the Karta occupies. Furthermore contending with the subject matter of the paper i.e. the Karta’s power of alienation ( with specific focus on alienation carried out for the purpose of benefit of estate and the meaning behind the same).

ALIENATION AS A CONCEPT

The term alienation in the context of the discussion regarding the Hindu Family entails the transference of Joint family property for value , thus by extension binding the interest of both the adult and minor coparceners provided it is done in the presence of certain condition. Now before one engages with the aforementioned conditions, some of the entities who can carry out alienation are follows: The Karta, Father, Any Coparcener, Sole surviving coparcener and manager of the property.

For the purposes of this paper our focus will be on the Karta’s power of alienation. Now the powers of alienation as conferred to the above mentioned act on the fulfillment of certain conditions. While the standard position as such entailed that no single coparcener could alienate the property, the Dharmashastra  in certain circumstances allowed for one coparcener to alienate the property.

Furthermore the Vijayneshwara school laid down a trifocal basis for alienation of property by the karta. They are the following, Apatkale[7], it entails the alienation of the Joint Family property in extremely exigent circumstances such as famine, epidemic. However that as a basis has been extended upon in the modern iteration of law[8]. The second criterion being Kutumbarthe which entails alienation carried out for the sake of the family property. The last aspect contending with indispensible duties such as charitable, pious purposes. The Vijayneshwara in regard to this specific aspect mentions one example which is the Dharmarthe i.e. the obsequies of the father such shradha, upanayana amongst others.

Apart from the above set of circumstances the Karta can also alienate the Joint family property in scenario where the family members are in consensus. Though differential stands are taken in regard to when some of the  family member consent to alienate, while other do not by varied schools[9]

ALIENATION CARRIED FOR THE PURPOSE OF BENEFIT TO THE ESTATE

The definitive case which first dealt with the issue of Benefit of estate as basis for alienation of property (apart from legal necessity) was the case of Hanooman Persuad v. Mussumat Babooee[10]. The court in this specific dispute was in a conflict of opinion regarding the exact meaning of them “benefit of the estate”.

One view being that a transaction cannot being deemed as being for the benefit of the estate unless and until it doesn’t possess a defensive character i.e. a transaction carried out to protect the estate from an eminent danger or destruction.[11] While the other view asserted that to classify the alienation under the guise of benefit of estate it is sufficient that owner or a trustee would have carried out the with the knowledge that was available[12] to them at the time of the transaction.

The next case which added another definitive basis to term was the one of Palaniappa v. Deivasikamony  AIR 1917 PC 33[13]. The case dealt with the question of whether a mahant i.e. the head of math possessed the power to alienate a debutter land. The  Judicial committee in this case very appropriately summed the problem  with defining the term benefit to the estate. For basic aspect such as preservation of the estate from extinction, defense against hostile litigation affecting it, protection of certain portion from inundation or injury could very well be construed benefits. However the problem lay with drawing  a clear demarcation as to what constituted benefits and what did not.

In the subsequent years between the above mentioned judgments, an interesting judgment as given by a full bench of the Bombay High Court in the matter of Hemraj v. Nathan[14]stated that while a property cannot be alienated solely for the purpose of enhancing its value. It would however be an equally incorrect assumption to state that no transaction can be of the be of the benefit of the estate which is not of a defensive a character.

In addendum to this came the 1964 Supreme Court in the matter of Balmukund v. Kamlavati & Ors[15]. The matter was instituted by  an individual who had bought a piece of land from the manager of the property (one of the four brothers owning the Joint family property), only for the manager to not go through with the transaction after contractually agreeing for the same. The Supreme Court in the matter averred that a transaction to be regarded as carried for the benefit of the family need not necessarily be of a defensive character. Instead the criterion should be imposed on the basis whether  the said transaction conferred or sought to confer benefit to the family[16].

It was further stated that in a scenario where all the adult members alongside the manager agree on selling the estate with an intent to get a new property would be deemed as being benefit to the estate. Provided all concerned member are well aware of the needs and demands of the family. Thus setting aside the position of the Hemraj[17] case. This position has also found reflection  in the later year cases of  Hari Singh & Anr. v. Umrao Singh & Anr. AIR 1979 All 65 [18], wherein a land not yielding profit was sold only to be used as basis for land yielding profit, this was deemed as being benefit to the estate.

Simultaneously there have been judgments which state that a transaction cannot be deemed as being benefit to the estate if it simply carried for the purpose of buying another piece of land[19].

In recent cases before the Bombay and Madras High Court [20]respectively ,the Court while examining the matter has often pondered the exception as laid out in the Balmukund[21] case contending with the issue of sale of a property to buy another a property. Thus this question serves as the prime basis of contention ( on evidence adduced from the recent years) regarding the definition of the term Karta.

CONCLUSION 

The Court on multiple instances has averred that owing to the inherent subjective nature of this aspect, that the aspect of the term benefit of the estate would be assessed on a case to case basis. However a requisite change that needs to be made in this regard is changing the nomenclature of the term benefit of the estate to the act of good management as stated by J. M. Kumar in the case Jagdish Parshad vs Laxmi Narain And Anr (2003) 135 PLR 481[22]. For an understanding such as that would greatly end the disputation surrounding this subject matter. More specifically if the changing the nomenclature is difficult , then effective/good management[23] should certainly be set in as a qualifier for understanding the concept of alienation of property by Karta. For an attempt such as this if not unify would certainly simplify the various positions that court across the country have taken in regard to alienation under the aegis of benefit of estate.

[1]  The Hindu Succesion Amendment Act, 2005

[2]  Sir Dinshah Fardunji Mulla’s classic Principles of Hindu Law, article 236

[3]  Suraj Bans Koer v. Sheo Prasad (1880) 5 Cal 148

[4]  Nopany investments v. Santokh Singh AIR 2008 SC 673

[5]  Union of India v. Shri Ram Bohra & Ors. AIR 1965 SC 1531

[6]  Id. at 2

[7] Sir Dinshah Fardunji Mulla’s classic Principles of Hindu Law, Ed. 21st , pg. 375

[8] Devulapalli Kameswara Sastri v. Polavarapu Veeracharlu (1911) ILR 34 Mad 422 – this case held that necessity should be understodd in the context of the family as to what will be deemed as proper and reasonable rather  tahn having a notion of something being absolutely indespensible

[9] While the Bombay and Madras schools allow for the share of the consenting coparceners to be bound for alienation, the same is not true as per the West Bengal and the Uttar Pradesh schools.

[10] Hanooman Persuad v. Mussumat Babooee, (1856) 6 MIA 393

[11]  This aspect has been discussed  in the case of  Bhagwan Das v. Mahadeo  (1923) 45 All 390

[12] Sir Dinshah Fardunji Mulla’s classic Principles of Hindu Law ,PAGE 381-380,  §241 A

[13] Palaniappa v. Deivasikamony  AIR 1917 PC 33

[14] Hemraj v. Nathan  (1935) 37 BOMLR 427

[15] Balmukund v. Kamlavati & Ors AIR 1964 SC 1385

[16] Id. at  13

[17] Id. at  14

[18] Hari Singh & Anr. v. Umrao Singh &Anr. AIR 1979 All 65

[19] Nirmal Singh v. Satnam , AIR 1960 Raj 313

[20] Kashinath Rajaram Kasbe And Ors vs Dattatraya Ramchandra Kasbe (2014) 56 BOMLR 472

    Vijayalakshmi vs A. Govindasamy( 2013) ILR 72 Mad 453

[21] Balmukund v. Kamlavati & Ors AIR 1964 SC 1385

[22] Jagdish Parshad vs Laxmi Narain And Anr (2003) 135 PLR 481

[23] As was mentioned in the case of  Hurry Mohan v. Ganesh Chander, (1884) 10 Cal 823



ABOUT THE AUTHOR

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Dhruv Shekhar is at present a law student at Jindal Global Law School (JGLS), having studied History before at St. Stephens College. Intrinsically passionate about the Films, Books and Football, he seeks to examine and study his interests within the ambit of the legalities concerned with the said subject matter. 

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