In a recent judgment in the matter of ‘K.C. Laxmana v. K.C. Chandrappa Gowda & Anr.[1]”(“Captioned Matter”), the Hon’ble Supreme Court of India (“SC”), has laid out a well settled principle regarding gifting of ancestral property. The SC has held 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’. The two judge bench held that “a deed of gift in regard to ancestral property, executed ‘out of love and affection’ does not come within the scope of the term ‘pious purpose’.

In the case at hand, a gift deed (“Gift Deed”) was executed by the Karta of a Hindu Undivided Family (“HUF”) in favour of K.C. Laxmana (being the Appellant under the Captioned Matter) (“Laxmana/ Appellant”) ‘out of love and affection’ and by virtue of which the Appellant was given a portion of the joint family property belonging to the HUF (“Schedule Property”). However, the Appellant was neither a coparcener nor a member of the HUF. Further, K.C. Chandrappa Gowda, being the Respondent under the Captioned Matter (“Chandrappa/ Respondent”) and one of coparceners of the HUF, was also not made a signatory to the Gift Deed.

Aggrieved, Chandrappa filed a suit in the Trial Court against his father and Karta of the HUF, KS Chinne Gowda (“Gowda”) and Laxmana for partition and separate possession of his one third share in the Schedule Property and for a declaration that the Gift Deed executed by Gowda in favour of Laxmana as null and void. The Trial Court dismissed the suit. Aggrieved by the order of the Trial Court, Chandrappa filed a first appeal. The Appellate Court set aside the judgment of the Trial Court. The judgment by the Appellate Court was challenged by Laxmana in the Hon’ble High Court of Karnataka (“High Court”) as Regular Second Appeal No. 372 of 2003 dated October 3, 2008 (“Appeal”). The High Court dismissed the Appeal and upheld the judgment of the Appellate Court. The present appeal/ Captioned Matter has been filed by the Appellant against the judgement and decree of the High Court in the Appeal.

Pursuant to the contentions urged by the parties to the Captioned Matter, the first question that arose for consideration of the SC, was whether the suit filed by Chandrappa was barred by limitation. In relation to the period of limitation, the SC held that Article 58 of the Second Schedule to the Limitation Act, 1963 does not have any application to the Captioned Matter. Article 58 provides a period of limitation of 3 years from the date when the right to sue first accrues to file a suit to obtain any declaration. The SC observed that the Captioned Matter would be governed by Article 109, which applies where the following conditions are fulfilled:

• the parties must be Hindus governed by Mitakshara;
• the suit is for setting aside the alienation by the father at the instance of the son;
• the property relates to ancestral property; and
• the alienee has taken over possession of the property alienated by the father.

The SC noted that the word alienation in this Article 109 includes “gift”. Further, as per Article 109, the period of limitation in the Captioned Matter is 12 years from the date the Appellant takes possession of the Schedule Property. The SC, after taking note of the relevant dates, observed that the suit filed by Chandrappa was not barred by limitation.

The SC, in the Captioned Matter, further observed that the Karta/Manager of a joint family property may alienate joint family property only in three situations, namely,

• legal necessity
• for the benefit of the estate; and
• with the consent of all the coparceners of the family.

In the instant case, the alienation of the Schedule Property was not with the consent of all the coparceners, accordingly the SC held that the alienation of the Schedule Property is voidable at the instance of the coparceners whose consent has not been obtained, i.e. the Respondent.

The SC further held 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'”. The SC further said that the “gift deed in the instant case is not for any charitable or religious purpose.”

While declaring the above principle regarding the gifting of ancestral property, the Apex Court relied on its judgment in the matter of ‘Guramma Bhratar Chanbasappa Deshmukh and Ors. vs. Mallapa Chanbasappa and Anr [2].’, wherein it was held inter-alia as follows:

• “…the expression ‘pious purposes, is wide enough, under certain circumstances, to take in charitable purposes though the scope of the latter purposes has nowhere been precisely drawn…”;

• “…It must be remembered that the manager has no absolute power of disposal over joint Hindu family property. The Hindu law permits him to do so only within strict limits. We cannot extend the scope of the power on the basis of the wide interpretation give to the words “pious purposes” in Hindu law in a different context. In the circumstances, we hold that a gift to a stranger of a joint family property by the manager of the family is void.”

The Apex Court further relied on its judgment in the matter of “Ammathayi @ Perumalakkal and Anr. Vs. Kumaresan @ Balakrishnan and Ors.[3]“, wherein it was inter-alia held that, “…a Hindu father or any other managing member has power to make a gift within reasonable limits of ancestral immovable property for pious purposes, and we cannot see how a gift by the father-in-law to the daughter-in-law at the time of marriage can by any stretch of reasoning be called a pious purpose, whatever may be the position of a gift by the father or his representation to a daughter at the time of her marriage…”

Placing reliance on the above mentioned matters, and the principle laid out by the SC for gifting of ancestral property, the Apex Court held that the Gift Deed was rightly declared as null and void by the first Appellate Court and the High Court and therefore dismissed the appeal filed by the Appellant in the Captioned Matter.

Watch this space for more on HUF and Ancestral properties, as the authors shall continue to track them.

Footnotes:

[1] Civil Appeal 2582 of 2010

[2] AIR 1964 SC 510

[3] AIR 1967 SC 569