New Delhi | In a significant verdict on property transactions involving minors, the Supreme Court has ruled that those aged below 18 years, upon attaining majority, are not mandatorily required to institute a lawsuit to repudiate property transfers executed by their natural guardians without approval from a court.
In a judgement delivered on October 7, the apex court said minors, on becoming majors, can repudiate the transfer of properties by manifesting through clear and unambiguous conduct, such as independently selling or transferring the same.
The verdict came in the case of K S Shivappa Vs Smt K Neelamma from a bench of Justices Pankaj Mithal and Prasanna B Varale.
"It can safely be concluded that a voidable transaction executed by the guardian of the minor can be repudiated and ignored by the minor within time on attaining majority either by instituting a suit for setting aside the voidable transaction or by repudiating the same by his unequivocal conduct," Justice Mithal, authoring the judgment, said.
The verdict said the moot question was whether it was necessary for minors to have filed a suit upon attaining majority within the prescribed time period to set aside an earlier sale deed executed by their natural guardian.
It said the question was whether such a sale deed could be repudiated through their conduct within three years of attaining majority.
In order to answer the questions, the bench referred to sections 7 and 8 of the Hindu Minority and Guardianship Act, 1956 and said, "A simple reading of the provisions makes it abundantly clear that a natural guardian of a minor has no authority in law to mortgage, sell, gift or otherwise transfer any part of the immovable property of the minor or even to lease out 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 without the prior permission of the court."
"Therefore, prior permission of the court is a sine qua non for a guardian of a minor to transfer the property of the minor in any of the manners provided under sub-section (2) of section 8 of the Act," it said.
The dispute revolved around two adjoining plots -- numbers 56 and 57 -- in Shamanur village in Karnataka's Davanagere, originally purchased in 1971 by one Rudrappa in the names of his three minor sons -- Maharudrappa, Basavaraj and Mungeshappa.
Without obtaining prior permission from the district court, Rudrappa sold these plots to third parties. Plot number 56 was sold to S I Bidari and later, purchased by B T Jayadevamma in 1983.
After the surviving minors attained majority, they and their mother sold the same plot to K S Shivappa in 1989.
A civil suit filed by Jayadevamma, claiming ownership, was eventually rejected by the Karnataka High Court, which upheld the minors' right to repudiate their father's sale through their own subsequent sale deed.
A similar transaction occurred with plot number 57, which Rudrappa sold without the court's permission to Krishnoji Rao, who in turn sold it to K Neelamma in 1993.
The surviving minors, on attaining majority, sold the same plot to K S Shivappa, who later combined both the plots and built a house.
Neelamma then filed a case before the additional civil judge in Davanagere, claiming ownership.
The trial court dismissed her suit, holding that the sale executed by Rudrappa was voidable and validly repudiated by the minors' subsequent sale.
However, both the first appellate court in 2005 and the high court in 2013 reversed this finding, holding that since the minors had not filed a formal suit to set aside their father's sale deed, the transaction stood confirmed.
Shivappa then approached the Supreme Court.
Referring to the provisions, the apex court reiterated that a natural guardian cannot transfer a minor's immovable property without the prior permission of a court and that any such transaction is voidable at the instance of the minor.
However, the bench clarified that the statute does not specify the mode by which such a voidable transaction must be repudiated.
Justice Mithal observed that a minor, on attaining majority, may avoid or repudiate such a transaction, either expressly by filing a suit for the cancellation of the sale deed or impliedly by clear and unequivocal conduct, such as executing a fresh sale of the same property.
"The provision, however, nowhere categorically provides the manner in which such a transaction of disposal of the property of a minor by a guardian, without the permission of the court, would be voidable. Such a transaction can be avoided or repudiated by the minor expressly by filing a suit for the cancellation of such a transaction or impliedly by his conduct, namely by transferring the property himself on attaining majority within the time prescribed...," the verdict said.
The avoidance of such a transaction by conduct appears to be permissible for two reasons, it added.
"First, at times the minor may not be aware of such a transaction and as such may not be in a position to institute any suit; secondly, the transaction of such a nature, if any, may not have been given effect to and the party acquiring right in the property may not be having possession of the property, giving an impression that the property is intact in the hands of the minor, in which case also, the minor on attaining majority may not deem it proper to institute a suit," the verdict said.
