Supreme Court Holds Sale by Karta Valid for Family Necessity; Restores Trial Court Verdict Upholding Purchaser's Title

A Bench of Justices Sandeep Mehta and Joymalya Bagchi heard an appeal against a judgment of the High Court of Karnataka dated 12.01.2007 which had reversed the trial court and decreed partition and separate possession in favour of the plaintiff. The appeal challenged the High Court’s finding that a sale executed by the Karta of a Hindu Undivided Family (HUF) in respect of land in Gulbarga was not for "legal necessity" and that the purchaser was not a bona fide purchaser for consideration.

The Court allowed the appeal, set aside the High Court judgment and upheld the trial court’s dismissal of the plaintiff’s suit. The Supreme Court held that the Karta’s sale of HUF land could be sustained as having been made to meet family exigencies connected to marriage expenses and that the purchaser had acted as a man of ordinary prudence and discharged his onus. The Court, in its reasoning, observed: “Right of the Karta to execute agreement to sell or sale deed of a joint Hindu family property is settled ... The Karta enjoys wide discretion in his decision over existence of legal necessity and as to in what way such necessity can be fulfilled. The exercise of powers given the rights of the Karta on fulfilling the requirement of legal necessity or betterment of the estate is valid and binding on other coparceners. There are no specific grounds that establish the existence of legal necessity and the existence of legal necessity depends upon facts of each case.” The Court further noted that, “Onus of proof on the stranger-purchaser cannot run counter to the principle of reverse burden enshrined in Section 106 of the Evidence Act, 1872,” and placed the onus of proving intra-family distributions on the coparceners who possessed special knowledge of those facts.

Background: The dispute arose from a suit filed in 2000 by a coparcener challenging a sale deed dated 26.07.1995 by the HUF Karta in favour of a purchaser, claiming the sale was not for legal necessity but to meet the Karta’s extravagant habits and that the purchaser was not bona fide. The suit land measured 9 acres 1 gunta in Survey No. 49/2, Bablad Village, Gulbarga. The plaintiff alleged that earlier HUF properties had been sold by the Karta and that assurances had been given that the proceeds would be settled in favour of all sons; those assurances were not honoured, the plaintiff said, and the present sale was collusive.

The purchaser pleaded payment of consideration and justified the sale as necessitated by marriage expenses of the Karta’s daughter. Evidence included signatures on money receipts by the Karta’s wife, the daughter whose marriage was cited, and two coparceners; mutation entries and revenue records showed possession and title entries in the purchaser’s name. The Trial Court found the sale to have been for legal necessity (marriage expenses) and dismissed the suit. The High Court reversed, finding that the marriage had occurred prior to the sale and that the purchaser had not made adequate enquiries about distribution of sale proceeds, thereby holding the purchaser not to be bona fide.

The Supreme Court examined authorities including Beereddy Dasaratharami Reddy v. V. Manjunath and considered Mulla’s exposition of "legal necessity," observing that the question is fact-specific and the Karta enjoys wide discretion. The Court accepted the trial court’s findings that the purchaser had shown a nexus between the sale and family expenses, that money receipts bore the signatures of family members, and that the delay and conduct of the plaintiff in belatedly assailing title undermined his case. The Court held that the purchaser discharged his evidentiary onus and that the plaintiff, having special knowledge of intra-family distributions, could not shift that burden to the stranger-purchaser. The Supreme Court allowed the appeal, set aside the High Court judgment and restored the Trial Court decree dismissing the suit; no interim directions were issued and no precedent was overruled.

Case Details: Case No.: Civil Appeal No. 5340 of 2017 (2025 INSC 1120)
Case Title: Dastagirsab v. Sharanappa @ Shivasharanappa Police Patil (D) by LRs. & Ors.
Appearances:
For the Petitioner(s): Advocates not indicated in the judgment
For the Respondent(s): Advocates not indicated in the judgment