SC settles law on property transfers by guardians

The ruling came last week in an appeal filed by one KS Shivappa, who had purchased two adjoining plots in Davanagere, Karnataka, from minors after they attained majority

The Supreme Court has ruled that minors, on attaining majority, can repudiate sale transactions executed by their guardians without the court’s permission, and it is not mandatory for them to move court to cancel such sales.

The court added that it was the subsequent purchasers, and not the minors, who were obliged to seek legal remedy if they believed their rights had been affected by the minors’ subsequent sale. (ANI)

Clarifying an important point of law under the Hindu Minority and Guardianship Act, 1956, a bench of justices Pankaj Mithal and PB Varale held that when minors, after reaching majority, transfer the same property that was earlier sold by their guardians, such an act itself constitutes sufficient repudiation of the earlier transaction.

“The disposal of any immovable property by a natural guardian without the court’s permission is voidable at the instance of the minor…the transfer which is voidable, can be repudiated by the minor on attaining majority by his action and not necessarily by the intervention of the court,” noted the bench, adding that repudiation could be done either expressly -- by filing a suit or impliedly, through conduct, such as entering into a new sale.

This ruling is significant as the bench clarified a long-standing legal ambiguity. Previous Supreme Court decisions had not conclusively determined whether filing a separate suit was mandatory to repudiate property sales made by guardians without court sanction. By settling this uncertainty, the judgment provides clearer guidance on how minors can assert their property rights once they attain majority.

The ruling came last week in an appeal filed by one KS Shivappa, who had purchased two adjoining plots in Davanagere, Karnataka, from minors after they attained majority. The dispute centred around a plot of land, which had earlier been sold by the minors’ father and natural guardian, Rudrappa.

Rudrappa had purchased two plots in 1971 in the names of his three minor sons. Shortly thereafter, he sold both plots to different buyers without seeking the court’s sanction, as required by law. One of these plots changed hands twice before being sold to KS Shivappa in 1989 by the two surviving sons (the third having passed away) after they reached majority. The other plot was similarly sold by Rudrappa to another buyer, Neelamma, in 1993.

When Shivappa bought both plots from the sons upon their attaining majority, he constructed a house on the combined land. Neelamma, claiming ownership of one of these plots, later sued him for possession and declaration of title.

The trial court ruled in favour of Shivappa, holding that the father’s sale without judicial permission was voidable, and the minors had effectively repudiated it by selling the property themselves after attaining majority. However, the first appellate court and the Karnataka High Court reversed this finding, saying the minors could not transfer the property without first filing a suit to cancel the earlier sale deed.

Setting aside the high court’s decision, the Supreme Court restored the trial court’s ruling and held that minors are not required to file a separate cancellation suit, provided their conduct clearly shows repudiation of the guardian’s sale within the period of limitation.

“The law nowhere mandates that a voidable sale must be avoided only through a formal suit. Repudiation through unequivocal conduct is sufficient,” said the bench, as it further noted that in this case, the minors had transferred the property themselves soon after attaining majority, while their names continued to appear in revenue records, and there was no evidence that they were aware of their father’s earlier sale.

The court added that it was the subsequent purchasers, and not the minors, who were obliged to seek legal remedy if they believed their rights had been affected by the minors’ subsequent sale.

“It is not always necessary for a minor to institute a suit for cancellation of a voidable sale transaction executed by his guardian on attaining majority within the limitation provided and that such a transaction can be avoided or repudiated by his conduct,” ruled the bench.

The judgment also reaffirmed that a power-of-attorney holder cannot depose on behalf of the principal on matters within the latter’s personal knowledge, observing that “proxies cannot substitute personal testimony” in disputes involving ownership and title.

The bench faulted the plaintiff, Neelamma, for failing to enter the witness box to prove her title and for relying instead on her power-of-attorney holder to testify. Citing precedents such as Janki Vashdeo Bhojwani Vs IndusInd Bank Ltd and Rajesh Kumar Vs Anand Kumar, the court held that a power-of-attorney holder cannot depose about facts within the personal knowledge of the principal.

“Where the plaintiff refuses to testify, the proxies cannot substitute his personal testimony on key issues within the personal knowledge of the plaintiff. A power-of-attorney holder is thus, not entitled to depose in place of the principal,” said the bench.

It added that Neelamma had not even proved the sale deed under which she claimed title or shown that her vendor had valid ownership. Finding that no valid title had passed to Neelamma, the court restored the trial court’s decree in favour of Shivappa and dismissed her suit.

“The sale deed executed by the father of the minors was repudiated by the minors within time on attaining majority; therefore, no valid right or title stood transferred to Krishnoji Rao or to Neelamma,” the bench concluded, allowing the appeal.