When the mortgagee is himself the purchaser and when the greater portion of the consideration went in discharge of the mortgagors, we do not see how any question of enquiry regarding pressure on the estate would arise at all.


[Case Brief] ARVIND @ ABASAHEB GANESH KULKARNI & ORS. Vs. ANNA @ DHANPAL PARISA CHOUGULE & ORS.


Case Name: ARVIND @ ABASAHEB GANESH KULKARNI & ORS. Vs. ANNA @ DHANPAL PARISA CHOUGULE & ORS.

Case Number: Appeal Civil 216 of 1970

Court:The Hon’ble Supreme Court

Bench: REDDY, O. CHINNAPPA (J) UNTWALIA, N.L.

Decided on: 22/01/1980

Relevant Act/Sections: Mortgage-Minor brothers alleged that mortgage was not for legal necessity and that the sale was for inadequate consideration-Elder brother discharged family debts-Small part of consideration not accounted for-Sale-Validity of.


BRIEF FACTS AND PROCEDURAL HISTORY:

1. A mortgagor executed two deeds of mortgage in favour of the father of the appellants for Rs. 1600 and Rs. 1000 in respect of certain lands. Both the mortgages were possessory mortgages but the land was leased back to the mortgagor for a stipulated rent.

2. The mortgagor died leaving behind him three sons, one adult and two minors. The adult son borrowed a further sum of Rs. 131 by executing a simple mortgage and purporting to act as the Manager of the joint family and the guardian of his minor brothers, executed a deed of sale in favour of the father of the appellants in respect of four out of ten items of land previously mortgaged.

3. The consideration for the sale was Rs. 3050 which was made up of Rs. 1600. Rs. 1000 and Rs. 131 due under three previous mortgages respectively and Rs. 200 received in cash on the date of sale.

4. The minor sons on becoming major filed a suit out of which this appeal arises, for a declaration that the sale deed executed was not for legal necessity, nor for the benefit of the estate and, therefore, not binding on them. They also prayed for joint possession of their 2/3rd share.

5. The trial court found that there was legal necessity for the sale to the extent of Rs. 2600 only, the consideration of Rs. 3050 for the sale was inadequate as the lands were worth about Rs. 400 and that there was no compelling pressure on the estate to justify the sale and therefore the sale was not for the benefit of the family and hence not binding on the plaintiffs.

6. A decree was granted in their favour for joint possession of 2/3rd share of the lands subject to certain payment to the second defendant. On appeal by the second defendant, the Assistant Judge held the suit of the first plaintiff to be barred by time and therefore modified the decree in favour of the second plaintiff. On appeal by the first plaintiff and second defendant, the High Court allowed the appeal by the first plaintiff and dismissed the appeal filed by the second defendant.


ISSUE BEFORE THE COURT:

1. Whether the sale deed dated May 1, 1935 was for legal necessity or benefit of the estate.


RATIO OF THE COURT:

  1. The court observed that the facts show that out of the consideration of Rs. 3050 for the sale there was undoubted legal necessity to the extent of Rs. 2600 the total amount due under the two deeds of mortgage executed by the father of the plaintiffs.

  2. The court observed that there were continuous dealings between the family of the plaintiffs and the family of the second defendant, over a long course of years.

  3. When the mortgagee is himself the purchaser and when the greater portion of the consideration went in discharge of the mortgagors, we do not see how any question of enquiry regarding pressure on the estate would arise at all.

  4. The court did not agree with the conclusion of the courts below that the sale was not binding on the plaintiffs and observed that the courts below appeared to think that notwithstanding the circumstance that there was legal necessity to a large extent it was incumbent on the second defendant to establish that he made enquiry to satisfy himself that there was sufficient pressure on the estate which justified the sale.

  5. The court observed that where ancestral property is sold for the purpose of discharging debts incurred by the father and the bulk of the proceeds of the sale were so accounted, the fact that a small part of the consideration is not accounted for will not invalidate the sale.

  6. The court observed that when the mortgagee is himself the purchaser and when the greater portion of the consideration went in discharge of the mortgagors, no question of enquiry regarding pressure on the estate would arise at all.

DECISION HELD BY COURT:

1. The court allowed the appeals and dismissed the suit with cost throughout.

Contact Us: briefcsed.org@gmail.com

©2020 by briefCASED.