PRASAD & ORS. versus V. GOVINDASWAMI MUDALIAR & ORS.

Citation: [1982] 2 S.C.R. 109 · Decided: 08-12-1981 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Appeal(s) allowed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

.· 
-
-· 
--
109 
A 
PRASAD & ORS. 
v. 
V. GOVINDASWAMI MUDALIAR & ORS. 
December 8, 1981 
[D.A. DESAI AND R.B. MISRA, JJ.) 
Hindu Law-Joint Hindu family-A11cestral business carried on-Karla start-
ing a new business-Incurring debts alienation of joint family property by karta 
and his brother for liquidation of debts-Alienation assailed by sons-Alienation-
Whether valid. 
,,.,, 
Hindu Law-Antecedent debt-What is-Debt whether to be antecedent in 
fact as well as in time-Whether to be independent of and not part of the rransac-
tion impeached. 
Hindu Law-Alienation of joint hindu family property-Validity of aliena-
tion assailed-Legal necessity and adequate consfderation-Proof of-Whether 
required. 
Constitution Df India 1950, Art. !33-Findings of fact-Supreme Court-Inter-
B 
c 
D 
ference by-When arises. 
B 
The Karta of a Joint Hindu Family was in sole management of the entire 
family affairs and he brought up his younger brother. The ancestral family 
business (Kulachara) was that of tobacco and money lending. After sometime 
the Karta started a new business of fungi. Jn connection with this new venture he 
borrowed money from others either on promissory notes or on the security of the 
family properties. He suffered Joss in the new business. When his creditors 
began to press him for immediate discharge of the debts the Karta and his 
brother on their behalf and on behalf of the other minors in the family entered 
into a written agreement on 7th July, 1955 (Ext. B-4) with Govioda Swami 
Mudaliar and his two brothers whereby they agreed to sell 
their almost 
entire property for 
a sum of 
Rs. 
14,000 to 
discharge their debts. 
Pursuant to this agreement a sale deed was executed on 22nd August, 1955 
(Ext. B-5) for an enhanced consideration of Rs. 16,500. The sale deed referred 
to the various debts including the mortgage debts owed by the vendors which 
were to be discharged by the vendees and the balance if any to be paid to the 
vendors. The veodees were asked to pay off the mortgage debts mentioned in 
the sale deed in the first instance if they had no sufficient funds to clear off all 
the debts. 
The sons of the· Karla and those of his brother filed two suits, suit No. 107 
of 1958 and suit No. 108 of 1958 respectively challenging the sale deed dated 24n<l 
F 
G 
H 
A 
B 
c 
D 
E 
110 
SUPREME COURT REPORTS 
( 1982] 2 S.C.R 
August, 1955 (Ext. B-5) and the mortgage deed of 2nd March, 1952 (Ext. B-49), 
and claiming partition. 
In suit No. 107 of 1958 the Karta and his brother were Defendant Nos. I 
and 2, the three minor sons of the Karta's brother, Defendant Nos. 3 and 5 and 
the vendees Defendant Nos. 6 to 8, the mortgagee, Defendant No. 9 and the 
official Receiver, Defendant No. 10. In suit No. 108 of 1958 the three minor 
sons of the Karla's brother were the plaintiffs and the plaintiffs and other defen-
dants of suit No. 107 of 1958 were impleaded as defendants. 
It was alleged in the suits that the father of the plaintiffs (Karla) started a 
new business of lungi which was not the ancestral busiuess of the family, and 
that in connection with the new venture he borrowed large sums of money. He 
sustained heavy losses, and when the mortgagees and unsecured creditors started 
pressing for immediate discharge of the debts he executed first an agreement to 
sell and then a registered sale deed for a nominal consideration of Rs. 16,500 
which was grossly inadequate and extremely low considering the extent of the 
land and the ancestral house and its market value. It was further alleged that 
except the two mortgages mentioned in the sale deed the other debts shown as 
consideration for the sale were false and fictitious, that the said mortgages were 
paid by defendants 6 to 8 out of the standing crops, and that there was absolutely 
no necessity for borrowing the large sums considering the large income from the 
joint family properties. 
A third suit (suit No. 4 of 1960) was filed by a creditor of the Karla and 
his brother against the vendees, alleging that the Karta had borrowed a sum of 
Rs. 1000 and executed a bond for that amount and that barring some payments 
a substantial amount was due on account of principal and interest and that the 
Karla executed a sham, nominal and fraudulent sale deed in respect of the family 
property in favour of the defendant with an intent to defeat and delay his credi-
tors, and that property worth Rs. 50,000 was alienated for a nomin<al price. 
The claim of the plainti
Excerpt shown. Read the full judgment & AI analysis in Lexace.