Validity of Gifts by Karta of ancestral property of HuF

The Supreme Court of India in the matter of KC Laxmana vs KC Chandrappa Gowda | 2022 LiveLaw (SC) 381 has HELD :

“It is trite law that Karta/Manager of a joint family property may alienate joint family property only in three situations, namely, (i) legal necessity (ii) for the benefit of the estate and (iii) with the consent of all the coparceners of the family.”

“It is settled law that where an alienation is not made with the consent of all the coparceners, it is voidable at the instance of the coparceners whose consent has not been obtained (See: Thimmaiah and Ors. Vs. Ningamma and Anr; (2000) 7 SCC409).”

“It is well-settled that a Hindu father or any other managing member of a HUF has power to make a gift of ancestral property only for a ‘pious purpose’ and what is understood by the term ‘pious purpose’ is a gift for charitable and/or religious purpose. Therefore, a deed of gift in regard to the ancestral property executed ‘out of love and affection’ does not come within the scope of the term ‘pious purpose’.”

The principle of law of what constitutes ‘pious purpose’ has been laid down by the Supreme Court in Guramma Bhratar Chanbasappa Deshmukh and Ors. vs. Mallappa Chanbasappa and Anr; AIR 1964 SC 510, wherein it was held as follows:

“It may, therefore, be conceded that the expression “pious purposes” is wide enough, under certain circumstances, to take in charitable purposes though the scope of the latter purposes has nowhere been precisely drawn. But what we are concerned with in this case is the power of a manager to make a gift to an outsider of a joint family property. The scope of the limitations on that power has been fairly well settled by the decisions interpreting the relevant texts of Hindu law. The decisions of Hindu law sanctioned gifts to strangers by a manager of a joint Hindu family of a small extent of property for pious purposes. But no authority went so far, and none has been placed before us, to sustain such a gift to a stranger however much the donor was beholden to him on the ground that it was made out of charity. It must be remembered that the manager has no absolute power of disposal over joint Hindu family property. The Hindu law permits him to do so only within strict limits. We cannot extend the scope of the power on the basis of the wide interpretation give to the words “pious purposes” in Hindu law in a different context. In the circumstances, we hold that a gift to a stranger of a joint family property by the manager of the family is void.”

Further, In the matter of Ammathayi @ Perumalakkal and Anr. Vs. Kumaresan @ Balakrishnan and Ors; AIR 1967 SC 569, the Supreme Court Court had reiterated the above position as under:

“10. As to the contention that Rangaswami Chettiar was merely carrying his father’s wishes when he made this gift in favour of his wife and that act of his was a matter of pious obligation laid on him by his father, we are of opinion that no gift of ancestral immovable property can be made on such a ground. Even the father-in-law, if he had desired to make a gift at the time of the marriage of his daughter-in-law, would not be competent to do so insofar as immovable ancestral property is concerned. No case in support of the proposition that a father-in-law can make a gift of ancestral immovable property in favour of his daughter-in-law at the time of her marriage has been cited. There is in our opinion no authority to support such a proposition in Hindu law. As already observed, a Hindu father or any other managing member has power to make a gift within reasonable limits of ancestral immovable property for pious purposes, and we cannot see how a gift by the father-in-law to the daughter-in-law at the time of marriage can by any stretch of reasoning be called a pious purpose, whatever may be the position of a gift by the father or his representation to a daughter at the time of her marriage. One can understand such a gift being made to a daughter when she is leaving the family of her father. As it is the duty of the father or his representative to marry the daughter, such a gift may be and has been held by this Court to be for a pious purpose. But we see no pious purpose for such a gift by a father-in-law in favour of his daughter-in-law at the time of marriage. As a matter of fact the daughter-in-law becomes a member of the family of her father-in- law after marriage and she would be entitled after marriage in her own right to the ancestral immovable property in certain circumstances, and clearly therefore her case stands on a very different footing from the case of a daughter who is being married and to whom a reasonable gift of ancestral immovable property can be made as held by this Court.”