ATM :: Major rules of a minor’s property


Sunil Tyagi | Mumbai | 23rd June 2015 | Hindustan Times
Any transfer of property by guardians of young wards without permission of a court can be challenged by the minor or their representatives

ATM

A minor (a child under the age of 18 years or 21 years in case of the appointment of guardian) may be the owner of immovable property devolved on him/her through inheritance from a deceased person or through a gift or purchase in the name of a minor by the guardian. Owing to the legal incompetence of a minor, the management of the property is the duty of the guardian, that is a person caring for the minor and his or her property.

Though the minor is the owner of the property and the guardian is legally competent to manage the property, mortgage or create charge (have a right over the property to recover amounts to the extent entitled) on the minor’s property or transfer by way of sale, gift, exchange it, there are certain restrictions. Often sale and transfer of a property owned by a minor is made by the guardian without realising that such sale or transfer is voidable at the instance of such a minor. In case of a minor who is Hindu as definde under the law, provisions of the the Hindu Minority and Guardianship Act, 1956, will govern the transfer of the minor’ sproperty.

In 2013, in the case of Saroj Vs Sunder Singh and others, the Supreme Court observed that to sell, gift, exchange, mortgage or create charge on the immovable property th eprior permission of the appropriate court is essential.

In this case, the appellant and her two sisters were minors when their father expired and the land devolved upon their mother and three of them, equally. Thereafter, while the daughters were still minors, the mother sold the entire property. One of the daughters preferred a suit seeking cancellation of the sale deeds for the sale of the land.

The the trial court, the mother cliamed that she sold the land to take care of and fulfill the requirements of the minor daughters and for the proper maintenance of the daughters. The trial court upheld the argument preferred by the mother. Thereafter, in appeal, the High Court also, upheld the judgement of the trial court.

Aggrieved by the judgements the daughter appealed to the Supreme Court. Going through the provisions of the Hindu MInority and Guardianship Act, 1956, the apex court observed that the natural guardian of the minor has power to do all acts which are necessary or reasonable and proper for the benefit of the minor or the realisation, protection or benefit of the minor’s estate, etc. However, the Act clearly provides that no immovable property of the minor or part thereof can be transfered by way of sale, gift, exchange or otherwise without obtaining prior written permission of the court.

The Supreme Court observed that though it was stated that the property had been sold for the proper benefit of the minors, their protection,, education, and marriage, there was nothing placed on record to suggest that previous permission of the court was obtained by the natural guardian before transfer by sale in question. Hence, the sale deeds executed by the mother shall become voidable at the instance of the daughters.

Thus, the court of law at its sole discretion, may permit the transfer of the minor’s property by his guardian to any third party subject to adherence to the observance of certain restrictions and conditions. Any transfer of property of a minor without the prior permission of the court of law can be challenged at the instance of the minor or any person at his or her behest. Such transactions are voidable. It is left to the minor to agree or disagree to such transfers without the prior permission of the court of law. He may exercise his option on attaining majority and within three years of coming to know of such a transfer.

Thus, it is imperative for guardians of minors to keep in mind these restrictions while managing and dealing with th eimmovable property of minors.

The author is a senior partner at Zeus Law, a corporate commercial law firm. One of its areas of specialisations its real estate transactional and litigation work. If you have any queries, email us at ht@zeus.firm.in and htestates@hindustantimes.com

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