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Shyam Narayan Prasad v. Krishna Prasad and Ors.

Civil Appeal · 2018 INSC 556Decided 2 Jul 2018
Civil Appeal No. 5415 of 2011
Justice Abhay Manohar Sapre · Justice S. Abdul Nazeer

Background

A family's ancestral property was partitioned in 1987 among the common ancestor Gopalji Prasad's five sons, including Shyam Narayan Prasad (defendant No.1) and Laxmi Prasad (defendant No.2). In 1990, Shyam Narayan Prasad and Laxmi Prasad executed an unregistered deed purporting to exchange a liquor-shop property (allotted to Laxmi Prasad) for a shoe-shop property. Laxmi Prasad's sons and grandson (the plaintiffs) sued to invalidate this exchange deed, arguing the liquor-shop property was coparcenary (ancestral) property in which they too had a birthright, and that the deed, being unregistered, could not legally transfer the immovable property.

Decision Breakdown

The Supreme Court held that property a coparcener receives on partition remains ancestral/coparcenary property as regards his own male descendants (sons and grandsons), who acquire a right in it by birth, so the plaintiffs did have a legitimate interest in the property. Since the exchange deed involved an immovable property (the RCC building) worth more than Rs. 100, Section 118 read with Section 54 of the Transfer of Property Act required it to be registered; being unregistered, Section 49 of the Registration Act barred it from being used as evidence of the transfer. The Court also rejected the appellant's fallback argument under Section 53A of the T.P. Act (protection of a transferee in part-performance of a contract), because he had never specifically pleaded that he took possession in part-performance. The appeal was accordingly dismissed, with no order as to costs.

Lesson Learnt

A family member cannot bypass other coparceners' (joint family members') birthright interest in ancestral property simply by entering an informal exchange agreement: if immovable property worth more than Rs. 100 changes hands, the deed must be registered to have any legal effect, and failing to register it (or failing to plead the right legal defence at the right stage) can doom the transaction entirely.

Official source (sci.gov.in)View Judgment (PDF)

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