TaxTMI 
TaxTMI 
1996 (5) TMI 421
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....e minors. After the death of the father and after 12 years of the sale in question the present suit was filed attacking the validity and binding nature of the sale on the ground that the sale was for a grossly inadequate consideration; that there was no pressing need to alienate the property; that the income from other properties of the joint family was sufficient to wipe off the debts if any and that most of the debts for the discharge of which Ex. P2 was executed were bogus in nature. The sale consideration was for a sum of ₹ 9,000/-. The first respondent (appellant herein) resisted the suit by contending that the suit was speculative one, the vendors were obliged to alienate comparatively a small fraction of the family property for the purpose of carrying on the business; that the income from other family properties were not sufficient for discharging the liabilities and that the sale was for adequate consideration. The trial court after elaborate consideration found that out of sale consideration of ₹ 9,000/- a sum of ₹ 5,750/- factually was utilised to discharge genuine antecedent debts and sale consideration was adequate. Consequently, the trial court uph....
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....a Debnath & Ors. (1970 (3)SCC 722). Learned Sr. Counsel appearing for the respondents while supporting the judgment of the High Court and the reasonings thereon also contended that in as much as the High Court has remanded the matter on the question of legal necessity, this Court may not interfere with that judgment. We have considered the rival submissions. The trial court after considering each and everyone of the debts in all amounting to 13 items recited in the sale deed, found that except the debts amounting to ₹ 3,750/- out of total consideration of ₹ 9,000/-, the other amount was proved to have gone into the discharge of antecedent debts binding on the sons. In that view of the matter, the trial court upheld the impugned sale and consequently dismissed the suit. Before the Appellate Court, it appears that both the parties proceeded on the ground that Ex. P2 was not supported by antecedent debts to the extent of only ₹ 3,250/-. The First Appellate Court observed in paragraph 7 as follows." "In fact, the appellants' learned counsel has accepted the finding recorded in paragraph 13 of the judgment that Ex. P2 was not supported by antecedent debt....
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....ntentions advanced before us. As noticed earlier, the contention of the learned Sr.Counsel for the appellant was that if the purchaser acts in good faith after enquiry, it is not obligatory on his part to make further enquiries into the application of surplus. if any, of the sale consideration. This question does not appear to be res integra any more as it is settled by a number of judgments rendered by Privy Council and approved by this Court. In Krishna Das & Ors. Vs. Nathu Ram & Anr (AIR 1927 PC 37) (supra) (supra) after referring to earlier case in Hunooman Persaud Panday vs. Musamat Babooee (6 MIA 393), the Court held that where the purchaser acts in good faith and after due enquiry and is able to show that the sale itself was justified by legal necessity. he is under no obligation to enquire into the application of any surplus and is, therefore, not bound to make repayment of such surplus to the members of the family challenging the sale. This judgment was referred to with approval in Ram Sunder Lal & Another's case (supra) where the ratio was laid down in more clear terms. It was held that where the sale of family property by the father was effected for adequate consideratio....
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....refer to two decisions of the Privy Council. One is Sri Krishan Das Vs. Nathu Ram. In that case the consideration for the alienation was ₹ 35,000/-. The alienee was able to prove that there was legal necessity only to the extent of ₹ 3,000/- and not for the balance. The High Court held that the alienation could be set aside upon the plaintiff's paying ₹ 3,000/- to the alienee. But the Privy Council reversed the decision of the High Court observing that the High Court had completely misapprehended the principle of law applicable to a case of this kind. What the alienee has to establish is the necessity for the transaction. If he establishes that then he cannot be expected to establish how the consideration furnished by him was applied by the alienor. The reason for this, as has been stated by the Privy Council in some other cases, is that the alienee can rarely have the means of controlling and directing the actual application of the money paid or advanced by him unless he enters into the management himself. This decision was followed by the Privy Council in Niamat Rai vs. Din Dayal where at p. 602 and 603 it has observed: "It appears from the judgment of t....