Minor Can Be Transferee of Immovable Property: Supreme Court Clarifies Legal Position

The Supreme Court ruled that minors can validly acquire immovable property via a sale deed, as such transfers are not contracts under Section 11 of the Indian Contract Act, 1872, and are legally enforceable.

Minor Can Be Transferee of Immovable Property: Supreme Court Clarifies Legal Position

The Supreme Court of India clarified that a minor can validly receive immovable property as a transferee under a sale deed, and such a transfer cannot be challenged on the ground of the minor’s incapacity under Section 11 of the Indian Contract Act, 1872. The ruling emphasized that while minors are not competent to contract, the transfer of ownership under a sale deed does not qualify as a contract.

Bench and Observations

  • The case was decided by a bench comprising Justices CT Ravikumar and Sanjay Kumar.
  • The Court observed:
    “A minor can be a transferee though not a transferor of immovable property. The conditions under Section 11 of the Indian Contract Act would not come in the way as a sale cannot be termed as a contract.”
  • The Court distinguished between a contract of sale and a sale under Section 54 of the Transfer of Property Act, stating:
    “A sale is a transfer of ownership in exchange for a price paid, promised, or part-paid and part-promised, and cannot be equated with a contract.”

  • Minor’s Right to Own Property:
    • The Court held that a minor could validly acquire ownership of immovable property through a sale deed.
    • On attaining majority, the minor is fully competent to transfer the property acquired earlier.
  • Impact of Section 11 of the Contract Act:
    • Since a sale deed is not a contract, Section 11 (which disqualifies minors from contracting) does not apply.
  • Benami Transactions Prohibited:
    • The Court referred to Section 4 of the Benami Transaction Act, 1988, which prohibits suits claiming rights over properties held benami.
    • The judgment upheld that no action can lie against the person in whose name the property is held, reinforcing the High Court’s finding.

Case Background

  • Parties:
    Neelam Gupta & Ors Versus Rajendra Kumar Gupta & Anr.
  • Facts:
    • The case centered on a suit property transferred to Sitaram in 1963 when he was a minor (aged 17).
    • Upon attaining majority, Sitaram transferred the property to the plaintiffs in 1968 through a sale deed.
    • The defendants argued that the 1963 transfer to Sitaram was invalid due to his minority, thus disputing his ability to transfer valid title in 1968.
  • Lower Courts’ Decisions:
    • The trial court and first appellate court ruled in favor of the defendants, invalidating the transfer.
    • However, the High Court, in a second appeal, reversed these findings, holding the transfer valid.

Supreme Court's Ruling

  • No Legal Disability for Sitaram:
    • The Court affirmed the High Court’s decision, noting that Sitaram had no legal disability to receive the property in 1963, and the subsequent transfer in 1968 was valid.
    • The judgment stated:
      “It is nobody's case that at the time of execution of the sale deed in 1968, Sitaram had not attained majority.”
  • Rejection of Defendant’s Arguments:
    • The contention that Sitaram’s minority in 1963 invalidated his title was dismissed.
    • The 1968 sale deed was upheld as valid and enforceable.
  • Dismissal of Appeal:
    • The Supreme Court dismissed the defendants' appeal, affirming that the transfer could not be challenged on grounds of Sitaram’s age at the time of the initial transfer.

Relevant Precedents and Provisions

  • Section 54, Transfer of Property Act, 1882: Defines sale as a transfer of ownership for consideration.
  • Section 11, Indian Contract Act, 1872: Prohibits minors from entering contracts.
  • Section 4, Benami Transactions Act, 1988: Bars suits related to benami properties.

Case Title: Neelam Gupta & Ors Versus Rajendra Kumar Gupta Anr., Civil Appeal Nos.3159-3160 of 2019

Attachment:

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