Supreme Court Rules: Minors Can Repudiate Guardian's Property Sales After Turning 18 Without Filing Lawsuit

The Supreme Court delivered a landmark judgment on October 7 regarding property transactions involving minors, establishing that individuals under 18 years are not obligated to file a formal lawsuit to invalidate property transfers executed by their natural guardians without court approval once they reach adulthood.

According to the apex court's ruling, minors who have attained majority can repudiate such property transfers through clear and unambiguous conduct, such as independently selling or transferring the same property themselves.

This significant verdict came from the bench of Justices Pankaj Mithal and Prasanna B Varale in the case of K S Shivappa Vs Smt K Neelamma.

"A voidable transaction executed by the guardian of a minor can be repudiated and ignored by the minor within the prescribed time upon attaining majority either by instituting a suit for setting aside the voidable transaction or by repudiating it through unequivocal conduct," Justice Mithal wrote in the judgment.

The core question addressed was whether minors, upon reaching adulthood, must necessarily file a lawsuit within the prescribed period to invalidate a sale deed executed by their natural guardian, or whether such a deed could be repudiated through their conduct within three years of attaining majority.

Referencing sections 7 and 8 of the Hindu Minority and Guardianship Act, 1956, the bench clarified: "A natural guardian of a minor has no authority in law to mortgage, sell, gift or otherwise transfer any part of the immovable property of the minor without the prior permission of the court."

The case involved two adjacent plots in Karnataka's Shamanur village, originally purchased in 1971 by Rudrappa in the names of his three minor sons. Without obtaining court permission, Rudrappa sold these plots to third parties.

After the surviving sons reached adulthood, they and their mother sold one plot to K S Shivappa in 1989, effectively repudiating their father's unauthorized sale. A similar situation occurred with the second plot, which the sons also sold to Shivappa after attaining majority.

While the trial court initially recognized the minors' right to repudiate their father's unauthorized sales through their own subsequent transactions, both the appellate court and high court reversed this decision, holding that the sons should have filed formal suits to invalidate their father's sale deeds.

The Supreme Court, however, overturned these rulings, emphasizing that the law does not specify the exact manner in which a voidable transaction must be repudiated.

Justice Mithal observed that a minor, after becoming an adult, may avoid such transactions either expressly by filing a lawsuit or implicitly through unequivocal conduct, such as executing a fresh sale of the same property.

The court noted two practical reasons supporting repudiation through conduct: "First, at times the minor may not be aware of such a transaction and may not be positioned to institute a suit; secondly, if the transaction hasn't been implemented and the acquiring party lacks possession, giving the impression that the property remains with the minor, the individual upon attaining majority may reasonably choose not to file a lawsuit."