JUPUDI VENKATA VIJAYA BHASKARversusJUPUDI KESAVA RAO (D) AND ORS.

A                 JUPUDI VENKATA VIJAYA BHASKAR
                                        V.

                   JUPUDI KESA VA RAO (D) AND ORS.

                            SEPTEMBER 19, 2003

B             [Y.K. SABHARWAL AND B.N. AGARWAL, JJ.]

        Hindu Adoption and Maintenance Act, 1956-Sections 17, 4 and
  1O(iv)-Appellant adopted under an ante-adoption agreement by respondent
  and his wife-Certain properties settled between the appellant and the
C niece of the respondents' wife, who was later married to him as per the
  agreement-Agreement also stated that appellant shall have no further
  claim over other properties of the respondent-Appellant filed a suit
  challenging the agreement contending that such concession amounted to
  a payment or reward in consideration of adoption-Trial Court dismissed
D the suit-Decision upheld by High Court-On appeal Held, provision
  enacted with the object to prevent trafficking of children-Such ante-
  adoption agreement not prohibited-Agreement does not show that any
  payment was made or agreed to be made-An agreement by which an
  adopted son agrees not to set up any claim on certain items belonging to
  the adoptive family not covered-£very kind ofagreement between a major
E adopted and would-be adoptive father not prohibited
          Section 4-0verriding effect ofthe Act-Position prior to enforcement
    of the Act-Major adopted son by an agreement could consent to a
    /imitation of his right in the property of his adoptive father or any other
F   condition-Such an agreement was legal and binding on the adoptive son.

       The respondent and his wife brought the appellant to their house
  in May 1957. He was brought up along with the niece of the respondent's
  wife. An ante-adoption agreement was entered into between the
  respondent and the appellant on 14.3.1962 after he attained majority.
G The respondents' wife had already settled certain properties by
  separate settlement deeds in favour of her niece and the appellant. The
  appellant and the niece of the respondent's wife married each other,
  as per the adoption agreement, on 24.3.1962, which was also the date
  of adoption. The adoption agreement had further stated that in respect          l -
H of the properties shown in the schedule therein, the appellant had
                                        948
                      J. V. V. BHASKAR v. J.K. RAO                  949
    agreed not to advance any claim or raise any dispute and that the A
    respondent would have absolute right to those properties without any
    limitation. The appellant later on instituted a suit challenging the
    validity of the said ante-adoption agreement on the ground that the
    same was hit by Section 17 (1) of the Hindu Adoption and Maintenance
    Act, 1956. The suit was dismissed and the High Court upheld the B
    decision. Hence this appeal.

          The appellant contended that the ante-adoption agreement was
    prohibited as he had given up his rights in the respondent's properties
    to which he would have been entitled after adoption and the same
    amounted to a payment or reward in consideration of the adoption hit C
    by Section 17(1) of the Act; that the legal position had changed after
    the enactment of the Act and it was no longer permissible to enter into
    such an ante-adoption agreement; and that Section 4 of the Act
    clarified that principles of Hindu Law or interpretation thereof
    prevailing prior to the commencement of the Act ceased to have any D
    effect.

        Dismissing the appeals, the Court

         HELD : 1. Prior to enforcement of the Hindu Adoption and
    Maintenance Act, Section 500 of Principles of Hindu Law stipulated E
    that where the adopted son was a major at the time of adoption, he
    may by an agreement with the adoptive father or the adopting widow
    made before the adoption, consent to a limitation of his rights in the
    property of his adoptive father. The settled law before the commence-
    ment of the Act was that when a person of full age at the time of F .
    adoption agrees or assents to the condition under agreement entered
    into with the adoptive father, such agreement was legal and binding
    on the adoptive son. [952-D-E]

         Kashibai Ramchandra Ghatge v. Tatya Genu Pawar & Ors., AIR G
    (1916) Bom. 312; Pandurang Sakharam Thakur v. Narmadabai Ramkishna
    Keluskar, AIR (1932) Dom. 571 and Kanduru Venkata Soma/ah v.
    Kanduru Ramasubbamma, AIR (1984) A.P. 313, referred to.

l        2. Section 17 of the Hindu Adoption and Maintenance Act, 1956
    has been enacted with a view to prevent trafficking of children. The H
    950                  SUPREME COURT REPORTS [2003] SUP.P. 3 S.C.R.

A ante-adoption agreement does not show any payment was either made
    or agreed to be made by the appellant to the respondent. It cannot be
    construed as an agreement whereby any payment was made or agreed
    to be made by the appellant to the respondent. It is difficult to construe
    the agreement wherein the appellant gave or agreed to give to his
B   adoptive father any other reward. The appellant before adoption had
    no interest of any kind in the properties, subject matter of the ante-
    adoption agreement. Various properties had already been settled in
    favour of the appellant and his would-be wife by separate settlement
    deeds and both ultimately got married on the date of adoption. Section
C   17 enacted to prevent trafficking of children is not intended to cover
    cases of the present nature, where a major agrees not to set up any
    claim with regard to certain items belonging to the adoptive family.
    It cannot have an overriding effect so as to change the legal proposition
    prevalent prior to the commencement of the Act and in these
D   circumstances it has no applicability. [953-D-H)

          Commissioner o/Gift-Tax, A.P. v. Smt. Gollapudi Santhamma, (1979)
    116 ITR 930, distinguished.

         3. In the present case there is no question of adoptive father giving
E   any payment or reward to the appellant as consideration for the
    adoption nor was any question of any payment or agreement to make
    payment by the appellant to his would be adoptive father. Such a
    question would arise only if the appellant had any right in the
    properties. Prior to adoption the appellant had no such right and,
F   therefore, the question of his giving anything to the respondent does
    not arise. The appellant had merely agreed not to claim any interest
    in some of the properties of the adoptive father and the agreement did
    not cover all properties of the respondent. Such an agreement is not
    prohibited as under the circumstances of the case there was no question
G   of any trafficking in children. Section 17 does not prohibit every kind
    of agreement between a major adoptee and the would-be adoptive
    father. [957-B-C, 957-E)

         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14870 of
H   1996.
          J. V. V. BHASKAR v. J.K. RAO [SABHARWAL, J.]                951

     From the Judgment and Order dated 18. i .94 of the Andhra Pradesh A
High Court in A.No. 1233 of 1988.

                                  WITH

     C.A. No. 14871 of 1996.
                                                                            B
     Sunil Gupta, P. Krishnamoorthy, A.D.N. Rao, Mrs. RevathyRaghavan,
Mrs. K. Sarda Devi, Ms. B. Sunita Rao, M.D. Babu, Sushi! K. Pathak and
V.G. Pragasam for the appearing parties.

     The Judgment of the Court was delivered by                             c
      Y.K. SABHARWAL, J. : The question for determination in these
appeals is about the validity of an ante-adoption agreement entered into
prior to adoption between to be adopted son and the would be adoptive
father after coming into force of the Hindu Adoption and Maintenance Act, D
1956 (for short 'the Act').

      The question has arisen in a suit instituted by the appellant for
partition in respect of properties mentioned in the Schedule to the ante-
adoption agreement. Defendant No. I is the adoptive father of the appellant
and defendat No. 2 is a formal party being son of the appellant supporting E
his father. The appellant, in May 1957, was brought by defendant No. I
and his wife to their house from the house of his natural parents. Since then,
he was brought up by defendant No. I and his wife. The wife of defendant
No. I also brought up her niece. Undisputedly, the ante-adoption agreement
(Exhibit B-16) dated 14th March, 1962 entered into between the appellant F
(plaintiff) and defendant No. I was executed when the appellant was a
major. The execution and genuineness of Exhibit B-16 is not under
challenge. The challenge is about the validity of Exhibit B-16 on the
ground that it is hit by Section 17(1) of the Act. The concurrent findings
of fact that have not been challenged are that the appellant was adopted G
by defendant No. I and his wife in the morning hours on 24th March, 1962;
On the same date, in the evening marriage between the appellant and niece
of wife of defendant No. I took place.

     The suit instituted by the plaintiff was dismissed by the trial court.
The judgment and decree of the trial court has been upheld by the High H
    952                   SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A Court in the first appeal. Exhibit B-16 has been held to be valid and not
  hit by Section 17 of the Act. In these appeals, challenging the impugned
  judgment of the High Court, the only point canvassed by Mr. Sunil Gupta,
  senior advocate for the appellant, is about Exhibit B-16, being invalid in
  view of prohibition contained in Section 17 of the Act. To consider this
B question, we would assume as correct the conclusion of the High Court
  that the appellant on adoption on 24th March, 1962 became a coparcener
  and the first defendant ceased to be a sole surviving coparcener. Learned
  counsel for the respondents has not raised the invalidity of adoption under
  clause (iv) of Section I 0 of the Act on the ground that the appellant was
C more than 15 years of age. Finding of the High Court on the said aspect
   is that in view of the custom in the Yaish community to which the parties
   belong adoption after the age of 15 years is permissible. this finding is also
   not under challenge.

          Prior to enforcement of the Act, Section 500 of Principles of Hindu
D Law stipulated that where the adopted son was a major at the time of the
                                                                                    -
  adoption, he may by an agreement with the adoptive father or the adopting
  widow made before the adoption, consent to a limitation of his rights in
  the property of his adoptive father. The settled law before the commencement
  of the Act was that when a person of full age at the time of adoption agrees
E or assents to the condition under agreement entered into with the adoptive
  father limiting his right in the properties of the adoptive father, such
  agreement was legal and binding on the adoptive son (See Kashibai
  RamchandraGhatgev. TatyaGenuPawar& Ors., AIR(l916)Bom.312;
  Pandurang Sakharam Thakur v. Narmadabai Ramkrishna Keluskar, AIR
f (1932) Born. 571 and Kanduru Venkata Somaiah v. Kanduru
  Ramasubbamma, AIR (1984) Andhra Pradesh 313).

       Learned counsel for the appellant has, fairly and rightly, not disputed
  the legal proposition that prior to the enforcement of the Act, it was
G permissible in law to enter into an ante-adoption agreement. Mr. Gupta,
  however, strenuously contends that after the enforcement of the Act, such
  an agreement is clearly hit by Section 17 and, therefore, the legal position
  prevailing prior to the enforcement of the Act is of no relevance. The
  question, therefore, is whether the ante-adoption agreement Exhibit B-16
  dated 14th March, 1962 is hit by Section 17 of the Act. Section 17 of the
H Act reads as tinder :
          J. V. V. BHASKAR v. J.K. RAO [SABHARWAL, J.]                   953

         17. Prohibition ofcertain payments. - (I) No person shall receive A
         or agree to receive any payment or other reward in consideration
         of the adoption of any person, and no person shall make or give
         or agree to make or give to any other person any payment or
         reward the receipt of which is prohibited by this section.
                                                                               B
         (2) If any person contravenes the provisions of sub-section (I),
         he shall be punishable with imprisonment which may extend to
         six months, or with fine, or with both.

         (3) No prosecution under this section shall be instituted without C
         the previous sanction of the State Government or an officer
         authorized by the State Government in this behalf."

      Exhibit B-16 mentions that it is an ante-adoption agreement executed
before the adoption. It is recited therein that the first defendant and his wife,
for 5 years have been fostering the plaintiff with an intention to take him D
in adoption. It also mentions that wife of defendant No. I at the instance
of her husband, namely, defendant No. 1 had settled certain properties
detailed therein in favour of the plaintiff under two settlement deeds dated
I 0th September 57 (Exhibit A-42) and dated 12th September, 1957
(Exhibit A-19). She had also conveyed with absolute right certain properties E
detailed therein in favour of the wife of the plaintiff under two settlement
deeds dated 31st July, 1957 (Exhibit B-49) and 15th August, 1957 (Exhibit
B-50). The document further mentions that it is already agreed that the
plaintiff would marry niece of wife of defendant No. I to whom the
aforesaid properties were settled. The document shows that the plaintiff F
agreed, in respect of the properties shown i~ the Schedule to Exhibit
B-16, not to advance any claim or raise any dispute. The plaintiff further
agreed that the first defendant shall have absolute right without any
limitation and he shall have no right or interest in the said properties which
are now subject matter of partition suit.
                                                                               G
      Mr. Gupta places strong reliance on Section 4 of the Act in support
of the contention that the principles of Hindu Law shall cease to have any
effect. Tho contention is that sincP, in the matter in issue, provision has
been made in the Act by enacting Section 17, the principles of Hindu law
or interpretation thereof prio_r to commencement of the Act will have no H
    954                   SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.

A relevance. Regarding the legal status and rights and interest of the appellant
  before and after adoption, it cannot be doubted that before adoption on 24th
  March, 1962, appellant had no interest in the properties in question. With
  effect from the date of adoption, the plaintiff by legal fiction served all the
  ties with the natural parents and became the child of defendant No. I and
B his wife. The question, however, is the validity of agreement, Exhibit
  B-16, entered into before adoption. Would it amount, in the facts and
  circumstances of the case, to defendant No. I receiving or agreeing to
  receive any payment or reward in consideration of the adoption?
  The contention urged is that giving up of right in the properties
  of defendant No. I to which the appellant would have been otherwise
C entitled on and after adoption but for Exhibit B-16, would amount to
  payment or reward or the appellant agreeing to make payment or reward
  to his would be adoptive father in consideration of the adoption. It is argued
  that such an agreement is prohibited by sub-section (I) of Section 17 of
  the Act.
D
          Section 17 of the Act has been enacted with a view to prevent
    trafficking of children. The contravention of sub-section (I) is punishable
    with imprisonment which may exter.d to six months or fine or both as
    provided for in sub-section (2) of section 17. The question is whether the
E   agreement Exhibit B-16 comes within the purview of Section 17(1) of the
    Act. The recital in Exhibit B-16 does not show any payment was either
    made or agreed to be made by the appellant/plaintiff to the first defendant.
    it cannot be construed as an agreement whereby any payment was made
    or agreed to be made by the appellant/plaintiff to defendant No. I. It also
F   seems difficult to construe this agreement whereby the plaintiff gave or
    agreed to give to his adoptive father any 'other reward'. The plaintiff before
    adoption had no interest of any kind in the properties, subject matter of
    Exhibit B-16. As earlier noticed, various properties had been settled prior
    to Exhibit B-16 in favour of the plaintiff and the girl with whom he had
    to marry and which marriage ultimately took place on the date of adoption.
G   In our view, Section 17 enacted to prevent trafficking of children is not
    intended to cover cases of the present nature where a major person agrees
    not to set up any claim with regard to certain items belonging to the
    adoptive family. Section 17 cannot be held to have an overriding effect so
    as to change the legal proposition prevalent prior to the commencement
H   of the Act. Section 17, under the circumstances, has no applicability.
          J. V. V. BHASKAR v. J.K. RAO [SABHARWAL, J.]                 955

      Learned counsel for the appellant, however, places strong reliance on A
a Division Bench decision of Andhra Pradesh High Court in Commissioner
of Gift-Tax, A.P. v. Smt. Go/apudi Santhamma, (1979) 116 ITR 930. In
this case, the High Court has held that the ante-adoption agreement
attracted the vice of Section 17. It has to be borne in mind that the High
Court was not considering any dispute between the adoptive son or B
adoptive father or natural heirs or members of the adoptive father but was
considering the question whether property of 'P' was to be subjected to
estate duty or not. In that case, the dispute between the Controller of Estate
Duty and the estate of one late the 'P' arose under these circumstances ;
On 14th June, I963 'P' adopted on 'R' his brother's grandson. Earlier to
that on I Ith June, I 963 'P' executed gift deeds in respect of certain lands C
in favour of his daughter, grand daughter and a great grandson. On 20th
July, 1963, deed of adoption was registered. On the same date he executed
a settlement deed in favour of 'R' whereby the properties in question were
settled upon him. 'P' died on 20th January, 1965. At the time of adoption
'R' was a major but in accordance with the customs prevailing in Vysya D
community to which the parties belonged, such adoption was permissible.
After the death of 'P', the accountable person, viz. his daughter, filed the
estate duty return. One of the questions arose relating to the inclusion of
properties covered by the settlement deed dated 20th July, 1963 which had
been executed by 'P' in favour of 'R'. The properties covered by the E
settlement deed were included for the purpose of determination of the
estate duty by the Assistant Controller. Aggrieved by the decision of the
Assistant Estate Controller, the matter was carried in appeal where a new
ground was taken by the accountable person that the deed though described
as settlement deed, was not merely a settlement deed operating as a gift F
but as one executed in consideration of the ante-adoption agreement
entered into between the adopted son and the deceased. The Appellate
Controller held that even if there was such an ante-adoption agreement in
existenct:; that would be invalid in view of the prohibition contained in
Section 17 of the Act. The tribunal on appeal reversed the finding of the
Appellate Controller and inter alia held that there was an ante-adotion G
agreement entered into between 'P' and 'R' and the same was valid and
not hit by Section 17 of the Act. In the reference at the instance of the
Controller of Estate Duty before the High Court it was contended that the
ante-adoption agreement was not valid under the Act and even assuming
it is valid, the tribunal committed an error in law in holding that oral H
    956                   SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.

A antecedent agreement conferred antecedent rights upon the adopted son.
    The High Court noticing that the tribunal has recorded a finding in
    favour of the accountable person that there was in fact an oral
    ante-adoption agreement between the parties proceeded to consider
    the question whether such an agreement is valid in view of Section 17
B   of the Act. It was noticed that nowhere in the deed of settlement there
    was any mention of an oral agreement between the adopted son and
    his adoptive father as to the manner in which the property should be
    settled in the event of his being adopted. The relevant portion of
    the settlement deed quoted in the judgment of the High Court is as
    follows:
c
             "It has been already arranged between your natural parents and
             ourselves prior to the adoption, that you cannot exercise right over
             any other property except those that are specifically set out in the
             deed. If at any time you were to deal with them, then this
D            settlement deed will not be operative and my properties are to be
             vested in my legal heirs. This was also agreed to by us before the
             adoption."

          U oder the aforesaid circumstances, noticing that it is manifest that the
E natural parents of the adopted son were parties to the agreement and rightly
    observing that Section 17 lays down a public policy so that there may
    be no trafficking in children, on facts, the High Court came to the
    conclusion that the ante-adoption agreement in that case attracted the vice
    of section 17.

F          What in fact the ante-adoption agreement was in that case is not clear
    at all. If there was an agreement between natural parents of 'R' and 'P'
    that prior to adoption 'P' must transfer certain properties in favour of 'R'
    as a consideration for adoption it would, of course, be hit by section 17.
    The oral agreement was set up at the appeal stage with a view to exclude
G   the properties from payment of the estate duty. An agreement had been
    entered into between the natural parents and the adoptive father whereby
    the latter agreed to transfer the properties in favour of the adoptive son prior
    to adoption as a consideration of adoption. The High Court did not lay
    down any proposition that every ante-adoption agreement would attract the
H   vice of Section 17. An agreement which violates Section 17 alone would
          J. V. V. BHASKAR v. J.K. RAO [SABHARWAL, J.]                 957

come within the vice of said provision. Further, the High Court did not A
analyse the provisions of Section 17 of the Act. Under Section 17 one has
to receive or agree to receive any payment or reward for consideration of
adoption. Both recipient and giver come within the purview of Section 17.

     In the present case there is no question of adoptive father giving any B
payment or reward to the plaintiff as a consideration for the adoption. As
already noticed, the:re was no question of any payment or agreement to
make payment by plaintiff to his would be adoptive father. Regarding
giving of reward by plaintiff or agreement to give any reward to his would
be adoptive father for consideration of adoption, that question would arise
only if the plaintiff had any right in the properties. Prior to adoption C
plaintiff had no such right and, therefore, the question of his giving
anything to defendant No. I does not arise. On facts earlier noticed, the
plaintiff was being fostered by adoptive father and his wife for five years
prior to adoption. The wife of adoptive father had transferred various
properties in favour of the plaintiff about five years earlier to adoption. At D
the same time she had also settled certain properties in favour of the girl
with w:10m the plaintiff was to marry and in fact married. By agreement
Exhibit B-16, the appellant/plaintiff agreed not to claim any interest in
some of the properties of his adoptive father. It did not cover all the
properties of defendant No. I. Such an agreement is not prohibited by E
Section 17. Under the circumstances of the case, there was no question of
any trafficking in children. Section 17 does not prohibit every kind of
agreement between a major adoptee and the would be adoptive father.
Exhibit B-16 does not suffer from the vice of Section 17 of the Act.

      For the aforesaid reasons, we find no infirmity in the impugned F
judgment of High Court. Resultantly, the appeals are dismissed leaving the
parties to bear their own cost.

A.Q.                                                    Appeals dismissed.