Property acquired with proceeds from joint-family assets is joint-family property absent proof of an independent source.

The plaintiffs, daughters of defendant No. 1 Chinnaswamy, sought partition and separate possession of the suit property.

The property had been purchased jointly in the names of Chinnaswamy and his nephew, defendant No. 4, Baluswamy.

The plaintiffs contended that the purchase was funded by proceeds from the sale of family properties.

The trial court dismissed the suit; the first appellate court reversed that decision and declared the plaintiffs entitled to a 1/10 share each.

Defendant No. 5, a subsequent purchaser, appealed under Section 100 of the Code of Civil Procedure (CPC).

The High Court admitted the appeal on a substantial question of law concerning whether the first appellate court had evidence to find that the purchase was funded by the proceeds of the earlier sale.

Whether the first appellate court was justified in holding that the suit property was acquired from the sale proceeds of Ex. P1, allegedly without evidence

Section 100 CPC confines a second appeal to a substantial question of law.

In determining whether property was acquired from a joint-family nucleus, the court may consider the evidence concerning the family’s prior property, the sale proceeds available, the timing and value of the subsequent purchase, and relevant admissions.

The court also applied the evidentiary principle that an adverse inference may be drawn where a party with relevant knowledge does not enter the witness box to support its case.

The High Court found that Ex. P1 recorded the sale of family properties for Rs. 17,000 and that, within approximately 45 days, Chinnaswamy and Baluswamy jointly purchased the suit property for Rs. 20,000.

It relied on Chinnaswamy’s admissions concerning the earlier properties and their sale, as well as the absence of evidence that Baluswamy had an independent source of funds.

Baluswamy’s failure to testify supported an adverse inference.

In those circumstances, the first appellate court was entitled to find that the purchase was funded by the available joint-family proceeds; the High Court therefore rejected the appellant’s assertion that the finding lacked evidentiary support.

It dismissed the second appeal and left undisturbed the decree declaring the plaintiffs entitled to 1/10 share each.