Before the enactment of Hindu Gains of Learning Act, 1930 it was settled law that income earned by a member of a joint family by the practice of a profession or occupation requiring special training was joint family property, if such training was imparted from the funds of the joint family. But this term „learning‟ was interpreted by the Courts to mean some kind of special learning, as distinguished from ordinary general education, that all members of the family might be expected to receive. The most famous decision in said regards is the decision of the Privy Council reported as AIR 1921 PC 35 Gokalchand v. Hukumchand where a person had acquired education by paying fee from the joint family income which enabled him to acquire knowledge, compete at a competitive examination and become a member of the Indian Civil Service. It was held by the Court that salary earned by said person was the property of joint family and thus should be partitioned between the members of the said family. After the decision of Privy Council in Gokalchand‟s case (supra), Hindu Gains of Learning Act, 1930 was enacted by virtue of which all gains of learning, whether the learning be special or ordinary, became the self-acquired property of the acquirer.
Madras High Court in the decision reported as AIR 1953 Mad 834 Parsam Venkataramayya v Parsam Venkatarmappa wherein it was observed as under:- "11. We are inclined to the view that if a member of a Joint family who was given a certain sum from the Joint family funds and who goes out of the family in the sense of leaving the family house as in the present case, starts a business of his own individually or in partnership and by virtue of his exertions he prospers in his business and acquires properties it will be not justifiable to hold that either the business or his properties would be joint family properties. In view of the constitution of the Hindu joint family and the incidents of its ownership of properties, to come to any other conclusion would be to deprive a member of such family of his initiative and his desire to eke out a livelihood by his individual efforts and intelligence. The trend of judicial opinion has been as far as possible to recognise properties acquired out of the individual exertions of a member of a joint family to be his self-acquisition. The Hindu Gains of Learning Act (Act 30 of 1930) is one of the enactments which gave legislative recognition to this view, by treating the properties acquired out of the earnings of the members of the family who happened to have had their education from out of the joint family funds as self-acquired and separate properties. The Act provides that notwithstanding any custom, rule or interpretation of the Hindu law, no gains of learning shall be held not to be the exclusive and separate property of the acquirer merely for the reason that his learning, in whole or in part has been acquired with the aid of the funds of the family and "learning" has been understood to mean education which is to enable a person to pursue any trade, industry, profession or avocation in life. If a member of the family is inclined to start a trade and for that purpose he gets assistance by way of a contribution from the joint family funds without any further assistance from the joint family and goes and starts a business and acquires properties, it appears to be reasonable to extend the principle of the Hindu Gains of Learning Act to such a case. We are unable to find any real distinction between the case of a member getting himself educated out of the joint family funds and employing himself somewhere earning and acquiring properties and a member getting a cash contribution from the family and starting a trade on his own account."
Chandrakant Manilal Shah And Anr vs Commissioner Of Income Tax 1992 AIR 66, 1991 SCR Supl. (1) 546 The definition of the term "learning" under Section 2 of the Hindu Gains of Learning Act, 1930 is very wide and almost encompasses within its sweep every acquired capacity which enables the acquirer of the capacity 'to pursue any trade, industry, profession of vocation in life". The dic- tionary meaning of "skill" inter alia, is: "the familiar 'knowledge of any science, art, or handicraft, as shown by dexterity in execution or performance; technical ability" and the meaning of "labour" inter alia is: "physical or mental exertion, particularly for some useful or desired end." Whether or not skill and labour would squarely fail within the traditional jurisprudential connotation of property e.g. jura in re propria, jura in re aliena, corpo- real and incorporeal etc. may be a moot point but it cannot be denied that skill and labour involve as well as generate mental and physical capacity. This capacity is in its very nature an individual achievement and normally varies from individual to individual. It is by utilisation of this capacity that an object or goal is achieved by the person possessing the capacity. Achievement of an object or goal is a benefit. This benefit accrues in favour of the individual possessing and utilising the capacity. Such individual may, for consideration, utilise the capacity possessed by him even for the benefit of some other individual. The nature of consideration will depend on the nature of the contract between the two individuals.
Chandrakant Manilal Shah And Anr vs Commissioner Of Income Tax 1992 AIR 66, 1991 SCR Supl. (1) 546 “Just like a cash asset, the mental and physical capacity generated by the skill and labour of an individual is possessed by or is a possession of such individual. Indeed, skill and labour are by themselves possessions. "Any possession" is one of the dictionary meaning of the word 'property'. In its wider connotation, therefore, the mental and physical capacity generated by skill and labour of an individual and indeed the skill and labour by themselves would be the property of the individ- ual possessing them. They are certainly assets of that individual and there is no reason why they cannot be con- tributed as a consideration for earning profit in the busi- ness of a partnership. They certainly are not the properties of the HUF, but are separate properties of the individual concerned. To hold to the contrary, would also be incompati- ble with the practical, economic and social realities of present day living.”
Chandrakant Manilal Shah And Anr vs Commissioner Of Income Tax 1992 AIR 66, 1991 SCR Supl. (1) 546 Where an undivided member of a family qualifies in technical fields -- may be at the expense of the family - he is free to employ his technical expertise elsewhere and the earnings will be his absolute property; he will, therefore, not agree to utilise them in the family business unless the latter is agreeable to remunerate him therefor immediately in the form of a salary or share of profits. This, of course, will have to be the subject matter of an agreement between the HUF and the member, but where there is such an agreement, it cannot be characterised as invalid. ……….. It is, therefore, illogical to hold that an undi- vided member of the family can qualify for a share of prof- its in the family business by offering moneys -- either his own or those derived by way of partition from the family -- but not when he offers to be a working partner contributing labour and services or much more valuable expertise, skill and knowledge for making the family business more prosperous.
Irrumathirumala ... vs Irumathirumal AIR 1969 AP 303 The offerings given to any Guru performing Samasrayanam are his personal property. The statement that property acquired from science and learning is separate property has had ancient sanction. Katyayana enumerates exhaustively the gains of learning. As pointed out by Mayne (Mayne's Hindu Law and Usage (11th Edn 352) gains which were the result, not of the education received at the expense of the joint family but of the peculiar skill and mental ability of a member educated at the expense of the family were not partible. There is no doubt left after the passing of the Hindu Gains of Learning Act, which provides that no gains of learning shall he held not to be the exclusive and separate property of the acquirer, merely by reason of his learning having been imparted to him by any member of his family, or with the aid of the joint funds of the family or with the aid of the funds of any member. The further fact that the acquirer or his family, while undergoing education or training was maintained by the funds of the joint family or of any member of it, is made wholly immaterial.
T.M. Channabasamma And Ors. vs T.M. Rudriak And Ors AIR 1982 Kant 198, ILR 1982 KAR 98 (DB) We have examined the purpose of repealing Section 6 of the Mysore Act X of 1933. It appears to us that that repeal was a necessary consequence of the extension of the Hindu Gains of Learning Act, 1930 to the State of Karnataka as well. The Miscellaneous Personal Laws (Extension) Act, 1959 amended S. 2 of the Hindu Gains of Learning Act, 1930 by extending the Act with effect from February 1, 1960 throughout the territory of India except Jammu and Kashmir while simultaneously repealing Section 6 of the Mysore Act X of 1933. Section 6 of the Mysore -Act X of 1933 is analogous to the provisions of the Hindu Gains of Learning Act, 1930 and it became redundent and se was repealed. No other inference is possible in this context.
Justice Dr. Arijit Pasayat & Justice S. H. Kapadia in case of SUBHODKUMAR & ORS. .Vs. BHAGWANT NAMDEORAO MEHETRE & ORS. Reported in AIR 2007 SC 1324, A Karta of Hindu Undivided Family had five sons. The Karta and four sons entered into an agreement of sale with respondents for selling part of their ancestral lands and thereafter executed a sale deed. The fifth son opposed the transaction and entered into a separate agreement of sale for selling part of the sold lands with appellants. The respondents-plaintiff filed a suit for possession of lands before trial court contending that the agreement entered into by the opposing son with the appellants-defendants was a fabricated antedated document. The appellants contested the suit contending that their agreement of sale was genuine and first in point of time: that they were not aware of the agreement executed by the Karta in favour of the respondents: and that the transaction was not for legal necessity. The trial court decreed the suit holding that the transaction was for legal necessity. The appellate court also dismissed the appeal but held that the legal necessity for possession was not a `fact in issue' The High Court dismissed the second Appeal of the appellants holding that the transaction was on account of legal necessity. In appeal to this court, the appellants contended that there was no legal necessity for the Karta and his four sons to execute the conveyance in favour of the respondents; that the conveyance was executed without the consent of one of the coparceners; that the opposing son entered into a conveyance with them in respect of his undivided share and was it earlier in point of time. Dismissing the appeal, the Court. HELD: A karta has power to alienate for value the joint family property either for necessity or all the coparceners of the family. When he alienates for legal necessity interest. When the Karta, however, conveys by way of imprudent transaction, the alienation is voidable to the extent of the undivided share of the non-consenting coparcener. Neither the opposing son nor his successors-in-title instituted a suit for partition and for demarcation of their share by metes and bounds. In the suit for possession filed by the respondents, the issue of legal necessity becomes irrelevant. A mere declaration that transaction was imprudent or was not for legal necessity in such a suit cannot give any right to the appellants to get their share without taking appropriate proceedings in accordance with law. The legal necessity in the present suit for possession was not a "fact in issue".