Sale Of Mentally Ill Person’s Property

In India, we have various laws for protection and benefit of mentally ill persons, as briefly discussed in this article and each of them cover different categories of persons suffering from mental illness or disability.

The financial needs of each person suffering from mental illness or disability may differ as per severity of his illness and cost of treatment. However, despite the varying degrees of financial expenditure incurred due to their specific illness, they all have a common predicament that is inevitable depletion of their funds and that could be solved by selling their immovable properties and using the sale proceeds for their treatment.

Therefore, there should be parity of procedure and provisions provided under law to all such persons who are not capable of taking legal decision, devoid of dissimilarities in their disability or illness.

1. Sale of property under Mental Health Act

The Mental Health Act, 1987 (“1987 Act”) clearly laid down rights and obligations of the Manager appointed for management of the property of mentally ill person and procedure to be followed by District Court. There were provisions to safeguard family members of mentally ill person, dependent on him.

Provision under 1987 Act

The Mental Health Act, 1987 was enacted with an object to provide a law for treatment and care of mentally ill persons and to make better provision with respect to their property and affairs.

The 1987 Act provided for definition of “mentally ill person” which was limited to a person who is in need of treatment due to any mental disorder other than mental retardation (which is covered under a separate statute).

Elaborate Provisions of Guardian and Manager:

• The Chapter VI of 1987 Act had provisions pertaining to property possessed by Mentally ill person; ‘possession of property’ was prerequisite for making an inquisition into the mental condition of such person under this Chapter.
• The Act provided that on completion of inquisition and after recording it’s finding, an order may be passed by the District Court appointing (i) a Guardian under Section 53 to take care of his person and (ii) a Manager under Section 54 for the management of his property. It was also provided that Guardian and Manager could be same person.
• The person appointed as Manager was required to execute a bond for certain sum as decided by the authority and accountable to provide receipts from property of such mentally ill person. Such Guardian and Manager would be paid an allowance quantum whereof would be determined by the authority.
• The Manager appointed under the 1987 Act had powers to look after the property of mentally ill person and realise all claims and discharge all liabilities. It was provided that such Manager could mortgage, create any charge on, or, transfer by sale, gift, exchange or otherwise, any immovable property of the mentally ill person or lease out any such property for a period exceeding five years, only after obtaining permission of the District Court in that behalf.
• Section 61 of the Act also provided that all instruments of transfer for the property, such as conveyance, would be signed by the Manager, in the name and on behalf of such mentally ill person.
• Section 62 of the Act provided for performance of contracts, which were entered into by the mentally ill person.
• Section 64 empowered the Manager to deal with lease or under lease held by mentally ill person subject to obtaining order from District Court.
• The Manager appointed under these provisions could be sued for managing sums of money received by him in respect of property of mentally ill person. The Manager could be removed from his position, he would then have to deliver the charge of such property to a New Manager, and still the Old Manager would be accountable for the monies received and disbursed by him.

2. Provisions under the 2017 Act

The Mental Healthcare Act, 2017 came into force on 29^th May, 2018 and repealed the Mental Health Act, 1987.

The key words “property and affairs” of a mentally ill person, were missing from the object of the Mental Healthcare Act, 2017 (“2017 Act”), limiting the 2017 Act to provide for mental healthcare and services for persons with mental illness and to protect, promote and fulfil rights of such persons during delivery of mental healthcare.

Although scope of definition of “person with mental illness” is widened by the 2017 Act. The later one is more focused on protection of persons availing mental healthcare and fulfilment of their rights.

Startlingly, 2017 Act, has neither any corresponding provision nor an alternate mechanism for adjudication of matters pertaining to property of Mentally ill person.

3. Other statutes touching upon similar issues

• ‘Limited Guardianship’ Under RPwD Act, 2016

The Rights of Persons with Disabilities Act, 2016 (“RPwD Act, 2016”) came into force on 19^th April, 2017 repealed the Persons with Disabilities (Equal Opportunity Protection of Rights and Full Participation) Act, 1995.

“Person with Disability” defined under the said Act means a person with long-term physical, mental, intellectual or sensory impairment which, in interaction with barriers, hinders his full and effective participation in society equally with others.

Under Section 14 of the RPwD Act, 2016, a Limited Guardian may be appointed by District Court or Designated Authority as notified by State Government, after finding that a person with disability is unable to take legally binding decisions.

The concept of “Limited Guardianship” means a system of joint decision which operates on mutual understanding and trust between the guardian and the person with disability, which shall be limited to a specific period and for specific decision and situation and shall operate in accordance to the will of the person with disability.

Firstly, RPwD Act, 2016 does not explicitly provide powers to guardian to mortgage, create any charge on, or, transfer by sale, gift, exchange or otherwise, any immovable property of Person with Disability. Secondly, the decision taken by guardian is not absolute; it is a joint decision of him and the person with disability.

Moreover, the benefits of guardianship even though limited under the said Act are not fully enforceable due to delay by State Governments in implementation thereof.

Recently, in the matter of Seema Girija Lal & Anr Vs. Union of India & Ors, by order dated 17^th July 2023 passed by Hon’ble Supreme Court, with respect to RPwD Act, 2016, the court has, inter alia, observed that various authorities/positions are not appointed by certain State Governments, and further directed the State Governments, to ensure compliance of the provisions of the Act. One of the compliances required to be carried out by Government of Maharashtra is appointment of ‘Designated Authority’ to provide Limited Guardianship as per Section 14 of the RPwD Act, 2016.

• ‘Guardian’ Under National Trust Act, 1999

The National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (“National Trust Act, 1999”) provides for appointment of Guardian under Section 14. There are provisions wherein a local committee is empowered to pass orders appointing Guardian and to set out such Guardian’s duties, the Guardian also has to furnish inventory and accounts and maintain immovable property of a person with disability. The concept of manager is not embodied in this Act.

The National Trust Act, 1999 provides for management of the property through Guardian, however, sale or dealing with property of person with disability, falls outside the purview of the said Act.

4. Settled position of Law

Till date there is no law relating to appointment of guardian of a person who is in coma or a vegetative state.

The courts have, in such cases, repeatedly relied on the doctrine of “parens patriae” to exercise its jurisdiction wherever the welfare of the person, be it a child or a person who is mentally ill, needs protection. The doctrine is based on a notion that if a citizen is in need of someone who can act as a parent, who can make decisions and take some other action, sometimes the state is best qualified to take on this role. Further, in absence of an enactment providing such protection, the Court is also a ‘State’ within the meaning of Article 12 of the Constitution.

In the matter of Rita Arvind Kakodkar versus State of Maharashtra, Hon’ble High Court of Bombay, by an order dated 11^th April 2022, appointed a sister of a widowed brother as his guardian at law and of his property and assets. The said order categorically provided following restrictions on power of such guardian in respect of immovable property:

1. Guardian was permitted to enter into transactions for sale of immovable property, however a prior permission of the Court would be required for conclusion of such transection of sale;
2. A separate interim application to be filed making the proposed purchaser a respondent in such application;
3. Proposed draft of transaction document to be annexed to such application clearly mentioning consideration;
4. All monies received to be deposited in bank account of brother

Practical Difficulties:

In a pragmatic sense, to appoint a guardian for sale of property of a person who is incapable of taking his legal decisions, the first step would be to identify whether such person falls within the definition of “Person with Disability” under RPwD Act, 2016 or “person with mental illness” under Mental Healthcare Act, 2017, or under the National Trust Act, 1999. Depending on nature of inability of that person, a relative can resort to the remedies available under the applicable act.

In absence of an enactment clearly setting out the procedure to be followed for sale of immovable property, the relative of mentally ill person is compelled to go to the courts before dealing with such property and even afterwards for every glitch or diversion from initial agreement with prospective purchaser, which may delay the sale.

In times of urgency, relatives of incapable person could get monetary aid from sale of immovable property to be used for treatment and care of that person.

Apart from sale of property, relatives may have incurred costs for maintenance of property on a day-to-day basis, which ideally should be recovered from sale proceeds.

Suggestion:

Why should two people having different illness, but same incapacity, be granted different remedies under different acts, when their necessity to enter into contract for sale of their property is for their own livelihood.

We need a uniform mechanism under one statue, setting out unequivocal process of sale of immovable properties of all persons incapable of taking legal decisions, through manager/guardian, be it mentally ill persons, people in comatose state or otherwise.

The author is an Advocate . Views are personal.