Can a court order the sale of a numismatic collection as part of a divorce settlement?

The court's legal power

Section 27 of the Hindu Marriage Act gives the court power to make orders as it 'thinks fit' regarding the disposal of property presented at or about the time of marriage. This provision is primarily aimed at wedding gifts and stridhan, but courts have interpreted their financial settlement powers broadly. Section 25 (permanent alimony and maintenance) allows the court to make lump sum or periodic payment orders that in practice can effectively require a party to liquidate assets to fund the settlement. A court that concludes the collection should be included in the settlement and that the collecting spouse cannot pay an equivalent cash amount will order the collection sold.

Why forced sale destroys value

A court-ordered sale is a forced sale under a defined timeline. The buyer knows this. Professional dealers attending a court-ordered numismatic auction — or buying privately when the seller is court-compelled to sell — offer lower prices because: the seller cannot wait for the right buyer; the seller cannot time the market; and the urgency of the court timeline transfers negotiating power entirely to the buyer. Collections sold under court order routinely realise 30-50% below their assessed collector value. Both parties lose.

The better approach — cash equivalent from other assets

Courts generally prefer negotiated settlements over forced sales. If the collecting spouse can offer the non-collecting spouse an equivalent cash amount — from savings, a property sale, or other assets — the court will typically accept this arrangement rather than ordering the collection sold. The collecting spouse retains the collection intact; the non-collecting spouse receives fair value in cash. Both parties avoid the discount that a forced sale imposes.

The calculation: if the collection is valued at ₹40 lakh and the non-collecting spouse is entitled to half, the collecting spouse can offer ₹20 lakh in cash from other assets and retain the full collection. This preserves the collection's integrity (no pieces broken up from sets, no premium lost to forced sale discount) and gives the non-collecting spouse fair value. Most solicitors advise clients to structure settlements this way when a collection is involved.

Section 27 — disposal does not mean only sale

The word 'disposal' in Section 27 of the Hindu Marriage Act does not mean only sale. The court can direct: that the collection be valued and its value taken into account in the overall financial settlement calculation; that the collection be transferred to the non-collecting spouse (if they want it rather than cash); or that the parties agree on a private sale through a specific auction house on a specific timeline with a reserve price. A negotiated court order specifying the terms of the sale — reserve price, auction house, timeline — will always achieve better results than a court-ordered forced sale at whatever price is achieved.

Laws & authorities referenced in this chapter

Hindu Marriage Act 1955 — §25 (permanent alimony: cash equivalent may be ordered), §27 (disposal of property: broadly interpreted)

Special Marriage Act 1954 — §36, §38 (equivalent provisions for non-Hindu marriages)

Family Courts Act 1984 — family court's jurisdiction over financial settlement orders

Code of Civil Procedure 1908 — court-appointed commissioner for forced sale execution