FAMILY ARRANGEMENT

BY CA A. K. JAIN

A family arrangement is a transaction between members of the same family which is for the benefit of the family generally. It is arrangement between member of a family descending from a common ancestor or near relation trying to sink their differences and disputes, settle and solve their conflicting claims once and for all to buy peace of mind and bring about harmony and goodwill in the family by an equitable distribution or allotment of assets and properties amongst member of the family. The object is to preserve the property and the good name of the family by recognising that it is not in the good interest of the family or the members to engage in fights or disputes.

Some of the important terms are described below:

1. Family

A family arrangement necessarily needs to be among family members, and not with outsiders. The term “family” has not been defined under any law. However, the courts have generally held that the term has to be understood in a wider connotation. A common tie of relation is enough to bring a person within the fold of a family. Also, the existence of legal/succession right to the family property is not a prerequisite to determine whether a person is a family member.

Halsbury’s Laws of England, Volume 18, Fourth Edition, deals with this subject at length.

Para 301 defines a family arrangement as follows:-

“A family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed right or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour”.  

“The agreement may be implied from a long course of dealing, but it is more usual to embody or to effectuate the agreement in a deed to which the term family agreement is applied”.

2. Property

The family arrangement should be for working out the rights in the family property. Typically, common property or joint property in the family is considered for the purpose of family arrangement. Individual or self-acquired properties are generally not considered unless antecedent title, claim or interest in the property is shown to be in existence. In essence, an antecedent title of the participants in the subject property is the guiding factor for evaluating a bona fide family arrangement.

It is, however, not necessary that every party taking benefit under the arrangement must necessarily have, under the law, a claim to the property. It suffices if the parties are related to one another and have a possible claim to the property or a claim or even semblance of a claim on some other ground such as, say, affection.

Some examples of division of property judicially approved and accepted as family arrangements are stated in para 303 of Halsbury’s Laws of England. These are :-

(1) an agreement for the division of family property by way of compromise of a family quarrel or litigation about a disputed or lost will, or even to prevent family friction, where there is no question as to the devolution of the property nor any disputed right, there being some consideration for the arrangement other than love and affection, or any arrangement as to division of property where the construction of a will or other instrument under which the parties claim is doubtful,

(2) an agreement dividing up family property, though entered into under a misapprehension of the legal rights of the parties, provided the misapprehension is not induced by any party to the agreement, even where the fact the misapprehension existed has been established by subsequent legal decision;

(3) an agreement between members of a family to divide equally whatever they obtain under the will of an ancestor,

(4) an agreement between co-heiresses dividing the property between them;

(5) an agreement between the heir-at-law and a person supposed to be entitled under a lost will dividing the property between themselves and other members of the family;

(6) an agreement dividing the family property between members of the family where some of the members had a title independently of the will of their father, who purported to dispose of the whole among his sons and daughters”.

3.  Dispute

Normally, a dispute is a prelude to a family arrangement. However, a pre-existing dispute is not always necessary. So, a bona fide arrangement in anticipation of a plausible dispute and to maintain harmony has also been held to be a valid family arrangement.

4. Family Dispute   
The dispute could relate to any aspect, but is usually relates to the rights or claims in respect of property, assets, enjoyment of rights in respect of properties, claims, shares, possible claims, family feuds, refusal to recognise rights of family members, etc. 

It could relate to any aspect which may threaten the rights of any member or the family as a whole, if the disputes are prolonged or escalated or in the nature of creating situations or circumstances that the members are not able to meet eye to eye. It could be a genuine dispute or a controversy, rival claims, assertions and denials. It is unfortunate that many disputes revolve around the sheer ego of the persons involved. The law takes it that these disputes are not in the best interest of the members of the family.

Valid Arrangements

We may now have a look at the concept of family settlement and the basis on which the same is recognized as valid and binding between the parties. It is often found that between members of the family claims and counter-claims are made against one another in respect of properties held by the members of the family and claims of ownership, maintenance, etc. are canvassed. With a view to avoid protracted litigation and exposure to public gaze of private family disputes, very often the family members try to bring about an amicable settlement of the family differences by invoking the assistance of a well-wisher of the family and arrive at a settlement of their mutual rights and obligations. Such family settlements may result in transfer of properties or recognition of the rights of some members of the family in various properties in dispute or may create limited rights in respect of such properties in favour of various members of the family. The word “family” is not to be interpreted in the narrow sense of members of a joint Hindu family as defined in Hindu Law but it would include wide range of persons who belong to one family in its comprehensive sense. The basis on which such family settlements are held as valid and binding between all parties is the mutual consideration which flows between the parties while putting an end to the claims and counter claims between them. It has been held under the law of contract that it is lawful consideration for a party when he gives up his claim to any property in return for any payment or transfer of property made to him or any obligation undertaken by the party. Existence of the right in the property is not necessary in order to make the family settlement valid and binding for a valuable consideration. The existence of the dispute or a threatened dispute between the members of the family is considered to be a precondition for a valid family settlement and such disputes and the consequent giving up of claims and counter-claims between the various members of the family constitutes good and valid consideration between the parties for enforcement of the rights and obligations created by such a family settlement. The family settlement, therefore, is not founded on existing rights or liabilities but rather on existing claims and disputes between the parties which are amicably resolved notices may be given by contending parties, even suits may be filed matters may be referred to arbitration and award may work out as family settlement.

The following are examples of family arrangements which have been supported by the Court.

1. A settlement made by parents on the occasion of their child's marriage making provision for the mother, though outside the marriage consideration, on her giving up her right to dower in her husband's estate.

2. An agreement between father and son altering the limitations of a family settlement.

3. An agreement providing for payment of the son's debts in consideration of his giving up his interest in the family business.

4. A covenant to settle property on a nephew, alienated from his father by a marriage without his father's consent, in order to reconcile father and son.

5. A resettlement of the family property making provision for an illegitimate child.

6. An agreement between members of a family to divide equally whatever they obtain under the will of an ancestor.

7. An agreement between co-heiresses dividing the property between them.

Invalid Arrangements

The following are examples of family arrangements which cannot be supported:

1. Any dealing between parent and child, before the latter is fully emancipated, exclusively for the advantage of the parent.

2. A compromise of claim to estates founded on a mistake as to the title induced by misrepresentation of one of the parties to the compromise.

3. An agreement as to division of property where the heir gave up property to which he had undoubted rights without consideration, and where he was ignorant, a drunkard, and without professional assistance, though there was no evidence of fraud or undue influence.

4. An agreement as to family property not executed by all the intending parties to it.

Critical Aspects of a Family Arrangement

The arrangement should be made in good faith. Good faith can be stated to be the essence of the family arrangement. It should not be made with a view to circumvent provisions of law relating to stamp duty or provide an advantageous position with regard to stamp duty and registration costs. It must not be in the nature of extinguishing or limiting the rights of a family member who is not a consenting party to the arrangement. It should be in the nature of settling disputes, promoting harmony and not in the nature of inciting disputes or disrupting the harmony. There should not be any fraud or undue influence played in any member or members of the family. It must be a voluntary arrangement.

Consideration in Family Arrangement

Family settlement is arrived at between the members of the family with a view to compromise doubtful and disputed right. It, therefore, follows that the allotment of shares under a family settlement is not what a person is legally entitled to since some of the members can be allotted a much lesser share of asset than what they are entitled to under the law, while others a much larger share than what they are entitled to, yet some others may get a share to which are not legally entitled to since the main consideration is surely and certainly purchase of peace and amity amongst the family members and such a consideration cannot be deemed as being without consideration.

In a family arrangement, the settlement of disputes, harmony within the family, honour of the family, prevention of disputes, compromise of disputes, preservation of property and, in general, matters in the nature of protecting the interest of all concerned will be treated as sufficient consideration, so long as the arrangement is made in good faith.

The basis on which the rights of the members to a family arrangement is recognised-

A family arrangement is not treated as a conveyance. It is only in the nature of allocation, distribution, re-distribution or recognition of pre-existing rights. This is like re-alignment of rights. In the process, some of the pre-existing rights of one of more members may even be extinguished by their consent. So long as it meets the other requirements of a valid family arrangement, this is also recognised. The matter to be considered is the recognition of a claim or a right and not the transfer of the same even though there could be relinquishment by one or more members or acknowledgement of rights of others by one or more members.

The question has often arisen before the Courts as to whether such family settlements result in transfer of properties from one person to another and whether such transfer can be said to be without consideration. A reference may be usefully made to the decision of the Supreme Court in the case of Ramcharandas V/s. Girjanandinidevi, AIR 1966 SC 323.

The Supreme Court has therein observed as follows:-   

“Such family settlement between the members of the family bonafide to put and end to the dispute amongst them is not a transfer. It is also not a creation of an interest. In a family settlement, each party takes a share in the property by virtue of independent title which is admitted to that extent by the other parties. Every party who takes benefit under it need not necessarily be shown to have under the law claim to share in property. All that is necessary to show is that the parties are related to each other in some way and have a possible claim to the property or a claim or even a semblance of a claim on some other ground as, say, affection”.

In the same case, the Supreme Court has given the reason d’tre for recognizing such family settlements as valid. It has observed:- 

“Courts give effect to a family settlement upon the broad and general ground that its object is to settle existing or future disputes regarding the property amongst members of the family. The word “family” in the context is not to be understood in a narrow sense of being a claim to share in the property in dispute”.       
 

Registration of Family Arrangement
A family arrangement can be made orally. It need not be necessarily reduced to writing. If it is implemented in oral form, the question of stamping or registration does not arise. It is legally valid and recognised. However, all the critical factors of a valid family arrangement would be applied to find out whether such arrangement would be valid and fair. The circumstances have to be looked into. 

A family arrangement requires to be duly stamped and registered - This depends on the manner in which the document is made. Generally, if it is a memorandum recording a past transaction or is a record or a chit or a list merely reducing the earlier oral family arrangement, then there may not be any necessity for payment of stamp duty and registration charges as this is not a document of title. Otherwise, if it is intended to be a document of title containing declarations of rights of parties, then it has to be properly stamped and registered. This is the most difficult and controversial part of family arrangements.

A particular document relating to a family arrangement requires to be stamped and registered - It depends on various facts and circumstances and the document itself. One has to look into the manner in which it is made; the phraseology and wordings employed; the setting out of rights and terms and conditions; reference to pre-existing rights of the members; reference to the parties being members of Joint Hindu Family; timing of the document, besides other matters which may be relevant on a case to case basis.

Depending on the wordings employed, facts and circumstances and other factors, it may or may not required to be stamped and registered. Each document has to be scrutinised on the basis of the wordings contained in the document to arrive at a conclusion whether the same requires to be stamped and registered or otherwise.

At times, it may only be stamped, but not registered in which case it can be looked into for collateral purposes. If it is required to be stamped and registered, but is not properly stamped and registered, it cannot be looked into for any purpose. Whether a purpose is collateral or not, is a matter which has to be gathered from the facts and circumstances concerned.

Family arrangement as such can be arrived orally or may be recorded in writing as memorandum of what had been agreed upon between the parties. The memorandum need not be prepared for the purpose of being used as a document on which future title of the parties be founded. It is usually prepared as a record of what had been agreed upon so that there be no hazy notions about it in future. It is only when the parties reduce the family arrangement in writing with the purpose of using that writing as proof of what they had arranged and, where the arrangement is brought about by the document as such, that the document would require registration as it would amount to a document of title declaring for future what rights in what properties the parties possess.

Another aspect that attracts our attention is whether family arrangement, if recorded in a document, requires registration as per the provisions of section 17(1)(b) of the Indian Registration Act, 1908. Section 17(1)(b) lays down that a document for which registration is compulsory should, by its own force, operate or purport to create declare, assign, limit or extinguish either in present or in future any right, title or interest in immovable property. Thus if an instrument of family arrangement is recorded in writing and operates or purports to create or extinguish rights, it has to be compulsorily registered. But where a document, merely records the terms and recital of the family arrangement after the family arrangement had already been made which per se does not create or extinguish any right in immovable properties, such document does not fall within the ambit of section 17(1)(b) of the Act and so it does not require registration.

According to the Supreme Court in Roshan Singh v. Zile Singh AIR 1988 SC 881, the true principle that emerges can be stated thus ‘If the arrangement, of compromise is one under which a person having an absolute title to the property transfers his title in some of the items thereof to others, the formalities prescribed by law have to be complied with, since the transferees derive their respective title through the transferor. If, on the other hand, the parties set up competing titles and the differences are resolved by the compromise, then, there is no question of one deriving title from the other and therefore, the arrangement does not fall within the mischief of section 17 (1) (b) it read with section 49 of the Registration Act as no interest in property is created or declared by the document for the first time.

Family Arrangement does not amount to transfer: The transaction of a family settlement entered into by the parties bonafide for the purpose of putting an end to the dispute among family members, does not amount to a transfer. It is not also the creation of an interest. For, as pointed out by the Privy Council in Hiran Bibi’s case AIR 1914 PC 44, in a family settlement each party takes a share in the property by virtue of the independent title which is admitted to that extent by the other party. It is not necessary, as would appear from the decision in Rangaswami Gounden v. Nachiappa Gounden AIR 1918 PC 196, that every party taking benefit under a family settlement must necessarily be shown to have, under the law, a claim to a share in the property. All that is necessary is that the parties must be related to one another in some way and have a possible claim to the property or a claim or even a resemblance of a claim on some other ground as say, affection.

It is well settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for information of the court for making necessary mutation. In such a case memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of section 17 of the Registration Act and is, therefore not compulsorily registrable –Kale v. Dy. Director AIR 1976 SC 807.

The family arrangement will need registration only if it creates any interest in immoveable property in present in favour of the party mentioned therein. In case however no such interest is created, the document will be valid despite its non-registration and will not be hit by section 17 of the Indian Registration Act, 1908. Maturi Pullaih v. Maturi Narasimhan AIR 1966 SC 1836.

Even a family arrangement, which was registrable but not registered, can be used for a collateral purpose, namely, for the purpose of showing the nature and character of possession of the parties .In pursuance of the family settlement. Kale v. Director of Consolidation AIR 1976 SC 807, (1976) 3 SCC 119.

Memorandum of Family Arrangement-Cum-Compromise     
To record a family arrangement arrived at orally, a memorandum of family arrangement-cum-compromise is required to be drawn up wherein the properties and assets belonging to the parties to the family arrangement are required to be specified. Thereafter the fact of arriving at family arrangement some time in the past with the help of well-wishers and family friends is required to be mentioned. In the operative portion of the Memorandum of Family Arrangement-cum-Compromise the properties and business which have been allotted to different parties are required to be specified. 

In addition to the Memorandum of Family Arrangement - cum-Compromise, other documents like affidavits of each of the parties to the Family Arrangement are required to be obtained wherein each of the parties confirms on oath that he has received a particular asset and the family arrangement is arrived to his total satisfaction and it is binding on him. In such an affidavit the party giving up his right in other properties which are allotted to other parties to the Family Arrangement states that the said other properties may be transferred in the records of the registering authorities without notice to him. On the basis of the affidavit which is required to be executed before a Notary Public; mutation entries can be made by the concerned authorities.

In order to enable the member of the family to whom a particular property is allotted on arriving at a family arrangement, a power of attorney is required to be given by a member in whose name the said property was standing prior to the family arrangement to enable the party receiving the property to deal with the property as his own. Depending on the facts of each case, various other documents may be required to be drawn up to effect a proper and binding family arrangement.

Difference between Family Arrangement and Partition

A family arrangement may be based on disputed or potential or possible or even notional claims. In a partition, there should be very clear pre-existing rights. In a family arrangement, as is obvious, some degree of relationship is involved. A partition can be entered into between persons who have no family relationship, but are co-owners of property. A family arrangement can be in the nature of re-aligning, re-distributing or even consolidating certain claims and rights. A partition is always in the nature of division of property. There could be other differences on a case-to-case basis. 

Essentials of a Family Arrangement

The family arrangement should be for the benefit of the family in general.

(i) The family arrangement must be bonafide, honest, voluntary and it should not be induced by fraud, coercion or undue influence.

(ii) The purpose of the family arrangement should be to resolve present or possible family dispute and rival claims not necessarily legal claims by a fair and equitable division of the property amongst various members.

(iii) The parties to the family arrangement must have antecedent title, claim or interest. Even if a possible claim in the property which is acknowledged by the parties to the settlement will be sufficient.

(iv) The consideration for entering into family arrangement should be preservation of family property, preservation of peace and honour of the family and avoidance of litigation. Kale v. Deputy Director of Consolidation (AIR 1976 SC 807)

(v) Family peace is sufficient consideration.

Antecedent title, claim or interest or even a possible claim

The members who may be parties to the family arrangement must have some antecedent title, claim or interest or even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the Court will find no difficulty in giving assent to the same. 

But where the person, in whose favour certain properties have been transferred under the guise of a family arrangement, has no and cannot have any claim or possible claim against the transferor, & therefore, the same cannot be regarded as a family arrangement.

1. A family settlement is considered as a pious arrangement by all those who are concerned and also by those who administer law. A family settlement is not within the exclusive domain of the Hindu Law but equality applies to all families governed by other religions as well. Thus, it shall apply to Muslims, Christians, Jews, Parsees and other faiths equally.

2. The concept of family arrangement is an age old one. It is not only applicable to Hindus but also to other communities in which there is a common unit, common mess and joint living. In the case of Bibijan Begum v. Income Tax Officer (34 TTJ 557), the Gauhati Bench of the Appellate Tribunal in a very elaborate judgment held that there is no bar for Mohammedans to effect a family arrangement. In that case the assessee had an absolute right over her Mehr property and in exchange of that land the assessee received another land over which a multi-storeyed building was to be constructed. The assessee’s two daughters and two sons had antecedent right to the properties in the capacity as her heirs though their shares were not specified. The Tribunal held that by a family arrangement the rights of those children had been specified. The family arrangement by which the assessee and her four children received 1/5th share each in the multi-storeyed building was, therefore, valid. The Tribunal therefore, held that the assessee lady could not be assessed in respect of that share of house property which was given to her children pursuant to the family arrangement.

3. Three parties to the settlement of a dispute concerning the property of a deceased person comprised his widow, her brother and her son-in-law. The latter two could not under the Hindu Law be regarded as the heirs of the deceased, yet, bearing in mind their near relationship to the widow, the settlement of the dispute was very properly regarded as a settlement of a family dispute - Ram Charan Das v. Girija Nandini Devi AIR 1996 SC 323 at page 329.

4. A family arrangement differs from partition in as much as in a family settlement there can be a division of income without the distribution of assets and there is no bar to a partial partition. The provision of section 271 of the Act, which places restriction on a partial positions do not apply to a family settlement.

5. The Gauhati High Court in the case of Ziauddin Ahmed v. CGT, 102 ITR 253 held that the family arrangement amongst the members of Mohammedan family is valid and therefore, the shares given by a father to his sons at less than market value in order to preserve the family peace is not liable to gift tax.

Miscellaneous

1. Hence a purely voluntary act of giving up one’s right in property without compelling circumstances indicating an existing or a possible dispute resulting in a compromise may well constitute a conveyance by way of gift and not valid family arrangement. It is, therefore, necessary that the preamble to the family arrangement should advert to the existence of difference which are likely to escalate to possible litigation and cause lack of peace and harmony in the family and likely to bring dishonor to the family name and prestige.

2. The amendment brought out w.e.f. 25th March, 1989 has removed the distinction as regards to a son or a daughter in respect thereto coparcenary property of Joint Hindu family as governed by Mitakshara law and daughters are clearly treated as coparceners.

Thus, Family Arrangement is a settlement of disputes within the family in a spirit of give and take. Family arrangements are arrived at for a consideration namely, to resolve the disputes amongst the parties, to preserve the family peace and harmony and to avoid litigation. The Transaction of a family settlement entered into by the parties bonafide for the purpose of putting an end to the dispute amongst family Members does not involve Transfer.

Family Settlements and Tax Planning        
We may now examine the scope of tax planning in connection with family settlements. We have already seen above what is really a family settlement and what is the nature of the transaction brought about as a result of such family settlement. The utility of the instrument of family settlement for tax planning may be examined in the context of : (1) joint family properties, and (2) individual properties.

1. Joint Family Properties        

In the case of joint family properties, the most commonly used media of tax planning is effecting complete or total partition. Supreme Court has now held in the case of Apoorva Shantilal Shah v/s. CIT (1983) 141 ITR 558 (SC) that father can effect partial partition even if he has minor sons, in exercise of his powers as patria potestas. He is not disabled to look after interests of his minor sons. It has also been held that even unequal partition can be effected by the father or with consent of all the coparceners, and only the concerned parties aggrieved by it can challenge the same till then it is valid. See CED v/s. Kantilal Trikamlal 105 ITR 92 (SC). Though the decisions relate to partial partition which were recognized as valid under s. 171 of the Income Tax Act, it equally applies in the case of total partition of joint family properties. Now w.e.f 1-1-1970, only total partition is recognized under s. 171.

2. Single Coparcener     
Similarly, where there is only a single coparcener and the other members of the family are females not entitled to any share, such as wife, mother, unmarried sisters, unmarried daughters etc. who have right of maintenance, a family arrangement can be arrived at with those members by Karta allotting to them specific properties in settlement of their claims. For example, in a joint family between the mother and son, it would be quite legitimate for the son to give one half property to the mother in lieu of her right of maintenance by way of family arrangement. See CIT v/s. Narain Dass Wadhwa (1980) 123 ITR 281 ( P & H) Similarly, it would be open to the Karta to allot properties to the unmarried daughters or sisters in lieu of their claim of maintenance and marriage expenses by way of family settlement. Therefore, where partition cannot be effected for some reason or the other, it would be advantageous to allot the properties under a family settlement. 

3. Requisites for family settlement -

The requirements of a valid family settlement are :        

(a) existing or future disputes or differences between the members of the family in respect of their rights on the properties.  

(b) existing of claims or semblance of a claim of the various members of the family on such properties and,      

(c) resolving of the said claims by family settlement arrived at between the members of the family including the guardians of minors involved. 

Thus, prior to the settlement there should be some evidence of claims or counter claims or differences or disputes between the members of the family on this issue which will justify a family arrangement taking place. The best evidence of this would be litigation in court or exchange of legal notices between parties, and adjudication through arbitrator. But this is not absolutely essential - Pulliah v. Narsimham AIR 1966 SC 1836. Further, it may also be noted that in the case of non Hindus also family settlements can be arrived at between the members of the family.     

4. Non Hindus and family settlements        
It may also be noted that in the case of non-Hindus also family settlements can be arrived at between the members of the family. If there are disputes, whether the properties are individual properties or joint family properties, such disputes can on filing suits and then arriving at some family arrangement be settled and property transferred to other members which will not attract gift tax or capital gains tax nor invite Registration. Of course, now after 1-4-1997, gift tax levy is abolished.

5. Individual Properties 
In the case of individual properties, whether in respect of Hindus or other communities, there can be a valid family settlement. The other family members can have claims in the estate either on account of rights of maintenance or otherwise and in settlement of such claims a family arrangement can be arrived at which will be considered to be one for a valid consideration and, therefore, such a settlement will not fall within the ambit of Section, 64 of the Income Tax Act, 1961. Such a transaction is clearly with and for a valid consideration. Obligations regarding maintenance are to be found under the general law and specifically, under the Hindu Adoption and Maintenance Act, 1956 and if any settlement takes place in this connection, it will be for a valid and valuable consideration. It is also significant that in case of family settlement, the Courts have gone so far as to hold that such family settlements do not amount to a transfer. Those observations are to be found in the decision of the Supreme Court in Ramcharandas v/s. Girjanandinidevi AIR 1966 SC 323 and other cases referred to therein. A particular instance of family settlement is found in a decision of the Supreme Court in CWT v/s. Vijayaba, 117 ITR 734(SC) where there did not appear to be any legal claim of the son against the Maharani, but even then a promise by her to pay certain amount to the son was held to be a valid liability created by her by way of a family settlement which was binding on the parties concerned. It may be that at times, the line is thin between a gift and a family settlement. A gift cannot masquerade as a family settlement which has to be bonafide and preceded by some dispute or difference between the parties as regards their claims. It is not necessary that the claim should be a legal and valid claim in order that there should be a valid family settlement, but nonetheless, there should be some differences or disputes in order that it should amount to a valid family settlement.

However, since the abolition of Gift Tax from 1-4-1997 the tax implications of family settlements are reduced and the question assumes importance now only as regards Stamp Duty and Registration of documents recording family settlements and Capital Gains if they are construed as gifts or transfers of immovable properties.

6. What should be the procedure to avoid the stamp duty?     
A family settlement arrangement be made oral. The concerned parties to deliver possession of the property allotted and the title deeds and records to the other. After few days, affidavits be recorded reciting therein the factum of settlement, date of settlement properties allotted, possession transferred documents of title handed over and arrangement implemented and acted upon etc. The parties may make necessary application for mutation in respect of agricultural land and for entry in register of record / title maintained by the municipal Council or local authority. If the property stands let out, notice of attorning in favour of the recipient be given, fresh rent deed be got executed and recipient to issue receipt. Necessary modification be got made with appropriate tax Departments for lands and buildings tax, house tax and to her taxes, electricity water etc. After some time a memorandum or confirmation recording the event may be executed for own satisfaction. It should not be in present tense but should be in past tense. It should not create or confer any interest or right or title but may acknowledge the factum of claims accepted and acted upon.

7. If the family arrangement is not required to be registered what is the evidentiary value of such family arrangement?

Even if the family arrangement is not registered it has evidentiary value. It is binding on persons who are parties to it and who have taken any advantage under such family arrangement.

A family arrangement being binding on the parties to the arrangement clearly operates as an estoppel to preclude any of the parties who have taken advantage under the agreement from revoking or challenging the same Kale vs. Dy. Director of Consolidation AIR 1976 SC 807.       

Even a family arrangement, which was registrable but not registered can be used for a collateral purpose, namely for the purpose of showing the nature and character of possession of the parties in pursuance of the family settlement Kale vs. Director of Consolidation AIR 1976 SC 807 (1976) 3 SCC 119.    

A family arrangement or settlement even embodied in a compromise decree is binding on all the parties to it. A consideration (which is the expectation that such a settlement will result in establishing or ensuring amity and goodwill amongst the relations) having passed by each of the disputants, the settlement consisting of recognition of the right asserted by each other cannot be permitted to be impeached thereafter. A party who had taken benefit under the transaction is not entitled to turn round and say that transaction was of a kind which the other party could not enter into and was therefore invalid Ra, Charan Das vs. Girija Nandini Devi AIR 1966 SC 329. 

8. Whether is it necessary that the arrangement is bonafide and for consideration?
Yes. If a family settlement or a family arrangement is found to be bondafide, voluntary, without coercion, under influence, misrepresentation and stands acted upon, it deserves to be uphold and accepted by the courts, even if it involves release or relinquishment or surrender of disposition, assignment, or transfer. (Refer : Smt. Vidyawati Devi Rathi vs. C.G.T (1988) 169 ITR 708 CIT vs. A Indiramma (1986) 160 ITR 829 (Karnataka), K. Venugopal vs. CIT (2001) 248 ITR 251 (Mad), CGT vs. D. Nagrirathinam (2004) 266 ITR 342 (Madras).

Briefly stated, though conflict of legal claims in present or in future is generally a condition for the validity of a family arrangement, it is not necessary so. Even bonafide disputes, present or possible, which may not involve legal claims will suffice. Members of a Joint Hindu Family may to maintain peace or to bring about harmony in the family, enter into such a family arrangement. If such an arrangement is entered into bonafide and the terms thereof are fair in the circumstances of a particular case, courts will more readily give consent to such an arrangement than to avoid it. (Refer : Pulliah vs. Narasimham - AIR 1966 SC 1836).    

9. Can any property he allotted to female by family arrangement and the quantum?
Yes. Any property can be allotted to a female in lieu of her right of maintenance, marriage or to discharge any other obligation. (Refer CGT vs. N. Jothi Kumar 91986) 157 ITR 785 (Madras), State of Kerala vs. K.P Gopal (1987) - 166 ITR 111(Kerala), Basant Kumar Aditya Vikram Birla vs. CGT – (1982) 137 ITR 72(Calcutta), Satpal Bansal vs. CIT (1986) 162 ITR 582 (P & H F), B.T Ravindra Nath Puja vs. CIT (1989) 179 ITR 243(Karnataka), Guramma Pharatan Deshmukh vs. Malappa Chambasappa - AIR 1964 SC 510, CGT vs. B.S Appa Rao (2001) 248 ITR 103(SC), Mandali Singhal vs. Ravi Singhal - AIR 1999 Delhi 156.

No set formula is, about the amount. It depends on the status of the family and the claimants. No set formula can be laid for fixing the amount of maintenance. It has in very nature of things to depend on the facts and circumstances of each case. Some scope for leverage can, however, be always there. Court has to consider the status of the parties, their respective needs, capacity of the husband to pay having regard to his reasonable expenses for his own maintenance. (Refer: Smt. Jaspeer Kaur Sahgal vs. District Judge - AIR 1997 SC 163).      

10. Is a family arrangement transfer u/s. 2(47) of the Act attracting liability to capital gain?

No. It is not a transfer and there is no liability to capital gain. (Refer : CIT vs. AL Ramanathan (2000) 245 ITR 494, Smt. Vijaya Raje Scindia vs. ITO (ITA No. 2780(Bom./89) dated 17-12-1993, H.H Moharani Manekuraje Pawan vs. ITO (15 ITD 545 (Indore), Mohd. Haroon Japanwala vs. ITO (22 ITD 61) Delhi, DCIT, Spl. Rg. 46 vs. Smt Vaishali K. Shah (ITA No. 7074/Mum/96 A.Y 1992-93.     

11. Whether the concept of family arrangement can be extended to firms and companies?

Family arrangement can be arrived at amongst individuals and not between Companies. The shareholders and the Company are separate and distinct persons and the shareholders have not interest in the business of the company. (Refer 27 ITR 1(SC), 112 C.C 379(SC). However, one can think of a family arrangement between the partners in respect of their share, if the partners were/are members of the family because the firm is not a legal person other than its partners. The partners are the real owner of the assets of the firm. The firm name is only a compendious name given to the partnership for the sake of convenience. The assets of the firm belong to and are owned by the partners of the firm. (Refer: N. Khadervali Saheb & Anrs. Vs. N. Gudi Sahib (20030 261 ITR 1(SC). The word ‘family’ in the context of a family arrangement is not to be understood in a narrow sense of being a group of persons who are recognized in law as having a right of succession or having a claim to share in the property in dispute. To consider a settlement as a family arrangement, it is not necessary that the parties to the compromise should all belong to one family. If the dispute which is settled is one between near relations then the settlement of such disputes can be considered as a family arrangement (Refer : Ram Charan Das vs. Girija Nandini Devi – AIR 1966 SC 323). If the partnership is amongst the family members, it may be possible. However, if outsiders are also partners, then it appears that properties of such firm may not be available for a family arrangement. As far as company is concerned it appears that its properties cannot be subject matter of family arrangement even if all the shareholders are members of the same family.

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Family Arrangement: Judgments

The Supreme Court in its landmark judgment, in Kale & Others vs Deputy Director of Consolidation, has explained and examined the essentials of a family arrangement. The Court held as under;

"The principles which apply to the case of ordinary compromise between strangers, do not equally apply to the case of compromises in the nature of family arrangements. Family arrangements are governed by a special equity peculiar to themselves, and will be enforced if honesty made, although they have not been meant as a compromise, but have proceeded from an error of all parties, originating in mistake or ignorance of fact as to that their rights actually are, or of the points On which their rights actually depend." The object of the arrangement is to protect the family from long drawn litigation cr perpetual strifes which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family. Today when we are striving to build up an egalitarian society and are trying for a complete reconstruction of the society, to maintain and uphold the unity and homogeneity of the family which ultimately results in the unification of the society and, therefore, of the entire country, is the prime need of the hour. A family arrangement by which the property is equitably divided between the various contenders so as to achieve an equal distribution of wealth instead of concentrating the same in the hands of a few is undoubtedly a milestone in the administrating of social justice. That is why the term "family" has to be understood in a wider sense so as to include within its fold not only close relations or legal heirs but even those persons who may have some sort of antecedent title, a semblance of a claim or even if they have a spes successions so that future disputes are sealed for ever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless or futile litigation is able to devote its attention to more constructive work in the interest of the country. The Courts have, therefore, leaned in favour of upholding a family arrangement instead of disturbing the same on technical or trivial grounds. Where the Courts find that the family arrangement suffers from a legal lacuna or a formal defect the rule of estoppel is pressed into service and is applied to shut out plea of the person who being a party to family arrangement seeks to unsettle a settled dispute and claims to revoke the family arrangement under which he has himself enjoyed some material benefits. The law in England on this point is almost the same. In Halsbury's Laws of England, Vol. 17, Third Edition, at pp. 215-216, the following apt observations regarding the essentials of the family settlement and the principles governing the existence of the same are made: "A family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving-its honour.

The agreement may be implied from a long course. Of dealing, but it is more usual to embody or to effectuate the agreement in a deed to which the term "family arrangement" is applied.

Family arrangements are governed by principles which are not applicable to dealings between strangers. The court, when deciding the rights of parties under family arrangements or claims to upset such arrangements, considers what in the broadest view of the matter is most for the interest of families, and has regard to considerations which in dealing with transactions between persons not members of the same family, would not be taken into account. Matters which would be fatal to the validity of similar transactions between strangers are not objections- to the binding effect of family arrangements".

In other words to put the binding effect and the essentials of a family settlement in a concretised form, the matter may be reduced into the form of the following propositions:

(1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family;

(2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence:

(3) The family arrangement may be even oral in which case no registration is necessary;

(4) It is well-settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum pre pared after the family arrangement had already been made either for the purpose of the record or for in formation of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of s. 17(2) of the Registration Act and is, therefore, not compulsorily registrable;

(5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property 'It which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the Courts will find no difficulty in giving assent to the same;

(6) Even if bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable the family arrangement is final and binding on the parties to the settlement.

The principles indicated above have been clearly enunciated and adroitly adumbrated in a long course of decisions of this Court as also those of the Privy Council and other High Courts, which we shall discuss presently. In Lala Khunni Lal & Ors. v. Kunwar Gobind Krishna Narain and Anr.(1) the statement of law regarding the essentials of a valid settlement was fully approved of by their Lordships of the Privy Council. In this connection the High Court made the following observations , which were adopted by the Privy Council:

The learned judges say as follows:

"The true character of the transaction appears to us to have been a settlement between the several members of the family of their disputes, each one relinquishing all claim in respect of all property in dispute other than that falling to his share, and recognizing the right of the others as they had previously asserted it to the portion allotted to them respectively. It was in this light, rather than as conferring - a new distinct title on each other, that the parties themselves seem to have regarded the arrangement, and we think that

(1) L. R. 38 T. A. 87. 102.

it is the duty of the Courts to uphold and give full effect to such an arrangement."

Their Lordships have no hesitation in adopting that view."

This decision was fully endorsed by a later decision of the Privy Council in Mt. Hiran Bibi and others v. Mt. Sohan Bipi

(1). In Sahu Madho Das and others v. Pandit Mukand Ram and another(2) this Court appears to have amplified the doctrine of validity of the family arrangement to the farthest possible extent, where Bose, J., speaking for the Court, observed as follows:

"It is well settled that compromise or family arrangement is based on the assumption that there is an antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is, each party relinquishing all claims to property other than that falling to his share and recognising the right of the others, as they had previously asserted it, to the portions allotted to them respectively. That explains why no conveyance is required in these cases to pass the title from the one in whom it resides to the person receiving it under the family arrangement. It is assumed that the title claimed by the person receiving the property `, under the arrangement had always resided in him or her so far as the property falling to his or her share is concerned and therefore no conveyance is necessary. But, in our opinion, the principle can be carried further and so strongly do the Courts lean in favour of family arrangements that bring about harmony in a family and do justice to its various members- and avoid in anticipation, future disputes which might ruin them all, and we have no hesitation in taking the next step. (fraud apart) and upholding an arrangement under which. One set of members abandons all claim to all title and interest in all the properties in dispute and acknowledges that the sole and absolute title to all the properties resides in only one of their number (provided he or she had claimed the whole and made such an assertion of title) and are content to take such properties as are assigned to their shares as gifts pure and, simple from him or her, or as a conveyance for consideration when consideration is present."

In Ram Charan. DAS v. Girjanandini Devi & Ors. (3), this Court observed as follows:

"Courts give effect to a family settlement upon the broad " and general ground that its object is to settle existing or future disputes regarding property amongst members of a family. The word 'family' in the content is not to be under stood in a narrow sense of being a group of persons who are recognised in law as having a right of succession or

(1) A.I.R. 1914 P.C.44. (2) [1955] 2 S.C.R. 22, 42-43. (3) [1965] 3 S.C.R. 841, 850-851. having a claim to a share in the property in dispute. . . . . . . . The consideration for such a settlement, if one may put it that way, is the expectation that such a settlement will result in establishing or ensuring amity and goodwill amongst persons bearing relationship with one another. That consideration having been passed by each of the disputants the settlement consisting of recognition of the right asserted by each other cannot be permitted to be impeached thereafter."

In Tek Bahadur Bhujil v. Debi Singh Bhujil and others(1) it was pointed out by this Court that a family arrangement could be arrived 4 at even orally and registration would be required only if it was reduced into writing. It was also held that a document which was no more than a memorandum of what had been agreed , to did not require registration. This Court had observed thus: "Family arrangement as such can be arrived at orally. Its terms may be recorded in writing as a memorandum of what had been agreed upon between the parties. The memorandum need not be prepared for the purpose of being used as a document on which future title of the parties be founded. It is usually prepared as a record of what had been agreed upon so that there be no hazy notions about it in future. It is only when the parties reduce the family arrangement in writing with the purpose of using that writing as proof of what they had arranged and, where the arrangement is brought about by the document as such, that the document would require registration as it is then that it would be a document of title declaring for future what rights f in what properties the parties possess."

Similarly in Maturi Pullaiah and Anr. v. Maturi Narasimham and ors.(2) it was held that even if there was no conflict of legal claims but the settlement was a bona fide one it could be sustained by the Court. Similarly it has also held that even the disputes based upon ignorance of the parties as to their rights were sufficient to sustain the family arrangement. In this connection this Court observed as follows: -

"It will be seen from the said passage that a family arrangement resolves family disputes, and that even disputes based upon ignorance of parties as to their rights may afford a sufficient ground to sustain it.

Briefly stated, though conflict of legal claims in praesenti or in future is generally a condition for the validity of a family arrangement, it is not necessarily so. Even bona fide disputes, present or possible, which may not involve legal claims will suffice. Members of a joint Hindu family may, to maintain peace or to bring about harmony in the family,

(1) A.I.R. 1966 S.C. 292, 295. (2) A.I.R. 1966 S.C. 1836.

enter into such a family arrangement. If such an arrangement is entered into bona fide and the terms thereof are fair in the circumstances of a particular case, Courts `will. more readily give assent to such an arrangement than to avoid it."

In Krishna Biharilal v. Gulabchand and others(1) it was pointed out that the word 'family' had a very wide connotation and could not be confined only to a group of persons who were recognised by law as having a right of succession or claiming to have a share. The Court then observed:

"To consider a settlement as a family arrangement, it is not necessary that the parties to the compromise should all , belong to one family. As observed by this Court in Ram Charan Das v. Girjanandini Devi and ors.[1965] 3 SCR 841 at pp. 850 & 851-the word "family" in the context of a family arrangement is not to be understood in a narrow sense of being a group of persons who are recognised in law as having a right of succession or having a claim to a share in the property in dispute. If the dispute which is settled is one between near relations then the settlement of such a dispute can be considered as a family arrangement see Ramcharan Das's case.

The courts lean strongly in favour of family arrangements to bring about harmony in a family and do Justice to its various members and avoid in anticipation future disputes which might ruin them all."

In a recent decision of this Court in S. Shanmugam Pillai and others v. K. Shanmugam Pillai & others(2) the entire case law was discussed and the Court observed as follows:

"If in the interest of the family properties or family peace the close relations had settled their disputes amicably, this Court will be reluctant to disturb the same. The courts generally lean in favour of family arrangements

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Family Arrangement: Judgements

Sea Rock judgement - In this case, the shareholders of the assessee company (Sea Rock Investments Ltd) were family members of the Manipal Pai group. There was a dispute among the members, and the dispute was referred to arbitration. According to the terms of the arbitration award, the assessee company had to transfer certain investments (shares in a firm) to certain family members for an agreed consideration.

The company argued that the transfer of shares should not be treated as a taxable transfer as the transaction was undertaken pursuant to a family dispute settlement in terms of the arbitration award. The assessing officer did not accept the transaction as family arrangement as the transferee assessee company was separate from it shareholders and it had actually received consideration for the transfer.

The high court held that the assessee company was a separate legal entity; thus, even though the shareholders were members of a joint family and the transfer by the company was in settlement of a family dispute, the transfer cannot be said to have been pursuant to such a family arrangement as the shareholders did not have a direct legal right on the investments held by the assessee company, which were the subject matter of the transfer. Further, the assessee company, having received consideration for the transfer, should be held liable for the capital gains. It seems that had the transfer been by the family members, the transfer would not have been liable to capital gains.

Incidentally, in this case, the taxpayer had also argued that it had not received any consideration (which aspect is not very clear) and, hence, on that point, the case had been sent back to the tax tribunal for a fresh adjudication.

Conclusion - Indian courts have consistently held a family arrangement to merely represent the working out of the rights in the common property, between the family participants and, hence, not a taxable transfer.

The Sea Rock judgement, while acknowledging the above principle, held that since the realignment was effected for a consideration through the group’s holding company, which is a separate legal entity from the shareholders, it would not fall within the ambit of a family arrangement. Now, it is not uncommon for promoter groups to hold investments through private holding companies. A realignment of ownership under a family arrangement may thus entail transfer of shares of such a holding company by the individual participants between themselves or transfer of investments by the holding company itself. Undoubtedly, even the latter transfer is, in substance, part and parcel of, and to give effect to, a family arrangement and, respectfully, should also be out of the tax net. The Sea Rock judgement, to that extent, merits reconsideration on this principle.

Interestingly, the proposed direct tax code (DTC) has widened the definition of the term “transfer” to include any disposition, settlement or an arrangement; it remains to be seen whether DTC would overturn the settled judicial thinking on the subject

Halsbury’s Law of England in para 303(2) states that an agreement dividing up family property, though entered into under misapprehension of legal rights of the parties, can be supported as a family arrangement provided the misapprehension is not induced by any party to the agreement, even where misapprehension existed has been established by any subsequent legal decision.

In the case of Shambhu Prasad Vs. Phool Kumar [AIR 1971 SC 1337], In this case Court observed by holding that there must exist a dispute, actual or possible in future, in respect of each and every item of property and amongst all members arrayed by one against the other. It would suffice if it is shown that there were actual or possible claims by parties in settlements whereof the arrangement as a whole has been arrived at, thereby acknowledging title in one to whom a particular property falls on the assumption (not actual existence in law) that he had an interior title therein. In the present case, the property was purchased by father out of his own money. The adopted son could not have claimed any share in such property. In spite of this position, the Apex Court held that - “But, as stated earlier, a dispute or contention, the settlement of which can constitute family arrangement, need not be one which is actually sustainable in law.”

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Family Arrangement: Judgements 

In the case of S. K. Sattar S. K. Mohd. Vs. Gundappa Ambadas [(1996) 6-SCC-373 ] Court described ‘family arrangement’ as a transaction between members of the same family for the benefit of the family so as to preserve the property, peace, and security of the family, avoidance of family dispute and litigation and for saving the honour of family. Such an arrangement is based on the assumption that there was an antecedent title in the parties and the agreement acknowledges and defines what title is.

Tax Implication, Transfer under Sec. 2(47) and Sec. 45(4) of the Income-tax Act, 1961:-

In the case of Roshan Singh Vs. Zile Singh [AIR 1988 SC 881] the Supreme Court held that parties to a Family arrangement set up competing claims to the properties and there was an adjustment of the rights of the parties. By family arrangement it was intended to set at rest competing claims amongst various members of the family to secure peace and amity. The compromise was on the footing that there was antecedent title of the parties to the properties and the settlement acknowledged and defined title of each of the parties.

In the case of CIT Vs. A. N. Naik Associates [265 ITR346, Bom], by the Memorandum of Family Settlement dated 30th January, 1997 it was agreed between the parties thereto that the business of six firms as set out therein would be distributed in terms of the family settlement as the parties desired that various matters concerning the business and assets thereto be divided separately and partitioned. Under the terms and condition of the settlement, it was set out that the assets proposed to be divided in partition under the settlement were held by the firms and the individual partners. With reference to the firms, the manner in which the firms were to be reconstituted by retirement and admission of new partners was also set out. Based on these documents and subsequent deeds of retirement of Partnership an order of the assessment was made holding that the respondents was liable for tax on capital gains. The Tribunal held that the business continued to be run and there was no dissolution of the firm and consequently Sec. 45(4) of the Act was not attracted.

Gift under Sec. 2(xii) and Sec. 4(1) of the Gift Tax Act, 1958:-

In the case of CGT Vs. D. Nagrirathinam (266-ITR-342, Mad.), the assessee was the owner of a half share in the building which consisted of ground floor and first floor. She also owned a residential house and a building. Pursuant to the dispute between the assessee and her son, at the intervention of the Panchayatdars, the assessee executed the deed of partition with a view to settle dispute with her son. As per the deed of partition, one of the properties was absolutely allotted to the son which was belonging to the assessee. Therefore, the gift tax assessment was made in respect of the value of the said property allotted to the son. The Tribunal held that only to solve the family dispute and bring harmony in the family the transactions were entered into and there was a family arrangement which did not constitute gift within the meaning of Sec. 2(xii) and 4(1)(a). The said decision of the Tribunal was upheld by the Court on the ground that the family members intended to maintain peace in the family and therefore, the family arrangement was arrived at which was bona fide one. Hence, the transaction did not constitute gift within the meaning of Sec. 2(xii) and 4(1)(a) of the Gift-tax act.

After analyzing various decisions and the facts of the case the ITAT Madras Bench in the case of Kay Arr Enterprises v.Joint Commissioner of Income-tax (2005) 97 ITD 291 (Chennai)/(2006)-99-TTJ(Chennai)411 held as under-

The word "family" in the context of a family arrangement is not to be understood in a narrow sense of being a group of persons who are recognized in law as having a right of succession or having a claim to a share in the property in dispute. If it is settled in one between near relations then the settlement of such a dispute can be considered as a family arrangement. A compromise or family arrangement is based on the assumption that there is an antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is, each party relinquishing all claims to property other than that falling to his share and recognizing the right of the others, as they had previously asserted it to the portions allotted to them respectively. These observations do not mean that some title must exist as a fact in the persons entering into a family arrangement. They simply mean that it is to be assumed that the parties to the arrangement had an antecedent. It is also to be noted that a family arrangement by which the property is equitably divided between the various contenders so as to achieve an equal distribution of wealth instead of concentrating the same in the hands of a few is undoubtedly a milestone in the administration of social justice. That is why the term "family" has to be understood in a wider sense so as to include within its fold not only close relations or legal heirs but even those persons who may have some sort of antecedent title, a semblance of a claim or even if they have a spes successionis so that future disputes are sealed for ever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless or futile litigation is able to devote its attention to more constructive work in the larger interest of the country.

This decision of the Tribunal was affirmed by the Madras High Court in Commissioner of Income-tax v. Kay Arr Enterprises 2008-299-ITR-348(Mad). The Madras High Court relied on CIT v. Ponnammal (R.) [1987] 164 ITR 706 (Mad) ; CIT v. Ramanathan (Al) [2000] 245 ITR 494 (Mad) ; Kale v. Deputy Director of Consolidation [1976] AIR 1976 SC 807 and Maturi Pullaiah v. Maturi Narasimham [1966] AIR 1966 SC 1836 while deciding the issue in favour of the assessee.

It is to be noted that on 18-07-2008 their Lordships S. H. Kapadia and B. Sudershan Reddy JJ. dismissed the Department’s special leave petition against the judgment dated July 6, 2007 of the Madras High Court in T. C. (A) No. 521 of 2007 reported in 299 ITR 348 whereby the High Court dismissed the Department’s appeal on the ground that no substantial question of law arose from the order of the Tribunal which had held that transfer of shares by way of family arrangement would not attract capital gains tax as the arrangement was to avoid possible litigation amongst family members and was made voluntarily and was not induced by fraud or coercion : CIT v. Ms. R. Jayanthi : S. L. P. (C) No. 18050 of 2008.

The Hon’ble Supreme Court in the case of Maturi Pullaiah v. Maturi Narasimham AIR 1966 SC 1836 has held as under:

“Although conflict of legal claims in praesenti or in future in generally a condition for the validity of family arrangement, it is not necessarily so. Even bona fide disputes, present or possible, which may not involve legal claims would be sufficient. Members of a joint Hindu family may, to maintain peace or to bring about harmony in the family, enter into such a family arrangement. If such an arrangement is entered into bona fide and the terms thereto are fair in the circumstances of a particular case, the Courts will more readily give assent to such an arrangement than to avoid it. In England also the Courts are averse to disturb family arrangements but try to sustain them on broadest considerations of the family peace and security.

The family arrangement will need the registration only if it creates any interest in immovable property in praesenti in favour of the parties mentioned therein. In case however no such interest is created, the document will be valid despite its non-registration and will not be hit by section 17 of the Registration Act.”

In this Apex Court judgment, the principles of family arrangement are depicted at paras 9 and 17 which reads as under :

“(9) A brief summary of the nature of family arrangements and the conditions for their validity is found in Halsbury’s Laws of England, 3rd Edn., Vol. 17 at pp. 215-26 :

‘A family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour.

The agreement may be implied from a long course of dealing, but it is more usual to embody or to effectuate the agreement in a deed to which the term “family arrangement” applied.’

The principles the Courts should bear in mind in appreciating the scope of such family arrangement are stated thus:

‘Family arrangements are governed by principles which are not applicable to dealings between strangers. The Court, when deciding the rights of parties under family arrangements or claims to upset such arrangements, considers what in the broadest view of the matter is most for the interest of families, and has regard to considerations which, in dealing with transactions between persons not members of the same family, would not be taken into account. Matters which would be fatal to the validity of similar transactions between strangers are not objections to the binding effect of family arrangements.’

This passage indicates that even in England Courts are averse to disturb family arrangement but would try to sustain them on broadest considerations of the family peace and security. This concept of a “family arrangement” has been accepted by Indian Courts but has been adapted to suit the family set up of this country which is different in many respects from that obtaining in England. As in England so in India, Courts have made every attempt to sustain a family arrangement rather than to avoid it, having regard to the broadest considerations of family peace and security.

(17) Briefly stated, though conflict of legal claims in praesenti or in future is generally a condition for the validity of a family arrangement, it is not necessarily so. Even bona fidedisputes, present or possible, which may not involve legal claims will suffice. Members of a joint Hindu family may, to maintain peace or to bring about harmony in the family, enter into such a family arrangement. If such an arrangement is entered into bona fide and the terms thereof are fair in the circumstances of a particular case, Courts will more readily give assent to such an arrangement than to avoid it.”

The Supreme Court in the case of Kale v. Dy. Director of Consolidation AIR 1976 SC 807, has held as under:

Before dealing with the respective contentions put forward by the parties, we would like to discuss in general the effect and value of family arrangements entered into between the parties with a view to resolving disputes once for all. By virtue of a family settlement or arrangement members of a family descending from a common ancestor or a near relation seek to sink their differences and disputes, settle and resolve their conflicting claims or disputed titles once for all in order to buy peace of mind and bring about complete harmony and goodwill in the family. The family arrangements are governed by a special equity peculiar to themselves and would be enforced if honestly made. In this connection, Kerr in his valuable treatise ‘Kerr on Fraud’ at p. 364 makes the following pertinent observations regarding the nature of the family which may be extracted thus :

‘The principles which apply to the case of ordinary compromise between strangers, do not equally apply to the case of compromises in the nature of family arrangements. Family arrangements are governed by a special equity peculiar to themselves, and will be enforced if honestly made, although they have not been meant as a compromise, but have proceeded from an error of all parties, originating in mistake or ignorance of fact as to what their rights actually are, or of the points on which their rights actually depend.’ The Supreme Court in Kale v. Dy. Director of Consolidation AIR 1976 SC 807,(supra) relying on the decision in the case of K. Shanmugam Pillai v. K. Shanmugam Pillai AIR 1972 SC 2069 after an exhaustive consideration of the authorities on the subject, observed as under :

“Equitable principles such as estoppel, election, family settlement, etc., are not mere technical rules of evidence. They have an important purpose to serve in the administration of justice. The ultimate aim of the law is to secure justice. In the recent times in order to render justice between the parties, Courts have been liberally relying on those principles. We would hesitate to narrow down their scope.”

The Supreme Court in the case of S. K. Sattar S. K. Mohd. Choudhari v. Gundappa Ambadas Bukate [1996] 6 SCC 373 has held in respect of family arrangement as under:

“Section 5 contemplates transfer of property by a person who has a title in the said property to another person who has no title. A family arrangement, on the contrary, is a transaction between the members of the same family for the benefit of the family so as to preserve the family property, the peace and security of the family, avoidance of family dispute and litigation and also for saving the honour of the family. Such an arrangement is based on the assumption that there was an antecedent title in the parties and the agreement acknowledges and defines what that title is. It is for this reason that a family arrangement by which each party takes a share in the property has been held as not amounting to a ‘conveyance of property’ from a person.

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Family Arrangement: Judgements

BOMBAY HIGH COURT

Daughters are entitled to Ancestral Property

A Full Bench of the Bombay High Court comprising Mohit Shah C.J, M. S. Sanklecha and M. S. Sonak, JJ, delivered a noteworthy judgment on daughter’s right to ancestral property in a joint HUF on 14th August, 2014. The Bench was constituted on a reference by Single Judge R.G. Ketkar J. who doubted the correctness of the decision of the Division Bench in the case of Vaishali S. Ganorkar & others v. Satish Keshavrao Ganorkar & others, Prior to the enactment of the Hindu Succession (Amendment) Act, 2005 (hereinafter the Amendment Act), the Hindu Succession Act, 1956 (hereinafter the Principal Act) did not provide any rights to daughters in respect of partition of property or the right to demand partition or claim shares in the coparcenary property. A coparcener is a person who has equal rights in the undivided property of a HUF. The Amendment Act now entitles women to an interest in the HUF property by amending Section 6 of the Principal Act and makes a daughter a coparcener in her own right, thereby upholding the fundamental right to equality and non discrimination on the basis of gender enshrined in the Constitution. In the current case the point of contention was not, therefore, whether daughters are also entitled to an interest in the HUF property like their male counterparts, which has been duly settled, but whether the Amendment Act has a prospective or retrospective effect, the determination of which will have a direct bearing on the controversial issue of whether daughters born before 2005 are also entitled to be coparceners in their own right in the same way that daughters born on or after 9 September 2005 are now entitled. A Division Bench upheld the prospective operation of the Amendment Act in Vaishali S. Ganorkar v. Satish Keshavrao Ganorkar, which in effect disentitles all daughters born before 9 September 2005 to claim their equal interest in the Joint HUF governed under the Mitakshara law. Further, the Bench interpreted the amended section to mean that daughters born before 2005 would get rights in the coparcenary property only on the death of the father-coparcener on or after 9 September, 2005.

This provision effectively leaves the daughters remediless if a male coparcener, in the interim, decides to dispose of the property by testament/will. Disagreeing with the decision of the Division Bench, Single Judge R. G. Ketkar J. held that the amended section has retrospective effect from the date of the enactment of the Principal Act and is applicable to all daughters who are born before or after 2005 as a daughter becomes a coparcener in her own right by virtue of her birth. The matter was thus referred by the Single Judge to the Full Bench in order to reconcile the differing opinions and reach a reasoned decision bound to impact the lives of millions in the country. Although Hindu women were considered a part of the HUF under the Shastric / Customary Law for the purpose of maintenance, they did not have a right in the property and it transmitted only to male coparceners by way of survivorship. Today, modern thinking has slowly shaped society to accept equality of the genders which has thankfully seeped into the laws of intestate succession resulting in the Amending Act, 2005. However, the amended Section 6 has left ample scope to the courts for interpretation and this is precisely the critical space where equality needs to be reasoned and upheld. More than just seeing this issue through the lens of feminist movements for equality, the case throws light on the current trend of the courts in application of the rules of interpretation.

The Full Bench concurring with the opinion of the Single Judge stated “We agree with the Respondents that normally a statute should be construed on its plain meaning. However, when the plain reading of the provision is not very clear then, in that case, one has to apply an appropriate tool of interpretation to unearth the intent, object and purpose of the enactment. In such cases, particularly, in cases of socio-economic legislations like the one we are concerned with, we must apply the Mischief or Purposive Rule of interpretation to find out the true meaning of the Statute”. The Mischief Rule propounded in 1584 from Heydon’s case, essentially seeks to rectify the existing defect in the common law and thus allows interpretation to keep in tune with the changing social philosophies of the time. Applying the Purposive Rule to this case, the Full Bench has determined the prospective v. retrospective operation of the Amendment Act. As is well established, the interpretation of statutes raises a presumption against retrospective operation of statues unless expressly or impliedly specified by the legislation itself, as it would result in the dire and chaotic consequence of unsettling already vested rights. However, the courts must not be restrained by the black letter of the law which subverts the justice and equality due to millions of daughters born before 9 September 2005.

The Court, to mete out justice, resorted to the application of an intermediary category known as ‘Retroactive Statute’ which does not operate backwards and does not take away vested rights, but successfully provides rights to those daughters who are alive at the time of the Amendment Act, irrespective of whether they were born before or after 2005. In case the coparcener has died before 2005, then the pre-amended law is applicable but by passing of the Amendment Act, all daughters who are alive ipso facto become coparceners, thus settling the interpretation of the amended Section 6. “The only requirement is that when an Act is being sought to be applied, the person concerned must be in existence/living. The Parliament has specifically used the word ‘on and from the commencement of Hindu Succession (Amendment) Act, 2005’ so as to ensure that rights which are already settled are not disturbed by virtue of person claiming as an heir to a daughter who had passed away before the Amendment Act came into force.”, the Court said.

Supreme Court Judgement- Huf

SC says daughters whose fathers died before amendment in Hindu Succession Act have no right to inheritance

A bench of Justices Anil R. Dave and Adarsh K Goel held that the date of a daughter becoming coparcener (having equal right in an ancestral property) is "on and from the commencement of the Act".

The Supreme Court has said that a daughter's right to ancestral property does not arise if the father died before the amendment to Hindu law came into force in 2005.

According to an Indian Express report, the apex court held that amended provisions of the Hindu Succession (Amendment) Act, 2005, do not have retrospective effect. The father would have to be alive on September 9, 2005, if the daughter were to become a co-sharer with her male siblings.

A bench of Justices Anil R Dave and Adarsh K Goel held that the date of a daughter becoming coparcener (having equal right in an ancestral property) is "on and from the commencement of the Act".

The Hindu Succession Act, 1956 did not give daughters inheritance rights in ancestral property. However, the Congress-led UPA government modified this Act on September 9, 2005. Earlier, women could only ask for sustenance from a joint Hindu family.

The only restriction in force after the passage of this amendment was that women could not ask for a share if the property had been alienated or partitioned before December 20, 2004, the date the Bill was introduced. But now the Supreme Court has added this new restriction.

Indian Express says that the apex court ruling overrules some high court judgements which say that the amendment being in the form of a gender legislation, should apply retrospectively for the sake of removing discrimination.

The top court shot down the argument that a daughter acquires right by birth, and even if her father had died prior to the amendment, the shares of the parties were required to be redefined. "The text of the amendment itself clearly provides that the right conferred on a 'daughter of a coparcener' is 'on and from the commencement' of the amendment Act. In view of plain language of the statute, there is no scope for a different interpretation than the one suggested by the text," it said. 

Further, there is neither any express provision for giving retrospective effect to the amended provision nor necessary intent, noted the court, adding "even a social legislation cannot be given retrospective effect unless so provided for or so intended by the legislature".

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Capital Gain in case of Family Settlement

The Madras High Court in a judgment reported as Palanikumar Pillai Vs. Palanikumar Pillai & others (1988) 1 LW 448 explained the scope of 'provision of owelty'. While referring to the Supreme Court judgment in Badri Narain Prasad Choudary & others Vs. Nil Rattan Sarkar (1978) 3 SCR 467, held to the following effect:

A Court may also be confronted with a situation, namely, that the item of property is not capable of physical partition or is such that, if divided, it will lose its intrinsic worth, in such a case, that item is allotted to one and compensation in money value is given to the other and if such a course is not possible it is sold outright and the sale proceeds divided between the joint owners. All the aforesaid and similar other methods are adopted by Courts in making an equitable partition of the joint properties either with the consent of the parties or where such consent is not forthcoming in exercise of its own discretion.

Whatever method is adopted, it is only to implement the process of equitable partition. It would well-night be impossible for a Court to effectuate a partition on an equitable basis, if it should be held that it is under a legal obligation to divide every item of the joint property in specis. Where properties are susceptible of such division, the Court adopts it. Where it is not, it adopts one or other of the alternative methods narrated above.

The Madras High Court in AL. Ramanathan's case (supra) returned a finding that an amount of Rs.8 lacs received in a family settlement to settle the disputes between the family is not subject to capital gain. It was observed as under:

A perusal of the records goes to establish that dispute arose in that family and the family arrangement was arrived at in consultation with the panchayatdars and accordingly realignment of interest in several properties had resulted. The family arrangement was arrived at in order to avoid continuous friction and to maintain peace among the family members. The family arrangement is an agreement between the members of the same family intended be generally and reasonably for the benefit off the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security off the family by avoiding litigation or by saving its honour. So, the family arrangements are governed by principles which are not applicable to dealings between strangers and the family arrangement among them is for the interest of the family, for the harmonious way of living. So, such realignment of interest by way of effecting family arrangement among the family members would not amount to transfer."

In Kay Arr Enterprises case (supra), there was transfer of shares as also consideration in cash. The Court held that such rearrangement of shareholding in the Company is to avoid possible litigation among the family members and is prudent arrangement and such transfer of shares is not alienation. The Court held to the following effect:

In the instant case also, the Tribunal found that the rearrangement of shareholdings in the company to avoid possible litigation among family members is a prudent arrangement which is necessary to control the company effectively by the major shareholders to produce better prospects and active supervision or otherwise there would be continuous friction and there would be no peace among the members of the family. Such a family arrangement intended either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour cannot be concluded as any other dealings between strangers, as such a family arrangement is for the interest of the family and for the harmonious way of living. Therefore, such a realignment of interest by way of effecting a family arrangement among the family members would not amount to transfer."

The Division Bench of Karnataka High Court in R. Nagaraja Rao's case (supra) has held that partition is not a transfer and adjustment of shares, crystallization of the respective rights in the family properties cannot be construed as a transfer in the eye of law. When there is no transfer of asset, there is no capital gain and consequently there is no liability to pay tax on capital gains.

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DELHI HIGH COURT

Sanjay Kaushish vs D. C. Kaushish And Others on 10 September, 1991

ORDER

1. Vide this Order I shall decide the aforesaid two applications moved by the defendants seeking rejection of the plaint under Order VII Rule I I of the Code of Civil Procedure.

2. Elaborate oral arguments have been addressed by counsel for the plaintiff. Counsel for the applicants had addressed very brief oral arguments, however, both the parties have filed written arguments. I have gone through them thoroughly.

3. Facts of the case as averred by the plaintiff, in brief, are that his late grandfather Pt. Lakshmi Chandra constituted a Joint Hindu Family with his two sons, namely, Pratap Chand and D. C. Kaushish defendant No. I and owned and possessed moveable and immoveable properties. The immoveable properties are described in Schedule A to the plaint. Pratap Chand is stated to have died issueless in 1916. Pt. Lakshmi Chand had died on February 10, 1934. D. C. Kaushish defendant No. I then became Karta of the Joint Hindu Undivided Family comprising of himself, his wife defendant No. 4, and his three sons, namely, Ajay Kaushish-defendant No. 2 and Uday Kaushish-defendant No. 3 and the plaintiff. It is the case of the plaintiff that defendant No. I as Karta of Hindu Undivided Family (for short the 'HOT') managed and possessed the HUF properties together with all acquisitions thereof and in the year 1958 a Cinema Building was constructed on the HUF plot which stood in the name of defendant No. I and by 1961 the Cinema Building was completed and business of exhibiting the films in the said Cinema commenced and certain other blocks known as 'Warehouse Block' and other constructions were also raised on the said plot in the year 1962 and there was some construction which preexisted on the said plot and plan of the said plot with its buildings has been filed along with the plaint. 

4. It is further averred that in the year 1947 defendant No. I as Karta of HUF had brought into existence a private limited company under the name and style of M/s. Asian Art Printers (P) Ltd. with the capital and funds of the HUF and in 1956 only defendant No. 4 and defendant No. I were the directors of the said company and prior to it one close friend of defendant No. I Dr. Surendra Singh was taken as Director having been given a token one share of Rs. 10/- in the said company. The said company carried on the business of printing from the ground floor of the Press Block in the same building. Till 1971 defendant No. 1 and defendant No.4 continued to be only shareholders in the said company although in reality the said company was the asset of the HUF.

5. It is averred that the cinema business proved very successful and huge profits were yielded from the said business due to prudent management and intelligent control and guidance of defendant No. 1 and the income went up to Rs. 4,00,000/- per annum. It is pleaded that this huge income attracted a levy of huge income-tax, wealth-tax and other taxes including house-tax and other charges and cases and in order to avoid and/or reduce the incidence of tax liabilities etc. which were then leviable and being levied on the HUF, defendant No. I devised a scheme of effecting a colourable and sham partition of the assets and properties including businesses and he got filed on December 22, 1962, a collusive and a sham suit for partition. Shri Ajay Kaushish, who was then minor, was shown to be represented by next friend Shri Shiv Narain Vashisht, sister's husband of defendant No. 1, and plaintiff and the other minor son of defendant No. I were shown represented through their mother-defendant No. 4.

6. Plaintiff pleads that certain false averments were made in the said plaint that Karta of the HUF-defendant No. I had mismanaged the HUF properties and businesses and had committed numerous acts of waste and thus, it was not in the interest of the minor plaintiff to remain joint and a relief of partition of the properties and businesses was sought.

7. It is averred that as per pre-planned scheme, collusive written statements were filed by the defendants and the moveable properties and assets of HUF were shown by defendant No. I which were required to be partitioned and thereafter a petition under Section 21 of the Arbitration Act was filed and an order for reference of the disputes was obtained from the court for decision by arbitrator and an arbitrator, who is a close relation of the parties, gave the award to which no objections were filed and the award was got made a rule of the court.

8. So, according to the plaintiff, all the steps have been taken with the sole object of reducing the tax and other liabilities of the family and as a matter of fact, all along the HUF properties and businesses continued to be joint and no partition by metes and bounds or otherwise took place and as a matter of fact, the decree was not given effect to as it was never intended to be given effect to amongst the parties and had been procured only for the purposes of reducing the tax liabilities, and then the plaintiff has given details in paras 22 to 24 showing how different steps were taken with the sole object of reducing the income-tax, wealth-tax and property-tax liabilities of the HUF properties and businesses. It is not necessary to reproduce these details for the purpose of deciding the present applications. It is then averred by the plaintiff that all relevant parties knew and understood and believed that all the properties and assets and the businesses would continue to belong to HUF and parties continued to hold the said properties and carry on the said businesses as HUF and it is only in or about the year 1984 that defendant No. 2 wanted to grab the HUF properties, assets and businesses to the exclusion of the plaintiff and ultimately to exclude the other members of the family, had started going in the direction of gaining complete control and management of the family company M/s. Asian Art Printers(p) Ltd. with a mala fide intention to appropriate the earnings of Sheila Theatre, other assets and businesses of the family to himself. With this mala fide intention, defendant No. 2,' being the eldest son having a great influence on defendant No. I and as plaintiff had contracted a love marriage contrary to the wishes of defendant No. 1, taking undue advantage of the feelings and sentiments of defendant No. I who had become unhappy with the plaintiff, instigated defendant No. I to exclude the plaintiff from the HUF assets and businesses.

9. Then, plaintiff has referred to clandestine activity of the defendants in increasing the share capital of M/s. Asian Art Printers(P) Ltd. without the knowledge of the plaintiff and with the object of taking full control of the business of that company and then facts in detail have been given as to how the defendants have been making efforts to exclude the plaintiff from HUF properties and businesses pleading that fake and fictitious resolutions have been passed changing the shareholding of the said company with a view to reduce the plaintiff to a minority in the said company. The plaintiff has also pleaded that as he had a lot of regard for his father defendant No. I who had brought him up and had given him high education and had also sent him abroad for having higher training and education, he has been signing documents without reading their contents and sometimes blank documents to enable defendant No. I to run the HUF business and manage the HUF properties and that it is only on December 14, 1984, that he was shocked to receive a letter from defendant No. I requiring him to leave the HUF properties.

10. Plaintiff has given details about the affairs of the said company but again, I need not reproduce those details. Suffice it to mention that the case of the plaintiff is that the HUF continues to exist and the properties of the HUF and business of the HUF remained intact and were always treated as such by the parties and only paper, bogus and sham decree had been obtained showing the partition of the properties amongst the HUF members solely for the purpose of obtaining tax benefits but in reality the properties and businesses remained joint of the family at all relevant times.

11. So, the plaintiff sought a decree for partition of the said assets, properties and businesses of the HUF for separating his share and for getting possession of his share and for rendition of accounts and for recovery of the amount which may be found due to him on rendition of accounts and by permanent injunction restraining the defendants from excluding and ousting the plaintiff from the use, occupation and enjoyment of the HUF properties and from participation in the businesses of the HUF and also restraining the defendants from raising loans and advances from third parties or creating any encumbrances, charges or liens on the said properties and restraining them from transferring, alienating, disposing or parting with possession any of those properties and assets and from raising any construction on plot Nos. 8601 to 8630 situated on Deshbandhu Gupta Road, New Delhi or from making any booking of space in the proposed multistoreyed building and receiving any advances from the prospective buyers or from, transferring any portions of the said property to any other person.

12. It appears that later on when the arguments were being heard in these applications, as a plea was sought to be raised by the defendants that the suit was not maintainable as no relief has been sought for cancellation of the decree by which the award partitioning the HUF properties and businesses was made a rule of the Court, the plaintiff amended the plaint and claimed relief that in the event the Court was to hold that it was incumbent upon the plaintiff to seek any relief regarding the void decree, the plaintiff prays that the said decree be declared void, sham, paper transaction and bogus and thus, was not binding on the parties. Later on, the plaintiff again sought amendment of the plaint with a view to incorporate certain admissions made by defendant No.1 in various proceedings showing that the properties and businesses were always held out to be HUF assets even subsequent to the passing of the decree.

13. The learned counsel for the defendants-applicants had urged that in view of the fact that a valid decree has been passed by which the award effecting partition of the properties amongst the family members had been made a rule of the Court, the present suit is not at all maintainable and the challenge to the said decree by the plaintiff is totally misconceived and in view of provisions of Sections 32 and 33 of the Arbitration Act, the suit is not at all maintainable. It has been then urged that as partition of the HUF properties and businesses has already taken place by virtue of the award which has been made a rule of the Court the suit seeking the same relief of partition is not maintainable. It has been also argued that the suit, is also barred by limitation inasmuch as it has been filed in 1986 while the decree was passed in 1963.

14. The learned counsel for the plaintiff, on the other hand, has contended that keeping in view the averments made in the plaint, it is quite clear that the plaint discloses cause of action and the decree which has been obtained was void as being merely a paper, sham and bogus (decree) which has been obtained only to defraud the authorities in order to pay less taxes and other duties and the plaintiff has a right to ignore the said decree and there was no need for the plaintiff to seek any relief regarding the void decree and that the HUF properties, assets and businesses continue to be joint at all relevant times and thus, the plaintiff has a right to seek partition of the same and the provisions of Sections 32 and 33 of the Arbitration Act are not applicable and the suit is within limitation having been instituted within three years of the accrual of cause of action to the plaintiff for filing the present suit seeking partition of the said properties.

15. The leaned counsel for the plaintiff has also contended that without framing issues the questions being raised by the defendants cannot be decided. He has argued that the question of limitation is always a mixed question of fact and law and unless and until the parties have led evidence, this question cannot be decided by this Court as preliminary point just on the basis of the averments made in the plaint.

16. It is true that in case from bare reading of the plaint and the admitted documents and the facts coming out in the statement of the plaintiff under Order X of the Code of Civil Procedure, the Court could come to the conclusion that the plaint does not disclose cause of action or the suit is barred by limitation or is not maintainable, the Court can decide the said points even without recording any evidence. [See Azhar Hussain v. Rajiv Gandhi, and Hardwari Lal v. Kanwal Singh].

17. In order to elucidate the facts the plaintiff was examined under Order X of the Code of Civil Procedure and he stated that only in 1985 he became aware (of) the partition decree based on the award and he had never himself appeared before the income-tax authorities in any matters and his father was looking after those matters and the family has derived benefits in taxation in filing returns with income-tax authorities based on partition decree and the tax incidence had gone down substantially because of filing of the tax returns with the tax authorities, based on the partition decree, by his father. It is stated by him that he was not aware of the quantum of benefits accruing to the family on that basis. He also stated when he was again examined on July 19, 1991, about the chartered accountants who were handling the income-tax and wealth-tax matters of the family and that his father was handling all the matters up to 1985 and since 1985 he had not filed any returns.

18. So, the plea taken by the plaintiff in the suit as well as in the facts disclosed by him while he was examined under Order X of the Code of Civil Procedure is that his fatherdefendant No. I had been handling all the affairs and he had only signed blank documents and some documents without reading them as he had full faith in and respect for his father and that partition decree was never given effect to and had been obtained only for purposes of getting the tax benefits and the properties always remained HUF properties.

19. There is a challenge to the decree by the learned counsel for the plaintiff, 'firstly, that it was sham and collusive decree; secondly, that the Court had not applied its mind to see whether the suit has been instituted on behalf of the minor for the benefit of the minor or whether the allegations that Karta had committed acts of wastage stood proved or not. He has also contended that the award being not registered which was required to be compulsorily registered, thus, the decree passed on the basis of such an award is nullity. As prayed by learned counsel for the defendants, I had also called the file of the suit in which the decree was passed.

20. It is evident that the award is scribed on the stamp paper and all legal steps have been taken before the decree was obtained. As the award had been given by an arbitrator who was appointed by the Court in a suit, the award was not required to be registered compulsorily. (See Suit No. 316-A/72, Hari Shankar Bhargava v. Smt. Mohan Devi, decided on August 8, 1974*, by Avadh Behari, J).

21. The short questions which arise for decision are whether it can be said that the partition had in fact taken place or not without recording any evidence and whether the said decree was obtained only for the purposes of obtaining tax benefits? It is the case of the plaintiff that in fact, no partition of the properties took place and the properties always were treated as HUF properties by the parties and they intended that those properties would continue to remain HUF properties despite the said decree being obtained. It is not necessary to express any considered view whether the decree is a nullity or not on account of the allegations made by the plaintiff that it was in violation of the provisions of Order 32 of the Code of Civil Procedure as Court had not passed any speaking order showing that the partition is in the interest of minor. The present application to be decided without going into that question.

22. The case of the plaintiff clearly is that a fraud has been practiced in obtaining the decree showing the partition of the properties as the said decree had been obtained when he was a minor and he had come to know about the decree only in 1984 and that in fact, no partition of the properties ever took place actually. As such averments have been made in the plaint, the question is whether it can be said that the suit for partition is not maintainable because the decree has been already obtained in that respect.

23. Counsel for the plaintiff has cited Syed Shah Gulam Ghouse Mohiuddin v. Syed Shah Ahmad Mohiuddin Kamisul Gadri (dead) by his L. Rs, . Facts of this case, in brief, are that Shah Abdul Rahim died leaving four sons and two daughters and had left behind large moveable and immoveable properties. Sons and the daughters appointed arbitrators to partition the Matrooka properties and then the arbitrators made the award partitioning the properties and on August 13, 1908, the decree was obtained confirming the award. The suit was filed for setting aside of the decree and for partition of the properties in the year 1941. Suit was dismissed. In appeal the suit was decreed and in further appeal to the High Court the order of the first Appellate Court was set aside. In the said suit also the appellant was a minor at the time the matter was referred for arbitration and the award was given and made a rule of the Court. The award was challenged in the suit by the appellant on the ground that no lawful guardian on behalf of the appellant was appointed to protect and represent his rights and interests and that award was also bad as certain properties were not of the type as indicated in the award. The trial Court had given a finding that the award and the decree had been obtained by fraud. It was also held that the suit was not barred by limitation as the appellant came to know about the real state of affairs only on August 13, 1938. Although in the said case the Supreme Court held that the arbitration proceedings were void by reason of lack of legal guardian of the appellant to enter into a compromise but it was held that the decree had been obtained by practicing fraud and the Supreme Court quoted the principle taken out from the words of Westbury, L. C. in Rolfe v. Gregory, (1865) 4 De GJ and Sm. 576 as follows:

"When the remedy is given on the ground of fraud, it is governed by this important principle that the right of the party defrauded is not affected by lapse of time, for generally speaking by anything done or omitted to be done so long as he remains, without any fault of his own, in ignorance of the fraud that has been committed."

On facts the Supreme Court found that the appellant had been kept out of knowledge of the true character of the properties until the year 1927 and even after that the appellant had no knowledge of the true character of the properties or of ouster or adverse possession' of the other party. It was held that the cause of action for seeking partition of the HUF properties is said to be a "perpetually recurring one". The Supreme Court held that the suit for partition was maintainable and was within time.

24. In the present case also, the averments made by the plaintiff are that defendant No. 1, his father, had collusively got filed the suit and had got the matter referred to the arbitrator who quickly gave the award showing partition of the properties which was got made a rule of the Court and it was all intended for obtaining the tax benefits and, the plaintiff was not aware of those facts till 1984 or so and the plaintiff had been signing various documents or papers at the behest of his father without knowing their contents and thus, he discovered the actual state of affairs when it was tried to oust him from the benefits of Joint HUF properties and thus, a cause of action arose for him to file the present suit in 1984. It is a question of fact to be decided after recording evidence whether in fact, the plaintiff remained ignorant about the said decree till 1984-85, as alleged by him, but for the purpose of deciding the present application the Court has to presume the facts stated in the plaint as correct. If that is so, it is not understandable as to how the plaint does not disclose cause of action and how the suit can be deemed to be barred on the basis of the decree already obtained which the plaintiff terms as sham, bogus one and mere paper transaction brought into existence to have the tax benefits only.

25. Counsel for the plaintiff next has placed reliance on Mst. Rukmabai v. Lala Laxminarayan. It is an important decision which has much bearing on the issues arising in this suit. The facts of the case, in brief, were that one Ramasahai and his eight sons and one cousin constituted HUF with Ramasahai acting as Manager. The said HUF carried on its ancestral family business of excise contracts. At the time of Ramasahai's death in 1897, the family though heavily indebted, had extensive properties located at various places. Certain members of the said HUF had died in between the period 1903 to 1940. However, in 1915 five family members, who were brothers, had executed a registered deed of relinquishment in favor of one Janki Prasad, member of the family. In that deed it was recited that the brother had become separated in 1898 by a deed of relinquishment of that date and as the said document was not registered, they were executing a fresh one confirming the earlier arrangement. Another brother of the family Govind Prasad executed a trust deed in favor of his nephew and his niece Rukhmabai, both of whom were minors at the relevant time. In that deed he asserted that he had become divided from his brothers under the aforesaid two deeds of relinquishment, and had-created a trust in the sum of Rs. 15,000 / for the benefit of said minors and handed over the money to the trustees appointed there under. With a part of the said amount, a site was purchased in Nagpur and a building was constructed thereon. 

26. In October 1929, Rukhmabai filed a suit against Chandanlal for partition of the said property and obtained a decree against him on January, 1934. An appeal was filed which was dismissed. Chandanlal was beneficiary under the trust along with Rukhmabai. After his death, the local commissioner tried to effect partition of the property by metes and bounds but he was obstructed by the other family members living in the house and then a suit was filed for declaration that the trust deed executed by Govind Prasad was a sham and a bogus document. It was the case of the plaintiff that the relinquishment deeds executed earlier were part of a scheme of fraud conceived by the members of the family to defraud the creditors. The plea of Rukhmabai was that in fact, there had taken place separation in the HUF and Govind Prasad had his own business and from out of his self acquisition had created the trust. The points arising for consideration were as to whether the house in question was the property of the joint family or the same was built up by Govind Prasad from his self acquisitions. The Supreme Court laid down that there is a presumption in Hindu Law that the family is joint and there can be division in status among the members of a Joint Hindu Family by defendant of shares which is technically called "division in status", or an actual division among them by allotment of specific property to each one of them which is described as "division by metes and bounds". It was observed that a member need not receive any share in the joint estate but may renounce his interest therein; his renunciation merely extinguishes his interest in the estate but does not affect the status of the remaining members vis-a-vis the family property. It was held that a division in status can be effected by an unambiguous declaration to become divided from the others and that intention can be expressed by any process. It was further emphasized that though prima facie a document clearly expressing the intention to divide brings about a division in status, it is open to a party to prove that the said document was a sham or a nominal one not intended to be acted upon but was conceived and executed for an ulterior purpose. It was held that there is no presumption that any property, whether moveable or immoveable, held by a member of a joint Hindu family, is joint family property and the burden lies upon the person who asserts that a particular property is joint family property to establish that fact. It was laid down that if it is proved that there was sufficient joint family nucleus from and out of which the said property could have been acquired, the burden shifts to the members of the family setting up the claim that it is his personal property to establish that the said property has been acquired without any assistance from the joint family property. After noticing the contents of the two relinquishment deeds the Supreme Court observed that if the same are not sham documents the same clearly brings about a division of status between all the members of the family. After analysing the other circumstances appearing in the case, the Supreme Court held, that the documents in question were not really intended to be a formal documents affecting the division between the parties. In the said case, evidence was also led that Govind Prasad had executed Wills which showed that he was treating some property as self acquisitions but the Supreme Court on examining the evidence held that there was no separation of the joint family. The evidentiary value of these documents must be rejected on the ground that there were further attempts on the part of the family to keep up the appearance consistent with the alleged partition. In para 29 of the judgment the Supreme Court summarised the position and held that there was no separation of the members of the family. All the members of the family continued to be joint and the family was doing business in different places and they had extensive properties and a fairly large income although they were heavily indebted and that the family was involved in debts in Ramasahai's life time and even after his death the position continued to be the same and various attempts were made to salvage the properties of the family and to keep both the moveable and immoveable properties not mortgaged from the reach of the creditors and the relinquishment deeds, innumerable mortgages, sale deeds and the trust deed were all executed as parts of the said scheme. So, it was held that the suit property was joint family property and the document of trust was held to be colourable and fictitious document which could not affect the said joint property. This judgment would be also relevant for deciding the question of limitation and also the question whether any relief of cancellation of document was required to be obtained along with the declaration that the said document was a void document as the same was only a sham and nominal document because it was held in this case that no such consequential relief was required and on the point of limitation it was held that the residuary Article 120 of the Old Limitation Act would be applicable which gives six years period of limitation to be counted from the date the right to sue accrues and the right to sue was described as accruing only when the right is asserted and the same is controverter and there must be some unequivocal threat to infringe with the right by the opposite party against whom the suit is instituted. In the said case it was held that the right to sue accrued only when the Commissioner in execution of the decree visited the property on February 13, 1937, for effecting the partition by metes and bounds and the suit was held to be within limitation.

27. In the present case also the plaintiff has clearly made unequivocal averments that a scheme was brought into play by defendant No. I of showing the partition of the joint Hindu family properties and business on paper only for the consumption of revenue authorities to have reduction in the incidence of tax and in that way the filing of the suit for partition and getting the matter referred to an arbitrator and obtaining the award from the arbitrator and getting it made a rule of the Court was only for achieving the said purpose and the real intention of the members of the joint Hindu family was to continue to keep the properties and the businesses joint and the said award and the decree were all collusive, sham and nominal one and thus, were void. I have not been able to understand any difference between the facts which were being considered by the Supreme Court in the aforesaid case and the facts of the present case, except that in the said case no decree was obtained while in the present case, a decree has been obtained. I do not think that the legal effect in any manner in both the cases can be at variance.

28. Counsel for the plaintiff has then sought support from Mudigowda Gowdappa Sankh v. Ramachandra Revgowda Sankh (dead) by his L. Rs, , in which it was held that it is now well established that an agreement between all the coparceners is not essential to the disruption of the joint family status, but a definite and unambiguous indication of the intention by one member to separate himself from the family and to enjoy his share in severalty will amount in law to a division of status. It is immaterial in such a case whether the other members assent or not. It was held that if, however, the expression of intention is a mere pretence or a sham, there is in the eye of law no separation of the joint family status. In the cited case, a partition deed was executed on April 28, 1944, between members of the family. A plea was taken that the same was sham transaction and was not intended to be effective. After recording evidence the trial Court reached the conclusion that the partition deed was not a genuine one and it was effected for an ulterior purpose in order to defeat the rights of the widows in the joint family. That finding was affirmed in appeal by the High Court. It was sought to be urged before the Supreme Court that even though the partition deed was bogus there was in law severance of joint family status and the family could not continue to be joint after execution of the said partition deed. The Supreme Court' held that the expression of intention in the sham document was a mere pretence and in eye of law there was no separation of the joint family status.

29. In the present case also, it is urged by the learned counsel for the plaintiff that the various steps taken for showing partition of the properties and by transferring the business Shiela Theatre to a company of the family have been taken only for the consumption of the revenue authorities and there was no real intention of the family members for separating from the joint Hindu family. So, unless and until the evidence is taken on merits no final decision can be arrived at by the Court whether in fact, all those transactions were brought into existence only for the consumption of the revenue authorities while in fact, the properties and the businesses continues to be owned by the joint Hindu family and there was no expression of the intention to have separation from the joint family and thus, the joint family status continued to be in existence till the filing of the present suit.

30. There are a number of judgments cited by the learned counsel for the plaintiff where the documents were found to be sham documents and it was held that undivided status of the parties continued to remain in existence and properties remained joint. (See Merla Ramanna v. Chelikani Jagannadha Rao, Pandit Sri Chand v. Pandit Orn Prakash, and Kalwa Devadattam v. Union of India). In the case of Kalwa Devadattam (supra), it was held that the continued management of the property by Karta since the alleged partition clearly supports the inference that the deed of partition was a nominal transaction which was never intended to be acted upon and was not given effect to. It appears, in the said case, for recovering the arrears of income-tax from the joint Hindu family certain properties were attached and a suit was filed challenging the said attachment on the plea that a partition of the joint Hindu family properties had already taken place and thus, the properties which have been attached had come to the share of the plaintiff and were liable to be released from attachment. The suit was dismissed with the finding that the partition deed was a sham and a bogus transaction while the properties continued to be treated as joint Hindu family properties.

31. Counsel for the plaintiff also cited McDowell and Co. Ltd. v. Commercial Tax Officer, and Sunil Siddharthbhai v. Commr. of Income-tax, Ahmedabad, wherein principles have been laid down that the tax authorities car go behind the documents to determine the true legal relations between the parties for imposing the proper taxes in accordance with law.

32. It is not for this Court to decide as to what should have been the incidence of tax on the properties to be determined by the revenue authorities. Suffice it to say that averments made in the plaint make it clear that the alleged award and the decree and other transactions detailed out in the plaint were under a scheme envisaged by defendant No. I for consumption of the revenue authorities to bring down the incidence of tax and other levies and the said purpose was achieved but the real intention of the members of the joint Hindu family was to treat these documents as sham, bogus and nominal and to continue to be joint in businesses and keep the properties also joint as before and in fact, the properties continued to be joint properties, so also the businesses.

33. The learned counsel for the defendants wanted me to draw an inference against the plaintiff pointing out that the plaintiff after becoming major somewhere in 1972 and till the filing of the suit had been signing various income-tax, wealth-tax returns and have been giving affidavits on the basis of the partition and the other transactions and thus, it does not lie in the mouth of the plaintiff now to assert that the award and the decree and the other transactions were mere bogus and paper transactions. It is to be remembered that the plaintiff has taken up the plea in the plaint that he had been signing the documents when they *ere blank and at the behest of his father and such a plea cannot be brushed aside on mere inference that plaintiff after becoming major and after receiving high education would not have signed the documents blank without knowing their contents. It is also argued on behalf of the defendants that the plaintiff had also taken tax benefits on the basis of the said decree and the transactions and thus is estopped from challenging the said decree and the documents. The question is not whether the plaintiff has also enjoyed the reliefs in the taxation on account of execution of the said documents and the obtaining of the said decree, the question is whether the said documents and the earlier decree were sham and bogus and nominal ones only for the purpose of obtaining tax reliefs or whether, in fact, the parties effected the partition of the joint Hindu family properties and businesses? That question cannot be decided unless and until necessary issues are framed and parties are given an opportunity to lead evidence. For deciding whether the plaint discloses cause of action or not, the Court has to only see the averments in the plaint and the accompanying documents relied upon in the plaint and the facts elicited from the plaintiff by examining him under Order X of the Code of Civil Procedure. Keeping in view all this material, it cannot be said that plaint does not disclose cause of action.

34. Next question which arises for consideration is whether the plaintiff was legally bound to obtain any declaration in respect of the award and the decree and if so, whether the plaintiff was legally bound to seek any consequential relief of cancellation of the said award and the decree. Counsel for the plaintiff has contended that as the case of the plaintiff is that the said award and the decree were fictitious, sham, make believe and nominal documents and were brought into existence as a subterfuge designed to defraud the tax/revenue authorities and were not intended to be acted upon and thus, the same were not at all binding documents and straightway seek relief of partition as his case is that joint Hindu family properties and the businesses continued to be joint at all relevant times. In the alternative he has contended that the plaintiff could claim a relief for declaration which relief has been sought by the plaintiff by amending the plaint.

35. Counsel for the plaintiff has cited Petherpermal Chetty v. Muniandy Servai, (1908) 35 Cal 551 (PC). Facts of this case, in brief, are that in order to defeat the claim of an equitable mortgage of certain property, the predecessor in title of the respondent, and co-member with him of a joint Hindu family, executed on June 11, 1895, what purported to be a deed of sale of the property in favor of the predecessor in title of the appellant. The question which came up for decision was whether the said deed was bogus transaction or not? It was held by the Privy Council that there was nothing to prevent the plaintiff from repudiating the said document as being bogus and recovering possession of the property. It was also laid down that the deed being bogus it was unnecessary for the plaintiff to have it set aside as a preliminary to his obtaining possession of the property. It was held that Article 91 of the Old Limitation Act would not be applicable and Article 144 would govern the limitation.

36. Counsel for the plaintiff has also referred to Full Bench decision in Narsagauda Savantgauda Patil v. Chawagauda Adgauda Patil, AIR 1918 Bombay 188, in which also it was held that it is not necessary in the case of void deed to have it set aside or cancelled and if there is any other substantial relief available, the same can be prayed for and cancellation of such a deed be not actually necessary or merely ancillary to the granting of such a relief.

37. In Fariduddin Alimad v. Murtaza Ali, Khan, AIR 1936 Oudh 67, -it was held that a suit for a mere declaration that a decree is absolutely illegal and void on certain grounds and is not binding on the plaintiffs is maintainable without any prayer for further relief.

38. In Jamilennessa Khatun v. Ijjatennessa Khatun, , it was laid down that Section 42 of the Specific Relief Act does not bar.a declaratory suit declaring the previous decree in a partition suit throwing clouds on the rights of the plaintiffs as nullity. On this principle following judgments may be also seen: Ma Mo v. Ma Set, AIR 1926 Rangoon 71, Mathura Singh v. Rama Rudra Prashad Sinha, AIR 1936 Pat 231 and Bulakram v. Ganga Bishun Chaudhuri, AIR 1940 Pat 133. In the last case, it was held that a plaintiff can bring a suit for a declaration that a document is void without seeking its cancellation and the Court may in its discretion, even if there is no prayer, order cancellation of the document.

39. Reference may be also made to Kalu Ram v. Babu Lal, where a Full Bench of the said Court also held that a declaration seeking to avoid a mortgage deed on the ground that it was fictitious and a compromise on the ground of fraud and a decree on the ground of negligence and collusion of the guardian, is maintainable without seeking any further relief of cancellation of the said documents and the decree. [See also B. Dallu Singh v. B. Chhakan Singh, , Khata Chinna Eswarareddi v. Kukkala Reddigari Venkatachelamma Reddi, Dhondiram v. Bhagubai, 1956 Hyderabad 118, Syed Rasool v. Mohammad Moulana].

40. Then reliance was placed by counsel for the plaintiff on Vemareddi Ramagaghava Reddy v. Konduru Seshu Reddy. In this judgment the Supreme Court held that Section 42 of the Specific Relief Act is not exhaustive of the cases in which a declaratory decree may be made and the Courts have power to grant such a decree independently of the requirements of the section. In the said suit, a declaration was sought that compromise decree was not binding on the deity. It was held that such a suit is maintainable. Same principle was reiterated by the Supreme Court in M/s. Supreme General Films Exchange Ltd. v. His Highness Maharaja Sir Brijnath Singhji Deo of Maihar.

41. Counsel for the plaintiff also strongly placed reliance on Pandit Sri Chand v. Pandit Om Prakash. It is a short judgment. In this case a suit for partition was filed. The question which arose for decision was whether the-plaintiff, in fact, had relinquished his share by two deeds of relinquishment or not? The trial Court held that the plaintiff had executed the relinquishment deeds. The suit was dismissed. The High Court, however, set aside the said judgment and passed a decree for partition holding those deeds as sham documents. The Supreme Court affirmed the finding.

42. So, the learned counsel for the plaintiff argues that in this suit seeking substantive relief of partition the plaintiff need not seek any-declaration for avoiding the void award and decree.

43. Be that as it may, in my view, the well settled principle of law is that if a particular document or decree is void the person affected by the said document or decree can very well ignore the same and file a suit seeking substantive relief which may available to him without seeking any declaration that the said decree or document is void or any consequential relief of cancellation of the same.

44. The next question is of limitation. It is evident that if averments in the plaint are to be taken into consideration, then the decree and the other transactions are to be treated as void, sham and fictitious documents. Therefore, it was not necessary for the plaintiff to have sought any declaration for avoiding the said document and the decree and plaintiff could file a suit claiming substantive relief which is a relief of partition and other ancilliary reliefs flowing from the same. The limitation for filing the suit for partition starts from the date the right to sue accrues. The right to sue could accrue when the said right is threatened by the opposite side. The residuary Article 113 of the Limitation Act would apply and in the present case, according to the plaintiff, the said right to sue accrued to him when he was tried to be ousted from the joint Hindu family businesses and properties which occurred in 1985 and the suit filed in the year 1986 is within time. The final decision on the point of limitation cannot be given at this stage. If we treat only the averments made in the plaint as correct, then the suit appears to be within time. The learned counsel f I or the plaintiff has cited a number of judgments to show that in such a suit residuary article is applicable and not the article dealing with relief of cancellation of the document or decree. [See Balasundara Pandiam Pillai v. Authimulam Chettiar, AIR 1919 Mad 679(l), Mst. Basant Kaur v. Ram Singh, AIR 1939 Lahore 544, Appanna Jami Venkatappadu, Dalim Kumar Sam v. Sint. Nandarani Dassi, Asaram v. Ludheshwar, AIR 1938 Nagpur 335 (FB) and Mst. Aisha Begam v. Mst. Kundan Jan.

45. So, keeping in view the averments made in the plaint, it cannot be said that the suit is on the face of it barred by time. However, the final decision on the point of limitation would be given after framing issues and recording evidence.

46. One of the points raised was that the present suit is barred by provisions of Sections 32 and 33 of the Arbitration Act, 1940. In the present case, there was no question of the award being challenged by filing any objections or filing any petition to challenge the agreement for reference. The case of the plaintiff is that the award and the decree were bogus and sham documents and have been brought into existence only for the consumption of the revenue authorities to reduce the incidence of tax and were not intended to be, in fact, acted upon by the parties. If that is so, it is not understood how the suit can be deemed to be barred by virtue of provisions of Sections 32 and 33 of the Arbitration Act.

47. Counsel for the plaintiff has cited Kailashpati Singhania v. Ram Gopal Gupta. In the said case a consent decree based on an award was passed which was declaratory in nature and the rights and liabilities of the parties under the same were only contingent, a suit was brought for enforcement of certain claims which have accrued subsequent to the passing of the decree, it was held that even if claims are made by virtue of rights declared by the decree, the same is not barred under Section 32 of the Arbitration Act or barred under Section 47 of the Code of Civil Procedure.

48. In the present case, the right to sue to the plaintiff is stated to have accrued only when his rights in the joint Hindu family properties and businesses were threatened. The award and the decree which are alleged to be a paper transaction had not put any threat to his right in the joint Hindu family properties and businesses because, according to the plaintiff, as averred in the plaint the parties never intended to effect any disruption in the status of the joint Hindu family or to give effect to any partition of the joint Hindu family properties and businesses as was laid down in the award and the decree and the parties continued to have the joint Hindu family properties and businesses up to till 1985 when the threat was held out for giving effect to the award and the decree and thereafter the right to sue accrued to the plaintiff for filing the suit claiming partition of the property. Obviously the cause of action for filing the suit arose to the plaintiff as is disclosed in the plaint on account of the threat held out to him of being ousted from the joint Hindu family properties and businesses somewhere in 1985. So, it cannot be said that present suit could be deemed to be barred by provisions of Sections 32 and 33 of the Arbitration Act.

49. Reference is then made by the learned counsel for the plaintiff to Vineet Kumar v. Smt. Bhagwandei, . It was held in this judgment that in terms Sections 32 and 33 of the Arbitration Act do not apply where the challenge is to the decree and not to the award. In the said case, the decree was sought to be attacked on the ground of fraud in the proceedings. It was held that a separate suit was maintainable to challenge such a decree.

50. In Ved Parkash v. Ram Narain Goel, it was held that after an award of an Arbitrator has been made a Rule of Court by the Court by consent of parties or after contest, no -application will lie under Section 33 though if the decree passed was a nullity in the sense that it was passed without jurisdiction, it may be possible to have it challenged under Section 47 of the Code of Civil Procedure whenever and wherever it is sought to be enforced against a party.

51. In Sukumar Ghosh v. Tulsi Charan Ghosh, it was held that though Section 32 of the Arbitration Act has barred any challenge to the award yet if there exists an independent ground to challenge the decree passed on such an award such a challenge is not barred under Section 32.

52. Similarly in the present case, the case of the plaintiff is that the said award and the decree were bogus and sham one and have been brought into existence for a specific purpose and were never intended to be acted upon. So, the challenge to the award and the decree in the present case is independent of the contents of the award and the decree. So, a separate suit is maintainable to enforce the substantive rights of the plaintiff. Plaintiff could ignore the bogus and the sham award and the decree while seeking the substantive relief. So, the question of the suit being barred under the provisions of Sections 32 and 33 of the Arbitration Act does not arise.

53. The Division Bench judgment given in Sudhindra Coomar v. Monmohini Coomar, 1983 Tax LR 730 (Cal) appears to support the case of the plaintiff on this point. In this case a suit for partition was brought by the plaintiff claiming his title to the property by inheritance and he also claimed that his mother had obtained the fictitious award and the decree and the sham award was obtained in collusion to defraud the creditors and the Income-tax Department during the lifetime of the father of the plaintiff. It was pleaded that the plaintiff's father continued to remain owner of the property covered under the sham award and thus, on his death the plaintiff inherited his share in the property. It was held that such a claim involving an adjudication as to factual existence of the decree based on the award did not come within the purview of Section 33 and as such Section 32 did not bar such an adjudication in an independent suit. It was held that the plaintiff in this suit had not asked for setting aside the award nor had he challenged the existence or validity thereof but he admitted existence and validity of the award, had claimed that it was a sham decree set up by his father and mother to defraud the creditors.

54. This case squarely applies to the facts of the present case as averred in the plaint. So, for parity of reasons it must be held that the suit of the plaintiff is not hit by the provisions of Sections 32 and 33 of the Arbitration Act.

55. In Orient Transport Co., Gulabra v. M/ s. Jaya Bharat Credit and Investment Co. Ltd., , it was observed by the Supreme Court that Section 32 of the Arbitration Act does not contemplate the case of a suit challenging the validity of a contract merely because it contains an arbitration clause. It was held that Sections 32 and 33 have a very limited application, namely, where the existence or validity of an arbitration agreement and not the contract containing the arbitration agreement is challenged. It was held that every person has a right to bring a suit which is of a civil nature and the Court has jurisdiction to try all suits of civil nature under Section 9 of the Code of Civil Procedure and this right has not been taken away by Section 32 of the Arbitration Act. On the same principle the right of the plaintiff to file the present suit does not appear to have been affected by provisions of Sections 32 and 33 of the Arbitration Act whereas the plaintiff's case is that the award and the decree were bogus and the sham documents and were never intended to be given effect to and were brought into existence fraudulently to defraud the revenue authorities and thus are void.

56. In the written arguments dated January 7, 199 1, filed on behalf of defendant No. 1, emphasis is only to show that the plaintiff minor was duly represented by next friend in the partition suit brought in 1961 and the plaint disclosed the cause of action for filing the suit as allegations were made regarding the Karta having indulged in wasteful acts in respect of the joint properties and a petition under Section 21 of the Arbitration Act was duly filed and the Court mde reference to the arbitrator and the arbitrator gave the award to which no objections were filed and the award was made a rule of the Court and even if the Court in so many words had not recorded its satisfaction that the suit was brought in the interest of the minor even then impliedly it has to be held that the Court did examine the question before proceeding in the matter.

57. The issues raised in the plaint are not even alluded to in these written arguments which have been dealt - with by me above in detail. The question is not whether proper procedure has been followed in getting the award and the decree, the question is whether parties intended to give effect to the partition contemplated by the award and the decree? This is a question of fact to be determined by recording evidence whether in fact, the partition of the properties actually took place or not.

58. Then reference has been made in the written arguments to certain admissions made by the plaintiff in affidavit and the returns filed under his signatures with the revenue authorities. Plaintiff has categorically taken the plea in the plaint that he had signed the documents without bothering to looking into the contents and the (sic) some of the documents even blank and he did sign the documents as he had full faith in his father. This issue also cannot be decided without recording evidence, whether plaintiff was also party to the fraud being practiced on the revenue authorities or not; or whether he signed those documents knowing their contents fully or not?

59. It has been then mentioned in the written arguments that no particulars of said fraud have been enumerated in the plaint. I do not understand what more particulars could be given by the plaintiff. After all, the case of the plaintiff is that the award and the decree were brought into existence for the specific purpose of defrauding the revenue authorities and the incidence of tax was, in fact, got reduced by adopting this method. Whether in fact the award and the decree were intended to create partition of the Joint Hindu Family properties and in fact, the said partition had taken place, can be decided only after recording evidence.

60. Reference is made to decision of the Supreme Court given in Bishundeo Narain v. Seogeni Rai and Jagernath, , in which it has been held that general allegations are insufficient even to amount to an averment of fraud of which any Court ought to take notice however strong the language in which they are couched may be, and the same applies to undue influence and coercion. I do not see how these observations can show that the averments made in the plaint are not exact or in any manner vague. In this judgment, it was observed that a decree unless and until it is set aside or avoided in one or other of the ways in which alone a decree may be attacked, holds its force and binds all concerned. There is no dispute about this proposition of law. However, where the decree is bogus, sham and a nominal paper decree, the same can be avoided by the person affected by it by filing a suit claiming the substantive relief and a proper plea could be taken in the suit that the decree is void. This is also one of the modes of avoiding the decree as contemplated in the said observations of the Supreme Court.

61. In the written arguments a quotation has been given from an unreported judgment in CA No. 162/62, Uttam Singh Duggal and Co. v. Union of India, decided on October 11, 1962*, to the following effect:

"After an award has been pronounced, the rights and liabilities of the parties in respect of their claims can be determined only on the basis of the award and after an award is pronounced, no action can be started on the original claim which had been the subject matter of the reference."

These observations must have been made by the Supreme Court in keeping in view the peculiar fact appearing in that case. The judgment has not been made available to this Court to analyze the same. So, it cannot be held that the Supreme Court has pronounced that even if the award and the decree are void even then the suit on the basis of the substantive right cannot be brought.

62. Then reliance is placed on Jawahar Lal Barman v. Union of India, . 1 do not think this judgment is of any help in support of the contention that the present suit is barred by any provision of the Arbitration Act. The judgment only refers to the main object of introduction of Sections 32 and 33 in the statute.

63. Then reference is made to certain judgments viz. Dhartipakar Madan Lal Aggarwal v. Rajiv Gandhi, , Nithayya Thevar v. Subramanian Ambalakarar, (1970) 1 Mad LJ 400, Bhagwan Das v. Goswami Brijesh Kumarji, Udhav Singh v. Madhav Rao Scindia and Delhi Development Authority v. Durga Chand Kaushish, which lay down that while deciding the application under Order VII, Rule I I of the Code of Civil Procedure the Court can look to the documents referred to in the plaint. There is no dispute about this proposition of law and I have referred to the averments made in the plaint and also to the facts which have come out in the statement made under Order X of the Code of Civil Procedure and to the documents to which my attention has been drawn during the course of arguments.

64. Then reference is made to Syed Asadullah Kazmi v. The Addl. District Judge, Allahabad, in which it was observed that once an order has acquired finality the controversy stands concluded and it could not be reopened and also to B. N. Pandey v. Smt. Indira Chohan, AIR 1983 Him Pra 93, wherein it has been observed that the decree or the order which has become final cannot be reopened on the ground that any new developments had taken place. These judgments are not applicable to the facts of this case. Apparently the question of the award and the decree being nullity was not in issue in those cases. The question in the present case is whether the said award and the decree are sham and bogus or not and have been brought into existence only to defraud the revenue authorities or not?

65. Reference is made to Modi Spinning and Weaving Mills Co. Ltd. v. Ladha Ram and Co., which lays down that the repudiation of a clear admission is not permissible. Again, it is a question of fact whether the plaintiff has made any admission or not knowingly. So, this judgment also does not advance the case of the defendants in support of the said applications.

66. Reference is then made to T. Arivandandam v. T. Y. Satyapal, , in which it has been held that the Court must have a meaningful and no formal reading of the plaint and see whether the plaint is vexatious and meritless and could exercise the power under Order VII, Rule I I of the Code of Civil Procedure for rejecting the plaint and the Court can also examine the party under Order X of the Code of Civil Procedure so that bogus litigation can be shot down at the earliest stage. I do not think that this judgment applies to the facts of the present case in view of the averments made in the plaint which cannot be brushed aside on the short ground that the defendants are of the opinion that in fact, the award and the decree had in fact been given effect to between the parties because that would be begging the question. It could be decided only after recording evidence as to whether actually parties had effected the partition on the basis of the said award and the decree.

67. In the written arguments reliance is also placed in Patasibai v. Ratanlal. In this judgment, the Supreme Court has held that even after issuance of summons the Court is not debarred from examining whether the trial should proceed when in fact, no friable issue is shown to arise. I do not understand how this judgment helps the case of the defendant. Keeping in view the averments made in the plaint it cannot be said that no friable issues arise.

68. Reference is made to Mohammad Ismail v. District Judge, Bijnor, 1983 All LJ 876, which lays down that if there was a duly sworn affidavit and no counter-affidavit in contravention has been filed, the contents of the affidavit should be deemed to be believed. I do not understand how this judgment is of any relevance to the points in (issue?) arising in the aforesaid applications.

69. 1 have also gone through the written arguments of defendant No. I dated April 6, 199 1. An effort has been made in these written arguments to show that the judgment given in Bishundeo Narain, (supra) is binding as it was the judgment given by a Bench of five Judges. I have already analysed the said judgment above and I have come to the conclusion that it is not applicable to the facts of the present case. So, nothing turns on this contention raised in the written arguments. Support is also sought to be drawn from Sant Bhushan Lal v. Brij Bhushan Lal. 1 have gone through this judgment and I find that the same is based on different facts and is not applicable to the points which I have to decide keeping in view the case set up by the plaintiff. It is true that if Court has to give a finding on merits that in fact, the partition of the Joint Hindu Family properties was given effect to on the basis of the award and the decree then the said judgment would become applicable and the plaintiff may fail in the suit ultimately on merits. For the same reason the judgment given in Maturi Pullaiah v. Maturi Narasimham, is not applicable and also Ram Charan Das v. Girja Nandini Devi, . Some support was sought to be drawn from Commr. of Wealth Tax-II, Ahmedabad v. Arvind Narottam ,which lays down that a citizen can adopt lawful methods for avoidance of the taxes.There is no dispute about this proposition of law. In the present case, the question is whether while avoiding the incidence of tax the award and the decree in question were intended to be acted upon and in fact, were acted upon or not? I have also gone through the written arguments given separately by defendant No. 3. They, in my opinion, do not make out the case for rejection of the plaint. Defendant No. 4 has also given written arguments which have been also perused by me. In my opinion, nothing mentioned therein meets with the points discussed by me in detail above.

70. In view of the above discussion, I hold that the plaint is not liable to be rejected under Order VII, Rule I I of the Code of Civil Procedure. The applications are dismissed.

71. Applications dismissed.

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DELHI HIGH COURT

Sh. Surender Kumar Khurana vs Sh. Tilak Raj Khurana & Ors on 18 January, 2016

CS(OS) No.1528/2010

1. The issue to be decided in the present suit, which is fixed for framing of issues, is as to whether on the facts as averred in the plaint, the requisite legal cause of action of existence of HUF and its properties is or is not made out. The parents of the plaintiff, defendant nos. 1 and 2 are now around 82 years of age and they plead that harassment caused to them by filing of this false and frivolous suit must come to an end inasmuch as, plaint itself does not show existence of any legal cause of action for claiming the reliefs with respect to the various properties referred to in the plaint.

2. In the forenoon today itself I have passed a detailed judgment in the case of Sh. Surender Kumar Vs. Sh. Dhani Ram and Others, CS(OS) No. 1737/2012 dismissing the suit for lacking the necessary ingredients of law as required for existence of HUF and its properties and since the ratio of that judgment would be directly applicable in the present case, at the outset let me reproduce the relevant paras of that judgment as under :

1. This application is filed by the defendant no.1 under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC) for dismissal of the suit on the ground that the suit plaint does not disclose the cause of action. In the application it is averred that the suit plaint does not show existence of the legal cause of action as the plaintiff is only a grandson of late Sh. Jage Ram who owned the property and thus not a class I legal heir, and since there are already the sons of late Sh. Jage Ram who are class I legal heirs (including defendant no.1/applicant who is the father of the plaintiff), and who are alive, plaintiff cannot lay any claim to the properties of late Sh. Jage Ram. It is further averred in the application that the properties of late Sh. Jage Ram were not Hindu Undivided Family (HUF) properties/joint Hindu family properties but were the individual properties of late Sh. Jage Ram. Accordingly, it is prayed that the suit which is seeking the relief of possession, and effectively partition etc, be dismissed.

2. Counsel for the plaintiff in response has argued that in the plaint, plaintiff has made a specific averment in para 4 that the properties of late Sh. Jage Ram, grandfather, remained joint Hindu family properties and have continued to be so even after his death between his legal heirs, and once the suit properties are joint Hindu family properties, the issue with respect to the plaintiff not being the class I legal heir is immaterial because plaintiff claims right in the suit properties as a coparcener of a joint Hindu family/HUF. On behalf of the plaintiff, reliance in support of his arguments is placed upon the judgments of the Supreme Court in the cases of Rohit Chauhan vs. Surinder Singh & Ors., AIR 2013 SC 3525 and Hardeo Rai vs. Sakuntala Devi & Ors., VI (2010) SLT 222.

3. A reading of the plaint shows that plaintiff claims rights in various immovable properties which are detailed in para 2 of the plaint, and which para reads as under:-

 "Agricultural Land

 i. Land comprising in Khasra No.125/1 measuring (4 Bigha and 12 Bishwa), in khasra No. 125/1/10 (4 Bigha and 16 Bishwa), in Khasra No. 125/1/21 (4 Bigha and 16 Bishwa) and in Khasra No.125/1/22 (4 bigha and 12 Bishwa) total land measuring 18 bigha and 16 bishwa situated in the revenue estate of village- Mundka, Delhi-110041.

 Abadi Land/House

 i. Plot No. 711 comprising (1 Bigha and 14 Biswa), plot bearing No. 715 comprising (4 Bigha and 2 Biswa) situated in extended Lal Dorra, Village-Mundla, Delhi-110041.

 ii. 4 Biswa of Land out of khasra No.711 allegedly relinquished by defendant no.4 Sh. Sant Ram, brother of defendant no.1 in favour of defendant no.1.

 iii. H. No.603 (area about 215 sq. yds. out of khasra No.370) situated in Old Lal Dora, Abadi, Village Mundka Delhi-110041.

 iv. H. No.356/524, area about 350 sq. yds. situated in Old Lal Dora Abadi of Village Mundka, Delhi-110041.

 v. H. No.527 (area about 200 sq. yds. out of khasra No.370) situated in Old Lal Dora, Abadi of Village Mundka, Delhi-110041."

4. Plaintiff claims that as a son of defendant no.1 and as grandson of late Sh. Jage Ram, plaintiff is entitled to his share as a coparcener in the aforesaid suit properties on the ground that the properties when they were inherited by late Sh. Jage Ram were joint family properties, and therefore, status as such of these properties as HUF properties have continued thereby entitling the plaintiff his rights in the same as a coparcener.

5. The Supreme Court around 30 years back in the judgment in the case of Commissioner of Wealth Tax, Kanpur and Others Vs. Chander Sen and Others, (1986) 3 SCC 567, held that after passing of the Hindu Succession Act, 1956 the traditional view that on inheritance of an immovable property from paternal ancestors up to three degrees, automatically an HUF came into existence, no longer remained the legal position in view of Section 8 of the Hindu Succession Act, 1956. This judgment of the Supreme Court in the case of Chander Sen (supra) was thereafter followed by the Supreme Court in the case of Yudhishter Vs. Ashok Kumar, (1987) 1 SCC 204 wherein the Supreme Court reiterated the legal position that after coming into force of Section 8 of the Hindu Succession Act, 1956, inheritance of ancestral property after 1956 does not create an HUF property and inheritance of ancestral property after 1956 therefore does not result in creation of an HUF property.

6. In view of the ratios of the judgments in the cases of Chander Sen (supra) and Yudhishter (supra), in law ancestral property can only become an HUF property if inheritance is before 1956, and such HUF property therefore which came into existence before 1956 continues as such even after 1956. In such a case, since an HUF already existed prior to 1956, thereafter, since the same HUF with its properties continues, the status of joint Hindu family/HUF properties continues, and only in such a case, members of such joint Hindu family are coparceners entitling them to a share in the HUF properties.

7. On the legal position which emerges pre 1956 i.e before passing of the Hindu Succession Act, 1956 and post 1956 i.e after passing of the Hindu Succession Act, 1956, the same has been considered by me recently in the judgment in the case of Sunny (Minor) & Anr. vs. Sh. Raj Singh & Ors., CS(OS) No.431/2006 decided on 17.11.2015. In this judgment, I have referred to and relied upon the ratio of the judgment of the Supreme Court in the case of Yudhishter (supra) and have essentially arrived at the following conclusions:-

(i) If a person dies after passing of the Hindu Succession Act, 1956 and there is no HUF existing at the time of the death of such a person, inheritance of an immovable property of such a person by his successors-in- interest is no doubt inheritance of an 'ancestral' property but the inheritance is as a self-acquired property in the hands of the successor and not as an HUF property although the successor(s) indeed inherits 'ancestral' property i.e a property belonging to his paternal ancestor.

(ii) The only way in which a Hindu Undivided Family/joint Hindu family can come into existence after1956 (and when a joint Hindu family did not exist prior to 1956) is if an individual's property is thrown into a common hotchpotch. Also, once a property is thrown into a common hotchpotch, it is necessary that the exact details of the specific date/month/year etc of creation of an HUF for the first time by throwing a property into a common hotchpotch have to be clearly pleaded and mentioned and which requirement is a legal requirement because of Order VI Rule 4 CPC which provides that all necessary factual details of the cause of action must be clearly stated. Thus, if an HUF property exists because of its creation by throwing of self-acquired property by a person in the common hotchpotch, consequently there is entitlement in coparceners etc to a share in such HUF property.

(iii) An HUF can also exist if paternal ancestral properties are inherited prior to 1956, and such status of parties qua the properties has continued after 1956 with respect to properties inherited prior to 1956 from paternal ancestors. Once that status and position continues even after 1956; of the HUF and of its properties existing; a coparcener etc will have a right to seek partition of the properties.

(iv) Even before 1956, an HUF can come into existence even without inheritance of ancestral property from paternal ancestors, as HUF could have been created prior to 1956 by throwing of individual property into a common hotchpotch. If such an HUF continues even after 1956, then in such a case a coparcener etc of an HUF was entitled to partition of the HUF property.

8. The relevant paragraphs of the judgment in the case of Sunny (Minor) (supra) are paragraphs 6 to 8 and which paras read as under:-

"6. At the outset, it is necessary to refer to the ratio of the judgment of the Supreme Court in the case of Yudhishter Vs. Ashok Kumar, (1987) 1 SCC 204 and in para 10 of the said judgment the Supreme Court has made the necessary observations with respect to when HUF properties can be said to exist before passing of the Hindu Succession Act, 1956 or after passing of the Act in 1956. This para reads as under:-

'10. This question has been considered by this Court in Commissioner of Wealth Tax, Kanpur and Ors. v. Chander Sen and Ors. MANU / SC / 0265 / 1986MANU / SC / 0265 / 1986

: [1986]161ITR370(SC) where one of us (Sabyasachi Mukharji, J) observed that under the Hindu Law, the moment a son is born, he gets a share in father's property and become part of the coparcenary. His right accrues to him not on the death of the father or inheritance from the father but with the very fact of his birth. Normally, therefore whenever the father gets a property from whatever source, from the grandfather or from any other source, be it separated property or not, his son should have a share in that and it will become part of the joint Hindu family of his son and grandson and other members who form joint Hindu family with him. This Court observed that this position has been affected by Section 8 of the Hindu Succession Act, 1956 and, therefore, after the Act, when the son inherited the property in the situation contemplated by Section 8, he does not take it as Kar of his own undivided family but takes it in his individual capacity. At pages 577 to 578 of the report, this Court dealt with the effect of Section 6 of the Hindu Succession Act, 1956 and the commentary made by Mulla, 15^th Edn. pages 924-926 as well as Mayne's on Hindu Law 12th Edition pages 918-919. Shri Banerji relied on the said observations of Mayne on 'Hindu Law', 12th Edn. at pages 918-919. This Court observed in the aforesaid decision that the views expressed by the Allahabad High Court, the Madras High Court the Madhya Pradesh High Court and the Andhra Pradesh High Court appeared to be correct and was unable to accept the views of the Gujarat High Court. To the similar effect is the observation of learned author of Mayne's Hindu Law, 12th Edn. page 919. In that view of the matter, it would be difficult to hold that property which developed on a Hindu under Section 8 of the Hindu Succession Act, 1956 would be HUF in his hand vis-a-vis his own sons. If that be the position then the property which developed upon the father of the respondent in the instant case on the demise of his grandfather could not be said to be HUF property. If that is so, then the appellate authority was right in holding that the respondent was a licensee of his father in respect of the ancestral house."

7 (i). As per the ratio of the Supreme Court in the case of Yudhishter (supra) after passing of the Hindu Succession Act, 1956 the position which traditionally existed with respect to an automatic right of a person in properties inherited by his paternal predecessors-in-interest from the latter's paternal ancestors upto three degrees above, has come to an end. Under the traditional Hindu Law whenever a male ancestor inherited any property from any of his paternal ancestors upto three degrees above him, then his male legal heirs upto three degrees below him had a right in that property equal to that of the person who inherited the same. Putting it in other words when a person 'A' inherited property from his father or grandfather or great grandfather then the property in his hand was not to be treated as a self-acquired property but was to be treated as an HUF property in which his son, grandson and great grandson had a right equal to 'A'. After passing of the Hindu Succession Act, 1956, this position has undergone a change and if a person after 1956 inherits a property from his paternal ancestors, the said property is not an HUF property in his hands and the property is to be taken as a self- acquired property of the person who inherits the same. There are two exceptions to a property inherited by such a person being and remaining self-acquired in his hands, and which will be either an HUF and its properties was existing even prior to the passing of the Hindu Succession Act, 1956 and which Hindu Undivided Family continued even after passing of the Hindu Succession Act, 1956, and in which case since HUF existed and continued before and after 1956, the property inherited by a member of an HUF even after 1956 would be HUF property in his hands to which his paternal successors-in-interest upto the three degrees would have a right. The second exception to the property in the hands of a person being not self-acquired property but an HUF property is if after 1956 a person who owns a self-acquired property throws the self-acquired property into a common hotchpotch whereby such property or properties thrown into a common hotchpotch become Joint Hindu Family properties/HUF properties. In order to claim the properties in this second exception position as being HUF/Joint Hindu Family properties/properties, a plaintiff has to establish to the satisfaction of the court that when (i.e date and year) was a particular property or properties thrown in common hotchpotch and hence HUF/Joint Hindu Family created.

(ii) This position of law alongwith facts as to how the properties are HUF properties was required to be stated as a positive statement in the plaint of the present case, but it is seen that except uttering a mantra of the properties inherited by defendant no.1 being 'ancestral' properties and thus the existence of HUF, there is no statement or a single averment in the plaint as to when was this HUF which is stated to own the HUF properties came into existence or was created ie whether it existed even before 1956 or it was created for the first time after 1956 by throwing the property/properties into a common hotchpotch. This aspect and related aspects in detail I am discussing hereinafter.

8 (i). A reference to the plaint shows that firstly it is stated that Sh. Tek Chand who is the father of the defendant no.1 (and grandfather of Sh. Harvinder Sejwal and defendants no. 2  to  4) inherited various ancestral properties which became the basis of the Joint Hindu Family properties of the parties as stated in para 15 of the plaint. In law there is a difference between the ancestral property/properties and the Hindu Undivided Family property/properties for the pre 1956 and post 1956 position as stated above because inheritance of ancestral properties prior to 1956 made such properties HUF properties in the hands of the person who inherits them, but if ancestral properties are inherited by a person after 1956, such inheritance in the latter case is as self- acquired properties unless of course it is shown in the latter case that HUF existed prior to 1956 and continued thereafter. It is nowhere pleaded in the plaint that when did Sh. Tek Chand father of Sh. Gugan Singh expire because it is only if Sh. Tek Chand father of Sh. Gugan Singh/defendant no.1 had expired before 1956 only then the property which was inherited by Sh. Gugan Singh from his father Sh. Tek Chand would bear the character of HUF property in the hands of Sh. Gugan Singh so that his paternal successors-in-interest became co-parceners in an HUF. Even in the evidence led on behalf of the plaintiffs, and which is a single affidavit by way of evidence filed by the mother of the plaintiffs Smt. Poonam as PW1, no date is given of the death of Sh. Tek Chand the great grandfather of the plaintiffs. In the plaint even the date of the death of the grandfather of the plaintiffs Sh. Gugan Singh is missing. As already stated above, the dates/years of the death of Sh. Tek Chand and Sh. Gugan Singh were very material and crucial to determine the automatic creation of HUF because it is only if Sh. Tek Chand died before 1956 and Sh. Gugan Singh inherited the properties from Sh. Tek Chand before 1956 that the properties in the hands of Sh. Gugan Singh would have the stamp of HUF properties. Therefore, in the absence of any pleading or evidence as to the date of the death of Sh. Tek Chand and consequently inheriting of the properties of Sh. Tek Chand by Sh. Gugan Singh, it cannot be held that Sh. Gugan Singh inherited the properties of Sh. Tek Chand prior to 1956.

(ii) In fact, on a query put to the counsels for the parties, counsels for parties state before this Court that Sh. Gugan Singh expired in the year 2008 whereas Sh. Tek Chand died in 1982. Therefore, if Sh. Tek Chand died in 1982, inheriting of properties by Sh. Gugan Singh from Sh. Tek Chand would be self- acquired in the hands of Sh. Gugan Singh in view of the ratio of the Supreme Court in the case of Yudhister (supra) inasmuch as there is no case of the plaintiffs of HUF existing before 1956 or having been created after 1956 by throwing of property/properties into common hotchpotch either by Sh. Tek Chand or by Sh. Gugan Singh/defendant no.1. There is not even a whisper in the pleadings of the plaintiffs, as also in the affidavit by way of evidence filed in support of their case of PW1 Smt. Poonam, as to the specific date/period/month/year of creation of an HUF by Sh. Tek Chand or Sh. Gugan Singh after 1956 throwing properties into common hotchpotch.

(iii) The position of HUF otherwise existing could only be if it was proved on record that in the lifetime of Sh. Tek Chand a Hindu Undivided Family before 1956 existed and this HUF owned properties include the property bearing no.93, Village Adhichini, Hauz Khas. However, a reference to the affidavit by way of evidence filed by PW1 does not show any averments made as to any HUF existing of Sh. Tek Chand, whether the same be pre 1956 or after 1956. Only a self-serving statement has been made of properties of Sh. Gugan Singh being 'ancestral' in his hands, having been inherited by him from Sh. Tek Chand, and which statement, as stated above, does not in law mean that the ancestral property is an HUF property."

9. I would like to further note that it is not enough to aver a mantra, so to say, in the plaint simply that a joint Hindu family or HUF exists. Detailed facts as required by Order VI Rule 4 CPC as to when and how the HUF properties have become HUF properties must be clearly and categorically averred. Such averments have to be made by factual references qua each property claimed to be an HUF property as to how the same is an HUF property, and, in law generally bringing in any and every property as HUF property is incorrect as there is known tendency of litigants to include unnecessarily many properties as HUF properties, and which is done for less than honest motives. Whereas prior to passing of the Hindu Succession Act, 1956 there was a presumption as to the existence of an HUF and its properties, but after passing of the Hindu Succession Act, 1956 in view of the ratios of the judgments of the Supreme Court in the cases of Chander Sen (supra) and Yudhishter (supra) there is no such presumption that inheritance of ancestral property creates an HUF, and therefore, in such a post 1956 scenario a mere ipse dixit statement in the plaint that an HUF and its properties exist is not a sufficient compliance of the legal requirement of creation or existence of HUF properties inasmuch as it is necessary for existence of an HUF and its properties that it must be specifically stated that as to whether the HUF came into existence before 1956 or after 1956 and if so how and in what manner giving all requisite factual details. It is only in such circumstances where specific facts are mentioned to clearly plead a cause of action of existence of an HUF and its properties, can a suit then be filed and maintained by a person claiming to be a coparcener for partition of the HUF properties.

10. A reference to the plaint in the present case shows that it is claimed that ownership of properties by late Sh. Jage Ram in his name was as joint Hindu family properties. Such a bald averment in itself cannot create an HUF unless it was pleaded that late Sh. Jage Ram inherited the properties from his paternal ancestors prior to 1956 or that late Sh. Jage Ram created an HUF by throwing his own properties into a common hotchpotch. These essential averments are completely missing in the plaint and therefore making a casual statement of existence of an HUF does not mean the necessary factual cause of action, as required in law, is pleaded in the plaint of existence of an HUF and of its properties.

11. I may note that the requirement of pleading in a clear cut manner as to how the HUF and its properties exist i.e whether because of pre 1956 position or because of the post 1956 position on account of throwing of properties into a common hotchpotch, needs to be now mentioned especially after passing of the Benami Transaction (Prohibition) Act, 1988 (hereinafter referred to as 'the Benami Act') and which Act states that property in the name of an individual has to be taken as owned by that individual and no claim to such property is maintainable as per Section 4(1) of the Benami Act on the ground that monies have come from the person who claims right in the property though title deeds of the property are not in the name of such person. An exception is created with respect to provision of Section 4 of the Benami Act by its sub-Section (3) which allows existence of the concept of HUF. Once existence of the concept of HUF is an exception to the main provision contained in sub-Sections (1) and (2) of Section 4 of the Benami Act, then, to take the case outside sub- Sections (1) and (2) of Section 4 of the Benami Act it has to be specifically pleaded as to how and in what manner an HUF and each specific property claimed as being an HUF property has come into existence as an HUF property. If such specific facts are not pleaded, this Court in fact would be negating the mandate of the language contained in sub-Sections (1) and (2) of Section 4 of the Benami Act.

12. This Court is flooded with litigations where only self- serving averments are made in the plaint of existence of HUF and a person being a coparcener without in any manner pleading therein the requisite legally required factual details as to how HUF came into existence. It is a sine qua non that pleadings must contain all the requisite factual ingredients of a cause of action, and once the ratios of the judgments of the Supreme Court in the cases of Chander Sen (supra) and Yudhishter (supra) come in, the pre 1956 position and the post 1956 position has to be made clear, and also as to how HUF and its properties came into existence whether before 1956 or after 1956. It is no longer enough to simply state in the plaint after passing of the Hindu Succession Act 1956, that there is a joint Hindu family or an HUF and a person is a coparcener in such an HUF/joint Hindu family for such person to claim rights in the properties as a coparcener unless the entire factual details of the cause of action of an HUF and each property as an HUF is pleaded.

13. In view of the above, actually the application filed under Order VII Rule 11 CPC in fact is treated as an application under Order XII Rule 6 CPC, inasmuch as, it is observed on the admitted facts as pleaded in the plaint that no HUF and its properties are found to exist. There is no averment in the plaint that late Sh. Jage Ram inherited property(s) from his paternal ancestors prior to 1956. In such a situation, therefore, the properties in the hands of late Sh. Jage Ram cannot be HUF properties in his hands because there is no averment of late Sh. Jage Ram inheriting ancestral property(s) from his paternal ancestors prior to 1956. There is no averment in the plaint also of late Sh. Jage Ram's properties being HUF properties because HUF was created after 1956 by late Sh. Jage Ram by throwing properties into a common hotchpotch. I have already elaborated in detail above as to how an HUF has to be pleaded to exist in the pre 1956 and the post 1956 positions and the necessary averments which had to be made in the present plaint. The suit plaint however grossly lacks the necessary averments as required in law to be made for a complete cause of action to be pleaded for existence of an HUF and its properties."

3. Now, let us see what are the facts of the present case and apply the ratio of the judgment in the case of Sh. Surender Kumar (supra). For this purpose reference will have to be made to the relevant paras of the plaint and these relevant paras of the plaint are paras 2 to 10 and which read as under:

"2. That defendant no.1, father of the plaintiff initially started business in partnership with defendant no. 3 Madan Lal Khurana in the name and style M/s Khurana Traders from a tenanted premises Opposite Shop No. 217, Behind Shri Gauri Shankar Temple, New Lajpat Rai Market, Chandni Chowk, Delhi-110006, in as early as 1980 and subsequently the plaintiff was also called and joined in the said business in the next couple of years. At that time it was agreed between the defendants and plaintiff that they being the Joint Hindu Family Members of Shri Tilak Raj Khurana, Hindu Undivided Family of which Sh. Tilak Raj Khurana defendant No.1, being father and head of the family and plaintiff, defendants No.3 & 4 being sons, shall be other family members thereof, and all male members including father/head of the family, would contribute and put their best efforts in the said and/or the other businesses, which may be established time to time in the different names, under different- different partnerships and different places and whatever they will earn and made from the earnings made from such business and/or the assets generated their from in the names of the said business or any individual, joint names of the family members, including in the name of defendant no.2, the same shall belong to and be of joint family assets/properties, irrespective who ever may look after any business, possessing any shop, house or any other property either under ownership or tenanted, at any point of time and all the family members except defendant no.2, shall have one forth share each therein at all relevant time. Since, defendant no. 1, being father of the plaintiff and defendants no.3 and 4, happens to be an experience person and plaintiff and defendant no.3 and 4 had complete faith on him, it was agreed he shall managed and kept all records of all transactions of the businesses, assets and properties etc. with him. It was also agreed specifically, unless divided mutually among all members together, all the said firms, funds, incomes and properties, existing or already disposed off, shall be treated as joint family undivided properties and on partition true accounts of all up-to such date, when agreed to partition, shall be rendered and each such members except defendant no. 2 as stated above, shall be given his due share and possession of the such firms, assets and properties.

3. That pursuant to the given aforesaid broad understanding by the defendants, the plaintiff was made to believe therein bonafidely being family member and as agreed between the parties, they started to act there upon, by working together initially in the firm M/s Khurana Traders and subsequently in the names of other firms established time to time in the names of M/s Khurana Associates and M/s Khurana Sales Corporation and using the funds and incomes of the said firms generated therefrom, acquired various properties time to times in the name of one or the other parties hereto.

4. That the plaintiff and defendants being in close relations with each other, their business is also common and they have vested interests in the business and properties. The business is being run under the name and style of M/s Khurana Traders, at the tenanted premises under tenancy of Sh. Tilak Raj Khurana, father of the plaintiff, at Opposite Shop No.217, Behind Shri Gauri Shankar Temple, New Lajpat Rai Market, Chandni Chowk, Delhi-110006. Since as early as 1980, the Firm was established as a Partnership Firm. The above Firm is being looked after by Sh. Tilak Raj Khurana and Sh. Sanjay Khurana - defendants no.1 and 4 respectively. Another firm is being run under the name and style of M/s Khurana Associates, at Shop No.205, New Lajpat Rai Market, Delhi-110006. The said shop was purchased in the name of Sh. Tilak Raj Khurana. The same is in possession of and being looked after by Sh. Surender Khurana, plaintiff herein. The third shop No. 267, New Lajpat Rai Market, Delhi-110006, comprising of basement, ground, first and second floors, is being run under the trade name and style of M/s Khurana Sale Corporation. The said property was purchased in the name of Sh. Surender Khurana, plaintiff herein and Sh. Madan Lal Khurana, defendant no.3.

5. The prior to 1980, there was no property in the name of plaintiff and the defendants. The business was started in the year 1980 by the plaintiff and defendants No. 1 and 3.

6. That from the income i.e. the joint funds received from the different shops since 1980 onwards, different properties as mentioned hereunder were acquired and purchased in different names of the family members and are joint properties having been purchased from the joint funds of the family members.

i) Tenancy Shop/premises under tenancy of Sh. Tilak Raj Khurana, father of the plaintiff and defendant no. 1 herein, Opposite Shop No. 217, Behind Shri Gauri Shankar Temple, New Lajpat Rai Market, Chandni Chowk, Delhi - 110006, business of which is being run under the name and style of M/s. Khurana Traders. The approx. value of the above shop is about Rupees Two crores and two other and two other godowns building No. 418, Shri Gauri Shankar Temple, Chandni Chowk, Delhi - 110006. The approx. value of the said two godowns is Rs. 50,00,000/- (Rupess Fifty Lacs), under the possession of defendants No. 1 and 4.

ii) Shop No. 205, New Lajpat Rai Market, Delhi - 110006, in the name of Sh. Tilak Raj Khurana defendant No. 1. The said shop is in occupation and possession of Sh. Surender Khurana, plaintiff herein, business being run under the trade name and style of M/s. Khurana Associates. The approx. value of the above said shop is about Rs. 60,00,000/- (Rupees Sixty Lacs).

iii) Shop No. 267, New Lajpat Rai Market, Delhi-110006, comprising of basement, ground, first and second floors, under the Joint names of Sh. Surender Khurana plaintiff herein and Sh. Madan Lal Khurana and is in occupation and possession of Sh. Madan Lal Khurana, defendant No. 3 herein, business being run under the trade name and style of M/s Khurana Sales Corporation. The approx. value of the above shop is about Rupees Two crores.

iv) Residential Built up property No. 172, Jagrity Enclave, Delhi-110092, comprising of basement, ground floor first floor and Barsati Room, area approx. 192 Sq.yds., purchased in the year 1983, in the joint names of Smt. Santosh Khurana- defendant No. 2, herein, and Sh. Sanjay Khurana-defendant No. 4 herein, and his family members are residing, therein along with Sh. Tilak Raj Khurana-defendant No. 1 and his wife Smt. Santosh Khurana-defendant No. 2. The approx. value of the above built-up property is about Rupees Four crores.

v) Residential Built up property No. 242, Jagrity Enclave, Delhi-110092, comprising of basement, ground floor and first floor area approx. 275 sq.yds, purchased in the year 1993, in the joint names of Sh. Madan Lal Khurana, defendant No. 3 herein, Sh. Sanjay Khurana, defendant no. 4 herein, and Sh. Surender Khurana, plaintiff herein respectively. Sh. Madan Lal Khurana, defendant no. 3 herein, is in possession and user with his family members of First Floor, and half portion of basement and Sh. Surender Khurana-plaintiff, with his family members is in possession and user of ground floor and half portion of basement. The approx. value of the above built up property is about Rupees Six crores.

vi) Residential Built up Property/Flat in Sai Cooperative Society, situated at Rohini, Delhi, in the name of Sh. Madan Lal Khurana defendant No. 3, purchased in the year 1981. Sh. Tilak Raj Khurana, defendant No. 3 herein, is in possession thereof. The approx. value of the above flat is about Rs. 75,00,000/- (Rupees Seventy Five lacs).

vii) Residential built up property/flat in Sai Cooperative Society, situated at Rohini, Delhi, in the name of Smt. Santosh Khurana defendant no. 2, purchased in the year 1981. Sh. Tilak Raj Khurana, defendant no. 1 herein, is possession. The approx. value of the above flat is about Rs. 75,00,000/- (Rupees Seventy Five Lacs).

viii) One plot at Rajender Nagar, Ghaziabad (UP) admeasuring 650sq.yds., acquired in the name of Smt. Santosh Khurana, defendant no. 2 in the year 1987, which was sold on or about 2001 for an approx. value of Rs. 25,00,000/- (Rupees Twenty Five Lacs). The amount has been received by defendant no. 1, account of which the defendant no. 1 will have to disclosed and render the account thereof.

ix) One plot at Ramprastha Colony, Ghaziabad (UP) admeasuring 555sq.yds., in the name Smt. Santosh Khurana, defendant no. 2, Sh. Surender Khurana, plaintiff herein and Sh. Sanjay Khurana, defendant no. 4, purchased in the year 1995. The said plot was constructed into Twelve Flats and said flats were sold by defendants no. 1,2, and 4, in league and collusion with each other, without prior consent, knowledge and plaintiff being party thereto and the entire sale consideration of all the said flats is with the defendants 1,2 and 4 who have to rendered the account thereof. In the estimation of plaintiff the sale consideration of said twelve flats would be total Rs. 5 (five) crores. The plaintiff is also entitled to receive his share in the sale consideration of said flats being a joint owner thereof.

x) That the plaintiff has also come to know that defendants 1 and 4, from the above said flats sale consideration/funds, have purchased on 1st May, 2004, a Shop No. SB-114 (C), at Jaipuria Developers Pvt. Ltd. Jaipuria Sunrise Plaza, @ Rs. 5000/- (Five Thousands) per.sq.ft. total area of which is 244.00sw.ft. Total sale value of the property is Rs. 11,22,400/- (Rupees Eleven lacs, Twenty Two Thousands four hundred). As on date the value of the same is more than Rs. 25,00,000/- (Rupees Twenty Five Lacs).

xi) That the plaintiff has also come to know that the defendants No. 1 and No. 4, from the above said flats sale consideration/funds, have purchased on 5th April 2004, another Shop No. SA-152, at Jaipuria Developers Pvt. Ltd., Jaipuria Sunrise Plaza, @ Rs.5000/-(five thousand) per sq.ft. total area of which is 267.00sq.ft. total sale value of the property is Rs. 12,28,200/- (Rupees Twelve Lacs, Twenty Eight Thousand, Two Hundred). As on date, the value of the same is more than Rs. 30,00,000/-(Rupees Thirty Lacs).

xii) That the plaintiff has also come to know that defendants 1 and 4, from the above said flats sale consideration/funds, have purchased on 5th April, 2004, another Shop No. SA-154©, at Jaipuria Developers Pvt. Ltd., Jaipuria Sunrise Plaza @ Rs. 5000/- (Five Thousands) per sq.ft total area of which is 244.00 sq. ft. totale sale value of the property is Rs. 11,22,400/- (Rupees Eleven Lacs, Twenty Two Thousands, Four Hundred). As on date the value of the same is more than Rs. 25,00,000/- (Rupees Twenty Five lacs).

xiii) One property plot area 300 sw. meters had been purchased by defendant no. 1, either in his own name or in the name of Smt. Santosh Khurana or Sh. Sanjay Khurana, defendant no. 4, at manesar, Gurgaon (Haryana). Approx. value of the property is Rs. 45,00,000/- (Rupees Forty Five Lacs).

xiv) One property plot area 300 sq.meters had been purchased by defendant no. 1, either in his own name or in the name of Smt. Santosh Khurana or Sh. Sanjay Khurana, defendant no.4, at Kundli, Sonepat (Haryana). Approx. value of the said property is Rs. 35,00,000/- (Rupees Thirty Five Lacs).

It is submitted although, the plaintiff is in legal possession of the aforesaid joint family properties, yet he is also in actual physical and symbolical possession.

7. That Shop No. 267, New Lajpat Rai Market, Delhi- 110006, comprising of basement, ground, first and second floors, under the joint names of Sh. Surender Khurana plaintiff and Sh. Madan Lal Khurana, defendant no. 3. The defendant no. 3 is running business under the trade name and style of M/s Khurana Sales Corporation, as detailed in para (iii) above from part of the said premises and he is releasing rents from rest of the part of the said shop approximately Rs. 60,000/- per month, which the said defendant is liable to render the account thereof, even since let out and the rent received by him.

8. That all the above properties have been purchased from the joint funds, joint income and joint business and all the money whosoever and whatsoever had earned from the joint business was/is kept by defendants. The defendants 1,2 and 4 have also sold and received considerations of various joint family properties including twelve flats built on plot at Ramprastha Colony, Ghaziabad, another plot at Rajender Nagar, Ghaziabad etc. Even the rental income received by the defendant no. 3 is also in his hands and all the defendants have to render the account of entire family incomes, funds, properties and other assets received and generated therefrom. It is further submitted that from the inception of the business, till date, no division, distribution or partition of joint family funds, properties have been done an/or no rendition of accounts have been made by the defendants, who kept and maintaining the account thereof and are in possession of the same and documents thereof.

9. That in the manner indicated above, all the share-holding of all the properties acquired from the joint family business and funds, rental earnings etc. comes ¼ share to each of the plaintiff, defendants no. 1,3 and 4, and accordingly, the plaintiff entitled to one-fourth share in the above.

10. That the plaintiff being the member of the same family with a common ancestor and on account of close relationship and joint family business amongst the parties, the rights, claim and interest of plaintiff, defendants no. 1,3 and 4 are common and equal in all the joint family business, firms funds, properties existing and already disposed off. All the family joint business and properties purchased from the family joint business/funds are joint ones and all the parties except defendant no. 2 to the suit are the co-owners of the same and plaintiff and defendant no. 1, 3 and 4 are entitled to one- fourth share in the joint family business as well as joint family properties."

4. In view of the ratio of the judgment in Sh. Surender Kumar's case (supra), the aforesaid averments made in paras 2 to 10 of the plaint cannot be said to be the legal and factual averments required to be made for existence of a cause of action with respect to HUF and its properties. There are three firms as per the plaint being M/s. Khurana Traders, M/s. Khurana Associates and M/s. Khurana Sales Corporation. Qua the firm M/s. Khurana Traders as per the averments made in para 2 of the plaint, plaintiff is admittedly not a partner. Though plaintiff claims to be a partner in M/s. Khurana Associates and M/s. Khurana Sales Corporation, no details are stated in the plaint as to under which partnership deed (of which date) plaintiff claims to be a partner of any of these firms. In a case such as the present, besides ipse dixit of the plaintiff being a partner, it is necessary in law as per Order VI Rule 4 of the Code of Civil Procedure, 1908 (CPC) to make specific reference to the partnership deed as per which plaintiff is a partner in M/s Khurana Associates and M/s. Khurana Sales Corporation.

This however has not been done and the plaint is conspicuously silent in this regard.

5. It is also seen that there is only ipse dixit of the plaintiff of joint funds and joint properties being purchased from the joint funds, however, 'joint funds' or joint properties are not in law equal to HUF funds/HUF properties or businesses. It is also further required to be noted that 'joint funds' is an expression which is not in law equal to joint Hindu family property.

'Working together' is not equivalent to existence of a joint Hindu family.

This is all the more so after passing of the Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as 'the Benami Act') and which states that what is apparent must necessarily be taken as real i.e who is the owner of a particular property as stated in the title deed is final, subject of course to the exceptions contained in Section 4(3) of the Benami Act of existence of HUF properties or trust properties. Specific and categorical averments have to be made with respect to existence, creation and continuation of HUF and its properties, and which necessary averments are not found in the plaint. Also, there is no averment in the plaint admittedly with respect to the properties being properties purchased in trust for non-applicability of the bar contained in sub-Sections (1) and (2) to Section 4 of the Benami Act to come in because of Section 4(3) of that Act.

6 (i). It is also required to be noted that properties which are referred to in para 6(vi) to 8 of the plaint are wholly vague properties without any details and it is not understood as to how, unless specific details exist of the properties, a property can at all be a subject matter of a suit, much less of partition. This is an aspect I have considered in the judgment in the case of Sunny (Minor) & Anr. Vs. Sh. Raj Singh & Ors., CS(OS) 431/2006, decided on 17.11.2015 and the relevant para of which judgment on the issue at hand is para 10 and which para 10 reads as under:-

"10. While on the aspect of properties mentioned in para 15 of the plaint, it bears note that defendants have categorically denied that there are any properties of the family which are found at serial nos.(c), (e), (f) and (g) of para 15 of the plaint either in the name of defendant no.1 or of any of the defendants and that in fact no such properties exist. Once that is so there does not arise any question of partition of such imaginary properties. This Court notes that the properties at serial nos. (c), (f) and (g) being of 200 sq. yds plot in Ber Sarai Extension, New Delhi, Ballabhagarh in Faridabad and Kotputli, Rajasthan are wholly vague and without any details of the municipal numbers or agricultural khasra numbers and therefore it cannot be said that any of the said three properties exist, and are thus available for partition. The defendants have further denied that the defendants have ever owned even a single flat, much less four flats, at Village Adhichini, Hauz Khas, New Delhi as mentioned at serial no.(e) of para 15 of the plaint. This Court further observes that the details given of even the last two properties in para 15 of the plaint being vehicles and personal belongings including bank accounts are again wholly vague and are thus incapable of being understood and hence partitioned, because what are the bus and tempo numbers are not stated and nor are the bank accounts details given of the alleged accounts in Allahabad Bank and Punjab National Bank and there is no proof on record that these properties are in the name of defendant no.1 or in the name of any member of the family. Therefore, qua all such vague/non-existent properties there does not arise any issue of passing any vague decree of partition having vague and incomplete particulars." (emphasis added)

(ii) Accordingly, qua vague properties, the suit is not maintainable and would stand dismissed as no reliefs can be granted with respect to properties of which complete details have not been mentioned in the plaint.

7. It may be noted that in para 6 of the plaint various properties are referred which are admittedly already sold, and with respect to such properties therefore there does not arise an issue of partition, and also that it is noted that in the suit plaint no relief is claimed for recovery of monies allegedly on account of the share of the plaintiff in such properties.

8. Accordingly, the following conclusions are arrived at:-

(i) The plaint only talks of 'joint funds', 'joint properties' and 'working together' without the necessary legal ingredients averred to make a complete existence of a cause of action of joint Hindu family/HUF with its properties and businesses.

(ii) Joint funds, joint businesses or working together etc do not mean averments which are complete and as required in law for existence of HUF and its properties have been made, and, joint funds and joint properties do not necessarily have automatic nexus for they being taken as with joint Hindu family/HUF properties.

(iii) In view of the specific bar contained in Sections 4(1) and (2) of the Benami Act, once properties in which rights sought by the plaintiff are not by title deeds/documents in the name of the plaintiff but are in the name of defendants, the plaintiff is barred under Section 4(1) of the Benami Act from claiming any right to these properties and the only way in which the right could have been claimed was if there was an existence of an HUF and its properties, but, the plaint does not contain the legally required ingredients for existence of HUF and its properties.

(iv)With respect to the properties lacking in exact details with the complete address, no reliefs can be claimed or granted with respect to the vague properties.

9. In view of the above, the suit plaint does not contain the necessary averments as required by law for existence of joint Hindu family/HUF properties and its businesses and thus in fact the suit plaint would be barred by Section 4(1) of the Benami Act as the necessary facts to bring the case within the exceptions contained in Section 4(3) of the Benami Act are not found to be pleaded/existing in the plaint.

10. Suit is accordingly dismissed, leaving the parties to bear their own costs. All pending applications accordingly stand disposed of.

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BOMBAY HIGH COURT

Shalini Sumant Raut & Ors vs Milind Sumant Raut & Ors on 14 December, 2012

CHAMBER SUMMONS NO. 492 OF 2012 IN SUIT NO. 143 OF 2010

WITH

 CHAMBER SUMMONS NO. 2123 OF 2011 IN SUIT NO. 143 OF 2010

ORDER

1. This suit is filed for declaration that the plaintiffs and the defendants are co-owners of the suit properties, for ascertaining of the share claimed by them, for partitioning the suit properties as per such shares and for possession of such partitioned share. Exhibit 'A' to the plaint shows 9 2 CHS 492/12 immovable and several movable properties belonging to the joint family of the parties which are sought to be partitioned. Exhibit 'B' to the plaint shows the family tree.

2. The parties claim through one Rajaram Balkrishna Raut (Rajaram) who died intestate on 23.11.1991 leaving behind 8 children and several grand children ancestral properties. The children and the grand children who are the children of the pre-deceased or the deceased children of Rajaram are the parties to the suit. The great grand-children of the Rajaram are not sought to be made parties, though the suit properties are claimed to be ancestral properties of Rajaram.

3. The son and the grandson of plaintiff No.4 have sought to be made party-defendants to the suit. They claim that they are coparceners in the coparcenary property of the joint family which are the properties shown in the schedule Exhibit A to the plaint. They claim to be entitled to their share therein separately and individually from plaintiff No.4 who, they claim, is unable to manage his affairs and claim his share. They claim that the parties to the suit have taken advantage of the old age of their father/grand-father who resides alone which may adversely affect his share and consequently their shares. They have claimed their right by virtue of their birth in the suit properties which are claimed to be coparcenary properties. [See. Surjit Lal Chhabda Vs. Commissioner of Income Tax, Bombay AIR 1976 SC 109] They claim to protect their interest in the joint family properties which are the suit properties.

4. It is contended by the plaintiffs as well as the defendants including plaintiff No.4 that during the lifetime of plaintiff No.4, his son and grandson would not have any share in the suit properties and, therefore, have no locus to be joined as party-defendants.

5. The parties to the suit have disposed of two of the properties in the suit. Hence defendant Nos.1 to 5 in the suit have applied for deletion of two immovable properties at Item Nos.6 & 7 shown in Exhibit 'A' to the plaint. They claim that the suit has become infructuous with regard to those properties and there is no lis between the parties with regard to those properties.

6. It would first have to be determined whether the applicants in Chamber Summons No. 2123 of 2011 who are the son and grandson of plaintiff No.4 must be made parties to the suit as having an independent right and interest in the suit properties being coparceners of the joint Hindu family.

If that is so decided, the properties which are sold pending the suit would have to be accounted for to them. If not, the properties sold by the parties with which the parties to the suit, at present, have no dispute, may stand deleted.

7. The seminal aspect for adjudication is whether a son or a grandson of a coparcener claiming an interest in the joint family properties/coparcenary properties would be entitled to claim such interest by virtue of his birth and hence prosecute or defend any litigation in respect of the joint family properties instituted by other coparceners who are his family members but who are of a generation or two generations prior to him. The test of the claim is in the right of the coparcener to apply for and obtain partition of the coparcenary property by virtue of his very birth. If that be so, the applicants as coparceners would be entitled to separately maintain a suit for partition to claim their share therein. If they can maintain a suit for partition they may also be joined as defendants in this suit and claim partition and other consequential reliefs in the suit, of course, subject to payment of court fees upon valuation of all the suit properties by them as per new and 4 CHS 492/12 different shares of all coparceners.

8. It may be mentioned at the inception that counsel on behalf of the applicants accepted that the applicants would pay court fees upon they being joined even as defendants in this suit pending the suit for determination, partition and recovery of their own share which they have claimed upon claiming interest in the suit properties.

9. It would be imperative to consider the Hindu Law relating to coparcenary property first.

10. In Mulla's Hindu Law, Twentieth Edition, Volume-I, Chapter XII relating to joint Hindu family-coparceners and coparcenary property-

Mitakshara Law the principles of the ancient settled uncodified Hindu Law are succinctly enunciated. The principles may be enumerated thus:

(i) The property inherited by a Hindu from his father, father's father or father's father's father is ancestral property (unobstructed heritage as regards his own male issue).

(ii) His male issues acquire an interest in it from the moment of their birth.

(iii) They become coparceners with their paternal ancestor upon their birth.

(iv) The joint and undivided family is a normal condition of Hindu society. Undivided Hindu family is ordinarily joint in estate, food and worship.

(v) A Hindu coparcenary is a narrower body than the joint family. It includes only those persons who acquire by birth an interest in the joint or coparcenary property. (Hence joint property and coparcenary property or joint Hindu family property or coparcenary property are synonymous).

(vi) The persons who acquire an interest by birth in a joint family property or coparcenary property are sons, grand sons and great grand sons of the holder of the joint property. Sons, grandsons or great grandsons are joint owners/coparceners. They become entitled to joint property/coparcenary property upon their birth.

(vii) (vii) Ancestral property and separate property are distinct. The property inherited by a Hindu from his father, father's father, father's father's father is ancestral property. The property inherited by him from other relations is his separate property.

(viii) Ancestral property is a species of coparcenary property. If a Hindu acquires coparcenary property from his father, it becomes ancestral in his hands as regards his sons. The sons become coparceners with the father as regards such property. The coparcenary would then consist of the father and the son.

(ix) The coparcenary may consist also of the grandson and the great- grandson, who acquire an interest by birth in coparcenary property.

Illustration: If A inherits property from his father, his two sons B & C, would become coparceners with him as regards such ancestral property. If B has a son D and C has a son E, the coparcenary will consists of the father, sons and grandsons.

(x) A joint Hindu family has a common male ancestor with his lineal descendants in the male line within four degrees counting from and inclusive from such ancestor (propositus). {After the amendment of 2005 to Section 6 of the Hindu Succession Act (HSA) (2005 Amendments) which shall be presently considered, the line within four degrees may be male or female}.

(xi) No coparcenary can commence without a common male ancestor.

{After 2005 Amendment a coparcenary may well commence with a 6 CHS 492/12 common female ancestor}.

(xii) After the death of common ancestor it may consist of collaterals, such as brothers, uncles, nephews and cousins. (These illustrations show two generations of coparceners).

(xiii) A coparcenary is a creature of law; it cannot be created by parties.

(xiv) No female can be a coparcener, although she may be a member of joint Hindu family. (This position has changed upon the 2005 Amendment.)

(xv) When a Hindu inherits the self acquired property of his father the sons take a vested interest in the property by reason of their birth and the property inherited by their father would become ancestral property in the hands of the son. The sons are coparceners as regards the property. When a son is born to either of them that son would also become a coparcener by the mere fact of his birth.

(xvi) The property inherited by a person from his father is ancestral in his hands. He is not the owner of the property, he is entitled merely to hold and manage the property as the head of the family for and on behalf of the family. The ownership of the property is in the joint family consisting of himself and his sons. They are all co-owners or coparceners. (Hence the expression co-owners and coparceners are synonymous).

(xvii) The essence of a coparcenary is unity of ownership.

(xviii) The ownership of a coparcenary is in the whole body of the coparceners. No coparcener or member of a joint Hindu family has a definite share in the property. His interest is a fluctuating interest. It is enlarged by the deaths in the family; it is diminished by the births in the family. Hence his interest is called "undivided coparcenary interest".

(xix) He becomes entitled to a definite share only on partition.

(xx) The members of a joint family who are within 3 degrees from the last holder of the property have a right to demand partition.

(xxi) Until partition he would have a common possession and common enjoyment of coparcenary property.

(xxii) The well known expression of HUF is that there is a "community of interest and unity of possession between all the members of the family which has been enunciated since the Privy Council case of Katama Natchiar Vs. Rajab of Shivagunga (1863) 9 MIA 539 @ 543 & 611.

(xxiii) Hence the interest of a coparcener in coparcenary property/joint Hindu family property is undivided and indefinite. If fluctuates on the birth or death of a member. So long as the family remains joint no individual member can have a definite share. When it is partitioned the share of the member in the joint family becomes definite.

(xxiv) On the death of one coparcener, the others take by survivorship the share which he had in common earlier.

(xxv) Coparcenary property is, therefore, held in collective ownership by all the coparceners in a quasi-corporate capacity.

(xxvi) The incidents of a coparcenary are that the lineal male descendants upto the third generation, acquire by birth, the ownership in ancestral properties of their ancestor.

(xxvii) Their descendants can ask for partition.

(xxviii) Till partition, each member or coparcener would have ownership extended over the entire property conjointly with the rest.

(xxix) As a result of the co-ownership the possession and enjoyment of the property is common. Hence the coparceners cannot alienate the property except for necessity without concurrence of all coparceners.

(xxx) The interest of the deceased members passes on his death to the surviving coparceners.

(xxxi) The surviving coparceners are not only his brothers and sisters but 8 CHS 492/12 also their children - each being entitled to his own specific equal share. [See. State Bank of India Vs. Ghamandi Ram AIR 1969 SC 1330]

xxxii) The interest of a coparcener in an undivided Mitakshra property is not individual property.

(xxxiii) Coparcenary property is of two types; apratibandha daya or unobstructed heritage, and sapratibandha daya or obstructed heritage.

(xxxiv) When a person acquires an interest in the property by birth, it is unobstructed heritage, because the accrual of the right to the property is not obstructed by the existence of the owner. The property inherited by a Hindu from his father or father's father or father's father's father is unobstructed heritage as regards his own male issue i.e. his son, grandson or great-grandson. His sons would acquire an interest in it from the moment of their birth. They become coparceners with their paternal ancestor in such property immediately upon their birth.{After the 2005 Amendment a daughter also would acquire an interest in the unobstructed heritage from the moment of her birth.}

(xxxv) A property acquired from others e.g. maternal grand-father is obstructed heritage. No right accrues by birth in such property. The right would accrue on the death of the last owner without leaving a male issue. Hence the accrual of the right is obstructed by the existence of the owner. The property devolving upon parents, brothers, nephews, uncles etc. upon the death of the last owner, is obstructed heritage. These relations do not get a vested interest in the property by birth. Until the death of the owner they only have a spes successionis or a bare chance of succession which is contingent upon surviving the owner.

(xxxvi) Unobstructed heritage devolves by survivorship; obstructed heritage devolves by succession.

(xxxvii) Property jointly acquired by the members of the joint family, with 9 CHS 492/12 the aid of ancestral property, is also joint family property. Property acquired by them without the aid of ancestral property may or may not be joint family property.

(xxxviii) The term joint family property is synonymous with coparcenary property. -page 370 (Separate property would be synonymous with self acquired property.)

(xxxix) A coparcener has joint interest or joint possession in joint family property or coparcenary property. page 370 (xl) Property inherited by a male Hindu from his father, father's father or father's father's father, is ancestral property. His son, grandson and great-grandson would acquire an interest in it by virtue of their birth, if they have a male issue. (Hence ancestral property is inherited and not self acquired property.) -page 372 (xli) If a person who acquired a property by birth has no male issue, he would hold that property as absolute owner thereof and he would be able to deal with it as he pleased. However if he had a male issue in existence at the time he inherited the property or if he had a male issue subsequently, they would become entitled to the interest in the property by virtue of their birth. -page 372 (xlii) A father cannot change the character of the joint family property into absolute property of his son by bequeathing it to him as if it was the self acquired property of the father. It would be ancestral property only in the hands of the son. His son would acquire it by survivorship since he would acquire an interest in it by his birth. -page 372 (Hence since the father cannot bequeath the property after his death, he cannot also transfer such property during his lifetime inter vivos.) (xliii) A person inheriting property from his three immediate paternal ancestors (father, father's father and father's father's father) must hold it in coparcenary with his son, son's son and son's son's sons. Such property is ancestral as regards his male issue. -page 373 10 CHS 492/12 (xliv) A son takes an interest equal to that of the father in ancestral property upon his birth. -page 377 (xlv) This right is wholly independent of his father. He does not claim through his father. -page 377 ........ "under the Mitakshara law each son upon his birth takes an interest equal to that of his father in ancestral property, whether it be movable or immovable. It is very important to note that the right which the son takes at his birth in the ancestral property is wholly independent of his father. He does not claim through the father." (see mulla's Hindu Law, Thirteenth Edition, p. 251, para 224). (See. Valliammai Achi Vs. Nagappa Chettiar & Anr. AIR 1967 SC 1153) Hence the transfer of such property would affect the interest of the son in the ancestral property.

(xlvi) There is no distinction between the rights of a father and his sons as regards ancestral property. -page 377 (xlvii) A father can, however, dispose of the ancestral property only for payment of his debts (legal necessity). -page 377-378 (xlviii) A father has no greater interest in the joint property than any of his sons. Each son acquires an interest equal to that of the father upon his birth. His grandson and great-grandsons similarly acquire an equal interest upon their birth. -page 378 (xlix) On the death of a coparcener, his interest in the coparcenary property does not pass by succession to his heirs. It passes by survivorship to the other coparceners. {This position of old uncodified Hindu law has been materially altered by Section 6 of the HSA as enacted in 1956 and later as amended in 2005.}

(l) There is a presumption that every Hindu family is joint in food, worship and estate. -page 393 (li) There is a presumption that a joint family continues joint. -page 393 (lii)The presumption of union is the greatest in the case of father and sons.

(liii) After the coparceners separate, there is no presumption as to joint 11 CHS 492/12 family property. -page 393 (liv) There is no presumption that the joint family possessed joint family property; the party who claims partition must prove that it is joint family property. (If it is admitted to be joint family property or ancestral property, that fact would not have to be proved.) -page 394 (lv) There may be a joint Hindu family which does not have any joint property or any estate. [See. Ram Narain Chand Vs. Purnea Banking Corporation Ltd. AIR 1953 Pat 110 (lvi) The plaintiff must prove (or it may be admitted) that the family possessed some property with the income of which some other property was acquired. Such property would become joint family property since it would be purchased with joint family funds. -page 395 (lvii) Where it is admitted that the family possessed some joint family property, it would form the nucleus from which another property could have been acquired. -page 395 (lviii)Such acquisition would carry a presumption that that was joint property. The presumption that properties in the hands of individual coparceners is coparcenary property (or joint property or ancestral property) would arise if the family nucleus is proved. -page 395 (lix)If no nucleus is shown the members alone would be co-sharers but the property would not be taken to be joint family property and hence would not devolve by survivorship. -page 395 (lx)Coparceners have community of interest and unity of possession. No coparcener is entitled to any any special interest in coparcenary property. No coparcener is entitled to exclusive possession of any part of the property. (No coparcener can, therefore, sell or alienate any ancestral property or joint family property except with the consent of the other coparceners.) -page 409 (lxi)No coparcener can predicate at any given moment what his share in joint family property is. No member would be entitled to a definite 12 CHS 492/12 share in joint family property or in its income. The income would be brought into a common chest or purse. His share would become defined only when the partition takes place. -page 409 (lxii) Each coparcener is entitled to joint possession and enjoyment of family property. -page 410 (lxiii) If a coparcener is excluded from joint possession or enjoyment, he is entitled to enforce his right by a suit. He is not bound to sue for partition. (He may sue for joint possession or enjoyment or for separate possession upon partition. However he would have to value his share in the coparcenary property on the date of filing of the suit and pay court fees thereon). -page 410 (lxiv) The right to enforce a partition and the right survivorship go hand in hand. "It is the right to partition which determines the right to take by survivorship" as held by the Privy Council in Anant Vs. Gopal (1895) 19 Bom 269.

11. These rules and incidents of coparcenary or joint family properties are enumerated in the case of State Bank of India Vs. Ghamandi Ram AIR 1969 SC 1330 thus:

"the incidents of co-parcenership under the Mitakshara law are :

first, the lineal male descendants of a person up to the third generation, acquire on birth ownership in the ancestral properties of such person; secondly that such descendants can at any time work out their rights by asking for partition; thirdly, that till partition each member has got ownership extending over the entire property conjointly with the rest; fourthly, that as a result of such co- ownership the possession and enjoyment of the properties is common; fifthly that no alienation of the property is possible unless it be for necessity, without the concurrence of the coparceners, and sixthly, that the interest of a deceased member lapses on his death to the survivors."

Further in the case of Surjit Lal Chhabda Vs. Commissioner of Income Tax, Bombay AIR 1976 SC 109 the conclusion derived from the position of uncodified Hindu Law is set out thus:

13 CHS 492/12 "the expression 'Hindu undivided family' must be construed in the sense in which it is understood under the Hindu Law.

The presumption therefore is that the members of a Hindu family are living in a state of union, unless the contrary is established.

generally speaking, the normal state of every Hindu family is joint and in the absence of proof of division, such is the legal presumption.

A Hindu coparcenary is a much narrower body than the joint family. It includes only those persons who acquire by birth an interest in the joint or coparcenary property and these are the sons, grandsons and great-grandsons of the holder of the joint property for the time being, that is to say, the three generations next to the holder in unbroken male descent. Since under the Mitakshara Law, the right to joint family property by birth is vested in the male issue only, females who come in only as heirs to obstructed heritage (sapratibandha daya), cannot be coparceners.

Outside the limits of coparcenary, there is a fringe of persons, males and females, who constitute an undivided or joint family. There is no limit to the number of persons who can compose it nor to their remoteness from the common ancestor and to their relationship with one another. A joint Hindu family consists of persons lineally descended from a common ancestor and includes their wives and unmarried daughters. The daughter, on marriage, ceases to be a member of her father's family and becomes a member of her husband's family. The joint Hindu family is thus a larger body consisting of a group of persons who are united by the tie of sapindaship arising by birth, marriage or adoption.

That it does not take more than one male to form a joint Hindu family with females is well established. In Gowli Buddanna v. Commissioner of Income-tax, Mysore, Bangalore, (1966) 3 SCR 224 = (AIR 1966 SC 1523).

These are the principles of the uncodified Hindu law.

12. In 1956 the Hindu Law underwent extensive reforms inter alia in the law of inheritance and succession. The enactment of the Hindu Succession Act, 1956 dealt with coparcenary property which survived upon any of the coparceners having female heirs. This brought about a departure from the old Hindu Law such that upon the death of any coparcener the 14 CHS 492/12 incidents of coparcenary property and its survivorship was largely diluted.

13. It would, therefore, be apt to see certain provisions of the Hindu Succession Act, 1956 in that behalf :

(a) The purpose and object of the Act as shown in the statement of the objects and reasons was to amend and codify the law relating to the intestate succession amongst Hindus. It is the third of the three installments of the Hindu Code; the first two having dealt with the aspects of adoption and maintenance and guardianship and minority issues. It amended and codified the law relating to intestate succession amongst Hindus. It brought about changes with regard to women's property and provided rules for devolution of interest of a deceased male in certain cases. It laid down a uniform and comprehensive system of inheritance applying to the persons governed inter alia by Mitakshara Law.

(b) Section 4 of the Act gave overriding effect to the Act. Section 4 runs thus:

4. Overriding effect of Act.- (1) Save as otherwise expressly provided in this Act,-

(a) any text, rule or interpretation of Hindu Law or any custom or usage as part of that law in force immediately before the commencement of this Act, shall cease to have effect with respect to any matter for which provision is made in this Act;

(b) any other law in force immediately before the commencement of this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions contained in this Act.

Thus Section 4 overrides any text, rule or interpretation of Hindu law or any custom or usage and any other law in force prior to the commencement of the Act. Under Section 4(1)(b) any of these would cease to apply to Hindus so far as it was inconsistent with any of the provisions of the Act.

(c) Section 6 deals with devolution of interest in coparcenary property. The relevant part of amended Section 6 runs thus:

6. Devolution of interest in coparcenary property.-When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act:

Provided that, if the deceased had left him surviving a female relative specified in class I of the Schedule or a male relative specified in that class who claims through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession , as the case may be, under this Act and not by survivorship.

The above rules of devolution of interest in coparcenary property would, therefore be, to the extent stated in Section 6 of the HSA, overridden and would cease to apply as inconsistent with the provisions of the HSA.

Consequently in case of ancestral property consisting of a father and his sons and grandsons only the rules of coparcenary property under the uncodified law would still prevail. But if the father has e.g. not only sons but also daughters and not only grandsons but also granddaughters his interest in coparcenary property would not survive to the other members of the coparcenary but would succeed to his heirs so that not only his sons and grandsons would get an increased share upon his death, but his successors being his sons, daughters as also his widow and his mother would succeed to his interest in the coparcenary property under the provisions of the HSA.

Hence there is a notional partition which is deemed to have been effected upon the death of a coparcener under Section 6 of the HSA 1956.

The share so separated devolves upon the heirs of the deceased instead of vesting in the other coparceners by survivorship. Such partition does not 16 CHS 492/12 bring about disruption in the coparcenary. It is only the interest of the deceased which is separated. The coparcenary minus the interest of the deceased continues with its incidents. The surviving coparceners continue as such.

In the case of Shankarlal Ramprasad Ladha Vs. Vasant Chandidasrao Deshmukh & Ors. 2009(2) ALL MR 93 it is held that the concept of notional partition is a legal device for demarcating the interest of the deceased when the explanation (I) of Section 6 is attracted. Like any other legal fiction, it is meant for a specific purpose. It is not a real partition by metes and bounds. It neither effects a severance of status, nor does it demarcate the interest of the surviving coparceners or any of the females who are entitled to a share on a partition.

The joint status of the family is not impaired by Section 6 of the HSA. The family is not disrupted.

(d) Further amendment to Section 6 by the Amendment Act 39 of 2005 which came into effect from 09.09.1995 brought about further changes in devolution of interest of a Hindu male in coparcenary property.

The relevant part of Section 6 as amended in 2005 runs thus:

6. Devolution of interest in coparcenary property.- (1) On and from the commencement of the Hindu Succession (Amendment) Act, 2005, in a joint Hindu family governed by the Mitakshara law, the daughter of a coparcener shall,-

(a) by birth become a coparcener in her own right in the same manner as the son;

(b) have the same rights in the coparcenary property as she would have had if she had been a son;

(c) be subject to the same liabilities in respect of the said coparcenary property as that of a son, and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener:

17 CHS 492/12 Provided that nothing contained in this sub-section shall affect or invalidate any disposition or alienation including any partition or testamentary disposition of property which had taken place before the 20th day of December, 2004.

(2) Any property to which a female Hindu becomes entitled by virtue of sub-section (1) shall be held by her with the incidents of coparcenary ownership and shall be regarded, notwithstanding anything contained in this Act, or any other law for the time being in force, as property capable of being disposed of by her by testamentary disposition.

(3) Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,-

(a) the daughter is allotted the same share as is allotted to a son;

(b) the share of the pre-deceased son or a pre-deceased daughter, as they would have got had they been alive at the time of partition, shall be allotted to the surviving child of such pre-deceased son or of such pre-deceased daughter; and

(c) the share of the pre-deceased child of a pre-deceased son or of a pre-deceased daughter, as such child would have got had he or she been alive at the time of the partition, shall be allotted to the child of such pre-deceased child of the pre-deceased son or a pre- deceased daughter, as the case may be.

Explanation.- For the purposes of this sub-section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.

There would be a notional partition under Section 6 of HSA, 1956 if a female relative (heir) or a person claiming through female relative (heir) was left by the deceased male Hindu coparcener. There shall be a deemed partition under the statutory provisions contained in Section 6(3) of the Act as amended in 2005. That would be a partition of the interest in Mitakshara property of a Hindu dying intestate.

Consequently after 2005 upon the death of a coparcener, leaving any 18 CHS 492/12 child, his son and his daughter would share equally in his interest in coparcenary property. They would share as if there was a partition. For all the Hindus dying after the commencement of the Amendment Act, leaving any child, the interest in the joint family property which he had would not survive at all. It would only succeed - either by testamentary or intestate succession.

This has brought about a total departure from the law relating to the coparcenary property. After 2005 for all Hindus leaving any child there could be no case of survivorship at all; after 1956 but before 2005 there would be survivorship of interest in coparcenary property but only in a family having no female relatives (heirs). Even during that period in a family having female relatives (heirs) there would be no survivorship but only succession of the interest of a Hindu male in Mitakshara coparcenary property.

(e) What would, therefore, be the succession amongst Hindu males is required to be seen. That is provided under Section 8 of the HSA. Section 8 runs thus:

8. General rules of succession in the case of males.-The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter:-

(a) firstly, upon the heirs, being the relatives specified in class I of the Schedule;

(b) secondly, if there is no heir of class I, then upon the heirs, being the relatives specified in class II of the Schedule;

(c) thirdly, if there is no heir of any of the two classes, then upon the agnates of the deceased; and

(d) lastly, if there is no agnate, then upon the cognates of the deceased.

The Schedule annexed to Section 8 showing Class I and Class II heirs show the son, daughter, widow and mother of a Hindu male dying intestate as his first heirs. Along with them are included the sons and daughters of predeceased sons and daughter; a grandson is not included anywhere in Class I or Class II of the schedule to Section 8 of the HSA. The grandson never succeeds to the property of the Hindu male dying intestate. That includes also 19 CHS 492/12 the interest in the joint family property which that Hindu male had and which would constitute his property or his estate.

(f) The act also deals with the property of a female Hindu which would be her absolute property under Section 14 and the rules of succession of female Hindus under Sections 15 & 16 but with which the dispute in this case is not concerned and hence which shall not be dealt with.

(g) Section 19 deals with the mode of succession of 2 or more heirs. Section 19 runs thus :

19. Mode of succession of two or more heirs.- If two or more heirs succeed together to the property of an intestate, they shall take the property,-

(a) save as otherwise expressly provided in this Act, per capita and not per stripes; and

(b) as tenants-in-common and not as joint tenants.

Hence if there are two or more heirs when they succeed to a property, the property would devolve upon them per capita each one taking for that branch and as tenants in common so that the heirs of any deceased successor would claim the share of such successor.

This is a further departure from the uncodified Hindu Law of survivorship of a coparcenary property in which the shares would fluctuate on the birth and death of any male member so that the other surviving male members would get a decreased or increased share upon the birth and death respectively thus augmenting the shares of all the survivors. The shares of the successors under the Hindu Succession Act would not so augment. Each branch would take its share; the increase and decrease would be within that branch. The successors of those successors alone would get that share.

 (h) Under Section 30 of the HSA, a Hindu, male or a female, would be entitled to make a testamentary disposition as per the provisions of Indian Succession Act, 1925. The relevant part of Section 30 reads thus:

30. Testamentary succession. -Any Hindu may dispose of by will or other testamentary disposition any property, which is capable of being so [disposed of by him or by her], in accordance with the provisions of the Indian Succession Act, 1925, or any other law for the time being in force and applicable to Hindus.

The interest of a Hindu in a coparcenary part which would otherwise survive to other coparceners equally can, therefore, be disposed of by will. Consequently the interest of a Hindu in Mitakshara coparcenary  property would not per se survive upon coming into force of the HSA. If the Hindu does not leave behind any will it would only succeed to his/her heirs under Section 8/15 of the Act as applicable.

14. This position would be governed by when the succession opened.

The succession would open upon the death of a Hindu. Hence if a Hindu died after 1956, the provisions of the old Section 6 as enacted in 1956 and as analyzed above would prevail. If he died after 2005, the provisions of new Section 6 as amended by the Amendment Act, 2005 and analyzed above would prevail.

15. In this case Rajaram expired on 23.11.1991 leaving behind 8 heirs being his 5 sons and 3 daughters. Some of them have expired leaving behind their widow and sons and daughters. These are the parties to the suit. Rajaram died intestate. Rajaram's succession opened on 23.11.1991. Consequently the law which applied to Rajaram's succession was under Section 6 of the HSA as enacted in 1956 and prior to the law as amended in 2005. Rajaram had left him surviving 3 daughters and 5 sons. His interest in his ancestral property which was Mitakshara coparcenary property, therefore, 21 CHS 492/12 devolved upon his sons and daughters by intestate succession under Section 8 of the Hindu Succession Act and not by survivorship. For such interest the Hindu Coparcenary property and all the incidents of such Hindu coparcenary as shown above would have applied had he left behind only sons. But he left behind 3 daughters also. Hence the incidents of a Hindu coparcenary do not apply to his interest in the coparcenary properties. The succession to his interest in the coparcenary property would be under Section 8 read with Section 19 of the HSA. All his sons and daughters would share equally per capita as tenants in common. Upon their death their children would take their share.

16. Under that succession so long as the sons and daughters of Rajaram are alive, the grandsons or the great-grandsons of Rajaram would not succeed at all to any interest in the coparcenary property that Rajaram had. Such interest could have only survived to them as coparceners had there been no female heir of Rajaram. (i.e. had Rajaram left no daughters or, of course, any persons claiming through daughters i.e. the heirs of such daughters.)

17. Consequently the general rules of jointness of a Hindu family, being community of interest and unity of possession, the incidents of a joint family property, the coparcener surviving to the interest of a deceased coparcener, the share of a coparcener diminishing or augmenting upon the death or birth of another coparcener, the joint ownership of a coparcener, the undivided share of coparcenary etc. stand diluted upon any coparceners having any female heir since 1956 in respect of such interest.

18. It was this beginning of egalitarianism which is the bed rock of a Hindu society.

19. The true effect of the uncodified Hindu law relating to the Hindu coparcenery, therefore, applied only so long as there were only male heirs in that HUF after 1956. It would continue as before until any one coparcener died. The devolution of interest in the coparcenary got changed as per Section 6 of the HSA. It continued as before if he had only sons. It came to an end in effect if he had a single daughter or even a predeceased son having a single daughter such that he had a female relative (heir) or a male heir claiming through a female relative (heir).

20. Ms. Iyer on behalf of the defendant Nos. 1 to 5 as also Mr. Divekar on behalf of plaintiff No.4 drew my attention to the judgment of the Supreme Court in the case of Commissioner of Wealth-tax, Kanpur Vs. Chander Sen AIR 1986 SC 1753 relating to partition of joint family business.

They argued that the property of a Hindu male succeeds to his heirs and would not form the HUF of that heir. It would be his individual property. The case of Chander Sen (supra) concerned the wealth tax payment. It must be analysed only after considering the settled uncodified Hindu Law enunciated inter alia in items (viii), (xv), (xvi), (xl), (xli), (xlii) and (xliii) above. In that case there was a partition of joint family business between the father and his only son. The father and son continued the business in partnership. The son formed the joint family with his own sons. The father died leaving behind amounts standing to the credit of the father in the partnership account. That amount was held to have devolved upon his son by succession. The son was his only heir. The son was, therefore, held to have inherited that property as an individual and not as Karta as his own joint family. That judgment relates to the account of property which an heir succeeds to. It does not deal with succession of a deceased Hindu male alone. It deals with how the property is to be assessed. In that case there was a partition. Upon partition the share coming to the coparceners would be their separate individual property acquired by them on partition. The property would no longer be coparcenery.

23 CHS 492/12 That property would have to succeed; it can never survive to the other coparceners, because there are no coparceners upon the partition. The joint Hindu family comes to an end upon the partition. That property being the self acquired property of a given coparcener, who no longer is a coparcener because the joint Hindu family no longer continues joint, would succeed under Section 8 to Class I heirs initially.

In that case there was partial partition. The Court was concerned with the partitioned property. Another property which was house property of the family had continued to remain joint as has been set out in para 2 of that judgment. The Court was not concerned with how that house property had devolved upon the son since it remained joint. It was observed in para 2 of the judgment that that property devolved by survivorship. We are concerned with such properties. It would have to be seen how such property would survive inter alia to the applicants.

In that case the joint Hindu family consisted only of father and the son.

The father had not left any other female relative (heir). His widow and mother had predeceased him. Under section 6 of the HSA also that house property, therefore, would only survive to the son, Chander Sen. Had Rajaram also left no female heir, his interest in the ancestral properties would have survived to his male heirs being his sons as also then to his grandsons and great-grandsons, because unlike in the case of Chander Sen (supra), Rajaram left behind 3 daughters, the entire legal position would change in respect of such interest in consonance with Section 6 of the HSA, 1956.

21. It would, therefore, be incorrect to state that the Supreme Court held in the case of Chander Sen (supra) that all the properties left by a Hindu would only devolve by succession to his heirs. That would not only be simplistic but erroneous. In that case the property was partitioned and the share that the deceased Hindu male, being the father of Chander Sen, got on partition was his self acquired property which remained in partnership and his 24 CHS 492/12 son succeeded thereto only; his son did not succeed to the house property which had remained joint.

22. The Supreme Court has considered other judgments of various High Courts being Allahabad High Court, Madras High Court Full Bench, Andhra Pradesh High Court, Madhya Pradesh High Court as also Gujarat High Court. All of these are shown to me. The Gujarat High court has taken a view different from the other High Courts. The other High Courts' view has been accepted by the Supreme Court which is set out in the case of Chander Sen (supra). All those judgments also dealt with the properties separated by partition or self acquired properties. Reliance upon those judgments for the rule relating to ancestral property would, therefore, be equally misplaced if those judgments also are minutely analyzed and dissected.

23. The effect of the devolution by succession of the partitioned property or even ancestral property has been set out in those judgments which is material for our case.

24. The Supreme Court in the judgment in the case of Chander Sen (supra) held in para 11 that the heirs in Class I do not include the grandson being the son of a son living. Hence it is held in para 12 of the judgment that when the son as a Class I heir inherits the property, he does so in his individual capacity. Under Section 4 of the HSA that provision would override the old uncodified Hindu Law as being inconsistent with such succession under Section 8 of the HSA. The son taking individually would take per capita and not per stripes and as tenant-in-common and not as joint tenant under Section 19 of the HSA. He would be entitled to will away that property by a testamentary disposition under Section 30 of the HSA. It is held in para 14 of the judgment that when a son gets his share in a HUF (which is by partition only) to which Section 8 is applied, which includes the son but not 25 CHS 492/12 the grandson, the son takes individually in his individual capacity and not as Karta of his own family. Therefore that property would not continue joint and would not taken to be joint property. The son who so inherits, inherits it as his own separate property and his son would not have any right as a coparcener therein.

25. The Gujarat High Court in the case of Commissioner of Income- tax, Gujarat-I Vs. Dr. Babubhai Mansukhbhai, (1977) 108 ITR 417 took a view that whatever the property which the son in a HUF inherited and acquired from his father was ancestral property qua him and, therefore, that property would be coparcenary property of his HUF in which his son would have a share and which his son would be able to have partitioned. That view has been dissented from by the Supreme Court in the case of Chander Sen (supra). That related to the self acquired property of the father which succeeded to the son.

In this case it is Rajaram's ancestral property that the applicants claim.

Again, therefore, it is the specific provision of the statute prevailing over the settled principles of Hindu Law which is overridden by the statute that would be essential to this case.

26. It would be interesting to see how the Supreme Court has considered the judgments with which it found favour. The case of Commissioner of Income-tax, U. P. Vs. Ram Rakshpal, Ashok Kumar (1968) 67 ITR 164 was in the case of a son and a father of HUF which was partitioned. The assets inherited by his son from his father from whom he had separated by partition was held not capable of being the income of the HUF of the son. This was because partition took away the character of coparcenary property. The father left behind his widow, married daughter, his son and his son's son. The estate left by him devolved by succession as per Section 6 of the HSA under Section 8 thereof. There were, therefore, 3 26 CHS 492/12 shares; for his widow, his married daughter and the son. There was no share for his sons' son Ashok Kumar.

The other question that came up for consideration was whether that 1/3rd of the property which was inherited by the son was inherited by him as Karta of his own family or as an individual. It was held in para 12 of the judgment that that was inherited by him in his individual capacity.

Hence it would not be coparcenary property and hence his son Ashok Kumar would not be able to ask for partition of that property.

27. Madras High Court's Full Bench judgment in the case of Additional Commissioner of Income-tax, Madras Vs. P. L. Karuppan Chettiar, 114 ITR 523 was also a case of partition effected between a father, his wife, their sons and daughter-in-law. The father was separated. The son constituted HUF with his wife and his subsequently born son. When the father died leaving behind his widow and the divided son who was Karta of his HUF as his legal heirs under Section 8 of the HSA, those 2 persons succeeded him to the partitioned properties of the father/husband. They could divide the properties amongst themselves. Since the father had left behind a female relative (heir) being his widow, the properties succeeded to the widow and the son as per the provisions of Section 6 of the HSA as per Section 8 thereof.

28. Hence the Supreme Court considered in para 16 of the judgment in the case Chander Sen (supra) upon considering the case of Madras High Court that when a Hindu male died, his sons and grandsons would have inherited in such property. Under Section 8 his sons' son would get excluded and the son alone would inherit the property to the exclusion of the grandson. No interest would accrue to the grandson in the property left by his grand- father. (This would be because Section 6 would come into play. There would be a notional partition. The property would succeed to the son and would not 27 CHS 492/12 survive to him. The succession is to the son as the Class I heir. The grandson is excluded from Class I).

The Supreme Court further held in para 16 that the effect of Section 8 was directly derogatory of the old Hindu Law and that the provision of Section 8 must prevail over uncodified law of survivorship in view of Section 4 of the HSA, which overrides the established provisions of Hindu law.

In fact the Supreme Court went further to show that since the grandson was excluded, an after born son of that son would also not get any interest in the property which was inherited by the son from the father. The Supreme Court observed that in respect of such property "it is not possible and visualize or envisage a Hindu undivided family."

In the above case there was a partition of the HUF during the lifetime of the father with his son.

It would not matter even where there is no partition if the father died leaving behind female relative (heir) as in this case. That aspect is not covered by the Supreme Court Judgment but directly falls under the aforesaid clear statutory provision of HSA. When those provisions applied also there would be no Hindu undivided family which could be visualized or envisaged for such interest of such deceased coparcener. The very concept of the HUF would then stand diluted or even terminated upon the death of coparcener. It, therefore, follows as a corollary that upon the death of any coparcener, there is a notional partition after 1956 and a deemed statutory partition after 2005 and the share which devolves upon any copercener in case of a family having female relative (heir) would be only upon succession and would devolve only as their individual property incapable of being partitioned and in which their own heirs would have no interest by their birth or by their continuance.

29. The case of Shrivallabhdas Modani Vs. Commissioner of Income tax, M. P.-I, 138 ITR 673 : (1983 Tax LR 559) of Madhya Pradesh 28 CHS 492/12 High Court was the case where no coparcenery was subsisting between a Hindu and his sons at the time of the death of the father. It was held that such property, which was not ancestral property, received by the son on his father's death could not be blended with other property, in that case the property allowed to the son on partition. Accordingly that property devolved by succession under Section 8 of the HSA. It was held by the Supreme Court in para 16A of the judgment that, therefore, the son's son who is not mentioned as an heir under Class I could not get any right in the property of his grand-father and the property devolved upon the son under the HSA and did not constitute HUF property consisting of his own branch including his sons.

Again this was not coparcenery property which devolved upon the son.

However it would make no difference if the interest in a coparcenery property devolved upon the son in case where the father left behind a female relative (heir) because that would devolve by succession as per Section 6 under Section 8 of the HSA.

30. The Supreme Court also accepted the judgment of the Andhra Pradesh High Court in the case Wealth-tax, A. P. II Vs. Mukundgirji, 144 ITR 18 : (1983 Tax LR 1370) where the property devolved under Section 8 of the HSA. It was observed by the Andhra Pradesh High Court that the Parliament wanted to make a clean break from the old Hindu Law in certain respects consistent with modern egalitarian concepts. The intention of the law was to depart from the pre-existing Hindu Law as is reflected also from Section 19 of the HSA. Hence it was observed by the Supreme Court in the case of Chander Sen (supra) that when any property devolved upon a Hindu under Section 8 of the Act it could never be HUF property in the hands of successor vis-a-vis his own sons because if it was not so, it would amount to creating two classes amongst Class I heirs viz. the male heirs in whose hands it would be joint family property and the female heirs for whom such concept could not have 29 CHS 492/12 been applied or contemplated then (prior to 2005).

31. Hence any property which devolves under Section 8 of the HSA upon the death of a Hindu male would be his own individual property incapable of partition. It would be his own property in which his son or grandson would have no interest during his lifetime. The properties which devolve under Section 8 of the HSA are self acquired properties or partitioned HUF properties. They are not ancestral HUF properties which are not partitioned. The law which as laid down by the Supreme Court considering the aforesaid judgments of various High Courts was in respect of separate or partitioned properties. The law is the same also with regard to the interest of a coparcener in ancestral properties in case where the ancestor had female relatives (heirs).

32. It must be appreciated that when a joint Hindu family consists only of a father and a son both have an equal interest in the joint family property. On the death of the father, the father's interest would survive to the son if he has no child. It would succeed to the son if he has a female child (heir) after 1956 and if he has either a female or a male child (heir) after 2005. In such a case the entire estate of the father would devolve upon the son by succession or survivorship. Where, however, there are more coparceners in a joint Hindu family, the entire estate of the father would be less than the entire coparcenary properties. In such a case interest of the father would succeed to his heirs under Section 8 of the HSA and the remainder of the coparcenary properties would remain in the coparcenary and the other coparceners would continue to be such. Since the coparcenary would then remain, their interest would be diminished by the birth of any member in the coparcenary (either male or female after 2005) and would be augmented upon the death of any coparcener (who does not leave behind any heir).

33. When Rajaram died, his interest in the coparcenery property devolved by succession upon his 8 children; 5 sons and 3 daughters and not upon all the surviving members of coparcenary including the sons of his sons (and including applicant No.1 in CHS 2123 of 2011.) That however relates not to the entire properties of Rajaram shown in Exhibit A to the plaintiff.

That relates only to his interest as a coparcener in all the suit properties. The interest of the other coparceners who are his 5 sons and their sons would continue as joint interest in the coparcenary property with community of interest and unity of possession being the prime principle of coparcenery property since the suit properties were admittedly ancestral properties of Rajaram. That coparcenary continued as before. The coparcenery property, which would be presumed upon they being ancestral properties, to the extent of the shares of the other coparceners continued joint. The share which plaintiff No.4 got as a successor along with his remaining 4 brothers and 3 sisters became his individual separate property. In that interest his sons and his grandsons (the applicants herein) would have no share. But in the remainder of the coparcenary ancestral joint Hindu family properties the applicants would continue to have their share as before Rajaram's death. The entire property of Rajaram which was ancestral and which continued joint would, therefore, not succeed to his sons as the heirs of Rajaram alone. The sons would hold the properties partly as coparceners of the HUF of Rajaram, which is presumed under the uncodified Hindu Law in the properties which are specifically averred to be ancestral in para 1 of the plaint itself, and would also succeed to the interest of Rajaram in such properties and would hold that portion of the properties so succeeded as their individual properties.

34. In the case of Gurupad Khandappa Magdum Vs. Hirabai Khandappa Magdum & Ors. AIR 1978 SC 1239 it is held that the share of the deceased in the coparcenary property must be ascertained to ascertain the 31 CHS 492/12 share of the heirs in the property of the deceased coparcener. The share that will succeed to them is only the share in the property that would have been allotted to the deceased coparcener if a partition of that property had taken place immediately before his death. It must, therefore, be assumed that the partition had so taken place. The share of the other heirs cannot be ascertained without reference to such share which would devolve by succession. All the consequences which flow from a real partition have to be logically worked out so that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which had taken place during the lifetime of the deceased.

Hence the heirs of such deceased coparcener will get his or her share in the interest which the deceased had in the coparcenary property at the time of his death in addition to the share which he or she would receive in the notional partition. Similarly the share of the widow in the coparcenary property would be ascertained by adding the share to which she is entitled upon the notional partition during her husband's lifetime to the share which she would get in the husband's interest upon his death.

35. In the family tree Exhibit B to the plaint only the legal heirs of Rajaram are shown. They would be the heirs of the interest which Rajaram had in the coparcenery property. All the coparceners of the family are not shown in Exhibit B. All the sons of Rajaram, their sons and their sons' sons living at the time of the death of Rajaram would constitute the HUF of Rajaram. They are coparceners in the family. All of them would have by birth a right in the coparcenary properties/HUF properties/ancestral properties being the properties shown in Exhibit A to the plaint. They would have an undivided interest therein. They would have a right to partition those properties. Until the partition is applied for and granted they would have community of interest and unity of possession. Rajaram's death does not effect their community of interest and unity of possession. They continued 32 CHS 492/12 joint since there was no partition of the HUF, though their coparcenary interest did not augment on Rajaram's death leaving behind 3 female relatives (heirs). Whatever be the share of all the coparceners being the sons, sons' sons and sons' sons' sons then living constituting the HUF, they would continue to have their share as before. Only the interest of Rajaram in that coparcenery property would succeed to his Class I heirs under Section 8. The applicants would have no interest in that share because their father, plaintiff No.4 who succeeded to the interest which Rajaram had in the coparcenery property would get it as his own individual property.

36. However, the entire of the properties would not succeed to his heirs. The other coparceners would continue their coparcenary interest in the remaining ancestral joint family properties. They would be entitled to ask for partition of the coparcenary properties to the extent of the interest which continued joint. In a large family such as this the interest of the father would be equal to that of his sons, sons' sons and sons' sons' sons in the coparcenary property. Hence the entire property cannot devolve by succession. Only that limited interest would devolve by succession. The other coparceners, including the applicants would be entitled to demand partition of the ancestral joint family properties less the interest of Rajaram and other such deceased coparceners.

37. Considering the sons of all the sons of Rajaram and after 2005 also the daughters and all the daughters of the sons as well as the daughters of Rajaram as also their sons and daughters, the number of coparceners would have to be enumerated and the share of each coparcener would accordingly have to be ascertained. That is yet not done by the applicants. Though the applicants in CHS 2123 of 2011 would be entitled to the share, the applicants have not stated what their share would be in the coparcenary property being the ancestral property of Rajaram.

38. The applicants claim that they are as much entitled to be parties in this suit as they would be entitled to sue on partition. The applicants in effect claim their share in the HUF family/coparcenary property of the HUF of Rajaram. That share is not ascertained by the applicants. Mr. Apte on behalf of the applicants agreed that an application of this nature is an application for partition the HUF properties and for protection of the HUF property/coparcenary properties until the partition is effected. He argued that in a partition suit such as this for claiming a specified share each plaintiff and defendant is essentially a plaintiff and entitled to ask for his share. He conceded that such share would be given only upon such party valuing his share and paying Court fee thereon.

39. Counsel on behalf of the applicants also relied upon the case of Narayan Ramchandra Katkar & Ors. Vs. Arjun Bhimrao gore & Ors. AIR 1986 BOMBAY 122 to claim partition in para 4 of which it is held that a suit by a son for partition and separate possession was maintainable even if his father was joint with his brother and did not consent to the partition. The applicants, as members of the HUF would be entitled to claim partition so long as the ancestral property continued joint and they continued to be coparceners. The test is whether the applicants can apply for partition and separation possession of their share in the HUF in which their grand-father and great-father Rajaram was Karta. For that purpose they do not require the consent of their father or grand-father, plaintiff No.4. That claim would have been maintainable even if their father or grand-father, plaintiff No.4, remained joint with his brothers and sisters.

40. It is seen that though the suit is indeed in respect of the ancestral properties left by Rajaram, the shares claimed by the plaintiffs are ascertained as if on succession. They are not ascertained taking into account the 34 CHS 492/12 survivorship of any coparcener of the HUF of Rajaram but as co-owners of the property belonging to Rajaram. The addition of the applicants to the array of parties in the suit would necessitate revision of the shares of each coparcener which, upon partition, he/she would be entitled to. Consequently the share of the parties to the suit would also similarly vary. The simplistic application of the applicants to make them party-defendants would, therefore, be not in order. The applicants would require to file their own separate suit for partition of whatever be the coparcenary interest which they have in the HUF of Rajaram which would continue after his death, until partition is demanded by any coparcener.

41. Though, therefore, the applicants may be entitled to partition, it would be neither feasible not proper to allow them to join in this suit. They may sue separately upon showing all the coparceners of the HUF of Rajaram which survived to his sons, sons' sons and sons' sons' sons and after 2005 also to the daughters, daughters' daughters and daughters' daughters' daughters and daughters' sons' daughters of Rajaram.

42. It may be mentioned that the plaintiffs have themselves admitted in para 1 that Rajaram was the holder of various ancestral properties. They have shown the legal heirs of Rajaram in paras 1, 2, 3, 4 & 5 of the plaint. In para 6 of the plaint the plaintiffs have claimed the shares as the heirs of Rajaram as per Hindu Law without mentioning whether it was uncodified or the codified Hindu law and how the plaintiff ascertained such shares. In para 7 of the plaint, the plaintiffs have stated that the heirs of Rajaram were "joint owners" of the suit properties. This is a concept unknown to Hindu Law. In para 8 of the plaint, the plaintiffs have averred that between the parties and their predecessor-in-title some of the properties are in possession of the some of the defendants are co-owners. In para 9 of the plaint, the plaintiffs have averred that certain valuable movables belong to joint family. In para 10 of 35 CHS 492/12 the plaint, the plaintiffs have averred that they have applied for partition of the ancestral and joint properties described in Exhibit A to the plaint. The plaintiffs have referred to co-owners, joint owners or coparceners in the Hindu coparcenary synonymously. In para 11(A) of the plaint, the plaintiffs have averred that the parties are co-owners of all the properties described in Exhibit A to the plaint and those properties are ancestral properties and the parties are joint owners. Hence upon the averment that Rajaram had ancestral property described in Exhibit A to the plaint, the plaintiffs have sought partition of those ancestral and joint properties described in Exhibit A to the plaint.

43. It can be seen that the plaintiffs have not understood the concept of joint ownership and co-ownership of ancestral properties. Ancestral properties cannot be jointly owned. Joint properties survive to the joint holders entirely upon the death of one joint holder. Ancestral properties survive to all the members of the coparcenary. Ancestral properties can be co- owned by community of interest and unity of possession such that each party is an owner of an undivided share. Upon the incidents of joint family property or coparcenary property, this interest is augmented by the death of any coparcener (co-owner) and is diminished by the birth of any coparcener in the HUF. The fact remains that the properties in Exhibit A stated to be the co- owned or jointly owned are unmistakably and repeatedly stated to be ancestral properties. The ancestral properties would survive to the coparceners in a Hindu coparcenary owning such joint family properties. The only exceptions to that would be the interest of the deceased Hindu in such coparcenary.

44. The fact that the suit is essentially for partition lends itself to the conclusion that the suit properties stated to be of Rajaram and not acquired by the parties themselves, are HUF properties capable of such partition. Yet all the coparceners of the HUF of Rajaram as on the date of the suit are not made 36 CHS 492/12 parties. Similarly the share of the each of the parties which is claimed, is not the share of each of the coparceners. The share of only the heirs of Rajaram upon succession cannot be ascertained and partitioned for the ancestral properties of Rajaram. The non-joinder of all coparceners may be fatal to the suit.

45. At the time when Rajaram died in 1991, his succession having opened, the interest in the joint family property devolved by succession upon his heirs, he having left daughters and widow as shown in paras 2 & 3 of the plaint respectively. Similarly after the death of Rajaram when the family continued joint but with diminution of the share of Rajaram and upon the death of Sumant, another son of Rajaram on 22.01.2008, the interest of Sumant in the coparcenary also devolved by succession, he having left a widow and a daughter as his female relatives (heirs) as shown in para 4 of the plaint. The daughter of Rajaram, Sunanda having died in 2001, the share in the coparcenary would not augment or diminish, she not having been a coparcener until her death; she is only an heir of the deceased Rajaram who would have succeeded to his Rajaram' interest in his ancestral properties.

46. The other sons and daughters of the sons and daughters of Rajaram, who were living at the time of the death of Rajaram, are not shown and hence not known to Court.

47. It may be mentioned that if the plaintiffs had sued for the suit properties not as ancestral properties of Rajaram, but as his self acquired properties which would wholly devolve by succession the suit would have been barred by the Law of Limitation, Rajaram's succession having opened in 1991, the cause of action to sue would have accrued to the plaintiffs as his heirs in 1991. The suit properties are admittedly HUF properties being the ancestral properties of Rajaram. The Hindu uncodified law would apply to 37 CHS 492/12 the suit properties subject to the in-roads made by the HSA only in respect of the interest of Rajaram in the HUF properties upon his death. Hence partition could be claimed in 2010 only of HUF properties.

48. The applicants, therefore, do have a share in the HUF properties, being the ancestral properties of Rajaram left after the interest of Rajaram and Sumant and another such deceased coparcener leaving behind female heirs or male heirs claiming though their female heirs is deducted therefrom.

49. Despite seeing some share of the applicants in CHS 2123 of 2011, because that share is not ascertained and because the entire HUF consisting of all the coparceners is not shown, at present the applicants are not made parties to the suit and are directed to sue themselves for partition as advised.

50. The parties to the suit have admittedly sold some of the properties mentioned in the schedule Exhibit A to the plaint being properties at Item Nos.6 & 7 thereof. Defendant Nos.1 to 5 have applied for deleting these properties. It appears that the other parties to the suit have agreed to have those properties deleted.

51. The Court has, however, seen that all the properties shown in Exhibit A to the plaint are admittedly ancestral properties of Rajaram. They constitute HUF properties. The interest in the HUF properties would survive to the sons, sons' sons and sons' sons' sons of Rajaram until 2005 and thereafter to the daughters, daughters' daughters, daughters' sons' daughters, daughters' daughters' and daughters sons' daughters after 2005. The applicants in CHS 2123 of 2011 as also the other coparceners would have an interest in those properties.

52. These properties fall within the law enunciated inter alia in items 38 CHS 492/12 (xxix), (xliii), (xlv) and (lx) above. These properties could not have been alienated without the consent of all the coparceners. If so alienated, the alienation could be challenged. The applicants in CHS 2123 of 2011 seek to challenge that alienation. The very application is because of such challenge and to prevent further alienation. The parties to the suit who have alienated the coparcenary properties would have to account for the alienation or justify the alienation upon its challenge.

53. Alienation can be made for the benefit of the estate, for legal necessity or for meeting any antecedent debts, for management of the joint property by the Karta or pious obligation of a son to discharge his father's debts subject to Section 6(4) of the has as amended in 2005 which runs thus.

(4). After the commencement of the Hindu Succession (Amendment) Act, 2005, no Court shall recognise any right to proceed against a son, grandson or great-grandson for the recovery of any debt due from his father, grandfather or great-grandfather solely on the ground of the pious obligation under the Hindu law, of such son, grandson or great-grandson to discharge any such debt:

Provided that in the case of any debt contracted before the commencement of the Hindu Succession (Amendment) Act, 2005, nothing contained in this sub-section shall affect-

(a) the right of any creditor to proceed against the son, grandson or great-grandson, as the case may be; or

(b) any alienation made in respect of or in satisfaction of, any such debt, and any such right or alienation shall be enforceable under the rule of pious obligation in the same manner and to the same extent as it would have been enforceable as if the Hindu Succession (Amendment) Act, 2005 had not been enacted.

54. The alienation can be challenged by the coparceners if it is unauthorized. Hence if the alienation is not for the above purposes it can only be challenged after it is made. (Ramesh Damodhar Deshmukh Vs. Damodhar Domaji Deshmukh & Ors. 1999(1) Mh. L. J. 153).

55. The applicants who claim to partition the properties and to protect their coparcenary interest therein would have to challenge the alienation. That is not expressly done. That also could be done by the applicants in their own suit for partition and protection of their coparcenary interest, if filed.

56. However the suit is not fully settled. The suit, therefore, continues. Pending the suit and pending the enumeration of all the coparceners and the ascertainment of correct shares, the properties cannot be allowed to be deleted so as not to form that suit properties which would come up for the Court's scrutiny.

57. The applicants are, therefore, seen to be the coparceners of the suit properties which are admittedly ancestral properties. The applicants would certainly be entitled to demand partition of the properties. Until such time as it is demanded they would continue to have interest in the undivided suit properties. That would be the community of interest and unity of possession. The applicants would have to ascertain their precise share in the suit premises to claim any partition. The shares of the parties to the suit would alter upon the applicants' claim. The applicants would have to consider and account for the notional partition as had taken place upon the death of Rajaram leaving 3 female heirs and ascertained their share in the suit properties. The applicants would also have to consider and account for the notional partitions which may have taken place in their HUF upon the death of other coparceners leaving behind other female heirs. The applicants, therefore, cannot simplicitor be party-defendants to the suit. They would require to join the other coparceners also who are the children of the other parties to the suit. The applicants would have to value their share in the suit premises as coparceners.

58. If the applicants also challenge the alienation by sale of two properties admittedly executed by the parties to the suit, as the other coparceners, they would have to value those suit properties entirely and pay court fees accordingly.

59. It is, therefore, too simplistic to state that the applicants may be only made party-defendants.

60. Consequently there shall be no order in both the aforesaid Chamber Summons.

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SUPREME COURT OF INDIA

Uttam vs Saubhag Singh & Ors on 2 March, 2016

CIVIL APPEAL NO. 2360_of 2016    

JUDGMENT

1. Leave granted.  

2. The present appeal is by the plaintiff who filed a suit for partition, being Suit No.5A of 1999 before the Second Civil Judge, Class II Devas, Madhya Pradesh, dated 28.12.1998, in which the first four defendants happened to be his father (defendant No.3), and his father’s three brothers i.e. defendant Nos. 1,2 and 4. He claimed a 1/8th share in the suit property on the footing that the suit property was ancestral property, and that, being a coparcener, he had a right by birth in the said property in accordance with the Mitakshara Law. A joint written statement was filed by all four brothers, including the plaintiff’s father, claiming that the suit property was not ancestral property, and that an earlier partition had taken place by which the plaintiff’s father had become separate. The trial court, by its order dated 20.12.2000 decreed the plaintiff’s suit holding that it was admitted by DW.1 Mangilal that the property was indeed ancestral property, and that, on the evidence, there was no earlier partition of the said property, as pleaded by the defendants in their written statements.

3. The first Appellate Court, by its judgment dated 12.1.2005, confirmed the finding that the property was ancestral and that no earlier partition between the brothers had in fact taken place. However, it held that the plaintiff’s grandfather, one Jagannath Singh having died in 1973, his widow Mainabai being alive at the time of his death, the said Jagannath Singh’s share would have to be distributed in accordance with Section 8 of the Hindu Succession Act, 1956 as if the said Jagannath Singh had died intestate, and that being the case, once Section 8 steps in, the joint family property has to be divided in accordance with rules of intestacy and not survivorship. This being so, no joint family property remained to be divided when the suit for partition was filed by the plaintiff, and that since the plaintiff had no right while his father was alive, the father alone being a Class I heir (and consequently the plaintiff not being a Class I heir), the plaintiff had no right to sue for partition, and therefore the suit was dismissed and consequently the first appeal was allowed.      

4. Following the same line of reasoning and several judgments of this Court, the High Court in second Appeal dismissed the said appeal, holding:-

“15. Thus in view of the provisions contained in Sections 4,6, 8 and Schedule of the Act as well as the law settled by the aforesaid judgments, it is clear that after coming into force of the Act grand-son has no birth right in the properties of grand-father and he cannot claim partition during lifetime of his father.      

16. In the present case, it is undisputed that Jagannath had died in the year 1973, leaving behind respondents No. 1 to 4 i.e. his four sons covered by Class I heirs of the schedule therefore, the properties had devolved upon them when succession had opened on the death of Jagannath. It has also been found proved that no partition had taken place between respondents No. 1 to 4. The appellant who is the grand son of Jagannath is not entitled to claim partition during the lifetime of his father Mohan Singh in the properties left behind by Jagannath since the appellant has no birth right in the suit properties.       

17. In view of the aforesaid, the substantial questions of law are answered against the appellant by holding that the first appellate court has committed no error in dismissing the suit for partition filed by the appellant referring to Section 8 of the Act and holding that during the lifetime of Mohan Singh, the appellant has no right to get the suit property partitioned.”        

5. It is this judgment that has been challenged before us in appeal.     

6. Shri Sushil Kumar Jain, learned senior advocate appearing on behalf of the appellant, took us through various provisions of the Hindu Succession Act, and through several judgments of this Court, and contended that Section 6, prior to its amendment in 2005, would govern the facts of this case. He conceded that as Jagannath Singh’s widow was alive in 1973 at the time of his death, the case would be governed by the proviso to Section 6, and that therefore the interest of the deceased in the Mitakshara coparcenary property would devolve by intestate succession under Section 8 of the said Act. However, he argued that it is only the interest of the deceased in such coparcenary property that would devolve by intestate succession, leaving the joint family property otherwise intact. This being the case, the plaintiff had every right to sue for partition while his father was still alive, inasmuch as, being a coparcener and having a right of partition in the joint family property, which continued to subsist as such after the death of Jagannath Singh, the plaintiff’s right to sue had not been taken away. He went on to argue that Section 8 of the Act would not bar such a suit as it would apply only at the time of the death of Jagannath Singh i.e. the grandfather of the plaintiff in 1973 and not thereafter to non suit the plaintiff, who as a living coparcener of joint family property, was entitled to a partition before any other death in the joint family occurred. He also argued that the Hindu Succession Act only abrogated the Hindu Law to the extent indicated, and that Sections 6 and 8 have to be read harmoniously, as a result of which the status of joint family property which is recognized under Section 6 cannot be said to be taken away upon the application of Section 8 on the death of the plaintiff’s grandfather in 1973.        

7. Shri Niraj Sharma, learned counsel appearing on behalf of the respondents, countered these submissions, and also referred to various provisions of the Hindu Succession Act and various judgments of this Court to buttress his submission that once Section 8 gets applied by reason of the application of the proviso to Section 6, the joint family property ceases to be joint family property thereafter, and can only be succeeded to by application of either Section 30 or Section 8, Section 30 applying in case a will had been made and Section 8 applying in case a member of the joint family dies intestate. He, therefore, supported the judgment of the High Court and strongly relied upon two judgments in particular, namely Commissioner of Wealth Tax, Kanpur and Others v. Chander Sen and Others, (1986) 3 SCC 567, and Bhanwar Singh v. Puran, (2008) 3 SCC 87, to buttress his submission that once Section 8 is applied to the facts of a given case, the property thereafter ceases to be joint family property, and this being the case, no right to partition a property which is no longer joint family property continues to subsist in any member of the coparcenary.

8. Having heard learned counsel for the parties, it is necessary to set out the relevant provisions of the Hindu Succession Act, 1956. The Act, as its long title states, is an Act to amend and codify the law relating to intestate succession among Hindus. Section 4 overrides the Hindu Law in force immediately before the commencement of this Act insofar as it refers to any matter for which provision is made by the Act. Section 4 reads as follows: 

“4. Overriding effect of Act.-Save as otherwise expressly provided in this Act,-

(a) any text, rule or interpretation of Hindu Law or any custom or usage as part of that law in force immediately before the commencement of this Act, shall cease to have effect with respect to any matter for which provision is made in this Act;

(b) any other law in force immediately before the commencement of this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions contained in this Act.” Section 6 prior to its amendment in 2005 reads as follows:

“6. Devolution of interest in coparcenary property.-When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act :     

Provided that, if the deceased had left him surviving a female relative specified in Class I of the Schedule or a male relative specified in that class who claims through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship.   

Explanation 1. -For the purposes of this section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.    

Explanation 2. -Nothing contained in the proviso to this section shall be construed as enabling a person who had separated himself from the coparcenary before the death of the deceased or any of his heirs to claim on intestacy a share in the interest referred to therein.” It is common ground between the parties that since the present suit was filed only in 1998 and the decree in the said suit was passed on 20.12.2000, that the amendment to Section 6, made in 2005, would not govern the rights of the parties in the present case. This becomes clear from a reading of the proviso (i) to Section 6 of the amended provision which states as follows:-    

“Provided that nothing contained in this sub-section shall affect or invalidate any disposition or alienation including any partition or testamentary disposition of property which had taken place before the 20th day of December, 2004.” The explanation to this Section also states thus:

“Explanation.-For the purposes of this section “partition” means any partition made by execution of a deed of partition duly registered under the Registration Act, 1908 (16 of 1908) or partition effected by a decree of a court.” From a reading of the aforesaid provision it becomes clear that a partition having been effected by a court decree of 20.12.2000, which is prior to 9th September, 2005, (which is the date of commencement of the Amending Act), would not be affected.        

9. The next important Section from our point of view is Section 8, which reads as follows:-

“8. General rules of succession in the case of males.-The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter

(a) firstly, upon the heirs, being the relatives specified in Class I of the Schedule;

(b) secondly, if there is no heir of Class I, then upon the heirs, being the relatives specified in Class II of the Schedule;

(c) thirdly, if there is no heir of any of the two classes, then upon the agnates of the deceased; and

(d) lastly, if there is no agnate, then upon the cognates of the deceased.” THE SCHEDULE Class I Son; daughter; widow; mother; son of a pre-deceased son; daughter of a pre- deceased son; son of a pre-deceased daughter; daughter of a pre-deceased daughter; widow of a pre-deceased son; son of a pre-deceased son of a pre- deceased son; daughter of a pre-deceased son of a pre-deceased son; widow of a pre-deceased son of a pre-deceased son, son of a pre-deceased daughter of a pre-deceased daughter; daughter of a pre-deceased daughter of a pre- deceased daughter; daughter of a pre-deceased son of a pre-deceased daughter; daughter of a pre-deceased daughter of a pre-deceased son.”

10. Also of some importance are Sections 19 and 30 of the said Act which read as follows:-

“19. Mode of succession of two or more heirs.-If two or more heirs succeed together to the property of an intestate, they shall take the property,-

(a) save as otherwise expressly provided in this Act, per capita and not per stirpes; and

(b) as tenants-in-common and not as joint tenants.

30. Testamentary succession.- Any Hindu may dispose of by will or other testamentary disposition any property, which is capable of being so disposed of by him or by her, in accordance with the provisions of the Indian Succession Act, 1925 (39 of 1925), or any other law for the time being in force and applicable to Hindus.

Explanation. - The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a member of a tarwad, tavazhi, illom, kutumba or kavaru in the property of the tarwad, tavazhi, illom, kutumba or kavaru shall, notwithstanding anything contained in this Act, or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this section.”

11. Before analysing the provisions of the Act, it is necessary to refer to some of the judgments of this Court which have dealt, in particular, with Section 6 before its amendment in 2005, and with Section 8. In G. K. Magdum v. H. K. Magdum, (1978) 3 S.C.R. 761, the effect of the old Section 6 was gone into in some detail by this Court. A Hindu widow claimed partition and separate possession of a 7/24th share in joint family property which consisted of her husband, herself and their two sons. If a partition were to take place during her husband’s lifetime between himself and his two sons, the widow would have got a 1/4th share in such joint family property. The deceased husband’s 1/4th share would then devolve, upon his death, on six sharers, the plaintiff and her five children, each having a 1/24th share therein. Adding 1/4th and 1/24th, the plaintiff claimed a 7/24th share in the joint family property. This Court held:-

“The Hindu Succession Act came into force on June 17, 1956. Khandappa having died after the commencement of that Act, to wit in 1960, and since he had at the time of his death an interest in Mitakshara coparcenary property, the pre-conditions of Section 6 are satisfied and that section is squarely attracted. By the application of the normal rule prescribed by that section, Khandappa's interest in the coparcenary property would devolve by survivorship upon the surviving members of the coparcenary and not in accordance with the provisions of the Act. But, since the widow and daughter are amongst the female relatives specified in class I of the Schedule to the Act and Khandappa died leaving behind a widow and daughters, the proviso to Section 6 comes into play and the normal rule is excluded. Khandappa's interest in the coparcenary property would therefore devolve, according to the proviso, by intestate succession under the Act and not by survivorship. Testamentary succession is out of question as the deceased had not made a testamentary disposition though, under the explanation to Section 30 of the Act, the interest of a male Hindu in Mitakshara coparcenary property is capable of being disposed of by a will or other testamentary disposition.

There is thus no dispute that the normal rule provided for by Section 6 does not apply, that the proviso to that section is attracted and that the decision of the appeal must turn on the meaning to be given to Explanation 1 of Section 6. The interpretation of that Explanation is the subject- matter of acute controversy between the parties.”

12. This Court, in dealing with the proviso and explanation 1 of Section 6, held that the fiction created by explanation 1 has to be given its full effect. That being the case, it was held:-

“13. In order to ascertain the share of heirs in the property of a deceased coparcener it is necessary in the very nature of things, and as the very first step, to ascertain the share of the deceased in the coparcenary property. For, by doing that alone can one determine the extent of the claimant's share. Explanation 1 to Section 6 resorts to the simple expedient, undoubtedly fictional, that the interest of a Hindu Mitakshara coparcener “shall be deemed to be” the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death. What is therefore required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death. That assumption, once made, is irrevocable. In other words, the assumption having been made once for the purpose of ascertaining the share of the deceased in the coparcenary property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made that a partition had in fact taken place must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. To make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one's imagination to boggle. All the consequences which flow from a real partition have to be logically worked out, which means that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which had taken place during the lifetime of the deceased. The allotment of this share is not a processual step devised merely for the purpose of working out some other conclusion. It has to be treated and accepted as a concrete reality, something that cannot be recalled just as a share allotted to a coparcener in an actual partition cannot generally be recalled. The inevitable corollary of this position is that the heir will get his or her share in the interest which the deceased had in the coparcenary property at the time of his death, in addition to the share which he or she received or must be deemed to have received in the notional partition.”

13. In State of Maharashtra v. Narayan Rao Sham Rao Deshmukh and Ors., (1985) 3 S.C.R. 358, this Court distinguished the judgment in Magdum’s case in answering a completely different question that was raised before it. The question raised before the Court in that case was as to whether a female Hindu, who inherits a share of the joint family property on the death of her husband, ceases to be a member of the family thereafter. This Court held that as there was a partition by operation of law on application of explanation 1 of Section 6, and as such partition was not a voluntary act by the female Hindu, the female Hindu does not cease to be a member of the joint family upon such partition being effected.

14. In Shyama Devi (Smt) and Ors. v. Manju Shukla (Mrs) and Anr., (1994) 6 SCC 342, this Court again considered the effect of the proviso and explanation 1 to Section 6, and followed the judgment of this Court in Magdum’s case (supra). This Court went on to state that explanation 1 contains a formula for determining the share of the deceased on the date of his death by the law effecting a partition immediately before a male Hindu’s death took place.

15. On application of the principles contained in the aforesaid decisions, it becomes clear that, on the death of Jagannath Singh in 1973, the proviso to Section 6 would apply inasmuch as Jagannath Singh had left behind his widow, who was a Class I female heir. Equally, upon the application of explanation 1 to the said Section, a partition must be said to have been effected by operation of law immediately before his death. This being the case, it is clear that the plaintiff would be entitled to a share on this partition taking place in 1973. We were informed, however, that the plaintiff was born only in 1977, and that, for this reason, (his birth being after his grandfather’s death) obviously no such share could be allotted to him. Also, his case in the suit filed by him is not that he is entitled to this share but that he is entitled to a 1/8th share on dividing the joint family property between 8 co-sharers in 1998. What has therefore to be seen is whether the application of Section 8, in 1973, on the death of Jagannath Singh would make the joint family property in the hands of the father, uncles and the plaintiff no longer joint family property after the devolution of Jagannath Singh’s share, by application of Section 8, among his Class I heirs. This question would have to be answered with reference to some of the judgments of this Court.

16. In Commissioner of Wealth Tax, Kanpur and Others v. Chander Sen and Others, (1986) 3 SCC 567, a partial partition having taken place in 1961 between a father and his son, their business was divided and thereafter carried on by a partnership firm consisting of the two of them. The father died in 1965, leaving behind him his son and two grandsons, and a credit balance in the account of the firm. This Court had to answer as to whether credit balance left in the account of the firm could be said to be joint family property after the father’s share had been distributed among his Class I heirs in accordance with Section 8 of the Act.

17. This Court examined the legal position and ultimately approved of the view of 4 High Courts, namely, Allahabad, Madras, Madhya Pradesh and Andhra Pradesh, while stating that the Gujarat High Court’s view contrary to these High Courts, would not be correct in law. After setting out the various views of the five High Courts mentioned, this Court held:

“It is necessary to bear in mind the preamble to the Hindu Succession Act, 1956. The preamble states that it was an Act to amend and codify the law relating to intestate succession among Hindus.

In view of the preamble to the Act i.e. that to modify where necessary and to codify the law, in our opinion it is not possible when Schedule indicates heirs in Class I and only includes son and does not include son's son but does include son of a predeceased son, to say that when son inherits the property in the situation contemplated by Section 8 he takes it as karta of his own undivided family. The Gujarat High Court's view noted above, if accepted, would mean that though the son of a predeceased son and not the son of a son who is intended to he excluded under Section 8 to inherit, the latter would by applying the old Hindu law get a right by birth of the said property contrary to the scheme outlined in Section 8. Furthermore as noted by the Andhra Pradesh High Court that the Act makes it clear by Section 4 that one should look to the Act in case of doubt and not to the pre-existing Hindu law. It would be difficult to hold today the property which devolved on a Hindu under Section 8 of the Hindu Succession Act would be HUF in his hand vis-à-vis his own son; that would amount to creating two classes among the heirs mentioned in Class I, the male heirs in whose hands it will be joint Hindu family property and vis-à-vis son and female heirs with respect to whom no such concept could be applied or contemplated. It may be mentioned that heirs in Class I of Schedule under Section 8 of the Act included widow, mother, daughter of predeceased son etc.

Before we conclude we may state that we have noted the observations of Mulla's Commentary on Hindu Law, 15th Edn. dealing with Section 6 of the Hindu Succession Act at pp. 924-26 as well as Mayne's on Hindu Law, 12th Edn., pp. 918-19.

The express words of Section 8 of the Hindu Succession Act, 1956 cannot be ignored and must prevail. The preamble to the Act reiterates that the Act is, inter alia, to “amend” the law, with that background the express language which excludes son's son but includes son of a predeceased son cannot be ignored.

In the aforesaid light the views expressed by the Allahabad High Court, the Madras High Court, the Madhya Pradesh High Court, and the Andhra Pradesh High Court, appear to us to be correct. With respect we are unable to agree with the views of the Gujarat High Court noted hereinbefore.” [at paras 21- 25]

18. In Yudhishter v. Ashok Kumar, (1987) 1 SCC 204 at page 210, this Court followed the law laid down in Chander Sen’s case.

19. In Bhanwar Singh v. Puran, (2008) 3 SCC 87, this Court followed Chander Sen’s case and the various judgments following Chander Sen’s case. This Court held:-

“The Act brought about a sea change in the matter of inheritance and succession amongst Hindus. Section 4 of the Act contains a non obstante provision in terms whereof any text, rule or interpretation of Hindu Law or any custom or usage as part of that law in force immediately before the commencement of the Act, ceased to have effect with respect to any matter for which provision is made therein save as otherwise expressly provided.

Section 6 of the Act, as it stood at the relevant time, provided for devolution of interest in the coparcenary property. Section 8 lays down the general rules of succession that the property of a male dying intestate devolves according to the provisions of the Chapter as specified in Clause (1) of the Schedule. In the Schedule appended to the Act, natural sons and daughters are placed as Class I heirs but a grandson, so long as father is alive, has not been included. Section 19 of the Act provides that in the event of succession by two or more heirs, they will take the property per capita and not per stirpes, as also tenants-in-common and not as joint tenants.

Indisputably, Bhima left behind Sant Ram and three daughters. In terms of Section 8 of the Act, therefore, the properties of Bhima devolved upon Sant Ram and his three sisters. Each had 1/4th share in the property. Apart from the legal position, factually the same was also reflected in the record-of- rights. A partition had taken place amongst the heirs of Bhima.

Although the learned first appellate court proceeded to consider the effect of Section 6 of the Act, in our opinion, the same was not applicable in the facts and circumstances of the case. In any event, it had rightly been held that even in such a case, having regard to Section 8 as also Section 19 of the Act, the properties ceased to be joint family property and all the heirs and legal representatives of Bhima would succeed to his interest as tenants-in-common and not as joint tenants. In a case of this nature, the joint coparcenary did not continue.” (at paras 12-15)

20. Some other judgments were cited before us for the proposition that joint family property continues as such even with a sole surviving coparcener, and if a son is born to such coparcener thereafter, the joint family property continues as such, there being no hiatus merely by virtue of the fact there is a sole surviving coparcener. Dharma Shamrao Agalawe v. Pandurang Miragu Agalawe (1988) 2 SCC 126, Sheela Devi v. Lal Chand, (2006) 8 SCC 581, and Rohit Chauhan v. Surinder Singh (2013) 9 SCC 419, were cited for this purpose. None of these judgments would take the appellant any further in view of the fact that in none of them is there any consideration of the effect of Sections 4, 8 and 19 of the Hindu Succession Act. The law, therefore, insofar as it applies to joint family property governed by the Mitakshara School, prior to the amendment of 2005, could therefore be summarized as follows:-

(i) When a male Hindu dies after the commencement of the Hindu Succession Act, 1956, having at the time of his death an interest in Mitakshara coparcenary property, his interest in the property will devolve by survivorship upon the surviving members of the coparcenary (vide Section6).

(ii) To proposition (i), an exception is contained in Section 30 Explanation of the Act, making it clear that notwithstanding anything contained in the Act, the interest of a male Hindu in Mitakshara coparcenary property is property that can be disposed of by him by will or other testamentary disposition.

(iii) A second exception engrafted on proposition (i) is contained in the proviso to Section 6, which states that if such a male Hindu had died leaving behind a female relative specified in Class I of the Schedule or a male relative specified in that Class who claims through such female relative surviving him, then the interest of the deceased in the coparcenary property would devolve by testamentary or intestate succession, and not by survivorship.

(iv) In order to determine the share of the Hindu male coparcener who is governed by Section 6 proviso, a partition is effected by operation of law immediately before his death. In this partition, all the coparceners and the male Hindu’s widow get a share in the joint family property.

(v) On the application of Section 8 of the Act, either by reason of the death of a male Hindu leaving self-acquired property or by the application of Section 6 proviso, such property would devolve only by intestacy and not survivorship.

(vi) On a conjoint reading of Sections 4, 8 and 19 of the Act, after joint family property has been distributed in accordance with section 8 on principles of intestacy, the joint family property ceases to be joint family property in the hands of the various persons who have succeeded to it as they hold the property as tenants in common and not as joint tenants.

21. Applying the law to the facts of this case, it is clear that on the death of Jagannath Singh in 1973, the joint family property which was ancestral property in the hands of Jagannath Singh and the other coparceners, devolved by succession under Section 8 of the Act. This being the case, the ancestral property ceased to be joint family property on the date of death of Jagannath Singh, and the other coparceners and his widow held the property as tenants in common and not as joint tenants. This being the case, on the date of the birth of the appellant in 1977 the said ancestral property, not being joint family property, the suit for partition of such property would not be maintainable. The appeal is consequently dismissed with no order as to costs.

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DELHI HIGH COURT

Vinod Chopra vs Vasudev Chopra & Anr. on 22 March, 2016      

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA     

To be referred to the Reporter or not? 

VALMIKI J. MEHTA, J (ORAL)       

I. A. No. 2323/2013 (u/O VI Rule 17 CPC by plaintiff)    
1. Counsel for the plaintiff states that he does not press this application because plaintiff wants to file a fresh application under Order VI Rule 17 of the Code of Civil Procedure, 1908 (CPC). The application is therefore allowed to be withdrawn, however, since suit is being decided today, there is no reason to grant adjournment to allow filing of the application under Order VI Rule 17 CPC to the plaintiff. The application is therefore disposed of.      

2. Learned counsel for the defendants on this application of the defendants under Order VII Rule 11 CPC argues that the plaint does not disclose the cause of action and also that the suit is barred by Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as the Act‟), and accordingly, it is prayed that the application which is filed under Order VII Rule 11 CPC by the defendants be treated as an application under Order XII Rule 6 CPC because the title of the application cannot change the substance of the same, inasmuch as, the suit on the admitted facts as stated in the plaint is liable to be dismissed.        

3. A reading of the suit plaint shows that the disputes are with respect to the property bearing no. J-5/10, Rajouri Garden, New Delhi situated on a plot admeasuring 200 sq. yds. This suit property as per the plaint was purchased by the grandfather of the plaintiff Sh. Tara Chand Chopra in the name of his son Sh. Vasudev Chopra and who is defendant no.1 in the present suit. Putting it in other words Sh. Tara Chand Chopra was the father of Sh. Vasudev Chopra/defendant no.1 and grandfather of the plaintiff. The plaintiff and the defendant no.2 are the two sons of defendant no.1 and the grandsons of late Sh. Tara Chand Chopra. As per the suit plaint, property was purchased in the year 1954/1958 by Sh. Tara Chand Chopra in the name of defendant no.1. The suit plaint states that Sh. Tara Chand Chopra died in May, 1964 and before that it was Sh. Tara Chand Chopra who constructed on the suit property with his own funds, inasmuch as, the suit property was purchased when the defendant no.1 was around 26 years of age. Plaintiff claims that the suit property is therefore an ancestral property belonging to the grandfather Sh. Tara Chand Chopra, and therefore, the plaintiff has a right in this ancestral property.  

4. I have had an occasion to consider this aspect in the judgment delivered in the case of Sunny (Minor) & Anr. Vs. Raj Singh & Ors., 225(2015) DLT 211. In this judgment, I have held by referring to the ratio of the judgment of the Supreme Court in the case of Yudhishter Vs. Ashok Kumar, (1987) 1 SCC 204 that inheritance of ancestral property after 1956 does not mean inheritance is of an HUF property but inheritance will be as a self acquired property in view of Section 8 of the Hindu Succession Act, 1956. The relevant paras of the judgment in the case of Sunny (Minor) & Anr. (supra) are paras 6 to 9 and 14 and which paras read as under:-       

"6. At the outset, it is necessary to refer to the ratio of the judgment of the Supreme Court in the case of Yudhishter Vs. Ashok Kumar, (1987) 1 SCC 204 and in para 10 of the said judgment the Supreme Court has made the necessary observations with respect to when HUF properties can be said to exist before passing of the Hindu Succession Act, 1956 or after passing of the Act in 1956. This para reads as under:-

"10. This question has been considered by this Court in Commissioner of Wealth Tax, Kanpur and Ors. v. Chander Sen and Ors. MANU / SC / 0265 / 1986MANU / SC / 0265 / 1986 : [1986]161ITR370(SC) where one of us (Sabyasachi Mukharji, J) observed that under the Hindu Law, the moment a son is born, he gets a share in father's property and become part of the coparcenary. His right accrues to him not on the death of the father or inheritance from the father but with the very fact of his birth. Normally, therefore whenever the father gets a property from whatever source, from the grandfather or from any other source, be it separated property or not, his son should have a share that and it will become part of the joint Hindu family of his son and grandson and other members who form joint Hindu family with him. This Court observed that this position has been affected by Section 8 of the Hindu Succession Act, 1956 and, therefore, after the Act, when the son inherited the property in the situation contemplated by Section 8, he does not take it as Kar of his own undivided family but takes it in his individual capacity. At pages 577 to 578 of the report, this Court dealt with the effect of Section 6 of the Hindu Succession Act, 1956 and the commentary made by Mulla, 15th Edn. pages 924-926 as well as Mayne's on Hindu Law 12th Edition pages 918-919. Shri Banerji relied on the said observations of Mayne on 'Hindu Law', 12th Edn. at pages 918-919. This Court observed in the aforesaid decision that the views expressed by the Allahabad High Court, the Madras High Court the Madhya Pradesh High Court and the Andhra Pradesh High Court appeared to be correct and was unable to accept the views of the Gujarat High Court. To the similar effect is the observation of learned author of Mayne's Hindu Law, 12th Edn. page 919. In that view of the matter, it would be difficult to hold that property which developed on a Hindu under Section 8 of the Hindu Succession Act, 1956 would be HUF in his hand vis-a-vis his own sons. If that be the position then the property which developed upon the father of the respondent in the instant case on the demise of his grandfather could not be said to be HUF property. If that is so, then the appellate authority was right in holding that the respondent was a licensee of his father in respect of the ancestral house." (emphasis is mine) 7(i). As per the ratio of the Supreme Court in the case of Yudhishter (supra) after passing of the Hindu Succession Act, 1956 the position which traditionally existed with respect to an automatic right of a person in properties inherited by his paternal predecessors-in-interest from the latter’s paternal ancestors upto three degrees above, has come to an end. Under the traditional Hindu Law whenever a male ancestor inherited any property from any of his paternal ancestors upto three degrees above him, then his male legal heirs upto three degrees below him had a right in that property equal to that of the person who inherited the same. Putting it in other words when a person, A‟ inherited property from his father or grandfather or great grandfather then the property in his hand was not to be treated as a self-acquired property but was to be treated as an HUF property in which his son, grandson and great grandson had a right equal to „A‟. After passing of the Hindu Succession Act, 1956, this position has undergone a change and if a person after 1956 inherits a property from his paternal ancestors, the said property is not an HUF property in his hands and the property is to be taken as a self-acquired property of the person who inherits the same. There are two exceptions to a property inherited by such a person being and remaining self-acquired in his hands, and which will be either an HUF and its properties was existing even prior to the passing of the Hindu Succession Act, 1956 and which Hindu Undivided Family continued even after passing of the Hindu Succession Act, 1956, and in which case since HUF existed and continued before and after 1956, the property inherited by a member of an HUF even after 1956 would be HUF property in his hands to which his paternal successors-in-interest upto the three degrees would have a right. The second exception to the property in the hands of a person being not self-acquired property but an HUF property is if after 1956 a person who owns a self-acquired property throws the self-acquired property into a common hotchpotch whereby such property or properties thrown into a common hotchpotch become Joint Hindu Family properties/HUF properties. In order to claim the properties in this second exception position as being HUF/Joint Hindu Family properties/properties, a plaintiff has to establish to the satisfaction of the court that when (i.e date and year) was a particular property or properties thrown in common hotchpotch and hence HUF/Joint Hindu Family created.         

(ii) This position of law alongwith facts as to how the properties are HUF properties was required to be stated as a positive statement in the plaint of the present case, but it is seen that except uttering a mantra of the properties inherited by defendant no.1 being „ancestral‟ properties and thus the existence of HUF, there is no statement or a single averment in the plaint as to when was this HUF which is stated to own the HUF properties came into existence or was created ie whether it existed even before 1956 or it was created for the first time after 1956 by throwing the property/properties into a common hotchpotch. This aspect and related aspects in detail I am discussing hereinafter.

8 (i). A reference to the plaint shows that firstly it is stated that Sh. Tek Chand who is the father of the defendant no.1 (and grandfather of Sh. Harvinder Sejwal and defendants no.2 to 4) inherited various ancestral properties which became the basis of the Joint Hindu Family properties of the parties as stated in para 15 of the plaint. In law there is a difference between the ancestral property/properties and the Hindu Undivided Family property/properties for the pre 1956 and post 1956 position as stated above because inheritance of ancestral properties prior to 1956 made such properties HUF properties in the hands of the person who inherits them, but if ancestral properties are inherited by a person after 1956, such inheritance in the latter case is as self-acquired properties unless of course it is shown in the latter case that HUF existed prior to 1956 and continued thereafter. It is nowhere pleaded in the plaint that when did Sh. Tek Chand father of Sh. Gugan Singh expire because it is only if Sh. Tek Chand father of Sh. Gugan Singh/defendant no.1 had expired before 1956 only then the property which was inherited by Sh. Gugan Singh from his father Sh. Tek Chand would bear the character of HUF property in the hands of Sh. Gugan Singh so that his paternal successors-in- interest became co-parceners in an HUF. Even in the evidence led on behalf of the plaintiffs, and which is a single affidavit by way of evidence filed by the mother of the plaintiffs Smt. Poonam as PW1, no date is given of the death of Sh. Tek Chand the great grandfather of the plaintiffs. In the plaint even the date of the death of the grandfather of the plaintiffs Sh. Gugan Singh is missing. As already stated above, the dates/years of the death of Sh. Tek Chand and Sh. Gugan Singh were very material and crucial to determine the automatic creation of HUF because it is only if Sh. Tek Chand died before 1956 and Sh. Gugan Singh inherited the properties from Sh. Tek Chand before 1956 that the properties in the hands of Sh. Gugan Singh would have the stamp of HUF properties. Therefore, in the absence of any pleading or evidence as to the date of the death of Sh. Tek Chand and consequently inheriting of the properties of Sh. Tek Chand by Sh. Gugan Singh, it cannot be held that Sh. Gugan Singh inherited the properties of Sh. Tek Chand prior to 1956.   

(ii) In fact, on a query put to the counsels for the parties, counsels for parties state before this Court that Sh. Gugan Singh expired in the year 2008 whereas Sh. Tek Chand died in 1982. Therefore, if Sh. Tek Chand died in 1982, inheriting of properties by Sh. Gugan Singh from Sh. Tek Chand would be self-acquired in the hands of Sh. Gugan Singh in view of the ratio of the Supreme Court in the case of Yudhister (supra) inasmuch as there is no case of the plaintiffs of HUF existing before 1956 or having been created after 1956 by throwing of property/properties into common hotchpotch either by Sh. Tek Chand or by Sh. Gugan Singh/defendant no.1. There is not even a whisper in the pleadings of the plaintiffs, as also in the affidavit by way of evidence filed in support of their case of PW1 Smt. Poonam, as to the specific date/period/month/year of creation of an HUF by Sh. Tek Chand or Sh. Gugan Singh after 1956 throwing properties into common hotchpotch.         

(iii) The position of HUF otherwise existing could only be if it was proved on record that in the lifetime of Sh. Tek Chand a Hindu Undivided Family before 1956 existed and this HUF owned properties include the property bearing no.93, Village Adhichini, Hauz Khas. However, a reference to the affidavit by way of evidence filed by PW1 does not show any averments made as to any HUF existing of Sh. Tek Chand, whether the same be pre 1956 or after 1956. Only a self-serving statement has been made of properties of Sh. Gugan Singh being, ancestral‟ in his hands, having been inherited by him from Sh. Tek Chand, and which statement, as stated above, does not in law mean that the ancestral property is an HUF property.      

9. Onus of important issues such as issue nos.1 and 2 cannot be discharged by oral self-serving averments in deposition, once the case of the plaintiffs is denied by the defendants, and who have also filed affidavit of DW1 Sh. Ram Kumar/defendant no.2 in the amended memo of parties for denying the case of the plaintiffs. An HUF, as already stated above, could only have been created by showing creation of HUF after 1956 by throwing property/properties in common hotchpotch or existing prior to 1956, and once there is no pleading or evidence on these aspects, it cannot be held that any HUF existed or was created either by Sh. Tek Chand or Sh. Gugan Singh. In my opinion, therefore, plaintiffs have miserably failed to discharge the onus of proof which was upon them that there existed an HUF and its properties, and the plaintiffs much less have proved on record that all/any properties as mentioned in para 15 of the plaint are/were HUF properties.    

14. Plaintiffs thus have failed to prove that there existed an HUF before 1956 on account of Sh. Tek Chand having inherited properties before 1956 and that the plaintiffs have further failed to prove that HUF was created after 1956 on account of throwing of property/properties into common hotchpotch either by Sh. Tek Chand or by Sh. Gugan Singh/defendant no.1. Accordingly, it is held that there is no HUF and there are no properties of HUF in which late Sh. Harvinder Sejwal had a share. The entire discussion given above for existence/creation of HUF and plaintiffs failing to discharge the onus of proof upon them will similarly apply qua the alleged family settlement pleaded by the plaintiffs because once again no credible evidence has been led except self-serving statements and which cannot be taken as discharge of the onus. In his cross-examination on 01.04.2013, the defendant no.3 as DW1 has denied the suggestion that there was any family settlement. It is therefore held that plaintiffs have failed to prove issue nos.1 and 2."       

5. Clearly therefore, mere averment of property being ancestral property will not give plaintiff-a grandson a right to the property once the father defendant no.1/Sh. Vasudev Chopra is alive and who admittedly inherited the property on the death of late Sh. Tara Chand Chopra as a sole legal heir of late Sh. Tara Chand Chopra and thus as a self-acquired property of Sh. Vasudev Chopra.

6. The judgment in the case of Sunny (Minor) & Ors has been referred and followed by me in the later case of Sh. Surender Kumar Vs. Sh. Dhani Ram and Others, 227 (2016) DLT 217. The relevant paras of this judgment are paras 4, 5, 7 and 9 and which read as under:-    

"4. Plaintiff claims that as a son of defendant no.1 and as a grandson of late Sh. Jage Ram, plaintiff is entitled to his share as a coparcener in the aforesaid suit properties on the ground that the properties when they were inherited by late Sh. Jage Ram were joint family properties, and therefore, status as such of these properties as HUF properties have continued thereby entitling the plaintiff his rights in the same as a coparcener.

5. The Supreme Court around 30 years back in the judgment in the case of Commissioner of Wealth Tax, Kanpur and Others Vs. Chander Sen and Others, (1986) 3 SCC 567, held that after passing of the Hindu Succession Act, 1956 the traditional view that on inheritance of an immovable property from paternal ancestors up to three degrees, automatically an HUF came into existence, no longer remained the legal position in view of Section 8 of the Hindu Succession Act, 1956. This judgment of the Supreme Court in the case of Chander Sen (supra) was thereafter followed by the Supreme Court in the case of Yudhishter Vs. Ashok Kumar, (1987) 1 SCC 204 wherein the Supreme Court reiterated the legal position that after coming into force of Section 8 of the Hindu Succession Act, 1956, inheritance of ancestral property after 1956 does not create an HUF property and inheritance of ancestral property after 1956 therefore does not result in creation of an HUF property.

7. On the legal position which emerges pre 1956 i.e before passing of the Hindu Succession Act, 1956 and post 1956 i.e after passing of the Hindu Succession Act, 1956, the same has been considered by me recently in the judgment in the case of Sunny (Minor) & Anr. vs. Sh. Raj Singh & Ors. CS(OS) No.431/2006 decided on 17.11.2015. In this judgment, I have referred to and relied upon the ratio of the judgment of the Supreme Court in the case of Yudhishter (supra) and have essentially arrived at the following conclusions:-        

(i) If a person dies after passing of the Hindu Succession Act, 1956 and there is no HUF existing at the time of the death of such a person, inheritance of an immovable property of such a person by his successors-in-interest is no doubt inheritance of an „ancestral‟ property but the inheritance is as a self- acquired property in the hands of the successor and not as an HUF property although the successor(s) indeed inherits „ancestral‟ property i.e a property belonging to his paternal ancestor.         

(ii) The only way in which a Hindu Undivided Family/joint Hindu family can come into existence after 1956 (and when a joint Hindu family did not exist prior to 1956) is if an individual‟s property is thrown into a common hotchpotch. Also, once a property is thrown into a common hotchpotch, it is necessary that the exact details of the specific date/month/year etc of creation of an HUF for the first time by throwing a property into a common hotchpotch have to be clearly pleaded and mentioned and which requirement is a legal requirement because of Order VI Rule 4 CPC which provides that all necessary factual details of the cause of action must be clearly stated. Thus, if an HUF property exists because of its such creation by throwing of self- acquired property by a person in the common hotchpotch, consequently there is entitlement in coparceners etc to a share in such HUF property.      

(iii) An HUF can also exist if paternal ancestral properties are inherited prior to 1956, and such status of parties qua the properties has continued after 1956 with respect to properties inherited prior to 1956 from paternal ancestors. Once that status and position continues even after 1956; of the HUF and of its properties existing; a coparcener etc will have a right to seek partition of the properties.

(iv) Even before 1956, an HUF can come into existence even without inheritance of ancestral property from paternal ancestors, as HUF could have been created prior to 1956 by throwing of individual property into a common hotchpotch. If such an HUF continues even after 1956, then in such a case a coparcener etc of an HUF was entitled to partition of the HUF property.     

9. I would like to further note that it is not enough to aver a mantra, so to say, in the plaint simply that a joint Hindu family or HUF exists. Detailed facts as required by Order VI Rule 4 CPC as to when and how the HUF properties have become HUF properties must be clearly and categorically averred. Such averments have to be made by factual references qua each property claimed to be an HUF property as to how the same is an HUF property, and, in law generally bringing in any and every property as HUF property is incorrect as there is known tendency of litigants to include unnecessarily many properties as HUF properties, and which is done for less than honest motives. Whereas prior to passing of the Hindu Succession Act, 1956 there was a presumption as to the existence of an HUF and its properties, but after passing of the Hindu Succession Act, 1956 in view of the ratios of the judgments of the Supreme Court in the cases of Chander Sen (supra) and Yudhishter (supra) there is no such presumption that inheritance of ancestral property creates an HUF, and therefore, in such a post 1956 scenario a mere ipse dixit statement in the plaint that an HUF and its properties exist is not a sufficient compliance of the legal requirement of creation or existence of HUF properties inasmuch as it is necessary for existence of an HUF and its properties that it must be specifically stated that as to whether the HUF came into existence before 1956 or after 1956 and if so how and in what manner giving all requisite factual details. It is only in such circumstances where specific facts are mentioned to clearly plead a cause of action of existence of an HUF and its properties, can a suit then be filed and maintained by a person claiming to be a coparcener for partition of the HUF properties."

7. In view of the ratios of the judgments in the cases of Sunny (Minor) & Anr. (supra) and Sh. Surender Kumar (supra), plaintiff on the admitted facts as stated in the plaint has no cause of action or right to claim relief for a share in the suit property which is inherited by his father Sh. Vasudev Chopra from plaintiff‟s paternal grandfather Sh. Tara Chand Chopra as a self acquired property of Sh. Vasudev Chopra.

8. The ratio of the judgment of the Supreme Court in the case of Yudhishter (supra) has been followed recently by the Supreme Court in its judgment delivered on 2.3.2016 in the case of Uttam Vs. Saubhagh Singh and Others, Civil Appeal No. 2360/2016 by extending the application to even coparcenary property inherited by a male Hindu from his paternal ancestor.    

9. The suit is also barred by Section 4(1) of the Act, inasmuch as, as per the admitted facts stated in the plaint the suit property was purchased by Sh. Tara Chand Chopra in the name of his son Sh. Vasudev Chopra/defendant no.1. Once the property is purchased in the name of defendant no.1, defendant no.1 becomes the sole owner of the suit property unless the plaintiff is able to bring out a case within the exceptions to Section 4(1) of the Act, which are contained in Section 4(3) of the Act of existence of HUF or property being purchased in trust. The plaint does not show existence of any HUF being created after 1956 or HUF existing prior to 1956 which continued after 1956. Also, the plaint does not make any averment with respect to the property being purchased in trust by the grandfather Sh. Tara Chand Chopra in the name of his son Sh. Vasudev Chopra/defendant no.1. The suit is therefore barred by the provision of Section 4(1) of the Act.     

10. In view of the above admitted facts, no legal cause of action arises, and the suit is also barred by Section 4(1) of the Benami Transactions (Prohibition) Act, 1988. The suit is thus dismissed by applying the provision of Order XII Rule 6 CPC. Parties are left to bear their own costs.

Judgments On Family Settlement

S. No.	Case	Court	Citation
1	Al. Ramanathan vs Income-Tax Officer	ITAT - Madras	1991 37 ITD 55 Mad
2	CGT vs D. Nagrirathinam	Madras High Court	2003 129 TAXMAN 822 Mad
3	CGT vs S.N. Zaman And S.M. Elahi	Gauhati High Court	1996 221 ITR 842 Gauhati
4	Commissioner of Income-Tax vs Al. Ramanathan	Madras High Court	2000 245 ITR 494 Mad
5	H.H. Maharani Manekaraje Pawar vs Income-Tax Officer	ITAT - Indore	1986 15 ITD 545 Indore
6	Kale & Others vs Deputy Director Of Consolidation	Supreme Court of India	1976 AIR 807, 1976 SCR (2) 202
7	Lakshmi Ammal And Ors. vs Chakravahthi And Ors.	Supreme Court of India	AIR 1999 SC 3363, 1999 (1) CTC 256, (1999) 1 SCC 235
8	Mohd. Amin And Others vs Vakil Ahmed And Others	Supreme Court of India	1952 AIR 358, 1952 SCR 1133
9	M/S. Taraknath & Anr vs Sushil Chandra Dey	Supreme Court of India	1996 SCC (4) 697, JT 1996 (5) 272
10	Ram Charan Das vs Girjanandini Devi And Ors	Supreme Court of India	1966 AIR 323, 1965 SCR (3) 841
11	Roshan Singh & Ors vs Zile Singh & Ors	Supreme Court of India	1988 AIR 881, 1988 SCR (2)1106
12	S. Shanmugam Pillai And Ors vs K. Shanmugam Pillai And Ors	Supreme Court of India	1972 AIR 2069, 1973 SCR (1) 570
13	Shambhu Prasad Singh vs Mst. Phool Kumari & Ors	Supreme Court of India	1971 AIR 1337, 1971 SCR 181
14	Sk.Sattar Sk.Mohd.Choudhari vs Gundappa Amabadas Bukate	Supreme Court of India	Civil Appeal No. 6972 of 1996
15	Tek Bahadur Bhujil vs Debi Singh Bhujil And Ors.	Supreme Court of India	AIR 1966 SC 292
16	Ziauddin Ahmed vs Commissioner Of Gift-Tax	Gauhati High Court	1976 102 ITR 253 Gauhati

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