THE ANCESTRAL PROPERTY CONUNDRUM

INTRODUCTION

Hindu Law is often difficult to understand because most of it
is uncodified and based on customs and rituals, while some of it is based on
enactments. One feature of Hindu Law which attracts a lot of attention is “ancestral
property”. After the 2005 amendment to the Hindu Succession Act, 1956 this
issue has gained even more traction. One controversy in this area is whether
ancestral property received by a person can be transferred away.

WHAT IS ANCESTRAL PROPERTY?

Under the Hindu Law, the term “ancestral property” as
generally understood means any property inherited from three generations above
of male lineage, i.e., from the father, grandfather, great grandfather. The
Punjab and Haryana High Court has held that property inherited by a Hindu male
from his father, grandfather or great grandfather is ancestral for him – Hardial
Singh vs. Nahar Singh AIR 2010 (NOC) 1087 (P&H). Hence, property
inherited from females, such as mothers, etc., would not fall within the
purview of ancestral property. The same High Court, in the case of Harendar
Singh vs. State (2008) 3 PLR 183 (P&H), has held that property
received by a mother from her sons is not ancestral in nature. Further, three
generations downwards automatically get a right in such ancestral property by
virtue of being born in the family. Thus, the son, grandson and great grandson
of a Hindu all have an automatic right in ancestral property which is deemed to
be joint property. This view has also been held by the Privy Council in Muhammad
Hussain Khan vs. Babu Kishva Nandan Sahai, AIR 1937 PC 238.

View-1: Ancestral property cannot be alienated

One commonly accepted view in relation to ancestral property
is that if the person inheriting it has sons, grandsons or great grandsons,
then it becomes joint family property in his hands and his lineal descendants
automatically become coparceners along with him. In Ganduri Koteshwaramma
vs. Chakiri Yanadi, (2011) 9 SCC 788, the Court held that the effect of
the 2005 amendment to the Hindu Succession Act was that the daughter of a
coparcener had the same rights and liabilities in the coparcenary property as
she would have had if she had been a son and this position was unambiguous and
unequivocal. Thus, on and from 9th September, 2005, according to this view, the
daughter would also be entitled to a share in the ancestral property and would
become a coparcener as if she had been a son.

A corollary of property becoming ancestral property is that
it cannot be willed away or alienated in any other manner by the person who
inherits it. Thus, if a person receives ancestral property and he has either a
son and / or a daughter then he would not be entitled to transfer such ancestral
property other than to his children. Hence, he cannot under his Will give it to
his son in preference over his daughter or vice versa. This has been the
generally prevalent view when it comes to ancestral property as modified by the
Hindu Succession Act amendment which placed daughters on an equal footing with
sons. Of course, if a person inherits ancestral property and he has no lineal
descendants up to three degrees downwards, male or female, then in any event he
is free to do what he wants with such property. Further, this concept only
applies to inheritance of property, i.e., property received on intestate
succession of the deceased.

JURISPRUDENCE ON THE SUBJECT

This concept of ancestral
property automatically becoming joint coparcenary property has undergone
significant changes. The Supreme Court in the case of CWT vs. Chander Sen
(1986) 161 ITR 370 (SC) examined the issue of whether the income /
asset which a son inherits from his father when separated by partition should
be assessed as income of the HUF of the son or as his individual income /
wealth? The Court referred to the effect of section 8 of the Hindu Succession
Act, 1956 which lays down the general rules of succession in the case of males.
The first rule is that the property of a male Hindu dying intestate shall
devolve according to the provisions of chapter II and class I of the schedule
provides that if there is a male heir of class I, then upon the heirs mentioned
in class I of the schedule. The heirs mentioned in class I of the schedule are
son, daughter, etc., including the son of a predeceased son but does not
include specifically the grandson, being a son of a son living.

Therefore, the short
question is, when the son as heir of class I of the schedule inherits the
property, does he do so in his individual capacity or does he do so as karta
of his own undivided family? The Court held that in view of the preamble to the
Act, i.e., that to modify where necessary and to codify the law, it was not
possible that when schedule indicates heirs in class I 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 Act makes it clear by section 4 that one
should look to the Act in case of doubt and not refer to the pre-existing Hindu
law. Thus, it held that the son succeeded to the asset in his individual
capacity and not as a karta of his HUF.

Again, in Yudhishter vs. Ashok Kumar, 1987 AIR 558,
the Supreme Court followed its aforesaid earlier decision and held that it
would be difficult to hold that property which devolved on a Hindu under
section 8 of the Hindu Succession Act, 1956 would be HUF property in his hand
vis-a-vis his own sons. Thus, it held that the property which devolved upon the
father of the respondent in that case on the demise of his grandfather could
not be said to be HUF property.

Once again, in Bhanwar Singh vs. Puran (2008) 3 SCC 87,
it was held that having regard to section 8 of the Act, the properties ceased
to be joint family property and all the heirs and legal representatives of the
deceased 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. The
meaning of joint tenancy is that each co-owner has an undefined right and
interest in property acquired as joint tenants. Thus, no co-owner can say what
is his or her share. One other important feature of a joint tenancy is that
after the death of one of the joint tenants, the property passes by
survivorship to the other joint tenant and not by succession to the heirs of
the deceased co-owner. Whereas tenants-in-common is the opposite of joint
tenancy since the shares are specified and each co-owner in a tenancy in common
can state what share he owns in a property. On the death of a co-owner, his
share passes by succession to his heirs or to the beneficiaries under the Will
and not to the surviving co-owners.

The Supreme Court in Uttam vs. Saubhag Singh, Civil
Appeal 2360/2016 dated 02/03/2016 held that on a conjoint reading of
sections 4, 8 and other provisions 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 succeeded to it and they hold the property as tenants in
common and not as joint tenants.

View-2: Ancestral Property becomes Sole Property

The Delhi High Court has
given a very telling decision and a diametrically opposite view in the case of Surender
Kumar vs. Dhani Ram, CS(OS) No. 1732/2012 dated 18/01/2016.
In this case, the issue was whether the properties of the deceased were HUF
properties in the hands of his legal heirs. The grandson of the deceased
claimed a share as a coparcener in the properties since they were inherited by
his grandfather as joint family properties and hence, they continued to be so.
The Delhi High Court negated this claim and laid down the following principles
of law as regards joint family properties:

(a) Inheritance of
ancestral property after 1956 (the year in which the Hindu Succession Act was
enacted) does not create an HUF property and inheritance of ancestral property
after 1956 therefore does not result in creation of an HUF property;

(b) Ancestral property can
only become an HUF property if inheritance is before 1956 and such HUF property
which came into existence before 1956 continues as such even after 1956;

(c) 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 heirs is no doubt inheritance of an “ancestral property”
but the inheritance is as a self-acquired property in the hands of the legal
heir and not as an HUF property, although the successor(s) indeed inherits
“ancestral property”, i.e., a property which belonged to his ancestor;

(d) The only way in which a
HUF / 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;

(e) 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;

(f) After passing of the
Hindu Succession Act, 1956, if a person 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 self-acquired property of the person who inherits
the same.

Accordingly, the Court held that a mere averment that
properties were ancestral could not make them HUF properties unless it was
pleaded and shown that the grandfather had inherited the same prior to 1956 or
that he had actually created an HUF by throwing his own properties into a
common hotchpotch or family pool. A similar view was expressed by the Delhi
High Court earlier in Sunny (Minor) vs. Raj Singh CS(OS) No. 431/2006;
dated 17/11/2005.

AUTHOR’S VIEW

It is submitted that the
view expressed by the Delhi High Court in the case of Surender Kumar
(supra) is correct. A conjoined reading of the Hindu Succession Act,
1956 and the decisions of the Supreme Court cited above show that the customs
and traditions of Hindu Law have been given a decent burial by the codified Act
of 1956! The law as understood in times of Manusmriti is not what it is today.
Hence, a parent is entitled to bequeath by his Will his ancestral property to
anyone, even if he has a son and / or a daughter. It is not necessary that such
ancestral property must be bequeathed only to his children. The property (even
though received from his ancestors and hence ancestral in that sense) becomes
the self-acquired property of the father on acquisition and he can deal with it
by Will, gift, transfer, etc., in any manner he pleases.

CONCLUSION