By Dr. Anup P. Shah
Chartered Accountant
INTRODUCTION
Hindu Law has always been a
very fascinating subject. The fact that it is both codified in some respects
and uncodified in others makes it all the more interesting. The Supreme Court
in the case of M. Arumugam vs. Ammaniammal, CA No. 8642/2009 order dated
8th January, 2020 had occasion to consider a mixed bag of
issues under Hindu Law. Some of the observations made by the Court are very
interesting and have a profound impact on the interpretation of Hindu Law. Let
us understand this decision in more detail and also analyse its implications.
FACTUAL MATRIX
The facts of this case are
quite detailed but are relevant to better appreciate the decision. There was a
Hindu male, his wife, two sons and three daughters. He also had an HUF in which
he (the karta) and his two sons were coparceners. The HUF had certain
property. This was prior to the 2005 amendment to the Hindu Succession Act,
1956 (the Act) and hence the daughters were not coparceners. The karta
died intestate. Accordingly, by virtue of the Act, his share in the HUF was to
be succeeded to by his legal heirs in accordance with the Act, i.e., equally
amongst the six surviving family members. On his death, a Release Deed was
executed in respect of the HUF amongst the two sons, the mother and the
daughters in which the mother and the daughters relinquished all their rights
in the father’s HUF to the two sons. As one of the daughters (the respondent in
this case) was a minor, her mother executed the deed as her natural guardian
for and on her behalf. Similarly, as one of the sons was a minor, the elder son
(the appellant in this case) executed this deed as his guardian.
After
nine years, a Deed of HUF Partition was executed between the two sons in which
the husband of the respondent (who was now a major) acted as a witness.
Thereafter, the two sons were in possession of the erstwhile HUF property in
their own individual, independent capacities. When they sought to sell this
property, the respondent objected to the sale on the grounds that when the
release deed was executed she was a minor and her mother had no authority to
sign it on her behalf. She also contended that she was, in fact, not even aware
of the release deed. Hence, the same was void ab initio and all
subsequent transactions and agreements were also void. Accordingly, she
filed a suit to set aside the transactions.
The trial court dismissed
the suit holding that the mother acted as the natural guardian of the minor
daughter and no steps were taken by the respondent on attaining majority to get
the release deed set aside within the period of limitation of three years. She
then filed an appeal before the Madras High Court which came to the conclusion
that the property in the hands of the legal heirs of the father after his death
was Joint HUF property and the mother could not have acted as the guardian of
the minor. It held that the eldest son on demise of the father became the karta
of the HUF and also the guardian for the share of the minors within the family.
Hence, he could not have executed such a release deed in his favour. It was,
therefore, held that the release deed was void ab initio. Consequently,
the eldest son filed an appeal before the Supreme Court.
It is in the background of
these facts that we can understand the ratio of the Apex Court on
various issues.
WHO CAN BE THE NATURAL GUARDIAN?
The Hindu Minority and
Guardianship Act, 1956 lays down the law relating to minority and guardianship
of Hindus and the powers and duties of the guardians. It overrides any
uncodified Hindu custom, tradition or usage in respect of the minority and
guardianship of Hindus. Under this Act, a guardian means a person who has the
care of the minor or of his property, or both. Further, the term also includes
a natural guardian. The term ‘Natural Guardian’ is of great significance since
most of the provisions of this Act deal with the rights and duties of a natural
guardian and hence it becomes necessary to understand the meaning of this term.
If the minor is a boy or an unmarried girl, then the father and after him the
mother automatically becomes the natural guardian. The natural guardian of a
Hindu minor has the power to do all acts which are necessary or reasonable and
proper for the minor’s benefit or for the realisation, protection or the
benefit of the minor’s estate. The most important restriction placed by the Act
on the natural guardian relates to his immovable property. A natural guardian
cannot without the prior permission of a Court enter into any disposal /
mortgage / lease exceeding five years of his immovable property.
This Act also has a caveat.
It states that a guardian cannot be appointed for the minor’s undivided
interest in a joint HUF property if the property is under the management of an
adult member of the family. Since the interest in an HUF property is not
separate or divisible from the rest of the shares, it is not possible to
segregate the interest of one member from another. The Supreme Court set aside
this provision in Arumugam’s case (Supra) stating that in that
case they were dealing with a situation where all the family members decided to
dissolve the Hindu Undivided Family assuming there was one in existence. Hence,
the exemption had no application.
As regards the plea that
the mother cannot act as the natural guardian and the karta of the HUF
would play both roles, the Apex Court observed that a karta is the
manager of the joint family property. He was not the guardian of the minor
members of the joint family. What the Hindu Minority and Guardianship Act
provided was that the natural guardian of a minor Hindu shall be his guardian
for all intents and purposes except so far as the undivided interest of the
minor in the joint family property was concerned. This meant that the natural
guardian could not dispose of the share of the minor in the joint family
property. The reason for this was that the karta of the joint family
property was the manager of the property. However, this principle would not
apply when a family settlement was taking place between the members of the
joint family. When such a dissolution took place and some of the members
relinquished their share in favour of the karta, it was obvious that the
karta could not also act as the guardian of that minor whose share was
being relinquished in his own (i.e., the karta’s) favour. There would be
an apparent conflict of interest. In such an eventuality, it would be
the mother alone who would be the natural guardian. Accordingly, there was
nothing wrong in the mother acting as the natural guardian of the minor
daughter.
CHALLENGE BY MINOR ON ATTAINING MAJORITY
Section 8 of the Hindu
Minority and Guardianship Act further provides that any disposal and / or
alienation of a minor’s immovable property by her natural guardian in
contravention of the Act is voidable at the instance of the minor. The Supreme
Court held that this meant that the release deed at best became a voidable
document which in terms of section 8 of the Act should have been challenged
within three years of the daughter attaining majority. Since she had failed to
do so, she could not now challenge the same. Thus, the period of limitation of
three years to challenge the document had expired.
Whether
property is joint or self-acquired
The next issue to be
decided by the Supreme Court was that in respect of the interest in the
coparcenary property which was succeeded by the legal heirs, whether it
continued to be HUF property or did it become the self-acquired property of
each heir? The Supreme Court referred to several decisions such as Guruprasad
Khandappa Magdum vs. Hirabai Khandappa Magdum, (1978) 3 SCC 383; CWT vs.
Chander Sen (1986) 3 SCC 567; Appropriate Authority IT vs. M.
Arifulla (2002) 10 SCC 342, etc. to hold that property devolving upon
legal heirs under intestate succession from a Hindu male is the individual
property of the person who inherits the same. It is not HUF property in the
recipient’s hands.
The Court also considered
section 30 of the Hindu Succession Act which clearly lays down that any Hindu
can dispose of his share in an HUF by means of a Will. It held that the
Explanation to section 30 clearly provided that the interest of a male Hindu in
a Mitakshara coparcenary is property capable of being disposed of by him
by a Will. This meant that the law-makers intended that for all purposes the
interest of a male Hindu in Mitakshara coparcenary was to be virtually
like his self-acquired property.
Manner of
owning the property
In this case, on the death
of the father and execution of the subsequent release deed, the two sons ended
up owning the property jointly. The Court referred to section 19 of the Act
which provides that when two or more heirs succeed together to the property of
an intestate, they shall take the property per capita and as tenants in common
and not as joint tenants.
It may be useful to explain
the meaning of these two terms. Although both may appear similar, but in law
there is a vast difference between the two. Succession to property would be
determined depending upon how a property has been acquired. A Joint Tenancy has
certain distinguishing features, such as unity of title, interest and
possession. 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. For
example, X, Y and Z own a building as joint tenants. Z dies. His undivided
share passes on to X and Y. Tenancy 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 / beneficiaries under the Will and not to the
surviving co-owners. If a Will bequeaths a property to two beneficiaries in the
ratio of 60:40, then they are treated as tenants in common.
The Supreme Court concluded
that section 19 clearly indicated that the property was not to be treated as a
joint family property though it may be held jointly by the legal heirs as
tenants in common till the property is divided, apportioned or dealt with in a
family settlement.
Notional
partition on demise of coparcener
The Supreme Court held that
under the Act, on the death of a coparcener a notional partition of the HUF
takes place. This proposition may be elaborated for the benefit of all that
when a coparcener dies, there would be a notional partition of his HUF just
before his death to determine his share in the HUF which is bequeathed by his
Will. Accordingly, on the date prior to the coparcener’s demise, one needs to
work out the number of coparceners and determine each one’s share on that date.
Thus, if there are ten coparceners just before his death, then each would have
a notional 1/10th share.
CONCLUSION
The
Supreme Court overruled the decision of the Madras High Court and upheld the
validity of the release deed. It also held that a mother would be the natural
guardian of the minor. This decision has elaborated on various important issues
relating to Hindu Law. It is an extremely unfortunate situation where for every
key feature of Hindu Law the Supreme Court needs to intervene. Should not the
entire Hindu Law be overhauled and codified in greater detail till such time as
India has a Uniform Civil Code?
