THE ANCESTRAL PROPERTY CONUNDRUM RELOADED

Introduction

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. In August, 2019, this Feature had analysed the confusion surrounding the issue of ancestral property, more specifically, whether ancestral property received by a person can be transferred away?

This Feature had then noted that, as regards ancestral property, two views were prevalent.

View-1: Ancestral property cannot be alienated. According to this view, if the person inheriting it has sons, grandsons or great-grandsons, then it automatically becomes joint family property in his hands and his lineal descendants automatically become coparceners along with him. 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.

View-2: Ancestral property becomes self-acquired property in the hands of the person inheriting it. Thus, he can deal with it by Will, gift, transfer, etc., in any manner he pleases.

RECENT DEVELOPMENTS

Subsequent to the publication of this Feature in August, 2019 the Supreme Court has once again analysed the issue of ancestral property. What is interesting to note is that on this burning issue two decisions of the Apex Court were delivered, both of Co-ordinate Benches and both orders delivered on the same day (without reference to one another)! These decisions appear divergent but ultimately due to the facts, the conclusion reached is the same. Let us examine both these decisions.

Case-1: Arshnoor Singh vs. Harpal Kaul, CA 5124/2019, order dated 1^st July, 2019 (SC)

A person had inherited property from his father who died in 1951 and which he, in turn, had inherited from his father. This person tried to sell the property but his son (the appellant before the Supreme Court) petitioned the Court against the same on the grounds that the property was ancestral property and hence he could not sell it on his own. Accordingly, the property was coparcenary / joint family property in which the son had also acquired an interest by birth and hence his father could not sell it as per his wish.

A two-member Bench of the Supreme Court analysed various decisions, such as Yudhishter vs. Ashok Kumar, 1987 AIR 558 on this subject (which were dealt with in detail in the August, 2019 issue of the BCAJ under this Feature). It held that after the Hindu Succession Act, 1956 came into force, the concept of ancestral property has undergone a change. Post-1956, if a person inherited a self-acquired property from his paternal ancestors, the said property became his self-acquired property and did not remain coparcenary property.

However, the Apex Court held that if the succession opened under the old Hindu law, i.e., prior to the commencement of the Hindu Succession Act, 1956, the parties would be governed by Mitakshara law. The property inherited by a male Hindu from his paternal male ancestor would be coparcenary property in his hands vis-à-vis his male descendants up to three degrees below him. The nature of property remained as coparcenary property even after the commencement of the Hindu Succession Act, 1956. Incidentally, the comprehensive decision of the Delhi High Court in the case of Surender Kumar vs. Dhani Ram, CS(OS) No. 1732/2012, dated 18^th January, 2016 had taken the very same view.

The Supreme Court further analysed that in the case on hand, the first owner (i.e., the great-grandfather of the appellant in that case) died intestate in 1951 and hence the succession opened in 1951. This was a time when the Hindu Succession Act was not in force. Hence, the nature of property inherited by the first owner’s son was coparcenary property and thereafter, everyone claiming under him inherited the same as ancestral property. The Court distinguished its earlier ruling in the case of Uttam vs. Saubhag Singh, Civil Appeal 2360/2016, dated 2^nd March, 2016 since that dealt with a case where the succession was opened in 1973 (after the Hindu Succession Act, 1956 came into force), whereas the present case dealt with a situation where the succession was opened in 1951.

The Supreme Court reiterated its earlier decision in the case of Valliammai Achi vs. Nagappa Chettiar, AIR 1967 SC 1153 that once a person obtains a share in an ancestral property, then it is well settled that such share is ancestral property for his male children. They become owners by virtue of their birth. Accordingly, the Supreme Court did not allow the sale by the father to go through since it affected his son’s rights in the property. Thus, the only reason why the Supreme Court upheld the concept of ancestral property was because the succession was opened prior to 1956.

Case-2: Doddamuniyappa vs. Muniswamy, CA No. 7141/2008, order dated 1^st July, 2019 (SC)

This decision of the Supreme Court also pertained to the very same issue. The Supreme Court held that it was well settled and held by it in Smt. Dipo vs. Wassan Singh 1983 (3) SCC 376, that the property inherited from a father by his sons became joint family property in the hands of the sons. Based on this principle, the Supreme Court concluded that property inherited by a person from his grandfather would remain ancestral property and hence, his father could not sell the same. In this case, neither did the Supreme Court refer to its earlier decisions in Uttam vs. Saubhag Singh (Supra) or Yudhishter vs. Ashok Kumar (Supra) nor did it go into the issue of whether the succession was opened prior to 1951. It held as a matter of principle that all ancestral property inherited by a person would continue to be ancestral property for his heirs.

It is humbly submitted that in the light of the above decisions, this view would not be tenable after the enactment of the Hindu Succession Act, 1956. However, based on the facts of the present case, one can ascertain that the first owner died sometime before 1950 and hence it can be concluded that the succession opened prior to 1956. If that be the case, as held in Arshnoor Singh vs. Harpal Kaul (Supra), the property continues to be ancestral in the hands of the heirs. Hence, while the principle of the decision in Doddamuniyappa’s case seems untenable, the conclusion is correct!

AUTHOR’S (FINAL) VIEW

A conjoined reading of the Hindu Succession Act, 1956 and the decisions of the Supreme Court show that the customs and traditions of Hindu Law have been given a decent burial by the codified Act of 1956. It is (once again) submitted that the view expressed by the Delhi High Court in the case of Surender Kumar (Supra) is the most comprehensive exposition on the subject of ancestral property. To reiterate, the important principles laid down by the Delhi High Court are that:

(i)   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;

(ii)  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;

(iii) 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;

(iv) 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 a self-acquired property of the person who inherits the same.

CONCLUSION

In recent times, some newspapers have also joined the confusion bandwagon and have started printing articles suggesting that ancestral property continues as ancestral in the hands of the person inheriting the same. All of these help add fuel to an already raging controversy.

Considering these latest Supreme Court decisions, it is evident that the government needs to urgently amend the Hindu Succession Act en masse and specifically address the burning issue of ancestral property. A piecemeal approach to amendment should be avoided and the entire Act should be replaced with a new one. The Act is over 60 years old and should be substituted by a modern, comprehensive legislation which can prevent litigation. Precious money and time would be saved by doing so. Till that time, we will continue witnessing sequels to this puzzle known as ancestral property!