By DR. Anup P. Shah
Chartered Accountant
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 1st 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 18th 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 2nd 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 1st
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!
