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Joint Hindu Family
Hindu Succession Act, 1956-ss. 4, 8 and 19-Property of father who dies intestate-Whether devolves on son, who separated by partition from his father, in individual capacity or Karta of his HUF. Wealth Tax Act, 1957-ss. 3 and 4-Property inherited under s 8 Hindu Succession Act, 1956-Whether HUF or individual property. Income Tax Act, 1961/Income Tax Act, 1922-Income from as sets inherited by son from father-Whether assessable as individual income. HEADNOTE: Rangi Lal and his son Chander Sen constituted a Hindu undivided family. They had some immovable property and the family business. By a partial partition the HUF business was divided between the two and thereafter it was carried on by a partnership consisting of the two. The house property of the family continued to remain joint. The firm was assessed to income-tax as a registered firm and the two partners were separately assessed in respect of their share of income. The mother and wife of Rangi Lal having pre-deceased him, when he died he left behind him his only son Chander Sen and his grandsons. On his death there was a credit balance of Rs.1,85,043 in his account in the books of the firm. In the wealth tax assessment for the assessment year 1966-67, Chander Sen, who constituted a joint family with his own sons, filed a return of his net-wealth by including the property of the family which u on the death of Rangi Lal passed on to him by survivorship and, also the assets of the business which devolved upon him on the death of his father. The sum of R.S.. l ,85,0 13 standing to the credit of Rangi Lal was, however, not included in the net-wealth of the assessee-family. Similarly, in the wealth tax assessment for the assessment year 1967-68 a sum of Rs.1,82,742 was not included, in the net wealth of the assessee family. It was contended that these amounts devolved on Chander Sen 255 in his individual capacity and were not the property of the assessee family. The Wealth-tax officer did not accept this contention and held that these sums also belonged to the assessee-family. A sum of Rs.23,330 was also credited to the account of late Rangi Lal on account of interest accruing on his credit balance. In the proceedings under the Income Tax Act for the assessment year 1367-68 this sum was claimed as deduction on the same ground. The Income-tax officer disallowed the claim on the ground that it was a payment made by Chander Sen to himself. On appeal, the Appellate Assistant Commissioner of Income-tax accepted the assessee’s claim in full and held that the capital in the name of Rangi Lal devolved on Chander Sen in his individual capacity and as such was not to be included in the wealth of the assessee family. The sum of Rs.23,330 on account of interest was also directed to be allowed as deduction. The Income-tax Appellate Tribunal dismissed the appeals filed by the Revenue and its orders were affirmed by the High Court. On the question: “Whether the income or asset which a son inherits from his father when separated by partition should be assessed as income of the Hindu Undivided Family consisting of his own branch including his sons or his individual income”, dismissing the appeals and Special Leave Petition of the Revenue, the Court, ^ HELD: 1. The sums standing to the credit of Rangi Lal belong to Chander Sen in his individual capacity and not the Joint Hindu Family. The interest of Rs.23,330 was an allowable deduction in respect of the income of the family from the business. [268C-D] 2.1 Under s. 8 of the Hindu Succession Act, 1956, the property of the father who dies intestate devolves on his son in his individual capacity and not as Karta of his own family. Section 8 lays down the scheme of succession to the property of a Hindu dying intestate. The Schedule classified the heirs on whom such property should devolve. Those specified in class I took simultaneously to the exclusion of all other heirs. A son’s son was not mentioned as an heir under class I of the Schedule, and, therefore, he could not get any right in the property of his grandfather under the provision. [265F-G] 256 2.2 The right of a son’s son in his grandfather’s property during the lifetime of his father which existed under the Hindu law as in force before the Act, was not saved expressly by the Act, and therefore, the earlier interpretation of Hindu law giving a right by birth in such property “ceased to have effect”. So construed, s. 8 of the Act should be taken as a self-contained provision laying down the scheme of devolution of the property of a Hindu dying intestate. Therefore, the property which devolved on a Hindu on the death of his father intestate after the coming into force of the Hindu Succession Act, 1356, did not constitute HUF property consisting of his own branch including his sons. [265G-H; 266A-C] 2.3 The Preamble to the Act states that it was an Act to amend and codify the law relating to intestate succession among Hindus. Therefore, it is not possible when the 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 s. 8, he takes it as Karta of his own undivided family. [267C-D] 2.4 The Act makes it clear by s. 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 that the property which devolved on a Hindu under s. X of the Act would be HUF in his hand vis-a-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-a-vis sons and female heirs with respect to whom no such concept could be applied or contemplated. [267E-G] 2.5 Under the Hindu law, the property of a male Hindu devolved on his death on his sons and the grandsons as the grandsons also have an interest in the property. However, by reason of s. 8 of the Act, the son’s son gets excluded and the son alone inherits the properly to the exclusion of his son. As the effect of s. 8 was directly derogatory of the law established according to Hindu law, the statutory provisions must prevail in view of the unequivocal intention in the statute itself, expressed in s. 4(1) which says that to the extent to which provisions have been made in the Act, those provisions shall override the established provisions in the texts of Hindu Law. [264G-H; 265A-B] 2.6 The intention to depart from the pre-existing Hindu law was again made clear by s. 19 of the Hindu Succession Act which stated that 257 if two or more heirs succeed together to the property of an intestate, they should take the property as tenants-in- common and not as joint tenants and according to the Hindu law as obtained prior to Hindu Succession Act two or more sons succeeding to their father’s property took a joint tenants and not tenants-in-common. The Act, however, has chosen to provide expressly that they should take as tenants-in-common. Accordingly the property which devolved upon heirs mentioned in class I of the Schedule under s. 8 constituted the absolute properties and his sons have no right by birth in such properties. [266F-H] Commissioner of Income-tax, U. P. v. Ram Rakshpal, Ashok Kumar, 67 I.T.R. 164; Additional Commissioner of Income-tax, Madras v. P.L. Karuppan Chettiar, 114 I.T.R. 523; Shrivallabhdas Modani v. Commissioner of Income-Tax, M.P-I., 138 I.T.R. 673 and Commissioner of Wealth-Tax A.P. II v. Mukundgirji 144 I.T.R. 18, approved. Commissioner of Income-tax, Gujarat-l v. Dr. Babubhai Mansukhbai (Deceased), 108 I.T.R. 417, overruled.
published in http://judis.nic.in/supremecourt/imgst.aspx?filename=8997 PETITIONER: COMMISSIONER OF WEALTH TAX. KANPUR ETC. ETC. Vs. RESPONDENT: CHANDER SEN ETC. DATE OF JUDGMENT16/07/1986 BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) PATHAK, R.S. CITATION: 1986 AIR 1753 1986 SCR (3) 254 1986 SCC (3) 567 1986 SCALE (2)75 CITATOR INFO : F 1987 SC 558 (10) RF 1991 SC1654 (27) … Continue reading
Hindu Law-Gift of ancestral property by the father in favour of his daughters through registered settlement deed-Father later claiming that the settlement deed got executed by misrepresentation and fraud-Plea by father that his signature was obtained as a witness to a sale deed and not for execution of settlement deed and that he has no capacity to gift to his daughters the Joint family property-Suit by daughters for permanent injunction for restraining the father from interfering with peaceful possession-Trial Court dismissed the suit-Confirmed by First Appellate Court and High Court Held, on facts and evidence, the gift was not vitiated by fraud and misrepresentation-Further, father has capacity to gift ancestral property to daughters to a reasonable extent. The respondent, by a registered settlement deed, settled the suit property to his appellant-daughters out of natural love and affection for them. After 5 years, the respondent asked the appellants to vacate the property and tried to trespass into the property. The appellants filed a suit for permanent injunction before trial court for restraining the respondent and his associates from interfering with the appellant’s peaceful possession and enjoyment of the suit property. The respond-ent resisted the suit contending that the suit property was an ancestral property; that settlement deed was not executed in favour of the respondents; that the appellants misrepresented the respondent taking advantage of his addiction to liquor for signing the sale deed of the property purchased by the appellants as an attesting witness and instead got the settlement deed signed. The trial court dismissed the suit of the appellants holding that the settlement deed was got executed by misrepresentation and that the respondent had no power to make a gift of a part of his ancestral properties in favour of his daughters. This was confirmed by the first appellate court and the High Court. In appeal, the appellants contended that the finding of fact by the lower courts regarding execution of settlement deed is vitiated due to misreading of the statement of one of the attesting witnesses: that the respondent, being the karta of the Joint Hindu family had the authority to make a gift of ancestral immoveable property to a reasonable extent to his daughters. The respondent contended that he had no authority to gift the only ancestral property possessed by the family in favour of his daughters. Citation: 2004 AIR 1284,2003(6 )Suppl.SCR605 ,2004(1 )SCC295 ,2003(10 )SCALE600 ,2003(10 )JT289= Allowing the appeal, the Court HELD : 1.1. Finding recorded by the trial court clearly shows that the court misread and misconstrued the testimony of the attesting witness PW 2. In his deposition, PW 2 has clearly stated that he was invited by the respondent to be a witness. He has nowhere stated that the respondent was taken for affixing signatures as witness. If respond-ent was to be a witness, then there was no need to ask PW2 and other witness to accompany the respondent or for them to sign the document. PW 2 also deposed that the respondent affixed his signatures on the settlement deed (Ex Al) after reading the same, that he has signed Exhibit Al as a witness and that he knew the respondent. Suggestion put to him that signatures of the respondent on Exhibit Al were obtained by threat was denied. The trial court did not refer to this part of testimony of PW 2 at all. In the cross- examination, PW 2 has stated that the fact that the respondent had invited him for signing as a witness has been read to him as if PW 2 had stated that the respondent was taken for affixing signatures as a witness to some documents on the date when the deed of settlement Exhibit Al was executed. This is a clear misreading of the testimony of PW 2. The trial court also failed to note that the evidence of respondent lacked total credibility especially in the light of his conduct in denying his signature on the settlement deed, vakalatnama as well as on the summons served on him. Projection made by the respondent in his testimony that the appellants taking advantage of the fact that he was a drunkard got the settlement deed signed fraudulently cannot be accepted. Respondent took no steps to get the settlement deed cancelled though, the appellants had been living in the house for five years after the execution of the settlement deed. In his statement he does not say that he did not know about the execution of the settlement deed. Plea taken by him that he was taken to the Sub-Registrar’s office to be a witness to a sale deed by his son-in-law cannot be accepted as it has not been proved on record that the respondent’s son-in-law had in fact purchased any house site. Findings recorded by the trial court and upheld by the First appellate court and the High Court based on misreading of evidence are liable to be set aside. The findings recorded on misreading of evidence being perverse cannot be sustained by law. [612-E-H; 613-A-D] 2.1. A father can make a gift of ancestral immoveable property within reasonable limits, keeping in view, the total extent of the property held by the family in favour of his, daughter at the time of her marriage or even long after her marriage. [617-E-F] 2.2. Question as to whether a particular gift is within reasonable limits or not has to be judged according to the status of the family at the time of making a gift, the extent of the immoveable property owned by the family and the extent of property gifted. No hard and fast rule prescribing quantitative limits of such a gift can be laid down. The answer to such a question would vary from family to family. The question of reasonableness or otherwise of the gift made has to be assessed vis-a-vis the total value of the property held by the family. Simply because the gifted property is a house, it cannot be held that the gift made was not within the reasonable limits. It is basically a question of fact. If on facts, it is found that the gift was not within reasonable limits, such a gift would not be upheld. It was for the respondent to plead and prove that the gift made by the father was excessive and unreasonable keeping in view the total holding of the family. In the absence of any pleadings or proof on these points, it cannot be held that the gift made in this case was not within the reasonable limits of the property held by the family. The respondent has failed to plead and prove that the gift made was to unreasonable extent keeping in view, the total holding of the family. The first appellate court and the High Court thus erred in non-suiting the appellants on this account. [617-G-H; 618-A-E] 2.3. The respondent had the capacity to make a gift to a reasonable extent of ancestral immoveable property in favour of his daughters. The gift was not vitiated by fraud of misrepresentation. The appellants are held to be the absolute owners or the suit property and the respondent is injuncted from interfering with the peaceful possession and enjoyment of the suit property by the appellant perpetually. [618-F-G] Kamala Devi v. Bachulal Gupta, [1957] SCR 452; Guramma Bhratar Chanbasappa Deshmukh AND ANOTHER v. Malappa, [1964] 4 SCR 497 and Ammathayee Ammal AND ANOTHER v. Kumaresan AND Ors., [1967] 1 SCR 353, referred to. Anivillah Sundararamaya v. Cherla Seethamma AND Ors., (1911) 21 MLJ 695; Pugalila Vettorammal AND ANOTHER v. Vettor Goundan, (1912) MLJ 321; Devalaktuni Sithamahalakshmamma AND Ors. v. Pamulpati Kotayya AND Ors., AIR (1936) Madras 825; Karuppa Gounder AND Ors. v. Palaniammal AND Ors., (1963) 1 MLJ 86; The Commissioner of Gift Tax v. Tej Nath, (1972) PLR (74) 1 and Tara Sabuani v. Raghunath, AIR (1963) Orissa 59, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 16757 of 1996.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7 CASE NO.: Appeal (civil) 16757 of 1996 PETITIONER: R. Kuppayee & Anr. RESPONDENT: Raja Gounder DATE OF JUDGMENT: 10/12/2003 BENCH: R.C. Lahoti & Ashok Bhan. JUDGMENT: J U D G M E N T BHAN, J. Aggrieved by the judgment and decree passed by the courts … Continue reading
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