Tuesday, December 24, 2024

Difference between ancestral property and inherited property

"The interest of a legal heir in inherited property is not established at birth, as with ancestral property. Rather, it is formally conferred through a testamentary will or agreement”, Justice Purushaindra Kumar Kaurav of Delhi High Court held in Shri Birbal Saini vs. Smt.Satyawati (2024). Notably, a legal heir can even be disqualified as a successor. The property owner holds absolute authority over designating their successor and setting the conditions for such succession.

The Court observed:"the Courts below have rightly relied on the decision of the Supreme Court in the case of Commissioner of Wealth Tax, Kanpur, etc. vs Chander Sen (1986) to hold that held that the suit property is not ancestral. Therefore, the sale of the suit property by the father in favour of his daughter, the respondent/plaintiff, was legally permissible and binding by law." 

It cited relevant extract from the decision of Commissioner of Wealth Tax, Kanpur which reads:-"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. The right of a son'sson 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. 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 9 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." 

The cited judgement further reads: "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. 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. 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 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."

After citing the above judgement, Delhi High Court observed that the primary controversy appears to be about the ancestral nature of the suit property. It explained the difference between characteristics of an ancestral property and inherited property. "By definition, an ancestral property is a coparcenary property, where "coparceners" are legal heirs with an inherent interest in the property from birth. Such properties remain undivided within joint families, with legal heirs enjoying their shares. The Supreme Court in the case of Matkul v. Mst. Manbhari and Others (1958) elucidates upon the concept of ancestral property in the following terms:-

“6. So far as the statement of the customary law itself is concerned, Rattigan's Digest which is regarded as an authority on the subject, does not support the appellant's case. In para 59 of the Digest of Civil Law for the Punjab chiefly based on the cutomary law it is stated that ancestral immovable property is ordinarily inalienable (especially amongst Jats, residing in the Central Districts of the Punjab) except for necessity or with the consent of male descendants or, in the case of a sonless proprietor, of his male collaterals. Provided that the proprietor can alienate ancestral immovable property at pleasure if there is at the date of such alienation neither a male descendant nor a male collateral in existence. Following this statement of the law the learned author proceeds to explain the meaning of ancestral property in these words:“Ancestral property means, as regards sons, property inherited from a direct male lenial ancestor, and as regards collaterals property inherited from a common ancestor”. Thus, so far as the customary law in Punjab can be gathered, the statement of Rattigan is clearly against the appellant.”

In  Rohit Chauhan v. Surinder Singh & Ors (2013) the Supreme Court emphasized that coparcenary properties are typically ancestral and should remain undivided. A coparcener is defined as an heir inheriting common ancestral property alongside others. Only coparceners can claim ownership interests in ancestral property. Non coparceners have no ownership rights. If a coparcener is the sole surviving heir, they inherit the entire property. In cases with multiple coparceners, each heir receives a proportional share based on the number of coparceners.

18. Conversely, a property obtained through inheritance, whether by way of a will or upon the demise of the property owner, is classified as inherited property. The inheritor holds exclusive ownership over the said property, and is entitled to freely transfer, sell, or dispose of it at their discretion. There are no claims based on birthright, with ownership being governed by the legal owner's directives, will, or the applicable succession laws. The interest of a legal heir in inherited property is not established at birth, as with ancestral property. Rather, it is formally conferred through a testamentary will or agreement. A legal heir can even be disqualified as a successor. The property owner holds absolute authority over designating their successor and setting the conditions for such succession.

19. It is, thus, clear from the factual background of the case at hand that the suit property could not have been held to be an ancestral property, as the same was received by the erstwhile owner, Sh. Bharat Singh, by way of a family settlement, wherein, the two brothers divided two equally measuring plots between themselves. Hence, the property could not have been said to be delved on the father by virtue of him being a coparcener in that property. The Courts below have rightly laid down the distinct position of the suit property from that of an ancestral property. Therefore, the Court does not find any error in the decisions of the Courts below and refrains from interfering with the same.

20. Section 100 of the CPC confers a limited jurisdiction on the High Court to deal only with any legal error apparent on the face of the record. The Supreme Court has clearly elucidated upon the essentials of a substantial question of law in the case of Chandrabhan (Deceased) Through Lrs vs Saraswati (2022). 

The Court held that:-“31. The proper test for determining whether a question of law raised in the case is substantial would be, whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so, whether it is either an open question in the sense that it is not finally settled by this Court. If the question is settled by the highest court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or the question raised is palpably absurd, the question would not be a substantial question of law.

32. To be "substantial‟, a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law "involving in the case" there must be first, a foundation for it laid in the pleadings and the 

question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case or not, the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis. (See: Santosh Hazari v. Purushottam Tiwari)”.

As there arose no substantial question of law to be adjudicated, the appeal was dismissed on December 24, 2024.



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