Nature of Properties & The Law of Succession

Author: Nikhil Sukhija

Introduction

The nature of property is an imperative concept to be understood in order to know more about the rights of succession. This article shall explain different types of property that can be transferred by way of intestate succession (where a person dies without a will).

Meaning of Property

In general sense, property is any physical or virtual entity that is owned by an individual or jointly by a group of individuals. Human life is not possible without property. It has economic, socio-political, sometimes religious and legal implications. It is the legal domain, which institutes the idea of ownership. The basic postulate of the idea is the exclusive control of an individual over some ‘thing’.

There are some Traditional principles related to property rights which includes:

1. Control over the use of the property.

2. Right to take any benefit from the property.  

3. Right to transfer or sell the property.  

4. Right to exclude others from the property.

Section 2(c) of the Benami Transactions (Prohibition) Act, 1988 defines property as:
“Property” means property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property.

Meaning of Succession

Succession implies the act of succeeding or following, as of events, objects, places in a series. In the eyes of law however, it holds a different and particular meaning. It implies the transmission or passing of rights from one to another. In every system of law provision has to be made for a readjustment of things or goods on the death of the human beings who owned and enjoyed them.

As per the previous articles on “The Analysis of Section 6 of the Hindu Succession (Amendment) Act, 2005” the concept and different views regarding the interpretation of Section 6 has been highlighted. The issue that arises after such analysis is “What are the properties that can succeeded where the holder of the property dies intestate”?

Nature of Properties

To begin with, there are four different types of properties:

1.      Ancestral Property;
2.      Joint Hindu Family Property;
3.      Hindu Family Property; and

4.      Self-acquired property

The property which is inherited up to three generations is referred to as ancestral property. This is a part of the coparcenary property. That is the property descends from father, father’s father, and great grandfather. Prior to Hindu Succession Act (HSA), 1956, the law of succession was governed by an uncodified law where the property acquired from ancestor was termed as ancestral property and a son getting birth in the family would get share in the property merely by virtue of their birth.  

There are two types acquisition, i.e. voluntary and involuntary acquisition. Voluntary acquisition is dealt under the Transfer of Property Act, 1882 where the acquisition takes place through a contract, like a sale deed. An involuntary acquisition is the acquisition which does not takes place through any act of an individual but by virtue of their birth and the conferment of right provided by the statute.

After the enactment of HSA, 1956, the position regarding the legal position has changed. Section 4 of the HSA provides an over-riding effect to the Act and Section 8 of the Act provides ‘General Rules of Succession’.

The Hon’ble Supreme Court of India in the case of Commissioner of Wealth Tax, Kanpur and Ors. v. Chander Sen and Ors[1]. and Yudhishter v. Ashok Kumar[2] has ruled that the nature of property acquired by the father under Section 8 from an ancestor is deemed to be self-acquired property of the person. Self-acquired property can be succeeded by the legal heirs only on the death of the holder, if he dies intestate (without a will) or as per will (if any).  Therefore, the difference between succession before and after HSA 1956 is an important concept to be understood for the purpose of understanding the concept of succession.

Basic ingredients of ancestral property are:

1.      An ancestor owned a property;

2.      He died intestate;

3.      Legal heir acquires the ancestral property.

Section 6 of the HSA, 1956 talks about devolution of interest in a joint hindu family. Joint Hindu Family is not a contract and it refers to a collective group of all the family members. If there is a family that is not living together under one roof but there is jointness of estate, they can be categorized as members of Joint Hindu Family. Prior to 1956, daughters were not included in the joint hindu family as far as succession is concerned but after 1956, they were given some share which was less than the share of a son (as explained in the previous article) and after the Amendment Act of 2005, daughters are given equal share as that of sons.

A family living together in unity, having a joint intent to maintain and keep a property is called Hindu Undivided Family (HUF). HUF consists of all individuals who are lineally descended from a common ancestor and also comprises of unmarried daughters. HUF is a legal entity recognized under the Income Tax Act, 1961.

Ingredients of an HUF property

1.      A lineal descendant up to 3 generations who are/were coparceners of the property.

2.      Coparcenary Property.

3.    Karta is the head of the family and he manages the property while other members are called  coparceners.

4.      Each member has ownership, possession and enjoys the property equally.

5.      No share can be determined until anybody asks for partition.

6.      Any member can ask for partition.

In the case of Suraj Munjal v. Chandan Munjal[3], plea of the appellant that the acquisition of property by his father from his grandfather creates his share in the property and thereby his prayer for the partition be accepted was rejected by the Hon’ble High Court of Delhi which held that any property acquired by the father from the grand-father is deemed to get the nature of a self-acquired property and therefore no share in partition can be awarded. The order of learned single judge was upheld which stated that the appellant in the present case has failed to satisfy the court that the properties in questions can be categorized as HUF property.   

Conclusion

Intestate succession takes place according to the provisions of Hindu Succession Act, 1956 in all the four types of properties (as far as succession is concerned) after the death of the father. All the coparceners have an interest in common ancestral property which is used as an HUF property. It is important to note that there shall be a clear and unambiguous declaration to create an HUF. This means there should be a clear intention on part of the holder of the property to create an HUF. Therefore, in order to understand the laws of succession as per Hindu Succession Act, it is imperative to understand their applicability as per the nature of the property.

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[1] AIR 1986 SC 1753

[2] AIR 1987 SC 558

[3] 257 (2019) DLT 597

Disclaimer: This article is meant to be informative and should not be treated as professional advice. For any legal or financial clarifications or suggestions, please contact the undersigned author , or you may reach out to us at protalkz03@gmail.com.

Nikhil Sukhija

Contact: 9555604055

Email: protalkz03@gmail.com