2019 (3) TMI 1891 - HC - Income Tax

Recovery proceedings - attachment orders of property with co-owners - HELD THAT - No doubt, as per the provisions of Transfer of Property Act,1882, against the share of the property of the defaulter proceedings can be initiated since the respective sharers are entitled to transfer their shares without specifying that the transfer is to take effect on any particular share or shares of the transferer as guided by Section 47 of Act,1882. Therefore the contention advanced by learned counsel for the petitioner that a co-ownership property cannot be sold without effecting partition cannot be sustained under law. The share is also not specifically mentioned in Ext.P2 document, therefore it is clear that, the parties have got equal share over the property in question in accordance with the provisions of Section 45 of the Transfer of Property Act. Petitioner is not entitled to succeed in the contention advanced with respect to the property held by the petitioner in co- ownership with her husband. After evaluating the situation and hearing respective counsel across the Bar, this writ petition is disposed of, directing the respondents not to proceed against the share of the property held by the petitioner in co-ownership with her husband if she has no liability against the proceedings initiated by the 4th respondent. The property in co-ownership held by the husband can be proceeded with by the respondents.

Summary

Issues:
1. Whether the BSNL can proceed against the co-ownership property of the petitioner and her husband for the husband's outstanding dues?
2. Whether a co-ownership property can be sold without partition?

Analysis:
1. The petitioner and her husband jointly possess a property, and the husband has outstanding dues to the BSNL. The BSNL initiated revenue recovery proceedings against him, prompting the petitioner to challenge this action, arguing that she should not be held liable for her husband's debts. The court noted that the property in question is co-owned by the petitioner and her husband. It was established that under the Transfer of Property Act, proceedings can be initiated against the defaulter's share of the property, even in cases of co-ownership. The court concluded that since the share was not specifically mentioned in the relevant document, the parties have equal ownership rights over the property as per the Act.

2. The court addressed the contention that a co-ownership property cannot be sold without partition. It clarified that under the Transfer of Property Act, co-owners are entitled to transfer their shares without partition. The court emphasized that the Act allows for proceedings against the defaulter's share without specifying any particular share, as guided by Section 47. Therefore, the argument that partition is necessary before selling a co-owned property was deemed unsustainable under the law. The court ruled that the petitioner is not entitled to succeed in her claim regarding the property held in co-ownership with her husband. The judgment directed the respondents not to proceed against the petitioner's share of the property if she has no liability, allowing the proceedings to continue against the husband's share.

In conclusion, the court disposed of the writ petition, maintaining that the BSNL can proceed against the husband's share of the co-owned property while protecting the petitioner's share if she is not liable for the outstanding dues. The judgment clarified the legal standing of co-ownership properties in debt recovery proceedings and affirmed the rights of co-owners to transfer their shares without partition as per the Transfer of Property Act.