2018 (6) TMI 13 - HC - Indian Laws

Inheritance of property - Execution of sale deed of subject properties in favor of appellant - HUF - defendant was not the sole owner of the subject properties but he was only a karta of the HUF which owned these properties - whether inheritance of property would construe HUF properties or self acquired properties? - Held that - Since Sh. Prithvi Singh/late defendant no.1 inherited the properties from his father Sh. Ram Singh in the year 1943, in the hands of Sh. Prithvi Singh properties were having the character of HUF properties because inheritance by a person from his parental ancestors prior to the year 1956 makes the properties inherited not as self-acquired properties but as HUF properties, whereas inheritance by a person of a property from his parental ancestors after the year 1956 makes the inherited property as a self-acquired property of the inheritor and not as an HUF property. Whenever a property is inherited by a person from his paternal ancestors before the year 1956, the inheritance is as an HUF property and even if the inheritance is land which is subject matter of the DLR Act. Bhumidar under the DLR Act is nothing but an owner of the land because by the DLR Act all that happened was that the ownership of the land which had vested with private landlords came to be vested in the State and the owners of the land, or the lessees of the land as the case maybe, in fact became the lessees of the land under the government, with the lessees being called by the term bhumidar under the DLR Act. Bhumidar therefore is nothing but an owner of the lessee rights in the land with the State being the owner/lessor. There is absolutely nothing whatsoever in the DLR Act that the bhumidar rights which are vested in a karta or a coparcener ceases to be the subject matter of HUF and that bhumidari land becomes the self-acquired property of the karta or the coparcener in whose name the land stands or is mutated - it is not the subject matter of the DLR Act to convert the HUF property into self-acquired property simply because the owner of lessee rights is under the DLR Act a bhumidar. The only object of the DLR Act was to do away the intermediary who was the private owner/landlord and the private owner/landlord, is now substituted by the government/State, with the private owner/landlord or the existing lessee of a property (in certain circumstances) of the private landlord, became the bhumidars under the DLR Act. The appeal is unnecessary harassment of the respondent nos. 1 to 6/plaintiffs and which is in furtherance of the illegal acts of execution of the subject sale deeds by Sh. Prithvi Singh in favour of the appellants/defendant nos.2 and 3 so as to deny the legitimate rights of the respondent nos. 1 to 6/plaintiffs in the subject properties - appeal is completely without merit and is dismissed.

Summary

Issues Involved:
1. Validity of the sale deeds executed by Sh. Prithvi Singh.
2. Nature of the inherited property (self-acquired vs. HUF property).
3. Legal necessity or benefit of the estate for the sale of HUF property.
4. Applicability of the Delhi Land Reforms Act, 1954 to HUF properties.

Issue-wise Detailed Analysis:

1. Validity of the Sale Deeds Executed by Sh. Prithvi Singh:
The primary issue before the trial court and the High Court was whether Sh. Prithvi Singh, as the karta of the HUF, had the authority to execute the sale deeds in favor of the appellants. The trial court decreed the suit filed by the plaintiffs, declaring the sale deeds illegal and null and void. The High Court upheld this decision, stating that Sh. Prithvi Singh was not the sole owner but only the karta of the HUF, and there was no legal necessity or benefit of the estate to justify the transfer of the properties.

2. Nature of the Inherited Property (Self-Acquired vs. HUF Property):
The court examined whether the properties inherited by Sh. Prithvi Singh from his father, Sh. Ram Singh, were self-acquired or HUF properties. It was established that since Sh. Ram Singh died in 1943, the properties inherited by Sh. Prithvi Singh before 1956 were HUF properties. This conclusion was based on precedents set by the Supreme Court in Commissioner of Wealth Tax, Kanpur vs. Chander Sen and Yudhishter vs. Ashok Kumar, which state that inheritance before 1956 constitutes HUF property.

3. Legal Necessity or Benefit of the Estate for the Sale of HUF Property:
The court found no evidence that the sale of the properties by Sh. Prithvi Singh was for legal necessity or benefit of the estate. The appellants argued that Sh. Prithvi Singh had the right to transfer the properties as he was the sole owner, but the court rejected this, affirming that the properties were HUF properties and could only be sold for legal necessity or benefit of the estate, which was not the case here.

4. Applicability of the Delhi Land Reforms Act, 1954 to HUF Properties:
The appellants contended that the properties, being bhumidari land under the Delhi Land Reforms Act, 1954, were self-acquired. The court dismissed this argument, clarifying that the DLR Act does not convert HUF property into self-acquired property. The court emphasized that bhumidar rights under the DLR Act are akin to ownership rights, and there is nothing in the DLR Act that changes the nature of HUF property to self-acquired property.

Conclusion:
The High Court upheld the trial court's judgment, declaring the sale deeds executed by Sh. Prithvi Singh in favor of the appellants as illegal, null, and void. The court affirmed that the properties were HUF properties and could not be sold without legal necessity or benefit of the estate. The appeal was dismissed with costs of ?20,000 payable by the appellants to the plaintiffs.