CAN A COPARCENER/CO-OWNER SELL HIS/HER SHARE IN A JOINTLY OWNED PROPERTY TO A THIRD PARTY? RIGHT OF PREEMPTION AGRICULTURE LAND VS RESIDENTIAL PROPERTY
Let us first see the provisions of the Transfer of Property Act 1882 and the Hindu Succession Act 1956. Section 22 of The Hindu Succession Act 1956 Section 22 of the Act is as under:- “22. Preferential right to acquire property in certain cases – (1) Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others devolves upon two or more heirs specified in class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred. (2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the court on application being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incident to the application. (3) If there are two or more heirs specified in class I of the Schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred. Explanation.- In this section, “court” means the court within the limits of whose jurisdiction the immovable property is situate or the business is carried on, and includes any other court which the State Government may, by notification in the Official Gazette, specify in this behalf.” OBITER Smt. Laxmi Debi v. Surendra Kumar Panda and Others by the High Court of Orissa. In this case the submission that Section 22 of the Act would not cover succession in respect of agricultural lands was rejected.It was observed and held that “It is clear that the Parliament had omitted the phrase “save as regards agricultural land” from item No. 5 of the Concurrent List in order to have a uniform personal law for Hindus throughout India, and accordingly, it necessitated the enlargement of Entry No. 5. We have no doubt, therefore, that in view of the change in law, the Act will apply to agricultural lands also, and the decision in AIR 1941 FC 72 (K) would no longer hold good.” The High Court of Judicature at Allahabad, in Smt. Prema Devi vs. Joint Director of Consolidation (Headquarter) at Gorakhpur Camp and Ors. held:- In List 2, Entry No. 18 is as follows:– “Land, that is to say, right in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.” This entry which is in the exclusive jurisdiction of the State Legislature is in the widest term. All laws relating to land and land tenures are therefore, within the exclusive jurisdiction of the State Legislature. Even personal law can become applicable to land tenures […]
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WHAT IS THE PRINCIPLE OF OWELTY ? WHEN DO THE COURTS APPLY IT IN THE CASE OF CO-OWNED PROPERTY?
When is a property jointly owned and cannot be partitioned by metes and bounds what remedy is available to parties? In the case of a property that is jointly held by the family, or which may be inherited by the family which consists of more than one sibling of the deceased how to partition the property? One alternative is division by metes and bounds. This can be done by parties under a registered agreement by executing a Deed of Partition or if there is more than one property then it can be done by executing a Deed of Family Arrangement and followed by executing a Deed of Conveyance or the document which is needed in the matter applicable to the facts and circumstances of the case. It could be of the nature of a Deed of Release, Deed of Relinquishment, Deed of Gift, or Deed of Exchange as the case may be. The same should be done by way of a registered deed. Now when in the following events : for example, a bungalow is jointly owned by the respective families of four brothers who passed away. The legal heirs of three brothers want to sell their undivided share in the property. But one branch of the deceased brother is objecting to the sale; another example, a bungalow cannot be divided or partitioned by metes and bounds because the legal heirs are more, and the area is less; the objecting party does not reside in the said inherited property; In such a case land is locked so even the generation of income from the same. What to do in such a case? In such cases, courts apply the principle of Owelty: what it is? OWELTY : In regard to partitions, the ground upon which the jurisdiction of courts of equity, was maintainable as it constituted a part of its appropriate and peculiar remedial justice. It is, that courts of equity were not restrained, as, courts of law were, to a mere, partition or allotment of the lands and ‘other real estate between the parties according to their respective interests in the same, and having regard to the true value thereof; but courts of equity might, with a view to the more-, convenient and perfect, partition or allotment of the premises, decree a pecuniary compensation to one of the parties for owelty or, equality of partition, so as to prevent an injustice or avoidable inequality.” ‘Lawrence -on Equity Jurisprudenoe (1929), Vol. I pp. 1227, 1228, s. 1147, also contains the following passage:- , The ordinary method of partition is to decree a physical severance of the separate interests, no sale being authorised unless a fair, partition is otherwise impossible, or at least prejudicial. There was no power of judicial sale at common law. The Court ordering physical partition may make its decree effective by compelling mutual conveyances by the parties of their respective interests. Owelty of partition may be awarded to equalize the shares of the parties and may be decreed to be a lien on the excessive allotment. Though only when necessary to a fair partition, and it should be […]
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PREVAILING LAW RELATING TO THE TRANSFER AND TRANSMISSION OF SHARES ON THE DEATH OF A MEMBER SHORTCOMINGS
This blog comes in wake of a judgment I came across of the Bombay High Court in the matter of Karan Vishnu Khandelwal Omdham Cooperative Housing Society Ltd. Vs Deputy Registrar -K-West In this matter facts of the case were as under: Mannalal Surajmal Khandelwal (deceased) was owner of a flat no.1 and by virtue thereof, was entitled to share certificate. The deceased during his lifetime registered a nomination in the name of Petitioner- his grandson. The nomination was acknowledged by the managing committee of the society in it’s meeting held on and made an entry in the nomination register. Mr. Mannalal Khandelwal died intestate on 20thJanuary, 2011, leaving behind, Rajendra Mannalal Khandelwal (Son- Respondent No.2); Krishnakumar Mannalal Khandelwal (Son); and Petitioner- son of Vishnu Mannalal Khandelwal (predeceased son of deceased). That upon demise of Mannalal Surajmal Khandelwal, Respondent No.2 – Rajendra M. Khandelwal, made an application to the society, inter alia, seeking transfer of membership and the share certificate in his name. Along with the application, he submitted a No Objection cum Declaration’ and indemnity bond made and executed by Krishnakumar Mannalal Khandelwal. This way, the Respondent No.2 claimed 2/3rdshare and interest in the flat and sought transfer of proportionate interest in flat and claimed membership. The application was rejected by the society on 8thAugust, 2018. Whereafter, the Respondent No.2 preferred an appeal under section 23 (2) of the Maharashtra Societies Act (‘MCS Act’ for short), being Appeal No. 09 of 2019 before the Deputy Registrar. The Petitioner sought intervention in the said appeal. The Intervention was allowed. The Deputy Registrar vide order dated 8thFebruary, 2021 allowed the appeal and held that since the Respondent No.2 has acquired 2/3rdright in flat No.1, to that extent, his interest be noted in the society record. In consequence, the Deputy Registrar acknowledged 2/3rdundivided right of the Respondent No.2 and 1/3rdundivided right of the Petitioner in flat No.1 and directed to make entries in the society records. In revision, the Divisional Joint Registrar upheld the order of the Deputy Registrar and dismissed the revision application of the Petitioner. Feeling aggrieved by that order, the Petitioner has filed this petition. MATTER BEFORE BOMBAY HIGH COURT WHEN ERROR OF LAW OCCURRED The matter when came up before the Bombay High Court, the court observed that Registrar passed the impugned order in haste may be at the behest of respondent No.2. Therefore, the impugned order not only suffers from gross irregularity being passed in breach of principles of natural justice but also against the law, and therefore, deserves to be quashed and set aside. While passing the Judgement Bombay High Court relied upon Indrani Wahi Vs. Registrar of Co-operative Societies (Civil Appeal 4930/2006), held that the cooperative society was bound by nomination made by the deceased and it was bound to transfer the shares to the nominee While passing the Judgment Hon’ble Court it relied upon the provisions of Section 154-B(2) of Maharashtra Cooperative Societies (Amendment) Act, 2019. In any event, by. It reads under: “154-13. On the death of a Member of a society, the society shall transfer share, right, title and interest in […]
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