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 employed as little as possible.” This position has been summarized in Freeman’s Cotenancy and Partition (1886 Edition) page 676, para. 507, under the caption of “Owelty”:-” Owelty”: ” When an equal partition cannot be otherwise made, courts of equity may order that a certain ‘sum be paid by the party to whom the most valuable property has been assigned. The sum thus directed to be paid to make the partition equal is called “owelty”. It is a lien on the property on account of which it was granted. “The law cannot contemplate the injustice of taking property from one person and giving it to another without an equivalent or a sufficient security for it.” The lien for owelty has precedence over prior mortgages and other liens existing ‘against the cotenant against whom the owelty was awarded.” It is significant to note that this provision for owelty is construed as a lien which the co-sharer who is awarded owelty is deemed to acquire on an excessive allotment of property to the other co-‘sharer. Owelty in general and lien therefor are thus described in Corpus Juris Secundum, Vol. 68, s. 15:”Section 15. Owelty and Lien Therefor(a) In General; (b) Liens.

(a) In General: The parties to a voluntary partition may agree to pay owelty to equalise the shares allotted. Owelty is the difference that is paid or secured by one coparcener or co-tenant to another for the purpose of equalizing a partition. The power to award owelty has, from the earlier times, been regarded as necessary to the act of partitioning property; and the parties to a voluntary partition may agree to the payment of owelty in order to equalize the shares allotted; and, where the matter of making the partition is delegated to commissioners, they have the power to award owelty as a necessary incident to the partition.

(b) Liens: An agreement for owelty in a voluntary partition of land ordinarily creates a lien or charge on the land. An agreement for owelty ordinarily creates a lien or charge on the land taken under the partition, and this lien may exist because of an express agreement between the parties providing for it or it may be implied in the absence of such express agreement.”

It, therefore, follows that when an owelty is awarded to a member on the partition for equalization of the shares on an excessive allotment of immovable properties to another member of the joint family such a provision of owelty ordinarily creates a lien or a charge on the land taken under the partition. A lien or a charge may be created in express terms by the provisions of the partition decree itself. There would thus be the creation of a legal charge in favour of the member to whom such owelty is awarded. If, however, no such charge is created in express terms, even so, the lien may exist because it is implied by the very terms of the partition in the absence of an express provision in that behalf. The member to whom excessive allotment of property has been made on such partition cannot claim to acquire properties falling to his share irrespective of or discharged from the obligation to pay owelty to the other members. What he gets for his share is, therefore, the properties allotted to him subject to the obligation to pay such owelty and there is imported by necessary implication an obligation on his part to pay owelty out of the properties allotted to his share and a corresponding lien in favour of the members to whom such owelty is awarded on the properties which have fallen to his share. (see T.S. Swaminathaudayar vs The Official Receiver SC)

DICTUM:

THERE IS A THEORY EVOLVED BY LAW NAMELY THE PRINCIPLE OF OWELTY

  1. Vandana W vs Occupation: Errand Boy on 18 December 2013 ( Bombay High Court)

As regards the practicability of the suit property being subjected to equal divisions by metes and bounds, one has to take into consideration the total area of the suit property. The suit property is a plot with a house constructed thereon. It’s total area is admittedly 450 sq.ft. and it is obvious that in such 16/22 a small area, if seven shares are carved out, and separately allotted, it would be well-nigh impossible for the plaintiff and each of the other co-sharers to enjoy the suit property fully and satisfactorily. If such a plot is divided in seven equal parts, what would come to the share of the plaintiff would be a minuscule piece of land having area of not more than 64.29 sq.ft. In such a small area, I do not think any workable construction can be made and even permission for construction under the present Municipal Laws would be difficult to come by.

Court Opined: This problem, in my opinion, can be solved by applying the principle of owelty

  1. In the case of Badri Narain Prasad Choudhary and others vs. Nil Ratan Sarkar, the Hon’ble Supreme Court has explained the principle of owelty. It is held that when the suit property is incapable of division in specie, or in other words when it is not possible to carve out specific shares from the suit property and allot them separately to the co-sharers or co-parceners for their effective enjoyment, 17/22 the rights and interests in the property should be separated, only by allowing one of them to retain the whole of the property on payment of just compensation to the other. In paragraph 19, page 35, the Hon’ble Supreme Court in this case has observed thus : “The suit property, being incapable of division in specie, there is no alternative but to resort to the process called owelty, according to which, the rights and interest of the parties in the property will be separated, only by allowing one of them to retain the whole of the suit property on payment of just compensation to the other. As rightly pointed out by K. Subba Rao, C.J. (speaking for a Division Bench of Andhra High Court in R. Ramaprasada Rao vs. R. Subbaramaiah), in cases not covered by Sections 2 and 3 of the Partition Act, the power of the court to partition property by any equitable method is not affected by the said Act.”

What is the provision under Sections 2 and 3 of the Partition Act? Let us see :

Section-2

Power to court to order sale instead of division in partition suits.

Whenever in any suit for partition in which, if instituted prior to the commencement of this Act, a decree for partition might have been made, it appears to the court that, by reason of the nature of the property to which the suit relates, or of the number of the shareholders therein, or of any other special circumstance, a division of the property cannot reasonably or conveniently be made, and that a sale of the property and distribution of the proceeds would be more beneficial for all the shareholders, the court may, if it thinks fit, on the request of any of such shareholders interested individually or collectively to the extent of one moiety or upwards, direct a sale of the property and a distribution of the proceeds.

 Section 3 Procedure when sharer undertakes to buy.

 (1) If, in any case in which the court is requested under the last foregoing section to direct a sale, any other shareholder applies for leave to buy at a valuation the share or shares of the party or parties asking for a sale, the court shall order a valuation of the share or shares in such manner as it may think fit and offer to sell the same to such shareholder at the price so ascertained, and may give all necessary and proper directions in that behalf.

(2) If two or more shareholders severally apply for leave to buy as provided in sub-section (1), the court shall order a sale of the share or shares to the shareholder who offers to pay the highest price above the valuation made by the court.

(3) If no such shareholder is willing to buy such share or shares at the price so ascertained, the applicant or applicants shall be liable to pay all costs of or incident to the application or applications.

 CONCLUSION:

 Partition by the law of equality is Owel

Shruti Desai

28th December 2022