Showing posts with label LandmarkJudgements. Show all posts
Showing posts with label LandmarkJudgements. Show all posts

Friday, 21 January 2022

SUPREME COURT OF INDIA: SARFAESI Act - Writ petition against private financial institution under Article 226 of Constitution of India against proposed action/actions under Section 13(4) of SARFAESI Act not maintainable.

SUPREME COURT OF INDIA



Before:- M.R. Shah and B.V. Nagarathna, JJ.

Civil Appeal Nos.257-259 of 2022. D/d. 12.1.2022.

Phoenix ARC Private Limited - Appellants

Versus

Vishwa Bharati Vidya Mandir & Ors. - Respondents

For the Appellants :- Mr. Suresh Dutt Dobhal, Mr. Shikhar Kumar, Advocates.

For the Respondents :- Mr. Basavaprabhu S.Patil, Sr. Adv., Mr. Geet Ahuja, Mr. V. N. Raghupathy, Advocates.

IMPORTANT

SARFESI Act - Writ petition against private financial institution under Article 226 of Constitution of India against proposed action/actions under Section 13(4) of SARFAESI Act not maintainable.

A. Constitution of India, 1950, Article 226 - Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, Sections 17 and 13(4) - Writ petition against communication and to pass ex-parte ad interim order virtually stalling/restricting proceedings under SARFAESI Act by creditor - Maintainability - Held, writ petitions against notice under Section 13(4) of SARFAESI Act not required to be entertained by High Court - High Court even erred in passing ex-parte ad interim order directing status quo, thereby virtually stalling the proceedings under SARFAESI Act - High Court ought to have considered appellant's application for vacating ex-parte ad-interim relief, filed at earliest in year 2016, considering that huge sum was involved.

[Paras 10 and 11]

B. Constitution of India, 1950, Article 226 - Writ petition against private financial institution - Maintainability - Held, writ petition against private financial institution under Article 226 of Constitution of India against proposed action/actions under Section 13(4) of SARFAESI Act not maintainable - Appellant being private financial institution proposing to take action under SARFAESI Act to recover monies lent during tcourse of commercial transaction and under contract, cannot be said to be performing public functions which are normally expected to be performed by State authorities - Borrowers should have availed of remedy under SARFAESI Act instead of filing writ petitions.

[Para 12]

C. Constitution of India, 1950, Articles 136 and 226 - Interference of Supreme Court with interim order / interlocutory orders passed in pending proceeding under Article 226 before High Court - Held, filing of writ petitions under Article 226 before High Court is abuse of process of Court, in view of availability of statutory and efficacious remedy - Thus, order passed mechanically and without giving reasons, seriously prejudicing rights of secured creditor to recover amount due and payable - Ad-interim relief continued since 2015, thereby depriving secured creditor of proceeding further with action under SARFAESI Act - Therefore, High Court should be extremely careful and circumspect in exercising its discretion while granting stay in such matters - Proceedings before High Court dismissed - Hence, ex-parte ad-interim order directing status quo to be maintained with regard to possession of mortgaged properties subject to borrowers making a payment of Rs. 1 crore with appellant set aside.

[Para 13.2]

Cases Referred :-

Agarwal Tracom Private Limited v. Punjab National Bank, (2018) 1 SCC 626.

Authorized Officer, State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85.

Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556.

CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603.

City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala, (2009) 1 SCC 168.

General Manager, Sri Siddeshwara Cooperative Bank Limited v. Ikbal, (2013) 10 SCC 83.

Harbanslal Sahnia v. Indian Oil Corpn. Ltd., (2003) 2 SCC 107.

J. Rajiv Subramaniyan v. Pandiyas, (2014) 5 SCC 651.

Kanaiyalal Lalchand Sachdev v. State of Maharashtra, (2011) 2 SCC 782.

Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610.

Praga Tools Corporation v. Shri C.A. Imanual, (1969) 1 SCC 585.

Radha Krishnan Industries v. State of Himachal Pradesh, (2021) 6 SCC 771.

Ramesh Ahluwalia v. State of Punjab, (2012) 12 SCC 331.

Sadhana Lodh v. National insurance Co. Ltd., (2003) 3 SCC 524.

State Bank of India v. Allied Chemical Laboratories, (2006) 9 SCC 252.

Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675.

Thansingh Nathmal v. Supt. of Taxes, AIR 1964 SC 1419.

Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433.

United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110.

United Commercial Bank v. Bank of India, (1981) 2 SCC 766.

Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1.


JUDGMENT
M.R. Shah, J. - Feeling aggrieved and dissatisfied with the impugned order dated 27.03.2018 passed by the High Court of Karnataka at Bengaluru in Writ Petition Nos. 35564-35566 of 2015 by which the High Court has entertained the aforesaid writ petitions under Article 226 of the Constitution of India against the appellant, an Assets Reconstructing Company and has passed an interim order directing for maintaining status quo with regard to SARFAESI action (possession of the secured assets), the original respondent - the Assets Reconstructing Company (ARC) has preferred the present appeals.
2. That the respondent No.1 herein Vishwa Bharati Vidya Mandir is running educational institutions and is a Society registered under the Karnataka Societies Registration Act, 1960 which had availed credit facilities to the tune of Rs.105,60,84,000/- (Rupees One Hundred Five Crores Sixty Lacs and Eighty Four Thousand Only) from Saraswat Cooperative Bank Limited. That similarly, St. Ann's Education Society had also availed credit facilities to the tune of Rs.20,05,00,000/- (Rupees Twenty Crores and Five Lacs Only) from the aforesaid Bank.
2.1 It appears that in order to secure the due repayment of the aforesaid credit facilities, various loans / security documents were executed by the respective respondents, including personal guarantees in favour of the bank. The respondents also created an equitable mortgage by way of deposit of title deeds over the immovable properties with respect to the mortgaged properties. It appears that on account of defaults committed by the borrowers / respondents in repayment of the outstanding dues, in the month of April, 2013, the account of the borrowers / respondents were classified as a "Nonperforming Asset" (NPA) by the Bank. As the borrowers / respondents failed and neglected to repay the outstanding dues of the Bank, the Bank issued a notice dated 01.06.2013 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as "SARFAESI Act"). It appears that in the month of March, 2014, the NPA account of the borrowers / respondents with respect to the credit facilities availed by them was assigned by the Bank in favour of the appellant - Phoenix ARC Private Limited vide registered Assignment Agreement dated 28.03.2014.
2.2 Pursuant to the assignment of the NPA account in favour of the appellant, the borrowers approached the appellant with a request for restructuring the repayment of outstanding dues. A Letter of Acceptance dated 27.02.2015 was executed between the parties, wherein the borrowers / respondents acknowledged and admitted the liability to repay the entire outstanding dues. However, the borrowers failed to repay the dues as per the Letter of Acceptance.
2.3 Since the borrowers again committed defaults in payment of the outstanding dues, the appellant - Phoenix ARC Private Limited issued a letter dated 13.08.2015 intimating the borrowers that since despite issuance of 13(2) notice dated 01.06.2013 and the subsequent execution of the Letter of Acceptance dated 27.02.2015, the borrowers had failed to repay the outstanding dues, therefore, the appellant would be proceeding to take possession of the mortgaged properties after expiry of 15 days from the date of the said letter.
2.4 Against the aforesaid communication/letter dated 13.08.2015, the borrowers / respondents herein filed the writ petitions before the High Court on the ground that the communication/letter dated 13.08.2015 is a possession notice under Section 13(4) of the SARFAESI Act, which is against the Security Interest (Enforcement) Rules, 2002.
2.5 It was the case on behalf of the original writ petitioners that the said possession notice under Section 13(4) of the SARFAESI Act is in violation of Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as "Rules, 2002") and without issuance of the possession notice under Rule 8(1) and without publication of possession notice in two leading newspapers as required under Rule 8(2). The High Court passed an ex-parte ad-interim order dated 26.08.2015 directing status quo to be maintained with regard to possession of the mortgaged properties subject to the borrowers making a payment of Rs. 1 crore with the appellant - Phoenix.
2.6 The petition was opposed by the appellant by filing statement of objections to the writ petitions contending, inter alia, that the letter dated 13.08.2015 as such cannot be said to be taking a measure under Section 13(4) of the SARFAESI Act and that it was only a proposed action/measure to be taken by the appellant. It was also submitted that the writ petitions are not maintainable. That the appellants filed an application being I.A. No. 01 of 2016 for vacation of the ex-parte ad-interim order dated 26.08.2015. However, instead of deciding the application for vacating the interim order, the High Court extended the interim order on 28.02.2017 on the condition that the borrowers shall deposit a further sum of Rs.1 crore. Simultaneously, the appellant also filed two separate original applications against the borrowers before the Debt Recovery Tribunal, Bangalore for recovery of the outstanding dues. Thereafter, the High Court again vide order dated 27.03.2018 extended the earlier ex-parte interim-order dated 26.08.2015 on condition that the borrowers deposit a further sum of Rs. 1 crore.
2.7 Feeling aggrieved and dissatisfied with the aforesaid interim orders / extension of the interim orders and entertaining the writ petitions, the appellant - Phoenix ARC Private Limited, the original respondent has preferred the present appeals.
3. Shri V. Giri, learned Senior Advocate has appeared on behalf of the respective appellants and Shri Basavaprabhu S. Patil, learned Senior Advocate has appeared on behalf of the original writ petitioners - borrowers.
4. Shri V. Giri, learned Senior Advocate appearing on behalf of the appellant(s) has vehemently submitted that in the present case the borrowers are liable to pay to the appellant - ARC / secured creditor an amount of Rs.117,31,68,487/-. It is submitted that for recovery of the amount due and payable, initially in the year 2003, notice under Section 13(2) of the SARFAESI Act was issued and therefore the proceedings under the SARFAESI Act commenced. It is submitted that thereafter despite the Letter of Acceptance dated 27.02.2015 admitting the dues and agreeing to make the payment due and payable, the borrowers failed to repay the amount due and payable, the appellant proposed to proceed further with the proceedings under the SARFAESI Act and therefore vide communication dated 13.08.2015, the borrowers were called upon to make the payment within 15 days failing which it was proposed to take further steps under the provisions of the SARFAESI Act. It is submitted that, technically speaking, at that stage communication dated 13.08.2015 cannot be said to be notice under Section 13(4) of the SARFAESI Act. Despite the above and treating and/or considering the communication dated 13.08.2015 as possession notice under Section 13(4) of the SARFAESI Act, the borrowers filed the writ petitions before the High Court against communication dated 13.08.2015. It is submitted that unfortunately the High Court has entertained the aforesaid writ petitions though not maintainable against a private party like the appellant - ARC and has granted an ex-parte ad-interim order, which has been extended from time to time directing to maintain status quo with respect to the possession of the mortgaged properties on payment of meager amount of Rs. 1 crore (in all Rs. 3 crores only) against the total dues of Rs.117 crores approximately.
4.1 It is submitted that as such the writ petitions against the private party - ARC and that too against the communication proposing to take action under the SARFAESI Act would not be maintainable at all, and, therefore, the High Court ought not to have entertained such writ petitions and ought not to have granted the interim protection to the borrowers, who have failed to repay the amount due and payable, which comes to approximately Rs.117 crores.
4.2 It is further submitted by Shri Giri, learned Senior Advocate appearing on behalf of the appellant - ARC that assuming that the communication dated 13.08.2015 is treated as an action under Section 13(4) of the SARFAESI Act, in that case also, the only remedy available to the borrowers was by way of an appeal under Section 17 of the SARFAESI Act. It is submitted that under no circumstances, the writ petitions would be maintainable and that too against the private ARC.
4.3 It is submitted that the High Court has not at all appreciated that as such there was no occasion to interfere in exercise of the powers under Article 226 of the Constitution of India against a private party and a non- State actor like the appellant - Phoenix ARC. It is submitted that the writ petitions under Article 226 of the Constitution of India for the relief sought in the writ petitions shall not be maintainable and that too against a private party. It is submitted that, however, the Hon'ble High Court has not only entertained the writ petitions but also passed an ex-parte ad-interim order dated 26.08.2015, which has been continued from time to time directing to maintain the status quo with regard to the SARFAESI action (possession of the secured assets). It is submitted that this effectively resulted in staying of all further proceedings under the SARFAESI Act. It is submitted that despite the application(s) for vacating the ex-parte ad-interim relief, the High Court extended the ex-parte interim order dated 26.08.2015 on condition that the borrowers pay further sum of Rs.1 crore only.
4.4 It is submitted that even in the subsequent order dated 27.03.2018, though the High Court observed that "though the learned counsel for the petitioners seeks to refer the nature of the claim and contend that the demand as made would not be justified, the said consideration in a writ petition of the present nature would not arise", still the High Court has extended the ex-parte interim order dated 26.08.2015 by observing that the "petitioner is required to settle the matter with the respondents". It is submitted that the High Court is not at all justified firstly, in entertaining the writ petitions under Article 226 of the Constitution of India for the relief sought in the main writ petitions and that too against a private party and, more particularly, when against any action under the SARFAESI Act, an appeal under Section 17 of the SARFAESI Act would be maintainable and is required to be filed.
4.5 Shri Giri, learned Senior Advocate appearing on behalf of the appellant(s) has relied upon the following decisions in support of the submission that the writ petitions before the High Court are not maintainable:-
United Bank of India v. Satyawati Tondon & Ors., (2010) 8 SCC 110; Kanaiyalal Lalchand Sachdev & Ors. v. State of Maharashtra & Ors., (2011) 2 SCC 782; General Manager, Sri Siddeshwara Cooperative Bank Limited & Anr. v. Ikbal & Ors., (2013) 10 SCC 83; Agarwal Tracom Private Limited v. Punjab National Bank & Ors., (2018) 1 SCC 626; Authorized Officer, State Bank of Travancore & Anr. v. Mathew K.C., (2018) 3 SCC 85; and Radha Krishnan Industries v. State of Himachal Pradesh & Ors., (2021) 6 SCC 771.
4.6 Making the aforesaid submissions and relying upon the above decisions, it is prayed to set aside the impugned order dated 27.03.2018 and also to dismiss the writ petitions filed before the High Court as being non-maintainable.
5. Shri Basavaprabhu S. Patil, learned Senior Advocate appearing on behalf of the original borrowers has vehemently submitted that the present appeals are against the ad interim order/interim order passed by the High Court and the main writ petitions are pending before the High Court. It is submitted that pursuant to the earlier order passed by this Court dated 06.08.2018, the impugned interim order passed by the High Court has been stayed. It is therefore submitted that when the main writ petitions are pending before the High Court, the present appeals may not be further entertained. It is submitted that despite the fact that there is a stay of operation of the impugned order passed by the High Court since 06.08.2018, thereafter no further steps have been taken by the appellant against the borrowers under the provisions of the SARFAESI Act.
5.1 Now, so far as the maintainability of the writ petition against the Assets Reconstruction Company (ARC) is concerned, it is submitted that the writ petition is filed against the ARC complaining of infraction of Rule 8. It is submitted that the said rule imposes a statutory duty on the secured creditor - the ARC to act fairly while dealing with the security so as to secure the interest of the borrower as well as public at large (depositors). In support of aforesaid submission, reliance is placed on the decision of this Court in the case of J. Rajiv Subramaniyan and Anr. v. Pandiyas and Ors., (2014) 5 SCC 651. It is therefore submitted that as in the present case as the ARC has not performed the statutory duty cast upon it and there is a contravention of the statutory duty imposed under the Security Interest (Enforcement) Rules, 2002, a writ would lie against ARC against such an illegal action.
5.2 Shri Patil, learned Senior Advocate appearing on behalf of the borrowers has also relied upon the decisions of this Court in the case of Praga Tools Corporation v. Shri C.A. Imanual and Ors., (1969) 1 SCC 585 and Ramesh Ahluwalia v. State of Punjab and Ors., (2012) 12 SCC 331 in support of his submission that even against a purely private body but performing public functions, which are normally expected to be performed by the State authorities, a writ would be maintainable.
5.3 Now, in so far as the submission on behalf of the appellant that assuming that a communication dated 13.08.2015 can be said to be a SARFAESI action under Section 13(4) of the Act, the borrowers had to prefer an appeal under Section 17 and, therefore, the writ petition would not be maintainable and/or is required to be entertained, it is vehemently submitted by Shri Patil, learned Senior Advocate appearing on behalf of the borrowers that on the ground of alternative remedy only, the writ petition would not be barred.
5.4 It is submitted that Section 13 of the SARFAESI Act provides for enforcement of security interest and sub-section 4(a) of Section 13 provides that in case a borrower fails to discharge his liability within the period specified under sub-section (2) of Section 13, the secured creditor may take possession of the secured assets of the borrower. It is submitted that Rule 8(1) of the Rules, 2002 mandates that where the secured assets is an immovable property, the authorized officer of the secured creditor shall take or cause to be taken possession, by delivering the possession notice prepared as nearly as possible in Appendix - IV of the said Rules, to the borrower and by affixing the possession notice on the outer door or at the conspicuous space of the property. It is submitted that Rule 8(2) of the said Rules also mandates that the said possession notice be published as soon as possible, but in any case not later than 7 days from the date of taking possession, in two leading newspapers, one in vernacular language having sufficient circulation in that locality by the authorized officer.
5.5 It is submitted that in the instant case, it is not the case of the appellant that it took any measure in terms of Section 13(4) of the SARFAESI Act. It is therefore submitted that the remedy under Section 17 of the SARFAESI Act, which would be against any measure referred to in sub-section (4) of Section 13 of the SARFAESI Act to file an application to the Debts Recovery Tribunal is not available to the borrowers in the instant case. It is further submitted that there is no compliance with Rule 8(1) and 8(2) of the Rules, 2002. It is submitted that as held by this Court in the case of Mathew Varghese v. M. Amritha Kumar and Ors., (2014) 5 SCC 610 on a detailed analysis of Rules 8 and 9 that any sale effected without complying with the same would be unconstitutional and, therefore, null and void. It is submitted therefore that the High Court has rightly entertained the writ petitions.
5.6 Making the above submissions and relying upon the decision of this Court in the case of J. Rajiv Subramaniyan and Anr. (supra), it is urged that the High Court has not committed any error in entertaining the writ petitions.
5.7 It is further submitted by Shri Patil, learned Senior Advocate appearing on behalf of the respondents - borrowers that even otherwise considering the fact that the present appeals are against the interim order granted by the High Court, the same may not be entertained. Reliance is also placed on the decision of this Court in the case of United Commercial Bank v. Bank of India and Ors., (1981) 2 SCC 766.
5.8 It is further submitted that even otherwise in the present case, subsequently, the appellant has taken recourse under section 19 of the Recovery of Debts Due To Banks And Financial Institutions Act, 1993 by filing O.A. No. 715 of 2017 before the Debts Recovery Tribunal, Bengaluru and the said Tribunal has passed an interim order directing the borrowers to deposit the fee collected / to be collected by all educational institutions run by the Society - borrower for academic year 2017-2018 into the Bank. It is submitted that another interim order has been passed on 06.07.2017 restraining the borrowers from selling, transferring, alienating or otherwise dealing with certain properties of the borrowers/respondents. It is submitted therefore that the interest of the appellant is fully protected and no prejudice would be caused to the appellant if the writ petitions are finally considered and disposed of by the High Court on merits.
5.9 Making the above submissions, it is prayed to dismiss the present appeals.
6. We have heard the learned counsel for the respective parties at length.
7. At the outset, it is required to be noted that in the present case, the respondents - borrowers whose accounts have been declared as NPA in the year 2013 have filed the writ petitions before the High Court challenging the communication dated 13.08.2015 purporting it to be a notice under Section 13(4) of the SARFAESI Act. It is required to be noted that as per the appellant - assignor approximately Rs.117 crores is due and payable to the Bank. While passing the ex-parte interim order on 26.08.2015 and while entertaining the writ petitions against the communication dated 13.08.2015, the High Court has directed to maintain status quo with respect to the possession of the secured properties on condition that the borrowers deposit Rs. 1 crore only. Despite the fact that subsequently an application for vacating the ex-parte ad-interim order has been filed in the year 2016, the application for vacating the interim order has not been decided and disposed of. On the contrary, the High Court thereafter has further extended the ex-parte ad-interim order dated 26.08.2015 on condition that the borrowers should deposit a further sum of Rs. 1 crore. Thus, in all the borrowers are directed to deposit Rs. 3 crores only against the dues of approximately Rs.117 crores.
7.1 It is the case on behalf of the appellant that the writ petitions against the communication dated 13.08.2015 proposing to take further action under Section 13(4) of the SARFAESI Act and that too against a private Assets Reconstructing Company (ARC) shall not be maintainable. It is also the case on behalf of the appellant that assuming that the communication dated 13.08.2015 can be said to be a notice under Section 13(4) of the SARFAESI Act, in view of the alternative statutory remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions.
7.2 While considering the issue regarding the maintainability of and/or entertainability of the writ petitions by the High Court in the instant case, a few decisions of this Court relied upon by the learned Senior Advocate appearing on behalf of the appellant - ARC are required to be referred to.
7.3 In the case of Satyawati Tondon & Ors. (supra), it was observed and held by this Court that the remedies available to an aggrieved person against the action taken under section 13(4) or Section 14 of the SARFAESI Act, by way of appeal under Section 17, can be said to be both expeditious and effective. On maintainability of or entertainability of a writ petition under Article 226 of the Constitution of India, in a case where the effective remedy is available to the aggrieved person, it is observed and held in the said decision in paragraphs 43 to 46 as under:-
"43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.
44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.
45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance.
46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad [AIR 1969 SC 556], Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107] and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order."
7.4 In the case of City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala, (2009) 1 SCC 168, it was observed by this Court in paragraph 30 that the Court while exercising its jurisdiction under Article 226 is duty bound to consider whether ...............(c) the petitioner has any alternative or effective remedy for the resolution of the dispute."
7.5 In the case of Kanaiyalal Lalchand Sachdev and Ors. (supra) after referring to the earlier decisions of this Court in the cases of Sadhana Lodh v. National insurance Co. Ltd. and Anr., (2003) 3 SCC 524; Surya Dev Rai v. Ram Chander Rai and Ors., (2003) 6 SCC 675 and State Bank of India v. Allied Chemical Laboratories and Anr., (2006) 9 SCC 252 while upholding the order passed by the High Court dismissing the writ petition on the ground that an efficacious remedy is available under Section 17 of the SARFAESI Act, it was observed that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person.
7.6 Similar view has been expressed by this Court in subsequent decisions in the case of General Manager, Sri Siddeshwara Cooperative Bank Limited & Anr. (supra) as well as in the case of Agarwal Tracom Private Limited (supra).
8. Applying the law laid down by this court in the aforesaid decisions, it is required to be considered whether, in the facts and circumstances of the case, the High Court is justified in entertaining the writ petitions against the communication dated 13.08.2015 and to pass the ex-parte ad interim order virtually stalling/restricting the proceedings under the SARFAESI Act by the creditor.
9. It is required to be noted that it is the case on behalf of the appellant that as such the communication dated 13.08.2015 cannot be said to be a notice under Section 13(4) of the SARFAESI Act at all. According to the appellant, after the notice under Section 13(2) of the SARFAESI Act was issued in the year 2013 and thereafter despite the Letter of Acceptance dated 27.02.2015, no further amount was paid, the appellant called upon the borrowers to make the payment within two weeks failing which a further proceeding under Section 13(4) of the SARFAESI Act was proposed. Thus, according to the appellant, it was a proposed action. Therefore, the writ petitions filed against the proposed action under Section 13(4) of the SARFAESI Act was not maintainable and/or entertainable at all.
10. Assuming that the communication dated 13.08.2015 can be said to be a notice under Section 13(4) of the SARFAESI Act, in that case also, in view of the statutory remedy available under Section 17 of the SARFAESI Act and in view of the law laid down by this Court in the cases referred to hereinabove, the writ petitions against the notice under Section 13(4) of the SARFAESI Act was not required to be entertained by the High Court. Therefore, the High Court has erred in entertaining the writ petitions against the communication dated 13.08.2015 and also passing the ex-parte ad-interim orders directing to maintain the status quo with respect to possession of secured properties on the condition directing the borrowers to pay Rs. 1 crore only (in all Rs.3 crores in view of the subsequent orders passed by the High Court extending the ex-parte ad-interim order dated 26.08.2015) against the total dues of approximate Rs.117 crores. Even the High Court ought to have considered and disposed of the application for vacating the ex-parte ad-interim relief, which was filed in the year 2016 at the earliest considering the fact that a large sum of Rs.117 crores was involved.
11. Now, in so far as the reliance placed upon the decision of this Court in the case of J. Rajiv Subramaniyan and Anr. (supra) by the learned senior counsel appearing on behalf of the borrowers in support of his submission that writ petition would be maintainable, it is to be noted that in the aforesaid case, the learned counsel appearing on behalf of the Bank did not press the maintainability and/or entertainability of the writ petition under Article 226 and therefore, this Court had no occasion to consider the entertainability and/or maintainability of the writ petition. Therefore, the aforesaid decision is not of any assistance to the respondents - borrowers.
12. Even otherwise, it is required to be noted that a writ petition against the private financial institution - ARC - appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lent the money to the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable. Therefore, decisions of this Court in the cases of Praga Tools Corporation (supra) and Ramesh Ahluwalia (supra) relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers.
13. Now, so far as the submission on behalf of the borrowers that in exercise of the powers under Article 226 of the Constitution, this Court may not interfere with the interim / interlocutory orders is concerned, the decision of this Court in the case of Mathew K.C. (supra) is required to be referred to.
13.1 In the case of Mathew K.C. (supra) after referring to and/or considering the decision of this Court in the case of Chhabil Dass Agarwal (supra), it was observed and held in paragraph 5 as under:-
"5. We have considered the submissions on behalf of the parties. Normally this Court in exercise of jurisdiction under Article 136 of the Constitution is loath to interfere with an interim order passed in a pending proceeding before the High Court, except in special circumstances, to prevent manifest injustice or abuse of the process of the court. In the present case, the facts are not in dispute. The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. The normal rule is that a writ petition under Article 226 of the Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within the well-defined exceptions as observed in CIT v. Chhabil Dass Agarwal [CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603], as follows: (SCC p. 611, para 15)
"15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case [Thansingh Nathmal v. Supt. of Taxes, AIR 1964 SC 1419], Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433] and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation."
13.2 Applying the law laid down by this Court in the case of Mathew K.C. (supra) to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the Court. The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13.08.2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs.1 crore only (in all Rs.3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs.117 crores. The ad-interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of Court. It appears that the High Court has initially granted an ex-parte ad-interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.
14. In view of the above and for the reasons stated above, present appeals succeed. The Writ Petition Nos. 35564 to 35566 of 2015 before the High Court are dismissed. Consequently, the ex-parte ad-interim order dated 26.08.2015 further extended by orders dated 28.02.2017 and 27.03.2018 stand vacated.
Present appeals are accordingly allowed with costs to the appellants to be paid by the original writ petitioners quantified at Rs.1 lakh in both the cases to be directly paid to the appellant within a period of four weeks from today. Pending application(s), if any, also stand disposed of.

SUPREME COURT OF INDIA: Specific Relief Act, 1963, Section 19(b) - Institution of suit for specific performance, Civil Procedure Code, 1908, Section 100 - Decree of specific performance of agreement to sell - Second appeal - Plea of Adverse possession - It is not necessary to go into issue of adverse possession as both parties are claiming title

 SUPREME COURT OF INDIA



Before:- Sanjay Kishan Kaul and M.M. Sundresh, JJ.

Civil Appeal Nos.5384-5385 of 2014. D/d. 17.1.2022.

Seethakathi Trust Madras - Appellants

Versus

Krishnaveni - Respondents

For the Appellants :- Mr. Chander Uday Singh, Sr. Adv., Mr. M. Yogesh Kanna, Mr. Raja Rajeshwaran S., Advocates.

For the Respondents :- Mr. V. Ramasubramanian, Mr. K. K. Mani, Ms. T. Archana, Advocates.

A. Civil Procedure Code, 1908, Section 100 - Decree of specific performance of agreement to sell - Second appeal - Plea of Adverse possession - It is not necessary to go into issue of adverse possession as both parties are claiming title - Crucial aspect is decree obtained for specific performance by Respondent and manner of obtaining decree - Respondent fully aware of prior registered transaction in respect of same property originally in favour of Niraja Devi - This is as per deposition of her manager - Thus, not possible to accept that decree obtained behind back of bona fide purchaser, when transaction took place prior to institution of suit for specific performance.

[Para 24]

B. Specific Relief Act, 1963, Section 19(b) - Institution of suit for specific performance - Case of Respondent that he did not even step into witness box to depose to facts and manager who stepped into witness box that too without producing any proper authorisation is contrary to interest of respondent as it was accepted that there knowledge of transaction with respect to same land between third parties and yet Respondent chose not to implead purchasers as parties to suit - Thus, endeavour was to obtain decree at back of real owners and that is the reason, at least, in execution proceedings that original vendor did not even come forward and sale deed had to be executed through process of Court - Therefore, case falls within exception set out in Section 19(b) of Specific Relief Act, being transferees who paid money in good faith and without notice of original contract - Hence, decree of specific performance of agreement to sell set aside.

[Para 25]

Cases Referred :-

Lachhman Dass v. Jagat Ram, (2007) 10 SCC 448.

Man Kaur (Dead) by LRs v. Hartar Singh Sangha, (2010) 10 SCC 512.

Surat Singh (Dead) v. Siri Bhagwan, (2018) 4 SCC 562.

Vidyadhar v. Manikrao, (1999) 3 SCC 573.

JUDGMENT
Sanjay Kishan Kaul, J. - Facts:
Land measuring 0.08 cents (100 cents = 1 acre) has seen a dispute spanning almost half a century.
2. One C.D. Veeraraghavan Mudaliar was the original owner of 120 acres of land comprising S.No.44 and 45 at No.18, Othivakkam Village, Chengalpattu Taluk. He entered into an agreement in October, 1959 to sell the Land in favour of Janab Sathak Abdul Khadar Sahib who intended to purchase the same on behalf of the appellant Trust for a sale consideration of Rs.18,000. The appellant Trust was registered under the Societies Registration Act, 1860 originally and now regulated under the Tamil Nadu Societies Registration Act, 1975. The other story is what is set up by the Respondent who claimed that C.D. Veeraraghavan Mudaliar entered into an agreement of sale with her on 10.04.1961 for sale of 50 acres in patta No.61 and paimash No.987/1 of the Land.
3. It is the claim of the Appellant that C.D. Veeraraghavan Mudaliar had sold 50 acres out of 120 acres of land to one Niraja Devi on 16.11.1963 vide registered sale deed, who took possession of the said land and enjoyed the same. These 50 acres were bounded by a hillock in the east, land belonging to C.D. Veeraraghavan Mudaliar in the west, Government Reserve Forest in the north and Hasanapuram grazing ground and lake in the south. Niraja Devi sold the 50 acres of land to one Perumal Mudaliar vide registered sale deed dated 19.04.1964, who also took possession of the said land and enjoyed the same. As per the Appellant, Perumal Mudaliar sold the 50 acres of land to the Appellant Trust on 19.03.1968 vide a registered sale deed.
4. Insofar as the remaining 70 acres of land is concerned, C.D. Veeraraghavan Mudaliar and his son sold the same to the Appellant vide registered sale deed dated 19.3.1968. The said property is bounded by the land of Niraja Devi on the east, Kumuli Forest Line on the north, boundary line of Kannivakam Village on the west, and boundary line of Hasanapuram Village on the south. In respect of this 70 acres there is no dispute.
History of the land dispute:
5. The Respondent filed a suit as O.S. No.31 of 1964 before the Principal Sub-Court, Chengalpattu for specific performance of the agreement dated 10.04.1964 against C.D. Veeraraghavan Mudaliar and his son, which was dismissed on 13.08.1964. The Respondent preferred an appeal against the said order, as A.S. No.366/65 before the District Judge, Changalpattu and the said appeal was also dismissed on 08.03.1966. However, the fate of the Respondent brightened in the second appeal, being S.A. No.1673 of 1966, before the High Court of Judicature at Madras, when they succeeded in terms of the judgment dated 07.07.1970 whereby specific performance of the agreement dated 10.04.1961 was decreed. The High Court inter alia held that time was not the essence of the contract and the land could be identified. In pursuance of the decree so passed in the second appeal, the Respondent filed for execution, being E.P. No.17 of 1976, before the Sub Court, Chengalpattu. The Sub-Court appointed the Taluk head surveyor as Commissioner for demarcation of 50 acres of land, who subsequently filed his interim and final reports. The Sub-Court purportedly executed the sale deed on 09.04.1981 through the officer of the Court and a delivery receipt dated 26.09.1981 was issued to Respondent.
6. The controversy insofar as the present case is concerned arose from a suit filed by the Respondent, being O.S. No.14 of 1984 before the Court of District Munsif, Chengalpattu against the Appellant praying for declaration of title and delivery in her favour to the extent of 0.08 cents of the land and delivery of the same. The suit was predicated inter alia on a rationale that the Respondent had taken possession of 50 acres by way of the execution proceedings, and that the Appellant had trespassed over 0.08 cents of the same. The suit was, however, dismissed on 07.09.1988 as the trial court formed an opinion that the Respondent cannot be said to have taken possession of 50 acres of land as the delivery receipt read that the delivery was effected by the Vetti. The crucial aspect is that the Respondent, who was the best person to speak about the delivery of 50 acres of land chose not to appear in the witness box. This proved fatal to her case as the manager of the Respondent who did appear in the witness box deposed that he was not authorised by the respondent to conduct the case. Thus, the case fell on the evidence led by the Respondent themselves. The testimony of the manager also became material as he admitted to possessing knowledge of the sale deed effected by C.D. Veeraraghavan Mudaliar in favour of Niraja Devi. The manager acknowledged that he was aware of the same through the corresponding encumbrance certificate before the filing of the suit in 1964, and also knew that Niraja Devi had sold 50 acres of land to Perumal Mudaliar. The subsequent purchaser, to the knowledge of the Respondent, was never impleaded as party in the suit nor did she seek to get the sale deeds cancelled. It is in view thereof it was opined that the Respondent was estopped from questioning the appellant's purchase. The plea of sale being hit by lis pendens was rejected and the appellant was held to have adverse possession of the land as confirmed by the Panchayat Board President, who appeared as a witness and deposed that the Appellant had been enjoying the land for more than 30 years. The Appellant had no knowledge of the earlier proceedings in respect of the suit for specific performance filed by the Respondent.
7. The Respondent preferred an appeal, being A.S. No.101 of 1998, before the Principal Sub Court, Chengalpet, which was dismissed on 28.03.2002. The dismissal was predicated on a dual finding, i.e., that the appellant was in adverse possession of the land, and as per Section 114(3) of the Indian Evidence Act, 1872 (hereinafter referred to as the `Evidence Act') the expression "may be presumed" showed that the court can infer the reality from available evidence and documents. The delivery receipt was found to be not a real document of delivery of possession, but of mere paper delivery.
8. The aggrieved Respondent filed a second appeal before the High Court of Judicature at Madras in S.A. No.1552 of 2003 claiming she was the absolute owner of land to the extent of 50 acres pursuant to the clear demarcation by the surveyor as well as the sale deed between her and C.D. Veeraraghava Mudaliar, which was executed on 09.04.1981 through the court process. The grievance against the Appellant was of trespass upon 0.08 cents of land, as a barbed wire fence and a gate had been put up on the same. It was Respondent's case that possession of the land had been taken over on 26.09.1981, and that the Appellant could not contend that he had title over the land by adverse possession. She professed ignorance of the sale in favour of Niraja Devi and Perumal Mudaliar as rationale for not impleading the Appellant, even though her manager had deposed to the contrary while she had not entered the witness box during the trial.
9. The Appellant claimed title to 50 acres including 0.08 cents and pointed out that Respondent's grievance was made only with respect to 0.08 cents. The Appellant Trust, in fact, claimed the ownership of entire 120 acres of land. It was contended that no proper delivery had ever been made as admitted by the amin and the possession was only a paper delivery without actual physical possession. No question of law was left to be determined as urged by the Appellant.
10. The High Court vide impugned judgment dated 06.01.2012, however, allowed the second appeal and set aside the judgments passed by the courts below on the ground that they did not properly appreciate the evidence particularly with respect to the execution proceedings. The delivery of 50 acres of land by the amin in accordance with the surveyor's plans was found to be proof of possession by the Respondent. Further, as per the surveyor's report, persons belonging to the appellant trust did endeavour to obstruct the possession proceedings but did not challenge the vires of the delivery proceedings. The plea of adverse possession was also rejected.
Pleas of the Appellant before this Court:
11. Learned senior counsel for the appellant contended that no substantial question of law was framed by the High Court, which itself is a sine qua non of exercising jurisdiction under section 100 of the Code of Civil Procedure, 1908 (hereinafter referred to as the `said Code'). The manner in which the High Court proceeded, it was urged, amounted to re-appreciating the evidence and disturbing the concurrent findings of the courts below. The High Court had proceeded into a fact-finding exercise, which was not within its jurisdiction under Section 100 of the said Code.
12. An aspect emphasised by learned counsel for the Appellant was that the Respondent chose not to depose in support of her own case, and the manager who deposed admitted that he had no power or authority to do so. The Respondent alone had knowledge of the alleged facts as appeared from the deposition of the manager and, thus, an adverse inference must be drawn against the Respondent in view of the judicial pronouncements in Vidyadhar v. Manikrao and Anr., (1999) 3 SCC 573 and Man Kaur (Dead) by LRs v. Hartar Singh Sangha, (2010) 10 SCC 512. It has been held in these judicial pronouncements that if a party to a suit does not appear in the witness box to state their own case and does not offer themselves to be cross-examined by the other side, a presumption would arise that the case set up is not correct. The latter of the two judgments has discussed the earlier judgments and catena of other judicial views to the same effect and opined that a plaintiff cannot examine his attorney holder in his place, who did not have personal knowledge either of the transaction or of his readiness and willingness in a suit for specific performance. Thus, a third party who had no personal knowledge cannot give evidence about such readiness and willingness, even if he is an attorney holder of the person concerned.
13. The admission of the manager of the Respondent who appeared in the witness box acknowledging that the sale to Niraja Devi by a registered conveyance deed dated 16.11.1963 prior to the filing of the suit shows that the Respondent was aware of the further sale by Niraja Devi to Perumal Mudaliar by another registered sale deed and thereafter in favour of the Appellant. In such an eventuality, it was urged that the purchasers were necessary parties to the suit and a decree for specific performance obtained behind their back would be a nullity. This proposition was sought to be supported by a judgment of this Court in Lachhman Dass v. Jagat Ram and Ors., (2007) 10 SCC 448. In para 16 of the judgment, it has been opined that a party's right to own and possess a suit land could not have been taken away without impleading the affected party therein and giving an opportunity of hearing in the matter, as the right to hold property is a constitutional right in terms of Article 300-A of the Constitution of India. Thus, if a superior right to hold a property is claimed, procedure therefore must be complied with. In this context, it was urged that as per Section 3 of the Transfer of Property Act, 1882, a registered transaction operates as a notice to all concerned. In the present case, the first sale deed was already registered prior to the institution of the suit by the Respondent for specific performance. Thus, that decree could not be binding on the Appellant.
14. In the alternative, it was pleaded that the decree of specific performance was vitiated by a fraud with the purchaser of the property being deliberately not impleaded in the suit. A reference was made to Section 19(b) of the Specific Relief Act, 1963 (hereinafter referred to as the `Specific Relief Act'), which reads as under:
"19. Relief against parties and persons claiming under them by subsequent title.-Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against-
xxxx xxxx xxxx xxxx
(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;"
15. Since Niraja Devi was a bona fide purchaser long prior to the institution of the suit for specific performance by the Respondent, specific performance could not be enforced against her or her transferees as they would fall within the exception of transferee for value who had paid money in good faith and without notice of the original contract.
16. Lastly it was sought to be urged that Section 114 of the Evidence Act in the factual context has not been correctly appreciated. The provision reads as under:
"114 Court may presume existence of certain facts. -The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case."
17. The aforesaid was in the context that the delivery effected was only a paper delivery and any infraction in effecting the delivery was not curable. The amin had not followed the prescribed procedure in delivering possession and the appellant had continued in possession for over 30 years. Moreover, the suit was only filed for 0.08 cents of land.
Pleas of the Respondent before this Court:
18. On the other hand learned senior counsel for the respondent claimed that the Respondent and her daughter are quite old and do not have the wherewithal to pursue litigation. The litigation has been pending since 1961. It was urged that the appellant had title only to 70 acres of land and has trespassed into 0.08 cents of the land, which blocked the entrance to respondent's land. Thus, though the suit pertains only to a smaller extent of land it affected the enjoyment by the respondent of their possession over larger extent of the land.
19. Learned counsel urged that the trial court and the lower court had overlooked crucial and vital evidence and, thus, the High Court rightly exercised jurisdiction under Section 100 of the said Act. There was no question of impleading the appellant or the prior purchasers as parties as no issue had been framed in the suit in respect thereof. The presumption under Section 114(e) of the Evidence Act must arise and the appellant Trust was aware of the execution proceedings as some of the persons belonging to the appellant Trust are stated to have obstructed the Surveyor's entry when he went to demarcate the land as well as by the interim and final reports of the surveyor. The Trust never questioned the same at the time and cannot question it now.
Conclusion:
20. We have given our thought to the aforesaid aspect.
21. We find that there are more than one infirmities which make it impossible for us to uphold the view taken by the High Court upsetting the concurrent findings of the courts below.
22. The first aspect to be taken note of is that the question of law ought to have been framed under Section 100 of the said Code. Even if the question of law had not been framed at the stage of admission, at least before the deciding the case the said question of law ought to have been framed. We may refer usefully to the judicial view in this behalf in Surat Singh (Dead) v. Siri Bhagwan and Ors., (2018) 4 SCC 562, wherein this Court has held that:
"29. The scheme of Section 100 is that once the High Court is satisfied that the appeal involves a substantial question of law, such question shall have to be framed under sub-section (4) of Section 100. It is the framing of the question which empowers the High Court to finally decide the appeal in accordance with the procedure prescribed under sub-section (5). Both the requirements prescribed in sub-sections (4) and (5) are, therefore, mandatory and have to be followed in the manner prescribed therein. Indeed, as mentioned supra, the jurisdiction to decide the second appeal finally arises only after the substantial question of law is framed under sub-section (4). There may be a case and indeed there are cases where even after framing a substantial question of law, the same can be answered against the appellant. It is, however, done only after hearing the respondents under sub-section (5)."
23. There is undoubtedly an element of dispute with respect to possession raised by the two parties qua their respective 50 acres. Insofar as 70 acres of land is concerned that undisputedly vests with the Appellant. The dispute sought to be raised by the Respondent does not pertain to 50 acres but only to 0.08 cents, a fraction of an acre (0.08 per cent of an acre). It may, however, be noticed that according to the Respondent the small area is important for the enjoyment purposes.
24. In our view, it is not necessary to go into the issue of adverse possession as both parties are claiming title. The crucial aspect is the decree obtained for specific performance by the Respondent and the manner of obtaining the decree. The Respondent was fully aware of the prior registered transaction in respect of the same property originally in favour of Niraja Devi. This is as per the deposition of her manager. In such a scenario it is not possible for us to accept that a decree could have been obtained behind the back of a bona fide purchaser, more so when the transaction had taken place prior to the institution of the suit for specific performance. Suffice to say that this view would find support from the judgments in Vidyadhar v. Manikrao (supra) and Man Kaur v. Hartar Singh Sangha (supra).
25. The second vital aspect insofar as the case of the Respondent is concerned is that the Respondent did not even step into the witness box to depose to the facts. It is the manager who stepped into the witness box that too without producing any proper authorisation. What he deposed in a way ran contrary to the interest of the Respondent as it was accepted that there was knowledge of the transaction with respect to the same land between third parties and yet the Respondent chose not to implead the purchasers as parties to the suit. Thus, the endeavour was to obtain a decree at the back of the real owners and that is the reason, at least, in the execution proceedings that the original vendor did not even come forward and the sale deed had to be executed through the process of the Court. The case of Niraja Devi and the subsequent purchasers including the Appellant would fall within the exception set out in Section 19(b) of the Specific Relief Act, being transferees who had paid money in good faith and without notice of the original contract. There are also some question marks over the manner in which the possession is alleged to have been transferred although we are not required to go into that aspect, as we are concerned with only 0.08 cents of land.
26. We are, thus, unequivocally of the view that for all the aforesaid reasons, the High Court ought not to have interfered with the concurrent findings of the trial court and the first appellate court.
27. The suit of the Respondent stands dismissed in terms of the judgment of the trial court and affirmed by the first appellate court and the impugned judgment of the High Court dated 06.01.2012 is consequently set aside.
28. The appeals are accordingly allowed leaving the parties to bear their own costs.

SUPREME COURT OF INDIA: Punjab Police Rules, 1934, Rule 13.7(9)

SUPREME COURT OF INDIA



Before:- K.M. Joseph and Pamidighantam Sri Narasimha, JJ.

Civil Appeal No.401 of 2022 Arising Out of SLP (Civil) No.30370 of 2017. D/d. 19.1.2022.

Sushil Kumar - Appellants

Versus

State of Haryana & Ors. - Respondents

For the Appellants :- Mr. Surender Kumar Gupta, Mr. Chitvan Singhal, Ms. Priyanka Terdal, Ms. Priya Mishra, Advocates.

For the Respondents :- Mr. Raj Singh Raja, AAG, Mr. Pankaj Kumar Singh, Mr. Vishwa Pal Singh, Mr. Rajendra Prasad, Ms. Pallavi, Mr. Brijender Singh Dhull, Advocates.

Punjab Police Rules, 1934, Rule 13.7(9).

JUDGMENT

Pamidighantam Sri Narasimha, J. - Leave granted.

2. This Civil Appeal arises out of the final judgment and order dated 29.07.2015 of the High Court of Punjab and Haryana at Chandigarh passed in LPA No. 1910 of 2011.

3. The Appellant was appointed as a Constable in the year 1995. It is his case that he was positioned as a Head Constable under the extent ORP Policy on 21.08.2001. Due to his acts of bravery his name was recommended by the Superintendent of Police (hereinafter `the SP') for promotion under the 10% quota of outstanding performance for inclusion in the B-I List for promotion to the post of Head Constable in the year 21.01.2004. However, the Appellant's name was dropped down by the Inspector General of Police (hereinafter the `IG'), when only 7 out of the 9 names were forwarded to the Central Departmental Promotion Committee (hereinafter the `CDPC'). Three years thereafter, i.e., in 2007 his name was again forwarded by the SP and this time it was passed by the IG, by virtue of which he was granted promotion and was made the Officiating Head Constable from 26.10.2008. It is his grievance that he should have been promoted in the year 2004 itself and that the delay in appointing him in 2008 is illegal and arbitrary. He filed a writ petition in 2011 seeking retrospective promotion with effect from 21.01.2004. The Single Judge dismissed the petition on the ground that selection is not a matter of right. Writ appeal was also dismissed by the Division Bench by the order impugned herein.

4. The learned counsel for the Appellant, Shri Surender Kumar Gupta has argued that the IG has no power to interfere with the recommendation of the SP. He further alleges that when the SP has forwarded the decision of the Departmental Promotion Committee (hereinafter `DPC'), the IG does not act as the appellate authority and cannot substitute his decision to that of the DPC. It is also contended that the IG has no power to adjudge the comparative merit in list B-I prepared by the DPC. He further submits that the IG has not given any reasons nor was the Appellant given any opportunity of hearing. He alleges that he is far more meritorious than the ones who have been recommended by the SP and approved by the IG in 2004. It is his case that the decision is arbitrary because the very same credentials enabled him to be selected and recommended in 2007. He has therefore prayed for retrospective promotion from the year 2004.

5. The learned Additional Advocate General for the Respondent-State, Shri Raj Singh Rana, has submitted that the names recommended by the SP to the CDPC are only provisional and subject to ratification by the IG, and mere forwarding of the name of the Appellant by the SP will not create any right of promotion in his favour. He has submitted that the word "through" in Rule 13.7(9) of the Punjab Police Rules, 1934 calls for application of mind by the IG and not mere forwarding of the recommendations as sent by the concerned unit head. The Respondents have alleged that the seven constables appointed were more qualified than the Appellant.

The Rules:

6. The present appeal pertains to the promotion of Constables to the post of Head Constables in the State of Haryana. The matters relating to the promotion of Constables to the rank of Head Constables are governed under the Punjab police Rules, 1934 as applicable in the State of Haryana.

6.1 The scheme of appointment and promotion is governed by the provisions which are as follows:

12.10 Appointment of Head Constable: Head constables shall be appointed by promotion from selection grade constables in accordance with rules 13.7 and 13.8.

13.1 Promotion from one rank to another.

(3) For the purposes of regulating promotion amongst enrolled police officers six promotion lists- A,B,C,D,E and F will be maintained.

Lists A, B, C, and D shall be maintained in each district as prescribed in rules 13.6, 13.7, 13.8 and 13.9 and will regulate promotion to the selection grade of constables and to the ranks of head constables and assistant sub-inspector.........

6.2 Chapter 13 of the Rules lay down the scheme for promotion. Rule 13.7 is concerned with the selection of candidates for admission to the Lower School Course at the Police Training College out of which postings of Head Constables are made. The Head Constables are selected out of a list of Selection Grade Candidates which is made out of three sources being: (a) direct recruitment-(55% quota), (b) Seniority-cum-merit -(35% quota) (c) Outstanding performance-(10% quota). Rule 13.7 prescribing the method of selection, leading to the appointment of Head Constable, to the extent that it is relevant for the 10% quota is extracted herein below:

"13.7 Selection of candidates for admission to courses at the Police Training College: List B (in Form 13.7) shall be maintained by each Superintendent of Police. It shall include the names of all constables selected for admission to the Lower School Course to be held at the Police Training College. Selection to the list B shall be made in the month of January each year and shall be limited to the number of seats allotted to the district for the year. The number of seats in Lower School Course in a year shall be allotted on the basis of existing vacancies and the vacancies likely to be created within one year in the respective unit. 55% of the seats allotted to a unit in the Lower School Course shall be filled in on the basis of a competitive examination, 35% on the basis of seniority-cum-fitness and 10% on the basis of consistent outstanding performance in job/obtaining Gold or Silver Medal in All India Police Games/Duty Meet/National Games or exceptional display of bravery during the course of performance of official duty............

(2)(iii) All constables irrespective of their educations qualifications shall be eligible to be brought on list B-1, on the basis of consistent outstanding performance in job/obtaining Gold or Silver medal in All India Police Games/Duty Meets/National or International Games or exceptional display of bravery during the course of performance of official duty if they are under the age of 40 years and have completed two years of service on the first day of January of the year in which selection is made. Only those constables shall be brought on list B-1 after two years of service, but before five year of service who have won a medal in International Sports events like Olympics, Asian Games, Commonwealth Games or similar International events. Constables who have won medals in National Games/All India Police Games/Duty Meets and who are being considered for exceptional bravery or consistent outstanding performance shall be considered only if, they have put in the minimum five year of service..........

(9) Various units shall be allotted only 90% of total seats of the year for list B and candidates for 10% seats common to all units shall be selected by Central Departmental Committee. For selecting 10% of the candidates on the basis of consistent outstanding performance in job/attaining Gold or Silver Medal in All India Police Games/Duty Meet/National Games or exceptional display of bravery in the job, each unit shall send its recommendation through the concerned Inspectors General of Police/Deputy Inspectors General of Police to the Central Departmental Promotion Committee to be appointed for the entire State by the Director General of Police. These 10% seats shall be filled in on the basis of State level comparative merit of candidates sponsored by the units as above on the recommendation of the State level Departmental Promotion Committee. Such candidates recommended by the above Departmental Promotion Committee shall be assigned to various units for inclusion in list B against 10% quota irrespective of the unit to which the candidate originally belongs......

(14) A Departmental Promotion Committee headed by the Superintendent of Police/commandant of the concerned district or unit and consisting of two Deputy Superintendents of Police shall prepare list B-1: Provided that list B-1 shall not be final until the same is approved by the Inspector General of Police/Deputy Inspector General of Police, who is the controlling officer of the said Superintendent of Police or Commandant. The Inspector General of Police/Deputy Inspector General of Police shall accord his approval only after due scrutiny of the list about its correctness. He will also be competent to refer the list back to the Superintendent of Police or Commandant from whom it had been received for correction of errors/omission, if any, in the list and will also be competent to seek clarification about some points from the Departmental Promotion Committee if he considers necessary."

7. The mandate of the above rule for appointment to the post of Head Constable under the aforementioned 10% quota for outstanding performance can be restated as under -

7.1 There shall be a Departmental Promotion Committee (DPC) in every district/unit comprising of the SP/ Commandant and two Deputy Superintendent of Police, headed by the SP.

7.2 The DPC shall prepare a list called List B-I. The list will be prepared from among the eligible candidates to be appointed the requirement of which is specified under Rule 13.7. All constables irrespective of their educational qualifications shall be eligible to be brought on list B-I on the basis of consistent outstanding performance in job or exceptional display of bravery during the course of performance of official duty if they are under the age of 40 years and have completed two years of service on the first day of January of the year in which selection is made.

7.3 The List prepared by the DPC, headed by the SP will be forwarded to the Inspector General of Police/ Deputy Inspector General of Police (hereinafter IG/DIG) who is the Cadre Controlling Officer of the SP/Commandant.

(i) The IG/DIG will undertake and examine its correctness.

(ii) The IG/DIG will be competent to seek clarifications from the DPC if he considers it to be necessary.

(iii) He is also competent to refer the list back to the SP for correction of any error or omission.

(iv) The IG/DIG shall thereafter accord his approval.

(v) It is specifically provided that the List shall not be final until the same is approved by the IG/DIG.

7.4 IG/DIG shall send its recommendations on behalf of each unit to the CDPC. The CDPC is appointed by the Director General of Police, (hereinafter the DGP).

7.5 Finally, the 10% quota is allocated out of a State Level Comparative Merit List prepared on the basis of the list sent from each unit by the IG.

Findings-

8. In view of the clear procedure laid down under the Rule 13.7, the contentions of the Appellant must fail for the following reasons-

8.1 In the first place, the assumption that the recommendation of DPC headed by the SP is final and that the IG has no power to review or substitute the decision is misconceived. The Rule itself clarifies the position that the recommendations of the SP are not final until the same is approved by the IG. Further, the powers of the IG are elucidated clearly in Rule 13.7(14). It is stated that the `approval' is by the Cadre Controlling Authority of the SP. It is the IG, who shall accord `approval' only upon scrutiny. This means if the IG is not satisfied, he shall not accord approval. The scope of the power vested in the IG is also indicated in the Rule which provides that he can seek clarifications from the DPC and also refer the List back to the SP for corrections/omissions if he thinks it is necessary. Having considered the Rule in its entirety, we are of the opinion that the recommendation of the DPC is not final. It is also evident that the recommendation of the DPC does not give any indefinite right to be appointed as Head Constable.

8.2 The 10% quota for constables having outstanding performance will be filled on the basis of State level comparative merits. As indicated above, there is a three-stage scrutiny before a constable is selected as a Head Constable. The third stage requires the candidate to be sufficiently high in the State Level Comparative Merit of the candidates to be selected under the 10% quota. Therefore, it can never be contended that mere recommendation of the SP at the initial stage is sufficient to claim a right for promotion. The further contention of the Appellant is that the power of the IG is "not discretionary but mandatory" is also incorrect as Sub-rule 14 of Rule 13.7 clearly empowers the IG to exercise the power of scrutiny and grant approval. This power would also extend to not granting an approval if the IG is not satisfied. Therefore, the power is not be rested solely on the basis of the word "through" in Rule 13.7(9).

8.3 As far as the contention of Appellant that the subsequent recommendation was also on the very same outstanding performance is concerned, it is to be noted that the merits and accolades of the candidates recommended for promotion vary from year to year on a comparative merit scale. The competitive environment differs from year to year. The scrutiny is dynamic and cannot be adjudged on the basis of a previous year's performance. The Appellant's accolades may not have made a fit case to be recommended in the year 2004 but the same could make a fit case to be considered in a subsequent year. It is the domain of the IG as also the CDPC to analyse, consider and clear the names of the candidates found fit to be promoted in the List B-I for that year and it must best be left to the discretion of the said authorities.

8.4 The Single Judge as well as the Division Bench for good reasons refrained from going into the individual comparative merit. In judicial review proceedings, the Courts are concerned with the decision-making process and not the decision itself.

9. We are of the opinion that there is no illegality or arbitrariness in the process of selection and for the reasons stated above we are not inclined to interfere with the judgment of the High Court. Appeal, is therefore, dismissed. Parties to bear their own costs.

SUPREME COURT: PROPERTY RIGHTS OF DAUGHTER PRIOR TO 1956 UNDER SUCCESSION ACT: Daughter's being Class-I heirs of their father too shall also be heirs and entitled to Share in the properties.



 

SUPREME COURT OF INDIA

Before:- S. Abdul Nazeer and Krishna Murari, JJ.
Civil Appeal No.6659 of 2011. D/d. 20.1.2022.

Arunachala Gounder (Dead) by Lrs. - Appellants
Versus
Ponnusamy and Ors. - Respondents


For the Appellants :- Mr. P. V. Yogeswaran, Mr. Ashish Kumar Upadhyay, Mr. Jaiyesh Bakhshi, Mr. Y. Lokesh, Mr. V. Sibi Kargil, Ms. V. Keerthana, Mr. Anubhav Chaturvedi, Advocates.

For the Respondents :- Mr. K. K. Mani, Ms. T. Archana, Advocates.


Hindu Succession Act, 1956 Sections 14 and 15.


Cases Referred :-

Bhagat Ram (dead) by LRs. v. Teja Singh (dead) by LRs., (2002) 1 SCC 210.

Bhajya v. Gopikabai, [1978] 3 SCR 561.

Bhaskar Trimbak Acharya v. Mahadev Ramji.

Chotay Lall v. Chunnoo Lall, 1874 SCC OnLine Cal 10.

Devidas v. Vithabai, 2008 (5) Mh.L.J. 296.

Ghurpatari v. Smt. Sampati, AIR 1976 ALL 195.

Gopal Singh v. Ujagar Singh, AIR 1954 SC 579.

Katama Natchiar v. Rajah of Shivagunga.

Katama Natchiar v. Srimut Rajah Mootoo Vijaya Raganadha Bodha Gooroo Sawmy Periya Odaya Taver, (1863) 9 MIA 539.

Lal Singh v. Roor Singh, 55 Punjab Law Reporter 168 at 172.

Pranjivandas Tulsidas v. Dev Kuvarbai, 1 Bomb. H.C., B. 131.

Sivagnana Tevar v. Periasami, 1878 (1) ILR Madras 312.

State of Punjab v. Balwant Singh, 1992 Supp. (3) SCC 108.

Tuljaram Morarji v. Mathuradas, Bhagvandas, and Pranjivandas, ILR (1881) 5 Bom 662.


JUDGMENT

Krishna Murari, J. - Challenge has been laid in this Civil Appeal to the judgment and order dated 21.01.2009 passed by the High Court of Judicature at Madras (hereinafter referred to as `High Court') dismissing a regular First Appeal being A.S. No. 351 of 1994 filed under section 96 of the Code of Civil Procedure, 1908, challenging the judgment and decree dated 01.03.1994 rendered by the Trial Court dismissing Original Suit No. 295 of 1991 for partition filed by the appellant herein, claiming 1/5th share in the suit properties.


2. The following genealogy of the parties is necessary to be taken note of for appreciating their claims and contentions :



3. Suit for partition was filed by Thangammal, daughter of Ramasamy Gounder, claiming 1/5th share in the suit property on the allegations that the plaintiff and defendant nos. 5 and 6, namely, Elayammal and Nallammal and one Ramayeeammal are sisters of Gurunatha Gounder, all the five of them being the children of Ramasamy Gounder. The said Ramasamy Gounder had an elder brother by the name of Marappa Gounder. Ramasamy Gounder, predeceased his brother Marappa Gounder who died on 14.04.1957 leaving behind the sole daughter by the name of Kuppayee Ammal who also died issueless in 1967. Further case set up by the plaintiff/appellant was that after the death of Marappa Gounder, his property was inherited by Kuppayee Ammal and upon her death in 1967, all the five children of Ramasamy Gounder, namely, Gurunatha Gounder, Thangammal (Original Plaintiff now represented by legal heir), Ramayeeammal, Elayammal and Nallammal are heirs in equal of Kuppayee and entitled to 1/5th share each.


4. Gurunatha Gounder, died leaving behind defendant nos. 1 to 4 (Respondents herein) as heirs and legal representatives. Ramayeeammal died leaving behind defendants 7 to 9. The plaintiff-appellant, Thangammal, died leaving behind, appellant nos. 1, 3 and 4 herein and Appellant no. 1, Arunachala Gounder, since having died is represented by her legal representatives appellant no. 1, Venkatachalam and appeallant no. 2, A. Mottaiyappan.


5. The defence set up by the defendant-respondents was that Marappa Gounder died on 11.05.1949 and not on 14.04.1957 as alleged by the plaintiff-appellant and as per the provisions of Hindu Law prevailing prior to 1956, Gurunatha Gounder was the sole heir of Marappa Gounder and accordingly, he inherited the suit properties and was in possession and enjoyment of these properties and after his death the respondents herein, were continuing as lawful owners.


6. It is an undisputed fact between the parties that the property in question i.e., the suit property, was independently purchased by Marappa Gounder in the year 1938 through the process of a Court auction and thus, it was his independent property. However, there was a issue between the parties in respect of the date of death of Marappa Gounder. The plaintiff - appellant asserted the date of death as 14.04.1957, whereas the defendant-respondent pleaded the date of death as 15.04.1949.


7. The Trial Court after considering the evidence brought on record of the case by the parties concluded that Marappa Gounder died on 15.04.1949 and thus, the suit property would devolve upon the sole son of deceased Ramasamy Gounder, the deceased brother of Marappa Gounder by survivorship and the plaintiff-appellant had no right to file the suit for partition and, accordingly, dismissed the suit.


8. The findings recorded by the Trial Court particularly in respect of the date of death of Marappa Gounder in 1949 was confirmed by the High Court in the first appeal and the decree dismissing the suit for partition was affirmed holding that the property would devolve upon the defendant by way of survivorship.


9. We have heard Shri P.V. Yogeswaran, learned counsel for the appellant and Shri K.K. Mani, learned counsel for the respondents.


Arguments on behalf of Appellants


10. Shri P.V. Yogeswaran, learned counsel for the appellant submits that since the property was purchased through Court auction sale by the Marappa Gounder on 15.12.1938, hence, it is his independent property and it was never considered as a joint family property, as such on death of Marappa Gounder, this property would devolve by succession upon his daughter, Kupayee Ammal, who died in the year 1967. He further submitted that under the law of Mitakshara, the right to inheritance depends upon propinquity i.e., proximity of relationship. Since, the daughter has closer proximity of relationship, she would inherit the property from the father instead of the father's brother's son and daughter.


11. He further points out that there are three classes of heirs recognized by Mitakshara, namely, (a) Gotrajasapindas, (b) Samanodakas and (c)Bandhus. The first class succeeds before the second and the second succeeds before the third. To support the contentions, he made a reference to Mulla Hindu Law 23rd Edition. He also submitted that under the Hindu Law, a daughter is not disqualified to inherit in separate property of her father and when a male Hindu dies without a son leaving only daughter, his separate property would devolve upon the daughter through succession and the property will not devolve upon brother's son through survivorship and the Courts below have wrongly applied the principles of Hindu Law and dismissed the suit. In support of his contention, he cited references from various commentaries which we shall deal with at appropriate place.


Arguments on behalf of Respondents


12. Shri K.K. Mani, learned counsel representing respondents submitted that the property in question was purchased by Marappa Gounder in Court auction sale out of the family funds and thus, it was a joint property, and on his death, since he had no male heir, the defendant as a coparcener succeeded to the estate. He further submitted that the Trial Court after scrutinizing the evidence brought on record by the parties came to the conclusion that the paternal uncle of plaintiff, Marappa Gounder, died prior to the enforcement of Hindu Succession Act, 1956 and, therefore, the plaintiff and other sisters of the plaintiff were not the heirs as on the date of death of Marappa Gounder in the year 1949 and thus, plaintiff was not entitled to the partition of 1/5th share in the suit properties, and thus, the suit was rightly dismissed. He further submits that when the date of death of Marappa Gounder, was confirmed to be in the year 1949, the Succession to his properties would open in the year 1949 when Kupayee Ammal, the daughter of Marappa Gounder, was not having any right to inherit the property left by her deceased father. The only heir available at the time of death of Marappa Gounder was Guranatha Gounder, the son of Ramasamy Gounder, who was none other than the father of the Defendants 1 to 4. Once the properties of Marappa Gounder devolved upon Guranatha Gounder, it became his property and, therefore, it could not be made the subject matter of the partition after the promulgation of Hindu Succession Act, 1956. He also submitted that neither any issue was framed nor any evidence was led by the plaintiff-appellant throughout the entire proceedings to establish that property purchased in the Court auction in the year 1938 was a self-acquired property of Marappa Gounder and thus, it would be presumed that it was a joint family property leaving no rights in his daughter to inherit the same.


13. We have considered the arguments advanced by the learned counsel for the parties and with their assistance perused the record of the case and the various texts and commentaries pertaining to Hindu Law.


14. Insofar as, the date of death of Marappa Gounder being 15.04.1949, it is a finding of fact affirmed by the two fact-finding Courts based on appreciation of material evidence existing on the record of the case and is not liable to be interfered with and we proceed to decide the issue between the parties taking the date of death of Marappa Gounder as 15.04.1949.


15. The other aspect of the matter is whether the suit property was exclusively purchased by Marappa Gounder in the Court auction and was his separate property or it was purchased out of the joint family fund making it a joint family property. It is correct that neither any issue was framed by Trial Court in this regard nor any evidence was led by the parties nor any finding has been returned. However, in view of the admission made by the defendant in para 3 of the written statement that suit properties are absolute properties of Marappa Gounder, he having purchased the same in a Court auction sale on 19.09.1938, there was hardly any necessity to frame any issue in this regard, once the fact was admitted in written statement.


16. It may be relevant to extract the relevant part of paragraph 3 of the written statement which reads as under :-


"3. It is true that the suit properties are the absolute properties of the Marappa Gounder, he having purchased the suit properties in the Court auction sale on 19.09.1938."

17. Furthermore, the defendants themselves have nowhere pleaded that purchase of suit property was made by Marappa Gounder out of the joint family funds. There is a clear admission in the written statement that property in question was the absolute property of Marappa Gounder, he having purchased the same in the Court auction sale.


17.1 In view of above facts, the arguments advanced by learned counsel for the respondent, in this regard, has no force and not liable to be accepted.


18. In the backdrop of the above facts, the primary issue which arises for our consideration is with respect to the right of the sole daughter to inherit the self-acquired property of her father, in the absence of any other legal heir having inheritable rights before the commencement of the Hindu Succession Act, 1956 or in other words, whether such suit property will devolve on to the daughter upon the death of her father intestate by inheritance or shall devolve on to father's brother's son by survivorship.


19. The determination and adjudication of the issue depends upon the answers to the following questions :-


1) What is the nature of the property and what would be the course of succession if it is a separate property as opposed to undivided property?

2) Whether a sole daughter could inherit her father's separate property dying intestate? And if so -

3) What would be the order of succession after the death of such daughter?

20. To answer these questions, we are required to delve into the concepts of old Hindu Law and its application. It is also imperative to look into it's origin and sources.


Sources of Hindu Law


21. The exact origin of Hindu Law is shrouded in antiquity, however, the Hindus believe their laws to exist in the revelations preserved in `Vedas', Shrutis (that which are heard and revealed) and Smritis in contradiction to Shrutis (that which is remembered). The Smritis comprise forensic law or the Dharma Shastra and are believed to be recorded in the very words of Lord Brahma. The Dharma Shastra or forensic Law is to be found primarily in the institutes or collections known as `Sanhitas', Smritis or in other words, the text books attributed to the learned scholarly sages, such as, Manu, Yajnavalchya, Vishnu, Parasara and Guatama, etc. Their writings are considered by the Hindus as authentic works. On these commentaries, digests and annotations have been written. These ancient sources have thus, charted the development of Hindu Law. These sources constantly evolved over the years, embracing the whole system of law, and are regarded as conclusive authorities. Besides these sources customs, equity, justice, good conscience and judicial decisions have also supplemented the development of Hindu Law.


22. The commentaries by various learned scholars have given rise to different schools of Hindu Law- like Daya Bhaga in Bengal, Mayukha in Bombay, Konkan and Gujarat and Marumakkattayam or Nambudri in Kerala and Mitakshara in other parts of India. The Mitakshara school of law is one of the most important schools of law having a very vide jurisdiction. It applies to majority of India with slight variations with the fundamental principles being the same. These slight variations formed various sub-schools, namely, Banaras School, Mithila School, Maharashtra/Bombay School, Dravida/ Madras School.


23. The Mitakshara is supposed to be the leading authority in the school of Benaras. Mr. Colebrooke, a famous sanskrit scholar of Bengal, writes "the range of its authority and influence is far more extensive than that of Jinota Vahanas Treatise for it is received in all other schools of Hindu Law, from Benaras to the southern extremity of the Peninsula of India, as the chief groundwork of the doctrines which they follow, and as an authority from which they rarely dissent"[1*]. The Mitakshara has always been considered as the main authority for all the schools of law, with the sole exception of that of Bengal, which is mostly covered by another school known as Daya Bhaga.


[1* A Treatise on Hindoo Law by Standish Grove Grady published in1868 by Gantz Brother Mount Road, Madras.]

24. Reference may also be made to another observation at Page-165, where it is stated as under :-


"Failing male issue, therefore, a widow takes the self-acquired property of her husband. No doubt, on failure of male issue and a widow, the daughter would take."

25. The commentary also refers to a case of Pranjivandas Tulsidas v. Dev Kuvarbai, 1 Bomb. H.C., B. 131, wherein a Hindu owning separate property died without a male issue, leaving behind - a widow, four daughter and a brother and male issues of other deceased brothers. The Court observed that the widow was entitled to a life estate in the property and subject to her interest the property would devolve to the daughters absolutely in preference to the brother and the issue of the deceased brothers.


26. References to this case have also been made in numerous reported as well as unreported cases; as in the case of Tuljaram Morarji v. Mathuradas, Bhagvandas, and Pranjivandas, ILR (1881) 5 Bom 662, it was observed that :-


"...The decision in that case and that in Pranjivandas v. Devkuvarbai have been steadily followed by the High Court in numerous unreported cases, and by the legal profession.... Any departure now from those decisions would cause much confusion and injustice throughout this Presidency, and no advantage that we can perceive. We, therefore, must abide by the principles which they clearly indicate."

27. In the case of Chotay Lall v. Chunnoo Lall and Another, 1874 SCC OnLine Cal 10 the Court noted:-


"The following are the direct authorities on the point. Sir M. Sausse in 1859, in Pranjivandas Tulsidas v. Devkuvarbai (2), held that a daughter takes absolutely when inheriting from her father. In Bhaskar Trimbak Acharya v. Mahadev Ramji (3) , decided in January 1869 by Sir Joseph Arnould, the head note states that all property acquired by a married woman by inheritance (except from her husband) classes as stridhan, and descends accordingly. But this case is founded exclusively on the case of Pranjivandas Tulsidas v. Devkuvarbai.

28. However, despite our best efforts we could not get a copy of the judgment in the case of Pranjivandas (Supra), therefore, we are relying upon the aforesaid observations made in the said case by the Bombay High Court as mentioned in the commentary by Standish Grove Grady and the above-mentioned cases.


29. One of the sub-schools of Mitakshara- the Madras school of law tends to cover most of the southern part of India. It exercises its authority under Mitakshara law school. The Mitakshara school derives majorly from the running commentaries of Smritis written by `Yajnavalkya'. Other important sources governing the Mitakshara school are `Vyavastha Chandrika' and most importantly Smriti Chandrika.


30. The digest of `Yajnavalkya' states that "What has been self-acquired by any one, as an increment, without diminishing the paternal estate, likewise a gift from a friend or a marriage gift, does not belong to the coheirs."


31. It may also be relevant to refer to commentaries and annotations from The principles and elements of Hindu Law in the form of a digest by Shyama Charan Sarkar Vidya Bhushan, known as `Vyavastha Chandrika'[4*], a digest of Hindu Law. Section II of the said digest deals with Daughters' Right of Succession.


[4* Vyavastha-Chandrika, A Digest of Hindu Law by Shyama Charan Sarkar, Vidya Bhushan printed in 1878 by I.C.Bose & Co., STANHOPE PRESS 249, Bow-Bazar, Calcutta.]

32. In Clause 118 of Section II of the commentary, it is stated as under :-


"In default of the widow, the daughters inherit the estate of the man who died separated (from his coparceners) and not re-united (with them)."

33. It also quotes `Vishnu' and `Vrihaspati' as under:-


"Vishnu : The wealth of a man who leaves no male issue goes to his wife; on failure of her, to his daughter.

Vrihaspati : The wife is pronounced successor to the wealth of her husband; in her default, the daughter. As a son, so does the daughter of a man proceed from his several limbs. How then, should any other person (b) take her father's wealth?

(B) Any other person - These terms exclude the son and widow, (who are preferable heirs), and include the father and the rest. - Smriti Chandrika, Chapter- XI, Section (ii), Clause 5 and 6.

"The meaning is how could the father and the rest take the property of a son-less man, while the daughter is alive."

34. It also quotes `Manu' as under :-


"Manu :- The son of a man is even as himself, and the daughter is equal to the son. How then can any other inherit his property, notwithstanding the survival of her, who is, as it were, himself."

35. Clause 120 of the `Vyavastha Chandrika' reads as under :-


"120 :- A daughter being entitled to inherit the divided property of her father, it has been, by parity of reasoning, determined that, she is entitled to inherit also such property as was separately acquired or held by him, or was vested in him."

36. The purport of the text of `Vrihaspati' is that the brother or the father and like would not take the property of a man who died without leaving a male, when the daughter is alive. By springing from the same limbs of the father, a daughter has been treated in Smriti Chandrika as equal to a son.


37. `NARADA' aware of the equitableness of the proposition that it is the daughter who should succeed on the failure of the son and the widow, says, "on failure of male issue, the daughter inherits, for she is equally a cause of perpetuating the race."


38. Standish Grove Grady in his book `Treatise' on Hindoo Law of Inheritance published in 1868, in Chapter IX - `Inheritance of Succession' while discussing the line of descent, has observed as under:-


"Line of Descent - It will be seen in the course of this chapter that the Hindoo Law of inheritance comprehends the deceased's family and his near relations, viz, his issue, male and female; his widow, who takes immediately in default of sons- a term which includes grandsons and great-grandsons. On exhaustion of this line of descent, the succession ascends to his parents, brothers, nephews, and grand nephews, this line continuing upwards to the grandfather and great-grandfather, the grandmother and great grandmother, the latter being given precedence by those who have preferred the mother to the father. The succession then runs downwards to their respective issue, including daughter's sons, but not daughters, the whole being preferred to the half blood; then follow the more remote kindred which we shall presently enumerate.

In proportion as the claimant becomes remote, the particulars vary with different schools and authors presently pointed out.

In default of natural kind, the series of heirs in all the classes, except that of Brahmins, closes with the preceptor of the deceased, his pupil, his priest, hired to perform sacrifices, or his fellow-student, each in his order and falling all these, the lawful heirs of the Kshtrya, Vashya and Soodra, who are learned and virtuous Brahmins, resident in the same town or village with the deceased.

If an estate should vest by succession in a Brahmin-as he, being such, cannot perform obsequies for one of an inferior caste - the duty may be discharged by substitution of a qualified person, equal in class with the deceased. In all cases where the heir is under disabilities, he must take the same course, paying the person employed for his services. The king too where the he takes by escheat, must cause obsequies to be performed for the deceased.

The Hindoos give the agnate succession the preference, the succession of females being deemed exceptions.

Females cannot on account of their sex perform obsequies. They do not, therefore, confer any benefit and are generally disqualified from inheriting. From this rule, there are only four exceptions for special reasons, viz, the widow, the daughter, the mother and the grandmother. According to the Benaras and Mithila Schools, the females above-mentioned inherit only when the family is divided. In an undivided family, females are not admitted as heirs. There are two modes of devolution of property :-

(I) From a sole separate owner

(ii) From a female.

Property of a united owner cannot be considered as devolving upon the rest, they being joint proprietors by birth. In the second class, the property will, in part, be affected by the rights of collateral sharers.

But even in undivided families, a widow takes the self-acquired property of her husband.

In the case of self-acquired property in the same Chapter, Grady states :-

"It may safely be stated as a true proposition that property, which is not ancesteral, is self-acquired, in whatever way the property may have been obtained, whether by gift or purchase or labour, mental or physical, or otherwise.

Referring to judgment of Katama Natchiar v. The Rajah of Shivagunga (which we shall deliberate in the later part of the judgment), he observes when a Zaminadari was escheated on the death of the last zamindar, the government granted it a new to a distant relation of his. This was treated as self-acquired property. That case has decided that all self-acquired property devolves in the same way as the family property of a divided member. Failing male issue, therefore, a widow takes the self-acquired property of her husband. No doubt, on the failure of male issue and a widow, the daughter would take".

39. In the commentary titled as `Hindu Law and Judicature' - from the Dharma-sastra of Yajnavalkya[5*] by renowned authors Edward Roer, PH.D., M.D. and W.A. Montriou, in Clause 135, it is stated as under :-


[5* Hindu Law and Judicature from the Dharma-Sastra of `Yajnavalkya' published in 1859.]

"135. If a man depart this life without male issue; (i) his wife, (ii) his daughter, (iii) his parents, (iv) his brothers, (v) the sons of his brothers, (vi) others of the same gotra, (vii) kindred more remote, (viii) a pupil, (ix) a fellow-student - these succeed to the inheritance, each class upon failure of the one preceding. This rule applies to all the caste."

40. In another digest "Hindu Law as administered in the Courts of Madras Presidency[6*]", arranged and annotated by H.S. Cunningham, the then Advocate General of Madras, it is stated in Clause 203 of Chapter VI, dealing with inheritance by daughters as under :-


[6* A Digest of Hindu Law- As administered in the Courts of The Madras Presidency, published in 1877 by HIGGINBOTHAM & Co.]

"Clause-203 :- In default of sons, grandsons, great grandsons, and widows, the daughter succeeds to a life estate in her father's property.

41. Clause 206 of the said commentary provides that `a married daughters and daughters who are widows succeed irrespectively of the fact of their being barren or having no male issue' and similarly, Clause 207 reads as under :-


"Clause-207 :- Daughters of each class hold their estate jointly; the share of any daughter dying vests in the surviving daughter or daughters of the same class, and descends to the daughters of the next class only when all the daughters of the prior class are exhausted. In each class, a daughter who has not been endowed on marriage, succeeds in preference to the daughter who has been endowed."

42. Clause 209 in the said commentary reads as under :-


"Clause 209 :- The daughter succeeds on the death of her father's widow, notwithstanding that such widow be not her mother."

43. `Mulla' in his book Hindu Law (22nd Edition), while discussing the law prior to the Hindu Succession Act, 1956 says that there are two systems of inheritance amongst the Hindus in India, namely, Mitakshara system and Dayabhaga system. The Dayabhaga system prevails in Bengal, while the Mitakshara system is applicable to other parts of India. The difference between the two systems arises from the fact that, while the doctrine of religious efficacy is the guiding principle under Dayabhaga School, there is no such definite guiding principle under the Mitakshara School. Sometimes consanguinity, and at the other times, religious efficacy has been regarded as the guiding principle. According to `Mulla', Mitakshara recognises two modes of devolution of property, namely, survivorship and succession. The rules of survivorship apply to joint family property, and the rules of succession apply to property held in absolute severalty by the last owner.


44. It may also be relevant to refer to section 34 regarding devolution of property according to Mitakshara Law[7*] - In determining the mode in which the property of a Hindu male, governed by Mitakshara Law, devolves on his death, the following propositions are to be noted :-


[7* Hindu Law by Mulla (22nd Edition)]

(1) Where the deceased was, at the time of the death, a member of joint and undivided family, technically called coparcenary, his undivided interest in the coparcenary property devolves on his coparceners by survivorship.

(2) (i) Even if the deceased was joint at the time of his death, he might have left self-acquired or separate property. Such property goes to his heirs by succession according to the order given in section 43, and not to his coparceners;

(ii) If the deceased was at the time of his death, the sole surviving member of a coparcenary property, the whole of his property, including the coparcenary property, will pass to his heirs by succession according to the order given in section 43;

(iii) If the deceased was separate at the time of his death from his coparceners, the whole of his property, however acquired, will pass to his heirs by succession according to the order given in section 43;

(3) If the deceased was re-united at the time of his death, his property will pass to his heirs by succession according to the Rule laid down in section 60.

45. According to `Mulla' under Mitakshara Law, the right to inherit arises from propinquity, i.e., proximity of relationship. Mitakshara divided blood relations into three classes, namely -


(a) Gotra-sapindas, i.e., Sapindas belonging to the same gotra or family as the deceased from 1st-7th degree;

(b) Samanodaka, i.e., persons belonging to the same gotra or family as the deceased from 8th -14th degree; and

(c) Bhinna gotra sapindas, i.e., Sapindas belonging to a different gotra or family from the deceased.

46. `Gotra Sapindas' and `Samanodaka' are persons connected to the deceased by an unbroken line of male descendants i.e., all agantes; and Bhinna gotra sapindas are persons connected to the deceased through a female i.e, cognates such as a sister's son. `Bhinna gotra sapindas' are also known as `Bandhus' in Mitakshara. These classifications while now archaic and delineated as class-I, class-II, class-III and class-IV heirs under the Hindu Succession Act, 1956, are of importance with respect to the property in question considering its succession opened before the commencement of the Hindu Succession Act, 1956.


47. The Gotra Sapindas of a person, according to Mitakshara are :-


(i) His six male descendants in the male line; i.e., his son, son's son's son, etc.

(ii) His six male ascendants in the male line, the wives of the first three of them, and probably also of the next three; ie, his father, father's father, father's father's father, etc, being Fl to F6 in the table and their wives, that is Ml to M6, being the mother, father's mother, father's father's mother, etc.

(iii) The six male descendants in the collateral male line of each of his male ascendants; i.e., to X6 in the line of F1, being his brother, brother's son, brother's son's son, etc; to X6 in the line of F2, being his paternal uncle, paternal uncle's son, etc; to X6 in the line of F3, being his paternal grand-uncle, paternal granduncle's son, etc.; to X6 in the line of F4; to X6 in the line of F5', and to x6 in the line of F6.

(iv) His wife, daughter, and daughter's son.

48. The Sapinda relationship extends to seven degrees reckoned from and inclusive of the deceased and six degrees, if you exclude the deceased. The wife becomes a sapinda of the husband on marriage. The daughter's son is not a gotraja sapinda, he is a bandhu because he is related to the deceased through a female. However, for the purpose of succession, he is ranked with gotraja sapindas.


49. The Hindu Law of Inheritance (Amendment) Act, 1929 was the earliest Statutory legislation which brought the Hindu females into the scheme of inheritance. The 1929 Act introduced certain female statutory heirs which were already recognized by the Madras School, i.e., the son's daughter, daughter's daughter, sister and sister's son in the order so specified, without making any modifications in the fundamental concepts underlying the textual Hindu Law relating to inheritance; only difference being that while before the Act, they succeeded as bandhus, under the Act, they inherited as `gotra sapindas'.


50. The Mitakshara law also recognises inheritance by succession but only to the property separately owned by an individual, male or female. Females are included as heirs to this kind of property by Mitakshara law. Before the Hindu Law of Inheritance (Amendment) Act 1929, the Bengal, Benares and Mithila sub-schools of Mitakshara recognised only five female relations as being entitled to inherit namely - widow, daughter, mother paternal grandmother and paternal great-grand mother. The Madras sub-school recognized the heritable capacity of a larger number of females heirs that is of the son's daughter, daughter's daughter and the sister, as heirs who are expressly named as heirs in Hindu Law of Inheritance (Amendment) Act, 1929. The son's daughter and the daughter's daughter ranked as bandhus in Bombay and Madras. The Bombay school which is most liberal to women, recognized a number of other female heirs, including a half -sister, father's sister and women married into the family such as stepmother, son's widow, brother's widow and also many other females classified as bandhus. From the above discussions, it is abundantly clear that a daughter was in fact capable of inheriting the father's separate estate.


Judicial Precedents


51. Privy Council has delivered some notable judgments on the issue arising for adjudication in the case at hands. Reference may be made to the case of Katama Natchiar v. Srimut Rajah Mootoo Vijaya Raganadha Bodha Gooroo Sawmy Periya Odaya Taver, (1863) 9 MIA 539. The dispute in the appeal before the Privy Council was in respect of the Right of Inheritance of Shivagunga Zamindary, situate in the District Maduaa, Presidency of Madras. The Privy Council after noticing the facts of the long litigation and the three suits filed between the parties, which were dismissed by the Provincial Court and the appeal was filed in each of the three suits which were heard together and disposed of by the decree of the Sudder Court. The Privy Council noted the following arguments advanced before it, by Anga Moottoo Natchiar, as under :-


"She submitted as in issue of fact that the Zamindar had been acquired by the sole exertions and merits of her husband; and as an issue of law that what is acquired by a man, without employment of his patrimony, shall not be inherited by her brothers and co-heirs, but if he dies without male issue, shall descend to his widows, his daughters and the parents, before going to her brothers or remoter collaterals.

52. After analysing the factual aspects in details, the Privy Council posed three questions as under :-


"The substantial contest between the appellant and the respondent is, as it was between Anga Mootoo Natchiar and the respondent's predecessors, whether the Zamindary ought to have descended in the male and collateral line; and the determination of this issue depends on the answers to be given to one or more of the following questions :

(i) Were Gowery Vallabha Taver and his brother, Oya Taver, undivided in estate, or had a partition taken place between them?

(ii) If they were undivided, was the zemindary the self-acquired and separate property or Gowery Vallabha Taver? and if so-

(iii) What is the course of succession according to the Hindoo Law of the South of India of such an acquisition, where the family is in other respects an undivided family?

53. Insofar as, the first question is concerned, the Privy Council did not disturb the findings in the decree of 1847 that Gowery Vallabha Taver and his brother, after the acquisition by the former of the zemindary, lived very much as if they were separate. The second question was answered in affirmative. With respect to the third question, the Privy Council observed as under :-


"The third question is one of nicety and of some difficulty. The conclusion which the Courts in India have arrived at upon it, is founded upon the opinion of the Pundits, and upon authorities referred to by them. We shall presently examine those opinions and authorities; but before doing so, it will be well to consider more fully the law of inheritance as it prevails at Madras and throughout the southern parts of India, and the principles on in these parts of India is to be found in the Mitacshara, and in ch.II., sec. 1, of that work the right of windows to inherit in default of male issue is fully considered and discussed.

The Mitacshara purports to be a commentary upon the earlier institutes of Yajnyawalcya; and the section in question begins by citing a text from that work, which. Affirms in general terms the right of the window to inherit on the failure of male issue. But then the author of the Mitacshara refers to various authorities which are apparently in conflict with the doctrines of Yajnyawalcya, and, after reviewing those authoritesi, seeks to re3concile them by coming to the conclusion "that a wedded wife, being chaste, takes the whole estate of a man, who, being separated from his coheirs, and not subsequently re-united with them, dies leaving no male issue," This text, it is true, taken by itself, does not carry the rights of widows to inherit beyond the cases in which their husbands have died in a state of separation from their co-heirs, and leaving no male issue; but it is to be observed that the text is propounded as a qualification of the larger and more general proposition in favour of widows; and, consequently, that in construing it, we have to consider what are the limits of the qualification, rather than what are the limits of the right. Now, the very terms of the text refer to eases in which the whole estate of the deceased has been his separate property, and, indeed, the whole chapter in which the text is contained, seems to deal only with cases in which the property in question has been either wholly the common property of a united family, or wholly the separate property of the deceased husband We find no trace in it of a case like that before us, in which the property in question may have been in part the common property of a unit4ed family, and in part the separate acquisition of the deceased; and it cannot, we think, be assumed that because widows take the whole estates of their husbands when they have been separated from, and not subsequently re-united with, their co-heirs, and have died leaving n™ male issue, they cannot, when their husbands have not been so separated, take any part of their estates, although it may have been their husband's separate acquisition. The text, therefore, does not seem to us to govern this case.

There being then no positive text governing the case before us, we must look to the principles of the law to guide us in determining it. It is to be observed, in the first place, that the general course of descent of separate property according to the Hindoo law is no disputed. It is admitted that, according to that law, such property descends to windows in default of male issue. It is upon the Respondent, therefore, to make out that the property here in question, which was separately acquired, does not descend according to the general course of the law. The way in which this is attempted to be done, is by showing a general state of coparcenaryship as to the family property; but assuming this to have been proved, or to be presumable from there being no disproof of the normal state of coparcenaryship, this proof, or absence of proof, cannot alter the case, unless it be also the law that there cannot be property belonging to a member of a united Hindoo family, which descends in a course different from that of the descent of a. share of the property held in union; but such a proposition is new, unsupported by authority, and at variance with principle. Thai two courses of descent may obtain on a part division of join property, is apparent from a passage in W.H. Macnaghten's "Hindu Law," title "Partition," vol. I. p. 53, where it is said as follows: "According to the more correct opinion, where there is an undivided residue, it is not subject to the ordinary rules of partition of join property; in other words, if at a general partition any part of the pro-perty was left joint, the widow of a deceased brother will not participate, notwithstanding the separation, but such undivided residue will go exclusively to the brother."

Again, it is not pretended that on the death of the acquirer. of separate property, the separately acquired property falls into the common stock, and passes like ancestral property. On the contrary, it is admitted that if the acquirer leaves male issue, it will descend as separate property to that issue down to the third generation. Although, therefore, where there is male issue, the family property and the separate property would not descend to different persons, they would descend in a different way, and. with different consequences; the sons taking their father's share in the ancestral property subject to all the rights of the coparceners in that property, and his self-acquired property free from those rights. The course of succession would not be the same for the family and the separate estate; and it is clear, therefore, that, according to the Hindoo law, there need not be unity of laeirship.

But to look more closely into the Hindoo law. When property belonging in common to a united Hindoo family has been divided, the divided shares go in the general course of descent of separate property. Why, it may well be asked, should not the same rule apply to property which from its first acquisition has always been separate We have seen from the passage already quoted from Macnaghten's "Hindu Law," that where a residue is left un-divided upon partition, what is divided goes as separate property; what is undivided follows the family property; that which remains as it was, devolves in the old line; that which is changed and becomes separate, devolves in the new line. In other words, the law of succession follows the nature of the property and of the interest in it.

Again, there are principles on which the rule of succession according to the Hindoo law appears to depend: the first is that which determines the right to offer the funeral oblation, and the degree in which the person making the offering is supposed to minister to the spiritual benefit of the deceased; the other is an assumed right of survivorship. Most of the authorities rest the uncontested right of widows to inherit the estates of their husbands, dying separated from their kindred, on the first of these principles (1 Strange's "Hindu Law," p. 135). But some ancient authorities also invoke the other principle.

Again, the theory which would restrict the preference of the co-parceners over the windows to partible property is not only, as is shown above, founded upon an intelligible principle, but reconciles the law of inheritance with the law of partition. These laws, as is observed by Sir Thomas Strange, are so intimately connected that they may almost be said to be blended together; and it is surely not consistent with this position that co-parceners should take separate property by descent, when they take no interest in it upon partition. We may further observe, that the view which we have thus indicated, of the Hindoo law is not only, as we have shown, most consistent with its principles, but is also most consistent with convenience."

54. On a complete reading of the judgment of Privy Council in extenso, the following legal principles are culled out:-


A) That the General Course of descends of separate property according to the Hindu Law is not disputed it is admitted that according to that law such property (separate property) descends to widow in default of male issue.

B) It is upon Respondent therefore to make out that the property herein question which was separately acquired does not descends according to the general Course of Law.

C) According to the more correct opinion where there is undivided residue, it is not subject to ordinary rules of partition of joint property, in other words if it a general partition any part of the property was left joint the widow of the deceased brother will not participate notwithstanding with separation but such undivided residue will go exclusively to brother.

D) The law of succession follows the nature of property and of the interest in it.

E) The law of partition shows that as to the separately acquired property of one member of a united family, the other members of the family have neither community of interest nor unity of possession.

F) The foundation therefore of a right to take such property by survivorship fails and there are no grounds for postponing the widow's right any superior right of the co-parcenars in the undivided property.

G) The Hindu Law is not only consistence with this principle but is also most consistent with convenience."

55. Another case of the Privy Council is Sivagnana Tevar and Anr. v. Periasami & Ors., 1878 (1) ILR Madras 312. The aforesaid case, before the Privy Council was in continuity and of the consequence of the previous case Katama Natchiar (Supra) but of a different branch of the family. In the said case, it was observed as under :-


"Their Lordships then have come to the conclusion that, as between the descendants of Muttu Vaduga and Dhorai Pandian, the palayapat was the separate property of the latter; that on the death of Dhorai Pandian, his right, if he had any left undisposed of in the property, passed to his widow, notwithstanding the undivided status of the family; and that therefore, the case was one to which the rule of succession affirmed in the Shivagunga case (Supra) applies."

56. The principles of law which can be deduced from reading of the aforesaid judgment can be summarized as under:-


"The law laid down in the case of Katama Natchiar v. Srimut Rajah Mootoo Vijaya Raganadha Bodha Gooroo Sawmy Periya Odaya Taver, that succession in the case of Hindu male dying intestate is to be governed by inheritance rather than survivorship, is reaffirmed.

In the absence of male member, the property devolves upon widow and thereafter to daughter."

57. A Full Bench of Allahabad High Court, in the case of Ghurpatari & Ors. v. Smt. Sampati & Ors., AIR 1976 ALL 195, while considering the question whether a custom under which daughters are excluded from inheriting the property of their father can by implication exclude the daughters' issues both males and females, also from such inheritance, made the following observations in respect of Right of Inheritance of a widow or a daughter of a male Hindu dying intestate :-


"17. The rules relating to inheritance by widow and daughter were enunciated in the ancient past by various sages and were ultimately elaborated by Vijnyaneshwara in Mitakshara. We may quote from Colebrooke's translation."

Katyayan said "let the widow succeed to her husband's wealth, provided she be chaste; and in default of her let the daughter inherit if married." Brihaspati Said, "the wife is pronounced successor to the wealth of her husband; and in her default the daughter; as a son so does the daughter of a man proceed from his several limbs, how then shall any other person take the father's wealth"? Vishnu laid down, "if a man leaves neither son, nor son's son, nor wife, nor female issue, the daughter's son shall take his wealth, for in regard to the obsequies of ancestors, daughter's son is considered as son's son." Manu likewise declared that "by a male child, who were daughter whether formally appointed or not, shall produce from a husband of an equal class, the maternal grandfather becomes the grand sire of son's son, let that son give the funeral oblation and possess the inheritance". The right of daughter and daughter's son to succeed to the property was thus well recognized in the Mitakshara Law. The daughter ranks fifth in the order of succession and the daughter's son ranked sixth."

58. Thereafter, the Court proceeded to consider the question of custom prevalent in a particular sect and whether they will have the sources of law with which we are not concerned in the case at hands.


59. The Hindu Law of Inheritance (Amendment) Act II of 1929 (hereinafter called as `the Act of 1929), for the first time entitled the daughter's daughter, subject to a special family or local custom, to succeed to the property of a male Hindu governed by Mitakshara Law. Daughter's daughter then ranked 13th-B in the order of succession. The order of succession to the estate of a Hindu dying interstate and governed by Mitakshara Law are set out in Paragraph 43 of Mulla's Principles of Hindu Law[11*] as under :-


[11* Mulla's Principles of Hindu Law (14th Edition)]

"The Sapindas succeeded in the following order :-

1-4 A son, grandson (son's son) and great grandson (son's son's son) and (after 14th April, 1937) widow, predeceased son's widow, and predeceased son's son's widow.

5. Daughter.

6. Daughter's son

13. Father's father

13.A Son's daughter's

13.B Daughter's daughter

60. In the case of Lal Singh & Ors. v. Roor Singh & Ors., 55 Punjab Law Reporter 168 at 172, it was held that daughters and daughters son have a preferential claim to the non-ancestral property as against the collaterals.


61. In the case of Gopal Singh & Ors. v. Ujagar Singh & Ors., AIR 1954 SC 579, it was observed by this Court that the daughter succeeds to the selfacquired property of her father in preference to collaterals. This Court proceeded to rely upon the following observation in Rattigan's Digest to `Customary Law' :-


"In regard to the acquired property of her father, the daughter is preferred to the collaterals."

62. Reference may also be made to the decision of Bombay High Court in Devidas & Ors. v. Vithabai & Anr., 2008 (5) Mh.L.J. 296. In the said case, one Arujna died in 1936, when succession opened and while determining the shares during partition daughter of one pre-deceased sons of Arjuna namely, Vithabai was held entitled for a share. The name of Vithabai was removed from revenue record. She filed a suit for declaration claiming 1/3rd share with other reliefs. Trial Court dismissed the suit. The First Appellate Court held that plaintiff, Vithabai, being daughter of Zolu was a Class-I heir and thus, was entitled to 1/3rd share and accordingly, reversed the decree. The matter was carried in second appeal. The High Court while reversing the decree of Lower Appellate Court and confirming that of the Trial Court observed as under :-


"12. Zolu, when died in 1935 was joint with his father and brothers. Therefore, his share in the coparcenery would devolve by survivorship and not by succession. Zolu did not hold any separate property admittedly and therefore, there was no question of property passing over by succession. The following illustration to Section 24 in Mulla's Hindu Law 19th Edition shall be enough to unfortunately negative the claim of the plaintiff. The case is squarely covered by this illustration.

(1) A and B two Hindu brothers, governed by the Mitakshara School of Hindu Law, are members of a joint and undivided family. A dies leaving his brother B and a daughter. A's share in the joint family property will pass to his brother, the surviving coparcener, and not to his daughter. However, if A and B were separate, A's property would on his death pass to his daughter as his heir.

The plaintiff due to the above proposition of law was not entitled to succeed to the estate of her father. The persons on whom the share of Zolu devolved were his brothers and father by survivorship. The share could not devolve on the daughter by succession since the plaintiff herself pleads that the property was joint and there was no partition. It was, therefore, not a separate estate of Zolu so that rule of succession could be applied. The property therefore passed over by survivorship in favour of brothers and father who were coparceners."

63. The 174th Law Commission in its report on `Property Rights of Women' while proposing reforms under the Hindu Law has observed as under :-


"1.3.3 The Mitakshara law also recognising inheritance by succession but only to the property separately owned by an individual, male or female. Females are included as heirs to this kind of property by Mitakshara law. Before the Hindu Law of Inheritance (Amendment) Act 1929, the Bengal, Benares and Mithila sub-schools of Mitakshara recognised only five female relations as being entitled to inherit namely;- widow, daughter, mother, paternal grandmother, and paternal great-grand mother.

1. The Madras sub-schools recognised the heritable capacity of a larger number of females heirs that is of the son's daughter, daughter's daughter and the sister as heirs were expressly named as heirs in Hindu Law of Inheritance (Amendment) Act,1929.

2. The son's daughter and the daughter's daughter ranked as Bandhus in Bombay and Madras. The Bombay School which is most liberal to women, recognised a number of other female heirs, including a half sister, father's sister and women married into the family such as step-mother, son's widow, brother's widow and also many other females classified as Bandhus."

64. From the above discussions, it is clear that ancient text as also the Smritis, the Commentaries written by various renowned learned persons and even judicial pronouncements have recognized the rights of several female heirs, the wives and the daughter's being the foremost of them.


65. The rights of women in the family to maintenance were in every case very substantial rights and on whole, it would seem that some of the commentators erred in drawing adverse inferences from the vague references to women's succession in the earlier Smritis. The views of the Mitakshara on the matter are unmistakable. Vijneshwara also nowhere endorses the view that women are incompetent to inherit.


Our Analysis


66. Right of a widow or daughter to inherit the self-acquired property or share received in partition of a coparcenary property of a Hindu male dying intestate is well recognized not only under the old customary Hindu Law but also by various judicial pronouncements and thus, our answer to the question Nos. 1 and 2 are as under :-


"If a property of a male Hindu dying intestate is a self-acquired property or obtained in partition of a co-parcenery or a family property, the same would devolve by inheritance and not by survivorship, and a daughter of such a male Hindu would be entitled to inherit such property in preference to other collaterals."

67. In the case at hands, since the property in question was admittedly the self-acquired property of Marappa Gounder despite the family being in state of jointness upon his death intestate, his sole surviving daughter Kupayee Ammal, will inherit the same by inheritance and the property shall not devolve by survivorship.


68. Insofar as, question no. 3 is concerned under the old customary Hindu Law, there are contradictory opinions in respect of the order of succession to be followed after the death of such a daughter inheriting the property from his father. One school is of the view that such a daughter inherits a limited estate like a widow, and after her death would revert back to the heirs of the deceased male who would be entitled to inherit by survivorship. While other school of thought holds the opposite view. This conflict of opinion may not be relevant in the present case inasmuch as since Kupayee Ammal, daughter of Marappa Gounder, after inheriting the suit property upon the death of Marappa Gounder, died after enforcement of Hindu Succession Act, 1956 (hereinafter referred to as `The Act of 1956'), which has amended and codified the Hindu Law relating to intestate succession among Hindus. The main scheme of this Act is to establish complete equality between male and female with regard to property rights and the rights of the female were declared absolute, completely abolishing all notions of a limited estate. The Act brought about changes in the law of succession among Hindus and gave rights which were till then unknown in relation to women's property. The Act lays down a uniform and comprehensive system of inheritance and applies, inter-alia, to persons governed by the Mitakshara and Dayabhaga Schools and also to those governed previously by the Murumakkattayam, Aliyasantana and Nambudri Laws. The Act applies to every person, who is a Hindu by religion in any of its forms including a Virashaiva, a Lingayat or a follower of the Brahmo Pararthana or Arya Samaj and even to any person who is Buddhist, Jain or Sikh by religion excepting one who is Muslim, Christian, Parsi or Jew or Sikh by religion. Section 14 of the Act of 1956 declares property of a female Hindu to be her absolute property, which reads as under:-


"14. Property of a female Hindu to be her absolute property.-

(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.

Explanation.-In this sub-section, "property" includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the commencement of this Act.

(2) Nothing contained in sub-section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property."

69. The legislative intent of enacting Section 14(I) of the Act was to remedy the limitation of a Hindu woman who could not claim absolute interest in the properties inherited by her but only had a life interest in the estate so inherited.


70. Section 14 (I) converted all limited estates owned by women into absolute estates and the succession of these properties in the absence of a will or testament would take place in consonance with section 15 of the Hindu Succession Act, 1956, which reads as follows:-


"Section -15. General rules of succession in the case of female Hindus.-

(1) The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16,-

(a) firstly, upon the sons and daughters (including the children of any pre-deceased son or daughter) and the husband;

(b) secondly, upon the heirs of the husband;

(c) thirdly, upon the mother and father;

(d) fourthly, upon the heirs of the father; and

(e) lastly, upon the heirs of the mother.

(2) Notwithstanding anything contained in sub-section (1)-

(a) any property inherited by a female Hindu from her father or mother shall devolve, in the absence of any son or daughter of the deceased (including the children of any pre-deceased son or daughter) not upon the other heirs referred to in sub-section (1) in the order specified therein, but upon the heirs of the father; and

(b) any property inherited by a female Hindu from her husband or from her father-in-law shall devolve, in the absence of any son or daughter of the deceased (including the children of any pre-deceased son or daughter) not upon the other heirs referred to in sub-section (1) in the order specified therein, but upon the heirs of the husband."

Section 16 - Order of Succession and manner of distribution among heirs of a female Hindu. -

The order of succession among the heirs referred to in Section 15 shall be, and the distribution of the intestate's property among those heirs shall take place, according to the following rules, namely:-

Rule 1.-Among the heirs specified in sub-section (1) of Section 15, those in one entry shall be preferred to those in any succeeding entry and those included in the same entry shall take simultaneously.

Rule 2.-If any son or daughter of the intestate had predeceased the intestate leaving his or her own children alive at the time of the intestate's death, the children of such son or daughter shall take between them the share which such son or daughter would have taken if living at the intestate's death.

Rule 3.-The devolution of the property of the intestate on the heirs referred to in clauses (b), (d) and (e) of subsection (1) and in sub-section (2) to Section 15 shall be in the same order and according to the same rules as would have applied if the property had been the father's or the mother's or the husband's as the case may be, and such person had died intestate in respect thereof immediately after the intestate's death."

71. The scheme of sub-Section (1) of Section 15 goes to show that property of Hindu females dying intestate is to devolve on her own heirs, the list whereof is enumerated in Clauses (a) to (e) of Section 15 (1). Sub- Section (2) of Section 15 carves out exceptions only with regard to property acquired through inheritance and further, the exception is confined to the property inherited by a Hindu female either from her father or mother, or from her husband, or from her father-in-law. The exceptions carved out by sub-Section (2) shall operate only in the event of the Hindu female dies without leaving any direct heirs, i.e., her son or daughter or children of the pre-deceased son or daughter.


72. Thus, if a female Hindu dies intestate without leaving any issue, then the property inherited by her from her father or mother would go to the heirs of her father whereas the property inherited from her husband or father-in-law would go to the heirs of the husband. In case, a female Hindu dies leaving behind her husband or any issue, then Section 15(1)(a) comes into operation and the properties left behind including the properties which she inherited from her parents would devolve simultaneously upon her husband and her issues as provided in Section 15(1)(a) of the Act.


73. The basic aim of the legislature in enacting Section 15(2) is to ensure that inherited property of a female Hindu dying issueless and intestate, goes back to the source.


74. Section 15(1)(d) provides that failing all heirs of the female specified in Entries (a)-(c), but not until then, all her property howsoever acquired will devolve upon the heirs of the father. The devolution upon the heirs of the father shall be in the same order and according to the same rules as would have applied if the property had belonged to the father and he had died intestate in respect thereof immediately after her death. In the present case the since the succession of the suit properties opened in 1967 upon death of Kupayee Ammal, the 1956 Act shall apply and thereby Ramasamy Gounder's daughters being Class-I heirs of their father too shall be heirs and entitled to 1/5th share each in the suit properties.


75. This Court while analysing the provisions of Sections 15 & 16 of the Act in the case of State of Punjab v. Balwant Singh & Ors., 1992 Supp. (3) SCC 108, has held as under:-


"7. Sub-section (1) of Section 15 groups the heirs of a female intestate into five categories and they are specified under clauses (a) to (e). As per Sections 16 Rule 1 those in one clause shall be preferred to those in the succeeding clauses and those included in the same clause shall take simultaneously. Sub- section (2) of Section 15 begins with a non-obstante clause providing that the order of succession is not that prescribed under sub-section (1) of Section 15. It carves out two exceptions to the general order of succes- sion provided under sub-section (1). The first exception relates to the property inherited by a female Hindu from her father or mother. That property shall devolve, in the absence of any son or daughter of the deceased (including the children of the pre-deceased son or daughter), not upon the other heirs referred to in sub-section (1) in the order specified therein, but upon the heirs of the father. The second exception is in relation to the property inherited by a female Hindu from her husband or from her father-in-law. That property shall devolve, in the absence of any son or daughter of the deceased (including the children of the pre-deceased son or daughter) not upon the other heirs referred to under sub-section (1) in the order specified thereunder but upon the heirs of the husband.

8. The process of identifying the heirs of the intestate under sub-section (2) of Section 15 has been explained in Bhajya v. Gopikabai and Anr. [1978] 3 SCR 561. There this Court observed that the rule under which the property of the intestate would devolve is regulated by Rule 3 of Section 16 of the Act. Rule 3 of Section 16 provides that "the devolution of the property of the intestate on the heirs referred to in clauses (b), (d) and (e) of sub-section (1) and in sub-section (2) of Section 15 shall be in the same order and according to the same rules as would have applied if the property had been the father's or the mother's or the husband's as the case may be, and such person had died intestate in respect thereof immediately after the intestate's death".

76. Again in the case of Bhagat Ram (dead) by LRs. v. Teja Singh (dead) by LRs., (2002) 1 SCC 210, a two-Judge Bench of this Court analysing the provisions of Sections 14, 15 and 16 of the Act reiterating the view taken in the State of Punjab v. Balwant Singh & Ors. (Supra), observed as under :-


"The source from which she inherits the property is always important and that would govern the situation. Otherwise persons who are not even remotely related to the person who originally held the property would acquire rights to inherit that property. That would defeat the intent and purpose of sub-Section 2 of Section 15, which gives a special pattern of succession."

77. Applying the above settled legal proposition to the facts of the case at hands, since the succession of the suit properties opened in 1967 upon death of Kupayee Ammal, the 1956 Act shall apply and thereby Ramasamy Gounder's daughter's being Class-I heirs of their father too shall also be heirs and entitled to 1/5th Share in each of the suit properties.


78. Unfortunately, neither the Trial Court nor the High Court adverted itself to the settled legal propositions which are squarely applicable in the facts and circumstances of the case.


79. Thus, the impugned judgment and decree dated 01.03.1994 passed by the Trial Court and confirmed by the High Court vide judgment and order dated 21.01.2009 are not liable to be sustained and are hereby set aside.


80. The appeal, accordingly, stands allowed and the suit stands decreed.


81. Let a preliminary decree be drawn accordingly. It shall be open to the parties to invoke the jurisdiction of appropriate Court for preparation of final decree in accordance with law.


82. However, in the facts and circumstances of the case, we do not make any order as to costs.