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CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

FAMILY LAW
Project on:

CONCEPT OF POOLING IN SEPARATE PROPERTY INTO COMMON STOCK

SUBMITTED TO: SUBMITTED BY:


DR. SHAIWAL SATYARTHI VIKASH GAURAV
(FACULTY OF FAMILY LAW ) ROLL NO: 835
SECOND YEAR
4th SEMESTER
ACKNOWLEDGEMENT

Any project completed or done in isolation is unthinkable. This project,


although prepared by me, is a culmination of efforts of a lot of people.
Firstly, I would like to thank our teacher, Dr. Shaiwal Satyarthi for his
valuable suggestions towards the making of this project.
Further to that, I would also like to express my gratitude towards my
seniors who were a lot of help for the completion of this project.
The contributions made by my classmates and friends are, definitely,
worth mentioning.
I would like to express my gratitude towards the library staff for their
help also.
Last, but far from the least, I would express my gratitude towards the
Almighty for obvious reasons.
Research methodology

AIMS AND OBJECTIVES:


The aim of the project is to present a detailed study on the topic Concept of pooling in separate
Property into Common Stock the subject of Family Law II.

SCOPE AND LIMITATIONS:


Though the topic Concept of pooling in separate Property into Common Stock is an immense
project and pages can be written over the topic but because of certain restrictions and limitations
I was not able to deal with the topic in great detail.

SOURCES OF DATA:
The following secondary sources of data have been used in the project-
1. Articles
2. Websites
3. Journals

METHOD OF WRITING AND MODE OF CITATION:


The method of writing followed in the course of this research paper is primarily analytical and
doctrinal. The research is followed with Uniform method of citation throughout the course of
this research paper.
CONTENTS

1. Introduction
2. Coparcenery Property under Hindu Law
3. Separate property under Hindu Law
4. Separate property thrown into the common stock
5. Conclusion
Bibliography
Introduction

Joint property is the property in which all the coparceners have community of interest and unity
of possession.
Property which is not joint is called separate or self acquire property. A Hindu, even if he be
Joint, may possess separate property. He is the sole owner of such property and has exclusive
possession and ownership over it. No other member of the coparcenary acquires any interest in it
by birth.
A member of joint family may, under certain circumstances, acquire property to hold it
exclusively as his own. But if the coparcener has voluntarily thrown his self- acquired property
into the joint funds with the intention of abandoning all separate claim to it, it would be joint
property, so as to be divisible among the entire member.
A Hindu, even if be joint, may possess separate property, such property
belongs exclusively to him. No other member of the coparcenaries, acquires any interest in it by
birth, and on his death intestate, it passes by succession to his heirs.
Coparcenery Property under Hindu Law

A Hindu Joint Family setup is an extended family arrangement prevalent which has an enormous
legal significance in India. Simply, a Hindu Joint Family would at best be described as, the lineal
descendants and their dependants where, the former trace their origin to one common ancestor.
The underlying essence of a joint family is the fact that it traces its origin back to one common
ancestor and with the addition and deaths of members, joint families can continue till eternity.1

It is important to understand that though a single familial unit, a Joint Hindu Family does not
have a separate legal identity and is not a juristic person. Though, the only collective statutory
recognition that has been bestowed upon a Joint Hindu Family is for the purposes of taxation.
Though, the definition is highly flexible.

The researcher, through this paper aims at throwing some light upon certain issues associated
with the Hindu Joint Family Setup; especially for a student of Family law. The focal points of the
research are drawn into the following heads:2

An analysis into how, the two schools of law look at the familial arrangement. For e.g. In a
Hindu undivided family governed by the Mitakshara Law, no individual member of that family
can predicate that he has a definite share in the property of that family.

A brief insight into who are the Important Role Players - the Karta and the women (especially in
the context of them becoming coparceners post 2005)

Status of the Property for the Joint Family –

1
Kusum, ‘Family Law Lectures Family Law-I’, Lexis-Nexis; NewDelhi: 2007.

2
S.A ,Desai ., ‘Mulla Hindu Law’, Lexis-Nexis; New Delhi: 2005.
An overview over the concept of partition of property. The researcher also intends to throw
some light into the status of the property for the purposes of Taxation. It may be stated that for
the purposes of the Income Tax Act (S. 171), a partition by metes and bounds i.e. a physical
division of property is required.

Distinction Between The Dayabhaga And Mitakshara Schools:

Important terminology:

Before embarking upon an explanation as to what is the distinction between the schools of law, it
is important to define some important terms.

Coparcenary: Partnership in inheritance; joint heir ship; joint right of succession to an


inheritance.

Unity of Possession: Though, a coparcenary may exist, yet till partition takes place there cannot
be a definite share for any of the coparceners.

Doctrine of Survivorship: The concept basically states that, the property would be devolved
upon the death of the coparcener to his next survivor, irrespective of who his heir is.

Karta: The eldest member of a Hindu Joint Family is known as the Karta of the coparcenary. He
is the representative of the family.

Alienation: the voluntary and absolute transfer of title and possession of real property from one
person to another.

Effect of Coparcenary:
There is a difference in the way a joint family comes into existence in the Mitakshara and the
Dayabhaga systems. Under the Dayabhaga School on the death of the Karta, the succession is
per stripes; that each son has an equal and absolute share. By absolute, one may note that none of
the descendants of the heir inheriting have any right over the property. In addition to this, if one
of the heirs dies then, even his wife or unmarried daughter have a share over his property which
is not possible under Mitakshara law.3

Interest by Possession

Another point of distinction between the Mitakshara and the Dayabhaga schools is that a
coparcener takes a fixed share once the Karta dies. In other words it's a certain share. Thus, for
example a person dies leaving behind 4 sons, then each son would have a determined 1/4th share
to the property.

Under the Mitakshara school of Hindu law, it may be said that there is a literal presumption of
love and affection in the family, i.e. there is a community interest in the family property. By
community interest one means that all the coparceners have an interest in the joint family
property. Under the Dayabhaga School though, there is a constant notion of having a fixed share
of property. Though, there may be a community interest as long a partition by metes and bounds
hasn't taken place.

Doctrine of Survivorship

This doctrine has been explained earlier. The Dayabhaga School allows for devolving of
properties only at the point of succession. Thus, there is no question of inheriting any property. It
is due to the application of this concept that there exists no coparcenary between a grandfather
and his grandson under the Dayabhaga School.

The application of this rule is also related because classical Hindu Law recognised the concepts
of unobstructed heritage and obstructed heritage to property. By unobstructed heritage one means
that between the lineal descendants the coparcenary never ends. Thus, if one of the chain
members dies then the coparcenary shifts to the next lineal descendant. This phenomenon has
3
S.K, Mitra , ‘Mitra on hindu law’Orient publishing Company;New Delhi: 2007.
been accepted under Mitakshara School. On the other hand, the Dayabhaga School recognizes
only obstructed heritage.

There are two further differences between the two schools of law that the researcher wants to
delve upon but they would be explained in the next part of the essay owing to the fact that they
involve the role players such as the Karta.

Key Role Players in the Hindu Joint Family

The Hindu Joint Family being considered as the close knit unit as it is though has a few
prominent members while its legal status is being considered. The researcher intends to reflect
the legal status of two prominent members: the Karta, the status of a female as a coparcener post
the 2005 amendment.

The Karta:

In a Joint Hindu Family, the Karta being the representative is responsible for the family. He is
supposed to oversee the income and assets of the joint property. He is accountable to all other
family members for the use of their shares of all sums which he spent. The Karta's powers and
liabilities and his power of alienation are similar in both the Dayabhaga and the Mitakshara
Schools. The difference that draws a contradistinction between the two is that the latter must be
in a position to render full accounts at all points of time. On the other hand the Karta under the
Dayabhaga School should render accounts only at the time of partition.

As per Hindu law's convention, the senior most male member is generally the Karta of the joint
family. The Andhra Pradesh High Court has stated that the Karta does not owe his position to
agreement or consent of other coparceners. His status has been a part of Hindu Culture for long.
As long as he is alive, irrespective of his age, health or strength, he continues to be Karta.

A conflict arises when in the presence of a senior male member can a junior male member be the
Karta. The position of law decided on this is that if all the coparceners agree, then a junior male
member can be a Karta. Though, this is contingent upon the whims and fancies of the
coparceners who may withdraw their consent at any time.
Can A Female Member Be The Karta?

The Mitakshara School sets a position of law, that on marriage the wife entails ownership rights
to her husband's separate and joint family property. Similarly, a daughter garners this right at
birth. The contingency to this being that there is a distinction between males and females.
Mitakshara law sets the status of women as bound to the family or asvatantra. Thus, their rights
can be entailed only while they belong to the family.

The Hindu Joint Family Setup has since time immemorial been criticized for being a patriarchal
setup. Thus, even the “manager” of a Joint Hindu Family has not been spared from this
patriarchal approach. The position of law qua the status of women as the Karta has been
inconclusive. The views seem to be rigid which, is a fatal flaw. Courts all over India have given
different views: -

Women, per courts, have been allowed as the Karta as a last resort. She may be a widow who
takes over in the absence of adult male members in the family. The court though does not delve
into what could this absence mean? The true test as per the court is not who transferred/incurred
the liability, but whether the transaction was necessary. The courts though have rejected the
notion of a widow as a coparcener for the want of a legal qualification to become a manger of a
JHF. The mother then may be the Karta as the natural guardian of minor male members. She can
also, represent the HUF for the purpose of assessment and recovery of income tax. After
refreshing through the authorities it was held that the mother or any other female could not be the
Karta of the Joint Family. Per the interpretation of the Court Hindu Law allows only a
coparcener as a Karta and since females cannot be coparceners, they cannot be the Karta.

Dharmashastras are the one and only sure guide. The Dharmashastras give recognition to two of
the above decisions. The status of female members qua debts incurred as the Karta will be
binding upon the family and must be paid out of the joint family funds. Thus, it may be
submitted that there does exist a certain sense of gender neutrality. Dharmashastras also mandate
her acts as manager by accepting positive benefits as well and not merely conservative/negative
acts. Thereby, the texts mandate her judgement as the Karta.
Status of Female Coparcenary (Pre and Post Amendment)

There is an inherent bond between property and personal laws in India. Before 1956, property
laws qua Hindus lacked coherence and differed on a regional basis. This can be seen in the
distinct application of the Mitakshara and the Dayabhaga Schools.4

The Mitakshara School of succession, dominant in North India, was excessively patriarchal and
the heirs had to be males. Under this, only lineal male descendants have a right by birth to
familial property that their father has. Their interest is equal to that of the father. The coparcenary
was exclusive till 2005 for male members. Distinct to this, the Dayabhaga system did not
acknowledge inheritance rights. Though there are instances where the patriarchal shackles are
broken, for instance under the Marumakkattayam law, in Kerala, lineage is traced through the
female line.

Though, with the advent of common law in India, the lawmakers sought to change this
patriarchal bias. Women were bestowed with greater rights but still denied coparcenary rights.
Subsequently, through state amendments, this need of gender neutrality was fulfilled.

For instance the State of Kerala abolished the concept of coparcenary according to the Kerala
Joint Family System (Abolition) Act, 1975. As per the statute the heirs (male and female) did not
acquire property by birth but hold tenancy rights till the property is partitioned. Subsequently,
Andhra Pradesh (1986), Tamil Nadu (1989), Karnataka (1994) and Maharashtra (1994) equal
‘coparcener' rights on ancestral property by birth to both sons and daughters.

The 15th Law Commission via its 174th report (2000) suggested amendments to balance the
discrimination against women. The present amended Act was modeled upon this report's
recommendations. The 2005 amendment gives women equal rights in the inheritance of ancestral
wealth, thus, bringing them at par with their male heirs. Section 6 of the Hindu Succession Act,
1956 (amended 2005) embodies this equality. An important question though, is still unanswered
even after the amendment; whether women or daughters can be allowed to become managers or

4
http://www.lawteacher.netaccessed on 1/4/2014 at 5.10 pm
Karta of the joint family? The issue raised against them being the Karta was their “absence” from
the joint family home post the amendment.5

Status of Property With Respect To Partition

Every adult coparcener has the right to demand a partition of the joint Hindu family. The
conflicting point is whether the son can demand a partition, if the father has an interest with his
brother, father or other coparceners? The position of law qua this point is inconclusive. In
Bombay, it has been held that the son is not entitled to a partition without the consent of his
father, if the father is joint with his father, brothers or other coparceners. However, if the joint
family consists only of the father and the sons, the son can demand a partition against the father
and if the family consists only of the grandfather and the grandsons, the sons can also enforce a
partition against the grandfather.6

Right of Father

A Hindu father joint with his sons and governed by Mitakshara Law in contradistinction to other
manager of a Hindu undivided family or an ordinary coparcener enjoys the larger power to
impose a partition on his sons with himself as well as amongst his sons inter se without their
consent, whether the sons are majors or minors.

However, the partition made must be fair and equal, and if not, then the major sons have a right
to repudiate the partition and the minor sons have a right to avoid that partition when they attain
majority. In case of such an unfair partition, it is voidable and not void ab initio. However, a
grandfather cannot bring about a partition amongst his grandsons. The father also has the
superior right to bring about a partial partition of the properties, with the rider that the partition
has to be bona fide and fair and just.

Intention to Separate

5
Paras Diwan, ‘Modern Hindu Law’, Allahabad law agency; Faridabad (Harayan): 2009.

6
S.R. Mayne , ‘Hindu Law & Usage’, Bharat Law House;, New Delhi: 2003.
Partition is a severance of status and thus is a matter of individual volition. The division of the
joint status may be brought about by any adult member of the family by intimating, indicating or
representing to the other members, in clear and unambiguous terms his intention to separate and
enjoy his share in the family property in severalty. It is immaterial in such a case whether the
other coparceners give their assent to the separation or not. Further, when there is
communication of intention by a single coparcener, the question to be proved on the facts of the
case is whether there was a total partition, or that the other members decided to remain united or
to reunite.7

The manifestation of the intention should be "declared", i.e. that it should be to the knowledge of
the person affected thereby. Thus it is a necessary condition that a member of a joint Hindu
family, seeking to separate himself from others will have to make known his intention to the
other members of the family from whom he seeks to separate.

Once a communication of intention has taken place in clear and unambiguous terms which has
resulted in the severance of the joint family status, it is not open for the coparcener to get back to
the original position by merely revoking the same. There has to be an agreement to reunite and
that a mere revocation of the intention cannot amount to an agreement to reunite. However, it has
been held that a notice that been given to the other coparceners can be withdrawn with their
consent.

Thus, it is submitted that once a notice has been issued that has come to the knowledge of the
other members, a severance would take place and such a notice cannot be withdrawn. It is
submitted that this is also reflected from Radhakrishna v. Satya Narayan, where the court held
that when in a suit for partition, the plaint contains a clear and an unambiguous expression of an
intention to separate, and summons have been served on the other coparceners, division in status
is effected from the date of the filing of the suit.8

7
http://archive.deccanherald.com accessed on 1/4/2014 at 5.10 pm

8
R.K Agarwala, ‘Hindu law’ Central law agency; Allahabad: 2011, p. 320.
“It sometimes happens that persons make statements which serve their purpose or proceed upon
ignorance of the true position, and it not their statements but their relation with the estate which
should be taken into account while determining the issue.” It is submitted that this statement has
to be read in the context of a further statement in the same case which said that “If the document
clearly shows a division of right, its legal construction and effect cannot be controlled or altered
by evidence of the future conduct”. It is submitted that reading these two statements together, the
conclusion that can be drawn is that, if the document is a clear expression of the intention to
separate, then it does act as a separation and the future conduct of the parties does not matter,
unless it can be shown that the document was never intended to act as one for partition but was a
sham one for another ulterior purpose.

It is also important to note the once a severance of joint status has taken place, the subsequent
conduct of the parties is not relevant to be determined. The mere fact that separated coparceners
chose to live together or act jointly for purposes of business or trade or in their dealing with
properties, would not give them the status or coparceners under the Mitakshara law. The
important point here is that the coparceners must be proved to have been separated, and if so,
then mere subsequent conduct unless a reunion takes place, would not restore the joint family
status

Separate property under Hindu Law


Any co-parcener, member of the joint hindu family, may acquire property out of his own self
earned funds without any detriment to the joint family property and such property is a separate
property, totally different from the joint family property.
Every co-parcenary has a right to seek partition of the joint hindu property and assert
his rights on his share. The legal heirs like sons and daughters have equal share in the property. If
any of the sons has predeceased, his children jointly acquire his share of property.

Property acquired in the ways indicated below is the separate property of the acquirer :
(i) Gains of learning: -
All acquisition made by means of learning ate separate property of the acquirer under
the Hindu gains of learing Act,1930.
(ii) Separate earnings-
separate earning of a member of a joint family. Th income of a such a member is his
separate property if it has been obtained
(a) By his own extertions
(b) Without the aid of the joint family property. But it has been earned at the expense
of joint family property, it is joint family property.
(iii) Sapratibondha daya(obstructed heritage).-
Property inherited by a hindu as obstructed heritage, that is, property inherited from
person other than his father,father’s father, or father’s father’s father.
(iv) Grovernment Grant:
Property granted by government to a member of a joint family is the donee’s
separate property,9 unless it appears from the grant that it was intended for the benefit for the
family.10
(v) Income from separate property:
the income from separate property and purchases made with such income.11
(vi) Gift:
A gift of a small portion of ancestral moveable property made through affection by a
father to his male issue is his separate property.
9
Katma nachiar v. rajah of Sivagunga, (1863) 9 MLa 539.
10
Sri Mahant Govind v. Sitaram,ILR (1899) 21 ALL 53.
11
Krishnaji v. Mahadev, ILR (1891) 15 Bom 373.
(vii) Share on partition:
Property obtained on Partition as his share by a coparcener who has no male issue.
(viii) Property held by sole surviving coparcener:
Property held by sole surviving coparcener, when no widow has power to adopt
exists.12
(ix) Property lost to family:
Ancestral property lost to the family and recovered by a member without taking any
assistance of the joint family property.

Separate property thrown into the common stock

Property thrown into the common stock. A member of a join –family may , under certain
circumstance , acquire to hold it exclusively as his own . But if coparcener has voluntarily throw
his self –acquired property into the joint funds with the intention of abandoning all separate
12
Parbati Kuer v. Sarangdhar, AIR 1960 SC 403.
claims to it, it would be joint property ,so as to be divisible among all the members. 13 Such an
intention need not be express, it is sufficient if the owner blends as one general account without
discriminating between the two , in such a way that a clear intention to waive his ( or her )
separate rights may be established. 14 A clear indication to waive separate rights must be
established and will not be inferred from acts which may have been done merely from kindness
or affection.15 Thus, when the head of a joint Mitakshara family kept only one account of
ancestral and self –acquired property and sued to amalgamate the funds, it was held that the self-
acquired property became joint property. 16
A Hindu , even if be joint , may possess separate property, Such property belongs exclusively
to him. No other member of the coparcenaries, acquires any interest in it by birth, and on his
death intestate, it passes by succession to his heirs.
Blending is not done by the primary act of blending but it is possible only by deliberate and
intentional acts of the owners of the property .Such an act can be done by express words or by
express conduct of the parties. Justice Hegde has observed that the act of blending is unilateral.
When a member of joint family mixes his property to a joint family property, he does not do the
act of gift nor is it gift. There is neither any donor nor done, nor does it attract the provisions of
the transfer of the property Act.17

In Lakireddi Chinna v. Lakireddi Lakshman18


The Supreme Court observed that the law relating to blending of separate property with joint-
family property is well settled. Property separate or self acquired of a member of a joint Hindu
family may be impressed with the character of a joint family property if it is voluntarily thrown
by the owner into the common stock with the intention of abandoning his separate claim thereto;
but to establish such abandonment a clear intention to waive separate rights must be established.

13
Ram Prasad v. Sheo Charan,10 MIA 190 at p.205.
14
Lal Bahadur v. Kanhaiya lal, 24 All 244: 34 IA 65.
15
AIR 1950 Mys 35.
16
Munshi Inder v. kunwar Shiam, ILR 40 Cal 470 (PC).
17
AIR 1970SC 1722.
18
AIR 1963 SC 1601.
From the mere fact that other members of the family were allowed to use the property jointly
himself, or that the income of the separate property was utilized out of generosity to support
persons whom the holder was not bound to support, or from, the failure to maintain accounts,
abandonment cannot be inferred, because an act of generosity or kindness will not ordinarily be
regarded as an admission of legal obligation.
The separate property of Hindu coparcener ceases to be so and acquires the
characteristic of a joint family or ancestral property not by any physical mixing with his joint
family or ancestral property but by his own volition and intention by his waiving and
surrendering his separate rights in its as separate property. The act is a unilateral act. As soon as
he declares his intention the property assumes the character of joint family property. The doctrine
is peculiar to Mitakshara school of Hindu law. When a coparcener throws his separate property
into the common stock, he makes no gift under the Transfer of property Act and, therefore, it
does not amount to transfer even.19 Where a member of coparcenary voluntarily gives up his
right in any property and mixes it with joint property, it would be deemed to be joint property.
Where he gives away his property in the common stock it would become a part and parcel of the
joint Hindu property and would not be treated separately.20
All the member of joint family cannot create joint property by throwing their money in common
stock. The property belonging to the coparceners only can create joint family property by
blending them into common stock.,21

Conclusion

A member of joint family, he acquire property from his own assertion and thrown his self acquire
property into the joint funds with the intention of abandoning all separate claims to it,it would be
joint property, so as to be divisible all the members.

19
Goli Eswariah v. Gift Tax Commissioner,AIR 1970 SC 1722.
20
Hemchand v. Danchand, AIR 1981 NOC 75.
21
Krishna v. Commr.IT , AIR 1977 SC 2230.
When a coparcener throws his separate property into the common stock, he makes no gift under
the Transfer of property Act and, therefore, it does not amount to transfer even. Where a member
of coparcenary voluntarily gives up his right in any property and mixes it with joint property, it
would be deemed to be joint property. Where he gives away his property in the common stock it
would become a part and parcel of the joint Hindu property and would not be treated separately.
All the member of joint family cannot create joint property by throwing their money in common
stock. The property belonging to the coparceners only can create joint family property by
blending them into common stock.

Bibliography

Books:
 Desai S.A., ‘Mulla Hindu Law’, Lexis-Nexis; New Delhi: 2005.
 Diwan Paras, ‘Modern Hindu Law’, Allahabad law agency; Faridabad (Harayan): 2009.
 Kusum, ‘Family Law Lectures Family Law-I’, Lexis-Nexis; NewDelhi: 2007.
 Mayne S.R., ‘Hindu Law & Usage’, Bharat Law House; New Delhi: 2003.
 Agarwala R.K., ‘Hindu law’ Central law agency; Allahabad: 2011.
 Mitra S.K, ‘Mitra on hindu law’ Orient publishing Company; New Delhi: 2007.
Websites:
 http://www.lawteacher.net
 http://archive.deccanherald.com
 http://manupatra.com
 http://westlaw.com
 http://www.netlawman.co.in
 http://www.lexisnexis.com
 http://www.legalsearch.com