• Inheritance & Succession- Under Indian Succession Act, 1925

  • Partition Suits- Under Indian Succession Act, 1925

    Power to Court to order sale instead of division in partition suits

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

    Procedure when sharer undertakes to buy

    If, in any case in which the Court is requested to direct a sale, any other shareholder applies for leave to buy at a valuation the share or shares of the party or parties asking for a sale, the Court shall order a valuation of the share or shares in such manner as it may think fit and offer to sell the same to such shareholder at the price so ascertained, and may give all necessary and proper directions in that behalf. If two or more shareholders severally apply for leave to buy the Court shall order a sale of the share or shares to the shareholder who offer to pay the highest price above the valuation made by the Court. If no such shareholder is willing to buy such share or shares at the price so ascertained, the applicant or applicants shall be liable to pay all costs of or incident to the application(s).

    Partition suit by transferee of share in dwelling- house

    Where a share of a dwelling-house belonging to an undivided family has been transferred to a person who is not a member of such family and such transferee sues for partition, the Court shall, if any member of the family being a share-holder shall undertake to buy the share of such transferee, make a valuation of such share in such manner as it thinks fit and direct the sale of such share to such shareholder, and may give all necessary and proper directions in that behalf. If in any case two or more members of the family being such shareholders severally undertake to buy such share, the Court shall follow the procedure prescribed under the law.

    Reserved bidding and bidding by shareholders:

    Every sale shall be subject to a reserved bidding, and the amount of such bidding shall be fixed by the Court in such manner as it may think fit and may be varied from time to time. On any such sale any of the shareholders shall be at liberty to bid at the sale on such terms as to non-payment of deposit or as to setting off or accounting for the purchase-money or any part thereof instead of paying the same as to the Court may seem reasonable. If two or more persons, of whom one is a shareholder in the property, respectively advance the same sum at any bidding at such sale, such bidding shall be deemed to be the bidding of the shareholder.

    Procedure to be followed in case of sales

    When any property is directed to be sold, the following procedure shall, as far as practicable, be adopted, namely: 

    1. If the property be sold under a decree or order of the High Court of Calcutta, Madras or Bombay in the exercise of its original jurisdiction on, the procedure of such Court in its original civil jurisdiction for the sale of property by the Registrar;
    2. If the property be sold under a decree or order of any other Court, such procedure as the High Court may from time to time by rules prescribe in this behalf, and until such rules are made, the procedure prescribed in the Code of Civil Procedure in respect of sales in execution of decrees.

    Order for sale to be deemed decrees

    Any order for sale made by the Court under Sec. 2, 3, or 4 shall be deemed to be a decree within the meaning of Section 2 of the Code of Civil Procedure.

    Partition on basis of shareholding

    A shareholder cannot ask a company for partition on the basis of his shareholding- Case Law: Bacha F. Guzdar Vs. CIT Bombay, AIR 1955 SC 74- Ramesh Kumar Bhagchandka v. Mahesh Kumar Bhagchandka[DB], RFA (OS) 49/2014(28/03/2014), 2014(212) DLT 677 [Pradeep Nandrajog, J.: Jayant Nath, J.]

    Family settlement

    Deed of Family Settlement is a Memorandum i.e. a written record of what the parties had orally agreed upon at one point of time and had acted thereupon. There is no requirement of registration of family settlement under Section-17 of the Registration Act, 1908.  Memorandum of Family Settlement is admissible in evidence-

     Essential Ingredients of the Partition Suit

    • Family Tree
    • List of entire ancestral properties.
    • All the legal heirs got to be made a party to the Suit.
    • Family Settlement, if any.
    • Adequate Court Fees, ad-valorem court fee or otherwise, got to be paid on the Partition Suit: Case Law- Vandana Sharma v. Hemlata Goswamy, I.A. No. 16744/2011 in CS (OS) 1544/2011(22/04/2014), 2014(5) AD(Delhi) 122: 2014(209) DLT 741: 2014(143) DRJ 252 [Mukta Gupta, J.]    

    Points to Remember:

    • So long as the property is not sold, any sharer can make an application for the purchase of the share of co-sharer who wants the same to be sold.
    • When exact division of the property by metes and bounds is impossible, the remedy, in the best interests of the parties, lies in sale of the property by way of a public auction or otherwise, as the parties and the Court deemed fit, in the peculiar facts and circumstances of the Case.
    • Right of pre-emptive purchase/ Pre-emptive right to buy- under the scheme of the Partition Act, 1893 (The Act), as envisaged under Sections 2 and 3(1) of the Act, when a request for sale is made by a shareholder under Section 2, the other shareholder becomes immediately entitled to make an application under Section 3 for leave to buy the share of the former and this right to buy would thus become crystallized on the date when this right arose- Case Law: Surender Kumar Gupta v. Mahender Kumar Gupta, Review Petition No. 510/2010 & Cm No. 4731/2011 in CM (M) No. 1275/2010(17/08/2011), 2011(7) AD(Delhi) 157 [Indermeet Kaur, J.]
    • Whether the request for sale/ buy by a shareholder is bonafide, mala fide, dilatory and vexatious in continuance of conduct, it will be ascertained from the material on record.
    • Sale of property by court- Court can order a sale, if requested to do so by owners of 50% share in property or more and cannot order the same on its own-Case Law: Faquira v. Raj Rani[DB], RFA 366/1981(09/08/1983), 1984 AIR(Del) 168: 1984(6) DRJ 33 [D.K. Kapur, J.: S. Ranganathan, J.]
    • In case court finds that the sale is likely to create hardship and difficulties for the minor shareholder or small shareholder, the Court can decline to make an order of sale.
    • Plaintiff being in actual possession of one immovable property, of which he is the recorded owner, would not mean that plaintiff would be in constructive possession of others.
    • Speculative Suits and/ or Suits having vague pleadings are impermissible.

    Judgments:

    • Principle of owelty- M.L. Subbaraya Shetty and Ors. vs. M.L. Nagappa Shetty, 2002(4) SCC 743
    • A suit for partial partition of joint property is not maintainable- Saichanakya v. Priti Tandon[DB], RFA (OS) 44/2014(04/04/2014), 2014(4) AD(Delhi) 808 [Pradeep Nandrajog, J.: Jayant Nath, J.
    • On The Issue of Family Settlement-
    • Nanibai & Ors. vs. Geeta Bai Kom Rama Gunge, AIR 1958 SC 706
    • Kale & Ors. vs. Deputy Director of Consolidation & Ors., AIR 1976 SC 807
    • Hansa Industries vs. Kidar Sons Industries Ltd., AIR 2007 SC 18
    • Vikram Singh Vs. Ajit Inder Singh[DB], RFA (OS) 87/2012(24/02/2014)= 2014(210) DLT 145= 2014(6) AD(Delhi) 374 [Pradeep Nandrajog, J.: R.V. Easwar, J.]
    • On The Issue Of Ad-valorem Court Fees-
    • Mohendra Chandra Ganguli Vs. Ashutosh Ganguli, 20 Cal. 762,
    • Asa Ram Vs. Jagan Nath, AIR 1934 Lahore 563,
    • Irappa Bommaneppa Vs. Shankreppa Bommaneppa, ILR 1953 Bom. 821,
    • Sathappa Chettiar Vs. Ramanathan Chettiar, AIR 1958 SC 245,
    • Sital Prasad Vs. Ramdas Sah AIR 1939 Patna 274 ,
    • Hari Ram Vs. Ram Ditta ALR 1935 Lahore 59,
    • Ramesh Kumar Bhagchandka v. Mahesh Kumar Bhagchandka[DB], RFA (OS) 49/2014(28/03/2014), 2014(212) DLT 677 [Pradeep Nandrajog, J.: Jayant Nath, J.]

    The captioned subject is complex by its very nature. We, therefore, always encourage our visitors & Clients to seek an independent legal advice by our empanelled lawyers. In such Cases, our lawyers devise most appropriate legal recourse for our Clients after examining the related provisions of law, i.e. The Partition Act, 1893, The Indian Succession Act, 1925, The Hindu Succession Act, 1956, The Code of Civil Procedure, 1908, The Limitation Act, 1963, The Evidence Act, 1872, Other  relevant Acts & Judgments and Citations of the Hon’ble Supreme Court Of India and the High Courts. Even otherwise, the question as to how to apply the laws, judgments and citations is rather more complex, as it involves a thorough examination of substantial laws, procedural laws and Court precedents in a given set of facts and circumstances.

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