Property under Hindu law may be
divided into two classes, viz.,
(1) Joint-family property or coparcenary
property; and
(2) Separate property or self-acquired
property.
1. Joint-family property or
Coparcenary property:
Joint-family property or coparcenary
property signifies the property in which
all the coparceners have community of
interest and unity of possession. Such
property consists of—
(a) Ancestral property;
(b) Property jointly acquired by the
members of the joint family;
(c) Separate property of a member
“thrown into the common stock”;
(d) Property acquired by all or any of
the coparcener with the aid of joint
family funds.
In Bhagwant P. Sulakhe v. Digamber
Gopal Sulakhe, the Supreme Court
observed that the character of any joint
family property does not change with
the severence of the status of the joint
family and joint family property
continues to retain its joint family
character so long as the joint family
property is in existence and is not
partitioned amongst the co-sharers. By
a unilateral act it is not open to any
member of the joint family to convert
any joint family property into his
personal property.
(A) Ancestral Property:
Ancestral property is a specie of
coparcenary or joint family property. By
the term “ancestral property” is meant
that property which descends from
father, father’s father and great
grandfather. In this property a person’s
descendant’s upto three generations,
i.e., sons, son’s son, son’s son’s son
acquire an interest by birth.
The following kind of properties will
constitute ancestral property with its
incidental characteristics, namely:
(1) Such property will devolve by
survivorship and not by succession.
(2) It is a property in which male issues
of a coparcener acquire an interest by
birth.
In this case a male Hindu inherits the
property from his father, father’s father
or father’s father’s father. Thus only the
property inherited by a Hindu from
anyone of the three immediate paternal
ancestors mentioned above is termed as
ancestral property and the only persons
who acquire an interest in it by birth are
sons, son’s son and son’s son’s son.
The Privy Council dealing with the
source of ancestral property held that it
is confined to property inherited from
the three immediate paternal ancestors
and the property inherited from a
maternal grandfather is the absolute
property of the inheritor in which his son
does not acquire any interest by birth.
Any property inherited by a person from
his female relatives, cannot be termed
as ancestral property. Where a property
is given in gift to the sister by her
brother, after the death of the sister, her
son inherits the same; it would be his
separate property not an ancestral
property.
Where a question arises as to whether a
property obtained by a male Hindu by
way of a gift or will from his father,
grandfather or great grandfather would
be ancestral or self acquired, the
Supreme Court held that it depends
upon the intention of the father or
grandfather as expressed in the deed of
gift on will or to be gathered from the
terms of the document and surrounding
circumstances.
If the intention of the grandfather was
that the father should take the property
exclusively, the property in the hands of
the father would be his separate
property. If the intention of the
grandfather was that the father should
take the property for the benefit of the
branch of the family it would be an
ancestral property in the hands of the
father, for his sons would get equal
rights with him in the property.
Whatever property……… till the day of
partition that shall be treated as joint
family property. The property earned by
the brothers after partition shall not be
regarded as joint family property. In
Commissioner of Income-tax v. P.
Chettiar, the Court held that where it
has not been indicated in the deed of
gift that the donee will take as a joint
family property, that property shall be
absolute property of the donee, in which
his sons will not have any right by birth.
In Hindus the ancestral business of joint
family has been regarded as a distinct
heritable asset. Where a Hindu dies
leaving a business it descends like other
heritable property to his heirs. In the
hands of sons, son’s son and great
grandsons it will become a joint family
business on the death of male ancestor
and the firm which consists of male
issues becomes a “joint family firm”.
The manager of a joint family cannot
start a new business so as to bind the
share of the other adult coparceners,
unless the business is started or carried
on with their express or implied consent.
The income of joint family business
constitutes joint family property.
Similarly any property acquired in
exchange of a joint family property
would also be held to be joint family
property.
In case ancestral property is absolutely
lost to the family, and a member of the
family, by his own exclusive exertions
recovers it without any aid from the joint
funds, and with the consent actual or
implied, of the others, the recoverer has
certain special claims on the property.
The recovery, if not made with the
privity of the co-owners, must at least
be bona fide, and not in fraud or by
anticipation of the intention of other co-
owners.
In Dharam Singh and others v. Sadhu
Singh and others, the question was
whether the property was ancestral or
separate. In this case properties
devolving on father of party due to the
death of issueless brothers and addition
to it by the relinquishment of shares by
sisters was held not to be ancestral
property vis-a-vis his sons.
(b) Property jointly acquired by the
members of the joint family:
Where property has been acquired by
the members of joint Hindu family by
their joint labour whether in business,
profession or vocation, with the aid of
joint family property, it becomes joint
family or coparcenary property.
According to Bombay High Court a
property acquired by the joint labour of
the members, even without the aid of
joint family funds, is presumed to be
joint family property in absence of any
indication of an intention to the
contrary.
Where two brothers acquired some
property in a joint Hindu family by their
joint efforts, in absence of an intention
to the contrary it would be presumed to
be joint property and their male
descendants would acquire an interest in
that property by birth.
In Bhagwant P. Sulakhe v. Digambar
Gopal Sulakhe, the Supreme Court held
that the character of any joint family
property does not change with the
severance of the status of the joint
family and a joint family property
continues to retain its joint family
character so long as the joint family
property is in existence and is not
partitioned among the co-sharers. By a
unilateral act it is not open to any
member of the joint family to convert
any joint family property into his
personal property.
In the above case, the remuneration
received by two of the members of a
joint family who constituted a firm which
was appointed as managing agent of a
company, for acting as managing agent
of the company must be held to be the
joint family property when the
agreement of the partnership indicated
that the two family members became
members of the firm which was
appointed the managing agent of the
company, representing the joint family
and for the benefit of the joint family.
In Gumam Singh v. Pritam Singh &
others. the court further held that if
property is acquired by the fund of joint
labour even if it was purchased from
income derived from land which was
taken on batai and cultivated jointly
there would be presumption of jointness
and property would be treated as joint
Hindu family coparcenary property.
(C) Property Thrown Into the Common
Stock:
Where any coparcener voluntarily throws
his self-acquired property into the joint
fund with the intention of abandoning all
separate claims to it, it would be joint
property, so as to be divisible among all
the members. Such an intention need
not be express, it is sufficient if the
owner blends it as one general account
without discriminating between the two,
in such a way that a clear intention to
waive his separate rights may be
established.
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.
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. 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 donee, nor does it attract the
provisions of Transfer of Property Act.
In K. Abebul Reddy v. Venkata Narayan
the Supreme Court observed that once it
is presumed that the family is joint and
it holds joint property it would be a legal
presumption that the property held by
an individual member or by all the
members is joint family property. If any
member claims his separate right over
certain part of joint property the burden
of proof would be on him to prove that
it was his separate property.
In Subrammania Reddi v. Venkatasubba
Reddi, the husband of daughter had
brought in certain properties which got
blended with joint family properties; she
had become widow and was issueless.
The main consideration to make a sort
of family arrangement and therefore
property had been given to her.
The other family members themselves
have treated certain items of properties
as separate properties. The partition
effected on that basis, but the family
members blending properties of widow
as joint Hindu property. The Supreme
Court observed that properties inherited
by widow from his relations on his
maternal side, cannot blended with
property of joint family property.
Where joint family does have joint family
property, the separate property of
coparceners does not convert into joint
family property, although it is quite
possible that the coparceners regard
their separate property as joint family
property. He can permit the other
coparceners to treat that property as
their property also.
Where the view is taken that separate or
self-acquired property has been thrown
into common stock and one’s separate
rights have been abandoned, these facts
have to be established expressly. A
presumption to this effect cannot be
drawn on the basis of mutual love and
affection of the coparceners.
In Lakireddi v. Lakireddi, 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.
From the mere facts that the other
members of the family were allowed to
use the property jointly with himself, or
that the income of the separate property
was utilised 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, for an act of generosity or
kindness will not ordinarily be regarded
as an admission of legal obligation.
In Pipari Lai v. Nanak Chand, the Privy
Council had laid down that where a son
claims that a business started by his
father is a joint family business because
he has been actively assisting in its
promotion, there the burden lies on him
to establish that the business which was
started in absence of any financial
assistance from ancestral property, was
intended to be a joint family business
and it was earnestly regarded as such.
Once it is established to be a joint
family business, its character will not
change despite the change in the
attitude of the father later.
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 members of joint Hindu 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. Such
a right is not available to female
members of the joint family as they are
not coparceners.
The doctrine is peculiar to Mitakshara
school of Hindu law. When a coparcener
throws his separate property into the
common stocks, he makes no gift under
the Transfer of Property Act and
therefore it does not amount even to
transfer.
(D) Property Acquired With The Aid of
Joint Family Funds:
Property acquired with the aid and
assistance of joint family property is
also joint. Thus, accumulation of
income, i.e., rent etc. of joint family
property, property purchased out of such
income, the proceeds of sale or
mortgage of such property and property
purchased out of such proceeds are also
joint family property.
Where in a joint Hindu family some
property is purchased in the name of
one of its members, it will be regarded
as a joint family property not his own
separate property. If he has acquired
any property without the help of joint
family property it could be treated as his
separate property. Where any member of
joint family blends his self acquired
property into common property of the
family or joint family property, it all
becomes joint property.
Where the Karta of joint family
purchases any property in his name and
does not assert that joint family
property was inadequate to purchase
that property, there the burden of proof
is on him to establish that the property
was purchased by his own separate
property. In absence of such proof, it
would be presumed, that the property
was purchased out of joint family
property and that would be regarded as
joint family property.
In D. Latchandora v. Chinnabadu, the
Court held that where certain property is
given to a member of joint Hindu family
in order to meet the expenses of his
maintenance and he acquires some
other property out of the income from
that property, in that case all the
properties thus acquired by him would
become his separate property. But in a
case from Madras High Court, it was
held that all the property thus acquired
by him would be regarded as joint
family property in the context of his
sons.
In Smt. Parbatia Devi v. Mst. Sakuntala
Devi, the Patna High Court held that
under Hindu law, when a property
stands in the name of a member of a
joint family, it is incumbent upon those
asserting that it is joint family property
to establish it.
When it is proved or admitted that a
family possessed sufficient nucleus with
the aid of which the member might have
made the acquisition, the law raises a
presumption that it is a joint family
property and the onus is shifted to the
individual member to establish that the
property was acquired by him without
the aid of the said nucleus.
In Satchidananda Samanta v. Ranjana
Kumar Basil, the Court held that a
business run by coparcener on joint
property need not always be joint family
business. In Dayabhag coparcenary one
coparcener started cinema business on
joint family property with the consent of
other coparceners.
The other coparceners did not contribute
capital in it. The cinema licence was
obtained only in the name of one
coparcener. Evidence on record showed
that the grant of cinema licence was not
opposed by other coparcener. It was
held that the cinema business was not
family business merely because it was
run on joint property.
2. Separate or Self-acquired
property:
Property which is not joint is called
separate or self-acquired property. The
word ‘separate’ suggests that the family
was formerly joint but has now become
separate. When a member separates
from joint family, the property which he
acquires will be treated as his separate
property vis-a-vis his relations with his
brothers, but so far his sons are
concerned it would be regarded as joint
family property. The term “self
acquisition” signifies that the property
has devolved upon him in such a manner
as nobody except himself has any
interest in it.
Property acquired by a Hindu in any of
the following ways is his self-acquired
or separate property even though he be
a member of a joint Hindu family:—
(1) Property acquired by a Hindu by his
own exertion would be his separate
property as it is not the result of any
joint labour with the other members of
the joint family, provided it is obtained
without detriment to joint family
property. Where a person has acquired
any property by way of adverse
possession after remaining in its
possession adversely for a period of
twelve years it would be treated as his
self-acquired property not a joint
property.
Where a member of joint family carries
on a business of medical practitioner in
Ayurvedic medicines and thereby earnes
heavy sum of money and gives loan on
mortgage, thus accumulating further
income, all the earnings and the
property thus acquired by him would be
his separate property.
Recently in Maklian Singh v. Kulwant
Singh, Supreme Court observed that if a
male member of the Joint Hindu Family
purchased the property by his own
incomes like salary income, such
property is his self acquired property.
Such property inherit his heir by
succession. It could not be said to be
the property of Joint Hindu Family.
(2) Property inherited by a Hindu from
any person other than his father,
grandfather or great grandfather would
be his separate property. Where a
person earns money from the practice of
a hereditary profession like the
hereditary priest, it will not be regarded
as his joint family property but on the
other hand his separate property.
In Madan Lal Phul Chand Jain v. State
of Maharashtra, the Court held that a
Hindu can own separate property
besides having a share in ancestral
property. Where any member of joint
family inherited land left by his uncle
that property came to him as a separate
property and he had an absolute and
unfettered right to dispose of that
property in the manner he liked. Thus
property inherited by a person from
colleterals such as brother, uncle etc.
cannot be said to be ancestral property
and his son cannot claim a share therein
as if it were ancestral property. On the
death of a brother issueless, the
property inherited by a person would be
his separate property.
(3) Any property obtained by a Hindu as
his share of partition of a joint Hindu
family, provided he has no male issue,
shall be treated his separate property.
Where a Hindu makes some acquisitions
after partition with the help of his share
in joint family property, that property
shall be regarded as his separate
property.
(4) Any property devolving on a sole
surviving coparcener provided there is
no widow in existence who has power to
adopt or has a child in her womb, will be
regarded as his separate property.
(5) Property obtained by a Hindu by a
gift or will unless made by his father,
father’s father or father’s father’s father
for the benefit of the family and not
exclusively for himself, would be his
separate property.
(6) Property obtained by gift of
ancestral property made by the father
through affection, will be his separate
property.
(7) Property obtained by a Hindu by
grant from the Government shall be
regarded as separate property.
(8) Joint family property lost to the joint
family and subsequently recovered by a
member thereof without the assistance
of joint funds from a stranger holding
adversely to the family property shall be
regarded as his separate property.
(9) Gains of Learning:
Any income earned by a member of joint
family substantially by means of his
education or specialisation, expertise or
special intelligence would be regarded
as his separate property. Where a
member of joint family acquires some
knowledge or specialisation after getting
the education at the cost of joint family
fund and later on earns a considerable
sum, whether that sum will be treated
as his separate property or joint family
property, became a controversial issue.
In order to bring the controversy to an
end the Hindu Gains of Learning Act,
1930 was passed. The Act provided that
no gams of learning shall be held not to
be the exclusive and separate property
of the acquirer merely by reasons of
learning having been imparted to him by
any member of his family or with the aid
of the joint funds of the family or with
the aid of the funds of any member.
Section 3 of the Act provides:
“Notwithstanding any custom, rule or
interpretation of the Hindu law, no gains
of learning shall be held not to be
exclusive and separate property of the
member of the joint family who acquires
them merely by reason of (a) his
learning having been in whole or in part,
imparted to him by any member living or
deceased, of his family or with the aid of
joint funds of his family or with the aid
of joint fund of any member thereof, or
(b) himself or his family having while he
was acquiring such learning been
maintained or supported, wholly or in
part, by the joint funds of his family or
by the funds of any member thereof.
“Learning means education whether
elementary, technical, specific, special or
general and training of every kind which
is usually intended to enable a person to
pursue any trade, industry, profession or
a vocation in life”—Section 2(c).
“Gains of learning means all acquisitions
of property made substantially by means
of learning, whether before or after the
commencement of the Act and whether
ordinary or extra-ordinary result of such
learning.”—Section 5(d).
Salary and Remunerations:
Where a member of joint family makes
acquisition with the aid of any part of
joint family property, it cannot be his
separate earning nor can it be said to
be his separate property simply on
account of the fact that such acquisition
was made by him by applying his own
wisdom or skill. In Palanippa v.
Commissioner of Income-tax.
The Supreme Court observed that where
no part of the family funds had been
spent to enable the Karta to earn
remuneration of managing director and
the family funds had been invested to
obtain dividends and other advantages
of being shareholders, the salary,
commission and sitting fees of Karta as
managing director shall remain his
personal property.
In Dhanwantary v. Commissioner of
Income Tax, the Court held that the
salary earned by a coparcener as
partner constituted joint family property.
Where the coparceners invested joint
family assests in partnership and it was
agreed that the profits earned in
partnership were to be taken as
personal salary of each coparcener, the
salary which the manager earned on
account of his personal skill and labour
was held to be as a part of joint family
property.
On the other hand in Commissioner of
Income-tax v. D.C. Shah, the Supreme
Court held that the salary given to a
coparcener as partner on account of his
special skill and experience constituted
his self acquired property, even though
the family has contributed a large parts
of its capital to the firm.
Where the security is given out of joint
family property for the appointment of
Karta of joint family on the post of a
manager in an industry, the court held
that the salary and remuneration earned
by the Karta will still be regarded his
separate property of Karta.
In Bhagwantji Sulakhe v. Digambar
Gopal Sulakhe, the Court observed:
Where a coparcener has been appointed
as a managing director of a company
the remuneration earned by the
coparcener will be regarded his separate
property irrespective of the fact that a
few shares of the company were
purchased out of joint family property to
enable him to become the managing
director.
Where the premium of the insurance
policy of a coparcener is deposited out
of joint family fund, the benefit earned
by him would be his separate property
not the joint family property.
In Sidrammappa v. Babajappa, the
Mysore High Court observed that if the
father has taken an insurance policy in
the name of the son and paid the
premiums thereof out of love and
affection, then the benefits of the policy
will belong to the son and constitute his
separate property.
Similar view was taken by the Andhra
Pradesh High Court in Narayanlal v.
Controller of Estate duty. The Supreme
Court in Prabhavati v. Sarangdhar
observed: “There is no proposition of
law by which the insurance policies
must be regarded as the separate
property of the coparceners on whose
lives the insurance is effected by the
coparcenary.” If the insurance policy
were taken with any detriment to the
joint family funds, then anything
obtained thereby would belong to the
joint family.
In Chandra Kant Mani Lai Shah v.
Income Tax Commissioner, the Supreme
Court laid down a new proposition by
saying that a partnership firm can be
constituted between the Karta and
undivided member of Hindu undivided
family. It is not necessary that such
undivided member should contribute
cash assets to become partner in the
firm. When an individual in place of cash
asset contributes his skill and labour in
consideration of a share in the profits of
the firm he can become a partner in the
firm.
In such cases when a coparcener
contributes his skill and labour while
entering into partnership with the Karta
of Hindu undivided family, it cannot be
said that he has not made contribution
of any separate asset to meet the
requirement of a valid partnership. The
profit thus earned by that coparcener
would not constitute the property of the
joint family but would be the separate
property of the individual coparcener
concerned.
In K.S. Subbiah Pillai v. Commissioner
of Income Tax, the remuneration and
commission was received by the Karta
of the family. The tribunal had held that
the remuneration and commission
received by the Karta of the joint Hindu
family where earned by him on account
of his personal qualifications and
exertions and not on account of the
investment of the family funds in the
company, therefore it could not be
treated as the income of H.U.F. In this
case the Supreme Court also observed
that the decision given by tribunal is
correct.
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