JOURNAL OF THE INDIAN LAW INSTITUTE
Volume 25
JANUARY-MARCH
NUMBER
1
ANCESTRAL PROPERTY AFTER HINDU SUCCESSION ACT
1956—JOINT FAMILY PROPERTY OR SEPARATE PROPERTY ?
A MUDDLE UNDER TAX CASES
Paras Diwan*
NO PROPOSITION of Hindu law is so well settled than the one which
lays down that when a Mitakshara Hindu male succeeds to the property
of his father, father's father or father's father's father, he takes it as
ancestral property and his son, son's son and son's son's son acquire an
interest in it by birth. This is the technical meaning of ancestral property
under the Mitakshara school. Property inherited from any ancestor
or ancestress other than father, father's father and father's father's father
is not ancestral property. Ancestral property is one of the species of
joint family property or the property of the Hindu undivided family
(HUF) as the Hindu joint family has come to be known under the tax
statutes. Recently, in some tax cases a view has been propounded
that after the coming into force of the Hindu Succession Act 1956
(hereinafter referred to as the Act) there is nothing like an * 'ancestral
property", for the son succeeding to his father's property takes it as
his separate property. Apart from its implication in tax cases, this view
would virtually lead to the abrogation of the Hindu joint family.
In this paper, it is proposed to examine critically the rationale of
these cases.
The Mitakshara classification of property into apratibandha daya
or unobstructed heritage and sapratibandha daya or obstructed heritage is
the natural corollary to the twin concepts of son's birth-right and devolution of joint family property by survivorship. The Mitakshara explains
both the terms thus:
The wealth of the father or of the paternal grandfather becomes the
property of his sons or of his grandsons, in the right of their
being his sons or his grandsons; and that is an inheritance not
liable to obstruction. But property devolves on parents or uncles,
*LL.M.,Ph. D., Professor of Law, Panjab University, Chandigarh.
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brothers or the rest, upon the demise of the owner, if there be no
male issue; and thus the actual existence of a son, and the survival
of the owner are impediments to the succession; and on their
ceasing, the property devolves on the successor in right of his being
uncle or brother. This is an inheritance subject to obstruction.1
Thus unobstructed estate is that in which the son, son's son and son's
son's son have already an interest by the mere fact of their birth in that
status. If they survive, they must necessarily take it by the mere fact of their
surviving. For instance, in the estate inherited by a Hindu male from his
father, father's father or father's father's father, his son has a vested
right by virtue of his birth and will take the estate if he survives his father;
in case he does not, his son will take the estate, and even if his son does
not survive, his son's son will take the estate. On the other hand, the
person who is next in apparent succession to an obstructed estate may
at any moment find himself cut off by the interposition of .a prior heir,
such as, a son or widow. His right will accrue for the first time at the
death of the actual holder and will be judged according to the existing
estate of the family at that time. Any nearer heir who may then be in
existence will completely exclude him, and if he should die before the
succession opens, even though he would have succeeded had he survived,
his heirs will not take it at all unless they happen to be the next heirs to
the deceased. In other words, he cannot pass on to others rights which
had accrued to him, nor can he bar, by any contract, the rights of those
who, after his death, are the actual reversioners when the succession
opens.*
The apratibandha daya or unobstructed heritage (ancestral property)
does not devolve by succession but by survivorship. The very definition
of unobstructed heritage makes no distinction between the property of
the father and the property of the grandfather so far as the son's right to
take it as unobstructed heritage is concerned. That the right vested by
birth in the son extends to property acquired by the father is unequivocally
stated by Vijnaneshwara thus: "[Therefore it is a settled point that
property in the paternal or grandpaternal estate is by birth...."3
1. See Mitakshara 1, 1, 2, 3.
2. See John D. Mayne, Treatise on Hindu Law and Usage 333 (11th ed. 1950). See
also Babu Anaji v. Ratnoji, I.L.R. (1897) XXI Bom. 319; Bahadur Singh v. Mohar Singh
(1901-02) XXIX I.A.I.
3. Supra note 1, 1, 23-27, 33. The difference between the two is explained thus:
[Consequently, the difference is this: although he has a right by birth in his father's
and his grandfathers property; still, since he is dependent on his father in regard to
the paternal estate and since the father has a predominant interest as it was acquired by
himself, the son must acquiesce in the father's disposal of his own acquired property,
but since both have indiscriminately a right in the grandfather's estate, the son has a
power of interdiction*
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The grandson's right by birth in the grandfather's properly is only a
logical result of the son's right by birth in the father's property, for, if
the son has no right by birth in his father's property, his son born before
the grandfather's death can have no right by birth in the grandfather's
property. John D. Mayne puts it thus: "How then does he acquire by birth
a right in the grandfather's property after it has descended to the father ?
If neither sons nor grandsons born before the grandfather's death have
any right by birth in the acquirer's property, they cannot acquire by
birth any equal right once the grandfather's property has descended.
Again, as Nilkantha says, 'this cannot be construed to mean that the
cause of the ownership is found in the grandfather's death, and not in the
birth of a son. For, in that case, such ownership would be wanting in
case of a grandson not born up to the time of his [the grandfather's]
death."4 It should be clearly understood that in the apratibandha daya,
a Hindu male has an effective vested interest in the property before the
inheritance fell in, and, therefore, his own sons acquire by birth a similar
interest. Hence, when the property actually devolves upon him, he
takes it subject to the interest they had already acquired. That is the
basis of ancestral property. Thus, all properties which a man inherits
from a direct male ancestor, not exceeding three degrees higher than
himself, is ancestral property, and property inherited from any other
ancestral or a collateral relation is not ancestral property.5
To sum up, under the Mitakshara law when a Hindu male inherits
property from his father, father's father or father's father's father, the
property in his hands is ancestral or joint family property in the sense
that in it his son, son's son and son's son's son acquire an interest by
birth. The fact of the matter is that where an HUF or Hindu joint family
does not exist, it comes into existence for the first time on the death of the
father, when sons inherit his separate property and constitute an
HUF, and their son, son's son and son's son's son acquire in that
property an interest by birth. Once such an HUF comes into existence and
it continues to exist till a partition takes place or the line becomes extinct.
For instance when P, a Hindu, constituting a nuclear family, dies leaving
behind a son, this son, on inheriting his father's separate property, cannot
obviously constitute an HUF or Hindu joint family since there cannot
be a family consisting of a single person, but the moment he gets a son,
The Smritichandrika is also explicit on this : "In the case of father's property the
ownership of father and son is u n e q u a l . . . . in the case of grandfather's property, the
ownership (Svameam) and also independent power (svatantriem) are both equal in the
father and son. Whereas in the case of father's property, while he is alive and free
from defect, he (father) alone possesses an independent power (svatantriem) and not
the son." VIII, 21.
4. Supra note 2 at 333-38. Emphasis added.
5. MuhammadHussain Khan v. Baku Kishva Nandan Sahai (1937) 641.A. 250.
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whether natural or adopted, he constitutes a Hindu joint family or an
HUF. Or, if P dies leaving sons or son's sons or son's son's sons, an
H U F comes into existence the moment he dies. Similarly, when a Dayabhaga Hindu dies and his sons inherit his property, they constitute an
HUF or corparcenary and when one of them dies leaving behind a son,
daughter or widow, he or she succeeds to his share in the HUF property
and becomes coparcener with the other surviving sons. Under the
Dayabhaga school, a son does not acquire any interest in any property
by birth; but when the father dies, the sons succeeding him constitute a
coparcenary and the coparcenary limit is the same as under the Mitakshara
school. Thus, if, for instance, three brothers succeed to the property of
their father and one of them dies leaving behind a son, he becomes a
coparcener; if he also dies, his son becomes a coparcener. Should he
also die, his son becomes coparcener, but if this son dies leaving
behind a son, he cannot become a coparcener since he is beyond the
coparcenary limit of three descendants. But for the purpose of taxation
laws, the Dayabhaga coparcenary is as much an HUF as the Mitakshara
joint family. In fact, for tax purposes the concept of coparcenary is not
of much significance. The tax laws are concerned with the HUF and
not with coparcenary. The Act has introduced a new line of heirs.
These heirs are both males and females. They are intestate's son,
daughter, widow, mother; a pre-deceascd son's son, daughter and widow ;
a predeceased son's son's son, daughter and widow ; and a predeceased
daughter's son and daughter. But does it mean that the Act thereby also
changed the character of the property inherited by a Hindu from his
father, father's father or father's father's father 7 Or, when a Mitakshara
Hindu dies leaving behind class I heirs who include sons, predeceased
son's sons or predeceased son's pre-deceased son's sons, will not the sons,
son's sons or son's son's sons take that property as joint family property ?
Or, when a Dayabhaga Hindu dies leaving behind sons, will these sons,
succeeding to the father's property, not constitute a coparcenary or an HUF
and take the property as coparcenary or HUF property ?
The question came up for consideration before the Allahabad
Fligh Court in Commissioner of Income-Tax v. Ram Rakshpafr where
one Durga Prasad, his son Rakshpal and his grandson Ashok
Kumar, son of Rakshpal, constituted an HUF until 11 October 1948
when there was a partition in the family leading to Durga Prasad's
separation. Thereafter, Durga Prasad earned on his own separate
business in the name and style M/s Muriidhar Mathura Prasad until he
died on 29 March 1958. Ram Rakshpal and his son Ashok Kumar
also carried on their own business under the name and satyle M/s Ram
Rakshpal Ashok Kumar, an HUF business. Since, on his death, Durga
6. (1968) 67I.T.R. 164.
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ANCESTRAL PROPERTY AFTER HINDU SUCCESSION ACT
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Prasad was survived by his own widow, a daughter and son Ram Rakshpal, the business of Durga Prasad, which was obviously his separate
property, devolved on these three heirs, each taking one-third share. The
daughter took away her one-third share, but the widow of Durga Prasad
and Ram Rakshpal entered into a partnership in the remaining two-third
assets. The question before the tax authorities was : Whether the
income from the one-third assets of late Durga Prasad which devolved on
Ram Rakshpal by succession was to be assessed as his individual property
or as part of the income of the HUF consisting of himself and his son?
Applying the well established principle of Hindu law that when a Hindu
takes by succession his father's property, his son acquires in it an interest
and it becomes the ancestral or HUF property, the income-tax officer
and appellate assistant commissioner held that the income was part of
the income of the HUF and should be assessed as such. But the appellate
tribunal took a contrary view, and a reference was made to the Allahabad
High Court. Beg J. (as he then was), who delivered the judgment of the
court, rightly quoted the following passage from the Privy Council in
Muhammad Husain Khan v. Babu Kishva Nandan Sahai:7
The rule of Hindu law is well settled that the property which a man
inherits from any of his three immediate paternal ancestors, namely,
his father, father's father and father's father's father is ancestral
property as regards his male issue, and his son acquires jointly with
him an interest in it by birth. Such property is held by him in
coparcenary with his male issue, and the doctrine of survivorship
applies to i t 8
In the language of the tax statutes, when a Hindu male inherits the
property of his father an HUF comes into existence consisting of himself
and his son or sons. If there already exists an HUF of the father and son,
the property inherited by the father from his father will be part of the
HUF property. That this was the position before the coming into force
of the Act was not denied by Beg J. But the learned judge came to the
conclusion that the Act has altered this position. We would summarise
his arguments as the other High Courts which agree with him adopt substantia1'^ the same reasoning.
The argument that the Act has abrogated the old rule of Hindu law is
founded on section 4. Sub-section (1) of section 4 runs as under:
(1) Save as otherwise expressly provided in this Act,—
(a) any text, rule, or interpretation of Hindu law or any custom or
usage as part of that law in force immediately before the com7. Supra note 5.
8. Id. at 266. D.F, Mulla's Hindu Law 245 (13th ed. 1966) was also quoted which is
to the same effect.
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mencement of this Act, shall cease to have effect with respect to
any matter for which provision is made in this Act.9
(b) any other law in force immediately before the commencement of
this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions contained in this Act.
According to Beg J. the Act provides a self-contained and comprehensive code relating to both testate and intestate succession to the
property of Hindus.10 This statement is evidently wrong in so far as it
relates to testamentary succession. The Act contains no provision in
respect of testamentary succession. The only provision relating to testate
succession is section 30, which simply lays down that a Mitakshara
Hindu may dispose of his undivided interest in the Mitakshara coparcenary property by will. This merely confers the testamentary power
of disposal of the undivided coparcenary interest on a Mitakshara
coparcener. The preamble to the Act clearly lays down that it is
*'an Act to amend and codify the law relating to intestate succession
among Hindus."11 Thus, the observation of the learned judge that the
Act provides a complete code relating to testate succession is obviously
wrong. It is submitted that his argument as to the intestate succession
is equally wrong.
Unfortunately the counsel for the revenue who argued the case relied
on C.N. Arunachala Mudaliar v. C. A. Muruganatha Mudaliarlz which was
a case as to the character of self-acquired property given by the father by
way of a gift to a son. In this case it was rightly pointed out that had the
father's property devolved by succession on the son, son's son and son's
son's son would have got a right by birth in it, and the property would have
been coparcenary property. The question, therefore, is, can the father,
by changing the mode of devolution, change the character of the
property? The property being father's separate property, he certainly had
the right to give it away in gift or alienate it in any other manner. Had
he gifted it to a third person, the question would not have arisen, as the
third person would have taken it as separate property. The question
arose because the donee was a son. The Supreme Court held that the
character of the property in the hands of the donee-son would depend upon
the intention of the donor-father. If he gave it as a separate property,
it would be a separate property, and if he gave it as joint family property,
it would have that character. Referring to the character of the separate
property on its passing by succession to the son, Mukherjea J. made the
following observations:
9.
10.
11.
12.
Emphasis added.
Supra note 6 at 170.
Emphasis added.
A.I.R. 1953 S.C. 495.
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It is obvious, however, that the son can assert this equal right with
the father only when the grandfather's property has devolved upon
his father and has become ancestral property in his hands. The property of the grandfather can normally vest in the father as ancestral
property if and when the father inherits such property on the death
of the grandfather or receives it by partition, made by the grandfather himself during his life-time. On both these occasions, the
grandfather's property comes to the father by virtue of the latter's
legal right as a son or descendent of the former and consequently it
becomes ancestral property in his hands ^
The learned judge stated the obvious. The separate property ot a
Hindu becomes ancestral property in the hands of his son so as to give
him in it a coparcenary interest only when (a) it devolves on him by
succession, or (b) the father, during his lifetime, divides it among his
sons. It is submitted that this passage was completely misunderstood by
Beg. J, On the basis of italicised part of the above quote, he observed
that it could not be inferred that''there is any question of the property
first vesting in the father and then vesting again in the father and the son
(i.e. the son and grandson of the deceased)."14 The logic of vesting
and divesting and then revesting is utterly an ill-conceived one. The
simple proposition of Hindu la^ that when a Hindu gets his father's
separate property by inheritance, he holds it as a coparcenary property
with his son or sons if he has any at that time, and if he has none, then
the moment he gets one. In the interlude, i.e., between the period from the
death of his father when he inherits the property and a son is born to him,
he can treat the property as his separate property and may alienate it, and
if, by the time he gets a son, no property is left, the son will obviously get
no interest. But if he does not alienate and the inherited property is still
with him, the moment a son is born to him, the son becomes a coparcener with him. In this proposition of Hindu law no logic of vesting,
divesting and revesting is involved. The son's birth right in the ancestral
property is a typical and peculiar Mitakshara concept. Since the learned
judge completely misunderstood and misconstrued this Hindu law doctrine
and used the logic of vesting, divesting and revesting, he was led to
Observe:
There cannot posibly be a double devolution or a vesting in a son
followed by a divesting and a revesting in the son and grandson.
13. Id. at 499. Emphasis added.
14 5«pranote6at 168.
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Such a proposition would contradict the basic principle of Mitakshara law that the grandson's rights arise at his birth in ancestral
property and not subsequently. The grandson's rights, at the death
of his grandfather, devolve upon him, under the Mitakshara law,
prior to its modification by the statutory law, simultaneously with
those of his father.15
After formulating this proposition, the learned judge observed that it
contradicted with the basic Mitakshara doctrine. It certainly does, but
the so-called Hindu law proposition is his brain wave and has never been
a proposition of Hindu law. Once this error was made it was easy for him
to jump to the following conclusion:
If the intention of the statutory law, as found in s. 8 of the Hindu
Succession Act, was that the right of a grandson whose father is
living should also be recognized at the time of succession to the
property of the grandfather, the result could only be achieved by a
specific mention of it in the Act. The right of the grandson cannot
be conceived of . . . as an automatic limitation attaching itself to
an inheritance in the hands of the son after the succession has
taken place because the Mitakshara law does not view it as a subsequent attachment or limitation. It regards it as a pre-existing
limitation operating at the time of devolution. If any property is
to devolve subject to any limitation or qualification which takes
effect upon and at the moment of devolution, the qualification must
necessarily be specifically stated in the form of a rule, subject to
which the devolution or succession takes place.16
The learned judge then adverted to the assumption that the Act
provides a complete code of succession and, therefore, should have specifically enacted the so-called limitation or qualification and since it had
not done so, a Hindu male succeeding to his father's separate property
takes it as his separate property.
The basic fallacy in the argument of the learned judge lies in the
assumption that the Act provides a self-contained and comprehensive code
relating to both intestate and testate succession. We have seen earlier
that the Act does not deal with testamentary succession at all. It is also
not a complete code in respect of intestate succession either. For
instance, the proviso to section 6 speaks of notional partition but does not
lay down any rules of notional partition, and therefore, it is the rules of
old Hindu law of partition which apply to notional partition. The Act in
drawing the list of heirs follows the principles of propinquity, but then
15. Ibid.
16. Id. at 168-69.
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ANCESTRAL PROPERTY AFTER HINDU SUCCESSION ACT
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the mother's placement in class I and father's in class II heirs can be explained
only on the basis of Vijnaneshwara's formulation that between mother and
father, mother has better propinquity and, therefore, will have precedence
over the father. Why does the Act still give importance to the source of
property in respect of succe >sion to the property of a Hindu female can
be understood only if we keep in view the old Hindu law of woman's
property and rules of its devolution. The property which a woman
inherits from her husband or father-in-law goes to the heirs of the husband, and the property which she inherits from her father or mother goes
to her father's heirs. This distinction that is maintained in section 15 of
the Act has a basis in the old Hindu law.
There is nothing in the Act which expressly or by necessary implication
lays down that the old Hindu law relating to the character of inherited or
ancestral property has been changed. Nowhere it is laid down that a
Mitakshara Hindu male succeeding to his father's separate property will take
it as his separate property and his son will have no interest in it by birth.
For instance, i£& Mitakshara Hindu dies leaving behind three sons A, B and
C and three grandsons AS, BS and CS, obviously as under the old Hindu
law, under the Act also, A, B and C will succeed to the separate property
of the father and not the grandsons AS, BS and CS as in the presence of a
near heir, Hindu law did not and the Act too does not visualise the
possibility of a remoter heir succeeding. There is nothing in the Act which
expressly or by necessary implication lays down that the old Hindu law
relating to the character of inherited or ancestral property has been
changed. Under the Dayabhaga school too, A, B and C will constitute
coparcenary in the language of Hindu law or an HUF in the language of
laws of taxation. Since the Dayabhaga law does not recognize son's birth
right, the question of AS, BS or CS getting any interest in it does not
arise. Beg J. also does not say so. The argument of vesting, divesting
and revesting cannot be used in respect of the Dayabhaga law. Had he
been concerned with this law, he would not have been able to say that
there is no HUF in such a situation. Then, is there something in the Act
which forces us to say that in such a situation an HUF exists under the
Dayabhaga law but does not exist under the Mitakshara law? There cannot
obviously be any justification for this dual interpretation, one under the
Mitakshara and another under the Dayabhaga school.
If the argument of Beg J. is taken to its logical end, there would
come into existence no new Mitakshara joint families or HUFs after the
coming into force of the Act. It may be emphasised that the foundation
of the Mitakshara coparcenary and the FIUF is laid when a Hindu inherits the separate property of his father, father's father or father's
father's father. On such inheritance, he holds the property as joint
family or HUF property in which his sons acquire an interest by birth.
If we are allowed to say that when a Hindu inherits his father's property
under section 8 of the Act and he cannot inherit the separate property of his
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father in any other manner, he holds it as his separate property, we are
led to the inevitable conclusion that no new Mitakshara Hindu joint
family can come into existence after the coming into force of the Act.
This amounts to saying that the Act has abolished the Mitakshara joint
family.
The Allahabad view finds its echo in the decision of the Assam High
Court in Ghasiram Agarwalla v. Commissioner of Gift-Tax}1 An HUF
consisted of Sagarml Agarwalla, his son Ghasiram Agarwalla and three
grandsons. The HUF properties included a rice mill. There was a partial
partition as to the rice mill. After partial partition the mill was converted
into a partnership business of Sagarmal and Ghasiram and Ghasiram's
sons having some defined shares in it. Sagarmal died on 1 June 1960
and at the time of his death, there stood to his credit a sum of Rs. 91,668
in the firm's books. This sum continued to stand in his name up to
31 March 1961, the last date of the accounting year, and thereafter
it was shown as equally divided between Ghasiram and his three sons and
the amount was transferred accordingly to the individual accounts. The
gift-tax officer held that on the death of Sagarmal the entire amount of
Rs. 91,668 devolved on Ghasiram as the sole heir, and since Ghasiram
allowed three-fourth of this amount to be credited to his three sons, he
made a gift of Rs. 68,751 to his sons and was, therefore, liable to gift-tax.
This view was upheld by the appellate assistant commissioner who observed that when Ghasiram inherited his father's separate property under
section 8 of the Act, he took it as his separate property. This view was
confirmed by the income-tax appellate tribunal which made a reference
to the High Court.
This was a very good case as its facts were simple with no scope for
confusion. But C. S. Nayudu and S. K. Dutta JJ. quoted the following
passage from Mulla's Hindu Law:18
A Hindu, even if he be joint, may possess separate property. Such
property belongs exclusively to him. No other member of the
coparcenary, not even his male issue, acquires any interest in it by
birth. He may sell it or he may make a gift of it, or bequeath it
by will, to any person he likes. It is not liable to partition, and, on
his death intestate, it passes by succession to his heirs, and not by
survivorship to the surviving coparceners.19
There cannot be any doubt that this is the correct statement relating
to separate property. But on this basis the learned judges jumped to
the wrong conclusion. They equated this passage to section 8 of the
17. (1968) 69 I.T.R. 235.
18. Art. 222, supra note 8.
19. Supra note 17 at 237.
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ANCESTRAL PROPERTY AFTER HINDU SUCCESSION ACT
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Act taking the view that the section codified the proposition of old Hindu
law. There is no discussion, no reference to any authority, except the
bald observation that separate property devolves on his heirs and does not
pass by survivorship. Then significantly, they added: "Hence, the view
taken by the members of the Appellate Tribunal that after the passing of
the Hindu Succession Act the law is changed does not appear to be
sound, because even before the Act the separate property devolved on
the heirs of the individual concerned." They held that in view of the
findings of the court below on the facts that Rs. 91,668 left by Sagarmal
at the time of his death in his account of the partnership was his selfacquired property, it devolved on his son Ghasiram as his separate
property and the division of this property made by Ghasiram among his
sons amounted to a gift by the father to sons, and was, therefore, liable
to the gift-tax. The learned judges did not spell out the basis on which they
came to the conclusion that the separate property devolving by succession,
as it did before and it does after the Act, on the sons also remains
separate property in the hands of the son qua his sons. This is how our
imagination boggles even in a simple case. It is submitted that on inheriting Sagarmal's property—the sum of Rs. 91,668-Ghasiram took it as
joint family property in which his sons also had an interest. He effected
a partition of this property among his sons and himself, which right as a
father he had under Hindu law. Since partition is not a transfer of
property, there was no question of any gift-tax being levied.
The Madras High Court followed in Additional Commissioner of IncomeTax v. V. R. A. Manicka Mudaliar20 the aforesaid decisions of the
Allahabad and Assam High Courts. In this case the simple question was
that whether the son who had inherited the separate property of his father
held it as his separate property or as the joint family property qua his
sons? Ismail and Sethuraman JJ. did not discuss the law but, following the
Allahabad and the Assam High Courts, held that the son took the property
as his separate property. The matter was then considered by a full bench
of the High Court in Additional Commissioner of Income-Tax v. P.L,
Karuppan Chettiar, where an HUF consisted of Paianiappa, his wife
Anandavalli, son Karuppan and daughter-in-law. The HUF effected a
partition on 22 March 1954 and Paianiappa and Karuppan separated. This
partition was recognised by the income-tax officer under section 25A of the
Income-tax Act 1922. In regard to the property which Karuppan got as
his share, a separate HUF consisting of himself, his wife and their subsequently born sons and daughter came into existence, This HUF was
assessed toincome-tax. On 9 September 1963 Paianiappa died leaving behind
his widow Anandavalli and son Karuppan. Anandavalli and Karuppan
succeeded to the property of Paianiappa as his heirs under section 8 of the
Act and each took onehalf share in the property. The question was whether
20. (1978* 1141.T.R. 521.
21. (1978) 114I.T.R. 523.
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the income derived from the property of Paianiappa inherited by Karuppan
would be assessed as the income of the HUF or as the income of his separate
property. Obviously, the question was the same : Whether the separate
property of the father inherited by a Hindu would constitute HUF property
or his separate property vis-a-vis his sons? The Madras High Court rightly
posed the question thus: How do the heirs in class I take the property under
section 8 and added : "If the mode of division provided by the section
is different from that which obtained before the Hindu Succession Act
came into operation, in accordance with the principles of Hindu law in
view of what is categorically stated in section 4 of the Act, it is section 8
of the Act that should prevail and not the principles of Hindu law." 22 No
one would challenge this formulation. But the learned judges took the
view that the old Hindu law of inheritance stood changed and stated the
following reason :
When we search for the relatives mentioned in class I of the Schedule, which is attracted by virtue of section 8, we find no sons' sons
are mentioned at all though the grandson of the deceased son is
mentioned. . . . But where the son as well as his son are the persons
concerned, by applying section 8, we have to come to the conclusion that the son alone, namely, Karuppan, in this case will inherit
the property to the exclusion of the grandson. This being the effect
of the statutory provision, no interest will accrue to the grandson
in the property which belonged to Paianiappa. 23
This was the trap. The old Hindu law of inheritance also did not say
that son and son's son together inherited a Hindu's separate property. It
only said that when a Hindu inherits his father's property his son gets an
interest in it by birth, i.e., if a son is already there he becomes a coparcener with his father in that property, and if he is not there but is born
later, he becomes a coparcener with his father from the date of his birth.
But, of course, if he has no son, son's son, son's son's son, it will be his
separate property in respect of all others. However, once the learned
judges were caught in the trap, they had no way out and were led to
observe:
Even assuming Palaniappa's property is ancestral property in the
hands of Karuppan, still because of the effect of the statute,
Karuppan's son will not have an interest in the property. This is
directly derogatory of the law established according to the
principles of the Hindu law and this provision in the statute must
prevail in view of the unequivocal expression of the intention in the
statute itself which says that, to the extent to which provisions had
22. Id. at 530.
23. Id. at 530-31.
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been made in the statute, those provisions shall override the established provisions in the texts of Hindu law.24
The whole argument is based on the fallacious assumption that under
the old Hindu law, son and grandson together inherited the separate
property of a Hindu. Once this assumption was made, it was easy to say
that since this was not so under the Act, the whole of the old Hindu law
stood abrogated by virtue of section 4. Once we realise that under the
old Hindu law as well as under the Act son alone succeeds to the separate
property of a Hindu, the whole argument crumbles and the section does
not come into application. Since no provision as to the character of the
separate property inherited by a son is made in the Act, the old Hindu
law rule that the separate property of his father inherited by a Hindu is
ancestral property qua his son has not been abrogated.
The submissions made here have the support of the Gujarat and Punjab
and Haryana High Courts. The question was considered by the Gujarat
High Court in Commissioner of Wealth-Tax v. Harshadlal Manilal25 and
Commissioner of Income Tax v. Bahuhhai Mansukhhhai.™ In the former
case, without considering the provision of the Act, the Gujarat High
Court categorically observed that the separate property of the father
inherited by a Hindu constitutes H U F property since his son acquires an
interest in it by birth, and, thus, for wealth-tax purposes, it should be
assessed as HUF property. In the latter case, the learned judges of the
same court considered all the authorities as well as the relevant provisions
of the Act. In this case a Hindu male Mansukhbhai, died intestate on 8
October 1963, leaving behind his separate property, which devolved by
succession on his widow and son Babubhai. He got one-half share in this
property and asserted that the same constituted property of his H U F
consisting of himself, his son and wife. Relying on the aforesaid
decisions of the Allahabad and Madras High Courts, the income-tax officer
rejected the contention of Babubhai. The appellate assistant commissioner
confirmed this order. But the income-tax appellate tribunal took the contrary
view. The case then came up before the Fligh Court on a reference.
Divan C.J., who delivered the judgment of the court, took the view
that sections 6 and 30 of the Act did not merely accept the existence
of the Hindu coparcenary but also preserved it, though some inroads were
made into it in terms of the proviso to section 6 and inasmuch as section
30 conferred on a coparcener testamentary power of disposition of undivided coparcenary interest. The learned chief justice observed that both
the sections deal with undivided share of a Hindu in a Mitakshara coparcenary property. They do not deal with separate property. Neither section
24. Id. at 531.
25. (1974)97I.T.R. 86.
26. (1977) 108 I.T.R. 417.
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6 nor section 8 deal with the character of the property of a Hindu when it
devolves on his son by inheritance under proviso to section 6 or under
section 8. Section 8 merely provides the mode of devolution of separate
property and also spacifiesthe heirs of a Hindu dying intestate. The proviso
to section 6 provides for cases in which the coparcenary interest will
devolve by succession, thus bringing section 8 into application, and not by
survivorship. Divan C.J. rightly observed that so far as the separate
property was concerned, it devolved according to the provisions of the
chapter in which section 8 was located but nothing in this section or in the
chapter dealt with the character of the property in the hands of the person
on whom the property devolved by succession. He said:
Neither section 6 nor section 8 nor section 30 affect this principle of
Hindu law as to in what capacity or in what character the son would
enjoy the property once he received it from his father in succession.87
It may be interesting to note that in Brij Lai v. Daulat Ram™ a non-tax
case, where neither the Allahabad and Assam nor any other precedents were
cited. Harbans Lai J. of the Punjab and Haryana High Court reached an
identical conclusion. The simplified facts of the case were that one Kheta
Ram died on lb July 1957 leaving behind his self-acquired property and his
widow, two sons, one of whom was named Daulat Ram, who also had a
son by the name Jagan Nath, and two daughters. Under the Act the
widow, sons and daughters inherited the property, each taking one
share. In execution of a money decree against Jagan Nath, his interest in
the coparcenary property was sought to be attached and sold. Jagan Nath
pleaded that he had no interest in the property. This contention was
accepted by the district judge who held that old Hindu law, under which
son of a Hindu got an interest by birth in the property inherited by him
from his father, father's father or father's father's father, stood abrogated.
Overruling this view, the learned judge said that so for as the daughters
were concerned, the estate inherited by them was their separate property,
but so far as the share inherited by Daulat Ram from his father Kheta Ram
was concerned, it must be treated as ancestral property and as such according to the established principle of the Mitakshara law it must partake the
character of coparcenary or joint family property or HUF property.
Repelling the contention that the old Hindu law rule stood abrogated by
virtue of section 4 of the Act, he observed:
Sections 6 and 8 of the Act only postulate as to how the property
left by a male Hindu will be inherited by the surviving heirs. It does
27. Id. at 422 Reliance was also placed on a passage from Mulla's Hindu Law,
supra note 8 at 847.
28. (1977)79Purti.L.R.27.
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not in any manner say as to how this property will be treated in the
hands of the heirs. The Act being silent in this matter, section 4 of
the Act cannot be interpreted to have abrogated the established
principles of Mitakshara law ... f It is clear from a perusal of section
4 of the Act that the entire Mitakshara law has not been abrgogated
by the Act but only to the extent the same is inconsistent with the
provisions of the Act. If there is a conflict between Mitakshara law
and the Act, the provisions of the Act will prevail. Where any field
has been left uncovered by the provisions of the Act, the Mitakshara
law will still continue to hold the field.29
The learned judge, in conclusion, held that the property inherited by
Daulat Ram from his father Kheta Ram was ancestral property in his hands
and as such Jagan Nath was bound to have a share in the property as a
coparcener. He rightly observed:
If any other interpretation is adopted, the result will be that as
soon as a male Hindu dies, the property left by him and inherited by
his son will also become self-acquired property and the entire Mitakshara law will have to be held to have come to an end. I do not
think this was the intention of section 4 of the Act.30
It is submitted that now under the Act a new line of heirs has been laid
down with the result that male and female heirs succeed to the property of
a Hindu simultaneously. But nothing in section 8 or in any other provision
of the Act lays down as to what will be the character of inherited property.
The implication of this section can be illustrated thus: A Hindu male
dies leaving behind two sons A and B, two grandsons AS and BS (sons
each of A and B) and two daughters C and D. A,B,C, and D will inherit
the property each taking one-fourth share. While C and D will take their
one-fourth, in the share obtained by A and B there will come into existence
an HUF. To use Hindu law language, there will come into existence a
coparcenary consisting of A and Bunder the Dayabhaga school or an HUF
in the language of tax statutes. Under this school neither AS nor BS has
any interest in this coparcenary. Under the Mitakshara school also there
will come into existence a coparcenary but this will be a coparcenary consisting of A, B, AS and BS, since under this school sons acquire an interest
by birth in the ancestral property.
The position of ancestral property under the Mitakshara school may be
summed up in the following three propositions:
(1) The ancestral property, i.e., property inherited by a Hindu male
from his father, father's father and father's father's father, in the
29. Id. at 31.
30. Ibid.
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hands of a Hindu male is joint family property or HUF property
qua his son, son's son or son's son's son.
(2) The ancestral property in the hands of a Hindu male is not HUF
property in respect of any other person except qua his son, son's
son and son's son's son. This means that so long as he does not
get a son, son's son or son's son's son, he can treat it as his
separate property.
(3) The ancestral property in the hands of a Hindu male who has no
son, son's son, or son's son's son will become HUF property at
any time when he gets any one of these.