According to a 3-judge bench of the Supreme Court consisting of Justices Ashok Bhushan, S.Abdul Nazeer and Hemant Gupta .through its judgment of the case – Kiran Devi v. The Bihar State Sunni Wakf Board & Others, delivered on April 5, 2021, any business being run by a “Karta” of a Hindu Undivided Family (HUF) would not give rise to a presumption of that being a joint business of HUF, unless there is a solid evidence in its support.
In the opinion of the Supreme Court, Patna High Court has committed a basic error of law and fact that the payment of rent or the Ration Card proves that the tenant was carrying business as a Joint Hindu Family Business. There can be presumption of Hindu joint family property if the property has been acquired by the male member or if the same has been treated as joint Hindu family. Burt no such presumption is attached to a business activity carried out by an individual in a tenanted premise.
A perusal of the facts on record would show that it was a contract of tenancy entered upon by great grandfather of the plaintiff. Even if the great grandfather was maintaining the family out of the income generated from the hotel business, that itself would not make the other family members as coparceners in the hotel business. It was the contract of tenancy which was inherited by the grandfather of the plaintiff, who had later surrendered it in favour of the Wakf Board.
The tenancy was an individual right vested with the grandfather of the plaintiff, who was competent to surrender it to the landlord. The HC has clearly erred in law by holding that since the grandfather was a tenant, the tenancy is a joint family asset. The contract of tenancy is an independent contract than the joint Hindu family business.
In fact, the evidence produced by the plaintiff is payment of rent by either Ram Sewak Ram or by the grandfather of the plaintiff. Such payment of rent is not indicative of the fact that the hotel business was of the joint Hindu family. In the judgment of the case- G. Narayana Raju (Dead) by his Legal Representative v. G.Chamaraju & Others – AIR 1968 SC 1276, the SC has held that there is no presumption under Hindu law that business standing in the name of any member of the joint family is a joint business even if that member is the manager of the joint family, unless it could be shown that the business in the hands of the coparcener grew up with the assistance of the joint family property or joint family funds or that the earnings of the business were blended with the joint family estate.
The SC has also held in the judgment of the case – P.S.Sairam & Another v. P.S. Rama Rao Pissey & Others- (2004) 11 SCC 320, that so far as immovable property is concerned , there would be a presumption that the same belongs to joint family , provided it is proved that the joint family had sufficient nucleus at the time of its acquisition, but no such presumption can be applied to a business.
Thus, mere payment of rent by great grandfather or by the grandfather of the plaintiff raises no presumption that it was a joint Hindu family business. The HC has clearly erred in law to hold so without any legal or factual basis.
Even if Devendra Prasad Sinha is considered to be representing the joint Hindu family, while running the hotel business in the tenanted premises , the question as to the act as Karta to surrender of tenancy was for the benefit of the joint Hindu family.
The challenge in this appeal was to an order passed by the Patna High Court on February 6, 2013 whereby a writ petition filed by respondent no.4 herein (the plaintiff) was allowed, holding that the tenant in the premises in question was representing a joint Hindu family and that the Karta was not competent to surrender the tenancy rights in favour of the respondent- Bihar State Sunni Wakf Board and consequently the induction of the appellant as a tenant by the Wakf Board was illegal. Accordingly, a direction was issued to dispossess the appellant from the premises and to handover the vacant possession to the plaintiff.
The plaintiff had started running the hotel since 1988.On account of disputes over the management, the hotel was closed and it remained so for several years. It is the plaintiff who wanted to resume the hotel business in the premises in question and thus communicated with the Wakf Board to continue the hereditary tenancy of the shop as Karta in his name.
The Wakf Tribunal held that the Defendant No.1, the Devendra Prasad Sinha – the grandfather of the plaintiff was running a hotel business and had later surrendered the tenanted shop to the Mutawalli (landlord) of the Wakf. The writing on paper to surrender the possession was admitted by the witness. It was also observed that there was no oral or documentary evidence that Devendra Prasad Sinha had surrendered the premises, where he was running joint family business. The Tribunal noted that the plaintiff even did not suggest that Devendra Prasad was managing a joint family business and thus in absence of such suggestion it was difficult or rather impossible to believe that Devendra Prasad was managing a joint family business . Consequently, the Wakf Tribunal dismissed the suit.
In the judgment impugned before the Supreme Court, the HC had held that the existence of joint family is established from the Ration Card issued on April 2, 1949 and from payment of rent for the period 1947-1955 that the premises were let out to joint family .The HC also rejected the surrender of tenancy on the ground that it was without the consent of other coparceners.
In conclusion, the Supreme Court has held that the impugned order passed by the High Court is not sustainable for the reasons recorded in the judgment, consequently, it has allowed the appeal, set aside the judgment of the High Court and restored the Order of the Wakf Tribunal.
