S 22 of hindu succession act and valuation of property
Tripti Nagwekar
(Querist) 24 August 2012
This query is : Resolved
Dear Advisors, nephew A together with his uncle B have a piece of land in ancestral say 1000 sq. ft. and the name of nephew A and uncle B are registered on 7 / 12 index. When A proposed to sell half portion i.e. 500 sq. ft. of his share without dividing total land of 1000 sft because division of land takes 3 years by government, uncle B refused nephew A to sell his share to outsider and tried to offer only Rs.10,000/- ten thousand for A’s share of land and at the same time outside party was offering me Rs.400,000/- to nephew A. So ultimately nephew A sold his share of 500 sqft to outsider buyer for Rs.4 lac under section 44 Transfer of Property Act, 1882 and outsider party i.e. buyer put Rs.100,000/- one lac on sale deed to avoid more stamp duty and registration fees. One the same day nephew A and buyer registered the agreement. After one month uncle B filed case against A and requested the court to cancel the sale deed and to allow uncle B to buy 500 sqft from the buyer at Rs.1 lac mentioned on sale deed under section 22 of Hindu Succession Act, 1956. On the basis of court the tehsildar has not put buyers name of 7/12 index. Further can nephew A and outsider buyer request the court to value the sold land at current market rate say Rs.6 lacs as civil suit is going on for past 2 years? Now please advise nephew A what the court would do in this case? What are the outputs? What are the ways for nephew A to come out?
ajay sethi
(Expert) 24 August 2012
Section 22 of the Hindu Succession Act reads as follows :-
22) Preferential right to acquire property in certain cases :
1) Where, after the commencement of this Act an interest in any immovable property of an intestate or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest in the property right to acquire the interest proposed to be transferred.
2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the court on application being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incident to the application.
3) If there are two or more heirs specified in class I of the schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred.
in present case it is upto the court to determine what should be the correct price at which property should be acquired .suit has to be disposed of .
ajay sethi
(Expert) 24 August 2012
In case the proposed transfer is effected by one of the co-heirs in violation of the right conferred on his co-heirs by Sub-section (1) the latter cannot certainly be without a remedy because every legal right must necessarily carry with it a remedy for enforcing the same. The remedy of the non-alienating co-heirs, in such circumstances will in our opinion be to seek the intervention of the Court to enable them to acquire the right which has been in violation of Sub-section (1) of Section 22. Inasmuch as the Section does not provide any special procedure for seeking the said remedy, the ordinary procedure for enforcement of any civil right has to be restored to by the co-heirs who wish to enforce their rights under Section 22(1). In other words the remedy is by way of a regular civil suit before the competent Court. Where the properties have been already alienated in favour of strangers there is all the more reason why there should be a full and fair adjudication of the entire matter in a suit tried before a competent civil Court because various factual questions are bound to arise for determination in such a suit wherein the principal issue would be whether the transfer complained of was effected in violation of Sub-section (1) of Section 22
The remedy, as we have already indicated, is only to file a suit for enforcement of the limited right of purchase conferred by Sub-section (1) of Section 22 and in such a suit the question of invalidity of the sale already effected by the co-sharer will be incidentally investigated and decided.
ajay sethi
(Expert) 24 August 2012
the learned Single Judge of Madhya Pradesh High Court has held in Ghewarwala Jain v. Hanuman Prasad and Anr. , that when sale has been concluded application under Section 22(2) for determining the price of property would not be maintainable. The learned Single Judge has held as under:
The title of this Section indicates that it concerns itself with preferential right to acquire property in certain cases. In Sub-section (1) the expression used is "proposes to transfer." Accordingly, when the legislature talks of preferential right to acquire the interest "proposed to be transferred" in Sub-section (1) of Section 22, it talks of a "contemplated transfer" and not of "concluded transfer" or "transfer already effected." The right to acquire preferentially the interest is conceived as a right exercisable at a stage where one of the heirs of the deceased proposes to transfer his or her interest in the property or business left by the deceased Hindu dying intestate. Acceptance of the contention that Section 22(1) of the Act creates a preferential right to acquire the interest already transferred will involve re-writing thereof. This is not permissible on any established principle of construction of statutes.
In view of the aforesaid discussion, an application under Section 22(2) of the Act cannot be regarded to be maintainable after 'transfer' has been effected. It is maintainable only at a stage where transferor heir proposes to transfer his or her interest in the property
Tripti Nagwekar
(Querist) 25 August 2012
Dear Sir,
Thank you very much for your esteem opinion on Section 22 of Hindu Succession Act 1956. In your extract of section 22(3)
If there are two or more heirs specified in class I of the schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred.
You have mentioned like this
in present case it is upto the court to determine what should be the correct price at which property should be acquired .suit has to be disposed of
Are above lines are the part of act because I get like this
Explanation.- In this section, ‘court" means the court within the limits of whose jurisdiction the immovable property is situate or the business is carried on, and includes any other court which the State Government may, by notification in the Official Gazette, specify in this behalf.
Please advise in this regard
sanjay Upadhyay
(Expert) 29 August 2012
The application made by the b will be liable to be dismissed as the law will take its own course as contemplated by ld.Ajay Sethi and even if one have set out the less value the Govt. already takes stamp duty as per market rate or govt. rate which they declared as the sale have alredy completed it have no effect at all about the declaration for cancelling the sale will not lie at all.
Tripti Nagwekar
(Querist) 30 August 2012
Thank you very much for your reply.
