The Aurangabad Bench of the Bombay High Court has clarified that the preferential right to acquire property under Section 22 of the Hindu Succession Act, 1956, can be invoked by co-parceners in an undivided Hindu joint family [Thukaram Vs Haribhau].

Section 22 lays down that if any Class I heir wishes to sell or transfer their share in jointly owned property (or business), other co-Class I heirs would have a preferential right to buy or acquire the same before such property can be made available for transfer to others.

Justice Shailesh Brahme has now held that when property remains ancestral and unpartitioned, the status of "Class I heirs", as referred to in Section 22, can be determined with reference to the original ancestor (propositus) rather than any one immediate deceased family member in the joint family.

The Court passed the ruling in a case where three brothers (plaintiffs) opposed a move by their uncles and step-brothers (defendants 6-9) to sell a share of joint family property to strangers (co-defendants).

The development took place after the plaintiffs' father died and they inherited his stake in the property.

The plaintiffs argued that they had a preferential right to purchase the property sought to be sold by the defendants 6-9, which was denied to them by the defendants.

The plaintiffs won two rounds of litigation in the case before the dispute reached the High Court.

On October 17, the High Court too ruled in favour of the plaintiffs, holding that they had a preferential right under Section 22 to purchase the property sought to be sold by defendants 6-9.

The Court based this ruling on the premise that all the parties were fellow Class 1 heirs of a common deceased ancestor (the plaintiffs' grandfather).

“The plaintiffs are co-parceners having birthright, and their status is akin to that of their uncles (defendants 6 and 7). In my considered view, they have a preferential right under Section 22 of the Act,” Justice Brahme held.

The litigation concerned agricultural lands in Radi village, Ambajogai taluka of Beed district. The properties were originally owned by one Keshav, whose sons — Balkrushna, Haribhau, and Sadashiv — and their descendants continued in joint possession.

After the death of Balkrushna in 1981, his sons (the plaintiffs) and other members of the family remained engaged in the cultivation of the ancestral land.

In 1989, defendants 6 to 9 - that is, the uncles and step-brothers of the plaintiffs - executed four registered sale deeds conveying portions of the joint property to outside purchasers (defendants 1 to 5) for consideration ranging from ₹8,000 to ₹73,000.

The plaintiffs filed a suit claiming that these transactions violated their statutory preferential right under Section 22 of the Act. They contended that the properties were undivided joint-family assets and that the alienating defendants had no authority to sell their undivided shares to strangers.

Justice Brahme examined witness testimony and documentary evidence to confirm that the lands were ancestral and the family remained a joint family.

The purchasers’ own witnesses admitted that no application for partition of a separate share of the property was made and that they were unable to identify the share purchased from the joint property.

The Court noted that even in earlier proceedings, defendants 6 and 7 (uncles of the plaintiffs) themselves had pleaded that the lands were ancestral joint-family properties.

From this, the Court concluded:

“Both the Courts below are justified in recording that the plaintiffs and the defendant Nos. 6 to 9 form undivided joint family and they are joint in possession (of the property in dispute)."

Turning to Section 22 of the Hindu Succession Act, Justice Brahme noted that it becomes difficult to interpret this provision when there is more than one deceased person dying intestate in an undivided family.

He stated that determining Class I heirs in such cases depends on several factors, namely "the status of property and the family; the time of death; the time when the partition opens for devolving the interest; the inter-se relationship and the degree; the manner in which the interest devolves as per Section 6 of the Act; and whether there is a coparcenary or birthright.”

The Court eventually held that Keshav (the grandfather of the plaintiffs and father to defendants 6 and 7) - not Balkrushna - must be treated as the propositus (the central reference figure with reference to whom heirship status of others is determined).

This is because the suit lands are ancestral and undivided joint-family properties, since Keshav had died intestate (without a will to partition the property), the Court explained.

If Keshav is taken to be the propositus, then the plaintiffs and defendants 6-7 would be treated as co-Class 1 heirs following the death of Balkrushna, the Court noted.

In this regard, the judgment noted that when the partition opened under Section 6 of the Hindu Succession Act, the plaintiffs (and their step-brothers, defendants 8 and 9) were entitled to have one-third share, along with defendants 6 and 7.

Therefore, the plaintiffs would have a preferential right under Section 22 of the Act, the Court held while dismissing the appeals filed in the matter by the defendants.

The Court also directed the plaintiffs to deposit the purchase price with 6% simple interest from December 31, 1992, within 90 days if not already paid, if they wished to acquire the property.

Advocate SS Kazi appeared for the appellants (defendants before the lower courts and their legal heirs).

Advocate Shrikant Kulkarni represented various respondents (plaintiffs and their legal heirs)

[Read Judgment]