Thursday, August 19, 2021

LAW OF SUCCESSION DECODED

 

 


LAW OF SUCCESSION DECODED

In a literal sense of term Succession means capable of comprehending every kind of passing of property.  The Indian Succession Act (ISA) 1925, came into operation on 30th September, 1925 and it seeks to consolidate all Indian Laws relating to succession. The Act consists of 11 Parts, 391 Sections and 8 Schedules and this Act is applicable to intestate and testamentary succession.

The law of succession defines the rules of devolution of property, in case a person dies intestate i.e without making a Will. The succession shall also be necessary, in case ,  a will is executed by the deceased, but it is only for some part of the estate, then, the remainder, shall have to be factored only in succession. These rules stipulates category of persons and extent or percentage of property that may devolve on such person or persons. A succession certificate shall be in effect throughout the whole country in terms of section 380 of Indian Succession Act, 1925. The Section 381 and 386 of the ISA, a succession certificate is conclusive as against the person/persons liable to whom all indemnity is afforded for payment made.  

A succession certificate is issued by a civil court to the legal heirs of a deceased person. If a person dies without leaving a will, a succession certificate can be granted by the court to realise the debts and securities of the deceased. It establishes the authenticity of the heirs and gives them the authority to have securities and other assets transferred in their names as well as inherit debts. It is issued as per the applicable laws of inheritance on an application made by a beneficiary to a court of competent jurisdiction. A succession certificate is necessary, but not always sufficient, to release the assets of the deceased. In order to apply for succession before a competent court, a death certificate, and no-objection certificates will be needed. A succession certificate, strictly speaking, does not impact adjudication of title of the deceased far less than that of the holder as regards the debts and securities covered thereunder, yet, it afford protection to the parties paying the debts. The grant of succession certificate is conclusive against the debtor. A succession certificate is effect throughout the whole of India as per section 380 of The Indian Succession Act, 1925. According to sections 381 and 386 of the Act, a succession certificate is conclusive as against the person/persons liable to whom full indemnity is afforded (make available) for payments made. But, despite the succession certificate is only conclusive of the representative title of the holder thereof as against the debtors, a suit of declaration will not lie that the holder of the certificate is not the legal representative of the deceased.

In case, legal heirs are residing in outside India Application can be filed through Power of Attorney also and the personal presence of individual before court is not required for the purpose of obtaining Succession Certificate. Newspaper Publication informing the Public at large, once. the application for succession certificate is filed the Court is required to issue notice to all the legal heirs and close relatives, so as to enable anyone having any objection in grant of Succession Certificate in favour of Applicant to raise objection. Similarly, Publication of the notice in newspaper is aimed at informing public at large, about the application for issuance of succession certificate so that if any members of public has any objection to grant of certificate can raise objection to grant of certificate. Once, citation is published in newspaper about the pendency of succession application, the court awaits of any prospective objection for 45 to 60 and if no objection is forthcoming, on the expiry of this period, the court passes an order for issuance of succession certificate. Conversely, if any objection is raised, the Court, only after adjudicating on the objections and in case the objection is dismissed, may proceed further.



APPLICABILITRY OF HINDU SUCCESSION ACT 1956 (HSA)

Before delving further, it is to be borne in mind that in case of Hindus, the governing Act of succession shall be Hindu Succession Act 1956 and the procedure of succession shall follow under the Indian Succession Act 1925. The relevant provisions of The Hindu Succession Act (HSA) 1956 and also the details as regards the mode and manner of inheritance is to be understood in case of estates of deceased male or female Hindu. Therefore, the relevant provisions of Hindu Succession Act 1956 (In short HSA 1956)  is required to be ascertained, before going further.

What is of pertinence is that HSA 1956 regulates intestate succession among Hindus. The HSA was amended in 2005 and Section 6 of the HAS was amended to confer legal rights and liabilities upon daughters in the ancestral property by birth in a Hindu Undivided Family (‘HUF’), equivalent to that of a son. However, a question continued to revolve as regards the issue that whether Section 6 of the HSA 1956 has retrospective applicability?

The ambiguity is finally cleared by hon’ble Supreme Court. 

In Vineeta Sharma Vs Rakesh Sharma (2020) 9 SCC 1. The Supreme Court’s Three (3) Judge Bench( CORAM: Justices Arun Mishra, S.Abdul Nazeer and and MR Shah) has laid down the position on the issue  and cleared the path from ambiguity.

The law was not clear before. In Prakash v. Phulavati (2016) 2 SCC 36 , it was held by the Supreme Court (Single Judge bench) that Section 6 of Hindu Succession Act 1956 (as amended in 2005), had no retrospective applicability and was applicable only in such cases, where both the father and his daughter were alive on the 9th  of September 2005, when the amendment in HSA 1956 came into force However, in and in Mongammal @Thulasi & Anr Vs T B Raju & Ors (2018) 15 DCC 662, a division judge bench of the Supreme Court held otherwise i.e it was held that the amended section 6 of HAS, 1956 conferred full rights upon the daughter, who could claim her rights to the property in question, despite her father having passed away before the amendment came in force. It was held that a female shall also be treated as coparcener on birth and no time line can be fixed for that. It is further held that the issue of when the father died was not relevant, as survivorship was only the mode of succession, not that of the formation of coparcenery rights. The Phulavati (Supra) decision was therefore overruled. The Court held that the intent and purpose of the relevant amendment was to ensure gender justice as constitutionally protected and no fetter could be attached thereto. Section 6 of HSA 1956 (Amended in 2005) as to apply retrospectively.

In this backdrop, the entitlement of legal heirs needs to be ascertained.  

In the Schedule to The Hindu Succession Act 1956 , following are the class I heirs In case of MALES):

Section 8 of HSA stipulates mode of succession I case of Male Hindu.

CLASS – I

Son; Daughter; Widow; Mother; Son of a pre deceased Son; Daughter of a pre deceased Son; Son of a pre deceased daughter; daughter of a pre deceased daughter Widow of a pre deceased Son, Son of a pre deceased Son of a pre deceased Son of a pre deceased Son ; Daughter of a pre deceased Son of a pre deceased son; widow of a pre deceased son of a pre deceased son,

*[Son of a pre deceased daughter of a pre deceased daughter ; daughter of a pre deceased daughter of a pre deceased daughter; daughter of a pre deceased son of a pre deceased daughter; daughter of a pre deceased daughter of a pre deceased Son] 

(* As per Hindu Succession Amendment act 2005 (w.e.f 09.09.2005)

 

The Class I legal heirs take the shares together without any preference and simultaneously, in exclusion of class II legal heirs. For instance, if a male Hindu dies and survived by his One Son, one daughter, wife and Mother each shall have one share each in the estate of deceased. If Widows are more than one, , one share shall be taken together by all widows.In case of branch of each pre deceased son and daughter, each branch shall take one share.

                                                            CLASS- II

I.            Father

II.          (1) Son’s daughter’s son (2) Son’s daughter’s daughter (3) Brother (4) Sister

III.        (1) Daughter’s Son’s Son (2) daughter’s Son’s Daughter (3) Daughter’s daughter’ s Son (4) Daughter’s  daughter’ s  daughter

IV.        (1) Brother’s Son (2) Sister’s Son (3) Brother’s Daughter (4) Sister’s daughter

V.          Father’s father, Father’s Mother

VI.        Father’s Widow, Brother’s Widow

VII.      Father’s Brother, Father’s Sister

VIII.    Mother’s father, Mother’s Mother

IX.        Mother’s Brother, Mother’s Sister     

The mode of inheritance in case of deceased males, section 8 of Hindu Succession Act 1956 as regards class II legal heirs shall be such that they will be entitled to shares if any of Class I legal heirs are not surviving. Moreover, the first entry in class II shall have preference to any other entry. Still further, if entry in category of class II in a particular category is more than one, the preceding entry preceding entry shall have the priority. For instance, the entry 1 of class II shall have clear preference to subsequent entries. Moreover in case of a category II or III of class II as the case may be, the prior entry shall have the first preference. eg the 1,2 and 3 in the category shall imply the first shall have prior rights in the exclusion of all other.

If class II legal heirs are also not available, then to the agnates of deceased (descendants from father’s side) and if agnates are not available , then the cognates ( descendants from Mother side) of deceased shall have the right in the estate of deceased.

Section 25 of the HSA 1956 disentitle the murder of deceased tor the one who abets murder from succeeding the estate of deceased. It will be treated as if such person had died before the deceased and succession process shall follow accordingly.

In case of Female Hindu, who dies intestate, the mode of succession is prescribed u/s 15 & Section 16  of HSA 1956. The mode of succession shall be as under:

Section 15(1):

(a)  Firstly, upon the sons and daughters( including the children of any pre- deceased son or daughter and the husband;

(b)   Secondly upon the heirs of the husband;

(c)  Thirdly, upon the Mother and Father;

(d)  Fourthly, upon the heirs of father; and

(e)  Lastly, upon the heirs of the Mother

However, if a female Hindu inherits properties from her Father or Mother and in case the deceased female does not have Son or daughter including the children of pre- deceased son or daughter, then the property shall devolve upon  the heirs of father and not in a manner shown above u/s 15(1) of HSA. Similarly, if deceased female Hindu had inherited properties from her husband or her father-in-law, then, in absence of her own son and daughter and children of pre deceased son and daughter, the property shall devolve only on heirs of husband and not as per section 15 (1) of HSA  as stipulated above.

The order of succession is described in section 16 of HSA 1956. The first entry as per Section 15 (1) succession shall be preferred to other succeeding entries have the priority. Those included in the same entry shall take that simultaneously.

The children of pre deceased son and daughter shall take only such share which his /her father or Mother would have been entitled to.

The aforesaid shall clearly demonstrate as to who shall have the entitlement and precedence as legal heirs and the succession application shall have to be moved in consonance with that.      



INDIAN SUCCESSION ACT, 1925

At the outset, what is of significance is that as regards Hindus , mode and manner of inheritance is prescribed in Hindu Succession Act (as amended and up to date) and therefore the mode and manner of succession prescribed in Indian Succession Act 1925 shall not apply in case of Hindus including a Virashaiva, Lingayats, the Brahmo, The Prarthana or Arya Samaj, or Budhists, Jains or  Sikhs by religion. The HSA 1956 shall apply to all, other than Muslim, Parsi, Christian or Jew by religion, unless it is shown that they are not governed by Hindu law by any custom or usage.

The Indian Succession Act 1925 was, however, made applicable to all. Since, a comprehensive succession mechanism was laid down by way of Hindu Succession Act 1956 and subsequent amendments have also been carried out in that, therefore, being a comprehensive and subsequent Act, HSA, 1956 so far as mode of distribution or succession is concerned, shall apply in case of Hindus. However, the procedure of filing the petition and the process that entails in it, is prescribed in Indian Succession Act 1925.        



Restrictions to Grant of Succession Certificate

No succession certificate can be granted, if:.

i) under section 370 (1) of the Act, as to any debt or security to which a right is required to be established by probate or letters of administration;

ii) Sections 212 of the ISA 1925 applies;

iii)  Section 213 of the ISA 1925 applies;

iv) Law requires probates or letters of administration as mandatory to establish right to property as in the cases of Parsis, Jews, East Indians, Europeans and Americans.

Provided that nothing will prevent as to granting a succession certificate to any person entitled to the effects of a deceased Indian Christian or any part thereto pertaining to any debt or security, that the right can be established by letters of administration.

Pre-requisites of Succession Certificate are as follows:

(i)     The beneficiary/ legal heirs are required to approach a competent court i.e the District Court and may file a petition for a succession certificate.

(ii)   The District Judge within whose jurisdiction the deceased ordinarily resided at the time of his death, or, if at that time had no fixed place of residence, the District Judge, within whose jurisdiction any part of the property of the deceased may be found, may grant the succession certificate.

(iii)       The petition should specify details such as the name of petitioner, relationship with the deceased, names of all heirs of the deceased. Besides that time, date and place of death along with the petition, death certificate and any other document that the court may require may also be attached.

(iv)       The court, after examining the petition, issues a notice to all concerned parties and also direct issuing citation in a newspaper and specifies a time frame (usually forty Five (45) days so as to enable any prospective objections that may be raised. In case, there is no contest, then, subject to satisfaction of the court  an order could be passed for issuing a succession certificate to the petitioner or petitioners, as , if there is more than one petitioner, then, the court may jointly grant them a certificate, but, more than one certificate for a single asset cannot be granted.

(v)   While granting certificate District Judge is required to specify the debts and securities set forth in the application for seeking the certificate, and may thereby entitle the person to whom the certificate is granted (i) to receive interest or dividends on the securities; or (ii) to negotiate or transfer the securities; or (iii) both to receive interest or dividends or negotiate or transfer the securities.

The Court Fee is levied as a fixed percentage of the value of the estate as prescribed under the Court-fees Act, 1870, (7 of 1870)).The court fee is payable in the form of judicial stamp papers of the said amount. The court fee in the aforesaid manner while issuing certificate is required to be paid and generally it varies from 2 to 2.5% of the value of the assets.



How to apply for ''Succession Certificate:

·       The Class 1 legal heirs or in absence of class 1 legal heirs class II legal heirs of the deceased may apply for a succession certificate to the estate of deceased, who may have died intestate. An application is required to be made before the District Judge for this purpose and a judge is appointed for this purpose. For instance, in New Delhi/Delhi Sr Civil Judge/Guardian Judge is appointed as a special court for this purpose.  The application u/s 372 of ISA 1925 is therefore required to be preferred.

·       The petitioner must sign and verify the petition;

·       The residences of the other legal heirs of deceased must be mentioned;

·       In case of The Hindu Succession Act (Act XXX OF 1956), the names of the heirs must be mentioned in the petition;

·       The right and entitlement of the petitioner is required to be mentioned;

·       The ordinary location of residence of the deceased or residence of deceased at the time of his/her death is to be specified,

·       The property (or some of the property)  of the deceased should be within the limits of the Jurisdiction of the Court concerned;

·       The debts and securities as to which the succession certificate is applied for, should be clearly specified;

·       Pertinently, what is of further importance is that a petitioner ought to clearly mention that there are no impediment u/sec. Sub section (1) of Section 370 of the Act or any other provisions of the Act or any other enactments for the time being in force, to the grant of succession certificate or to the validity of it, in case of it was granted.

Although Section 370 of the Indian Succession Act, 1925, specifically provides that a succession certificate shall not be granted with respect to any debt or security in cases where a right to such property is required to be established by obtaining Letters of Administration or a Probate, in certain states, a probate and a succession certificate are compulsory to transfer the title of an immovable property. It is to be further noted that in the absence of a Will, banks and financial institutions typically rely on the succession certificate and/or a legal heir certificate.



Procedure for procuring a Legal Heirship Certificate

While the Indian Succession Act, 1925 does not prescribe a method for obtaining a legal heir certificate, still, Revenue Officers such as Tahsildars, Revenue Mandal officers or Talukdars, in every Taluk issues a Legal Heriship Certificate. A legal heir certificate could only relied upon for limited purposes and it is not construed as conclusive, when it comes to determining the legitimate class of heirs of a deceased person under the laws of succession, or the title of heirs to any disputed property that belonged to the deceased. Thus, in disputed case a legal heir certificate shall not have efficacy and the claimant must approach a civil court of competent jurisdiction for determination of the rightful heirs.



What are the effects of a succession certificate?

The holder of a succession certificate has a claim over the property and assets of the deceased person and he will have the authority to represent the deceased in collecting debts and securities due to the deceased or payable in his name, inherits the debts and other liabilities of the deceased person. The succession certificate is valid throughout India. The Indian Succession Act, 1925 governs the same. The Court can extend the Succession certificate to any other immovable property of which the applicant was not having knowledge at the time of filing of the application.

Where a certificate in the form, in consonance with the stipulations of Second Schedule has been granted by a Court outside the State or where a certificate so granted has been extended in such form by such Court, the certificate shall, when stamped in accordance with the provisions of the Court-Fees Act, with respect to certificates under this Act, shall have the same efficacy in the other State.

Revocation of certificate

The certificate may be revoked , if

(a)     the proceedings to obtain the certificate itself was defective;

(b) the certificate was obtained by fraud or by making a false suggestion, or by the concealment of material facts from the court;

(c) the certificate was obtained by raising false or untrue allegation of a fact though such allegation may have been made inadvertently or by ignorance;

(d) the certificate has become inoperative through circumstances;

(e) a decree or order made by a competent Court in a suit or other proceeding with respect to effects comprising debts or securities specified in the certificate.



PROVISIONS OF Appeal

The Section 284, 299 and 388 of Indian Succession Act 1925 (ISA) shall be relevant.

As per Section 299, any order passed by the District judge shall be appealable before the High Court in accordance with the provisions of Code of Civil Procedure.

Section 384 contains appellate provisions that lies before high court. Appeal shall lie before high court in case of granting or refusing to grant succession certificate or revoking the certificate The limitation period shall be governed as per the provisions of Civil procedure Code and Limitation Act, 1963. If it is the first appeal to the high court the limitation period shall be Ninety (90) days, and in case of second appeal on question of law u/s 100 of Code of Civil Procedure, the limitation period again shall be 90 days from the date of the judgment passed.

Section 388 of ISA 1925 provides the investiture of authority before the courts inferior to District Court and state government by notification may invest such power available to District judge to the inferior court. Such power shall be exercised by the inferior court, as if it was a District Judge under this part.

An appeal under this section against the ord4er passed by such inferior court shall lie before the District Judge and not to the high court. The Regular Second Appeal (RSA) could be then preferred against the order of District Judge, before the high court u/s 100 of Code of Civil Procedure. The Review and Revisional power u/s 114 and 115 of Code of Civil procedure shall also be available to the high court.



INVALID CERTIFICATE & ITS EFFECT

A certificate granted in respect of any of the effects of a deceased person shall be invalid if there has been a previous grant of such a certificate or of probate or letters of administration in respect of the estate of the deceased person and if such previous grant is in force. This shall be deemed to supersede any certificate previously granted under this Act in respect of any debts or securities included in the estate.

However, when a certificate under the ISA 1925 Act has been superseded or is rendered invalid for its revocation, under section 18, or for any other reason, all payments Effect on certificate of subsequent probate or letters of administration:–

(1) A grant of probate or letters of administration under the Probate and Administration Act in respect of an estate shall be deemed to supersede any certificate previously granted under this Act in respect of any debts or securities included in the estate.

(2) When at the time of the grant of the probate or letters any suit or other proceeding instituted by the holder of the certificate regarding any such debt or security is pending, the person to whom the grant is made shall, on applying to the Court in which the suit or proceeding is pending, be entitled to take the place of the holder of the certificate in the suit or proceeding.

No decision under this Act upon any question of right between any parties shall be held to bar the trial of the same question in any suit or in any other proceeding between the same parties, and nothing in this Act shall be construed to affect the liability of any person who may receive the whole or any part of any debt or security, or any interest or dividend on any security to account therefore to the person lawfully entitled thereto.

When a certificate under this Act has been superseded or is invalid from any of the causes mentioned in section 22, the holder thereof shall, on the requisition of the Court which granted it, shall have to deliver it up to that court and without any reasonable cause, if he omits to do so, he is liable to be punished with fine which may extend to one thousand rupees, or with imprisonment for a term which may extend to three months, or with both.

The following provisions of Indian Succession Act 1925 which relates to application for seeking succession certificates and some discerning provisions are as under:

Sections 370-371 deals with grant of certificate or restrictions, besides the jurisdiction of the Court granting certificate

Sections 372 -373 relates to filing application for succession certificate  and laying down of procedure

Sections 374-375 refers to Contents of certificate and security from grantee of certificate

Sections 376-377 deals with extension of certificate and Forms of certificate

Section 378 prescribes the details of amendment of certificate in respect of powers as to securities

Sections 379-380 deals with Mode of collecting Court-fees on certificates and Local extent of certificate

Sections 381-382 deals with Effect of certificate, and effect of certificate granted or extended by Indian representative in foreign State and in some other cases

Section 383 deals with Revocation of certificate

Section 385 deals with Effect on certificate of previous certificate probate or letters of administration

Section 386 deals with Validation of certain payments made in good faith to holder of invalid certificate

Section 387 deals with Effect of decisions under this Act and liability of holder of certificate thereunder

Section 388 deals with Investiture of inferior Courts with jurisdiction of District Court for purposes of this Act

Section 389 relates to Surrender of superseded and invalid certificates

The Hon’ble Delhi High Court in FAO No. 184/2017 has held that “in cases where someone dies without a Will, succession can only be granted to the legal heirs of that person, not the nominee”.

The Hon’ble Karnataka High Court in T. Ramaiah Vs. K.S. Rooprad and others CRP No. 2152/1988 , has held that (i) The legal representative may come on record in E.P. proceedings and trial Court need not insist them to produce Succession certificate under Indian Succession Act.

In another Judgment the Hon’ble Supreme Court on 27.4.2000, in between Madhavi Amma Bhavani Amma and others Vs. Kunjketty Pillai Meenaksh Civil Appeal No. 1544 of 1990 , has held that “proceedings u/Sec.372 of the Act for the grant of Succession certificate under Indian Succession Act would not bar any party to the said proceedings to raise same issue in the subsequent suit”. In another Judgment decided by the Hon’ble Supreme Court in Banarsi Dass Vs. Teeku Dutta (Mrs) Civil appeal No. 2918/2005  u/s 372 of the Act for the grant of Succession certificate under Indian Succession Act would not bar any party to the said proceedings to raise the same issue in the subsequent suit”. It is further held that before issuing Succession Certificate under Indian Succession Act, 1925, no direction for DNA test could be passed.

The court also requires a bond with one or more surety or sureties or any other security for rendering an account of debts and securities received by the petitioner of succession certificate for indemnifying the persons, in the event( though unlikely)  any subsequent claim is raised.



Conclusion:

Law of succession after the enactment of Hindu Succession Act 1956 and Hindu Succession (Amendment) Act 2005) have undergone a sea change. The female child is now treated as coparcener from the time of birth and without any fetter and are entitled to equal shares in the estate of parents. The hiccups, as regards the applicability of Hindu Succession (Amendment) Act 2005 it is now held by hon’ble Supreme Court that it will have retrospective operation. The ambiguity prevailed as regards the entitlement of female child, if her father had died before the enactment of the Amendment act is therefore put to rest and irrespective of the time of death of father , a female child shall be entitled to share in the estate of father, as much her brother shall be entitled to. Whereas the Hindu Succession Act 1956 is applicable to Hindus, Sikhs, Budhist, Jains etc and not applicable in case of Muslim, Christian, Jew and Parsi. Indian Successions Act, 1925, on the other hand contains the procedure of filing succession application and provisioning of succession certificates. In case of Hindus, as regards mode and manner of succession is already entailed in HSA, 1956 being the latter Act and even amendment in HSA 1956 in the year 2005 has stipulated changes and the application for succession could be filed under Sections 372 of Indian Succession Act 1925, only after factoring the shares and rights, as stipulated under Hindu Succession Act 1956. The Succession Certificate is, therefore, a document, which is issued by the court, for claiming movable properties by the successors of the deceased and the certificate affirms as to who are the legal heirs of the deceased. This may be enough for the legal heirs to administer properties. The succession certificate has applicability all over the country, subject to limitation that is carved out in the Indian Succession Act itself. In other words, Succession Certificate is a document which is issued by a competent court thereby the succession certificate holder can claim rights over movable properties as the successors of the deceased, who may have died intestate.  The Banks also oftenly demand succession certificates for release of funds or FDs in the name of deceased. It establishes the legitimacy of the heirs and accords them the authority to receive the deposits and such assets of deceased and may get that transferred in their names.

 

                                           Anil K Khaware

Founder & Sr Associate

Societylawandjustice.com

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