THE MINIMUM THRESHOLD OF CIRP BEFORE NCLT UNDER SECTION 9 -IBC 2016

 

The minimum threshold of CIRP before NCLT under Section 9 -IBC 2016

 

The Insolvency & Bankruptcy Code (IBC) or referred to as  “Code” in short.  2016 was set up for expediting the issue of Corporate Insolvency Resolution Process (CIRP) entailing thereby the Financial Creditor and Operational Creditor for initiating the process as aforesaid so as to facilitate the resolution and/or dissolution process of corporate debtor, if necessary. The Code has provided a comprehensive mechanism to deal with the issue raised therein under a single window. As per section 4 of the Code, the minimum threshold for raising application before Adjudicating Authority in National Company Law Tribunal (NCLT) was fixed at Rs One (1) Lakh only.

However, the notification dated 24.03.2020 issued by the Ministry of Corporate Affairs, Government of India has now stipulated that the minimum amount of default limit for operational creditor for initiating CIRP as Rs. one crore (raising the minimum amount from Rs. one lakh to Rs one crore). The said notification is only 'Prospective in nature' and not a 'retrospective' as would be evident from the discussion that follows hereunder. It may through appear, that the said notification does not in express term speaks about the applicability of 'retrospective' or 'retroactive' operation, hence, it is prospective.

The section 4 of the Code may be perused in the context:

4. Applicability of this part-

(1)    This part shall apply to matters relating to the Insolvency and liquidation of Corporate debtors where the minimum amount of default if one lakh rupees,

Provided that the Central Government may by notification, specify the minimum amount of default of higher value which shall not be more than One Core Rupees.

NOTIFICATION:

As per the Notification No. S.O. 1205(E) dated 24.03.2020 issued by the Ministry of Corporate Affairs, the minimum amount of Default for an Application under Section 9 of the IBC, 2016 is enhanced to Rs. One Crore.

The Section 4 of Insolvency & Bankruptcy Code 2016 (IBC) reads as under:

The amendment to Section 4 of IBC had raised the threshold limit for preferring an 'Application' under the Code to Rs.1,00,00,000/-. The application by the Operational Creditor is required to be filed in FORM 5 before the Adjudicating Authority. If the claim of operational creditor relates back to the pre-amendment date, but the application before the Adjudicating Officer is filed after amendment, the relevant date for reckoning of threshold of Rs 1 Crore shall be the date of application and not the date when the claim relates to.

The law enunciated in this regard shall also be of pertinence:

(i)          It is held in Metal’s and Metal Electric Pvt Ltd Vs Goms Electricals Pvt Ltd (2022) ibclaw.in 196 NCLAT ( Principal Bench, New Delhi) that the threshold limit under Section 10A of the Code for initiation of CIRP is Rs.1 Crore (vide Notification to Section 4 of the Code dated 24.03.2020), this 'Tribunal' taking note of the fact that the Section 4 of the Code which specifies the minimum threshold of Rs.1 Crore, the same shall apply and if the sum claimed in the Application is below the sum of Rs 1 crore and if the application is filed subsequent to notification, before the 'Adjudicating Authority' after the Notification dated 24.3.2020 by which, the threshold limit was increased from Rs.1 Lakh to Rs. 1 Crore. Thus, inescapable and consequent conclusion that emerge is that the 'Application' filed is for a ums of less than Rs 1 Crore, the same shall not be maintainable, because of the lack of pecuniary jurisdiction to the 'Adjudicating Authority, (National Company Law Tribunal).

(ii)        The NCLAT, principal bench, New Delhi in Jumbo Paper Products Vs Hansraj Agro Fresh  Pvt Ltd Company Appeal (AT) (Ins) No. 813 of 2021  has observed that threshold limit of Rs.1,00,00,000/- will be applicable for an application filed under Section 7 or 9 on or after 24.03.2020, even if default was of a date, earlier than 24.03.2020.

(iii)       The Supreme Court in (i) Madhusudan Tantia Vs. Amit Choraria & Anr in CA (AT) (Ins) No. 557 of 2020 (ii) Union of India & Ors. Vs M/s. G.S. Chatha Rice Mills & Anr, Civil Appeal No. 3249 of 2020 and (iii) Union of India v M.C. Ponnose 2020 SCC online SC 770. 9. It is clear that the judgment in Madhusudan Tantia case (supra) shows that the demand notice under section 8 was issued on 31.7.2019 and the application under section 9 was filed on 5.9.2019. Both these dates are before 24.3.2020, and therefore threshold limit of the debt as per Law at the time the application under section 9 was filed was Rs. 1 Lakh and hence, there was no impediment in the hearing of the application by the  adjudicating Authorities.

(iv)       In Tharakan web Innovations Pvt Ltd Vs National Company Law Tribunal (2022) ibclaw.in28 HC The Kerala High Court in WP (C) No. 27636/2020 & 14158/2021 has reiterated the aforesaid. The date of default prior to 24.03.2020 shall not be relevant and what shall be relevant is the date when the application u/s 9 is filed before the Adjudicating Authority.

(v)         It is evident, therefore, that the said notification however will not apply to the pending applications filed before the concerned 'Adjudicating Authorities, under IBC prior to the issuance of the aforesaid notification, as the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, shall be considered as prospective and not retrospective. There has been nothing in the amendment that may suggest the notification to be retrospective and obvious corollary to that shall be that the notification is prospective in nature and hence, pending application before the Adjudicating Authority irrespective of the claim being less than Rs 1 Crore shall be continued to be heard by the respective NCLTs, if filed before the date of above referred notification.

There is yet another dimension to it. The following question has also emerged:   

Whether the issue of maintainability of Section 9 IBC petition can be decided by Registrar of a Tribunal?

The Delhi High Court in Skillstech Services Pvt Ltd Vs Registrar NCLT, New Delhi WP (C) 474/2021 has categorically held that whether the notification as regards the enhancement of pecuniary limit of Rs 1 Crore or its applicability in a given case shall have to be decided by a bench or a Registrar to a Tribunal can decide it without placing it before the bench of NCLT is settled by Delhi High Court.

The para no. 6 and 7 as held by the Delhi High Court are of significance in this context.

6. This court is of the opinion that the question as to whether the NCLT has jurisdiction to entertain a particular case or not cannot be determined by the Registrar in the administrative capacity. The Registrar would have to place the matter before the appropriate bench of the NCLT, for the said question to be judicially determined. The appropriate bench of the NCLT would have to, then, take a considered view as to whether notice is liable to be issued in the matter or not.

7. The question as to whether the notification dated 24th March, 2020 applies to a particular petition that has been filed prior to the said notification or not is also a question to be determined by the Bench of the NCLT and not by the Registrar of the Tribunal”.

It therefore clearly follows that whether the application as regards its meeting of threshold of Rs 1 Crore or other ancillary aspect could be dealt with by the Registrar to a Tribunal is clearly negatived by the hon’ble High Court.

                              ---------

                              Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com

 

WHEN FIR UNDER SECTION 498-A OF IPC COULD BE QUASHED

 

When FIR under SECTION 498-A OF IPC could be quashed

 

Recently the Supreme Court has laid down criteria for quashing  the F.I.R u/s 498-A of Indian Penal Code. The Supreme Court in a matter bearing no. 2024 INSC 369 and captioned as Achin Gupta Vs State of Haryana, have, comprehensively, dealt with the aspect.  is significant to note that ever since, the section 498-A of IPC is brought in the statute book i.e in 1984, its rampant misuse is reported. This is not to say, that the section was ill conceived. In fact, it served its purpose s well, but the aspect of misuse of it is also rampant and that is the cause of concern, over the years. Periodically, the Supreme Court has laid guidelines, still, some improvement is always craved for. The Supreme Court has, given the sanctity of marriage, have amply dealt with in several cases that section 498-A of IPC could not be invoked in omnibus manner and with a view to settle score with relatives of husband and such complaints could be quashed by invoking provisions of Section 482 of Indian Penal Code by the High Courts.

 

In the above backdrop, the discussion herein follows:

1.   That the High Court of Punjab & Haryana In Achin Gupta  Supra) had declined to quash the charge sheet in F.I.R dated 05.04.2022 in the Criminal Main No. 14198-2022 (CRM-M-14198-2022) filed by the Appellant for the offences punishable under Section 323, 406, 498A and 506 of the Indian Penal Code, 1860 (for short, the “IPC”) arising from the First Information Report No. 95 of 2021 lodged by the wife of the Appellant) at the Urban Estate Hisar Police Station, District Hisar (Haryana).

2.   That a bare perusal of F.I.R would indicate that the Appellant and his family members are alleged to have demanded dowry and thereby caused mental and physical trauma to the complainant- wife. It was also stated in the F.I.R that the family of the complainant had spent a large sum at the time of marriage and had also handed over her ‘stridhan’ to the Appellant and his family. However, soon thereafter, the Appellant and his family started harassing the complainant on the false pretext alleging that she had failed to discharge her duties as a wife and daughter-in-law and also demanded some more dowry. The Appellant is alleged to be an alcoholic, had extra marital relationship and used to regularly raise his hands on the complainant and she was subjected to inhuman treatment. It was also stated in F.I.R that father and mother of the husband of complainant  would always take the side of their son i.e., the Appellant herein. The father and mother was also arrayed as accused no.2 and 3 and would pressurize the First Informant to get something more towards dowry.

3.   That it was also alleged that the accused persons have ignored the complainant due to their dowry demand and they have even not returned the complainant, her stridhan and threatened her that if without fulfilling their demand of dowry, if the complainant comes to their house, they will kill her. The complainant also alleged that she was serving as an Assistant Professor and that the Appellant and his family would keep her entire salary. The Appellant would assault her whenever she would ask for money, saying that the First Informant should ask her family to bear her personal expenses. The Appellant allegedly continued with the extra marital affair for a long period & later filed a divorce petition in 2019 on absolutely false and baseless grounds.

4.   That upon the registration of FIR, the police carried out the investigation & proceeded to file chargesheet, in October 2021 only against the Appellant herein. A closure report was filed against the remaining 4 accused. The filing of charge sheet resulted in the Criminal Case No. CHI/1856/2021in the court of Judicial Magistrate, First Class, Hisar (Haryana). The Appellant herein moved before the High Court for seeking quashing of the charge sheet /criminal proceedings quashed. The High Court vide its judgment & order dated 05.04.2022declined to quash the criminal proceedings in exercise of its inherent powers under Section 482 of the Criminal Procedure Code, 1973.

5.   That the High Court made the following observations: -

 

“I have heard learned counsel for the petitioner at length and have gone through the record carefully. The main thrust of the arguments raised by counsel for the petitioner is that the complainant had never been interested in living in the matrimonial home and she kept on pressurizing the petitioner for living separately from his family members. In order to achieve her objective she kept on causing harassment to the petitioner and his family members. However, a perusal of the allegations in the FIR would show that the petitioner and the family members gave taunting to the complainant for lowering down their image in the society. Demand of a car was also made. Complainant was taunted for not having been incurred sufficient expenditure on marriage by her parents. There are allegations of beating the complainant by her husband and the other family members. It has been specifically alleged that the petitioner is an alcoholic and has illicit relations with one xxxxx .

 

6.    That the High Court relied upon Hon'ble Supreme Court has settled the law time State of Haryana vs Bhajan Lal, 1992 Supp (1) SCC regarding exercising the jurisdiction under Section 482 Cr.P.C and as per the said parameter, according to high court the F.I.R could not have been quashed.

7.   That the High Court while dismissing the quashing petition preferred by the appellant had further relied upon a judgment passed by hon’ble Supreme Court in Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra, 2021 SCC Online SC 315 wherein it is held that quashing of FIR is an exception rather than an ordinary rule and the High Court should exercise the powers under Section 482 Cr.P.C. sparingly with circumspection. The high court has thus held that after taking into consideration the above facts and circumstances of the present case, in the light of the law settled, the present case does not fall in the category of cases for invoking the inherent powers under Section 482 Cr.P.C. The parameters laid down by the Hon'ble Supreme Court mandate that in a case where from the bare reading of the allegations in the FIR no cognizable offence is made out or it has been lodged to wreak the vengeance then the High Court may intervene. The veracity of the allegations leveled by the complainant can be assessed only after a thorough investigation and thereafter by the Trial Court on the basis of the evidence led before it.

SUPREME COURT

In the above backdrop, the appellant was before Supreme Court.

        Contentions of Appellant:

(i)              The Appellant and his family had filed a divorce petition and also a domestic violence case against the complainant in 2019 and 2020 respectively. As a counter blast to the same, the FIR No. 95 of 2021 dated 09.04.2021 came to be lodged after a period of more than 11 months from the date the First Informant left her matrimonial home and that too, only after the service of summons to her in the domestic violence case. No plausible explanation has been offered for such delay.

(ii)             The FIR was filed with an oblique motive & by way of vengeance towards the Appellant. The complainant and Appellant were married for over 12 years.

(iii)           The allegations in the FIR are too vague and general in nature. There is no specific allegation/incident of harassment levelled against the Appellant in the FIR.

 

Contentions of respondent wife:

(i)              The Appellant and his family continuously demanded for additional dowry after the marriage. They used to beat the complainant and take away her entire salary.

(ii)             After filing of the divorce petition, the Appellant stopped paying anything towards her maintenance and also disconnected the basic facilities such as water connection etc., leaving her with no option but to leave the matrimonial home and return to her parents house at Hisar.

(iii)           The Appellant had an affair with another woman. Only with a view to save the marriage, she kept quiet and did not inform about it to the others.

(iv)          The domestic violence case filed against the complainant  is absolutely frivolous and vexatious.

(v)            The Appellant failed to inform this Court that he had withdrawn the divorce proceedings instituted against the complainant.

ANALYSIS OF SUPREME COURT

(i)          The Appellant and the Respondent No. 2/wife  got married in October 2008.The couple lived together for more than a decade and in the wedlock a child was born in March 2012.It was also noted that the Appellant filed a divorce petition in July 2019 on the ground of cruelty. The divorce petition was withdrawn as the Appellant was finding it difficult to take care of his child, while travelling all the way to Hisar on the dates fixed by the Court. The Appellant’s mother had to file a domestic violence case against the First Informant/complainant in October 2020 under the provisions of the Protection of Women from Domestic Violence Act, 2005.

(ii)        The plain reading of the FIR and the chargesheet papers indicate that the allegations levelled by the First Informant are quite vague, general and sweeping, specifying no instances of criminal conduct. It is also pertinent to note that in the FIR no specific date or time of the alleged offence/offences has been disclosed. Even the police thought fit to drop the proceedings against the other members of the Appellant’s family. Thus, the Supreme Court was of the view that the FIR lodged by the Respondent No. 2 was nothing but a counterblast to the divorce petition & also the domestic violence case.

 

(iii)       The Supreme Court has also noted that the Respondent No. 2/wife had lodged the FIR on 09.04.2021, i.e., nearly 2 years after the filing of the divorce petition by the Appellant and 6 months after the filing of the domestic violence case by her Mother-in-law. Thus, the First Informant/complainant remained silent for nearly 2 years after the divorce petition was filed. With such an unexplained delay in filing the FIR, the Supreme Court had noted that the same was filed only to harass the Appellant and his family members.

(iv)    In para no. 20 and 21 in Achin Gupta (Supra), the Supreme Court has observed as under:

“20. It is now well settled that the power under Section 482 of the Cr.P.C. has to be exercised sparingly, carefully and with caution, only where such exercise is justified by the tests laid down in the Section itself. It is also well settled that  Section 482 of the Cr.P.C. does not confer any new power on the High Court but only saves the inherent power, which the Court possessed before the enactment of the Criminal Procedure Code. There are three circumstances under which the inherent jurisdiction may be exercised, namely :

(i)      to give effect to an order under the Code,

(ii)     to prevent abuse of the process of Court, and

(iii)       to otherwise secure the ends of justice.”

 

 

“21. The investigation of an offence is the field exclusively reserved for the Police Officers, whose powers in that field are unfettered, so long as the power to investigate into the cognizable offence is legitimately exercised in strict compliance with the provisions under Chapter XII of the Cr.P.C.. While exercising powers under Section 482 of the Cr.P.C., the court does not function as a Court of appeal or revision. As noted above, the inherent jurisdiction under the Section, although wide, yet should be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the Section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts exist. The authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has the power to prevent such abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers, the court would be justified to quash any proceeding if it finds that the initiation or continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto”.

Significantly, the supreme Court has further observed in the Achin Gupta (Supra) that Once the investigation is over and chargesheet is filed, the FIR pales into insignificance. The court, thereafter, owes a duty to look into all the materials collected by the investigating agency in the form of chargesheet. It is further observed by the Supreme Court that there is nothing in the wording of Section 482 of the Cr.P.C. which in any manner restricts the exercise of the power of the court to prevent the abuse of process of court or miscarriage of justice only to the stage of the FIR. More pertinently, it is held that it would be a travesty of justice to hold that the proceedings initiated against a person can be interfered with at the stage of FIR but not if it has materialized into a chargesheet.

(v)      The Supreme Court had also relied upon judgment rendered by it reported as R.P. Kapur v. State of Punjab reported in AIR 1960 SC 866, while  summarising some categories of cases where inherent power can, and should be exercised to quash the proceedings: -

(i) where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction;

ii) where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;

(iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.

(vi)         In the case of Arnesh Kumar v. State of Bihar, (Criminal Appeal No. 1277 of 2014, while granting anticipatory bail to accused under Section 498A of the IPC and Section 4 of the Dowry Prohibition Act, 1961,  paras 6 respectively are worth taking note of. They are reproduced below: -

“6. There is phenomenal increase in matrimonial disputes in recent years. The institution of marriage is greatly revered in this country. Section 498-A of the IPC was introduced with avowed object to combat the menace of harassment to a woman at the hands of her husband and his relatives. The fact that Section 498-A  is a cognizable and non-bailable offence has lent it a dubious place of pride amongst the provisions that are used as weapons rather than shield by disgruntled wives. The simplest way to harass is to get the husband and his relatives arrested under this provision. In a quite number of cases, bed-ridden grand-fathers and grand-mothers of the husbands, their sisters living abroad for decades are arrested. Crime in India 2012 Statistics published by National Crime Records Bureau, Ministry of Home Affairs shows arrest of 1,97,762 persons all over India during the year 2012 for offence under Section 498-A of the IPC, 9.4% more than the year 2011. Nearly a quarter of those arrested under this provision in 2012 were women i.e. 47,951 which depicts that mothers and sisters of the husbands were liberally included in their arrest net. Its share is 6% out of the total persons arrested under the crimes committed under Penal Code, 1860. It accounts for 4.5% of total crimes committed under different sections of penal code, more than any other crimes excepting theft and hurt. The rate of charge-sheeting in cases under Section 498A, IPC is as high as 93.6%, while the conviction rate is only 15%, which is lowest across all heads. As many as 3,72,706 cases are pending trial of which on current estimate, nearly 3,17,000 are likely to result in acquittal”..

 

(vii)        The Supreme Court, in the case of State of A.P. v. Vangaveeti Nagaiah, reported in (2009) 12 SCC 466 : AIR 2009 SC 2646, interpreted clause (iii) referred to above, observing thus: -

“6. In dealing with the last category, it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is clearly inconsistent with the accusations made, and a case where there is legal evidence which, on appreciation, may or may not support the accusations. When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained….”.

 

(viii)      In Preeti Gupta v. State of Jharkhand, reported in 2010 Criminal Law Journal 4303 (1), the Supreme Court has observed the following: -

“28. It is a matter of common knowledge that unfortunately matrimonial litigation is rapidly increasing in our country. All the courts in our country including this court are flooded with matrimonial cases. This clearly demonstrates discontent and unrest in the family life of a large number of people of the society.”

 

(ix) The Supreme Court has thus concluded in Achin Gupta (Supra) by observing as under:

“33. The ultimate object of justice is to find out the truth and punish the guilty and protect the innocent. To find out the truth is a herculean task in majority of these complaints. The tendency of implicating husband and all his immediate relations is also not uncommon. At times, even after the conclusion of criminal trial, it is difficult to ascertain the real truth. The courts have to be extremely careful and cautious in dealing with these complaints and must take pragmatic realities into consideration while dealing with matrimonial cases. The allegations of harassment of husband's close relations who had been living in different cities and never visited or rarely visited the place where the complainant resided would have an entirely different complexion. The allegations of the complaint are required to be scrutinized with great care and circumspection. Experience reveals that long and protracted criminal trials lead to rancour, acrimony and bitterness in the relationship amongst the parties. It is also a matter of common knowledge that in cases filed by the complainant if the husband or the husband's relations had to remain in jail even for a few days, it would ruin the chances of amicable settlement altogether. The process of suffering is extremely long and painful”.

 

The observation of Supreme Court is apt, while quashing the proceedings/charge sheet u/s 323, 406, 498A and 506   against the appellant herein.

                                           ------

 

Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com

RIGHT OF WIDOW IN DECEASED HUSBAND'S PROPERTY AFTER HER REMARRIAGE

 

Right of widow in DECEASED husband's  property after HER remarriage

The law related to inheritance amongst Hindus are quite comprehensive and the issues keeps trickling in as regards this. Though, Hindu Succession Act 1956 or Indian Succession Act 1925 illustrates the aspect of succession in respect of estate left over by a male Hindu or a female Hindu. However, Hindu Succession Act 1956 and Amendment Act 2005 shall apply for inheritance, if no testamentary disposition, such as Will, was left by the deceased. On the other hand if deceased has not died intestate and left a Will or testament, the provisions of Indian Succession Act 1925  for seeking Probate or Letter of Administration of Will, as the case may be, shall apply. The broad contour of this article, however, revolves around right of a widow in the estate of her deceased husband, in case, she marry after the demise of her husband. Whether any embargo is caused in respect of inheriting assets of her deceased husband who died intestate, in case, a woman marries again shall be the crux of the matter.

The issues have found reflection in a recent judgment of Nagpur Bench of Bombay High Court in Second Appeal No.144 of 2007 captioned as Smt jaiwantbai Vs Sunanda & Ors (decided on 23^rd August 2021).

While admitting the appeal, the hon’ble Bombay high Court had framed the following issue?

a) “whether a widow can claim the estate of the husband after re-marriage”?

The Bombay High Court, earlier, had dealt with somewhat similar issue based on a judgment rendered by Supreme Court captioned as Kasturi Devi Vs. Deputy Director of Consolidation & Others AIR 1976 SC 2595. However, the said judgment was remitted in case of right of inheritance of Mother from the estate of deceased Son. It has been held that there will not be any effect on her share of inheritance from a son even after she re-married. However, in Smt jaiwantbai (Supra) the issue is what is the effect on widow’s right of inheritance on the property of the deceased husband.

                          FACTS OF THE CASE

The facts of Smt Jaiwantbai (Supra) shall be of relevance before proceeding further:

Smt Jaiwantbaii is the mother of the deceased-Anil Shenuji Wankhade,  who was working as a Pointsman with Indian Railways. The respondent no.1 “Sunanda”  was married to Anil S Wankhaede (In short referred to as (“ASW”). There was also dispute between Sunanda and ASW and she was living separately. After the death of husband-ASW, Sunanda, re-married in the month of May, 1991 with one Ganesh Saligram Dode (GSD). The appellant herein (Mother of deceased ASW) claimed dues from the Indian Railways in the year 1993. The fact of re-marriage of Sunanda was communicated to the employer- Indian Railways. The employer requisitioned certificate of marriage, however, it could not be submitted. In this backdrop, the employer disbursed dues of Rs.65,000/- to Sunanda. In view of this Smt Jaiwantbai had filed a suit before the Civil Judge (Junior Division), thereby it was prayed that status of Sunanda be declared and injunction order be passed against the employer of her Son and claimed dues from Indian Railways.

The suit filed by the Mother (Appellant herein) was decreed and Indian Railways were directed to pay all the dues to Jaiwantaba. As Indian railways had already released the dues to “Sunanda” (Wife of deceased), thus, the first appeal before the District Court, Akola. The first Appellate Court had modified the judgment. Passed by the Court of first instance. The Indian Railways was directed to disburse the amount to Mother Jaiwantabai and wife Sunanda. The Mother had preferred the second appeal before the High Court against the judgment of First Appellate Court. Whereas the trial Court had accepted the claim of the plaintiff in toto, but, the first Appellate Court has also recognized the share of wife “Sunanda”. The plaintiff (Mother) was aggrieved by the first Appellate Court’s judgment.

The appellant contended that after the re-marriage, “Sunanda” had lost all her rights in the property of deceased husband and that conduct of employer of husband in releasing fund to “Sunanda” was unwarranted as no succession certificate was insisted and funds was released based on nomination. The appellant therefore prayed that the amount be recovered from the wife by the employer and be paid back to appellant Mother.

Per contra, on behalf of wife it was contended that The Hindu Widow’s Re-Marriage Act, 1856 (In short “Act of 1856”) is repealed in the year 1983 and even Section 24 is omitted from the Hindu Succession Act, 1956 (hereinafter referred to as the “Act of 1956”) w.e.f 9^th September, 2005. Reliance was placed on a judgment in the case of Sanjay Purushottam Patankar Vs. Prajakta Pramnod Patil 2015 (6) Mh.L.J. 533 DB. The Indian railways on the other hand maintained that the amount has already been disbursed to the wife on the basis of valid nomination and if the mother claims its recovery, the same may be against the wife only, if she succeeds.

 

Before the High Court. Following facts stands proved: following facts were proved—

a) Marriage between Sunanda and deceased-ASW;

b) Deceased-ASW was working with Indian Railways as a Pointsman;

c) Death of ASW on 19^th April, 1991;

d) remarriage by the wife after the death of husband;

d) Relationship of Jaiwantabai, as a mother with deceased ASW;

e) Disbursal of the amount by Indian Railways to wife of ASW;

f) Re-marriage of wife-Sunanda in the month of May, 1991;

 

The Bombay High Court has observed in Jaiwantbai (Supra) para no. 12 as under:

“12] It is true that the dues from employer is nothing but the self-acquired property of the deceased-Anil. It is also true that as per Section 2 of the Act of 1856 on re-marriage, the rights and interests for deceased husband’s property ceases and then there will be determination as if she have then died. It is also true that the Act of 1856 was repealed in the year 1983. It is pertinent to note that when the Hindu Succession Act was drafted in the year 1956, Section 24 was incorporated. The widow losses right if she remarries on the date when succession opens. It is also true that Section 24 is omitted from the Act of 1956 w.e.f. 9^th  September, 2005. Deceased-Anil expired on 19^th  April, 1991, so on that date succession to his property opened. So, we have to see what was the position in force at that time. The Act of 1856 was already repealed. Section 24 was very much there on the statute book. So, on the basis of that provision, whether it can be said that defendant-Sunanda can be excluded from succeeding the property of deceased-Anil?

                                     

The para 13, 14 and 15 of the aforesaid judgment is of vital importance:

13] The Division Bench of this Court (Principal Seat) in the case of Sanjay Purushottam Patankar (supra), was pleased to refuse stay to the execution of the order passed in testamentary petition. Succession certificate was granted in favour of the wife (even though she re-married) in respect of estate of deceased husband. Then the mother filed separate petition for grant of succession certificate. She asked for stay of the order passed in first testamentary petition. It was refused by learned Single Judge. It was confirmed by the Division Bench of this Court. The provisions of Section 14 of the Act of 1956 was considered.

 

14] It is very well true that if we have to deal with rights of a particular party, we have to consider the provisions of relevant law in its entirety. Section 14 of the Act of 1956 makes the female Hindu being absolute owner if she possessed the property. Whereas Section 24 of the said Act disinherits the widow if she re-marries. Here this Court wants to note the difference in between the wordings of Section 2 of the Act of 1856 on one hand and the wordings of Section 24 of the Act of 1956. There is emphasis ‘on the date when succession opens’ as per Section 24 of the Act of 1956. The status of the widow being remarried continuing to be widow must be on the date when succession opens. The wordings “if on the date the succession opens” does not find place in Section 2 of the Act of 1856. So, we have to respect the intention of the legislators while incorporating these provisions in Section 24 of the Act of 1956.

 

15] In other words, if the widow has not re-married when the succession opens, the disqualification under Section 24 of the Act of 1956 will not be applicable. Admittedly, defendant-Sunanda re-married in May, 1991 (i.e. after opening of succession on 19th April, 1991). For the above discussion, contention of the appellant so as to disqualify the defendant-Sunanda cannot be accepted. The plaintiff-Jaiwantabai and defendant-Sunanda being class 1 heirs are entitled to get equal share in the property of deceased-Anil. As contemplated under Section 10 of the Act of 1956, the widow (Rule 1) and the mother (Rule 2) of the intestate takes one share each. So both are entitled to get 50% from the property of deceased-Anil”.

 

The substantial question as framed above was thus answered in the affirmative by the high court on the basis of the facts involved in this appeal. It was further held that both wife and the Mother shall be entitled to 50 percent share each on the amount paid by the employer on account of deceased.

In this context, a judgment of Supreme Court in a matter bearing Appeal (Civil) 1323 of 2008(Arising out of SLP (C) No. 236 of 2004)  captioned as Cherotte Sugathan (Died through LR & Ors Vs Cherotte Bharathi & Ors shall be of relevance. It is held as under:

14. The question posed before us is no longer res integra. In Chando Mehtain & Ors. v. Khublal Mahto & Ors. [AIR 1983 Patna 33], the Patna High Court opined :

“ The Hindu Widows Remarriage Act, 1856 has not been repealed by the Hindu Succession Act, 1956 but Section 4 of the latter Act has an overriding effect and in effect abrogates the operation of the Hindu Widows Remarriage Act, 1856. According to Section 4 of the Hindu Succession Act all existing laws whether in the shape of enactments or otherwise shall cease to apply to Hindus in so far as they are inconsistent with any of the provisions contained in this Act. In Kasturi Devi v. Deputy Director of Consolidation [AIR 1976 SC 2595], this Court categorically held that a mother cannot be divested of her interest in the deceased son’s property either on the ground of unchastity or remarriage. Kerala High Court, in Thankam v. Rajan [AIR 1999 Kerala 62], held that remarriage of the wife cannot be a ground for her loosing right to succeed to her deceased husbands property”.

 

“15. Yet again this Court, in Velamuri Venkata Sivaprasad (Dead) by LRs. v. Kothuri Venkateswarlu (Dead) by LRs & Ors. [(2000) 2 SCC 139], held :

“Incidentally, Section 24 of the Succession Act of 1956 placed certain restrictions on certain specified widows in the event of there being a remarriage; while it is true that the section speaks of a pre-deceased son or son of a pre-deceased son but this in our view is a reflection of the Shastric law on to the statute. The Act of 1956 in terms of Section 8 permits the widow of a Hindu male to inherit simultaneously with the son, daughter and other heirs specified in Class I of the Schedule. As a matter of fact she takes her share absolutely and not the widows estate only in terms of Section 14. Remarriage of a widow stands legalised by reason of the incorporation of the Act of 1956 but on her remarriage she forfeits the right to obtain any benefit from out of her deceased husband’s estate and Section 2 of the Act of 1856 as noticed above is very specific that the estate in that event would pass on to the next heir of her deceased husband as if she were dead. Incidentally, the Act of 1856 does not stand abrogated or repealed by the Succession Act of 1956 and it is only by Act 24 of 1983 that the Act stands repealed. As such the Act of 1856 had its fullest application in the contextual facts in 1956 when Section 14(1) of the Hindu Succession Act was relied upon by Defendant. We respectfully agree with the said view”.

 

The aforesaid judgments and its recitations leaves no room of doubt that succession opens only on the day of death of a person and status of the parties as regards his/her being living for inheritance on that day or status as regards re-marriage as on that day itself shall be of relevance. The catena of judgments having been referred to above and interpretation thereof in very unambiguous terms, elucidates that the remarriage by a woman after the death of her husband shall not disentitle the widow from inheriting the estate of deceased and the terms of Hindu Succession Act 1956 as amended and up to date shall apply completely.

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                                  Anil K Khaware

Founder & Senior Associate

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