The Calcutta High Court recently comprising of a bench of Justices Harish Tandon. & Kausik Chanda observed that consideration of property shall only pass to a stranger in the absence of a heir having a preferential right u/s 22 of the Hindu Succession Act, 1956. (Pabitra Kumar Maity v Shyamali Manna)
An interesting, important and significant point was raised in the instant appeal as to whether the gift of an immovable property to a stranger to the exclusion of the other heirs of Class-I can be regarded as a transfer before the High Court.
Facts of thr case
The plaintiff/appellant filed suit for declaration, permanent injunction and preferential right to acquire the property in the 2nd Court of the Civil Judge. Originally, the larger property comprised in Schedule ‘Kha’ belong to Subhendu Kumar Maity , Joykrishna Maity and Ajay Krishna Maity. On the death of the respective owners, the heirs and legal representatives inherited the said “Kha” Schedule Property and subsequently executed a partition deed on 19.7.2002. Subsequently, a deed of gift was executed and registered on 16.4.2015 by the Defendant no. 2 in favour of the Defendant no. 1 bequeathing some other properties, described in Schedule ‘Ka/1’ to the plaint with an intent to avoid the right of pre-emption. The Trial Court held the nature of the transfer contemplated under Section 22 of the said Act is not applicable to the transaction of gift which is without consideration and negatived the claim of the plaintiff in this regard. Therefore the present appeal.
Contention of the Parties
The Advocate appearing for the appellant submitted that the decision of the Trial Court in holding that the gift does not attract the provision of Section 22(1) of the said Act is misconceived. According to him, Section 122 of the Transfer of Property Act, defining the gift clearly stipulates that it is a mode of transfer having two essential characteristics namely that it is made voluntarily and without consideration. Mr. Dutt, arduously submits that the Transfer of Property Act defining Section 5 of Transfer of Property Act means an Act by which a living person conveys property in present or future to one or more living person or to himself or to one or more other living person and , therefore, the gift cannot be excluded from the purview of the transfer contemplated under Section 22(1) of the Hindu Succession Act.
The Senior Advocate appearing for the Defendant no. 1/Respondent no. 1 submitted that the harmonious interpretation of the language employed in sub-Section (1), (2) and (3) of Section 22 of the Hindu Succession Act, 1956 leads to a clear stipulation that the quantification of consideration is the essential element to attract others provisions and any other incident of transfer like gift which admittedly lacks consideration is outside the purview of the said mischief provision. He further submitted that the expression ‘proposes to transfer his or her interest in the property’ has to be understood to proper mean and include an intended transfer and not otherwise. According to him, the aforesaid expression conveys a clear legislative intention that before the transfer actually takes place the intention to transfer should be manifested which includes an agreement for transfer which is conspicuously absent in the parlance of a gift.
Courts Observation & Judgment
The bench refereed to the case of Madanlal Vs. Prema Das AIR 2008 wherein it was held that the interpretation of the said expression involved the incident of the underlying legislative intent. The Court held that it is imperative upon the co-sharer proposing to transfer his share in the immovable property to the outsider to offer the same to the other co-sharer first before embarking its journey by selling his share to the outside.
The bench noted that section 2 should be interpreted when the court deprives a stranger to the property acquiring an interest by way of a gift and such right is being vested upon the heir specified in Class-I of the Schedule. It is anomalous when a co-sharer who gifted the property and the done who received the property shall not be entitled to any consideration if the property by the operation of the law is directed to be given to the co-sharer or the heir is specified in Class-I of the Schedule.
The proper meaning which can be assigned to sub-Section(2) of Section 22 is the moment the Court finds that an heir is entitled to a preferential right under sub-Section(1), in absence of any agreement, the consideration so determined shall pass to the stranger purchaser. Any other interpretation would render the provision otiose and redundant. The word ‘transfer’ has to be given a pragmatic meaning and not in conjunction with the consideration appearing in subsection (2) of Section 22 of the Act. If any restrictive meaning of the word transfer is given, it would be a premium to the heir divesting his right by way of a gift to wriggle out of mischief of the provision contained in sub-Section(1) of Section 22 of the Act.
The court remarked, “We, thus, held that even a gift being the transfer comes within the ambit of Section 22 of the Act and the heir coming within Class-I of the Schedule is entitled to preferential right. So far as the concluded transfer is concerned, we do not find any restriction having put under Section 22 to have its restricted applicability in case of proposed transfer if the transfer has been affected without his knowledge, still the heir can maintain the proceeding invoking the preferential right enshrined under Section 22 of the Act. We thus modifying the decree of the Trial Court to the extent that plaintiff has a preferential right in respect of Ka(1) Schedule Property.”
The bench dismissing the appeal remarked, “In view of the modification of the decree, the matter is remitted to the Trial Court for determining the market price of the share in respect of the immovable property acquired by the defendant by way of a gift and such determination shall be made after affording an opportunity of the hearing to the respective parties. The appeal is thus disposed of.”
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