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Property

  1. Can a foreign citizen hold any immovable property in India?

    Can a foreign citizen hold any immovable property in India? This is the question often raised by Non Resident Indians. Several Indians owning property in India and desirous of settling their property in favour of their sons, daughters and grand children who are citizens of another country also raise this question quite often. Section 31 (1) of the Foreign Exchange Regulation Act, 1973 categorically states that no person who is not a citizen of India shall, except with the previous general or special permission of the Reserve Bank of India, acquire or hold or transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise any immovable property situate in India. The only exception is acquisition or transfer of any such immovable property by way of lease for a period not exceeding five years. The dictionary meaning of the word “hold” as given in The Shorter Oxford English Dictionary is “ to have or keep as one’s own; to own as property; to be in possession or enjoyment of”. Therefore it is clear that a foreign national cannot hold any immovable property situate in India whatever is the means by which the said property comes to him. Now the question is: If some one purchases any property in India in contravention of the said statutory provision, will he acquire a valid title to the property? The above said Section 31 (1) does not provide that if some one purchases any property the title therein does not pass to him. What the Act provides is that if a person contravenes Section 31 and some other Sections, he can be penalized under Section 50 and can also be prosecuted under Section 56. However there is no provision in the Act which makes transaction void or says that no title in the property passes to the purchaser in case there is a contravention of the provision of Section 31 (1). Section 63 contains a proviso regarding confiscation of certain properties but it does not contain any provision for confiscation if there is a breach of Section 31 (1). Therefore the property purchased or acquired in any manner whatsoever in contravention of Section 31 (1) is also not liable to confiscation. It is therefore clear that if a person contravenes the provisions of Section 31 he can be penalized under Sections 50 and 56, but it will not invalidate the passing of title to the purchaser of the property and he can have a valid title to the property even if there is a violation of the provisions of the Foreign Exchange Regulation Act and it is for the concerned authorities to take action against him if there is any violation of the said Act.

  2. What are the rights of women to property under the Hindu law?

    In theory, in the ancient times, the woman could hold property but in practice, in comparison to men’s holding, her right to dispose of the property was qualified, the latter considered by the patriarchal set up as necessary, lest she became too-independent and neglect her marital duties and the management of household affairs. This was the situation prior to 1937 when there was no codified law. The Hindu Women’s Right to Property Act, 1937 was one of the most important enactments that brought about changes to give better rights to women. The said Act was the outcome of discontent expressed by a sizeable section of society against the unsatisfactory affairs of the women’s rights to property. Even the said Act did not give an absolute right to women. Under the said Act a widow was entitled to a limited interest over the property of her husband – what was to be termed as Hindu widow’s estate. The Act was amended in 1938 to exclude the widow from any interest in agricultural land.

    The Hindu Succession Act, 1956 introduced many reforms and it abolished completely the essential principle that runs through the estate inherited by a female heir, that she takes only a limited estate. The Supreme Court put a lot of controversy at rest by holding that the woman becomes the absolute owner under Section-14 of the Hindu Succession Act, 1956. The object of Section 14 is two-fold : (1) to remove the disability of a female to acquire and hold property as an absolute owner and (2) to convert the right of woman in any estate held by her as a limited owner into an absolute owner. The provision was retrospective in the sense that it enlarged the limit of the estate into an absolute one even if the property was inherited or held by the woman as a limited owner before the Act came into force. Any property acquired under the 1937 Act held in capacity of a limited owner was now converted to her absolute estate. The Hindu Succession Act, 1956 abrogates all the rules of the law of succession hitherto applicable to Hindus whether by virtue of any text or rule of Hindu law or any custom or usage having the force of laws in respect of all matters dealt with in the Act. Therefore no woman can be denied property rights on the basis of any custom, usage or text and the said Act reformed the personal law and gave woman greater property rights. The daughters were also granted property rights in their father’s estate.

    Under Section 8 of the Hindu Succession Act, 1956 the property of a male Hindu dying intestate (that is, without leaving any testamentary instrument like will, settlement etc.,) shall devolve on his son, daughter, widow, mother, son of a predeceased son, daughter of a predeceased son, son of a predeceased daughter, daughter of a predeceased daughter, widow of a predeceased son, son of a predeceased son of a predeceased son, daughter of a predeceased son of a predeceased son, widow of a predeceased son of a predeceased son. Thus female heirs were granted property rights in the estate of the deceased male Hindu.

    The above said Section applies to the self acquired property or the separate property of a male Hindu.

    However Section-6 of the Act clearly states that in the case of joint family property, known as coparcenary property, the interest of a male Hindu, on his death, would devolve by survivorship upon the surviving members of the coparcenary and not in accordance with the above said provision. Coparcenary consists of grandfather, father, son and son’s son. However, if the deceased had left him surviving a female relative (daughter, widow, mother, daughter of a predeceased son, widow of a predeceased son, daughter of a predeceased son of a predeceased son, widow of a predeceased son of a predeceased son) the interest of the deceased in the coparcenary shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship. For example, A (who had an interest in the coparcenary property) dies leaving behind him his 2 sons B & C and a daughter D. When he was alive, B & C (sons) were members of the coparcenary and D (daughter) was not a member of the coparcenary. On the death of A, his daughter D will get only 1/3 share in the 1/3 share of her father in the coparcenary property. It means the sons B & C will get 1/3 +1/9 each where as the daughter D will get only 1/9 share in the property.

    Under Section 23 of the Hindu Succession Act, 1956, where a Hindu intestate has left surviving him or her both male and female heirs and his or her property includes a dwelling house, wholly occupied by members of his or her family, the right of any such female heir to claim partition of the dwelling house shall not arise until the male heirs choose to divide their respective share therein; but the female heir shall be entitled to a right of residence therein; Provided that where such female heir is a daughter, she shall be entitled to a right of residence in the dwelling-house only if she is unmarried or has been deserted by, or has separated from, her husband or is a widow.

    No doubt, the above provisions of the Hindu Succession Act, 1956 are gender discriminatory. To remove the said gender discriminatory provisions the Hindu Succession (Amendment) Act, 2005 was enacted and the said Act came into force on 9th September, 2005 and it gives the following rights to daughters:

    In a Joint Hindu family the daughter of a coparcener shall,-

    (a) by birth become a coparcener in her own right in the same manner as the son; (b) have the same rights in the coparcenary property as she would have had if she had been a son; (c) be subject to the same liabilities in respect of the said coparcenary property as that of a son, and any reference to a Hindu coparcener shall be deemed to include a reference to a daughter of a coparcener:

    Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and (a) the daughter is allotted the same share as is allotted to a son; (b) the share of the pre-deceased son or a pre-deceased daughter, as they would have got had they been alive at the time of partition, shall be allotted to the surviving child of such pre-deceased son or of such pre-deceased daughter; and (c) the share of the pre-deceased child of a pre-deceased son or of a pre-deceased daughter, as such child would have got had he or she been alive at the time of the partition, shall be allotted to the child of such pre-deceased child of the pre-deceased son or a pre-deceased daughter, as the case may be.

    The above mentioned provision under Section 23 of the Hindu Succession Act, 1956 relating to right of residence in dwelling houses has been omitted under the Hindu Succession (Amendment) Act, 2005.

    Thus gender discrimination has been removed to a larger extent by the 2005 Act. Now, daughters can claim equal right in the self acquired/separate property and also coparcenary property left by their father.

  3. What are the rights of Non Resident Indians to buy, hold or sell property in India?

    Definition of NRI and PIO

    Non-Resident Indian (NRI) is a citizen of India but a resident outside India. ‘Person of Indian Origin' (PIO) means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who at any time, held an Indian Passport or who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

    Acquisition of immovable property in India by NRIs / PIOs is regulated in terms of Section 6 (3) (i) of the Foreign Exchange Management Act (FEMA), 1999 and the regulations made thereunder from time to time.

    Purchase of immovable property

    Under the general permission available, Non-Resident Indian (NRI) and Person of Indian Origin (PIO) can purchase immovable property in India. The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land / plantation property / farm house in India. In other words, NRI/PIO cannot acquire agricultural land/ plantation property / farm house in India. However, a person who had bought the agricultural land/ plantation property / farm house in India when he was a resident, can continue to hold the immovable property without the approval of the Reserve Bank even after becoming an NRI/PIO. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank. There are no restrictions on the number of residential / commercial properties that can be purchased. Payment can be made by NRI / PIO out of (a) funds remitted to India through normal banking channels or (b) funds held in NRE / FCNR (B) / NRO account maintained in India. No payment can be made either by traveler’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.

    Sale of immovable property

    NRIs can sell property in India to i) a person resident in India; or ii) an NRI; or (iii) a PIO. PIOs can sell property in India to i) a person resident in India; or ii) an NRI; or iii) a PIO ( with the prior approval of the Reserve Bank). An NRI / PIO may sell agricultural land /plantation property/farm house (already owned by him) to a person resident in India who is a citizen of India. The sale proceeds may be credited to NRO account of the NRI /PIO. From the balance in the NRO account, NRI/PIO may remit abroad up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes.

    Inheritance of immovable property:

    NRIs and PIOs can inherit and hold immovable property in India from a person who is resident in India. However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek prior approval of the Reserve Bank for inheriting immovable property in India. NRIs/PIOs can sell such inherited property. General permission is available to the NRIs/PIOs to repatriate the sale proceeds of the immovable property inherited from a person resident in India subject to the following conditions: (i) the amount should not exceed USD one million, per financial year (ii) this is subject to production of documentary evidence in support of acquisition / inheritance of assets and an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.4/2009 dated June 29, 2009 (iii) in cases of deed of settlement made by either of his parents or a close relative (as defined in section 6 of the Companies Act, 1956) and the settlement taking effect on the death of the settlor ) the original deed of settlement and a tax clearance / No Objection Certificate from the Income-Tax Authority should be produced for the remittance (iv) where the remittance as above is made in more than one installment, the remittance of all such installments shall be made through the same Authorised Dealer.

    Acquiring immovable property by Gift, Settlement etc.

    NRIs and PIOs can freely acquire immovable property by way of gift either from i) a person resident in India; or ii) an NRI; or iii) a PIO. However, the property can only be commercial or residential in nature. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift. The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes. NRI / PIO may gift residential / commercial property to (i) person resident in India or (ii) an NRI or (iii) PIO. However NRI / PIO can gift an agricultural land / a plantation property / a farm house in India (already owned by him as explained above) only to a person resident in India who is a citizen of India.

    Lease of Immovable Property

    NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRI/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.

    Mortgage of Immovable Property

    NRI / PIO can mortgage a residential / commercial property to (a) an Authorised Dealer / Housing Finance Institutions in India without the approval of Reserve Bank (b) a bank abroad, with the prior approval of the Reserve Bank.

  4. Are "benami" transactions valid in India?

    Whenever a property has been purchased by one person for which consideration has been paid or provided by another person, the said transaction is considered to be a “benami” transaction. The proposition of law regarding the ownership of any property would be that the person in whose name the property has been purchased is presumed to be the real owner of the property and the burden of proving the transaction as benami is on the person who asserts that the property was purchased through the funds provided by him. Property means property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property. The Benami Transactions (Prohibition) Act, 1988 is a piece of prohibitory legislation and it prohibits benami transactions subject to stated exceptions. Sections 3,5,8 of the Act came into force on 5-9-1988 and the remaining sections came into force on 19-05-1988.

    The object of the Benami Transaction (Prohibition) Act, 1988 is to vest ownership rights in benamidar as against the real owner. The benamidar before the enactment of Benami Transactions (Prohibition) Act, 1988 could not have any right, title and interest in the property which the benamidar could convey. Before the Benami Transactions (Prohibition) Act, 1988 was passed, two kinds of transaction were recognized by the courts in India. The first kind of benami transaction was called the real benami transaction in which when ‘A" sells a property to ‘B’ but the sale deed mentions ’C’ as the purchaser. Here the real owner is ‘B’ and ‘C’ is only the benamidar. The second class or kind of transaction is the sham transaction in which one person purports to transfer his property to another without intending to pass the title to the transferee. This second type of transaction was ‘loosely’ called benami transaction. In the first type of transaction, since there are three persons involved, it is also referred as tripartite benami transaction. The fundamental difference between the two categories of transactions is that in the former there is an operative transfer resulting in the vesting of title in the transferee, whereas in the latter there is no operative transfer and the transferor continues to retain title of the property notwithstanding execution of the documents;

    Section 3 of the Act reads as follows:-

    “3. Prohibition of benami transactions-

    (1) No person shall enter into any benami transaction.

    (2) Nothing in sub-section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter.

    (3) Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.”

    Therefore, purchase of property by any person in the name of his wife or unmarried daughter for the benefit of the wife or the unmarried daughter is not prohibited under the Act. There is a rebuttable presumption that the property had been purchased for the benefit of the wife or unmarried daughter. If the concerned person does not let in any satisfactory evidence to rebut the presumption that the property was purchased for the benefit of the wife or unmarried daughter, the transaction cannot be treated as a benami transaction and he cannot be held to be the real owner. If he fails to prove that the property was purchased not for the benefit of the wife or unmarried daughter he cannot claim that he is the owner of the property.

    To prove benami the following aspects should be considered:

    (1) the source from which the purchase money came

    (2) the nature and possession of the property after the purchase

    (3) motive, if any, for giving the transaction a benami colour

    (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar

    (5) the custody of the title deeds after the sale

    (6) the conduct of the parties concerned in dealing with the property after the sale.

    Section 4 of the Act reads as follows:-

    “(1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.

    (2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.”

    Therefore, on coming into force of the Benami Transactions (Prohibition) Act, 1988 defence raised for the proof of the fact that the property held by a person is in the capacity of a benamidar is expressly prohibited. Neither the court is permitted in law to consider such defence nor to record its findings.

     

     

  5. What rights do daughters have in ancestral property?

    The Hindu Succession  Act, 1956 is an Act to codify the law relating to intestate succession among Hindus. Intestate succession means succession to property left by a Hindu without any testamentary instrument like Will, Settlement etc. The Act brought about important changes in the law of succession but without affecting the special rights of the members of a coparcenary.  Coparcenary consists of  a male Hindu, his son,  grand son (son’s son) and great grand son (son’s son’s son).  Daughters were excluded from succession to coparcenary property. The law by excluding the daughter from participating in the coparcenary ownership not only contributed to her discrimination on the ground of  gender but also led to oppression and negation of her fundamental right of equality guaranteed under Article 226 of the Constitution of India.  Parliament felt that non inclusion of daughters in the coparcenary property was causing discrimination to them and accordingly decided to bring in necessary changes in the law.  Accordingly Section-6 of the Hindu Succession Act, 1956 was substituted by a new provision vide the Hindu Succession (Amendment) Act, 2005 as follows:'6. Devolution of interest in coparcenary property.-(1) On and from the commencement of the Hindu Succession (Amendment) Act, 2005, in a Joint Hindu family governed by the Mitakshara law, the daughter of a coparcener shall,- (a) by birth become a coparcener in her own right in the same manner as the son; (b) have the same rights in the coparcenary property as she would have had if she had been a son; (c) be subject to the same liabilities in respect of the said coparcenary property as that of a son, and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener: Provided that nothing contained in this sub-section shall affect or invalidate any disposition or alienation including any partition or testamentary disposition of property which had taken place before the 20th day of December, 2004. (2) Any property to which a female Hindu becomes entitled by virtue of sub-section (1) shall be held by her with the incidents of coparcenary ownership and shall be regarded, notwithstanding anything contained in this Act, or any other law for the time being in force, as property capable of being disposed of by her by testamentary disposition. (3) Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,- (a) the daughter is allotted the same share as is allotted to a son; (b) the share of the pre-deceased son or a pre-deceased daughter, as they would have got had they been alive at the time of partition, shall be allotted to the surviving child of such pre-deceased son or of such pre-deceased daughter; and (c) the share of the pre-deceased child of a pre-deceased son or of a pre-deceased daughter, as such child would have got had he or she been alive at the time of the partition, shall be allotted to the child of such pre-deceased child of the pre-deceased son or a pre-deceased daughter, as the case may be.

     

    Explanation.- For the purposes of this sub-section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not. (4) After the commencement of the Hindu Succession (Amendment) Act, 2005, no court shall recognise any right to proceed against a son, grandson or great-grandson for the recovery of any debt due from his father, grandfather or great-grandfather solely on the ground of the pious obligation under the Hindu law, of such son, grandson or great-grandson to discharge any such debt: Provided that in the case of any debt contracted before the commencement of the Hindu Succession (Amendment) Act, 2005, nothing contained in this sub-section shall affect- (a) the right of any creditor to proceed against the son, grandson or great-grandson, as the case may be; or (b) any alienation made in respect of or in satisfaction of, any such debt, and any such right or alienation shall be enforceable under the rule of pious obligation in the same manner and to the same extent as it would have been enforceable as if the Hindu Succession (Amendment) Act, 2005 had not been enacted.

     

    Explanation.-For the purposes of clause (a), the expression "son", "grandson" or "great-grandson" shall be deemed to refer to the son, grandson or great-grandson, as the case may be, who was born or adopted prior to the commencement of the Hindu Succession (Amendment) Act, 2005.  

     

     

    (5) Nothing contained in this section shall apply to a partition, which has been effected before the 20th day of December, 2004".        The new Section 6 provides for parity of rights in the coparcenary property among male and female members of a joint Hindu family on and from 09-09-2005.  Thus on and from 09-09-2005 the daughter is entitled to a share in the ancestral property and is a coparcener as if she had been a son.  The States of Tamil Nadu,  Andhra Pradesh, Karnataka  and Maharashtra  made necessary changes in the law giving equal rights to daughters in the ancestral property by enacting State amendments and in these states the daughters have been provided parity of rights in the co-parcenary property with effect from the dates notified by the said State amendments.  The effective dates are:- Tamil Nadu(25-03-1989),  Andhra Pradesh (5-9-1985)  Karnataka (30-07-1994) and Maharashtra (22-06-1994).  The State of Kerala abolished the joint family system by enacting the Kerala Joint Hindu Family System (Abolition) Act. 1975 with effect from 1-12-1976.

            The right accrued to a daughter in the ancestral property, by virtue of the Amendment  Act, 2005 is absolute, except in the circumstances provided in the amended Section-6.  The excepted categories to which new Section-6 is not applicable are two, namely, (1)  where the disposition or alienation including any partition which took place before 20-12-2004 and (2) where testamentary disposition of the property was made before 20-12-2004.

  6. Can the property of a minor be alienated by his guardian?

          Whether the property of a minor can be alienated by his guardian? This is the issue dealt with in this Article. Who is a Minor? Section 4 (a) of the Hindu Minority and Guardianship Act, 1956 defines a Minor as “a person who has not completed the age of eighteen years”. Under Section-6 of the said Act, the natural guardians of a Hindu minor, in respect of the minor's person as well as in respect of the minor's property (excluding his or her undivided interest in joint family property) are -

    “(a) in the case of a boy or an unmarried girl—the father, and after him, the mother: provided that the custody of a minor who has not completed the age of five years shall ordinarily be with the mother;

    (b) in the case of an illegitimate boy or an illegitimate unmarried girl - the mother, and after her, the father;

    (c) in the case of a married girl - the husband;

    Provided that no person shall be entitled to act as the natural guardian of a minor under the provisions of this section—

    (a) if he has ceased to be a Hindu, or

    (b) if he has completely and finally renounced the world by becoming a hermit (vanaprastha) or an ascetic (yati or sanyasi)

    Explanation.—In this section, the expressions 'father' and 'mother' do not include a step-father and a step-mother”.

    Under Section-7 of the said Act, the natural guardianship of an adopted son who is a minor passes, on adoption, to the adoptive father and after him to the adoptive mother. Under Section-8 (2) of the Act, the natural guardian shall not, without the previous permission of the court,—

    (a) mortgage or charge, or transfer by sale, gift, exchange or otherwise any part of the immovable property of the minor or

    (b) lease any part of such property for a term exceeding five years or for a term extending more than one year beyond the date on which the minor

    will attain majority.

    No court shall grant permission to the natural guardian to do any of the acts mentioned above except in case of necessity or for an evident advantage to the minor. Now, the question is whether any alienation made by a natural guardian without previous permission of the court is illegal for ever. Under Section 8 (3) any disposal of immovable property by a natural guardian, in contravention of the above provisions is voidable at the instance of the minor or any person claiming under him. Therefore the alienation is not void but it is voidable at the instance of the minor or any person claiming under him. If the minor, on attaining majority (18 years) chooses not to challenge the alienation, the alienation will be perfectly valid. But, on the other hand, if he challenges the alienation, the validity of the alienation will be decided by the court. However, such a challenge should be made within 3 years after the attainment of majority. Any suit to set aside an alienation of minor’s property by the guardian filed more than three years after the attainment of majority is barred under Section-60 of the Limitation Act. Therefore the alienation cannot be challenged by a minor after three years from the attainment of majority.

    In some cases, it may so happen that the elder son did not challenge the alienation within three years after attainment of majority but the younger son challenges within three years. In other words, the suit filed by the younger son is within three years. The question is whether the suit filed by the younger son (within three years of attainment of majority) is maintainable. Section-7 of the Limitation Act states as follows:-

    “Where one of several persons jointly entitled to institute a suit or make an application for the execution of a decree is under any such disability, and a discharge can be given without the concurrence of such person, time will run against them all; but, where no such discharge can be given, time will not run as against any of them until one of them becomes capable of giving such discharge without the concurrence of the others or until the disability has cased.

    Explanation I - This section applies to a discharge from every kind of liability, including a liability in respect of any immovable property.

    Explanation II - For the purposes of this section, the manager of a Hindu undivided family governed by the Mitakshara law shall be deemed to be capable of giving a discharge without the concurrence of the other members of the family only if he is in management of the joint-family property”

    The Full Bench of the Madras High Court has held that the claim being a joint claim and the suit having been brought more than three years after the attainment of majority by the elder brother (who was the manager of the joint family, competent to give discharge) the claim was barred by limitation even in respect of the share of the younger brother who had not yet completed 21 years. Therefore if the eldest male member and Manager of the Hindu Undivided Family does not file a suit within three years after his attainment of majority, he cannot do it after three years and the said disability would extend to the other younger members of the joint family also and they are barred from bringing any suit. This is because as the eldest member and manager, he is deemed to be capable of giving a discharge without the concurrence of the other members of the family.

     

     

     

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Marriage

  1. When persons belonging to different castes marry, what happens to their caste status?

        

    When persons belonging to different castes marry, what happens to their caste status? What will be the caste status of their children? Whether a woman belonging to a forward community and marrying a Scheduled Caste/Scheduled Tribe/OBC citizen becomes entitled to claim reservation under the SC/ST/OBC quota?

    The issue "If a woman who by birth belongs to a scheduled caste or a scheduled tribe marries to a man belonging to a forward caste, whether on marriage she ceases to belong to the scheduled caste or the scheduled tribe?" came up for consideration before the Full Bench of the Bombay High Court in Rajendra Shrivastava vs. State of Maharashtra, (2010) 112 Bom LR 762 and the Full Bench held as follows:-

     

    "When a woman born in a scheduled caste or a scheduled tribe marries to a person belonging to a forward caste, her caste by birth does not change by virtue of the marriage. A person born as a member of a scheduled caste or a scheduled tribe has to suffer from disadvantages, disabilities and indignities only by virtue of belonging to the particular caste which he or she acquires involuntarily on birth. The suffering of such a person by virtue of caste is not wiped out by a marriage with the person belonging to a forward caste. The label attached to a person born into a scheduled caste or a scheduled tribe continues notwithstanding the marriage. No material has been placed before us by the applicant so as to point out that the caste of a person can be changed either by custom, usage, religious sanction or provision of law."

     

     

    The Hon'ble Supreme Court of India in Rameshbhai Dabhai Naika Vs State of Gujarat & Others ( CIVIL APPEAL NO. 654 OF 2012- Decided on January 18, 2012) was pleased to endorse the above view of the Full Bench Judgment of the Bombay High Court. The Supreme Court was also pleased to observe that the view expressed earlier by the Supreme Court in Valsamma judgment that in an inter-caste marriage or a marriage between a tribal and a non-tribal the woman must in all cases take her caste from the husband, as a rule of Constitutional Law is a proposition, the correctness of which is not free from doubt."

     

     

    However, the question is: Whether a woman marrying a Scheduled Caste/Scheduled Tribe/OBC citizen becomes entitled to claim reservation under the SC/ST/OBC quota? The answer is: No. The Supreme Court of India has held that a candidate who had the advantageous start in life being borne in a forward community and had march of advantageous life but is transplanted in backward class by adoption, marriage or conversion does not become eligible to the benefits of reservation.

     

     

    What will be the caste of the children? The question of the status of a child born to a scheduled tribe mother from a forward caste father came up for consideration before the Hon'ble Supreme Court of India in Rameshbhai Dabhai Naika Vs State of Gujarat & Others ( CIVIL APPEAL NO. 654 OF 2012- Decided on January 18, 2012) and the Supreme Court held as follows:-

     

     

     

    "In an inter-caste marriage or a marriage between a tribal and a non-tribal there may be a presumption that the child has the caste of the father. This presumption may be stronger in the case where in the inter-caste marriage or a marriage between a tribal and a non-tribal the husband belongs to a forward caste. But by no means the presumption is conclusive or irrebuttable and it is open to the child of such marriage to lead evidence to show that he/she was brought up by the mother who belonged to the scheduled caste/scheduled tribe. By virtue of being the son of a forward caste father he did not have any advantageous start in life but on the contrary suffered the deprivations, indignities, humilities and handicaps like any other member of the community to which his/her mother belonged. Additionally, that he was always treated a member of the community to which her mother belonged not only by that community but by people outside the community as well. In the case in hand the tribal certificate has been taken away from the appellant without adverting to any evidences and on the sole ground that he was the son of a Kshatriya father. The orders passed by the High Court and the Scrutiny Committee, therefore, cannot be sustained. The orders passed by the High Court and the Scrutiny Committee are, accordingly, set aside and the case is remitted to the Scrutiny Committee to take a fresh decision on the basis of the evidences that might be led by the two sides. "

     

     

    The above mentioned decisions of the Hon'ble Supreme Court of India provide the answers to the questions mentioned at the beginning of this post.


  2. Can the right of the wife to initiate matrimonial proceedings before a Family Court in India be defeated on account of foreign citizenship of the husband or his domicile in another country?

    Can the right of the wife to initiate matrimonial proceedings before a Family Court in India be defeated on account of foreign citizenship of the husband or his domicile in another country? In other words, do the Family Courts in India have jurisdiction to pass divorce decrees or decrees of other types (alimony, judicial separation etc.,) against persons who have been granted citizenship of another country on his/her migration to the said country?

    To cite an example, an Indian Citizen migrated to the United States of America and on his migration he was granted US Citizenship. His wife, before the marriage was residing adjacent to his residence and their marriage was solemnized in the year 2002. The marriage was conducted in accordance with the Hindu Rites and Customs in the Balaji Temple at New Jersey, USA. The parties were living happily as husband and wife. Subsequently, in the year 2003, the wife came to India for a short visit promising to return after completing her dance program. However, all of a sudden she changed her mind and contrary to the promise made, began to act in films with no idea of returning to the United States. She then filed a divorce petition before the Principal Family Court, Chennai on the ground of cruelty. The husband was not aware of the proceedings initiated at Chennai since summons were not served on him. However, an ex-parte order of divorce was granted by the Family Court, Chennai. On coming to know of the said decree the husband engaged a lawyer at Chennai and filed a petition to set aside the ex-parte decree. The ex-parte decree was set aside and the husband filed his counter in the original petition filed by his wife and opposed her plea. He also filed a Writ Petition in the High Court, Madras contending that the Family Court at Chennai has no jurisdiction to entertain the divorce proceedings, as he is a citizen of the US and a permanent resident in the said country and therefore the Family Court proceedings at Chennai was one without jurisdiction and he prayed for a direction to the Family Court to refrain from taking up the matrimonial proceedings.

    The moot question to be decided is as to whether the Indian Courts have jurisdiction to take up matrimonial proceedings involving two Hindus governed by the Hindu Marriage Act even in cases where the opposite party is a foreign national having his domicile outside India.

    Section 19 of the Hindu Marriage Act was amended in the year 2003 and with effect from 23-12-2003 the wife is entitled to file a matrimonial petition before the District Court in whose territorial jurisdiction she is residing. Prior to this amendment, women were compelled to approach the courts in whose jurisdiction the marriage was solemnized or the husband resides or the parties to the marriage last resided together. Now she can file a petition in the local court within whose jurisdiction she is residing, no matter where the husband resides.

    The High Court decided that the domicile or citizenship of the opposite party is immaterial in a case like this (mentioned above). In case the marriage was solemnized under the Hindu Law, marital relationship is governed by the provisions of the Hindu Marriage Act and therefore Section 19 referred to above has to be given a purposeful interpretation. It is the residence of the wife, which determines the question of jurisdiction.

    The High Court therefore held that when the marriage was solemnized under the Hindu law, the proceedings for divorce has also to be made under the Hindu Marriage Act and that the Hindu Marriage Act has to given an extended coverage even outside the territory to which the Act extends. The High Court held that the right of the wife to initiate proceedings before the local District Court where she is actually residing cannot be defeated by taking a technical plea that no such proceeding would lie on account of Foreign Citizenship of the husband or his domicile in another country. A great relief to the women seeking divorce against their husbands who are residing in foreign countries as foreign citizens.

  3. Can a court of a foreign country grant any decree of divorce or other matrimonial relief in respect of the marriages performed under the Hindu Marriage Act, 1956?

    Can a court of a foreign country grant any decree of divorce or other matrimonial relief in respect of marriages performed under the Hindu Marriage Act, 1956 and whether such judgments and decrees of foreign courts can be enforced in India? Interesting question!

    In a case before the Supreme Court of India, the marriage took place at Tirupathi in India according to the Hindu law and the parties settled down at New Orleans, Lousiana, USA but they separated after three years. Thereafter the husband moved to Missouri and set up a residence in the State of Missouri. The wife returned to India. The husband filed a petition for dissolution of marriage in the Circuit Court of St. Louis County, Missouri, USA on the ground that his wife deserted him for more than one year and that the marriage was irretrievably broken. The Circuit Court assumed jurisdiction over the matter on the ground that the husband had been a resident of the State of Missouri for over 90 days immediately preceding the date of filing the Petition and passed a decree for dissolution of the marriage in the absence of the wife on the only ground that the marriage was “irretrievable broken”. Thereafter the husband returned to India and married another woman. The first wife filed a criminal complaint against her husband for the offence of bigamy. The husband contended that the first marriage was dissolved by the Circuit Court of St. Louis County, Missouri, USA and therefore he did not commit the offence of bigamy. Accepting his contentions the Magistrate acquitted him. The wife took the matter on appeal to the High Court and the High Court reversed the judgment of the Magistrate on the ground that a Photostat copy of the decree of the Circuit Court of St. Louis County, Missouri was not admissible in evidence to prove the dissolution of marriage. The husband filed an appeal before the Supreme Court of India.

    The Supreme Court of India held that even assuming that the foreign court by its own rules of jurisdiction had rightly entertained the dispute and granted a valid decree of divorce according to its law, it cannot be recognized by the courts in India and therefore unenforceable in India since with regard to the jurisdiction of the forum as well as the ground on which it was passed, the foreign decree is not in accordance with the Hindu Marriage Act under which the parties were married and the wife had not submitted to the jurisdiction of the foreign court or consented to its passing a decree.

    Therefore, the decree of divorce passed by a foreign court in respect of a marriage performed under the Hindu Marriage Act is not enforceable in India and the courts in India shall not recognize such a decree as valid. However, if the wife submits to the jurisdiction of the foreign court and contests the proceedings without raising any objection with regard to the jurisdiction of the foreign court or consents to passing a decree by the foreign court, then such a decree is binding on her. If she does not appear in such proceedings and remains ex-parte, the decree that may be passed in such proceedings is not enforceable in India.

    The message is clear: If your husband initiates any matrimonial proceedings against you in any foreign court in respect of your marriage performed according to the Hindu Marriage Act, do not submit to the jurisdiction of such foreign courts. If you do not submit to the jurisdiction of such a foreign court, its decree will not be binding on you and it cannot be enforced in India and no court in India will recognize such decrees as valid in India.

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DOWRY

  1. Can the provisions of Section 498-A of the Indian Penal Code be misused?

    Violence against women is a phenomenon that cuts across boundaries of culture, class, education, ethnicity and age. The feminist movement of the 70s and 80s made a major contribution in bringing pressure on the Central Government and the Criminal Law Amendment Committee (1982) to provide legislative protection to women against domestic violence and dowry so that the victim gets justice while she is alive. As a result significant amendments were made in the Indian Penal Code, the Indian Evidence Act and the Dowry Prohibition Act, with the intention of protecting women from marital violence, abuse and dowry demands. The most important amendment came in the form of the introduction of Section 498-A in the Indian Penal Code which reads as follows:-

    “Whoever, being the husband or the relative of the husband of a woman, subjects such woman to cruelty shall be punished with imprisonment for a term which may extend to three years and shall also be liable to fine.

    Explanation- For the purpose of this section, "cruelty" means-

    (a) Any willful conduct which is of such a nature as is likely to drive the woman to commit suicide or to cause grave injury or danger to life, limb or health (whether mental or physical) of the woman; or

    (b) Harassment of the woman where such harassment is with a view to coercing her or any person related to her to meet any unlawful demand for any property or valuable security or is on account of failure by her or any person related to her meet such demand.”

    The offence under Section 498-A is cognizable (the accused can be arrested and jailed without warrant or investigation), non-compoundable (the complaint cannot be withdrawn by the petitioner) and non-bailable (the accused must be produced in court for getting bail and he will have to be put behind the bars till bail is granted).

    In several cases, the FIR (complaint given by the wife) is typically an imaginary story, running into many pages, with absolutely no supporting evidence. It typically takes about 3 to 8 years for the accused (husband and his relatives) to prove their innocence in the court. There is no penalty for the misuse of this provision of law and after acquittal of the accused the courts are reluctant to entertain defamation and perjury cases against the falsely testifying witnesses. This has given rise to the formation of Harassed Husbands Associations in various States and also at the All India level. Seminars, Conferences, Processions etc are organized by such Associations to throw light on the harassment suffered by the husbands at the hands of their wives.

    The Supreme Court of India, in Sushil Kumar Sharma vs. Union of India and others, JT 2005(6) 266 was pleased to observe as follows:

    “The object of the provision is prevention of the dowry menace. But as has been rightly contented by the petitioner many instances have come to light where the complaints are not bonafide and have been filed with oblique motive. In such cases acquittal of the accused does not in all cases wipe out the ignominy suffered during and prior to trial. Sometimes adverse media coverage adds to the misery. The question, therefore, is what remedial measures can be taken to prevent abuse of the well-intentioned provision. Merely because the provision is constitutional and intra vires, does not give a licence to unscrupulous persons to wreck personal vendetta or unleash harassment. It may, therefore, become necessary for the legislature to find out ways how the makers of frivolous complaints or allegations can be appropriately dealt with. Till then the Courts have to take care of the situation within the existing frame work. But by misuse of the provision a new legal terrorism can be unleashed. The provision is intended to be used a shield and not an assassin’s weapon. If cry of “wolf” is made too often as a prank, assistance and protection may not be available when the actual “wolf” appears. There is no question of investigating agency and courts casually dealing with the allegations. They cannot follow any straitjacket formula in the matters relating to dowry tortures, deaths and cruelty. It cannot be lost sight of that ultimate objective of every legal system is to arrive at truth, punish the guilty and protect the innocent. There is no scope for any pre-conceived notion or view. It is strenuously argued by the petitioner that the investigating agencies and the courts start with the presumptions that the accused persons are guilty and that the complainant is speaking the truth. This is too wide available and generalized statement. Certain statutory presumptions are drawn which again are rebuttable. It is to be noted that the role of the investigating agencies and the courts is that of watch dog and not of a bloodhound. It should be their effort to see that an innocent person is not made to suffer on account of unfounded, baseless and malicious allegations. It is equally undisputable that in many cases no direct evidence is available and the courts have to act on circumstantial evidence. While dealing with such cases, the law laid down relating to circumstantial evidence has to be kept in view.”

    Justice Malimath Committee on Reforms of Criminal Justice System, Government of India, Ministry of Home Affairs, 2003 observed the following and gave the recommendation to amend the law immediately:

    “16.4.4. In less tolerant impulsive woman may lodge an FIR even on a trivial act. The result is that the husband and his family may be immediately arrested and there may be a suspension or loss of job. The offence alleged being non-bailable, innocent persons languish in custody. There may be a claim for maintenance adding fuel to fire, if the husband cannot pay. She may change her mind and get into the mood to forget and forgive. The husband may realize the mistakes committed and come forward to turn a new leaf for a loving and cordial relationship. The woman may like to seek reconciliation. But this may not be possible due to the legal obstacles. Even if she wishes to make amends by withdrawing the complaint, she can not do so as the offence is non compoundable. The doors for returning to family life stand closed. She is thus left at the mercy of her natal family.

    16.4.5. This section, therefore, helps neither the wife nor the husband. The offence being non-bailable and non compoundable, makes an innocent person undergo stigmatization and hardship. Heartless provisions that make the offence non-bailable and non-compoundable operate against reconciliations. It is therefore necessary to make this offence (a) bailable and (b) compoundable to give a chance to the spouses to come together.”

    Taking cognizance of the increasing number of false complaints being filed under section 498-A of the Indian Penal Code (IPC), the Central Government recently issued directives to the State Governments not to make any immediate arrests but conduct thorough investigations before taking any action. However, it is widely felt that unless women are punished for lodging false complaints, this directive would not help.

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RESERVATION

  1. When a person belonging to Scheduled Caste / Scheduled Tribe of one State migrates to another State what happens to his caste status?

          Scheduled Castes/Scheduled Tribes for each State are indicated in the Notifications issued by the President of India under Article 341 of the Constitution of India for each State. The castes that are notified in such Notifications are treated as Scheduled Caste / Scheduled Tribe in the concerned State. In other words, a caste which is not notified as Scheduled Caste / Scheduled Tribe in the Presidential Notification for the concerned State will not be treated as a Scheduled Caste / Scheduled Tribe in that State even though the very same caste finds a place in the Presidential Notification issued for another State.

           The considerations for specifying a particular caste or tribe or class for inclusion in the list of Scheduled Castes/Scheduled Tribes/Backward Classes in a given State would depend on the nature and extent of disadvantages and social hardships suffered by that caste, tribe or class in that State which may be totally non existent in another State to which persons belonging thereto may migrate. Coincidentally, it may be that a caste or tribe bearing the same nomenclature is specified in two states but the considerations on the basis of which they have been specified may be totally different. So also the degree of disadvantages of various elements which constitute the input for specification may also be totally different. Therefore, merely because a given caste is specified in State – A as s Scheduled Caste does not necessarily mean that if there be another caste bearing the same nomenclature in another State the person belonging to the former would be entitled to the rights, privileges and benefits admissible to a member of the Scheduled caste of the latter State.

            Scheduled Castes and Scheduled Tribes belonging to a particular area of the country must be given protection so long as and to the extent they are entitled in order to become equal with others. But equally those who go to other areas should also ensure that they make way for the disadvantaged and disabled of that part of the community who suffer from disabilities in those areas.

            A Scheduled Caste / Scheduled Tribe person who migrates from the State of his origin to another State in search of employment or for educational purposes or the like, cannot be treated as person belonging to the Scheduled Caste / Scheduled Tribe of the State to which he migrates and hence he cannot claim benefit as such in the latter State. A person belonging to the reserved category in one State cannot ipso facto claim the same benefit on his migration to another State. If a State makes a provision to the effect that the benefit of reservation is extended only to such Scheduled Castes or Scheduled Tribes which are recognized as such in relation to that State then such a provision would be perfectly valid. Therefore, unless the caste of the migrant is notified in the Presidential Notification issued for the State to which he migrates he cannot claim the benefits of reservation in that State.

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ADOPTION

  1. What is the law on Adoption in India?

    In Indian society, a male spouse enjoyed the position of dominance for centuries together. This was particularly so in Hindu families. Under the old Hindu Law, a Hindu male had an absolute right to adopt a male child and his wife did not have the locus to question his right or to object to the adoption. A wife could adopt a son to her husband but she could not do so during her husband’s life time without his express consent. After his death she could adopt a son to him, in certain parts of India, only if he had expressly authorized her to do so. In other parts of India, she could adopt without such authority. However, in no case, a wife or widow could adopt a son to herself. An adoption by a woman married or unmarried of a son to herself was invalid and conferred no legal rights upon the adopted person. A daughter could not be adopted by a male or female Hindu. The physical act of giving was a prime necessity of the ceremonial requirements relating to adoption.

    After India became a sovereign, democratic republic, this position has undergone a sea change. The old Hindu Law has been codified to a large extent on the basis of constitutional principles of equality. The Hindu Marriage Act, 1955 codifies the law on the subject of marriage and divorce. The Hindu Succession Act, 1956 codifies the law relating to intestate succession. The Hindu Minority and Guardianship Act, 1956 codifies the law relating to minority and guardianship among Hindus. The Hindu Adoptions and Maintenance Act, 1956 codifies the law relating to adoptions. The said Act is also a part of the scheme of codification of laws. Once the Hindu Succession Act was passed giving equal treatment to the sons and daughters in the matter of succession it was only logical that the fundamental guarantee of equality of a status and equality before law is recognized in the matter of adoption.

    The 1956 Act, now provides for adoption of boys as well as girls. An adopted child shall be deemed to be the child of his or her adoptive father or mother for all purposes with effect from the date of the adoption and from such date all the ties of the child in the family of his or her birth shall be deemed to be severed and replaced by those created by the adoption in the adoptive family. The child cannot marry any person whom he or she could not have married if he or she had continued in the family of his or her birth and any property which vested in the adopted child before the adoption shall continue to vest in such person subject to the obligations, if any, attaching to the ownership of such property including the obligation to maintain relatives in the family of his or her birth and the adopted child shall not divest any person of any estate which vested in him or her before the adoption. The adopted child should not have completed the age of fifteen years, unless there is a custom or usage applicable to the parties which permits persons who have completed the age of fifteen years being taken in adoption. If the adoption is by a male and the person to be adopted is a female, the adoptive father should be at least twenty one years older than the person to be adopted. If the adoption is by a female and the person to be adopted is a male, the adoptive mother should be at least twenty -one years older than the person to be adopted.

    By virtue of the proviso to Section 7 the consent of wife has been made a condition precedent for adoption by a male Hindu. The mandatory requirement of the wife’s consent enables her to participate in the decision making process which vitally affects the family. If the wife finds that the choice of the person to be adopted by the husband is not appropriate or is not in the interest of the family, then she can veto his discretion. A female Hindu who is of a sound mind and has completed the age of eighteen years can also take a son or daughter in adoption to herself and in her own right. A female Hindu who is unmarried or a widow or a divorcee can also adopt a son to herself, in her own right, provided she has no Hindu daughter or son’s daughter living at the time of adoption. However, is she is married a female Hindu cannot adopt a son or a daughter during the life time of her husband unless the husband is of unsound mind or has renounced the world. A married woman cannot adopt at all during the subsistence of the marriage except when the husband has completely and finally renounced the world or has ceased to be a Hindu or has been declared by a Court of competent jurisdiction to be of unsound mind. If the husband is not under such disqualification, the wife cannot adopt even with the consent of the husband whereas the husband can adopt with the consent of the wife.

    By incorporating the requirement of wife’s consent in the proviso to Section 7 and by conferring independent right upon a female Hindu to adopt a child, Parliament has tried to achieve one of the facets of the goal of equality enshrined in the Preamble and reflected in Article 14 read with Article 15 of the Constitution of India.

    The term “consent” has not been defined in the Act. Therefore, while interpreting these provisions, the Court shall have to keep in view the legal position obtaining before the enactment of the 1956 Act, the object of the new legislation and apply the rule of purposive interpretation and if that is done, it would be reasonable to say that the consent of wife envisaged in the proviso to Section 7 should either be in writing or reflected by an affirmative/ positive act voluntarily and willingly done by her. If the adoption by a Hindu male becomes subject matter of challenge before the Court, the party supporting the adoption has to adduce evidence to prove that the same was done with the consent of his wife. This can be done either by producing document evidencing her consent in writing or by leading evidence to show that the wife had actively participated in the ceremonies of adoption with an affirmative mindset to support the action of the husband to take a son or a daughter in adoption. The presence of wife as a spectator in the assembly of people who gather at the place where the ceremonies of adoption are performed cannot be treated as her consent. In other words, the Court cannot presume the consent of wife simply because she was present at the time of adoption. The wife’s silence or lack of protest on her part also cannot give rise to an inference that she had consented to the adoption.

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LIVE-IN-RELATIONSHIP

  1. Is Live-in-Relationship recognized in India?

    A new social phenomenon has emerged in our country known as “live-in-relationship”. This new relationship is still rare in our country and is sometimes found in big urban cities, but it is very common in North America and Europe. When a wife is deserted, in most countries the law provides for maintenance to her by her husband, which is called “alimony”. However, earlier there was no law providing for maintenance to a woman who was having a live-in- relationship with a man without being married to him and was then deserted by him. In the United States of America, the expression “palimony” was coined which means grant of maintenance to a woman who has lived for a substantial period of time with a man without marrying him, and is then deserted by him. The first decision on palimony was the well-known decision of the California Superior Court in Marvin Vs Marvin. This case related to the famous film actor Lee Marvin, with whom a lady Michelle lived for many years without marrying him and was then deserted by him and she claimed palimony. Subsequently in many decisions of the courts in the US, the concept of palimony has been considered and developed. The US Supreme Court has not given any decision whether there is a legal right to palimony, but there are several decisions of the courts in various States in the US. These courts in the US have given divergent views, some granting palimony, some denying it altogether, and some granting it on certain conditions. Hence in the US, the law is still in a state of evolution on the right to palimony. Although there is no statutory basis for grant of palimony in the US, the courts there which have granted it have granted it on a contractual basis. Some Courts in the US have held that there must be a written or oral agreement between the man and the woman that if they separate the man will give palimony to the woman, while other courts have held that if a man and woman have lived together for a substantially long period without getting married there would be deemed to be an implied or constructive contract that palimony will be given on their separation. A law has now been passed in the year 2010 by the State Legislature of New Jersey that there must be a written agreement between the parties to claim palimony. Thus, there are widely divergent views of the courts in the US regarding the right to palimony. Some States like Georgia and Tennessee expressly refuse to recognize palimony agreements.

    In our country, while enacting the Protection of Women from Domestic Violence Act, 2005 the Parliament has taken notice of this new relationship, that is, live-in- relationship. Section 2(a) of the Act states:

    “2.(a) “aggrieved person” means any woman who is, or has been, in a domestic relationship with the respondent and who alleges to have been subjected to any act of domestic violence by the respondent.”

    Section 2(f) states:

    “2.(f) “domestic relationship” means a relationship between two persons who live or have, at any point of time, lived together in a shared household, when they are related by consanguinity, marriage or through a relationship in the nature of marriage, adoption or are family members living together as a joint family”.

    Therefore, the expression “domestic relationship” includes not only the relationship of marriage but also a relationship “in the nature of marriage”. Unfortunately, this expression has not been defined in the Act.

    Some countries in the world recognize common law marriages. A common law marriage, sometimes called de facto marriage, or informal marriage is recognized in some countries as a marriage though no legally recognized marriage ceremony is performed or civil marriage contract is entered into or the marriage registered in a civil registry. The Supreme Court of India has held that “relationship in the nature of marriage” is akin to a common law marriage. Common law marriages require that although not being formally married:

    (a) The couple must hold themselves out to society as being akin to spouses.

    (b) They must be of legal age to marry

    (c) They must be otherwise qualified to enter into a legal marriage including being unmarried.

    (d) They must have voluntarily, cohabitated and held themselves out to the world as being akin to spouses for a significant period of time.

    The Supreme Court of India has held that “relationship in the nature of marriage” under the Protection of Women from Domestic Violence Act, 2005 must also fulfill the above requirements, and in addition, the parties must have lived together in a “shared household” as defined in Section 2 (s) of the Act. “Shared household” means a household where the person aggrieved lives or at any stage has lived in a domestic relationship either singly or along with the respondent and includes such a household whether owned or tenanted either jointly by the aggrieved person and the respondent or owned or tenanted by either of them in respect of which either the aggrieved person or the respondent or both jointly or singly have any right, title, interest or equity and includes such a household which may belong to the joint family of which the respondent is a member, irrespective of whether the respondent or the aggrieved person has any right, title or interest in the shared household. Merely spending weekends together or a one night stand would not make it a “domestic relationship”.

    An ‘aggrieved person” under the Act can approach the Magistrate under Section 12 for the relief mentioned in Section 12 (2). Under Section 20 (1) (d) the Magistrate can grant maintenance while disposing of the application under Section 12(1). Section 26(1) provides that the relief mentioned in Section 20 may also be sought in any legal proceeding, before a civil court, family court or a criminal court. Thus, a woman who can prove that she has been in a live- in -relationship with a man as explained above can claim maintenance under the Act.

    The Supreme Court of India has said: “In feudal society sexual relationship between man and woman outside marriage was totally taboo and regarded with disgust and horror, as depicted in Leo Tolstoy’s novel Anna Karenina, Gustave Flaubert’s novel Madame Bovary and the novels of the great Bengali writer Sharat Chandra Chattopadhyaya. However, Indian society is changing and this change has been reflected and recognized by Parliament by enacting the Protection of Women from Domestic Violence Act, 2005”.

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CORRUPTION

  1. Can corruption be abolished?

    Anna Hazare’s fast at the Ramlila Grounds has drawn good support from the urban middle class people. Lokpal and Jan Lokpal are the oft-repeated words on the digital media and in the print media. Will such Lokpal or Jan Lokpal put an end to corruption?

    Article 14 of the Constitution of India reads as follows:- “The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India”. This is a fundamental right. Since the guarantee of equal protection embraces the entire realm of “State action” it would extend not only when an individual is discriminated against in the matter of exercise of his rights or in the matter of imposing liabilities upon him, but also in the matter of granting privileges, e.g., granting licences for entering into any business, inviting tenders for entering into a contract relating to Government business, or issuing quotas, giving jobs etc. In all these cases, the principle is the same, viz., that there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is the same or in other words, its action must not be arbitrary but must be based on some valid principle which itself must not be irrational or discriminatory.

    Corruption results in infringement of the above said fundamental right. The moment the said fundamental right is infringed, corruption steps in. For example, if two persons apply for a job, one with 85 per cent marks and the other with 70 per cent marks and if the person with 70 per cent marks is selected for the job, where the marks is the criterion for appointment, then the presumption is the appointing authority has done favour to the person with 70 per cent marks for extraneous considerations. Likewise, in awarding a contract, if a person who offers to do a particular work for the Government at a lower rate is not given the contract and a person who offered to do the same work for a higher rate is given the contract, both the persons standing on the same footing in all other aspects, then the presumption is the person who is awarded the contract has managed to get the contract by bribing the concerned authority. When a person who applies for electricity connection on 1st January by complying with all the requirements is not given the connection and another person who applies for the connection on 1st February is given the connection, the presumption is the latter person bribed the concerned official to get the connection earlier. We can show a large number of such examples.

    All the public authorities must be directed to publish the details on their official website and on their official notice boards. If it is electricity connection, the details must include, the date of application and the date of giving connection. If it is a college admission, the details must include the marks of all selected candidates. If it is a case of public employment the details must include the marks obtained by each candidate in the written examination and in the interview. If it is a case of awarding contracts, the details must include the amounts tendered by all the persons who submitted the tenders. If such details are published on the website and the official notice boards, any person who participated in the process can know whether he has been overlooked for extraneous reasons and considerations. If a person who stands on a better footing than the selected person, then he must be given the right to ask for the reasons for not selecting him and the concerned authority should have the duty to give the reason within a prescribed time limit, say a week or so. If no reason is given by the concerned public authority within the prescribed time limit, the said person should be given the right to lodge a complaint against the concerned public official and a case should be registered against the concerned public official and it should be made a cognizable offence and prosecution much be launched besides taking departmental disciplinary action as per law. On the other hand, if any reason is given by the public official the concerned person can approach a court of law contending that the said reason is unreasonable and contrary to law and the court of law will have to decide on the validity of the selection. If such transparency and enforcement are ensured, it will go a long way in preventing corruption to a large extent.

    Corruption cannot be eliminated if the machinery supposed to eliminate corruption itself is corrupt Therefore it is highly important and absolutely necessary to appoint persons of known integrity and honesty to such posts in a transparent manner. If a member of the Lokpal or Lokayukta is corrupt, what is the point in approaching him complaining of corruption? The recent large scale scams such as CWG scam, 2G scam, etc would have died a natural death but for the active intervention of the Hon’ble Judges of the Supreme Court of India who are known for their integrity and honesty. We can not expect such a course of action from corrupt judges especially when big business houses are involved in such scams.

    No person is above the law. The present requirement of obtaining sanction to prosecute the public servants, including Ministers, should be done away with. It should be left to the concerned court of law to examine whether there is any prima facie case against the concerned public servant and if the court comes to the conclusion that there is a prima facie case the court may direct prosecution and if no prima facie case is made out the court may reject the complaint. The requirement of obtaining sanction from the Governor should be done away with.

    With regard to corruption in the Judiciary, a National Judicial Commission should be set up to examine all complaints against the judges of the higher judiciary and to take such follow-up action as may be necessary. With regard to the lower judiciary, the High Court of the concerned State may take action on the basis of complaints that show a prima facie case.

    Therefore, without ensuring transparency and enforcement, as stated above, we cannot hope to go a long way in preventing or eliminating corruption.

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Company Formation

  1. What is the procedure for registering a company in India?

    Formation of company in India is governed by the Companies Act, 1956. For incorporating a private limited company a minimum of two directors and a minimum of two shareholders are required. The number of shareholders is limited to 50. An invitation to the public to subscribe to any shares or debentures is prohibited. No invitation or acceptance of deposits from persons other than members, directors or their relatives is allowed. Before starting the process of registering a company the prospective directors must have Director Identification Number (DIN) and Digital Signature Certificate (DSC). DIN and DSC can be obtained by submitting online application. After acquiring the DIN and DSC, the next step is to get the name of the Company approved by the Registrar of Companies (ROC). An online application should be submitted to the Registrar of Companies giving a maximum of six names and the ROC will reply within seven days as to the availability of the names. Once the name is approved, the next step is drafting the Memorandum of Association (MOA) and the Articles of Association (AOA) of the proposed company. After the MOA and AOA are prepared they are printed and sent to the ROC for vetting and to mark out objections, if any. The documents are then stamped and finally all the documents along with some other details like particulars of appointment of Managing Director, Directors, Manager and Secretary are sent to the concerned Registrar. The last step is to pay the registration fee, which varies on the basis of the company’s authorized capital, after which the company gets registered as a private limited company under the Companies Act, 1956 and gets its certificate of incorporation. There are some more things that are required by a private limited company, like getting a Permanent Account Number and a Company Seal, after it is registered. However, unlike a public limited company, a private company can begin its operation right after getting a certificate of incorporation and complete the rest of the formalities simultaneously.

    A foreign company can commence operations in India by incorporating a company under the Companies Act, 1956 through Joint Ventures (JV) or Wholly Owned Subsidiaries (WOS). Foreign Companies can set up their operations in India by incorporating a JV Company with an Indian Partner and / or with the general public and operating either as a listed company or as an unlisted company. Foreign companies can also set up wholly owned subsidiary in Sectors where 100% Foreign Direct Investment (FDI) is permitted under the FDI policy of the Government of India. Once the company is incorporated in India, foreign investor has to either intimate Reserve Bank of India (RBI) of the foreign equity or take approval of Foreign Investment Promotion Board (FIPB). Intimation to RBI or approval from FIPB is dependent upon the sector in which foreign investor intends to do business. Once a company has been duly registered and incorporated as an Indian Company it is subject to Indian laws and regulations as applicable to other domestic Indian companies. All foreign investments are freely repatriable (net of applicable taxes) except in cases where (i) the foreign investment is in a sector like Construction and Development Projects and Defence wherein the foreign investment is subject to a lock-in-period and (ii) Non Resident Indians (NRI) choose to invest specifically under non repatriable schemes. Further, dividends (net of applicable taxes) declared by foreign investments can be remitted freely through an Authorized Dealer Bank.

  2. What is a Limited Liability Partnership?

    Limited Liability Partnership (LLP) is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership

     

    The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

     

    The desirability of LLP form in India was expressed in the context of small enterprises by Bhat Committee (1972), Naik Committee (1992), Expert Committee on Development of Small Sector Enterprises headed by Sh. Abid Hussain in 1997 and Study Group on Development of Small Sector Enterprises (SSEs) headed by Dr. S P Gupta (2001). The committees set up by the Ministry of Company Affairs, namely, Committee on Regulation of Private Companies and Partnerships headed by Sh. Naresh Chandra (2003), Committee on New Company Law (Dr. J.J. Irani Committee) (2005) also recommended for legislation on LLPs.

     

    The Limited Liability Partnership (LLP) Bill, 2006 was introduced in the Rajya Sabha on 15th December, 2006. The Bill was referred to the Lok Sabha Standing Committee on Finance, for examination. The Standing Committee consulted various chambers of commerce, professional institutes and other experts and also heard the M/o Corporate Affairs. The said Committee presented/submitted its report to the Parliament on 27th November, 2007. Based on such report the Ministry of Corporate Affairs revised the LLP Bill and the revised LLP Bill, 2008 was introduced in the Rajya Sabha on 21st October, 2008. This was passed by the Rajya Sabha on 24th October, 2008. The Bill was passed by Lok Sabha on 12th December, 2008. The President gave assent to this Bill on 7th January, 2009.

     

    Any two or more persons associating for carrying on a lawful business with a view to profit may set up an LLP. The LLP Act does not restrict the benefit of LLP structure to certain classes of professionals only. A minimum of two partners will be required for formation of an LLP. There will not be any limit to the maximum number of partners. A body corporate may be a partner of an LLP. An entity which has objectives like “charitable or other not for profit objectives” would not be able to set up LLP since the essential requirement for setting LLP is ‘carrying on a lawful business with a view to profit’. The LLP Act 2008 allows Foreign Nationals including Foreign Companies & LLPs to incorporate a LLP in India provided at least one designated partner is resident of India. However, the LLP/Partners would have to comply with all relevant Foreign Exchange Laws/ Rules/ Regulations/ Guidelines. Every limited liability partnership shall have either the words “limited liability partnership” or the acronym “LLP” as the last words of its name. Indian Partnership Act, 1932 is not applicable to LLPs.

     

    LLP form is a form of business model which is organized and operates on the basis of an Agreement and it provides flexibility without imposing detailed legal and procedural requirements, enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner. LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. The LLP is a separate legal entity, and is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The mutual rights and duties of partners inter se and those of the LLP and its partners shall be governed by the agreement between partners or between the LLP and the partners. This Agreement would be known as “LLP Agreement”. As per provisions of the LLP Act, in the absence of agreement as to any matter, the mutual rights and liabilities shall be as provided for under Schedule I to the Act. Therefore, in case any LLP proposes to exclude provisions/requirements of Schedule I to the Act, it would have to enter into an LLP Agreement, specifically excluding applicability of any or all paragraphs of Schedule I.

     

     

    LLP form is a form of business model which is organized and operates on the basis of an Agreement and it provides flexibility without imposing detailed legal and procedural requirements, enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner. LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. The LLP is a separate legal entity, and is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The mutual rights and duties of partners inter se and those of the LLP and its partners shall be governed by the agreement between partners or between the LLP and the partners. This Agreement would be known as “LLP Agreement”. As per provisions of the LLP Act, in the absence of agreement as to any matter, the mutual rights and liabilities shall be as provided for under Schedule I to the Act. Therefore, in case any LLP proposes to exclude provisions/requirements of Schedule I to the Act, it would have to enter into an LLP Agreement, specifically excluding applicability of any or all paragraphs of Schedule I.

     

    Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.

     

    A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners. The management-ownership divide inherent in a company is not there in a limited liability partnership. LLP will have more flexibility as compared to a company. LLP will have lesser compliance requirements as compared to a company.

     

    LLPs shall be registered with the Registrar of Companies (ROC) appointed under the Companies Act, 1956) after following the provisions specified in the LLP Act. Every LLP shall have a registered office. An Incorporation Document subscribed by at least two partners shall have to be filed with the Registrar in a prescribed form. Contents of LLP Agreement, as may be prescribed, shall also be required to be filed with Registrar, online.

     

    Every LLP would be required to file annual return in Form 11 with ROC within 60 days of closer of financial year. The annual return will be available for public inspection on payment of prescribed fees to Registrar. The incorporation document, names of partners and changes, if any, made therein, statement of account and solvency annual return will be available for inspection by any person and the fees for such inspection of an LLP is Rs 50/- and fees for certified copy or extract of any document u/s 36 shall be Rs. 5/- per page.

     

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