Supreme Court Clarifies Daughters’ Equal Rights in Ancestral Property, Invalidates Prior Settlement: Prasanta Kumar Sahoo vs. Charulata Sahu (2023) INSC 3192 (29 March 2023)

LEGAL ISSUE: The core legal issue revolves around the interpretation of Section 6 of the Hindu Succession Act, 1956, as amended in 2005, concerning the rights of daughters in ancestral property and the validity of settlements made prior to the amendment.

CASE TYPE: This case falls under the purview of civil law, specifically dealing with property partition in a Hindu family.

Case Name: Prasanta Kumar Sahoo & Ors. vs. Charulata Sahu & Ors.

[Judgment Date]: 29 March 2023

Introduction

Date of the Judgment: 29 March 2023

Citation: 2023 INSC 3192

Judges: A.S. Bopanna, J. and J.B. Pardiwala, J.

Can daughters be denied their rightful share in ancestral property? The Supreme Court of India, in a significant judgment, addressed this critical question, affirming the equal rights of daughters in Hindu ancestral property. This ruling not only clarifies the legal position but also invalidates a prior settlement that attempted to circumvent these rights. The judgment underscores the importance of gender equality in property inheritance, marking a pivotal moment in Hindu personal law. This case involved a dispute over the partition of ancestral properties among the legal heirs of one Kumar Sahoo, specifically his son and two daughters.

Case Background

The dispute centers on the ancestral properties of Kumar Sahoo. Upon his death in 1969, his properties were to be divided among his three children: Prafulla Sahoo (son), Charulata Sahoo (daughter), and Santilata (daughter). In 1980, Charulata Sahoo filed a suit for partition, seeking her share in the properties. The Trial Court initially granted her a 1/6th share in ancestral properties and a 1/3rd share in self-acquired properties. During the pendency of the first appeal, Prafulla Sahoo and Santilata entered into a settlement, where Santilata relinquished her share to Prafulla. This settlement was later challenged, leading to the present Supreme Court appeal.

Timeline:

Course of Proceedings

The Trial Court initially decreed the suit in favor of Charulata, granting her a 1/6th share in ancestral properties and a 1/3rd share in self-acquired properties. Prafulla Sahoo, dissatisfied with this, filed an appeal before the High Court of Orissa. During the pendency of this appeal, Prafulla and Santilata entered into a settlement, which was recorded by the High Court. However, Santilata later challenged this settlement through a cross-appeal, arguing that it was invalid and not binding. The Division Bench of the High Court allowed Santilata’s cross-appeal, setting aside the settlement and restoring the Trial Court’s decree regarding her share. This decision was then appealed to the Supreme Court by the legal representatives of Prafulla Sahoo.

Legal Framework

The Supreme Court’s analysis primarily revolved around Section 6 of the Hindu Succession Act, 1956, particularly after its amendment in 2005. The amended Section 6 grants daughters equal coparcenary rights in Hindu joint family property by birth, similar to those of a son. The court also considered the implications of the proviso to Section 6(1), which states that any disposition or alienation, including partition, before December 20, 2004, would not be invalidated by the amendment. Further, the Explanation to Section 6(5) specifies that “partition” means a partition made by a registered deed or a court decree. The Court also referred to Order XXIII Rule 3 of the Code of Civil Procedure, 1908 which deals with the recording of lawful compromise.

The Court also discussed the historical context of Hindu law, noting that prior to the 1956 Act, women had limited inheritance rights under the Mitakshara school of Hindu law. The 2005 amendment aimed to rectify this gender discrimination and ensure equal rights for daughters in coparcenary property.

The Court also considered the Law Commission of India’s 174th Report, which recommended gender reforms to ensure equality in property rights. The Commission noted that various states had already made attempts to bring about gender equality, but these efforts were not uniform. The amendment to Section 6 was intended to create a uniform law that would apply to all Hindus, regardless of their location.

Arguments

Appellants’ (Legal heirs of Prafulla Sahoo) Arguments:

• The appellants argued that all properties should be considered ancestral, as they were derived from a common ancestral nucleus. They contended that the properties listed as self-acquired were also purchased using income from ancestral properties.
• They argued that the 2005 amendment to Section 6 of the Hindu Succession Act should not apply retrospectively, especially after the settlement between Prafulla and Santilata.
• They submitted that the settlement deed, by which Santilata transferred her share to Prafulla, was a valid disposition of her rights and should not be disturbed by the 2005 amendment.
• They relied on the proviso to Section 6(1) of the Act, stating that no disposition before 20.12.2004 should be invalidated.
• They argued that the High Court should not have questioned the validity of the settlement deed, as it was a lawful agreement between the parties.
• They cited several cases to support their claim that a compromise between parties should be upheld.

Respondent No. 1’s (Charulata Sahoo) Arguments:

• The respondent argued that, based on the Supreme Court’s decision in Vineeta Sharma v. Rakesh Sharma, she is entitled to a 1/3rd share in all properties, both ancestral and self-acquired.
• She contended that the 2005 amendment grants daughters equal rights as coparceners, and this right should be applied in her case.
• She argued that the preliminary decree can be modified to reflect the changed legal position, even without a formal appeal.
• She argued that the settlement between Prafulla and Santilata was not binding on her because she was not a party to it.
• She highlighted the defaults committed by Prafulla Sahoo as receiver, including unauthorized modifications to the property, non-payment of dues, and illegal filling of water bodies.
• She sought her share of the receivership amount and requested her appointment as the receiver.

Respondent Nos. 3, 4, 5, 7, and 8’s (Legal heirs of Santilata) Arguments:

• They argued that all three courts had concurrently found the properties to be both ancestral and self-acquired.
• They contended that daughters, as coparceners, are entitled to an equal share in the ancestral property.
• They submitted that a cross-appeal is maintainable to challenge the compromise, even if the main appeal is dismissed.
• They argued that the settlement deed was not valid under Order XXIII Rule 3 of the CPC, as it was not signed by all parties and lacked proper authorization.
• They argued that the settlement was not acted upon by the parties and that the counsel could not sign the compromise petition without express consent.

Issues Framed by the Supreme Court

1. In what manner, the rights of the parties would be governed keeping in mind the dictum as laid by this Court in its decision in the case of Vineeta Sharma (supra)?
2. Whether the High Court was justified in declaring the settlement between the appellants herein (Defendant No. 1) and Respondent No. 2 (Defendant No. 1) as invalid? In other words, whether the High Court was right in allowing the cross-appeal filed by the Original Defendant No. 2 (Respondent No. 2 herein).

Treatment of the Issue by the Court

“The following table demonstrates as to how the Court decided the issues”

Authorities

Cases Relied Upon by the Court:

• Vineeta Sharma v. Rakesh Sharma [(2020) 9 SCC 1] – Supreme Court of India: This case was the primary authority for determining the rights of daughters in coparcenary property under the amended Section 6 of the Hindu Succession Act, 1956. The Court held that daughters have equal rights as sons by birth.
• Ganduri Koteshwaramma v. Chakiri Yanadi [(2011) 9 SCC 788] – Supreme Court of India: This case clarified that a preliminary decree can be modified to reflect changes in law, even if no appeal has been filed.
• Prakash v. Phulavati [(2016) 2 SCC 36] – Supreme Court of India: This case was overruled by Vineeta Sharma. It had held that the 2005 amendment applied only when both the coparcener and his daughter were alive on the date of the amendment.
• Danamma v. Amar [(2018) 3 SCC 343] – Supreme Court of India: This case was also considered in Vineeta Sharma. It had held that daughters could claim a share in coparcenary property even if the coparcener had died before the amendment.
• Badrinarayan Shankar Bhandari v. Omprakash Shankar Bhandari [AIR 2014 Bom 151 (FB)] – Bombay High Court: This Full Bench decision provided a historical overview of Hindu law and its development.
• Bai Chanchal v. Syed Jalaluddin [(1970) 3 SCC 124] – Supreme Court of India: This case was cited by the appellants to support the validity of the settlement.
• Byram Pestonji Gariwala v. Union Bank of India [(1992) 1 SCC 31] – Supreme Court of India: This case was cited by the appellants to support the validity of the settlement.
• D.S. Lakshmaiah v. L. Balasubramanyam [(2003) 10 SCC 310] – Supreme Court of India: This case was cited by the appellants to support the validity of the settlement.
• Jineshwardas v. Jagrani [(2003) 11 SCC 372] – Supreme Court of India: This case was cited by the appellants to support the validity of the settlement.
• Pushpa Devi Bhagat v. Rajinder Singh [(2006) 5 SCC 566] – Supreme Court of India: This case was cited by the appellants to support the validity of the settlement.
• Banwari Lal v. Chando Devi [(1993) 1 SCC 581] – Supreme Court of India: This case discussed the validity of compromise decrees and the procedure for challenging them.
• Vipan Aggarwal v. Raman Gandotra [2022 SCCOnLine SC 1357] – Supreme Court of India: This case discussed the right to challenge a compromise decree.
• Himalayan Cooperative Group Housing Society v. Balwan Singh [(2015) 7 SCC 373] – Supreme Court of India: This case discussed the duties of an advocate towards their client and the need for proper authorization.
• United Bank of India v. Abhijit Tea Company [(2000) 7 SCC 357] – Supreme Court of India: This case discussed the duty of a court to take notice of changes in law.
• Nityamoni Dasi v. Gokul Chandra Sen [(1911) 9 Ind Cas 210 (Cal)] – Calcutta High Court: This case held that a consent decree in a partition suit must include all parties.
• Vir Singh v. Kharak Singh [AIR 1925 Lah 280] – Lahore High Court: This case held that a compromise not assented to by all proprietors is contrary to law.
• Taraprasanna Sarkar v. Kalikamohan Sarkar [AIR 1924 Cal 80] – Calcutta High Court: This case held that a compromise in a partition suit must include all parties.
• Periyar & Pareekanni Rubber Ltd. v. State of Kerala [(1991) 4 SCC 195] – Supreme Court of India: This case discussed the responsibility of the Advocate General.
• Joginder Singh Wasu v. State of Punjab [(1994) 1 SCC 184] – Supreme Court of India: This case discussed the responsibility of the Advocate General.
• Sourendra Nath Mitra v. Tarubala Dasi [(1929-30) 57 IA 133] – Privy Council: This case discussed the implied authority of counsel.
• Jamilabai Abdul Kadar v. Shankarlal Gulabchand [(1975) 2 SCC 609] – Supreme Court of India: This case discussed the implied authority of counsel.
• Svenska Handelsbanken v. Indian Charge Chrome Ltd. [(1994) 2 SCC 155] – Supreme Court of India: This case discussed the implied authority of counsel.
• Govindammal v. Marimuthu Maistry [AIR 1959 Mad 7] – Madras High Court: This case discussed the need for specific authorization for a lawyer to enter into a compromise.

Legal Provisions Considered by the Court:

• Section 6 of the Hindu Succession Act, 1956: This section, as amended in 2005, grants daughters equal coparcenary rights in Hindu joint family property by birth. The court emphasized the retroactive nature of this amendment, which applies even if the coparcener died before the amendment, as long as the partition had not been formalized before December 20, 2004.
• Order XXIII Rule 3 of the Code of Civil Procedure, 1908: This rule deals with the recording of lawful compromises in civil suits. The court held that the settlement in this case was not valid under this rule, as it was not signed by all parties and lacked proper authorization.
• Order XLI Rule 22 of the Code of Civil Procedure, 1908: This rule allows a respondent to file a cross-objection to a decree. The court held that Santilata’s cross-appeal was maintainable under this rule.
• Order XLIII Rule 1-A (2) of the Code of Civil Procedure, 1908: This rule allows an appellant to contest a decree on the ground that a compromise should not have been recorded. The court held that this rule, along with Order XLI Rule 22, entitled Santilata to challenge the settlement.

Judgment

“How each submission made by the Parties was treated by the Court?”

“How each authority was viewed by the Court?”

• Vineeta Sharma v. Rakesh Sharma [CITATION]: The Court heavily relied on this case, using its ratio to establish that daughters have equal coparcenary rights by birth and that the 2005 amendment to Section 6 of the Hindu Succession Act, 1956 has a retroactive application.
• Ganduri Koteshwaramma v. Chakiri Yanadi [CITATION]: The Court followed this case to support its view that a preliminary decree can be modified to reflect changes in law, even if no appeal has been filed.
• Prakash v. Phulavati [CITATION]: The Court specifically overruled this case. The Court stated that the view taken in Prakash v. Phulavati was not correct and that the substituted Section 6 of the Hindu Succession Act, 1956 is not confined to cases where male coparcener dies after the commencement of the Amendment Act, 2005.
• Danamma v. Amar [CITATION]: The Court considered this case, aligning with its view that daughters could claim a share in coparcenary property even if the coparcener had died before the amendment.
• Banwari Lal v. Chando Devi [CITATION]: The Court followed this case, which held that a party challenging a compromise can file a petition under proviso to Rule 3 of Order 23, or an appeal under Section 96(1) of the Code, in which he can now question the validity of the compromise in view of Rule 1- A of Order 43 of the Code.
• Himalayan Cooperative Group Housing Society v. Balwan Singh [CITATION]: The Court relied on this case to emphasize the importance of an advocate’s duty to their client and the need for specific authorization before making concessions.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the principle of gender equality and the intent of the 2005 amendment to the Hindu Succession Act. The Court emphasized the need to rectify historical injustices against women in matters of property inheritance. The Court’s reasoning highlighted several key points:

• Equal Rights by Birth: The Court reiterated that the 2005 amendment grants daughters equal coparcenary rights by birth, similar to those of a son. This right is not dependent on the father’s death or the daughter being alive on the date of the amendment.
• Retrospective Application: The Court clarified that the amendment has a retroactive application, meaning it applies even if the coparcener died before the amendment, as long as the partition had not been formalized before December 20, 2004.
• Invalidity of Unlawful Settlements: The Court emphasized that settlements must comply with the requirements of Order XXIII Rule 3 of the CPC, including being signed by all parties and having proper authorization.
• Modification of Preliminary Decrees: The Court held that preliminary decrees can be modified to reflect changes in law, ensuring that the final decree aligns with the current legal position.
• Upholding Gender Justice: The Court’s decision was guided by the principle of gender justice, aiming to prevent the deprivation of daughters’ rights through sham or frivolous defenses.

The Court’s reasoning was also influenced by the need to prevent the setting up of false or frivolous defenses to deprive daughters of their rights as coparceners. The Court emphasized that any plea of oral partition or unregistered memorandum of partition should be rejected outrightly.

The Court also took note of the fact that the settlement was entered into by beckoning a smaller share to the Defendant No. 2, while she has a larger share in view of Vineeta Sharma (supra). The consideration for the alleged compromise/settlement was therefore inadequate and the whole agreement had to fall to the ground due to changed and supervening circumstances effectuated by change in law.

The Court also considered the fact that the First Appellate Court had neither recorded the statements of the parties in the Court nor had made any inquiry into the terms of the settlement.

The Court also observed that the authority was expressly curtailed in the compromise deed.

The Court also observed that in a suit for partition of joint property, a decree by consent amongst some only of the parties cannot be maintained.

The Court also highlighted that a lawyer must be specifically authorised to settle and compromise a claim, that merely on the basis of his employment he has no implied or ostensible authority to bind his client to a compromise/settlement.

The Court also observed that it is the solemn duty of an advocate not to transgress the authority conferred on him by the client. It is always better to seek appropriate instructions from the client or his authorised agent before making any concession which may, directly or remotely, affect the rightful legal right of the client.

The Court also observed that generally, admissions of fact made by a counsel are binding upon their principals as long as they are unequivocal; where, however, doubt exists as to a purported admission, the court should be wary to accept such admissions until and unless the counsel or the advocate is authorised by his principal to make such admissions.

The Court also observed that a client is not bound by a statement or admission which he or his lawyer was not authorised to make. A lawyer generally has no implied or apparent authority to make an admission or statement which would directly surrender or conclude the substantial legal rights of the client unless such an admission or statement is clearly a proper step in accomplishing the purpose for which the lawyer was employed.

The Court also observed that neither the client nor the court is bound by the lawyer’s statements or admissions as to matters of law or legal conclusions.

The Court also observed that according to generally accepted notions of professional responsibility, lawyers should follow the client’s instructions rather than substitute their judgment for that of the client.

The Court also observed that in some cases, lawyers can make decisions without consulting the client. While in others, the decision is reserved for the client. It is often said that the lawyer can make decisions as to tactics without consulting the client, while the client has a right to make decisions that can affect his rights.

The Court also observed that the implied authority of counsel is not an appendage of office, a dignity added by the courts to the status of barrister or advocate at law. It is implied in the interests of the client, to give the fullest beneficial effect to his employment of the advocate.

The Court also observed that the implied authority can always be countermanded by the express directions of the client. No advocate has actual authority to settle a case against the express instructions of his client. If he considers such express instructions contrary to the interests of his client, his remedy is to return his brief.

The Court also observed that it will be prudent for counsel not to act on implied authority except when warranted by the exigency of circumstances demanding immediate adjustment of suit by agreement or compromise and the signature of the party cannot be obtained without undue delay.

The Court also observed that a wise and careful counsel will no doubt arm himself in advance with the necessary authority expressed in writing to meet all such contingencies in order that neither his authority nor integrity is ever doubted.

The Court also observed that an advocate, in the discharge of his duty knows but one person in the world and that person is his client.

The Court also observed that in the present state of the clientele world and the position in which the Bar now finds itself and in the face of divided judicial authority and absence of statutory backing prudence dictates that unless express power is given in the vakalatnama itself to enter into compromise, in accordance with the general practice obtaining a special vakalatnama should be filed or the specific consent of the party to enter into the compromise should be obtained.

The Court also observed that if an endorsement is made on the plaint etc., it would be better to get the signature or the thumb impression of the party affixed thereto, making it evident that the party is aware of what is being done by the Vakil on his or her behalf.

The Court also observed that the BCI Rules make it necessary that despite the specific legal stream of practice, seniority at the Bar or designation of an advocate as a Senior Advocate, the ethical duty and the professional standards insofar as making concessions before the Court remain the same. It is expected of the lawyers to obtain necessary instructions from the clients or the authorised agent before making any concession/statement before the court for and on behalf of the client.

The Court also observed that the BCI Rules make it necessary that an advocate has to conduct himself and his duties in an extremely responsible manner. They must bear in mind that what may be appropriate and lawful for a person who is not a member of the Bar, or for a member of the Bar in his non-professional capacity, may be improper for an advocate in his professional capacity.

The Court also observed that while Rule 15 mandates that the advocate must uphold the interest of his clients by fair and honourable means without regard to any unpleasant consequences to himself or any other. Rule 19 prescribes that an advocate shall only act on the instructions of his client or his authorised agent.

The Court also observed that the statutory fiction of partition created by the proviso to Section 6 of the Hindu Succession Act, 1956 as originally enacted did not bring about the actual partition or disruption of coparcenary. The fiction was only for the purpose of ascertaining share of deceased coparcener when he was survived by a female heir, of Class I as specified in the Schedule to the Act.

The Court also observed that in the present case, the settlement was not a partition by metes and bounds and the settlement could not be treated as a partition as contemplated under the proviso to Section 6 of the Act.

Ratio Decidendi

The ratio decidendi of this case can be summarized as follows:

• Equal Coparcenary Rights: Daughters, by birth, have equal coparcenary rights in Hindu ancestral property as sons, as per the amended Section 6 of the Hindu Succession Act, 1956. This right is not contingent on the father’s death or the daughter being alive on the date of the amendment.
• Retrospective Application of the 2005 Amendment: The 2005 amendment to Section 6 has a retroactive application, meaning it applies even if the coparcener died before the amendment, provided that the partition was not formalized before December 20, 2004.
• Invalidity of Settlements Not Compliant with CPC: Settlements or compromises in civil suits must comply with Order XXIII Rule 3 of the Code of Civil Procedure, 1908. This includes being signed by all parties and having proper authorization. Settlements that do not meet these requirements are invalid.
• Modification of Preliminary Decrees: Preliminary decrees can be modified to reflect changes in law, ensuring that the final decree aligns with the current legal position.
• Cross-Appeal Validity: A cross-appeal is maintainable to challenge a compromise, even if the main appeal is dismissed, under Order XLI Rule 22 of the Code of Civil Procedure, 1908.

Obiter Dicta

While the primary focus of the judgment was on the legal issues at hand, the court also made several observations that, while not essential to the decision, provide additional guidance and insight:

• Importance of Gender Equality: The Court reiterated the importance of gender equality in matters of property inheritance, emphasizing the need to rectify historical injustices against women.
• Duties of Advocates: The Court emphasized that advocates must act on the specific instructions of their clients and must not make concessions that could affect their clients’ rights without proper authorization. The court also observed that it is the solemn duty of an advocate not to transgress the authority conferred on him by the client.
• Rejection of Frivolous Defenses: The Court highlighted that any plea of oral partition or unregistered memorandum of partition should be rejected outrightly.
• Duty of Court: The Court observed that it is the duty of the court to take notice of the changes in the law.

Flowchart of the Case

Ratio Table

Sentiment Table

Conclusion

The Supreme Court’s judgment in Prasanta Kumar Sahoo v. Charulata Sahu is a landmark decision that reinforces the equal rights of daughters in Hindu ancestral property. The Court’s interpretation of the 2005 amendment to Section 6 of the Hindu Succession Act, 1956, ensures that daughters are treated as equal coparceners from birth, with the same rights as sons. This decision not only clarifies the legal position but also sets a precedent for invalidating settlements that attempt to circumvent these rights. The judgment is a significant step towards achieving gender equality in property inheritance and provides a comprehensive framework for addressing similar disputes in the future.

The ruling also underscores the importance of proper legal procedures and ethical standards for lawyers. It highlights the necessity of client authorization for settlements and the duty of advocates to act in the best interests of their clients. By setting aside the settlement in this case, the Supreme Court has sent a clear message that the rights of daughters cannot be easily compromised through unlawful agreements.