Supreme Court Clarifies Married Daughter’s Succession Rights in Lease Premises under Inventory Proceedings Act, 2012

Introduction

Date of the Judgment: 13 March 2019

Citation: 2019 INSC 243

Judges: L. Nageswara Rao, J., M.R. Shah, J.

Does a married daughter have the right to inherit leasehold property under Indian law? The Supreme Court of India recently addressed this crucial question, clarifying the succession rights of married daughters in the context of inventory proceedings. This judgment provides significant clarity on the application of the Goa Succession, Special Notaries and Inventory Proceeding Act, 2012, and its interplay with the Goa Rent Act. The Court held that a married daughter has a right of succession in the “lease premises” and the same ought to have been included in the list of assets in the inventory proceedings. The bench comprised Justices L. Nageswara Rao and M.R. Shah, with the majority opinion authored by Justice M.R. Shah.

Case Background

The dispute revolves around a leasehold property originally belonging to the partnership firm “Ramnath Anant Kesarkar” at Margao. The parents of the appellants (Uma Mahesh Bandekar and another) and respondents (Vivek Sadanand Marathe and others), Sadanand V. Marathe and Nirmalabai S. Marathe, succeeded to the lease premises through a Deed of Partition dated 29 March 1976. The business was carried out in the tenanted premises belonging to Jairam Vasant Katkar. Sadanand V. Marathe passed away on 12 May 1985, and Nirmalabai S. Marathe died on 5 May 1998. After their demise, respondent no. 1, the brother of appellant no. 1, initiated Regular Inventory Proceedings No. 11/2013/C on 8 November 2013. Respondent no. 1 was appointed as the head of the family to administer the estate. A court valuer was appointed, who submitted a report on 30 April 2014. The appellants raised objections, particularly regarding the non-inclusion of the lease premises in the inventory proceedings. The respondent argued that the partnership firm did not form part of the deceased’s estate, and married daughters were not entitled to the tenanted premises.

Timeline:

Course of Proceedings

The Inventory Court dismissed the appellants’ objections on 2 June 2015, refusing to include the lease premises in the estate of the deceased. The High Court of Judicature at Bombay, Bench at Goa, upheld this decision on 5 May 2016, primarily relying on Section 2(o) of the Goa, Daman & Diu Buildings (Lease, Rent and Eviction) Control Act, 1968 (Goa Rent Act). The High Court reasoned that a married daughter does not qualify as a tenant under the Goa Rent Act. It also considered Decree No. 43525 of the Portuguese Civil Code but concluded that the Goa Rent Act, by virtue of Section 59, repealed the decree. The appellants then appealed to the Supreme Court.

Legal Framework

The case primarily involves the interpretation of the Goa Succession, Special Notaries and Inventory Proceeding Act, 2012 (Inventory Proceeding Act, 2012) and the Goa Rent Act. The Inventory Proceeding Act, 2012, aims to consolidate and amend laws related to intestate and testamentary succession, notarial law, and partition of inheritance. Section 3 of the Inventory Proceeding Act, 2012 defines succession as the transmission of a deceased person’s estate to their successors. Section 5 categorizes successors as heirs and legatees. Section 9 states that all persons born or conceived at the time of succession are competent to succeed, unless otherwise provided by law. Section 68 specifies that children and their descendants succeed to their parents without distinction of sex or age. Section 399 includes leases in the list of assets to be considered for succession. Section 460 provides that the Inventory Proceeding Act, 2012 applies to pending proceedings and repeals corresponding provisions of other laws. The Goa Rent Act, on the other hand, deals with the control of rents and evictions. Section 2(o) of the Goa Rent Act defines ‘tenant,’ which the High Court used to exclude married daughters from inheriting tenancies.

Arguments

Appellants’ Arguments:

• The appellants argued that the Inventory Court and the High Court erred by applying the Goa Rent Act instead of the Inventory Proceeding Act, 2012.
• They contended that the Inventory Proceeding Act, 2012, does not differentiate between married and unmarried daughters regarding succession rights.
• They submitted that Section 399 of the Inventory Proceeding Act, 2012, includes leases as part of the assets subject to succession.
• The appellants emphasized that the proceedings were not initiated under the Goa Rent Act and were not a dispute between a landlord and tenant, therefore, the Goa Rent Act should not apply.
• They argued that the definition of ‘tenant’ under the Goa Rent Act should not override succession laws.
• They relied on Sections 3, 5, 9, 68 and 399 of the Inventory Proceeding Act, 2012, to support their claim that a married daughter has a right of succession to the lease premises.

Respondents’ Arguments:

• The respondents argued that the appeal had become infructuous because the final order of partition had been passed by the Inventory Court, excluding the lease premises, and the appellants had accepted it.
• They contended that the Goa Rent Act, specifically Section 2(o), excludes married daughters from being considered tenants, thus denying them succession rights to lease premises.
• They cited the case of Mohammad Laiquiddin vs. Kamala Devi Misra (Dead) by Lrs., (2010) 2 SCC 407, where the Supreme Court considered Decree No. 43525 under the Portuguese Civil Code and Section 59 of the Goa Rent Act. They argued that the Goa Rent Act repealed Decree No. 43525, and therefore, the appellants could not claim rights based on it.
• The respondents submitted that the Goa Rent Act is a special law that overrides the general law of succession.
• They argued that the statutory tenancy under the Goa Rent Act does not confer any inheritance rights on legal heirs.
• They claimed that the general law of succession under the Portuguese Civil Code, 1867, was repealed by the Goa Rent Act concerning building tenancies.
• They argued that Sections 399 and 460 of the Inventory Proceeding Act, 2012, had no application in the present case.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. What is the right of a married daughter by way of succession in the “lease premises,” and whether, with respect to “lease premises,” a married daughter shall have a right of succession, vis-a-vis, the Inventory Proceeding Act, 2012?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• The Court relied upon the provisions of the Inventory Proceeding Act, 2012, particularly Sections 3, 5, 9, 68, 399, 446 and 460 to determine the succession rights of a married daughter.
• The Court held that the provisions of the Goa Rent Act, particularly Section 2(o), were not applicable in determining succession rights in inventory proceedings.
• The Court noted that Decree No. 43525 of the Portuguese Civil Code was repealed by the Goa Rent Act and the Inventory Proceeding Act, 2012, but its principles were consistent with the Act.
• The Court distinguished the case of Mohammad Laiquiddin vs. Kamala Devi Misra (Dead) by Lrs., (2010) 2 SCC 407, noting that it dealt with the interpretation of the Goa Rent Act and did not address succession rights under the Inventory Proceeding Act, 2012.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following points:

• The Inventory Proceeding Act, 2012, does not distinguish between married and unmarried daughters in matters of succession.
• Lease premises are considered assets that can be inherited under the Inventory Proceeding Act, 2012.
• The Goa Rent Act is not applicable to succession matters, as it deals with the relationship between landlords and tenants.
• The Court emphasized that the proceedings were not initiated under the Goa Rent Act, and the dispute was not between the landlord and tenant.
• The Court also noted that the Portuguese Civil Code principles were consistent with the Inventory Proceeding Act, 2012, regarding the succession rights of all children, regardless of gender or marital status.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

The Court’s decision was heavily influenced by the legal interpretation of the Inventory Proceeding Act, 2012, and the non-applicability of the Goa Rent Act. The factual aspects of the case were considered, but the legal framework played a more significant role in the final decision.

Logical Reasoning:

The Court considered the alternative interpretation that the Goa Rent Act should apply, but rejected it because the proceedings were not initiated under that Act and the dispute was not between a landlord and tenant. The Court emphasized that the Inventory Proceeding Act, 2012, is the relevant law for succession matters.

The Court’s decision was based on a straightforward application of the Inventory Proceeding Act, 2012, and a clear distinction between succession laws and tenancy laws. The Court held that the High Court and the Inventory Court had erred in applying the Goa Rent Act to a succession matter. The Court reasoned that the Inventory Proceeding Act, 2012, does not discriminate between married and unmarried daughters and that lease premises are part of the assets to be considered for succession.

Key quotes from the judgment:

“…the proceedings before the inventory court as well as the High Court were under the provisions of the Inventory Proceeding Act, 2012/Portuguese Civil Code…”

“…the provisions of Goa Rent Act shall be applicable with respect to dispute between the landlord and the tenant.”

“…all the children and their descendants succeed to their respective parents and other ascendants, without distinction of sex or age.”

There were no dissenting opinions in this case. The bench comprised two judges, and both concurred with the final judgment.

Key Takeaways

• A married daughter has equal succession rights to lease premises under the Inventory Proceeding Act, 2012, as a son or unmarried daughter.
• The Goa Rent Act, which defines “tenant,” does not apply to succession matters.
• Lease premises are considered assets that can be inherited under the Inventory Proceeding Act, 2012.
• Inventory proceedings must include all assets, including leasehold properties, in the list of assets for succession.
• Final orders in inventory proceedings can be amended to include assets that were wrongly excluded, based on a mistake of facts.

This judgment clarifies the rights of married daughters in matters of succession, particularly concerning leasehold properties. It ensures that succession laws are applied uniformly, without discrimination based on marital status. The decision also highlights the importance of applying the correct legal framework in different types of proceedings. This judgment could have a significant impact on future cases involving succession rights, especially in regions where similar legal frameworks are in place.

Directions

The Supreme Court directed that the partition as per the final order passed by the inventory court and the consequent drawing of the final chart of partition, pursuant to the final order dated 31.07.2017 in Regular Inventory Proceeding No. 11/2013/C, be amended accordingly with the aid of Section 446 of the Inventory Proceeding Act, 2012, to include the lease premises.

Specific Amendments Analysis

Not Applicable

Development of Law

The ratio decidendi of this case is that a married daughter has a right of succession in the “lease premises” under the Inventory Proceeding Act, 2012, and that the Goa Rent Act is not applicable to succession matters. This judgment clarifies that succession laws must be applied uniformly, without discrimination based on marital status, and that leasehold properties are part of the assets to be considered for succession.

Conclusion

The Supreme Court allowed the appeal, setting aside the orders of the Inventory Court and the High Court. The Court held that a married daughter has a right of succession in the “lease premises” and that the same should have been included in the list of assets in the inventory proceedings. The Court directed the amendment of the final partition order to include the lease premises. This judgment clarifies the succession rights of married daughters and ensures that succession laws are applied uniformly, without discrimination based on marital status.