Supreme Court clarifies preferential rights on agricultural land under Hindu Succession Act: Babu Ram vs. Santokh Singh (2019) INSC 176 (7 March 2019)

Case Background

The case revolves around two brothers, Santokh Singh and Nathu Ram, who inherited agricultural land from their father. Santokh Singh claimed they had an arrangement for separate enjoyment of specific land portions. However, Nathu Ram, not wanting to continue with this arrangement, sold his share of the land to Babu Ram on 19 August 1991.

Santokh Singh then filed a civil suit in the Court of Senior Sub-Judge, Hamirpur, seeking a permanent injunction and declaration. He argued that as a co-sharer, he had a preferential right to acquire the land being transferred by Nathu Ram to Babu Ram. The trial court dismissed the suit on 4 May 1994.

Santokh Singh appealed to the District Judge, Hamirpur, who partly allowed the appeal. Relying on previous decisions, the appellate court held that Santokh Singh had a preferential right under Section 22 of the Hindu Succession Act, 1956 to acquire the land. The court declared the transfer of land to Babu Ram as illegal and directed Babu Ram to transfer the land to Santokh Singh upon payment of Rs. 60,000.

Babu Ram then filed a Regular Second Appeal in the High Court, which upheld the District Judge’s decision, leading to the current appeal before the Supreme Court.

Timeline

Course of Proceedings

The trial court initially dismissed Santokh Singh’s suit, disagreeing with his claim of preferential right. However, the District Judge’s court overturned this decision, relying on precedents that supported Santokh Singh’s preferential right under Section 22 of the Hindu Succession Act, 1956.

The High Court framed the substantial question of law as:

“Whether Section 22 of the Hindu Succession Act excludes interest in agricultural land of an intestate and the preferential right over “immovable property” as envisaged in the said provision is confined only to business and such immovable property which does not include the agricultural land?”

The High Court, relying on a previous decision of its Division Bench in the case of Roshan Lal vs. Pritam Singh, dismissed the second appeal, affirming the applicability of Section 22 to agricultural land.

Legal Framework

The core of this case involves the interpretation of Section 22 of the Hindu Succession Act, 1956, which states:

“22. Preferential right to acquire property in certain cases – (1) Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.”

The court also considered the legislative competence of the Parliament to enact laws regarding succession, referring to the Seventh Schedule of the Constitution of India. Specifically, Entry 5 of List III (Concurrent List) which deals with:

“Marriage and divorce; infants and minors; adoption; wills, intestacy and succession; joint family and partition; all matters in respect of which parties in judicial proceedings were, immediately before the commencement of this Constitution, subject to their personal law.”

The court also contrasted this with Entry 18 of List II (State List), which pertains to:

“Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.”

The court noted that the original Section 4(2) of the Hindu Succession Act, 1956, which exempted certain agricultural holdings, was omitted by the Hindu Succession (Amendment) Act, 2005.

Arguments

The appellant, Babu Ram, argued that Section 22 of the Hindu Succession Act, 1956, does not apply to agricultural land. He contended that the term “immovable property” in Section 22 should be interpreted to exclude agricultural land because the Parliament lacks the power to legislate on matters related to agricultural land, except for devolution. The appellant relied on previous judgments of the Punjab and Allahabad High Courts, which supported this view.

• Appellant’s Submissions:
  • Section 22 of the Hindu Succession Act, 1956, does not cover agricultural lands.
  • The Parliament’s legislative power regarding agricultural land is limited to devolution, not pre-emption rights.
  • The term “immovable property” in Section 22 should not include agricultural land.
  • Relied on the judgments of the Punjab High Court in Jaswant and ors. vs. Smt. Basanti Devi and the Allahabad High Court in Smt. Prema Devi vs. Joint Director of Consolidation.

The respondent, Santokh Singh’s legal representatives, argued that Section 22 does apply to agricultural land. They contended that the omission of the phrase “save as regards agricultural land” from Entry 5 of List III in the Constitution indicates that the Parliament has the power to legislate on succession matters, including agricultural land. They relied on the judgments of the Orissa High Court in Sm. Laxmi Debi v. Surendra Kumar Panda and Others, which supported this view.

• Respondent’s Submissions:
  • Section 22 of the Hindu Succession Act, 1956, applies to agricultural lands.
  • The omission of “save as regards agricultural land” from Entry 5 of List III in the Constitution indicates that Parliament has power to legislate on succession, including agricultural land.
  • Relied on the judgment of the Orissa High Court in Sm. Laxmi Debi v. Surendra Kumar Panda and Others.

The innovativeness of the arguments lies in the interpretation of the constitutional entries and the legislative competence of the Parliament, with the appellant emphasizing the limitations on Parliament’s power and the respondent highlighting the changes in the constitutional framework.

Issues Framed by the Supreme Court

The Supreme Court considered the following issue:

1. Whether the preferential right given to an heir of a Hindu under Section 22 of the Hindu Succession Act, 1956, is applicable if the property in question is agricultural land.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

The court also considered the following legal provisions:

• Section 22 of the Hindu Succession Act, 1956: This section provides a preferential right to acquire property for heirs in Class I of the Schedule.
• Entry 5 of List III (Concurrent List) of the Constitution of India: This entry deals with marriage, divorce, adoption, wills, intestacy, and succession.
• Entry 18 of List II (State List) of the Constitution of India: This entry deals with land, land tenures, transfer, and alienation of agricultural land.
• Section 4(2) of the Hindu Succession Act, 1956: This section, before its omission, stated that the provisions of the Act would not apply in cases of devolution of tenancy rights in respect of agricultural holdings.

Judgment

The Supreme Court held that the preferential right given to an heir under Section 22 of the Hindu Succession Act, 1956, applies even if the property in question is agricultural land.

The court’s view on the authorities is as follows:

• In the matter of the Hindu Women’s Rights to Property Act, 1937, (1941) 3 FCR 12 = AIR 1941 FC 72:* This case was distinguished because it was based on the Government of India Act, 1935, which had different legislative entries. The court noted that the current constitutional framework is different.
• Sm. Laxmi Debi v. Surendra Kumar Panda and Others, AIR 1957 Orissa 1:* This case was followed because the Orissa High Court correctly interpreted the constitutional entries and held that the Hindu Succession Act applies to agricultural lands.
• Jaswant and ors. vs. Smt. Basanti Devi, 1970 PLJ 587 = 1970 Punjab Law Reporter Vol. 72 page No.958:* This case was overruled because the Punjab High Court incorrectly interpreted the constitutional entries and held that Section 22 does not apply to agricultural lands.
• Smt. Prema Devi vs. Joint Director of Consolidation (Head quarter) at Gorakhpur Camp and Ors., AIR 1970 Allahabad 238:* This case was overruled because the Allahabad High Court incorrectly interpreted the constitutional entries and held that the Hindu Succession Act does not apply to agricultural lands.
• Vaijanath and ors. vs. Guramma and anr., (1999) 1 SCC 292:* This case was followed to support the view that the term ‘property’ can include agricultural lands.

The court emphasized that the legislative intent behind Section 22 was to keep family property within the family. The court reasoned that since the right to the property arises from succession under the Act, the preferential right to acquire that property is also a part of the same concept.

The court observed that the changes in the constitutional entries, specifically the omission of “save as regards agricultural land” from Entry 5 of List III, clearly indicate that the Parliament has the power to legislate on succession matters, including agricultural land.

The court stated:

“Since the right itself in certain cases was created for the first time by the provisions of the Act, it was thought fit to put a qualification so that the properties belonging to the family would be held within the family, to the extent possible and no outsider would easily be planted in the family properties.”

The court further noted:

“The present Entry 5 of List III shows “succession” in its fullest sense to be a topic in the Concurrent List. The concept of succession will take within its fold testamentary as well as intestate succession.”

The court also clarified:

“Therefore, the content of preferential right cannot be disassociated in the present case from the principles of succession. They are both part of the same concept.”

The court overruled the decisions of various High Courts that held a contrary view.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of the Constitution and the legislative intent behind the Hindu Succession Act, 1956. The court emphasized the changes in the constitutional framework, particularly the omission of “save as regards agricultural land” from Entry 5 of List III, which indicated that the Parliament has the power to legislate on succession matters, including agricultural land. Additionally, the court was driven by the intent to ensure that family property remains within the family, as reflected in the preferential right under Section 22.

The sentiment analysis of the reasons given by the Supreme Court is as follows:

The ratio of fact to law in the court’s decision is as follows:

Key Takeaways

• The preferential right of an heir to acquire property under Section 22 of the Hindu Succession Act, 1956, applies to agricultural land.
• This judgment clarifies a long-standing ambiguity regarding the applicability of Section 22 to agricultural land.
• The decision ensures that family property, including agricultural land, is more likely to remain within the family.
• The judgment overrules previous decisions of various High Courts that held a contrary view.
• The judgment reinforces the legislative competence of the Parliament to legislate on succession matters, including agricultural land.

Directions

The Supreme Court dismissed the appeal and affirmed the judgment and decree passed by the Court of District Judge, Hamirpur. No specific directions were given.

Development of Law

The ratio decidendi of this case is that the preferential right given to an heir of a Hindu under Section 22 of the Hindu Succession Act, 1956, is applicable even if the property in question is an agricultural land. This judgment clarifies the scope of Section 22 and settles the divergent views of various High Courts on the matter. The Supreme Court has overruled the judgments of the Punjab and Allahabad High Courts which had held that Section 22 does not apply to agricultural land. This decision solidifies the position that the Parliament has the legislative competence to enact laws regarding succession to all types of property, including agricultural land.

Conclusion

In conclusion, the Supreme Court’s judgment in Babu Ram vs. Santokh Singh clarifies that the preferential right of an heir to acquire property under Section 22 of the Hindu Succession Act, 1956, applies to agricultural land. This decision settles a long-standing legal debate and ensures that family property, including agricultural land, remains within the family to the extent possible. The court’s interpretation of the constitutional entries and the legislative intent behind the Act provides a clear legal framework for future cases.