Supreme Court Upholds Estoppel on Inheritance Rights Based on Father’s Release Deed: Elumalai vs. Kamala (2023)

Introduction

Date of the Judgment: 25 January 2023
Citation: 2023 INSC 83
Judges: K.M. Joseph, J., Hrishikesh Roy, J. (Bench of 2 Judges)
Can a person’s actions to relinquish their inheritance rights impact their children’s future claims to the same property? The Supreme Court of India recently examined this complex issue in a case involving a release deed and inheritance rights. The core question was whether a release deed executed by a father, for consideration, would prevent his children from claiming their share in their grandfather’s property. This judgment clarifies the application of the principle of estoppel in inheritance matters, particularly when a prior release deed exists.

Case Background

The case revolves around a property dispute within a family. Shri Sengalani Chettiar had two wives. His first marriage produced a son, Shri Chandran, who is the father of the appellants, Elumalai and another. From his second marriage, Sengalani Chettiar had five daughters and another son. The dispute concerns property that was self-acquired by Sengalani Chettiar. Shri Chandran had executed a Release Deed on 12 November 1975, relinquishing his rights to the property in exchange for consideration. Shri Chandran passed away on 9 December 1978, and Sengalani Chettiar died on 19 January 1988. The second wife of Sengalani Chettiar passed away on 25 August 2005. A suit for partition was filed in 2006 by two children from Sengalani Chettiar’s second marriage, seeking to exclude the appellants based on the Release Deed executed by their father.

Timeline

Course of Proceedings

The trial court initially ruled that the Release Deed was void because it was executed by Shri Chandran while his father, Sengalani Chettiar, was still alive. The trial court held that the Release Deed did not bar the appellants from inheriting their grandfather’s property and granted the plaintiffs a 2/7 share. The High Court, however, overturned the trial court’s decision, relying on the principle laid down in Gulam Abbas v. Haji Kayyam Ali and others (AIR 1973 SC 554). The High Court held that since Shri Chandran had executed a release deed for consideration, the appellants were estopped from claiming any share in the property. The High Court also noted the death of the second plaintiff and adjusted the shares accordingly.

Legal Framework

The judgment discusses the following legal provisions:

• Section 6 of the Transfer of Property Act: This section specifies what kind of property can be transferred. It states that a “chance of an heir apparent succeeding to an estate” cannot be transferred. “Section 6 (a) declares that a chance of an heir apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman or other mere possibility of a like nature cannot be transferred.”
• Section 8 of the Hindu Succession Act, 1956: This section outlines the rules for the devolution of property of a male Hindu dying intestate. It specifies that the property will devolve to Class I heirs, which includes the son of a pre-deceased son.
• Section 8 of the Hindu Minority and Guardianship Act, 1956: This section defines the powers of a natural guardian and states that a guardian cannot bind a minor by a personal covenant. “the guardian can in no case bind the minor by a personal covenant.”

Arguments

Appellants’ Arguments:

• The appellants argued that the High Court erred in applying the principle from Gulam Abbas (supra), which arose under Mohammadan Law, to a case governed by the Hindu Succession Act.
• They contended that the Release Deed was void because, in 1975, their father, Shri Chandran, had only a spes successionis (a mere expectation of inheriting), which cannot be transferred under Section 6 of the Transfer of Property Act.
• The appellants asserted that upon the death of their grandfather, Sengalani Chettiar, in 1988, they had a right to inherit under Section 8 of the Hindu Succession Act, 1956, as Class-I heirs, which cannot be negated by the Release Deed.
• They also contended that Section 8 of the Hindu Minority and Guardianship Act, 1956, prevents their father from binding them through a personal covenant.

Respondents’ Arguments:

• The respondents supported the High Court’s judgment, arguing that the intention of the parties should be considered.
• They claimed that the Release Deed was executed to protect the interests of Sengalani Chettiar’s son from his second marriage, who was not mentally well.
• They argued that since Shri Chandran had received consideration and relinquished his rights, the appellants should not be allowed to claim succession to the property.

Submissions by Parties:

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the Release Deed executed by Shri Chandran, the father of the appellants, is valid in the eyes of law, considering that he had only a spes successionis at the time of execution.
2. Whether the principle of estoppel, as applied in Gulam Abbas (supra), can be extended to the facts of the present case.
3. Whether the appellants, as Class-I heirs under Section 8 of the Hindu Succession Act, 1956, can be barred from inheriting their grandfather’s property due to the Release Deed executed by their father.
4. Whether Section 8 of the Hindu Minority and Guardianship Act, 1956, prevents the application of the principle of estoppel.

Treatment of the Issue by the Court

Authorities

The 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?

• Gulam Abbas v. Haji Kayyam Ali and others (AIR 1973 SC 554)*: The Supreme Court upheld the principle of estoppel laid down in this case and applied it to the present case.
• Section 6 of the Transfer of Property Act: The Court agreed that a spes successionis cannot be transferred.
• Section 8 of the Hindu Succession Act, 1956: The Court acknowledged the rights of Class I heirs but held that estoppel could prevent such rights.
• Section 8 of the Hindu Minority and Guardianship Act, 1956: The Court held that this section does not apply to a spes successionis.
• AIR 1976 Allahabad 573: The Court approved the view that a renunciation of an expectancy is not a transfer but can create an estoppel.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle of equitable estoppel. The court emphasized that Shri Chandran’s conduct of executing the Release Deed and receiving consideration created a bar for him and his children from claiming any right in the property. The court also noted that Sengalani Chettiar acted on the basis of the release deed. The court also reasoned that the intention of Sengalani Chettiar was to exclude Shri Chandran from inheritance. The Court also clarified that Section 8 of the Hindu Minority and Guardianship Act, 1956, does not apply to a spes successionis.

Logical Reasoning:

The Court considered the argument that the grandfather did not execute any document by way of a Will. The court opined that this shows that the grandfather proceeded on the basis that the branch represented by Shri Chandran was being cut off from inheritance. The Court rejected the argument that the principle in Gulam Abbas (supra) may not be available in view of the factual matrix. The Court stated that having received valuable consideration and allowed his father to proceed on the basis that he was free to deal with the property without the prospect of being haunted by any claim, a clear estoppel sprang into existence following the receipt of consideration by Shri Chandran. The Court also stated that the effect of the estoppel cannot be warded off by persons claiming through the person whose conduct has generated the estoppel.

“The very fact that Shri Chettiar did not execute any document by way of Will only shows that he proceeded on the basis that the branch represented by Shri Chandran was being cut off from inheritance from the property in question.”

“Estoppel would shut out in equity any claim otherwise either by Shri Chandran or his children, viz., the appellants.”

“We also find no merit at all in the attempt at drawing a distinction based on religion. The principle of estoppel applies without such distinction.”

Key Takeaways

• A release deed executed by an heir apparent for consideration can create an estoppel, preventing them and their descendants from claiming inheritance rights.
• The principle of estoppel applies irrespective of the religion of the parties.
• The provisions of Section 8 of the Hindu Minority and Guardianship Act, 1956, do not apply to a spes successionis.
• Conduct of a person can create an estoppel against them and those claiming through them.

Directions

No specific directions were given by the Supreme Court in this case.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that a release deed executed by an heir apparent for valuable consideration creates an estoppel against them and their descendants, preventing them from claiming inheritance rights. This case reinforces the principle of equitable estoppel and clarifies its application in inheritance matters, particularly when a release deed is involved. It also clarifies that the principle of estoppel applies irrespective of religion.

Conclusion

The Supreme Court dismissed the appeals, upholding the High Court’s decision. The Court held that the Release Deed executed by Shri Chandran, though not a transfer of property, created an estoppel that prevented him and his children from claiming a share in the property. The Court clarified that the principle of estoppel applies irrespective of religion and that Section 8 of the Hindu Minority and Guardianship Act, 1956, does not apply to a spes successionis. This judgment reinforces the importance of conduct and intention in determining inheritance rights and highlights the binding nature of estoppel. The court also held that the principle in Gulam Abbas (supra) applies to the facts of the case.