Supreme Court Upholds Self-Acquired Property Rights in Family Dispute: S. Subramanian vs. S. Ramasamy (2019)

Introduction

Date of the Judgment: May 1, 2019
Citation: Civil Appeal Nos. 4536-4537 of 2019 (Arising out of SLP (C) NOS. 31125-26 of 2013)
Judges: L. Nageswara Rao, J., M.R. Shah, J.

Can a property acquired by an individual through a settlement deed be considered part of a joint family property if the family members live together and take loans together? The Supreme Court of India recently addressed this question in a case involving a dispute between two brothers over their father’s property. The core issue revolved around whether the father, Sengoda Gounder, had blended his self-acquired property into the joint family property, thereby making it partible among his sons. The Supreme Court, in this case, overturned the High Court’s decision, reaffirming the principle that a clear intention to waive separate rights must be established for self-acquired property to be considered joint family property. The judgment was delivered by a two-judge bench comprising Justice L. Nageswara Rao and Justice M.R. Shah, with Justice M.R. Shah authoring the opinion.

Case Background

The dispute began when S. Ramasamy (Respondent No. 1) filed a suit (OS No. 10 of 2006) seeking a permanent injunction to restrain his younger brother, S. Subramanian (Appellant), from alienating or encumbering his one-third share of the suit properties. This was followed by another suit (OS No. 19 of 2005) filed by Ramasamy against both Subramanian and their father, Sengoda Gounder, for the partition of the suit properties. Ramasamy claimed that the properties were part of a Hindu Joint Family, which included himself, his father, and his younger brother. He contended that the properties, which Sengoda Gounder received through a settlement deed (Ex-A1 dated 07.04.1956), were treated as joint family properties. Ramasamy alleged that his father and brother were colluding to alienate these properties, which prompted him to file the initial injunction suit.

Subramanian, the younger brother, contested the claim, asserting that no joint family ever existed. He argued that the suit properties were Sengoda Gounder’s self-acquired properties through the settlement deed (Ex-A1) and that he had no proprietary right or share in them. Subramanian further stated that Sengoda Gounder had executed two settlement deeds (Ex-A13 and A14) and a will (Ex-B24 dated 08.11.2004) in his favor, making him the absolute owner of the properties. He also argued that the second suit for partition was barred by Order 2 Rule 2 of the Code of Civil Procedure (CPC).

Timeline

Course of Proceedings

The Trial Court jointly tried both suits and dismissed them, concluding that the suit properties were self-acquired by Sengoda Gounder and not part of a joint family. The First Appellate Court upheld this decision. However, the High Court of Judicature at Madras, in second appeals, reversed the decisions of the lower courts. The High Court framed four substantial questions of law, including whether the lower courts were correct in not treating Sengoda Gounder’s actions as blending the suit properties with ancestral properties and whether the settlement deeds and will in favor of Subramanian were valid. The High Court concluded that Sengoda Gounder had indeed blended his self-acquired properties with the joint family properties and that he did not have the competence to execute the settlement deeds and will entirely in favor of Subramanian. The High Court directed a preliminary decree for partition, allotting a half share each to Ramasamy and Subramanian.

Legal Framework

The case primarily involves the interpretation of the concept of “blending” in Hindu law, where self-acquired property can become joint family property. The relevant legal provision is Section 100 of the Code of Civil Procedure (CPC), which governs second appeals in the High Court. According to Section 100 of the CPC, a second appeal can only be entertained if there is a substantial question of law involved. The High Court is not required to re-appreciate the entire evidence on record as if it is deciding the first appeal.

The Supreme Court observed that the High Court exceeded its jurisdiction under Section 100 of the CPC by re-appreciating the entire evidence and overturning the findings of fact recorded by the lower courts. The Supreme Court also noted that the substantial questions of law framed by the High Court were not substantial questions of law at all, but were questions of fact.

Arguments

Appellant’s (S. Subramanian) Arguments:

• The High Court exceeded its jurisdiction under Section 100 of the CPC by re-appreciating the evidence and interfering with the factual findings of the lower courts.

• The substantial questions of law framed by the High Court were not actually substantial questions of law but rather questions of fact.

• The High Court erred in concluding that there was a blending of the suit properties with the ancestral properties. The suit properties were self-acquired by Sengoda Gounder and were not inherited from his direct male ancestors.

• The execution of settlement deeds (Exhibits A13 & A14) and a will (Exhibit B24) by Sengoda Gounder in favor of Subramanian clearly indicated that he intended to treat the suit properties as self-acquired and not as joint family properties.

• The loans taken by the family members do not imply a blending of the suit properties into joint family properties. The loans were repaid by Sengoda Gounder from the income derived from the suit properties.

• Relied upon the decisions of the Supreme Court in Panchugopal Barua v. Umesh Chandra Goswami, (1997) 4 SCC 713, Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722, and Ishwar Dass Jain v. Sohan Lal, (2000) 1 SCC 434, to argue that the High Court’s interference with factual findings was not permissible under Section 100 of the CPC.

Respondent’s (S. Ramasamy) Arguments:

• The High Court was aware of its limitations under Section 100 of the CPC but was compelled to intervene because the lower courts did not properly appreciate the evidence, particularly Exhibit A1 and Exhibits A19, 24, 45, & 46.

• The High Court correctly held that Sengoda Gounder’s actions constituted a blending of the suit properties with the joint family properties.

• The sale deeds (Exhibits A10 and A2) indicated that the properties were treated as ancestral properties, further supporting the claim of blending.

• Once the blending occurred, Sengoda Gounder lost the competence to execute settlement deeds and a will treating the suit properties as self-acquired properties.

• The High Court was justified in appreciating the evidence to conclude that the findings of the lower courts were perverse and contrary to the evidence on record.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues in a separate section. However, the core issues addressed by the court can be summarized as:

• Whether the High Court was justified in re-appreciating the evidence and overturning the factual findings of the lower courts while exercising its powers under Section 100 of the CPC.
• Whether the High Court correctly concluded that there was a blending of the suit properties with the joint family properties by Sengoda Gounder.
• Whether the High Court’s substantial questions of law were indeed substantial questions of law or merely questions of fact.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

On the scope of Section 100 of the CPC:

• Panchugopal Barua v. Umesh Chandra Goswami, (1997) 4 SCC 713 – Supreme Court of India: This case was cited to emphasize that the High Court cannot re-appreciate evidence in a second appeal under Section 100 of the CPC.
• Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722 – Supreme Court of India: This case was cited to highlight that a second appeal under Section 100 of the CPC cannot substitute the opinion of the First Appellate Court unless the conclusions are erroneous due to being contrary to mandatory provisions, law pronounced by the Apex Court, or based on inadmissible evidence.
• Ishwar Dass Jain v. Sohan Lal, (2000) 1 SCC 434 – Supreme Court of India: This case was cited to explain that a substantial question of law arises when material evidence is not considered or when a finding is based on inadmissible evidence.

On the concept of blending:

• The Court reiterated the settled law that separate or self-acquired property of a member of a joint Hindu family may be impressed with the character of joint family property if it is voluntarily thrown by the owner into the common stock with the intention of abandoning his separate claim. However, a clear intention to waive separate rights must be established. Mere use by other family members or utilization of income for family support does not imply blending.

Treatment of Authorities by the Court

Judgment

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

How each authority was viewed by the Court?

• The Supreme Court followed the principles laid down in Panchugopal Barua v. Umesh Chandra Goswami, (1997) 4 SCC 713, emphasizing that the High Court cannot re-appreciate evidence in a second appeal under Section 100 of the CPC.
• The Supreme Court followed the principles laid down in Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722, highlighting that the High Court cannot substitute its opinion for that of the First Appellate Court unless the conclusions are erroneous.
• The Supreme Court followed the principles laid down in Ishwar Dass Jain v. Sohan Lal, (2000) 1 SCC 434, clarifying the circumstances under which a substantial question of law can arise.
• The Supreme Court reiterated the settled law on the concept of blending, emphasizing that a clear intention to waive separate rights must be established for self-acquired property to be considered joint family property.

What weighed in the mind of the Court?

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

• The High Court’s overreach in re-appreciating evidence under Section 100 of the CPC.
• The lack of clear intention to blend the self-acquired property into joint family property.
• The explicit actions of Sengoda Gounder in executing settlement deeds and a will in favor of Subramanian, which indicated his intention to treat the properties as self-acquired.
• The settled legal position that mere use by other family members or utilization of income for family support does not imply blending.

Fact:Law Ratio

Logical Reasoning

Reasoning of the Court

The Supreme Court’s reasoning was based on the following key points:

• Jurisdiction under Section 100 of the CPC: The Court emphasized that the High Court’s jurisdiction in second appeals under Section 100 of the CPC is limited. The High Court cannot re-appreciate the evidence and substitute its own findings of fact for those of the lower courts unless the findings are perverse or based on no evidence.
• Substantial Questions of Law: The Court clarified that a second appeal can only be entertained on a substantial question of law, not merely a question of law or fact. The questions framed by the High Court were deemed to be questions of fact, not substantial questions of law.
• Blending of Self-Acquired Property: The Court reiterated the settled law that for self-acquired property to be considered joint family property, there must be a clear intention to waive separate rights and blend the property into the common stock. Mere use by family members or utilization of income for family support does not imply blending.
• Intention of the Property Owner: The Court noted that the settlement deeds and the will executed by Sengoda Gounder in favor of Subramanian indicated his intention to treat the properties as self-acquired and not as joint family properties.
• Treatment of Loans: The Court held that the loans taken by the family members did not automatically imply a blending of the suit properties into joint family properties.

The Court quoted from the judgment:

“As per catena of decisions of this Court, while deciding the second appeal under Section 100 of the CPC, the High Court is not required to re-appreciate the entire evidence on record and to come to its own conclusion and the High Court cannot set aside the findings of facts recorded by both the Courts below when the findings recorded by both the Courts below were on appreciation of evidence.”

“Even abandonment cannot be inferred from mere allowing other family members also to use the property or utilisation of income of the separate property out of generosity to support the family members.”

“The law on the aspect of blending is well settled that property separate or self-acquired of a member of a joint Hindu family may be impressed with the character of joint family property if it is voluntarily thrown by the owner into the common stock with the intention of abandoning his separate claim therein; but to establish such abandonment a clear intention to waive separate rights must be established.”

Key Takeaways

✓ Self-acquired property remains separate unless there is a clear intention to blend it into joint family property.
✓ High Courts should not re-appreciate evidence in second appeals under Section 100 of the CPC.
✓ The intention of the property owner is crucial in determining whether self-acquired property becomes joint family property.
✓ Mere use by family members or utilization of income for family support does not imply blending.
✓ This judgment reinforces the principle that self-acquired property rights are protected unless there is a clear and voluntary act of blending.

Directions

The Supreme Court allowed the appeals, quashed the High Court’s judgment, and restored the Trial Court’s decision dismissing the suits. There was no order as to costs.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that the High Court cannot re-appreciate evidence in a second appeal under Section 100 of the CPC and that self-acquired property does not become joint family property unless there is a clear intention to blend it. This judgment reinforces the existing legal position on the limitations of the High Court’s jurisdiction in second appeals and the requirements for blending self-acquired property into joint family property. It clarifies that a clear intention to waive separate rights must be established, and mere use by family members or utilization of income for family support does not imply blending.

Conclusion

The Supreme Court allowed the appeals, setting aside the High Court’s decision and restoring the Trial Court’s order. The Court held that the High Court exceeded its jurisdiction by re-appreciating evidence and that there was no blending of the suit properties into joint family properties. This judgment reinforces the principle that self-acquired property remains separate unless there is a clear intention to blend it into joint family property, and it limits the scope of interference by the High Court in second appeals under Section 100 of the CPC.