Create Your Legal Document in Minutes! Get 10% off on your first order with code: LFI10
PRACTICAL ASPECTS OF LIS PENDENS – SECTION 52 OF THE TRANSFER OF PROPERTY ACT, 1882

PRACTICAL ASPECTS OF LIS PENDENS – SECTION 52 OF THE TRANSFER OF PROPERTY ACT, 1882

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | January 09, 2023

Introduction

The principle of Lis Pendens – ‘Lis’ meaning litigation/dispute and ‘Pendens’ meaning pending – is embodied in this maxim, and it finds itself codified in Section 52 of the Transfer of Property Act, 1882. While the doctrine was found in the English case of Ballamy v. Sabine, Privy Council has observed its purpose as follows[1]:

“Broad purpose of Section 52 is to maintain status quo unaffected by act of any party to the litigation pending its determination. The applicability of the section cannot depend on matters of proof or strength or weakness of the case on one side or other in bona fide proceedings. To apply such test is to misconceive the object of the enactment”.

In simple words, the doctrine of Lis Pendens rules that neither party to the suit can transfer, or otherwise deal in anyway with the suit property in a manner which affects the rights of the other party. The doctrine thus, restricts alienation of the suit property, to avoid creation of any third party rights which further prolongs justice due to endless litigation.

Application of doctrine

The doctrine of Lis Pendens is applied as mentioned under section 52 of the Transfer of Property Act, 1882. However, it is paramount to note that by certain state amendments, it is mandatory to also register a notice of Lis Pendens in order to give effect to the doctrine.

Section 52 of Transfer of Property Act, 1882 was amended in the State of Maharashtra by Bombay (Amendment) Act 14 of 1939 [2] and the same reads as follows:

52. (1) During the pendency in any court having authority within the limits of India excluding the State of Jammu and Kashmir established beyond such limits by the Central Government, of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, if a notice of the pendency of such suit or proceeding is registered under section 18 of the Indian Registration Act, 1908, the property after the notice is so registered cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose.

(2) Every notice of pendency of a suit or proceeding referred to in sub-section (1) shall contain the following particulars, namely:-

(a) The name and address of the owner of immovable property or other person whose right to the immovable property is in question;

(b) The description of the immovable property the right to which is in question;

(c) The Court in which the suit or proceeding is pending;

(d) The nature and title of the suit or proceeding; and

(e) The date on which the suit or proceeding was instituted.

In its application in the State of Maharashtra, Section 18 of the Registration Act, 1908 has been amended as follows:

a) Delete the word “and” after clause (e)

b) After “and” in (e), add – notices of pending suits or proceedings referred to in Section 52 of the Transfer of Property Act, 1882

The effect is same in the State of Gujarat [3].

Thus, following are the necessary conditions for the application of the doctrine:

a) The suit shall be pending in a competent court.

b) The suit shall not be collusive/friendly in nature.

c) A right to immovable property must be directly and specifically in question.

d) A notice of Lis Pendens shall be registered under section 18 of The Registration Act, 1908 with the concerned Registrar/Sub-Registrar. [Applicable in the State of Gujarat and Maharashtra]

Effect of doctrine

On the application of the doctrine, any transfer made during the pendency of the suit is not void ab initio or illegal, but only makes the purchaser bound by the decision of the court [4]. The rights of the parties are only subservient to the decision of the court. If the transferor’s title is upheld, the sale will be valid and the transferee’s title will not be affected [5]. The doctrine of Lis Pendens is thus intended to strike at attempts made by parties to circumvent jurisdiction of court through private dealings to create third party rights [6].

Removal of Lis Pendens

In certain circumstances, a notice of Lis Pendens is filed to intentionally drag parties to litigation, and delay transactions of the immovable property. In such cases, court has the discretionary power to lift the operation of Section 52. The court itself has provided the aspects be borne by it when it considers exemption of operation to deprive plaintiff of fruits of litigation [7], though these are not exhaustive:

a) Can party be relieved only on a court imposing conditions? Is imposing conditions a prerequisite?

b) On facts pleaded by the plaintiff, will he prima facie, be entitled to the relief of specific performance of the contract?

c) If court concludes that specific relief cannot be granted, then while considering the alternative relief of damages which the plaintiff in the suit for specific performance is entitled to, should the plaintiff be secured?

d) If to be secured, should it only be the market value of the property on the date of the suit at time when the suit is filed be considered?

In a case, where there is no concluded contract between the parties, it would be highly inequitable to continue the cloud on the title of the property, especially when even if the plaintiff leads evidence, the chances of success are very dismal. Thus, operation of section 52 is lifted off from the suit premises, even if the notice of lis pendens was registered and fulfilled all conditions to be valid [8].

Conclusion

While registration of the notice is compulsory in Gujarat and Maharashtra, it is not so in rest of the states. This creates a peculiar problem. Transferors in a pending suit sell off the premises to unsuspecting purchasers who do not have any means to check if the premises are subject to any pending litigation. This jeopardizes the subsequent purchaser, who after investing all his earnings gets dragged in litigation, the result of which may deprive him out of the money invested as well as the possession of the suit [9].

The solution to this is that every state must make it compulsory to register a notice of Lis Pendens with the local registrar while filing a suit to dispute title of property. This will enable the subsequent purchaser to check if any litigation is pending on the premises. In cases where a Lis Pendens if filed to intentionally cloud genuine title, the courts have the power to remove the same after considering all the facts of the case, and the nature of the suit.

[1] Gouri Datt Maharaj v. S K Sukur Mohammed [AIR 1948 PC 147]

[2] The Transfer of Property and The Indian Registration (Bombay Amendment) Act, 1939

[3] Act 11 of 1960, S. 87; Gujarat A.L.O 1960

[4] Hardev Singh v. Gurmail Singh (2007)

[5] T G Ashok Kumar v. Govindammal & Anr. [2010 (Civil Appeal No .10325 of 2010)]

[6] Rajendra Singh & Ors. v. Santa Singh & Ors. [1973 AIR 2537, 1974 SCR (1) 381]

[7] Shantilal J Khona v. Anandrai Shivlal Dave [ 2002 (3) Bom. C.R. 346]

[8] Ambaji Developers & Ors v. Mukundrai D Sanghavi (2019)

[9] 12th Report by Law Commission of Karnataka (18.8.2010)

A CHANGE IN AFFIRMATIVE ACTION OF RESERVATION – AN IMPORTANT JUDGEMENT BY THE HON’BLE SUPREME COURT OF INDIA

A CHANGE IN AFFIRMATIVE ACTION OF RESERVATION – AN IMPORTANT JUDGEMENT BY THE HON’BLE SUPREME COURT OF INDIA

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | December 16, 2022

Introduction

The 103rd Constitution Amendment Act was assented by the President of India in January 2019, and this amendment introduced a 10% reservation for Economically Weaker Sections (herein referred as EWS) for admission in central-run public educational institutions and private educational institutions, and for employment in central public institutions.

The amendment added clause 15(6) and 16(6) in the constitution which allowed state action of providing for reservation for EWS, which in itself is a permissible affirmative action, but to the exclusion of categories mentioned in Article 15(4), 15(5) and Article 16(4).

Various petitions were filed before the Hon’ble Supreme Court of India challenging the amendment for being discriminative against backward classes and violating the basic structure of the constitution.

A Five Judge bench of the Hon’ble Supreme Court, in Janhit Abhiyan v. Union of India [1], delivered its judgement on November 7, 2022, upholding the constitutionality of the 103rd Amendment in a majority of 3:2.

Arguments in the case

Challenging arguments, by the petitioners, relied on Constituent Assembly debates, the Preamble and various judgements of the Hon’ble Supreme Court, to show that the concept of reservation itself was to address historic inequalities and that the special provisions for specific classes is an action of positive discrimination, which in itself forms a congenital feature of the basic structure of the constitution. The reservation which the amendment propounds to create is not for a class, but for a section of society which will exist indefinitely, based not on economic condition but financial incapacity and which rewards poor financial behaviour; thus is not reliable for reservation.

The petitioners pointed out that there is no reasonable classification for the creation of the class, and the created classification does not have any nexus to the object to be reached, thus violating Article 14 [2]. Economic criteria as the sole factor for reservation had not been accepted earlier, and the ceiling limit of 50% is breached by the said amendment [3]. A few arguments were made that the amendment could be sustained if the phase “other than” was read down [4] by the court to be “in addition to”. Lastly, reservation cannot be used as a poverty alleviation scheme to reach development goals.

In support of the amendment, the Union of India argued that the amendment does not violate the basic structure, but fosters it, and that a constitutional amendment can be struck down only when it changes the identity of the constitution [5]. Creation of a new class fosters ‘economic justice’ and reservation for EWS is maintainable, as seen under Right of Children to Free and Compulsory Education Act, 2009 [6].

It was further argued that exclusion of classes already mentioned in Article 15(4) and Article 16(4) does not violate equity code and is necessary to avoid dual benefit. The 10% ESW reservation is in addition to the 49.5% existing reservation for categories under the said provisions. Moreover the concept of equality and reservation is changing and evolving, and such affirmative action must be positively interpreted to benefit the targeted class.

The Minority view

The minority judgement was delivered by Justice J Ravindra Bhat and the then Chief Justice of India, U U Lalit. They held that economic criteria for educational reservation under Article 15 was acceptable, however EWS reservation under Article 16 for governmental jobs has to be struck down. The exclusion of SC/ST/OBC is a constitutionally prohibited form of discrimination. They form the majority of EWS, and depriving them of the said benefit directly benefits the upper class which has faced no historic discrimination, defeating the very intent of reservation. Article 16(4) is premised on adequate representation, and reservation for EWS is not for lack of representation, thus being unqualified.

A breach of the 50% ceiling limit itself will result in compartmentalisation, and any reservation for EWS will lead to virtual deletion of Article 15(4) and 16(4). The ceiling limit existed to balance reservation and open competition. The amendment legitimizes discrimination by exclusion to benefit targeted group. However the EWS, i.e the targeted group, itself is created by exclusion of economically weaker sections of SC/ST/OBC who remain economically weaker due to being subjected to discrimination in all dimensions.

The Majority view

The majority judgement was delivered by Justices Dinesh Maheshwari, Bela Trivedi and J B Pardiwala, which upheld the 103rd Amendment and accepted creation of provisions for reservation of EWS as permissible affirmative action to ensure inclusion and held that the 50% ceiling limit is not sacrosanct and has been by-passed previously in certain circumstances. The classification for EWS is not an unreasonable one and has a clear purpose of achieving substantive equality. Justice Trivedi held “Just as equals cannot be treated unequally, unequals cannot be treated equally”, and the exclusion of SC/ST/OBC is valid. Reservation, in itself, is not to be continued forever and must be revisited to fulfil the object of having a casteless and classless society. Justice Maheshwari held that compensatory discrimination, wherever applied is exclusionary in character and acquires worth only after exclusion of other classes.

The argument to read down the specific provision was rejected as the intent of the legislature is clear and unambiguous from the provision itself. Since the 10% reservation is in addition to the existing reservation, the question of reducing reservation of existing communities does not arise. Since the objective of reservation is to provide a level playing field to an underprivileged class, creation of the same for EWS after taking in account the current situation, the state is permitted to provide reservation for EWS.

The Effect

Since the constitutional amendment has been upheld, various states seek to increase reservation above 50%. Jharkhand Assembly passed a bill [7] to increase reservation to a total of 77% for SC/ST/OBC. However an imperative point to note is that the judgement in the said case allows reservation only for EWS, which is a new form of affirmative action. The decision of 50% cap applies to caste based reservation, and not new forms of affirmative actions. Breaching this 50% cap for communities already included in this 50% might be struck down by the court for being in violation of the ceiling limit.

Conclusion

The Majority judgement took note of the UNGA Resolution passed on 25th October 2015, for the eradication of poverty and all its forms. State action, in the form of the 103rd amendment, attempts to eradicate poverty by providing for additional reservation of 10% for EWS. However such reservation will continue for a long period as there will always be poor. Reservation as a solution is itself for a limited period. Now that affirmative action has created reservation for a new class, there is no restriction on how many other classes may be reserved by such action, leaving the question of social equality for the general and unreserved class, an already much debated issue.

[1] WRIT PETITION (CIVIL) NO. 55 OF 2019
[2] Article 14: Equality before law
[3] INDIRA SAWHNEY v. UOI – AIR 1993 SC 477
[4] Doctrine of reading down: Power of courts to interpret meaning of a provision to save it from it being declared illegal.
[5] M NAGARAJ v. UOI [WRIT PETITION (CIVIL) 61 OF 2002]
[6] Society for unaided private schools of Rajasthan v. Union of India (2012)
[7] 11th November, 2022

Can a woman be punished under Section 354 of IPC?  (Assault or Criminal force on a woman with the intent to outrage her modesty)

Can a woman be punished under Section 354 of IPC? (Assault or Criminal force on a woman with the intent to outrage her modesty)

By Shivam B. Trivedi, Advocate

rshivamtrivedi798@gmail.com | December 14, 2022

Introduction

The general understanding is that a woman cannot be charged under Section 354 of IPC, however, the true interpretation differs.

Section 354 of the Indian Penal Code, 1860 (“IPC”) is enacted with the objective of maintaining decent behaviour in the society and to protect women who are subject to criminal force and assault. If any person (irrespective of gender) uses criminal force on any woman with intent to outrage her modesty or with the knowledge that her modesty will be outraged, he or she will be punished.

Conviction of a woman under section 354 of IPC

Usually, the charge under S.354 of IPC is levied upon men. There has not been any noteable judicial precedent highlighting the conviction of a woman under S.354 of IPC. However, the court of Metropolitan Magistrate, Mazgaon, Mumbai, in the year 2022 in case no.7000138/PW/2021took cognizance of the complaint filed under S. 354 of IPC against a woman and after considering the evidence, sentenced her (being the accused) to imprisonment for a term of one year with fine of Rs. 5,000/-. (State of Maharashtra v/s Rovena Aadnya Amit Bhosle) holding that the Accused (being a woman) should be protective and sensitive towards women.

Essentials of Sec 354 of IPC

The essential conditions necessary to be satisfied to get a conviction under S.354 of IPC are as follows:-

~The presence of an assault/criminal force/ physical force;

~The physical force must be used with the intention of outraging the modesty of a woman or there must be knowledge that such act is likely to outrage the modesty of a woman;

However, it has been observed that if there is no intention to outrage the modesty or if it has not been proved beyond reasonable doubt that the intention was malafide in nature then conviction under S.354 of IPC would not be possible. [Bhanu Singh v/s State Of Chhattisgarh,2022]

Analysis

If and when it is proved to the satisfaction of the court, after considering the evidence submitted during the course of trial, that the accused person who is charged with an offence under S.354 of IPC is convicted, then the court shall sentence the Accused person (irrespective of gender) to imprisonment which shall not be less than one year but which could extend to five years and the convict shall also be liable to fine. The offence u/s. 354 of IPC can be committed by any man or woman. A woman can assault or use criminal force over other woman as equally and effectively as any man. The pronoun ‘he’ used in the expression “that he will thereby outrage her modesty” must therefore be taken u/s 8 of IPC as importing a male or female. Therefore, u/s 354 of IPC, a man as well as a woman both can be held guilty. It cannot be maintained that woman is exempted from any punishment under this section.

Conclusion

From the aforesaid, it could be concluded that S.354 of IPC is gender neutral in nature and the general presumption that S.354 of IPC could only be invoked against men has been changed and women in the society could take shelter under this section against any form of aggravated assault not just against men but against anyone. However, the aforesaid view of the writer is absolutely personal and subject to corrections.

EFFECT OF NOMINATION IN A CO-OPERATIVE HOUSING SOCIETY

EFFECT OF NOMINATION IN A CO-OPERATIVE HOUSING SOCIETY

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | November 19, 2022

INTRODUCTION

​Myth is existing in the mind of general public that upon death of a member of Co-operative Housing Society, the Nominee of such member becomes the Owner of the Flat.

There is a general practice in housing societies of members making nominations for their respective flats. The nomination form is then submitted to the secretary or chairman of the society. After the member’s demise, the society in its meeting takes note that the member has passed away and based on the nomination form, inducts the nominee as a member and notes the same on the share certificate. It becomes imperative to understand what the purpose and legal effect of making a nomination is. A nominee holds the flat in a fiduciary capacity, i.e. as a trustee for the legal heirs of the deceased till such time the legal heirs are determined by the applicable succession laws. A nominee does not become the owner of the flat by virtue of the nomination. In order to become an owner of a flat, it will have to be received by way of gift, Will, family arrangement or other such similar document.

LEGAL POSITION

The Maharashtra Co-operative Societies Act, 1960 (“the said Act”) governs co-operative societies. Section 30 of the said Act deals with transfer of interest on death of a member. This provision has come up for interpretation before the Bombay High Court on several occasions as there is invariably a dispute that arises between the nominee and the legal heirs regarding the vesting of ownership rights in the flat of deceased member.

In the case of Ramdas Shivram Sattur v. Rameshchandra Popatlal Shah, the Bombay High Court followed its previous decision in the case of Gopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar and held that a nominee does not become the owner of the properties in question. The purpose of nomination is to protect the rights of the deceased member in the subject matter of nomination till the legal representatives of the deceased take appropriate steps and to give a valid discharge to the society.

A recent judgment of the Bombay High Court in the case of Karan Vishnu Khandelwal v. Honourable Chairman/Secretary Vaikunth (Andheri) Co-operative Housing Society Ltd. & Ors. has once again brought to the fore the effect of nomination in case of a co-operative housing society versus the rights of legal heirs. While this judgment reiterates the well settled legal position that a nominee is merely a trustee and shall hold the flat in his capacity as trustee till the time the legal heirs are ascertained, the manner in which it is drafted is likely to cause some confusion. The brief facts of the case are set out hereunder to better appreciate the findings.

Brief facts

1. One, Mr. Mannalal Khandelwal (“Mannalal”) was the owner of a flat in Vaikunth (Andheri) Co-operative Housing Society, Mumbai (“the said Flat”).

2. During his lifetime, he made a nomination in favour of his grand son (son of a predeceased son), the Petitioner herein. The nomination was duly acknowledged by the managing committee in its meeting and recorded in the nomination register maintained by the society.

3. Thereafter, Mannalal died without leaving behind a will.

4. After his death, one of his sons, Rajendra (Respondent No. 2) made an application to the society seeking transfer of membership and issue of share certificate in his name. He also submitted an NOC and indemnity bond from his brother, Krishnakumar. On this basis, Rajendra sought 2/3rd share and interest in the said Flat. The society rejected Rajendra’s application.

5. Rajendra preferred an appeal before the Deputy Registrar Co-operative Societies. The Deputy Registrar allowed the appeal and held that since Respondent No. 2 had acquired 2/3rd right in the said Flat and to that extent, his interest be noted in the society record. In consequence, the Deputy Registrar acknowledged 2/3rd undivided right of Respondent No. 2 and 1/3rd right of the Petitioner in the said Flat and directed the society to make an entry in its records.

6. In revision, the Divisional Joint Registrar upheld the order of the Deputy Registrar and dismissed the revision application of the Petitioner.

7. Aggrieved by the order of the Divisional Joint Registrar, the Petitioner approached the Bombay High Court.

Decision

The Bombay High Court set aside the order of the Divisional Joint Registrar on broadly two grounds (a) the impugned order was in breach of the principles of natural justice and (b) the impugned order was against the law. It is the latter ground that we are concerned with.

Analysis

The Bombay High Court placed reliance on the judgment of the Supreme Court of India in the case of Indrani Wahi v. Registrar of Cooperative Societies, Section 30 of the said Act and the Maharashtra Cooperative Societies (Amendment) Act, 2019 whereby Section 154B-13 came to be inserted in the said Act.

Section 154B-13 reads as under –

“154B-13. Transfer of interest on death of a Member

On the death of a Member of a society, the society shall transfer share, right, title and interest in the property of the deceased Member in the society to a person or persons on the basis of testamentary documents or succession certificate or legal heirship certificate or document of family arrangement executed by the persons, who are entitled to inherit the property of the deceased Member or to a person duly nominated in accordance with the rules:

Provided that, society shall admit nominee as a provisional Member after the death of a Member till legal heir or heirs or a person who is entitled to the flat and shares in accordance with succession law or under will or testamentary document are admitted as Member in place of such deceased Member:

Provided further that, if no person has been so nominated, society shall admit such person as provisional member as may appear to the committee to be the heir or legal representative of the deceased Member in the manner as may be prescribed.”

What emerges from the above is that a society is empowered to transfer the right of a deceased person on the basis of (i) testamentary documents, (ii) succession certificate, (iii) legal heirship certificate, (iv) family arrangement or (v) duly made nomination. However, it is expressly clarified that a nominee shall be admitted as a provisional member. Therefore, a nominee is merely a trustee who holds the flat till the time the legal heirs are ascertained.

In the case at hand, Mannalal had made a valid nomination in favour of his grandson (the Petitioner). However, he had died intestate, i.e. without leaving behind a Will. Therefore, the Society was directed to transfer the flat to the Petitioner in his capacity as nominee (trustee) and admit him as a provisional member till the time Rajendra (Respondent No. 2) was able to obtain a succession certificate or legal heirship certificate or testamentary document, as the case maybe.

What the Divisional Joint Registrar had done was in effect, ascertained the shares of the parties as per the applicable succession laws, given that Mannalal had died intestate. While this would likely be the eventual manner in which the ownership rights in the said Flat devolve, the Bombay High Court did not want to give a go-by to the nomination and the compulsory requirement of obtaining a legal heirship certificate or letters of administration without will that would have to be obtained by the heirs of Mannalal given that the flat is situated in Mumbai. The Bombay High Court therefore, directed the society to admit the Petitioner as a provisional member and call upon Respondent No. 2 to furnish the necessary documents on the basis of which the legal ownership in the flat would eventually vest. At first glance, it may appear that the Bombay High Court held in favour of the nominee as against the legal heirs. However, what it has done is to recognize the nominee as an interim trustee till the time Respondent No. 2 procures the necessary legal documents acknowledging his ownership right and the ownership right of all other legal heirs in the flat.

Conclusion

In light of the Maharashtra Cooperative Societies (Amendment) Act, 2019 and the aforesaid judgments of the Supreme Court of India and Bombay High Court, it becomes amply clear that in the eyes of a law, a nominee is a trustee and does not acquire ownership rights in a flat by virtue of nomination. Therefore, if the intent of a member is to vest ownership rights in a person, he/she will have to do the same by way of gift, Will, family arrangement or other such document; a nomination alone will not suffice. It is also important for societies to take note of this so that after a member’s demise, the ownership rights in the flat finally vest in the legal heirs or such person as maybe named in the Will or family arrangement or other such document, and not in the nominee.

IS A COMPLAINT BY A TRANSGENDER WOMAN UNDER SECTION 498A OF IPC MAINTAINABLE?

IS A COMPLAINT BY A TRANSGENDER WOMAN UNDER SECTION 498A OF IPC MAINTAINABLE?

By Shivam B. Trivedi, Advocate

rshivamtrivedi798@gmail.com | November 11, 2022

Introduction

Section 498-A of the Indian Penal Code, 1860 (“IPC”) was incorporated in the year 1983 with the object of giving protection to married women who were subjected to cruelty and abuse (verbal or physical), either by the husband or the relatives of the husband and to curb the menace of cruelty subjected to a married woman which often leads to death.
To file a complaint under Section 498-A, the Complainant has to satisfy certain conditions as mentioned by the Hon’ble Supreme Court in U. Suvetha v. State, (2009) 6 SCC 757 which are as follows:-
1. The complainant is a married woman;
2. She must have been subject to cruelty and abuse; and
3. The cruelty or harassment caused shall only be either by her husband or any relative of her husband.

Complaint by Transgender woman under Section 498-A of IPC

Recently, a Criminal Petition was filed before the Hon’ble High court of Andhra Pradesh by a person to quash the complaint filed against him under Section 498-A of IPC by a transgender woman claiming to be his wife. It was contended by the husband that the complaint filed against him cannot be sustained as it was filed by a transgender and not a woman. The High Court of Andhra Pradesh felt that the above issue needs consideration and has, therefore, stayed all the proceedings till further orders and is likely to decide the same on priority.

Analysis

In another case, facts before the Madurai Bench of Hon’ble High Court of Madras in Arunkumar & Anr v. The Inspector General of Registration were as under:-

The first petitioner was male. The second petitioner was assigned as a female at birth but later on described as Third Gender (“T”). The Tamil Nadu marriage registration authority refused to register the marriage of the petitioners on the ground that the second petitioner was not a female but was transgender. The said refusal was challenged before the Hon’ble High Court at Madras by way of a Writ Petition.

The Hon’ble High Court at Madras in its Judgement dated 22nd April 2019 observed and held as under: –

• In the decision reported in (2014) 5 SCC 438 (National Legal Services Authority v/s Union of India), the Hon’ble Supreme Court upheld the transgender person’s right to decide their self-identified gender. The Hon’ble Supreme Court further noted that the existence of a third category outside the male-female binary has been recognized in the indigenous Hindu tradition.

• The second petitioner appears to have been an intersex person at birth and was assigned the female gender at birth. However, in the School records, the second petitioner has been described as a male and the gender specified in the Aadhar Card is T (Third Gender). A person who is in the Third Gender category is entitled to remain beyond the duality of male/female or can opt to identify oneself as male or female. It is entirely the choice of the individual concerned.

• Sex and gender are not one and the same. A person’s sex is biologically determined at the time of birth. Not so in the case of gender. That is why after making an exhaustive reference to the human rights jurisprudence worldwide in this regard, the Hon’ble Supreme Court held that Article 14 of the Constitution of India which affirms equality, shall not deny to any person equality before the law or equal protection of laws within the territory of India would apply to transgenders also. Transgender persons who are neither male nor female fall within the expression “person” and are hence entitled to legal protection of laws in all spheres of State activity as enjoyed by another citizen of this country. Discrimination on the ground of sexual orientation or gender identity, therefore, impairs equality before the law and equal protection of laws and violates Article 14. Article 19(1)(a) and Article 21 of the Constitution of India were expansively interpreted so as to encompass one’s gender identity also.

• Gender identity, therefore, lies at the core of one’s personal identity, gender expression, and presentation, and therefore, it will have to be protected under Article 19 (1) (a) of the Constitution of India. A transgender’s personality could be expressed by a transgender’s behavior and presentation. The state cannot prohibit, restrict or interfere with a transgender’s expression of such personality which reflects such inherent personality. Often the state and its authorities either due to ignorance or otherwise fail to digest the innate character and identity of such persons. Values of privacy, self-identity, autonomy, and personal integrity are fundamental rights guaranteed to members of the Transgender community Under Article 19 (1) (a) of the Constitution of India, the State is bound to protect and recognize these rights.

• The expression “bride” under Section 5 of the Hindu Marriage Act, 1955 cannot have a static or immutable meaning. As noted in Justice G.P. Singh’s Principles of Statutory Interpretation, the court is free to apply the meaning of a statute to present-day conditions. A statute must be interpreted in the light of the legal system as it exists today.

• Both the Petitioners herein (Petitioner No.2 being a transwoman) profess Hindu religion. Their right to practice Hindu religion is recognized under Article 25 of the Constitution of India. When the right of transgender persons to marry has been upheld by the Hon’ble Supreme Court, in the very nature they cannot be kept out of the purview of the Hindu Marriage Act, of 1955. One can have a civil marriage. One can also have a sacramental marriage. The Petitioners’ marriage was solemnized in a temple. Therefore, their fundamental right under Article 25 has also been infringed in this case.

• Seen in the light of the march of law, the expression “bride” under Section 5 of the Hindu Marriage Act,1955 will have to include within its meaning not only a woman but also a transwoman. It would also include an intersex person/transgender person who identifies themselves as a woman.

• The marriage registry was directed to register the marriage of the Petitioners.

The Transgender Persons (Protection of Rights) Act, 2019(“ the Act”)

The Act came into force on 10th January 2020. The Act is to provide for the protection of the rights of “transgender persons” and their welfare and for matters connected therewith and incidental thereto.

Section 2(k) of the said Act defines “transgender persons” means a person whose gender does not match with the gender assigned to that person at birth and includes trans-man or trans-woman (whether or not such person has undergone Sex Reassignment Surgery or hormone therapy or laser therapy or such other therapy), person with intersex variations, genderqueer and person having such socio-cultural identities as kinner, hijra, aravani and jogta.

Section 3 of the Act deals with the prohibition against discrimination against a transgender person on various grounds as provided therein.

Conclusion

In view of the aforesaid discussion, it is observed that:-

(a) The rights of transgender persons need to be protected;

(b) Transgender persons have the fundamental rights guaranteed under the Constitution of India; and

(c) The meaning of married woman under section 498-A of IPC should include married transwomen.

The writer prima facie believes that the meaning of “married woman” under section 498-A of IPC should include transwoman. However, the said issue is pending before the Hon’ble High Court of Andhra Pradesh. The above view of the writer is absolutely personal and needs to be decided by the appropriate forum.

LEGALIZING ABORTION UPTO 24 WEEKS FOR ALL WOMEN; A LANDMARK JUDGEMENT

LEGALIZING ABORTION UPTO 24 WEEKS FOR ALL WOMEN; A LANDMARK JUDGEMENT

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | October 25, 2022

INTRODUCTION

The Hon’ble Supreme Court judgment pronounced on the 28th September 2022, in X v. The Principal Secretary [1], declared that all woman have a right to safe abortion upto 24 weeks. The Hon’ble Supreme Court declared that the distinction based on the marital status of a women in Rule 3B(c) of the Medical Termination of Pregnancy Rules, 2003 (MTP Rules) is “artificial and constitutionally unsustainable”, and single women with pregnancies upto 24 weeks cannot be denied safe and legal abortion. Section 3B(c) allows termination of pregnancy upto 24 weeks if there is change of marital status during the ongoing pregnancy (widowhood and divorce). The Court also recognised marital rape, a much contraversal topic, as a legal ground for abortion under Rule 3B(a).

Looking back at the history of abortion in India, there has always existed social stigma against abortion, even when the women is married. Thus women were forced to choose an unsafe method of abortion, which seriously impacted the health of the woman, many cases resulting to death. In fact, about 8 women die each day due to unsafe abortions, and 67% of the abortions carried out are unsafe [2]. The Medical Termination of Pregnancy Act, 1971 (MTP Act), was enacted to legalize abortions, and found its basis from the Abortion Act, 1967 passed in the United Kingdom. The MTP Act legalized abortions, and as years have passed, the legislature has made much more strict rules for who can terminate a pregnancy as people have shown preference for a male child over a female child. It is also imperative to note that the MTP Act is an exemption to Section 312 of the IPC [3].

THE CASE

The challenge to the provisions were made by a 25 year old single woman who wanted to terminate her pregnancy after the Delhi High Court stated that consensual relationships are not covered under MTP Rules 2003. The Hon’ble Supreme Court, in an order passed on 21th July 2022, allowed the petitioner to abort her 24 week pregnancy as allowing her an unwanted pregnancy would have been contrary to the intent of Section 3(2) of the MTP (Amended) Act, 2021. However, the Court further heard the matter as it dealt with a ‘substantive question of law’ which was – is the distinction between married and single women under Rule 3B(c) of the MTP Rules 2003 constitutionally valid?

THE JUDGMENT

As mentioned before, the Court held that the rule was infact discriminatory and violative of Article 14. The Court held that the law be given a purposive interpretation. In the MTP Act, Explanation 2 of Section 3(2) contained the following words –

“Where any pregnancy occurs as a result of failure of any device or method used by any married woman or her husband for the purpose of limiting the number of children, the anguish caused by such unwanted pregnancy may be presumed to constitute a grave injury to the mental health of the pregnant woman.”

The same were amended in 2021, and Explanation 1 of Section 3(2) says – “For the purposes of clause (a), where any pregnancy occurs as a result of failure of any device or method used by any woman or her partner for the purpose of limiting the number of children or preventing pregnancy, the anguish caused by such pregnancy may be presumed to constitute a grave injury to the mental health of the pregnant woman.”

The Court after interpreting the intention of the legislature held that the legislature intended to clarify the scope of Section 3(2) and recognized that pregnancies could happen outside marriage as well. Even the statement of objects and reasons of the MTP Amended act indicated that the primary concern was to increase access to safe and legal abortions. The statement of object and reasons also do not distinguish between married and unmarried women, thus encompassing all women.

The court held that Rule 3B(c) cannot be read in isolation and has to be read with other sub-clauses of 3B. The other sub-clauses are as follows –

(a) survivors of sexual assault or rape or incest;

(b) minors;

(d) women with physical disabilities [major disability as per criteria laid down under the Rights of Persons with Disabilities Act, 2016 (49 of 2016)];

(e) mentally ill women including mental retardation;

(f) the fetal malformation that has substantial risk of being incompatible with life or if the child is born it may suffer from such physical or mental abnormalities to be seriously handicapped; and

(g) women with pregnancy in humanitarian settings or disaster or emergency situations as may be declared by the Government.

The court held that none of these sub-clauses distinguish between married and unmarried women. Thus the court gave Section 3B(c) a purposive interpretation, read it with explanation 1 of Section 3(2) of the MTP (Amended) Act, 2021 and held that any woman can abort her pregnancy upto 24 weeks. The court held that such laws are ‘provider-centric’ laws and must be applied accordingly.

CONCLUSION

A landmark judgment on a sensitive issue has not only upheld bodily autonomy of women, but also accepted marital rape in the scope of abortion. This judgment has removed the unreasonable classification made by law. Laws cannot be static and must evolve as times change. After the Supreme Court of United States overturned Roe v. Wade [4], abortion rights became uncertain. The Supreme Court of India has rightly protected women’s right on abortion and her reproductive autonomy.

However, according to law, it is the Registered Medical Practitioner (RMP) who still holds strong power on a women who is seeking abortion, and even though the women can seek help in a Court of Law, RMPs still hold fundamental power in the choice of a women to terminate her pregnancy.

[1] SLP (C) No 12612 of 2022

[2] BMJ Global Health Reports

[3] Section 312 – Causing Miscarriage, IPC (1860)

[4] 410 U.S. 113 (1973)

Is Fraud an Arbitrable Dispute? / Can Allegations of Fraud be Decided by an Arbitrator?

Is Fraud an Arbitrable Dispute? / Can Allegations of Fraud be Decided by an Arbitrator?

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | October 25, 2022

INTRODUCTION

In commercial transactions, there are often allegations of siphoning off of funds, lack of transparency in maintaining accounts and disposing of or encumbering property in a manner contrary to what was agreed upon between the parties. The circumstances surrounding such acts/omissions and the consequences of such acts/omissions may be coupled with allegations of fraud. While alleging fraud, it is important to note that such allegations may affect the arbitrability of the dispute if there is an arbitration agreement between the parties. It is therefore, imperative to understand what facets of fraud are arbitrable and what facets are not.

ANALYSIS

What is meant by ‘arbitrable’ or ‘arbitrability’?

In the case of Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd.[1], the Supreme Court laid down 3 facets or tests of arbitrability. The three facets of arbitrability, relating to the jurisdiction of the Arbitral Tribunal, are as under:

(i) Whether the disputes are capable of adjudication and settlement by arbitration?

(ii) Whether the disputes are covered by the arbitration agreement?

(iii) Whether the parties have referred the disputes to arbitration?

Another important indicator given by the Supreme Court in Booz Allen’s case was to ascertain whether the disputes relate to rights in rem or rights in personam. In this regard, the Supreme Court held as follows.

“38. Generally and traditionally all disputes relating to rights in personam are considered to be amenable to arbitration; and all disputes relating to rights in rem are required to be adjudicated by courts and public tribunals, being unsuited for private arbitration. This is not however a rigid or inflexible rule. Disputes relating to subordinate rights in personam arising from rights in rem have always been considered to be arbitrable.”

It would not be out of place to mention that the Arbitration Act, 1996 (“the Act”) does not of itself set out what disputes are arbitrable. It does not exclude any category of disputes treating them as non-arbitrable either. However, Section 34(2)(b) of the Act lays down that if ‘the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force,’ the same will be a ground for setting aside the arbitral award. Similar language is also used in the context of Sections 48(2) and 57(1)(b) of the Act. What will then require to be shown is that there is a law which makes the subject-matter of the dispute incapable of settlement by arbitration.

The courts have held that certain kinds of disputes may are not capable of adjudication through the means of arbitration. The following categories of disputes are generally treated as non-arbitrable (a) criminal offences, (b) matrimonial disputes, (c) guardianship matters, (d) insolvency and winding up matters and (e) testamentary matters.

Meaning of fraud

“15. “Fraud” is a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. Fraud can be of different forms and hues. Its ingredients are an intention to deceive, use of unfair means, deliberate concealment of material facts, or abuse of position of confidence. The Black’s Law Dictionary defines “fraud” as a concealment or false representation through a statement of conduct that injures another who relies on it..”[2]

Is fraud an arbitrable dispute?

In the case of A. Ayyasamy v. A. Paramasivam & Ors.[3], the question of arbitrability of fraud came up before the Supreme Court. The brief facts of the case are set out hereunder to better appreciate the findings and decision of the Supreme Court. The parties to the lis were brothers who had entered into a deed of partnership for the purpose of carrying on a hotel business in partnership. The eldest brother took charge of the administration of the hotel on the assurance that he would carry on the business in a disciplined manner. It was also agreed between the brothers that the daily collection of money would be deposited the very next day in the hotel’s current account. However, the eldest brother failed to deposit the day-to-day collection into the bank account as promised. Further, the eldest brother drew a cheque on the hotel’s current account for a substantial sum in favour of his son without the knowledge and consent of the other brothers. There was also an allegation that the eldest brother would keep the hotel account books with him and not permit the other brothers to examine the same. The aggrieved brothers filed a suit seeking a declaration that as partners they were entitled to participate in the administration of the said hotel and sought a permanent injunction against the eldest brother from interfering with their right to participate in the administration of the hotel. The eldest brother challenged the maintainability of the suit on the ground that there was an arbitration agreement between the parties. The brothers resisted the challenge to maintainability on the ground that serious allegations of fraud had been alleged by them and the same could only be decided by a civil court and not an arbitral tribunal. Two courts held that considering that there were serious allegations as to fraud and malpractices committed by the eldest brother in respect of the finances of the partnership firm and the case does not warrant to be tried and decided by the arbitrator and a civil court would be more competent which has the means to decide such complicated matter.

Before coming to the decision of the Supreme Court, it is pertinent to note that the Supreme Court drew a distinction between ‘serious fraud’ and ‘fraud simpliciter’ and held the former to be non-arbitrable and the latter to be arbitrable.

“18. …However, at the same time, mere allegation of fraud in the pleadings by one party against the other cannot be a ground to hold that the matter is incapable of settlement by arbitration and should be decided by the civil court. The allegations of fraud should be such that not only these allegations are serious that in normal course these may even constitute criminal offence, they are also complex in nature and the decision on these issues demands extensive evidence for which the civil court should appear to be more appropriate forum that the Arbitral Tribunal…”[4]

“23. …It, thus, follows that those cases where there are serious allegations of fraud, they are to be treated as non-arbitrable and it is only the civil court which should decide such matters. However, where there are allegations of fraud simpliciter and such allegations are merely alleged, we are of the opinion that it may not be necessary to nullify the effect of the arbitration agreement between the parties as such issues can be determined by the Arbitral Tribunal.”

The Supreme Court finally held that the allegations of purported fraud were not so serious and could be taken care of by the arbitrator. Reversing the judgments of the two lower courts that had rejected the applications filed under Section 8 of the Act, the Supreme Court allowed the appeal.

CONCLUSION

As set out hereinabove, allegations of fraud may affect the arbitrability of the dispute depending on the seriousness of the fraud alleged. Resultantly, the nature of proceedings filed by the affected party would also be determined by the fraud alleged.

[1] (2011) 5 SCC 532

[2] A. Ayyasamy v. A. Paramasivam & Ors. (2016) 10 SCC 386

[3] Ibid

[4] Ibid

Deemed Conveyance and Certain Practical Difficulties

Deemed Conveyance and Certain Practical Difficulties

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | March 20, 2022

INTRODUCTION

Section 11 of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (“the Act”) requires the promoter to convey all his right, title and interest in the land and building in favour of the co-operative society or organization of flat purchasers. There is often a delay on the part of the promoters in executing such conveyance. Such delay prejudices the flat purchasers and their right to fully enjoy and exploit their property. The concept of deemed conveyance seeks to remedy this.

ANALYSIS

If the promoter fails to convey his right, title and interest in the land and building within 4 months from the formation and registration of the society or company, or within such time as maybe agreed upon by and between the promoter and flat purchasers, the society can make an application to the competent authority for issuing a certificate/an order stating that such society is entitled to have a unilateral deemed conveyance. Such application is required to be accompanied by true copies of the registered agreements for sale and all other relevant documents, including the occupation certificate, if any.

On receipt of such application, the competent authority shall make enquiry, verify the authenticity of the documents submitted and give the promoter a reasonable opportunity to be heard. If satisfied, the competent authority shall issue a certificate to the Sub-Registrar stating that it is a fit case for enforcing unilateral execution of a conveyance deed conveying the right, title and interest of the promoter in the land and building in favour of the society.

On receipt of such certificate and unilateral instrument of conveyance, the Sub-Registrar shall give the promoter an opportunity to show cause why such unilateral instrument of conveyance should not be registered as ‘deemed conveyance’. If satisfied, the Sub-Registrar shall register the instrument as ‘deemed conveyance’.

As the name suggests, deemed conveyance is a unilateral execution of a conveyance deed whereby the promoter is deemed to have conveyed his right, title and interest in the land and building in favour of the society of flat purchasers, followed by the unilateral registration thereof under the Registration Act, 1908. The provision for deemed conveyance was inserted in the interest of flat purchasers. However, there are certain practical difficulties that arise that prevent flat purchasers from taking benefit of this provision or prove to be a hindrance.

CERTAIN PRACTICAL DIFFICULTIES THAT ARISE

​One issue that usually arises is that of stamp duty. If all the flat purchase agreements of the society members (including agreements for shops, garages and parking) are duly stamped and registered and the full FSI potential of the land on which the society building stands has been utilised, the instrument of deemed conveyance shall be treated as a supplementary document to such agreements and the stamp duty and registration fees payable on the instrument of deemed conveyance will be nominal.

However, if any one or more society member’s flat purchase agreements or agreements for shops, garages and/or parking are not duly stamped and registered, stamp duty liability on such agreements will have to be cleared. Further, if the FSI potential of the land on which the society building stands has not been fully utilized, stamp duty will be payable on the present market value of such unutilized FSI, making the stamp duty payable on the instrument of deemed conveyance, substantial. Notification dated 12th April, 2012 sets out the detailed procedure. Given the property prices in Mumbai, this stamp duty liability may run into several lakhs or crores.

Another issue that arises in some cases is that the promoter has the right to develop only a portion of the land which is part of a larger undivided plot. There are also cases in which phase wise redevelopment is done of multiple buildings standing on the same sub-divided plot. When an order of deemed conveyance is passed in such cases, disputes often arise about the area of land conveyed under such order/certificate of deemed conveyance.

Computing or quantifying the entitlement of a society applying for deemed conveyance may not always be easy as the society maybe entitled to the land on which the society building stands, as well as proportionate right in common areas, internal access roads, gardens, etc. together with other societies.

Lastly, a society being a successor in title of the promoter cannot claim any rights higher than that of the promoter. Defects in title of the promoter cannot be remedied by execution of an instrument of deemed conveyance nor are the rights of original owners of the land affected or influenced by an order of deemed conveyance or the registration of the certificate thereafter. Original owners can raise disputes of title, computation and quantification of area, FSI, etc. by filing a civil suit. The civil suit will be decided on its own merits unaffected by any order of deemed conveyance that may have been passed.

CONCLUSION

When a promoter fails to fulfil his obligations of conveying his right, title and interest in the land and building, the competent authority steps in to fulfil such obligations to avoid hardship to the flat purchasers. However, to take the benefit of the provision of deemed conveyance, flat purchasers and societies must have all their documents in place and be willing to comply with all applicable provisions of law. Flat purchasers and societies must also have sufficient funds available with them as the stamp duty payable on an instrument of deemed conveyance may run into several lakhs or crores in certain cases. Lastly, a society being a successor in title of the promoter cannot claim any rights higher than that of the promoter.

Remedies Available to Original Owner of Land After Order of Deemed Conveyance under MOFA

Remedies Available to Original Owner of Land After Order of Deemed Conveyance under MOFA

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | Dec 24, 2021

[*The relevant sections and statutes have been mentioned in brackets]

INTRODUCTION

After taking possession of flats and forming co-operative housing societies, flat owners often have to wait for years till the developer conveys his right, title and interest in the land and building to the co-operative housing society. This is a hindrance to co-operative housing societies as the transfer of title in the land and building in their favour remains in abeyance till such time. More often than not, a situation arises when the society owns the building consisting of flats and apartments but not the land underneath the building. Such situation presents several difficulties in utilization and exploitation of the full potential of the property. The concept of deemed conveyance under Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (“the Act”) (also popularly known as “MOFA”) seeks to remedy this.

ANALYSIS

Section 11 of the Act read with Rule 9 of the rules framed thereunder casts an obligation on the promoter (as defined therein) to convey his right, title and interest in the land and building to the co-operative housing society or company formed by the flat takers or apartment owners. If the promoter fails to do this within 4 months from the formation and registration of the society or company, or within such time as maybe agreed upon between the promoter and flat purchasers, the society can make an application to the competent authority for deemed conveyance. As the name suggests, deemed conveyance is a unilateral execution of a conveyance deed whereby the promoter is deemed to have conveyed his right, title and interest in the land and building in favour of the society of flat purchasers, followed by the unilateral registration thereof under the Registration Act, 1908.

In some cases, the promoter has the right to develop only a portion of the land which is part of a larger undivided plot. There are also cases in which phase wise redevelopment is done of multiple buildings standing on the same sub-divided plot. When an order of deemed conveyance is passed in such cases, disputes often arise about the area of land conveyed under such deemed conveyance. Computing or quantifying the entitlement of a society applying for deemed conveyance may not always be easy as the society maybe entitled to the land on which the society building stands, as well as proportionate right in common areas, internal access roads, gardens, etc. together with other societies. The question that therefore, arises for consideration is what would be the appropriate forum and nature of proceedings to be initiated for adjudication of such disputes involving questions of title, quantification of area entitlement and FSI, etc. arising from an order of deemed conveyance. Would the remedy be by way of filing an appeal, civil suit or writ petition?

To answer this, it is important to understand the jurisdiction being exercised by the competent authority under Section 11 of the Act and what rights, if any, are being determined by an order of deemed conveyance.

In Mazda Construction Company & Ors. v. Sultanabad Darshan CHS Ltd.[1], the Bombay High Court explained the scope of scope of powers exercised by the competent authority while issuing an order of deemed conveyance as under:

“20. To my mind, reading of Sections 10 and 11 together with Section 5A would make it amply clear that what is to be performed by the Competent Authority is a duty and obligation which the promoter is to perform in law. That is to convey the title and execute the documents according to the agreement. If that is the duty which is to be performed by the promoter, but which he fails to perform, then, the Competent Authority steps in to fulfill it. That is a duty towards the flat purchasers and which duty cannot be avoided except at the cost and pains of legal proceedings including a criminal prosecution. In these circumstances and when sections 10 and 11 are read together and harmoniously with the preceding sections including those which contain the particulars of the agreement, then, it becomes absolutely clear that what has to be conveyed even by a deemed conveyance, which is an unilateral act and which enables the flat purchasers to acquire the Promoter’s right, title and interest in the land and the building. Therefore, it cannot be said that an unilateral deemed conveyance conveys something more than what belongs to the Promoter. Section 11(1) provides for conveyance of Promoter’s right, title and interest in the land and building as is clear from the words “his right, title and interest….” appearing therein. I am not in agreement with Mr. Samdani that there are no guidelines guiding and enabling the Competent Authority to grant a deemed conveyance and therefore, the powers are likely to be abused or exercised arbitrarily in every such case. There are inbuilt checks and safeguards inasmuch as what is to be issued is a certificate entitling a unilateral deemed conveyance. It is not a document which stands alone or is a distinct transaction. It is a grant or conveyance in terms of what the agreement between parties stipulates and provides for being conveyed to the flat purchasers. Therefore, the Applicant is permitted to apply to the Competent Authority u/s 11(3) and such application is to be accompanied by true copies of the registered agreements for sale executed by the Promoter with each individual member/ flat purchaser and other relevant documents. It is to further that and to insist on the promoters fulfilling their obligations within the prescribed period, but noticing that their failure has resulted in hardship to flat purchasers, that the Legislature has stepped in. To my mind, this is not a power which can be exercised by the Competent Authority in ignorance of or by brushing aside the earlier provisions and contents of the agreement with the flat purchasers. Equally, the Competent Authority has to take into consideration the contents of other relevant documents.” (emphasis supplied)

In the case of M/s Mahanagar Partnership Firm & Ors. v. District Deputy Registrar of Co-operative Societies (Pune City), Pune & Ors. [2], the Bombay High Court held as follows.

“9. In the case of Mazda Construction Company Vs. Sultanbad Darshan CHS Ltd, Writ Petition No.3912 of 2012, it is held that issue of title in respect of the property cannot be gone into by the Competent Authority under the provisions of the MOFA and the same can be decided only by the Civil Court. In paragraph 17 of Angelina Randolph Pereira’s case (supra), it is held that contentions regarding title in respect of property in question or adjudication in respect of the property in question or adjudication in respect of entitlement of the exact quantification of FSI on the plots in question cannot be gone into the proceedings under section 11 of the MOFA. The Competent Authority cannot decide validity of the agreements between the parties. The order granting Deemed Conveyance does not conclude issue of right, title, interest in the immovable property. The petitioners can still file substantive suit of title claiming the appropriate reliefs. Merely because order of Deemed Conveyance is passed and certificate of title is issued by the Competent Authority under section 11, the petitioners are not precluded from seeking adjudication of their right in respect of the suit property by filing suit. All such contentions can be gone into in a properly instituted suit.

10. In view of the consistent view taken by this Court in the aforesaid decisions, I do not find that any case is made out for invocation of powers under Article 227 of the Constitution of India. It is made clear that if any suit is filed by the petitioners for adjudication of title in respect of the suit property, the same can be decided without being influenced by the order of Deemed Conveyance passed by the Competent Authority and certificate of title issued by the Competent Authority in favour of the second respondent. Subject to this clarification, Petition fails and the same is dismissed with no order as to costs.” (emphasis supplied)

A similar view was also taken by the Hon’ble High Court at Bombay in M/s. Chintamani Builders vs. State of Maharashtra & Ors. [3], Angeline Randolph Pereira vs. Suyog Industrial Estate Premises Co-operative Society Limited [4] and Bhalchandra Gaurishankar Pandya & Ors vs. State of Maharashtra & Ors. [5]

CONCLUSION

When a promoter fails to fulfil his obligations of conveying his right, title and interest in the land and building, the competent authority steps in to fulfil such obligations to avoid hardship to the flat purchasers. However, a society being a successor in title of the promoter cannot claim any rights higher than that of the promoter. Moreover, the flat purchase agreements are an internal arrangement or agreement between the promoter and flat purchasers to which the original owners may or not maybe party. In case the original owners are not party to such agreement, their entitlement will not be affected or influenced by the order of deemed conveyance or the registration of the certificate thereafter. Original owners can raise disputes of title, computation and quantification of area, FSI, etc. by filing a substantive civil suit by pointing out relevant documents as also by leading oral evidence and not by way of invoking the extra-ordinary writ jurisdiction. An order granting deemed conveyance will not conclude such issues. The civil suit will be decided on its own merits unaffected by any order of deemed conveyance that may have been passed.

[1] Order dated 31.08.2012 in Writ Petition 3912 of 2012 (Bombay High Court)

[2] Order dated 6.12.2018 in Writ Petition (St.) No. 31966 of 2018 (Bombay High Court)

[3] Order dated 11th August, 2016 in WP No. 2839 of 2013

[4] 2018 (6) ALL MR 729

[5] Order dated 6th August, 2021 in WP No. 2948 of 2015

APPLICABILITY OF SECTION 79A OF THE MAHARASHTRA COOPERATIVE SOCIETIES ACT FOR REDEVELOPMENT OF SOCIETY’S PROPERTY IN MAHARASHTRA

APPLICABILITY OF SECTION 79A OF THE MAHARASHTRA COOPERATIVE SOCIETIES ACT FOR REDEVELOPMENT OF SOCIETY’S PROPERTY IN MAHARASHTRA

By Nazaqat Lal, Advocate & Solicitor

nazaqat_lal@hotmail.com | Nov 05, 2021

INTRODUCTION

Buildings of co-operative housing societies are being redeveloped on a large scale in the state of Maharashtra. Prior to 2009, a number of complaints were received from members against managements of co-operative societies in which redevelopment was taking place. Some of the common complaints included not taking the members in confidence in the redevelopment process, lack of transparency in the tender process, no orderliness in the work of architects and project consultants, no preparation of redevelopment project report, no consistency in agreements with different developers, etc. At that time, there was no concrete policy to address the aforesaid grievances. As a result, a study group was formed to study the complaints received at various levels. After consultation with all stakeholders, the study group opined that it was essential to frame regulations for redevelopment of buildings of co-operative housing societies. Accordingly, the State Government issued directives under Section 79-A (“the Directives”) of the Maharashtra Co-operative Societies Act, 1960 (“the Act”).

ANALYSIS

The Directives lay down a step by step process for undertaking redevelopment of co-operative housing societies. The process commences with the calling of a special general body meeting of the society to discuss the redevelopment of the society’s building and ends with the original members being allotted flats in the redeveloped building. One of the primary objectives of the Directives is to ensure transparency and make the process democratic.

A number of cases started being filed alleging non compliance with these Directives and consequently, praying for the redevelopment to be stopped. A question that naturally arose was whether compliance with the Directives was mandatory or directory and accordingly, whether any deviations were permissible.

In a series of judgments passed by various benches over the years, the Bombay High Court has consistently taken the view that the Directives are directory and not mandatory.

In the case of Maya Developers v. Neelam R. Thakkar & Ors.[1], the developers sought interim reliefs against certain members who were not handing over peaceful and vacant possession despite the execution of the development agreement. The Defendants alleged that the Directives under Section 79-A had not been followed. Some specific non-compliances alleged were no detailed feasibility report, no transparency and the selection of the Developer was not just haphazard but was contrived to benefit Maya Developers, one of whose partners was a relative of a managing committee member. It was further contended that there was no decided case yet on the nature of the guidelines issued under Section 79-A and that these guidelines had a binding statutory force. The Bombay High Court held that what the 2009 Directive seeks to set in place are a set of guidelines.

“74. …This is also apparent from the fact that the Government chose to issue these under Section 79A rather than some other section of the Act. What is set out is a broad policy; and this stands to reason, for not every single provision of this Directive lends itself to strict compliance. Clauses 1, 2, 5, 7, 8 and 10 all use the word ‘should’, not ‘must’ or ‘shall’. Clause 11 in terms says that the Development Agreement ‘should’ contain some conditions and provisions but these are specifically subject to the terms and conditions approved by the General Body Meeting of the Society. This Directive must be read as a whole, and not in the manner Mr. Pai suggests by plucking out one clause here and another there. Read thus, it is clear that the whole of the 2009 Directive is recommendatory, not obligatory. If it were otherwise, and to be read as Mr. Pai would have me do, it would undermine the authority of the society in general meeting, and the fundamental democratic underpinnings of cooperative societies. When Mr. Pai asks that is it possible that a majority can decide the fate of all, the answer must be an unequivocal yes; that is the basis of the entire edifice of the MCSA, subject to specific statutory exceptions. It is impossible to accept his submission that the 2009 Directive in mandatory. It is, as Mr. Kapadia says, a broad road map, and was brought into existence to provide guidance when there were far too many problems in redevelopment of societies. Material compliance is more than sufficient; and it in no way undermines or detracts from the overall authority of the general body of a society’s members. It is sufficient if participation, notice and disclosure are ensured. Where majority decisions are consistent with material compliance with the provisions of the Directive, that is surely enough.”

The case of Maya Developers (supra) is also important as it discusses in detail the jurisdiction of the High Court in light of Section 91 of the Act.

In the case of M/s National Properties v. Sindhi Immigrants CHS & Ors.[2], the developer sought a mandatory injunction directing certain members to hand over vacant and peaceful possession pursuant to the development agreement executed with the society and majority members. It was the Plaintiff’s case that the defendants were all related to one Kukreja Group, an entity that had participated in the tender process but was not selected. Subsequently, this entity, through its members and relatives purchased a few flats and tried to stall the redevelopment process. The Defendants alleged collusion between the Plaintiff and the society alleging that the Plaintiff’s proprietor was the secretary of the society. It was also the Defendants’ case that the Directives under Section 79-A had not been complied with. The Hon’ble Bombay High Court held that the consents were initially granted and at that time the contesting defendants were not even flat holders. Further, once the society approved the proposal by the requisite majority, it is not open for the minority individual members to obstruct the redevelopment process. As far as alleged noncompliance of the Directives issued under Section 79-A was concerned, the Court followed the line of judgments in the case of Maya Developers (supra) and Kamgar Swa Sadan Co-operative Housing Society Ltd.[3] and held that the Directives under Section 79-A was merely recommendatory and did not have statutory force.

In the case of Abhanga Samata CHS v. Parag Arun Binani & Anr.[4], a solitary member had challenged the process of redevelopment on the ground that the Directives under Section 79-A had not been followed in letter and spirit and the selection of the developer itself was vitiated by fraud. Some of the non compliances alleged included not inviting tenders by issuing advertisements in newspapers, society not producing written consent letters from members, absence of video conferencing of meetings, etc. The trial court held in favour of the member and injuncted the redevelopment process. The society and developer appealed against the trial court’s order. Their main contention was that all the decisions had been taken by the majority and such decisions would be binding on the dissenting minority. Moreover, the Directives under Section 79-A were directory and not mandatory, and therefore, substantial compliance was sufficient. The appellate court (the Bombay High Court) set aside the trial court’s order and held that the findings by the trial court were contrary to the material on record. Moreover, the irregularities noted by the trial court cannot displace the decisions taken by the majority members of the society. It further held that the Directives under Section 79-A are not mandatory and substantial compliance is sufficient. Decisions taken democratically cannot be interfered with unless the same were caused by fraud or misrepresentation.

CONCLUSION

From the aforesaid judgments and the judgments relied upon therein, it becomes amply clear that the Bombay High Court has consistently taken a view that the Directives are directory and not mandatory in nature. Therefore, a redevelopment would not ordinarily be stopped on the ground of lack of strict compliance with the Directives. The Court has also held that the State Government is empowered to issue directions in public interest for the purpose of proper implementation of the Act and the Directives are required to be followed only when the members are unable to come to a decision on their own. The Bombay High Court has given paramount importance to the decision of the majority and held that the same would be binding on the minority. The Court has also taken into consideration that the buildings undergoing redevelopment are usually in a condition that is hazardous for the inhabitants to continue residing in and therefore, have been reluctant to intervene in stopping redevelopment processes. In order to get an order injuncting redevelopment, very grave instances of fraud, collusion and/or misrepresentation would have to be shown that severely prejudice the rights of the co-operative housing society and its members at large.

[1] Notice of Motion (L) No. 834 of 2015 : 2016 SCC Online Bom 6947 : (2016) 6 Bom CR 629

[2] Notice of Motion No. 285 of 2016 in Commercial Suit No. 509 of 2016 (Bombay High Court)

[3] 2018 SCC OnLine Bom 1319

[4] Appeal from Order (St) No. 7776 of 2021 (Bombay High Court)

EFFECT OF BEQUEST UNDER THE WILL TO AN ATTESTING WITNESS

EFFECT OF BEQUEST UNDER THE WILL TO AN ATTESTING WITNESS

By Nazaqat Lal, Advocate and Solicitor

nazaqat_lal@hotmail.com | Nov 01, 2021

Section 63 of the Indian Succession Act, 1925 (“the Act”) requires a will to be attested by at least two witnesses. The attesting witnesses must sign or affix their thumb impression or mark, in the presence of the testator. The section does not permit or provide for delegation of such power by the attesting witnesses.

Unlike other documents, a will speaks from the death of the testator. By executing a will, a testator intends to the living the carrying out of his wishes after his death. Therefore, the initial burden of proving the due execution, attestation, genuineness of the will and sound mind of the testator falls on the attesting witnesses.

Section 67 of the Act deals with the effect of gift to an attesting witness. It states that any benefit or bequest given to an attesting witness or the attesting witness’s spouse, shall be void. However, a legatee under a will does not lose his legacy by attesting a codicil which confirms the will. The object of Section 67 is to avoid chances of possible collusion or undue influence. It is pertinent to note that benefit or bequest given to an attesting witness does not affect the validity of the will and the will shall be deemed to sufficiently attested.

Another important aspect is the applicability of Section 67 of the Act. Section 67 does not apply to wills made by Hindus, Buddhists, Sikhs or Jains. Therefore, any benefit or bequest to an attesting witness or the attesting witness’s spouse under a will made by a Hindu, Buddhist, Sikh or Jain would not be void. In the case of Jose v. Ouseph & Ors.[1], a Division Bench of the Kerala High Court explained the applicability of Section 67 as follows.

“7. Section 67 of the Indian Succession Act, 1925 deals with the effect of gift to attesting witness. This Section is not applicable to Wills of Hindus by virtue of Section 57 read with Schedule III of the Indian Succession Act and as such legatees under the Will of such persons do not forfeit their legacy on becoming attesting witnesses. But in the case on hand the parties are Christian and Section 67, if attracted, will be applicable to them. Legacy to the attesting witness of a Will is void under Section 67…”

This decision of the Kerala High Court was followed by the Delhi High Court in the case of Anand Burman v. State[2].

“7. The learned counsel for the petitioner, however, points out that Section 67 of the Indian Succession Act is placed in Part-VI of the said Act and Section 57 of the Act, which deals with applicability of the said part, to the extent it is relevant, specifically provides that only those provisions of the said part which are set out in Schedule-III shall, subject to the restriction and modification specified therein, apply to the Will and Codicils made by any Hindu, Buddhist, Sikh or Jain made on or before 1.1.1927. He further points out that Chapter-III of the said Act does not refer to Section 67 of the Act which clearly shows that the aforesaid provisions do not apply to the Will in question. He further pointed out that Section 58 of the Act clearly provides that provisions of Part-VI shall not apply to testamentary succession to the property of any Hindu, Buddhist, Sikh or Jain save and except as provided in Section 57 of the Act. The net effect of these provisions, when read together, is that the bequest made to the attesting witnesses of the Will, executed by a Hindu, is not void under Section 67 of the said Act. Therefore, the bequest made to the petitioner is not void. As regards his competence as an attesting witness, Section 68 of the said Act specifically provides that no person, by reason of interest in, or of his being an executor of, a Will shall be disqualified as a witness to prove the execution of the Will or to prove the validity or invalidity thereof. Therefore, Shri Ashok Chand Burman was a competent witness to prove execution of the Will executed by late Smt. Sudha Burman.”  (emphasis supplied)

This contention was accepted by the Delhi High Court and reliance was placed on Jose v. Ouseph & Ors. (supra). Accordingly, probate was granted by the Delhi High Court.

[1] AIR 2007 Kerala 77

[2] Test. Cas 25/2010, Judgment pronounced on July 27, 2012

SALE OF HUF PROPERTY INVOLVING A MINOR

SALE OF HUF PROPERTY INVOLVING A MINOR

By Nazaqat Lal, Advocate & Solicitor

nazaqat_lal@hotmail.com | Oct 26, 2021

Introduction

Section 8 of the Hindu Minority and Guardianship Act, 1956 (“the Act”) provides that sale or transfer of immovable property of a minor requires the natural guardian of such minor to take prior permission of court. The section further casts an obligation on the court not to provide such permission except in the case of necessity or for an evident advantage to the minor. Disposal of a minor’s immovable property without court’s prior permission is voidable at the instance of the minor or any person claiming under him. The intention of the Legislature to protect the property and interest of minors till the time they attain majority is abundantly clear.

Section 12 of the Act states that no guardian shall be appointed for the minor’s undivided interest in joint family or HUF property where such property is under the management of an adult member of the family. The question that naturally arises from a combined reading of these two sections is whether Section 8 of the Act is applicable to sale or transfer of joint family property by a Karta wherein a minor’s undivided interest is involved. Alternatively, is prior court permission required by the Karta at the time of sale or transfer of joint family property that involves a minor’s undivided share? This question was answered in the negative by the Bombay High Court[1] and Supreme Court of India[2].

The Bombay High Court placed reliance on Sections 4 and 6 of the Act to answer the aforesaid question. Section 4 defines the term ‘guardian’ and Section 6 sets out the natural guardians in the case of a Hindu minor and the order of priority of persons who are entitled to be guardians to Hindu minors.

Analysis

The opening words of Section 6 are as under.

6. Natural guardians of a Hindu minor.—The natural guardians of a Hindu minor; in respect of the minor’s person as well as in respect of the minor’s property (excluding his or her undivided interest in joint family property), are— …” (emphasis supplied)

These words were interpreted and explained by the Bombay High Court as follows.

7. …The words “excluding his or her undivided interest in joint family property” which have been put in brackets make it clear that undivided interest of a Hindu minor is excluded from the operation of the provisions of the Act and the subject-matter with which the Act deals is limited to guardians in respect of minor’s person or in respect of minor’s property other than his undivided interest in joint family property, whether they be natural guardians or testamentary guardians or guardians appointed or declared by Court. The concept of a guardian in respect of undivided interest in the joint family property is thus specifically excluded from the purview of the Act. The powers which a Hindu father therefore has, as a natural guardian of his minor sons under Hindu Law, are kept intact and are not in any way affected by the provisions of the Hindu Minority and Guardianship Act so far as the undivided interest of a Hindu minor in the joint family property is concerned.

  1. The restrictions contained in s. 8, therefore, do not apply in respect of the undivided interest of a minor in joint family property and consequently s. 8 does not debar the manager or karta of a joint Hindu family from alienating joint family property including the interest of minor without obtaining the previous permission of the Court, even if the manager or karta, happens to be the natural guardian in respect of the separate property of any one or more of the minor coparceners. Of course, the alienation would have to be justified under Hindu law but s. 8 does not require that any previous permission of the Court should be obtained before effecting such alienation. Under Hindu law a manager and karta of a joint Hindu family can alienate joint family property so as to bind the interest of minor coparceners in such property provided the alienation is either for legal necessity or for the benefit of the estate. If the manager and karta happens to be the father, he has certain additional powers of alienation under Hindu law and in exercise of those powers he can alienate joint family property so as to bind the interest of his minor coparceners in such property. These powers are not at all curtailed or affected in any way by the provisions of the Hindu Minority and Guardianship Act.”

The Supreme Court answered the question on similar lines.

5. With regard to the undivided interest of the Hindu minor in joint family property, the provisions afore-culled are beads of the same string and need be viewed in a single glimpse, simultaneously in conjunction with each other. Each provision, and in particular Section 8, cannot be viewed in isolation. If read together the intent of the legislature in this beneficial legislation becomes manifest. Ordinarily the law does not envisage a natural guardian of the undivided interest of a Hindu minor in joint family of the property. The natural guardian of the property of a Hindu minor, other than the undivided interest in joint family property, is alone contemplated Under Section 8 where under his powers and duties are defined. Section 12 carves out an exception to the rule that should there be no adult member of the joint family in management of the joint family property, in which the minor has an undivided interest, a guardian may be appointed; but ordinarily no guardian shall be appointed for such undivided interest of the minor. The adult member of the family in the management of the Joint Hindu Family Property may be a male or a female, not necessarily the Karta. The power of the High Court otherwise to appoint a guardian, in situations justifying, has been preserved. This is the legislative scheme on the subject. Under Section 8 a natural guardian of the property of the Hindu minor, before the disposes of any immovable property of the minor, must seek permission of the court. But since there need be no natural guardian for the minor’s undivided interest in the joint family property, as provided Under Sections 6 and 12 of the Act, the previous permission of the Court Under Section 8 for disposing of the undivided interest of the minor in the joint family property is not required. The joint Hindu family by itself is a legal entity capable of acting through its Karta and other adult members of the family in management of the joint Hindu family property. Thus Section 8 in view of the express terms of Sections 6 and 12, would not be applicable where a joint Hindu family property is sold/disposed of by the Karta involving an undivided interest of the minor in the said joint Hindu family property. The question posed at the outset therefore is so answered.”

The Act has drawn a distinction between joint family property in which a minor has undivided interest and other property of a minor. Consequently, the rules applicable to sale and transfer of both types of property are also different; the latter being more stringent. However, in both cases, necessity and benefit of the minor or estate, as the case maybe, are a sine qua non.

Conclusion

While the Legislature has kept the interest of minors paramount, it has to also ensure that joint family property remains easily transferable. If Section 8 was applicable to sale and transfer of joint family property, thereby, requiring prior court permission to sell or transfer joint family property in which a minor’s undivided interest was involved, it would become very difficult to effect sales and transfers of joint family property as at most times, there would be at least one minor in the Hindu undivided family.

[1] Sakharam Sheku Shinde v. Shiva Deorao Jamale [1973 SCC OnLine Bom 89 : (1974) 76 Bom LR 267]

[2] Narayan Bal & Ors. v. Sridhar Sutar & Ors. [AIR 1996 SC 2371 : (1996) 8 SCC 54]

Making Documentation Easy

Copyright 2020 Quick Legal Formats Private Limited. Legal Formats India is not a "Lawyer Referral Service", does not provide legal advice or representation and does not seek to solicit clients for the purpose of legal representation. Neither is Legal Formats India a law firm nor a substitute for an attorney or an advocate or law firm or legal practitioner. Your use of this website constitutes acceptance of the Terms of Use, Privacy Policy and Cookie Policy.

Designed and Developed by MagentaHive Technologies.

Copyright 2020 Quick Legal Formats Private Limited. Legal Formats India is not a "Lawyer Referral Service", does not provide legal advice or representation and does not seek to solicit clients for the purpose of legal representation. Neither is Legal Formats India a law firm nor a substitute for an attorney or an advocate or law firm or legal practitioner. Your use of this website constitutes acceptance of the Terms of Use, Privacy Policy and Cookie Policy.

Designed and Developed by MagentaHive Technologies.

Copyright 2020 Quick Legal Formats Private Limited. Legal Formats India is not a "Lawyer Referral Service", does not provide legal advice or representation and does not seek to solicit clients for the purpose of legal representation. Neither is Legal Formats India a law firm nor a substitute for an attorney or an advocate or law firm or legal practitioner. Your use of this website constitutes acceptance of the Terms of Use, Privacy Policy and Cookie Policy.

Designed and Developed by MagentaHive Technologies.

GET HELPREVIEWS