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10 September 2020
The judiciary continues to take progressive steps towards making succession law more women friendly. In its 11 August 2020 landmark decision in Vineeta Sharma v Rakesh Sharma, a three-judge bench of the Supreme Court held that daughters and sons have equal coparcenary rights in a Hindu undivided family (HUF).(1)
In its decision, the Supreme Court clarified two points:
There are two categories of persons in an HUF (ie, members and coparceners). The judgment affects only coparceners.
A 'coparcener' is someone who:
A 'member' is entitled only to maintenance and is granted no inheritance or partition rights in the coparcenary.
Coparcener of an HUF
Member of an HUF
The 2005 amendment was passed to confer equal status on both sons and daughters of coparceners. Prior to the 2005 amendment, coparcenary rights were granted only to male descendants (ie, sons) of coparceners. However, while the 2005 amendment sought to grant equal rights to sons and daughters, the wording gave rise to various lacunae, which led the Supreme Court to issue contradictory rulings on this issue.
Until Sharma, equal status was granted only to daughters whose fathers (coparceners) were alive when the amendment came into force on 9 September 2005. This view was upheld by the Supreme Court in 2015 in Prakash v Phulvathi. However, in 2018 the Supreme Court issued a contradictory ruling in Danamma v Amar, granting two daughters of a coparcener rights in their father's property even though he had passed away in 2001.
Sharma has clarified that the equal rights conferred on daughters of coparceners by the 2005 amendment apply from birth, irrespective of when their father dies. The Supreme Court has clarified that the 2005 amendment applies retrospectively and not only in cases where the father was alive on the date on which the 2005 amendment took effect.
This ruling applies subject to the condition that the coparcenary property should not have been partitioned by the father before 20 December 2004. As long as the property remained coparcenary property and was not partitioned as of this date, a daughter can now claim an interest therein.
Daughters of coparceners will benefit from this judgment. However, the status of a coparcener's wife (who is a member of an HUF, as above) remains the same. Thus, wives have only limited rights of maintenance and cannot seek partition of their husband's property, among other things.
Daughters will now be treated on par with sons of coparceners and will be granted equal coparcenary rights in their father's property on their birth. Further, daughters' marital status will not affect the rights conferred on them by the 2005 amendment – hence, they continue to be part of their father's HUF post-marriage.
Daughters can now request the partition of their father's coparcenary property and seek an equal share with their siblings and other coparceners. On acquiring a share in a coparcenary property, a female coparcener can bequeath her HUF share to any beneficiary that she chooses (and to the exclusion of others) in her will.
Although this is a landmark judgment which has cleared up previous confusion and improved women's rights under the law, its real-world application is limited. The judgment applies only to HUF property and does not affect personal or self-acquired assets which are held individually.
Personal and self-acquired assets are passed on under will or intestate succession law. In reality, most personal wealth, including ownership rights in valuable family businesses, are held in the personal names of the patriarch or promoters or in private trusts, holding companies or limited liability partnerships. 'Older' business families may continue to hold some ancestral wealth in HUFs, but the scale and materiality of such holdings are usually limited. Few business families are setting up new HUFs and most existing HUFs are being dissolved. Hence, this judgment may not help to transfer real wealth into the hands of daughters. However, although more needs to be done, this decision is still a victory for daughters.
For further information on this topic please contact Rishabh Shroff or Tanmay Patnaik at Cyril Amarchand Mangaldas by telephone (+91 22 2496 4455) or email (firstname.lastname@example.org or email@example.com). The Cyril Amarchand Mangaldas website can be accessed at www.cyrilshroff.com.
(1) This article is in response to an update published on Moneycontrol.com on 12 August 2020.
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