Can there be presumption of Hindu joint family property if a business activity carried out by Karta in a tenanted premise? Supreme Court answers

Supreme Court: The 3-judge bench of Ashok Bhushan, SA Nazeer and Hemant Gupta*, JJ has held that there can be presumption of Hindu joint family property if the property has been acquired by the male member or if the same has been treated as joint Hindu family. But no such presumption is attached to a business activity carried out by an individual in a tenanted premise.

Background

The plaintiff had filed a suit for declaration before the competent civil court stating that he is a tenant in the suit premises and is entitled to continue in the suit premises as a tenant on payment of monthly rent. The basis of such declaration was that Ram Sharan Ram, the great grandfather of the plaintiff, predeceased his brother Ram Sewak Ram who died issueless and his widow predeceased him. Ram Sewak Ram was carrying out joint family business of hotel in the premises of the Wakf Board. Due to advanced age, he handed over the possession of the hotel business to his nephew Devendra Prasad Sinha, the grandfather of the plaintiff. The grandfather of the plaintiff succeeded to the tenancy as member of the joint Hindu family. After his death, defendant Nos. 1 to 3 succeeded to tenancy as members of the Joint Hindu Family. The shop was being run by Surendra Kumar, son of Devendra Prasad Sinha, when the grandfather of the plaintiff fell ill. Surendra Kumar, the father of the plaintiff started paying rent to the Wakf Board. However, Surendra Kumar later joined service and the hotel was being run through the servants. The plaintiff had started running the hotel since 1988. On account of disputes over the management, the hotel was closed and it remained closed for several years. It is the plaintiff who wanted to resume the hotel business in the premises in question and thus communicated with the Wakf Board to continue the hereditary tenancy of the shop as Karta in his name.

The Wakf Board in its written statement asserted that Md. Salimuddin was the duly appointed Mutawalli of the Wakf estate in question and the appellant was a tenant duly inducted by the Management Committee. It was further pleaded that the defendants had no knowledge that Ram Sewak Ram was carrying any business of hotel but that Devendra Prasad Sinha was a tenant in the suit premises who had surrendered his tenancy rights in favour of Md. Salimuddin through a written letter dated 31.5.1996 and thereafter handed over vacant possession of the premises. Subsequently, the appellant had been inducted as a tenant on a monthly rent of Rs.600/- on 5.6.1996.

Wakf Tribunal’s judgment

The writing on paper to surrender the possession was admitted by the witness. There was no oral or documentary evidence that Devendra Prasad Sinha had surrendered the premises where he was running joint family business. The plaintiff did not even suggest that Devendra Prasad was managing a joint family business and thus in the absence of such suggestion it was difficult or rather impossible to believe that Devendra Prasad was managing a joint family business.

Consequently, the suit was dismissed.

High Court’s judgment

The suit premises were let out to Ram Sewak Ram who carried out joint family hotel business in the said premises until his death in January, 1960. Thereafter, defendant No. 1 became the Karta and succeeded to joint family business including the suit premises. He could not have surrendered the tenancy in favour of Mutawalli on 31.5.1996 without the consent of other members of the joint family.

Consequently, the judgment of the Tribunal was set aside and also a direction was issued to dispossess the appellant from the suit premises and to handover the vacant possession of the suit premises to the plaintiff.

Supreme Court’s judgment

Whether Shri Devendra Prasad Sinha was running the joint family business and/or whether the act of surrender of possession was that of a joint Hindu family business or only of surrender of tenancy; or that as a Karta, surrender of tenancy was for the benefit of the joint Hindu family?

“Even if a male member had taken premises on rent, he is tenant in his individual capacity and not as Karta of Hindu Undivided Family in the absence of any evidence that Karta was doing the business for and on behalf of Joint Hindu Family.”

The Court held that the High Court has presumed the existence of the joint family of which Ram Sewak Ram was said to be the Karta from perusal of the Ration Card issued on 2.12.1949, however,  Hindu Joint Hindu Family cannot be presumed to be in existence only on the basis of Ration Card unless there is evidence that the funds of joint Hindu Family were invested in the business in the tenanted premises.

Hence, the High Court has committed a basic error of law and fact that the payment of rent or the Ration Card proves that the tenant was carrying business as a Joint Hindu Family Business.

Further, mere payment of rent by great grandfather or by the grandfather of the plaintiff raises no presumption that it was a joint Hindu family business.

Whether on account of cessation of activities of running of the hotel, the act of the surrender of tenancy is in fact for the benefit of the joint family?

While the High Court found that the letter of surrender was not reliable or tenable, the Court noticed that the executor of the surrender letter has admitted such surrender letter in the written statement and while appearing as a witness. Further, the Mutawalli Md. Salimuddin has also accepted the surrender letter in the written statement and while appearing in the witness box.

Hence,

“Merely for the reason that signatures in the translated copy do not tally with the Urdu copy is not sufficient to hold the surrender letter as unreliable as the translation can be incorrect but the correctness of the document in has not been disputed by the executor or by the acceptor.”

The said document could not have been said to be unreliable on the basis of the statement of the plaintiff who is not a party to such transaction. The Court, hence, concluded that,

“It is one thing to say that the document is unreliable and another to say that the document does not bind the plaintiff. We have no hesitation to hold that the document was validly proved and accepted by the Wakf Board. Therefore, the act of surrender of tenancy was for the benefit of the Joint Hindu family.”

[Kiran Devi v. Bihar State Sunni Wakf Board,  2021 SCC OnLine SC 280, decided on 05.04.2021]

*Judgment by Justice Hemant Gupta

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