Demystifying the Conundrum Regarding the Applicability of Hindu Succession Act, 1956 upon Agricultural Lands

Introduction

The divergent views taken by the various High Courts regarding the question pertaining to the applicability of the Hindu Succession Act, 1956¹ (HSA, 1956) to agricultural land mounting confusion and legal uncertainty at the outset in the legal sphere.²

The legal question raised before the Supreme Court is whether the devolution of an interest of an immovable property of an intestate under HSA, 1956 excludes agricultural land, and the pre-emptory right over immovable property as given under Section 22³ of the HSA, 1956 deals only to business and to such immovable property except the agricultural land?⁴

Some of the High Courts of the State held that the provision of Section 22 of the HSA, 1956 would include the agricultural lands following the reasoning of the Orissa High Court in Laxmi Debi⁵, while on the other hand, some of the High Courts held that the provision of Section 22 of the HSA, 1956 would not be made applicable to agricultural lands following the reasoning advanced in Jaswant Singh⁶ and Prema Devi⁷. This inconsistency in the views of the various High Courts of the State leads to many legal complexities regarding the succession of agricultural land.

An answer to this question can be pertinently examined by evaluation of the constitutional provisions qua the competence of the Union Government to enact the laws, pertaining to ‘succession’ of agricultural land.

The distribution of legislative powers is enumerated in Chapter I of Part XI of the Constitution of India.⁸ The division of legislative power based on territoriality has been given under Article 245, wherein the provision states that the law made by Parliament shall be applicable over the entire territory of India or any part of the territory of India, while the law made by the State Legislature shall be made applicable to the whole territory of the State or any part thereof. Furthermore, the legislative division of power based on subject-matter has been given under Article 246, which provides three categories of List. The Union List⁹, State List¹⁰, and Concurrent List¹¹ contain exhaustive subject-matters over which law can be made as per the provision of the Constitution. Parliament is empowered to legislate on the subject-matter enumerated in the Union List, State Legislature is empowered to legislate on the subject-matter enumerated in the State List, while Parliament and the State Legislature are both empowered to legislate on the subject-matter enumerated in the Concurrent List.¹²

A special provision remedies the inconsistency between the law made by Parliament and the State Legislature, by providing that the Central law shall prevail over the State-made laws to the extent of the repugnancy of the State law.¹³

It would be important to examine regarding succession of agricultural lands by putting over the inquiry that “Whether succession is a transfer or alienation and would include the expression ‘transfer of property’ or not and as to whether succession with respect to agricultural land falls within Item 5 of List III of the Constitution of India or not”? Therefore, it is imperative to understand whether succession means the transfer of interest inter vivos or only includes the devolution of interest of an intestate upon the successors.

Succession: Meaning thereof

The term “succession” is also not defined under the HSA Act of 1956. However, as per Chapter II of the HSA Act, 1956, “it is apparently clear that properties of the deceased Hindu dying intestate are to devolve upon the surviving heirs and distributed in accordance with the provisions contained therein”. According to Manupatra Dictionary, “succession means the statutory rules of inheritance of a dead person’s estate when the property is not given by the terms of a will, also called laws of ‘descent and distribution’”. Succession also refers to the power or right to come to the inheritance of ancestors. The word “succession” in relation to property and rights and interests in property generally implies “passing of an interest from one person to another”.¹⁴ Therefore, while going through all the definitions of succession hereinabove propose that succession means the devolution of an interest of a Hindu dying intestate by the operation of law and that succession does not include the transfer inter vivos.

Historical background

Prior to the commencement of the Constitution of India, the distribution of power between the Federal and State Governments was governed by the Government of India Act, 1935¹⁵ (the GOI Act, 1935). The Seventh Schedule to the GOI Act, 1935, contains items in three types of Lists.¹⁶ The Federal Government is authorised to make laws on the items contained in the Federal Legislative List (List 1)¹⁷, while the provincial Government is authorised to make laws on the items contained in the Provincial Legislative List (List 2).¹⁸ With regard to the items contained in the Concurrent Legislative List (List 3), both federal and provincial Governments are authorised to make laws.¹⁹ The list of items relevant to determining the competency of the Central Government to legislate on subject-matter “succession to agricultural land” under the Constitution of India has been comparatively discussed with the items mentioned under the GOI Act of 1935.

(emphasis supplied)

Upon careful comparative reading and consideration of the Seventh Schedule to the GOI Act, 1935 and Constitution of India, it has been observed that “the makers of the Constitution of India have in their wisdom omitted the phrase ‘save as regards agricultural land’ in Item 5 of the Concurrent List of Constitution of India, which were earlier there happened to be in the corresponding Item 7 of the Concurrent List of the GOI Act, 1935”. Furthermore, Item 21 of the Provincial Legislative List (List 2) contained the provision regarding “… transfer, alienation and devolution of agricultural land….” of the GOI Act, 1935 while the corresponding Item 18 contained in State List (List 2) omits the entry regarding “…devolution of agricultural land” and only contained in State List regarding “…transfer and alienation of agricultural land….”

Therefore, earlier in the GOI Act, 1935, it contained that the laws regarding the succession of agricultural land cannot be made by the Federal Government as Entry 7 of the Concurrent List debarred the Federal Government to make laws on the subject, while Entry 21 of the Provincial Legislative List empowers the provincial Government to make laws regarding the devolution of agricultural land.²⁰ The observation²¹ made by the Federal Court on reference being made under Section 213²² of the GOI Act, 1935, in the light of current entry that was contained under GOI Act, 1935, are correct to the point that the (1) “The Hindu Women’s Rights to Property Act, 1937, and the Hindu Women’s Rights to Property (Amendment) Act, 1938²³, (a) do not operate to regulate succession to agricultural land in the Governors’ provinces; and (b) do operate to regulate devolution by survivorship of property other than agricultural land.” (2) “The subject of devolution by survivorship of property other than agricultural land is included in Entry 7 of List 3, the Concurrent List.”²⁴

Noticeably, “the entries made under the corresponding items in the present Constitution of India have been significantly changed and it can be observed that the makers of Constitution of India by omitting the phrase ‘save as regards agricultural land’ from Entry 5 of the Concurrent List impliedly empowered the Central Government to legislate on the subject succession of agricultural land. Moreover, the makers of the Constitution of India by omitting the phrase ‘…devolution of agricultural land’ from Entry 18 of the State List also favourably suggests that the Central Government can legislate on the subject ‘succession to agricultural land’”. ²⁵

Hindu Succession Act, 1956 and judicial decisions pertaining to applicability of HSA, 1956 to agricultural land

The HSA (1956) contains special provisions for regulating succession to the property of a Hindu dying State. The term “property” has not been defined under the Act but the term “intestate” has been defined to mean “a person is deemed to die intestate in respect of property of which he or she has not made a testamentary disposition capable of taking effect”.²⁶ To determine whether the devolution of an interest of an immovable property of an intestate under HSA, 1956 excludes agricultural land, and the pre-emptory right over immovable property as given under Section 22 of the Act deals only to business and to such immovable property except agricultural land? The relevant provisions have been mentioned and enumerated below.

Since the enactment of the HSA, 1956 Section 22 of the Act remains unchanged and the effect of this provision can be understood with the help of deleted Section 4(2) of the Act and both provisions of the HSA, 1956 has been reproduced hereinbelow for ready referencing:

4. Overriding effect of Act. — (1) Save as otherwise expressly provided in this Act,—

(a)-(b)       *       *       *

(2) For the removal of doubts, it is hereby declared that nothing contained in this Act shall be deemed to affect the provision of any law for the time being in force providing for the prevention of fragmentation of agricultural holdings or for the fixation of ceilings or for the devolution of tenancy rights in respect of such holdings (now omitted).²⁷

22. The preferential right to acquire property in certain cases.— (1) where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in Class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.

(2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the court on application being made to it on this behalf; if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such a person shall be liable to pay all costs of or incident to the application.

(3) If there are two or more heirs specified in Class I of the Schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred.

Explanation.—In this section, “court” means the court within the limits of whose jurisdiction the immovable property is situate or the business is carried on and includes any other court which the State Government may, by notification in the Official Gazette, specify in this behalf.

The High Court of Orrisa has adjudicated on the scope of Section 22 of the HSA, 1956 for the first time in Laxmi Debi v. Surendra Kumar Panda²⁸ wherein the Court negated the argument that HSA, 1956 does not include succession of agricultural land. This Court has also negated the strength of the Federal Court judgment wherein Gwyer, C.J. (the then C.J. of the Federal Court) ruled that “the Hindu Women’s Rights to Property Act of 1937, and the Hindu Women’s Rights to Property (Amendment) Act of 1938, do not operate to regulate succession to agricultural land in the Governors’ Provinces; and do operate to regulate devolution by survivorship of property to other than agricultural lands”. The Orrisa High Court held that “the Federal Court decision does not hold good in view of the currently changed position of law whereunder that decision was made based on the law of legislative competency as it then stood by the GOI Act, 1935”.²⁹

The Full Bench of the Punjab and Haryana High Court³⁰ while deciding the constitutional validity of Section 14³¹ of the HSA, 1956, wherein an argument was advanced that Section 14 of the Act, 1956, does not apply to agricultural land for the legislative field of Parliament under Entry 5 of List III in the Seventh Schedule to the Constitution, does not extend to legislate over agricultural land. The Punjab and Haryana High Court, keeping in view the decisions of the Orrisa High Court in Laxmi Debi v. Surendra Kumar Panda³² and also the similar view of Mahajan, J. in Sant Ram Dass v. Gurdev Singh³³ that “this was the position under the GOI, 1935, because in the corresponding entry legislation in regard to agricultural land had been specifically left out, but Entry 5 of List III, as not worded, differs from the corresponding entry in that Act in that legislation on agricultural land, on subjects mentioned in the entry, has not been taken out from the ambit and scope of the entry and currently the position under Constitution of India has been changed and items under Seventh Schedule under the Constitution of India should be interpreted alike to include succession of agricultural land”.³⁴

The Division Bench³⁵ of the Punjab and Haryana High Court, dealing with the scope of Section 22 of the HSA, 1956 framed two issues:

(1) Is Section 22 of the HSA Act, 1956 applicable to completed transfers or where there is a proposal to transfer the property?

(2) Can Section 22 of the HSA Act, 1956 be applicable to agricultural land?³⁶

Regarding the first issue, an argument was advanced that Section 22 of the Act, 1956 only covers the case wherein the property is proposed to transfer and not such cases where the property has been actually transferred putting reliance on phrase “proposes to transfer” used in Section 22(1) and the phrase “may be transferred under this section” coupled with the further use of the expression “if any person proposing to acquire the interest is not willing to acquire it” as used in Section 22(2) of the Act, 1956. A similar language has been used in Section 22(3) of the Act, 1956 “proposing to acquire any interest under this section”. The Court observed that such difficulties would crop up upon the literal interpretation of Section 22 of the Act 1956. Therefore, the Court looks into the intention of the legislature to kept out the strangers coming into the heirs of Class I of the Schedule after coming into force of the Act, and held that the correct way to interpret the scope of Section 22 of the Act to include the completed transfer within the scope of the phrase “proposes to transfer” in order to subserve the purpose of the Act and also to avoid the difficulties that would arise out of the surreptitious transfer or an open transfer before a decision to transfer it is known.³⁷ Regarding the second issue, the Court held that “upon comparing the language of Entry 18 of List II of the Constitution of India with its counterpart in the Government of India Act, 1935, namely, Entry 21.1 pointed out that there were material differences in the language of these two entries because devolution had been taken out from the said entry and put in concurrent Entry 5 of List III, which enabled Parliament to legislate regarding succession. However, this is not the case for agricultural lands. Entry 6 of List III, when read, points out that Parliament has no jurisdiction to legislate over agricultural lands beyond the power it has under Entry 5 of List III, that is, regarding devolution”. Therefore, it is clear that Section 22 does not cover the case of agricultural land.³⁸ The Court further observed that “when the Union Legislature used these words, it did so knowing fully well that it had no power to legislate regarding agricultural lands, except for the purposes of devolution. Section 22 does not provide a devolution of agricultural lands. It merely gives a sort of right to pre-emption. As already pointed out, Entry 6 in List III clearly takes out agricultural lands from the ambit of the Concurrent List. Agricultural land is specifically dealt with in Entry 18 of List II. The only exception being in the case of devolution. Therefore, it must be held that Section 22 does not embrace agricultural lands”.³⁹

Similarly, the Allahabad High Court held that the Hindu Succession Act, 1956, cannot be made applicable to agricultural land.⁴⁰ However, keeping in view the nature of the dispute contested in Prema Devi case⁴¹, the decision seems to be made on the correct line of reasoning.

The Supreme Court in Vaijanath v. Guramma,⁴² entertaining the issues pertaining to intestacy and succession of joint family property, which includes agricultural land, held that agricultural land has not been excluded from Entry 5 of the Constitution, which covers wills, intestacy, and succession as well as joint family and partition. Therefore, it is legal for the Union Government to enact central legislation for the succession of property, which includes the succession of agricultural land.⁴³ The Court went further to explain that considerable changes were brought in entries to the Seventh Schedule of the Constitution. Earlier, the legislative competence to enact laws regarding the succession and devolution of agricultural lands was vested with the State Government citing the reference of Item 21 of the State List and Item 7 of the Concurrent List found in the GOI Act, 1935. Presently, “referring Item 5 of the Concurrent Lists of the Constitution sufficiently indicates that the subject ‘devolution’ has been taken out from the Item 18 and also succession has fallen fully within the concurrent domain, making it very clear that when it comes to ‘transfer, alienation of agricultural land’ which are transfers inter vivos, the legislative competence under Item 18 of List II is with the State Legislatures but when it comes to ‘intestacy and succession’ which are essentially transfers by operation of law as per law applicable to the person upon whose death the succession is to open, both the Union as well as State Legislatures are competent to deal with the topic.” Consequently, the principle laid down under Article 254 of the Constitution shall govern the relationship in case of inconsistency between the law enacted by the Central Government and State Legislatures.⁴⁴

The Supreme Court, thereafter, turned to the next stage of issues, wherein it questioned whether the preferential right could be enjoyed under Section 22 of the Act by one or more the heirs? Would this part be within the legislative competence of the Union Government? The “right in or over land, land tenures …” “are within the exclusive competence of the State Legislatures under Entry 18 of List II of the Constitution”. “The laws relating to pre-emption enacted by State Legislatures are examples where pre-emptory rights have been conferred upon certain categories and classes of holders in cases of certain transfers of agricultural lands.” Whether conferring a preferential right by Section 22 is consistent with the basic idea and principles is the question. The Court answered this issue with the help of three illustrations:

(a) Three persons, unrelated to each other, had jointly purchased an agricultural holding where one wished to dispose of his interest. The normal principle of pre-emption may apply in the matter and any of the other joint holders could pre-empt the sale in accordance with rights conferred in that behalf by appropriate State legislation.

b) If those three persons were real brothers or sisters and had jointly purchased an agricultural holding, investing their own funds, again like the above scenario, the right of pre-emption will have to be purely in accordance with the relevant provisions of the State legislation.

(c) But, if, the very same three persons in illustration (b) had inherited an agricultural holding and one of them was desirous of disposing of his or her interest in the holding, the principles of Section 22 of the Act would step in. ⁴⁵

In the third illustration, the reason for the applicability of Section 22 of the HSA, 1956, is clear. Here in this illustration, “the source of the title of any of the heirs is by succession which is recognised as per the provisions of the Act and, one can argue that the preferential right under Section 22 of the HSA, 1956 cannot be disassociated from the principles of succession”.⁴⁶

Conclusion

The Supreme Court of India, in Babu Ram v. Santokh Singh⁴⁷ dealt with issues related to the succession of agricultural land. The issue in this case revolves around the applicability of Section 22 of the HSA, 1956, to agricultural lands. The brief facts of the case state that the plaintiff, as the co-sharer, is entitled to the preferential right to acquire land that was sought to be transferred by Defendant 1 to Defendant 2. The Court has clarified that the co-sharer can be entitled to claim pre-emption under Section 22 of the HSA, 1956, only when the property was devolved to them by way of inheritance. Otherwise, if the co-sharer has acquired interest in the property rather than inheritance, then in that case, the law of pre-emption shall be made applicable as per the State law. The Court after considering various differing authorities of the High Courts and its own Court held that the preferential right given to an heir of a Hindu under Section 22 of the Act is applicable even if the property in question is an agricultural land. The Court also ruled that HSA, 1956 should be made applicable to the succession of agricultural lands. The opinion of Gwyer C.J., in Hindu Women’s Rights to Property Act, 1937, In re⁴⁸ does not hold good in current scenarios when upon the coming into force of the Constitution of India the provisions regarding legislative competence have changed considerably.