Karnataka High Court

Karnataka High Court: While deciding the instant appeal wherein the question arose that whether the Muslim Personal Law (Shariat) Application Act, 1937 (Act of 1937), overrides Section 2(q) and Article 48 of the Karnataka Stamp Act 1957, which deal with the contract of “settlement”, the Bench of Anant Ramanath Hegde, J.*, held that Act of 1937 does not override the provisions of Karnataka Stamp Act. Thus, transfer of property by way of “settlement” is very much permissible even among the Mohammadans.

It was pointed out that when the Act of 1937 was brought into force, it was Stamp Act, 1899 which was in force and also, recognised “settlement”, and that the term “settlement” as defined in Section 2(24) of the Act of 1899 is in substance similar to the definition in Section 2(q) of Karnataka Stamp Act.

Background: The propositus had three wives. In 1965, the propositus executed 3 settlement deeds- one in favour of his grandsons, who are the appellants in the instant appeal; the second settlement deed in favour of his only son and third settlement deed in favour of his minor daughters from his third wife, who are the respondents in the instant appeal. All the settlement deeds were registered under the provisions of the Registration Act, 1908

When the propositus died in 1968, his first wife was a divorcee, his second wife had died issueless, and his third wife was alive. A suit claiming a share in the properties covered by the second settlement was filed by the daughters of the third wife.

The Trial Court held that there is no concept of transfer by way of “settlement” to settle the properties among the Mohammadans. Accordingly, the suit was decreed ordering partition of all the properties covered under the second settlement.

Counsel for the appellants contended that the transfer through a “settlement deed” is not expressly barred under the Mohammadan Law.

Per contra, the respondents argued that the concept of “transfer of the property through a settlement deed” is not expressly recognised in the Shariat Law. It was submitted that any transaction which is likely to deprive the right of an heir apparent violates the principles of Shariat Law. Hence, the settlement was rightly rejected by the Trial Court.

It was argued that the settlement deed in question is contrary to the Quranic injunction as it seeks to confer an unfair advantage over the descendants of propositus from his first wife to the detriment of the third wife and the children from the third wife. Hence, such inequitable distribution of the property by a Mohammadan, violates the Quranic injunction.

Court’s Assessment: The Court noted that transfer of property through a settlement deed is one of the modes of transfer recognised under law, though transfer/settlement through a settlement deed is not specifically provided in the Transfer of Property Act, 1882. The term “settlement” is defined under Section 2(q) of Karnataka Stamp Act, 1957 and Art. 48 of Karnataka Stamp Act deals with the stamp duty payable on the settlement deed.

The Court further noted that “settlement” under Karnataka Stamp Act is a contract involving the property. It involves the owner and the beneficiary. Since it is a contract, any person competent to contract irrespective of his or her religious faith or belief, can enter into a contract of settlement either as a settler or beneficiary. The settler must own a property as well. The definition of “settlement” does not mandate equal or equitable distribution of the property through a settlement deed. The settler is competent to settle the property in a manner he chooses as long as his discretion does not violate any law.

Taking note of the Preamble of Karnataka Stamp Act, the Court noted that application of the Act is not dependent on religious faith or belief. It applies to all, irrespective of their religious faith or belief. “In other words, the Act is religion-neutral”.

The Court stated that Shariat law which is believed to be the divine instructions of the Almighty may not envisage all types of contracts which are recognised under contemporary law. That does not mean that the contract entered through a ‘deed of settlement’ is impermissible among the Mohammadans. What is not expressly recognised in Shariat law is not necessarily something which is forbidden. It may still be in tune with the philosophy of the Quran.

The Court further emphasised that any contract that is neither recognised nor forbidden in Sharia law; and which is expressly recognised in a law that is religion-neutral, then such contract should be held permissible under the religion-neutral law, irrespective of their religious faith including Mohammadans.

Taking note of Muslim Personal Law (Shariat) Application Act, 1937, the Court stated that the overriding effect of the 1937 Act is only in respect of any usage or customs contrary to the Shariat Law and not on any Statute passed by competent legislature.

The Court stated that Karnataka Stamp Act has conferred the right to enter into transactions referred to in the Act including the ‘Contract of settlement’ on all persons irrespective of their religious faith or belief. Therefore, the interpretation that the Mohammadans cannot enter into ‘Contract of Settlement’ recognised under Karnataka Stamp Act violates the right guaranteed under Art.14 of the Constitution.

Therefore, with the afore-stated assessment, the Court thus allowed the appeal.

[Sultan Mohiyuddin v. Habeebunnisa, RFA 626 of 2013, decided on 25-04-2024]

*Judgment by Justice Anant Ramanath Hegde

Advocates who appeared in this case :

For appellant- Advocate Manu Kulkarni a/w Advocates Kesthur Sudarshan and Amrita Aryendra

For respondents- Vikram Huligal, Sr Counsel a/w Advocate Mohd. Tahir

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