Issues relating to partition of huf property
Bhagirath Biyani
(Querist) 05 March 2013
This query is : Resolved
We are 5 brothers. After passing away of our father, his property share was transferred by his elder brother to his sons. Property in Rajasthan consists of a plot of 1000 sq mtrs, half of which has Haveli building. 2 of the eldest brothers expired without leaving a will. They are survived by 9 and 3 inheritors (consisting of wife, daughters and sons). Over 3 years ago all co-parceners had verbally consented to put the property for sale. Legal Documents were drafted. One agreement for all to sign but all kept waiting for the signature from the eldest brother’s family. So for 9 heirs and 3 heirs separate agreement drafted. Again all kept waiting because even this was not shared or discussed among the 9 heirs. All have been kept in loop about ongoing efforts to put the property for sale. The Queries are:
Last year 3 brothers were told that HUF only owner of the property and only correct approach to sale? All relevant details about HUF were shared for consensus. Few months ago consent letter to sale the property was also signed by all but one family in favour of the eldest male member of the family. Application has been made for PAN in name of father’s HUF. Bank is agreeable to account opening by Karta but insisting that consent letter to this effect should also be signed by all co-parceners, including some inheritors of eldest brother’s family. The queries are:
a. Now wife of the eldest brother is open to sign with condition that only she to have sole powers to distribution the property among 3 sons and 5 daughters, to which two sons not consenting. What is the way out?
b. One of the brother’s only daughter, having his Powers Of Attorney, has sold some weeks ago his 1/5th share of property to our cousins having adjoining property without consulting any? That part-property sale has also been registered. Is that legal? Can that be legally nullified, stayed or challenged?
c. Will the property be considered legally under HUF, also by the buyers, who are approaching, well aware of the property history; know about the recent sale of 1/5th? Can Karta go ahead to negotiate with buyers for all or the remaining 4/5th, keeping all informed. Will such deal be acceptable for registration and by Income Tax?
Raj Kumar Makkad
(Expert) 06 March 2013
You have not mentioned how that property was transferred in favour of eldest coparcener after death of their father by all other coparceners without which no definite reply can be offered to you.
M V Gupta
(Expert) 07 March 2013
Facts narrated are bit confusing. You have stated that u are five brothers. On the death of ur father, "his property share was transferred by his elder brother to his sons". The reference here seems to be that the elder brother of ur father had transferred his share (50%) in the HUF property to his sons. Is this presumption correct? pl clarify. As regards the remaining 50% share belonging to ur father, the eldest of u brothers automatically becomes Karta of ur HUF and as such the eldest brother can sell the property for the benefit of the family. Since all of u are majors, you have to join the sale deed by conveying ur consent for the sale. This can be done either by all of u signing the sale deed as transferors, or as confirming parties or merely signing the deed as witnesses, as per choice of the purchaser.
Bhagirath Biyani
(Querist) 07 March 2013
Thanks for the reply. The same message has been modified,(parts in beacket).
We are 5 brothers. After passing away of our (i.e.we 5 sons), father, his property share was transferred by his, i.e. our father's elder brother to his sons, (i.e. we 5 brothers),Property in Rajasthan consists of a plot of 1000 sq mtrs, half of which has Haveli building.
2 of the eldest brothers, (out of we 5 brothers), expired (7 years ago), without leaving a will. They, (our two elder brothers), are survived by 9 and 3 inheritors (consisting of wife, daughters and sons), (12 of the two brothers).
Over 3 years ago all co-parceners, (i.e. we 3 brothers and 12 of the other two brothers), had verbally consented to put the property for sale. Legal Documents were drafted. One agreement for all to sign, but all,(i.e. we 3 brothers), kept waiting for the signature from both the elder brother’s family. So for 9 heirs and 3 heirs, separate agreement drafted to seek compliance. Again all, (i.e. we 3 brother), kept waiting because even this (draft document) was not shared or discussed among (themselves - mother, brothers with respective sisters - 9 heirs and 3 heirs). All, (all along), have been kept in loop about ongoing efforts to put the property for sale. ,
Last year all co-parceners, (i.e. 15 signatories/beneficiaries), were told (about the expert advice) that HUF only owner of the property and only correct approach is to sale (accordingly)? All relevant details about HUF were shared for consensus. Few months ago consent letter to sale the property was also signed by all but one family, in favour of the eldest male member of the family. Application has been made for PAN in name of father’s HUF. Bank is agreeable to account opening by Karta but insisting that consent letter to this effect should also be signed by all co-parceners, including some inheritors of eldest brother’s family.
The queries are:
a. Now wife of the eldest brother is open to sign with condition that only she to have sole powers to distribute their,(i.e. eldest brothers share), property among 3 sons and 5 daughters, to which two sons not consenting. What is the way out?
b. One of the brother’s only daughter, having his Power Of Attorney, has sold three weeks ago his 1/5th share of property to our cousins having adjoining property, without consulting any (of the rest, i.e. we 14). That part-property sale has also been registered. Is that legal? Can that be legally nullified, stayed or challenged?
c. Will the property be considered legally under HUF, also by the buyers, who are approaching, well aware of the (family and) property (history; now) also know about the recent sale of 1/5th? Can Karta go ahead to negotiate with buyers for all or the remaining 4/5th, keeping all informed. Will such deal be acceptable for registration and by Income Tax?
M V Gupta
(Expert) 08 March 2013
Ur amended query confirms my assumptiiion. It appears that ur father and his elder brother had inherited the property from their father. As such when ur grand father died, ur elder paternal uncle became the Karta of HUF. Ur father was only a coparcener. It is not clear whether there was partition of properties between ur father and uncle, when ur uncle transferred his share to his sons. (I presume it was a gift by your uncle to his sons)If there was no partition, then legally ur uncle continues to be the karta of the HUF and his signature will be necessary to sell ur shares. If there was a partition amongst ur father and his elder brother, then eldest male memebr of ur families will be the karta as advised in my earlier reply.
As regards the issues raised by you, my views are as under:
a. As all members of her family are entitled to equal share in the sale proceeds, separate cheques will be given to them by the buyer. Hence the question of ur Aunt distributing the proceeds may not arise.
b.One of the coparceners can sell his undivided share to another coparcener thereby increasing his share in the HUF properties. Consent of others is not necessary.
c. As there is no partition amongst u five brothers, the property will continue to be HUF property.
Bhagirath Biyani
(Querist) 08 March 2013
"Thank you shri M.V.Guptaji, for bearing with and have grasped well the layman's way of conveying the issue. Glad that you have summarised background correctly. I also value and appreciate your points at a,b,c.
Our father were total 4 brothers. 2 of them separated in 1942 and 1953.
My elder uncle and my father continued the same Haveli as residence. Father expired in 1957. Another Haveli was constructed in 1963. We 5 brothers vacated half of the old Haveli and in its place moved to the new Haveli. So there was no partition of any HUF, right?
The issues, as I understand, remain and need to be resolved are:
a. 9 signatories for the share of the eldest brother, have so far in over 3 years, not interacted on the issue; mother has so far not involved 5 daughters or son-in-laws - though 3 of them are in the same city - and doesn't want any of us to that. Mother and one son have old internal differences with other 2 sons. Mother also does not wish to involve or share their concerns with any other in our wider family to arbitrate.
b. Issue remains, one of the brother’s only daughter, having his Power Of Attorney, has sold three weeks ago his 1/5th share of property to our cousins having adjoining property, without consulting any (of the rest, i.e. we 14). That part-property sale has also been registered as per both parties, will be ascertained any day.
Queries are: Is that legal? Can that be legally nullified, stayed? Should or must it be challenged. As that may also ensure of single sale of total property, which will mean more buyers to make offers to buy. It will also have less legal complexities, is that right?
c. If the property is of father's HUF, Karta is willing to act. But issue at 'a' remains. Query then is:
1. Can Karta go ahead for sale as buyers seem to be willing?
2. The issue of HUF bank account will remain. If that also can be by-passed, issue of distribution of proceeds by Karta to will remain, without due consent of any of of the signatories - 3 of 1/15th and 9 of 1/45 part. Is there a way out of that?
3. Will such a deal done by Karta, without consent of each of the signatory be acceptable for registration and by Income Tax?"
4. If all the rest - after counting-out 1/5th share already sold – owners of 4/5th share do not consent to go by HUF approach, though most will come together to negotiate and sale, legal issues connected to sale without all signatories remain, as also the issue at 2 above, about distribution.
