Hindu Undivided Family – No Presumption That Business Run By Karta In Tenanted Premise Is Joint Family Asset
Case: Kiran Devi Vs. Bihar State Sunni Wakf Board
Coram: Justices Ashok Bhushan, S. Abdul Nazeer and Hemant Gupta
Case No: [CA 6149 OF 2015]
Court Observation: “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”, observed the Supreme Court
“A perusal of the facts on record would show that it was a contract of tenancy entered upon by great grandfather of the plaintiff. Even if the great grandfather was maintaining the family out of the income generated from the hotel business, that itself would not make the other family members as coparceners in the hotel business. It was the contract of tenancy which was inherited by the grandfather of the plaintiff who later surrendered it in favour of the Wakf Board. The tenancy was an individual right vested with the grandfather of the plaintiff who was competent to surrender it to the landlord. The High Court has clearly erred in law by holding that since the grandfather was a tenant, the tenancy is a joint family asset. The contract of tenancy is an independent contract than the joint Hindu family business”.
“Thus, mere payment of rent by great grandfather or by the grand-father of the plaintiff raises no presumption that it was a joint Hindu family business. The High Court has clearly erred in law to hold so without any legal or factual basis”, the judgment authored by Justice Hemant Gupta observed.
“..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 added.