Case Title: Babu Ram v. Santokh Singh
According to the Supreme Court, even if the property in dispute is agricultural land, the preferred right granted to a Hindu heir under Section 22 of the Hindu Succession Act is still relevant.
In a second appeal, the Himachal Pradesh High Court was presented with a significant legal question that, does Section 22 of the Hindu Succession Act exclude an intestate's interest in agricultural land and does the preferential right over "immovable property" contemplated by the provision apply only to business and such immovable property, which excludes agricultural land? According to the High Court, Section 22 does not forbid ownership of agricultural property, and the successor has first claims on such property. In the current case, this judgement was contested before the Supreme Court.
According to Section 22, when an ownership in any underlying asset of an intestate passes to two or more heirs and one of those heirs offers to transfer his or her stake in the asset or company, the other heirs have a preferential right to buy the proposed transferred interest. Insofar as the State of Himachal Pradesh is concerned, the question of inheritance to an interest in agricultural lands is solely covered by Section 22 of the Hindu Succession Act, according to the Apex Court. It further noted that since Section 4(2) of the Act was repealed, Section 22 of the Act is now applicable without exception. Section 4(2), which stated that the Act's provisions would not apply in situations involving, among other things, the devolution of tenancy rights with regard to agricultural holdings, is now repealed.
The bench next contemplated on whether one or more heirs could benefit from the preferential right despite Section 22's provisions applying to agricultural land succession. According to the court, if an heir's interest or source of title in agricultural property is solely due to the succession rights granted under the Act's provisions, the Act also specifies how that right may be used. The Bench observed that when the Parliament considered granting succession rights for various properties, including agricultural holdings, it qualified the right to sell to an outsider and offered other heirs priority rights with a specific purpose. According to the Shastrik Law, a coparcener's interest would pass according to the rules of survivorship, however Section 6 of the Act created an exception. If the circumstances outlined in Section 6 were met, the devolution of the deceased person's interest would not go via survivorship but rather in conformity with the Act's provisions. Since the Act's provisions in some cases created the right itself for the first time, it was deemed appropriate to include a qualification to ensure that family properties would indeed be held well within family, to the greatest extent possible, and that no outsider would be easily potted in the family assets. Heavy reliance was placed on the verdict of Roshan Lal (deceased) through his LRs. V. Pritam Singh and Ors decided on 01.03.2018 wherein after carefully examining all pertinent rulings on the issue, it was determined that the provisions of Section 22 of the Act would apply to the succession involving agricultural properties. Also, relying on the case of Vaijanath and Ors. v. Guramma and Anr. pertaining to joint family property, including agricultural land, the Court in the present matter opined that a preferred right was granted to the remaining heirs with the intent that the property acquired by inheritance should stay within the confines of the family.