Family Partition versus Family Arrangement

Family disputes and consequential family partition and family arrangement are not new to us. Since ages, the human civilization has been exposed to disputes, settlement and arrangements within the family. The destruction of property and human lives in Mahabharata was the outcome of the family dispute that could not be resolved by partition and/or arrangement. Hence, family partition and family arrangement assume significant importance in not only preserving the property but also human lives and values. This is the subject that has travelled through the time and across the geographical boundaries, religion, caste and creed enveloping in its fold all and sundry. In the recent past, we have come across family disputes and arrangements in a number of industrial houses.

There is no specific legislation enacted by the Government to deal with the family disputes, family partition and family arrangement. The whole concept of family partition and family arrangement has been evolved over the years and further defined and refined by the judiciary keeping in mind the spirit behind the ‘family arrangement’.

However, whenever we talk about family partition and arrangement, we invariably refer to Hindu Undivided Family, unwittingly conveying an erroneous message that family partitions and family arrangements take place only among the Hindu families. This concept is equally dear to and prevalent amongst the people of other religions such as Muslims, Christians, Sikhs, Jews, etc.

The word ‘family’ for the purposes of family partition is essentially restricted to the persons having right of succession to the property. For example, in the partition of a HUF, the members of the undivided family – whether male or female – can ask for the partition of the undivided property. However, for the purposes of family arrangement, the word ‘family’ has been given wider connotations. For example, in Ramcharan Das vs. Gririja Nandini Devi AIR 1966 SC 323, the Apex Court held that even the existence of legal title to the subject property is not the criteria to determine whether the person constitutes the member of the family. In this case, the three parties to the settlement of family dispute concerning the property of the deceased person constituted his widow, widow’s brother and widow’s son-in-law. The latter two, though could not under the Hindu Law be regarded as the heirs of the deceased, bearing in mind their relationship to the widow were considered to be part of the family so as to arrive at a proper and legitimate family arrangement. The Apex Court held that: "Courts give effect to a family settlement upon the broad and general ground that its object is to settle existing or future disputes regarding property amongst the members of the family. The word ‘family’ in this context is not to be understood in the narrow sense of being a group of persons who are recognized in law as having a right of succession or having a claim to a share in the property in dispute."

Partition is the determination of individual rights in the joint family and the distribution of the property accordingly amongst the members. The property hitherto enjoyed by the family jointly is divided and distributed to be enjoyed by the individual members severally. Family arrangement is a pious, humane, rational, logical and intelligent approach to arrive at some understanding/agreement between the members of the family for the benefit of all the members with a view to find the solution on doubtful and disputed rights of all the members of the family.

Essentially, partition involves determination of individual rights of members of family in the property in terms of succession laws. More or less, the whole process progresses mathematically. The family arrangement does not progress on the same lines. The distribution of property under the ‘family arrangement’ may be unequal. The family arrangement is a settlement in which each party takes a share of the family property by virtue of an independent title, which is, to that extent, and by way of compromise, admitted by the other parties. Unlike the members of a family in family partition, the members of a family in family arrangement need not have a right of succession in the subject property.

Family partition is the determination of the individual rights in the family property. Therefore, there is clearly no question of any transfer of property involved in the case of partition. However, in the case of a family arrangement, such a question may arise in view of the fact that the term family is given a wider meaning and the arrangement is not necessarily strictly according to law of succession. But in any case, the family arrangement does not create any new right of the participants in the family property but only recognizes and demarcates the rights of the parties to the family arrangement. Accordingly, the Courts have held that there is no ‘transfer’ involved in the case of family arrangement as the participants already had or assumed to have had antecedent title, interest in the property.

Family partition/arrangement involves deliberations amongst the members concerned so as to come to terms, which are mutually acceptable to them. One of the most widely used methods of settling such internal disputes is arbitration.

SPECIAL STORY: Family Partition & Family Arrangement

In this June 2006 issue of Income Tax Review, we carry a Special Story on Family Partition and Family Arrangement. The various articles in this Special Story cover general aspects, tax implications, stamp duty and registration requirements and important case laws covering all aspects on the subject. I am sure the articles would help readers understand the subject of family partition and family arrangement and help them in their day-to-day practice. I thank Shri Vipul Joshi for designing the Special Story for this month. I also thank all the authors for sparing their valuable time and giving their articles in time. My thanks are also due to Shri V. H. Patil who has edited this Special Story.

Index to Volume XXXI (April 2005 to March 2006)

From the last three years we have been preparing the Annual Index of our journal. The first two were given with the February 2004 and August 2004 issues of the Journal. The third Annual Index was given with the August 2005 issue of the journal. The fourth Annual Index to Volume XXXI (April 2005 to March 2006) is accompanying this issue of the Journal. Annual Index makes the reference to the different issues of the journal more handy and convenient. I wish to record the appreciation of the hard work and special efforts put in by the Chairman Shri Vipin Batavia and the Convener Shri Yatin Desai in bringing out the Annual Index. I also thank all those who have assisted in the preparation of the Index. I am also thankful to all those who have given their constructive suggestions in the process of preparation.