An Article about "GUARDIANS ROLE IN MINORS PROPERTIES"

GUARDIANS ROLE IN MINORS PROPERTIES

Transfer of immovable property by persons domiciled in India is governed by the provisions of Transfer of Property Act, 1882. The term "Transfer of Property", as envisaged under section 5 of the Act means an act by which a living person conveys the property to one or more living persons. Living person includes a company or association or body of individuals, whether incorporated or not. However, not all living persons are competent to transfer the immovable property. 

Certain pre-requisites are envisaged under the statute which restricts alienation of property by a person who is not competent to enter intoa contract. One such restriction is transfer of immovable property by minor.

Hindu Minority and Guardianship Act 1956 (Act 32 of 1956) is one such legislation which is applicable to all Hindus. It is worthwhile to deliberate who is a Hindu as per the provisions of the Act. It may be generally said that all persons other than Mohammedans, Christians and Jews are Hindus. According to the definition a person is considered as Hindu by religion in any of its forms or developments including Veerashaiva, Lingayat, followers of Brahrno Prarthana or Arya Samaj, Buddhists, Jain and Sikh.

According to Indian Majority Act, 1875, which applies to all persons domiciled in India and to all matters except marriage, divorce and adoption, every person whose property has assumed superintendence by Court of Wards is deemed to have attained majority at the completion of 21 years and in all other cases at the completion of 18 years. Guardian means a person having care of theperson of a minor or his property or both person and property.

CLASSES OF GUARDIANS

Guardians for a minor may be classified as under: 

a) Natural Guardians

b) Testamentary Guardians

c) Guardians appointed by the Court and

d) De facto Guardians

1. NATURAL GUARDIAN

Under Section 6 of the Hindu Minority and Guardianship Act, 1956, the father is the natural guardian of the person and of the separate property of his minor son or a minor unmarried daughter and after him, the mother. Theexpression father and mother does not include step-father or step-mother. In case of adopted son, the guardian is the adoptive father and thereafter the adoptive mother. But in case of a child who has not completed five years of age mother is the natural guardian. The guardian of Hindu minor is entitled to take careof minor's property except minor's share injoint family property. 

The Kartha isentitled to take care of a minor's share in joint family property. In case of an illegitimate boy or an illegitimate unmarried girl, the mother is the natural guardian and after her, the father. In the case of a minor married girl, the husband is the natural guardian. It may be generally questioned as to the provision for minor unmarried girl, as the marriage of a minor is an offence. A person is disqualified from acting as a natural guardian under this Act if he ceases to be a Hindu or has finally renounced the world by converting himself to a hermit. 

Prior to the enactment of the Hindu Minority and Guardianship Act, 1956, the natural guardian had wide powers to deal with the property of his minor son or daughter whereby he could mortgage, sell, create a charge evenwithout permission of the Court. However, this unfettered power of the natural guardian to alienate the property of his minor children has been regulated by the Hindu Minority and Guardianship Act,1956 which has been enacted keeping in view the interest and welfare of the minor children. Section  read with Section 8(2) of the Act envisages that a Guardian cannot, without previous sanction of the court, alienate the minor's property in any manner, subject to the exception of lease not exceeding five years or not exceeding one year beyond the date when the minor attains majority. However, purchasing a property on behalf of a minor does not requirecourt's permission.

2. TESTAMENTARY GUARDIANS

Testamentary Guardians mean the persons appointed throughWill as guardians of minor and his property. They deal with the property belonging to the minor subject to such restrictions, as are imposed in the Will. The father may appoint any other person as guardian by a Will if the mother has expired earlier. In case the father appoints a guardian by Will even if the mother is alive it is not operative as the mother succeeds him as natural guardian. 

Mother may also appoint a guardian by Will, who succeeds her. In case she does not appoint any guardian by Will, the guardian appointed by the father through Will succeeds as guardian after the death of the mother. A Hindu mother may appoint any other person as guardian. The guardian so appointed shall act as natural guardian of the minor subject to the restrictions imposed in the Act and the Will. In case of minor being a girl, the powers of the appointed guardian will end on the marriage of minor girl and her husband will be the guardian thereafter. Only a person who has attained majority is competent to become a guardian. No guardian can be appointed forthe undivided interest in the joint family property of the minor. However, the jurisdictional High Court may appoint a guardian for the undivided interest of the minor in joint family property.

3. GUARDIANS APPOINTED BY THE COURT

Appointment of Guardian by the Court is governed by the provisions of the Guardians and Wards Act, 1890. Section 7 of the Guardians and Wards Act, 1890 provides that where the court is satisfied that the appointment of a Guardian is necessary to safeguard the interest of the minor child, it can make an order appointing and declaring a person as Guardian of a minor of his person or property or both. No order appointing another person to be the guardian can be made by the court until the powers of the guardian already appointed or declared have ceased to be so under the provisions of this Act.

4. DEFACTO GUARDIANS

A person who is not the haddock guardian and does not act for a specific purpose as a guardian, but manages the affairs of the minor in the same manner as the natural guardian or guardian appointed by the court could be referred to as Defector Guardian although in strict sense of the term there is nothing in the law to describe the de facto guardian. However, the authority of any person to deal with or dispose of any property of a Hindu minor on the ground of his being a de facto guardian of such a minor has been totally abrogated and any alienation by such a guardian is void ab initio and the same cannot be ratified subsequently by the minor after attaining majority. Thus, it is advisable to the intending buyers of immovable property with minor's interest to take all the necessary precautions and due care before proceeding to buy the property to avoid any future complications.

An Article about "Territorial Jurisdiction to try Cheque Bounce Cases"

Territorial Jurisdiction to try Cheque Bounce Cases

While hearing a petition challenging the territorial jurisdiction of a court to try an offience under the Negotiable Instruments Act, 1881, the Hannibal Supreme Court has held that only a lower court in whose jurisdiction an offence of cheque bounce is committed will try the case.

The Apex court observed that there are numerous instances where complaints are being filed at more than one place to harass an accused and held that the court cannot be oblivious of the fact that a banking institution holding several cheques signed by the same borrower can not only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to file four complaint cases at four different places. This only causes grave harassment to the accused. 

It is, therefore, necessary to strike a balance between the right of the complainant and the right of an accused vis-a-vis the provisions of the Code of CriminalProcedure in a case of this nature. Jurisdiction of the court to try a criminal case is governed by the provisions of the Criminal Procedure Code and not on common law principle.

The Hon'ble Court has further observed that the complainants, including financial institutions and banks, while filing cheque bounce cases, should ensure that no inconvenience is caused to the accused.

These observations were made by the apex court during the hearing of case between Harman Electronics and National Panasonic India (NPI) under the Negotiable Instruments Act.

Harman Electronics and NPI had entered into a transaction in Chandigarh and a cheque issued by the former at Chandigarh was dishonoured in the city itself. However, NPI had filed a complaint in Delhi, after issuing a notice from New Delhi to Harman Electronics in Chandigarh, asking the company to pay Rs five lakh.

The company then questioned the jurisdiction of the Court ofAdditional Sessions Judge, New Delhi, in the case. The trial court held that it had jurisdiction to entertain the complaint as the notice was sent to the accused from Delhi and the complainant was having its registered office in Delhi. The Apex court while holding the judgement in favour of the company said the Delhi High Court had no jurisdiction to try the case and the same should be transferred to the court of competent jurisdiction.

Banks need to conduct periodical inspection of mortgagedproperties

Whenever loans are granted by the banks and housing financialinstitutions to individuals for purchase of flats in an existing old apartmentbuilding, these flats are mortgaged to them, mostly, by way of equitable mortgage and in a very few cases by registered mortgage based on the facts and circumstances of those cases.

The borrowers, who avail of such loans, have to execute the loan documents for creating the security in favour of the financial institutions and the formats of these loan documents more or less contain various terms and conditions and other obligations to be discharged by the borrowers. Such terms and conditions, inter-alia, provide that the borrower shall nottransfer, assign, alienate, merge, amalgamate, exchange his right, title and interest in the said mortgaged property or deal with the same in any manner whatsoever, without the prior written permission of the lending financial institutions so long the security stands with the financial institutions.

Recently it happened in a case in Mumbai wherein the existing apartment building was handed over to the developers for redevelopmentwho razed the building to the ground. One of the flats in the existing building was mortgaged to the Bank of India and the borrower was in default. The Bank ofIndia invited bids for auction of the mortgaged flat and in consideration ofthe highest bid, to give the symbolic possession of the same. When the bidders came to know of the reality that the apartment building is razed to the ground, the bidders backed out. 

Now this loan is on the books of the Bank of India as a Non-Performing Asset, but without the existence of secured asset to enable the bank to proceed as per the provisions of SARFAESI Act. Thus the Bank has been left with no alternative, except to proceed against the defaulter, and the guarantors, if any, before the DRT or the Ordinary Civil Court, as the case may be, which will be a long drawn process.

In some cases, it has been observed that the offices of such lending institutions are being demolished for redevelopment and these institutions are apathetic in as much as that they do not initiate any legalaction to stop such destruction of their secured assets by obtaining suitable orders from the court of competent jurisdiction. If such timely action isinitiated by the financial institutions, a message will spread and all the parties involved will settle with the lending financial institutions to safeguard their interest either by way of a substituted security or repayment of their outstanding dues to enable them to avoid such hurdles to fulfill their designs.

This objective may be achieved if a mechanism is developed or established by the financial institutions to conduct inspection of their secured assets, particularly in resale cases, at least once in a year to ascertain the existence and status of the property and such a vigilance on their part will go a long way in the prevention of flouting the terms and conditions and the obligations by the borrowers and the societies.

An Article Regarding "Litigation in property matters"

Litigation in property matters

Scrutiny of property documents is a very technical job which only experts in the matter can correctly carry out. If scrutiny of property documents is not carried out in a scientific way there is every likelihood of the purchaser being trapped into litigation.

The first and foremost thing to be considered by a prospective buyer of an immovable property before finalization of any deal is to get scrutinized the property documents to know about the marketable title of the property, genuineness of the document, enforceability of the title and whether the provisions of the laws, rules and regulations of the revenueauthorities are complied with. Origin of the property, flow of title and present status of the property are to be verified in a systematic manner.

On being satisfied with the title of the property, the purchaser can enter into a sale agreement with the vendor. It may be noted that the property transactions are not executed through oral agreements or understandings.

These transactions are executed underwritten documents which require compulsoryregistration. While drafting property documents, be it a sale agreement, sale deed, gift deed, mortgage deed, will, etc., every minute care is to be taken to protect the interests of the parties which in turn requires considering and dealing with the various aspects of the matter to bring out all the relevant information leaving no scope for ambiguity leading to interpretation and disputing. Failure to adhere to this golden principle would lead to misunderstanding between the parties. The fact that a large number of cases relating to property matters are filed for adjudication of the courts would itself go to show that there is a great scope for improvement in the scrutiny and drafting of property documents.

Disputable Issues

Precisely, it is not possible to categorically state as to the type of disputes which could arise from out of a property transaction - It may relate to the valid title of the vendor, time schedule for payment of sale consideration, handing over possession of the property, non- compliance of the conditions detailed in the agreement to sell by either of the parties to the transaction, share of a coparcener on partition of HUF, interpretation of the recitals of a will, and the like. Failure on your part to take care of tracing the title of the property in a proper way will lead to various types of litigation.

When disputes arise, at the first instance people try to resolve their disputes amicably and when they fail to reach an amicable settlement they knock the doors of the competent court for resolving the disputes.

Readers may kindly note that when once the matter becomes sub judice, it will take very long period to get the disputes resolved by the courts and the litigants are generally prevented to deal with the propertywithout the permission of the concerned court when the matter is subjudice.

There could be different type of relief sought from a court of law. The relief may be for specific performance, restraining the opposite party from interfering with the peaceful possession and enjoyment of the property, compensation for the loss, recovery suits, eviction suits, interpretation of a Will, declaratory suits, partition of joint family property and so on.

Types of suits / action

When the vendor of a property though initially has agreed to sell his property to the purchaser at an agreed sale consideration backs out of his commitment, the purchaser can file a suit against the vendor for specific performance of the agreement and the court on being satisfied with your claim, as a purchaser, may adjudicate and pass an order for execution of the sale deed in your favour. On failure of the vendor to transfer the property in your name despite the court's order, you may file an execution petition. On the basis of the execution petition, the court will take necessary steps to get the propertyregistered in your name as per court's order.

Declaratory suits

Under certain circumstances, when your title to the property is challenged or found to be doubtful or defective, it is necessary for you to get an order from the court on your title for which purpose you may need to file a declaratory suit in a court of law.

Injunction

Filing suit for permanent injunction restraining the opposite party from interfering with your peaceful possession and enjoyment of theproperty may be necessary when your property is under the threat of interference by some third party.

Partition Suit

Similarly, when you are a co-owner of a property and when you desire to get your share in the property to be enjoyed by you separately and independently, you may have to file a suit for partition.

Money Suit

For realization of the money lent on the security of an immovable property by way of mortgage, you may have to file a suit for recovery of the money due from the Mortgagor and on his failure you may have to proceed, according to law, for realization of the money due by selling the property mortgaged.

Disputes before quasi-judicial authorities

Different types of litigations concerning the land revenue,land acquisitions, title documents etc., are heard and disposed of by several quasi judicial authorities such as Tahsildars, Assistant Commissioners, Deputy Commissioners, Survey Settlement Commissioners. Therefore, knowledge of authority of these officers would help you a lot in your property matters.

Disputes concerning stamp duty and under valuation

District registrars of Registration and the Inspector General of Registration adjudicate the disputes concerning the stamp duty payable and under valuation of property. In case you have any grievance with regard to the valuation and the payment of stamp duty on your property transfer, you may approach these authorities for remedy to your grievance.

Landlord and Tenant disputes

In respect of disputes between the landlord and tenant falling within the jurisdiction of the Rent Controller, you may have to file petition only before the Rent Controller for relief. The disputes may relate to non-payment of rent, enhancement of rent, fixation of fair rent, eviction of the tenant, etc.

Criminal cases

To initiate cause of action for forgery and fraud in property transactions, you may have to file at the first instance a police complaint or file a complaint before the Magistrate. Criminal courts have a different structure and if you lodge a complaint, the State will prosecute the matter. In criminal matters, there is no suit valuation.

Writ jurisdiction

You may invoke writ jurisdiction against the decisions of the Government affecting your property rights by filing writ petition in the concerned High Court or in the Supreme Court for appropriate relief.

The type of legal remedy explained above is only illustrative and not exhaustive. In addition to these remedies, there are other relief/remedies available to a party. The relief is to be sought from a court of competent jurisdiction and for this purpose having knowledge of the jurisdiction of various courts is necessary. An experienced advocate dealing with property matters could render very useful service in the matter who may guide you properly and protect you from unnecessary litigation's.

An Article Regarding "Property settlement among family members"

Property settlement among family members

Settlement of property among family members and others is a mode of distributing both movable and immovable properties and has been defined under Section 2 (24) of the Indian Stamp Act and Karnataka Stamp Act. A settlement deed is a non-testamentary disposition, in writing, of movable or immovable property made 

a)    in consideration of marriage, 

b)    for the purpose of distributing properties of a Settler among his family or those for whom he desires to provide for or for the purpose of providing for some person dependent on him, or 

c)    for any religious or charitable purposes. 

Settlement also includes an agreement in writing to make such a disposition or where a disposition is not made in writing, any instrument recording, whether by way of a declaration of a trust or otherwise, the terms of any such disposition. The Karnataka Stamp Act has similarly defined settlement.
The essential ingredients are

(1)    It is a non-testamentary disposition that is it is not a Will. As such it operates immediately on execution, whereas a Will comes into operation only after the death of its author. However, a settlement may also contain a clause for reservation of life estate. 

(2)    The Act specifies it must be in writing; So an oral disposition is not a settlement. 

(3)     There may be an agreement to make such a disposition. 

(4)    If it is not in writing, any record evidencing such disposition is also a settlement. 

(5)    There must be a settler i.e. the owner of a movable or an immovable property. 

(6)    There must be people that are family members or other persons who are dependent on the settler in whose favor the property is to be settled. It may be for religious or charitable purposes.

Trust vs Settlement 

A settlement deed should not be mistaken for a trust deed. In the case of trust, the author vests the property in favor of its trustees, who manage and administer the property /properties as per the direction of the author for the benefit of third person/s called beneficiaries. The trustees will act only as per the directions of the author of a trust deed and the beneficiaries do not have any say in the management of the said properties.

However, in settlement, there is no intermediate person, like a trustee and the beneficiaries have complete control over the administration, management of the property settled in their favor and enjoy the property as absolute owners subject to the conditions of the settlement deed.

Will vs Settlement

Settlement deed IS different from Will, since a Will is a testamentary document, which becomes operative after the death of its author, whereas a settlement becomes operative immediately. 

Another distinguishable feature is that a Will is revocable and that any number of Wills may be executed by its author in respect of a single property during his life time, though only the last Will executed becomes operative. Whereas, settlement is not revocable and after proper execution of a settlement deed, the Settler relinquishes all his rights, title and interest over the said property, subject to the terms and conditions contained in the settlement deed.

Partition vs Settlement

Usually partition of joint properties is mistaken for settlement. However, partition constitutes division of properties between the joint owners as well as the division of joint interest ownership in the property. Thus, the division amounts to severance of the joint interest in the ownership of the common properties and the common property is thus divided among them. Each partner becomes the absolute owner of his share and each partner's share is subject to a pre-determined percentage, governed by either the inheritance laws or by the partnership deed as the case may be. In settlement, however, the property is owned by a third person and is settled in favor of persons who do not have any previous interest in the said property and the share of the beneficiary is as per the wishes of the settler.

Gift vs Settlement Stamp duty-Registration

There are marked differences between gift and settlement. Gift is not made for any consideration, whereas settlement may be for consideration. Like-wise gift may be made to any person, whereas a settlement is mostly made in favor of dependents. Also gift requires acceptance, whereas settlement does not. The gift is revocable or may be suspended as per section 126 of the Transfer of Property Act on happening of any specified event, which does not depend on the will of the donor unlike that of settlement, which is final & binding once it is executed by the settler.

Advantages

Settlement has a very simple procedure where the properties are distributed to the dependents or for religions charitable purposes during the lifetime of the settler. This avoids future misunderstanding amongst the beneficiaries/recipients. Settlement can be made only in respect of self-acquired properties.

The deed of settlement attracts stamp duty as registration of the settlement deed is compulsory. Article. 58 of the Indian Stamp Act and Article 48 of Karnataka Stamp Act refers to stamp duty payable on execution and registration of settlement deeds. Since, settlement amounts to conveyance of property, the stamp duty payable is similar to that payable on a sale deed, i.e. based on the market value of the property. However, concessions are available in case of settlement made in favor of family members, i.e. Rupees One thousand as stamp duty and access of Rupees Fifty. Family members include the spouse, son, daughter-in-law and grand children of the Settler.