Division of property on divorce In India
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Division of property on divorce In India

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What happens to the marital property of spouses wupon divorce in India. A comprehensive legal analysis.

What happens to the marital property of spouses wupon divorce in India. A comprehensive legal analysis.

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Division of property on divorce In India Presentation Transcript

  • 1. Division of Property on Divorce: Special Emphasis on HMA, 1955 Varun Vaish 2008-74
  • 2. What is property in Matrimony?  Property in matrimonial relationship may be of various forms, such as share in a joint business venture, dowry, presentations before, during or after marriage by friends and relations of either party or both parties, jewellery, benefits of hire purchase, matrimonial home and furniture and other contents thereof, loan by one spouse to the other, various other properties pooled by them during marriage and so forth.[1]  On the breakdown of the marriage, the court may be approached by either party or both parties to settle the properties among the spouses and/or children their children.  In that event, it would not be necessary to initiate separate court action either in civil court or elsewhere to distribute the property.  [1] Asutosh Mookerjee, “Marriage Separation and Divorce” 3ed. Reprint 2005, p. 399.
  • 3. What is Marriage Settlement?-  Exact definition of ‘marriage settlement’ has not been given in any statute. It has, however, been always liberally interpreted according to circumstances.  In Princep v. Princep[1] Justice Hill explained that all deeds are marriage settlements whereby property is settled upon the husband in the character of husband or upon the wife in the character of wife or upon both in the character of husband and wife.  It was said that the Court can make settlement of their joint property for the benefit of either spouse and/or the children. The property must of course be joint.[1]  [1] Aksam China v. Parbati AIR 1967 Ori 163.  [1] 1929 P 225:98 LPJ 105
  • 4. English Law on the Division of Property  Main aspect of English matrimonial law is the endeavour of law to make adequate financial provisions for the spouses and children and make just and proper settlement of the property of the spouses.[1]  The Matrimonial Causes Act, 1973, Part II deals with the, “financial relief for parties to marriage and children of family”.  [1] Dr. Paras Diwan, “The Law of Marriage and Divorce”, 5th ed. 2008, p. 716.
  • 5. English Law  The principles of such property adjustments and financial provisions have been borrowed from English Law.  The National Assistance Act, 1948 (English Law) made provisions for children of broken families so that their normal upbringing may not be hindered.  Then came the Maintenance Agreement Act, 1957 (English Law). Because of agreement between husband and wife over maintenance after separation or dissolution of marriage, the members of the family were expected to have reasonable economic support. Such agreement has had to be approved, modified or varied by the court.
  • 6. English Law  Section 24 lays down that on granting a decree for divorce, nullity or judicial separation or at any time thereafter the court may make an order that a party shall transfer to the other  (to any child of the family or to some other person for the benefit of the child)  such property as may be so specified, being the property to which the first-mentioned is entitled, either in possession or in reversion.  Part II of the Act deals with “financial relief for parties to marriage and children of family”, and  part III related to “protection, custody etc. of children”.
  • 7. English Law Section 39 enabled the innocent husband to apply for a share in the property of a wife who had been proven guilty of adultery.  Section 27 and 28 give the wife a right to apply for giving protection to her self acquired property, when she had been deserted by her husband without cause.  Section 40 of the Act empowered the court to divert any property, which might have been settled on the guilty spouse, for the benefit of the children and he innocent party.  Funds brought into the marriage settlement by the guilty husband might be settled wholly or partly on the wife and the children.  Thereby the court encouraged morality and discouraged vices.
  • 8. English Law  The court should endeavour to restore the financial position of the parties in status quo as far as possible while ensuring that the innocent and the children may not suffer because of the breaking up of the marriage.[1]  [1] Noel v. Noel 10 PD 179; Tarington v. Tarington 11 PD 84.
  • 9. Marriage Settlement under English Law-One Third Rule-  Under the English Law, the Matrimonial Causes Act, 1973, the provisions of Section 25 apply “to parties” without any distinction as to husband or wife.  Likewise, all the powers vested under Section 23 and 24 of such Act are applicable in favour of the husband or the wife without any discrimination.  For the purpose of distribution of family assets different norms are followed but “one-third” theory is normally accepted at least as a starting point even if it may not be strictly adhered to when so required in view of some peculiar facts and circumstances
  • 10. English Law  Lord Denning gave justifications to the one-third theory as the starting point for distribution of assets in Watchel v. Watchel[1] as follows:  “….In any calculation the Court has to have a starting point. If it is not to be one-third, should it be one half or one quarter? A starting point of one third of the combined resources of the parties is as good and rational a starting point as any other….In these days of rising house prices, she should certainly have a share in the capital assets which she has helped to create. The windfall should not all go to the husband. But we do not think that it should be as much as one-half if she is also to get periodical payments for her maintenance and support.”  [1] (1973) 1 All ER 829 (CA).  Dallimer v. Dallimer (1978) 8 Fam Law 142 (CA)
  • 11. English Law  Under the English law, having determined the ownership of the family assets, the general course would be to then apply the one-third ratio (as normally applied in the absence of any peculiar facts or circumstances). However in the case of holding the matrimonial home in joint names, and in the absence of any other special facts and circumstances, the wife would get one-half share.
  • 12. Rules for Division of Property Under English law The portion of the property to be settled on the wife and children is a matter of judicial discretion.  Such discretion is to be used according to the facts and circumstances of each case. The general rule is to settle and moiety share on the wife and children.  The remainder, which may include the portion of the children (in the absence or default of children), goes to the husband.  The circumstances for consideration include such points as desertion, cruelty, adultery and the like as also financial position of the parties or contribution, if any, by the husband to the wife.  The court should endeavour to restore the financial position of the parties in status quo as far as possible while ensuring that the innocent and the children may not suffer because of the breaking up of the marriage.[1] 
  • 13. Family Settlement in India  It has already been noted that family settlement is prevalent in India over long years past.  In Uma Datt v. Ram Jiwan[1] it has been observed that the fact that the claims of the parties had been adjusted and that the disputed property between them had been settled amounts to a sufficient consideration for upholding the family settlement.  Thus family settlement has always been considered to be a legal and valid document.  [1] AIR 1941 Oudh 185.
  • 14. Family Settlement  The Supreme Court has also reiterated that the 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 members of a family.[1]  1] Ram Charan Das v. Girija Nandini Devi AIR 1966 SC 323; Maturi Pullaiah v. Maturi Narasimham AIR 1966 SC 1836.
  • 15.  In the case of Manali Singhal v. Ravi Singhal[1]  The document being a family settlement, was found to be a legal document and was fit to be acted upon.  Such matter went upto the apex court, which observed that “family settlement” arrived at between the parties in the matrimonial suit in the form of a “Memo of family settlement” (providing maintenance, separate residence, vehicle etc. for the wife and minor daughters) was legal and valid.  On husband’s failure to fulfil the terms of such “family settlement”, the wife initiated a suit for specific performance of the “family settlement”.  [1] I (1999) DMC 355 (Del)
  • 16. Family Settlement  In a case under Section 27 of the Hindu Marriage Act, the M.P. High Court held that a petition under section 27 of the Hindu Marriage Act is maintainable only in respect of the joint property of the wife and husband.[1]  In other words, the wife would not be permitted to lay her hands on the exclusive property of the husband and vice versa. But the concept of “family settlement” is of a larger dimension than the concept of “disposal of property”  [1] Rajendra Singh v. Tulsa Bai 1 (1996) DMC 572 (MP)
  • 17. Stridhan In the case of Rashmi Kumar v. Mahesh Kumar Bhada[1] it has been held that  the properties gifted to the bride before or at the time of marriage or at any time thereafter are her stridhan property and not the joint property of the husband and wife.  Even if the husband uses the same at the time of distress, he has an obligation to restore it or its value to the wife.  hen the wife entrusts her stridhan to her husband or any member of his family and when the husband or such member of the family dishonestly misappropriates or converts the same to his own use or wilfully suffers some other person to do so, he commits a criminal breach of trust vide Sections 405 and 406 of the Indian Penal Code.[2]  [1] (1997) 2 SCC 397.  [2] Pratibha Rani v. Suraj Kumar (1985) 2 SCC 370; Ajay Kumar Ghosh v. Kajal Ghosh I (1999) DMC 224 (Cal)
  • 18. Dwelling House  Even if the house property was exclusively owned by the husband from before marriage, wife’s right of residence in a portion is now firmly entrenched in our jurisprudence. Such portion would be commensurate with the status and lifestyles of the parties.[1]  [1] Kanchan B.R. v. Akash Alias Usuf Hussain 1 (2001) DMC 574 (Del).
  • 19. Section 27 of the HMA, 1955  In any proceedings under this Act, the court may make such provisions in the decree as it deems just and proper with respect to any property presented, at or about the time of marriage, which may belong jointly to both the husband and the wife.
  • 20. Section 27 of the HMA, 1955  This section has two requisites:  (i) The settlement of property cab be made only at the time of the passing of the decree, i.e., when the court grants a decree in a matrimonial cause, and not at any time subsequent thereto.  (ii) Orders relate only to the joint property of the spouses has been presented to them at or about the time of marriage. The property of the parties acquired by them before or after the marriage is not within the purview of the section.
  • 21. Section 27 of the HMA, 1955  Section 27 the provision regarding disposal of property has been made to discourage multiplicity of suit so that the court, while deciding the matrimonial action, may also give directions as to the disposal of the joint properties of the husband and wife presented to them at the time of marriage or thereabout.[1]  [1] Kamla v. Bhagirath 1 (1997) DMC 344 (Raj)
  • 22. Section 27- Exclusive Property  In Krishna v. Padma[1], the Mysore High Court held that the property which is not presented to spouses at or about the time of marriage is outside the purview of the Section. But the Allahabad High Court in Kanta Prasad v. Omwati[2], has taken the view that the court has power of making necessary provisions about separate property of the spouses, since, the court said, section 27 does not debar the court form doing so. [1] AIR 1968 Mys 226.  [2] AIR 1972 All 153.
  • 23. Section 27- Exclusive Property  In Shukla v. Brij Bhushan[1], the Delhi High Court observed:  Section 27 of the Hindu Marriage Act, 1955, is a substantive provision empowering the court in any proceeding under the said Act to make a just and proper order regarding presented at or about the time of the marriage of the parties and belonging jointly to both of them. The court exercising the jurisdiction under the Act is powerless to deal with properties exclusively belonging to one or the other spouse.[2]  [1] AIR 1982 Del 223.  [2] See also Sushma Kumari v. Ramesh Chand, (1982) 1 DMC 272; Surya Kant v. Jashumati, (1981) 1 HLR 473; Sangeetha v. Balkrishna, AIR 1994 Bom 1: (1994) 2 Civ LJ 24.
  • 24. Section 27 of the HMA, 1955  The Division Bench of the Andhra Pradesh High Court observes that the parties can approach the family court for an appropriate order on settlement of properties which were given at the time of marriage or acquired out of funds given at the time,  and that what is more is that it is also permissible to make a prayer for partition and separate possession of any property in which such party to the marriage claims to have contributed a share towards acquisition of such property.[1]  [1] Mariamma Ninan and Mariamma P. Thomas v. K.K. Ninan 1 (1997) DMC 570 (DB-AP)
  • 25. Section 27-for Stridhan  It was held that she was not entitled to the relief of their recovery under section 27 of the Act. Her remedy lay by a suit in a civil court. Neither could such an order be based on Order 7, rule 7 read with section 151 of the Code of Civil Procedure, 1908.  In other cases also this view has been held. The Rajasthan High Court has also taken this view.[1]  [1] Anil Kumar v. Jyoti, AIR 1987 (Raj) 157: (1987) 2 HLR 162.
  • 26. What property is covered under Section 27. The property, as contemplated by section 27, is not the property which is given to the time of the marriage only. It includes the property given to the parties before or after marriage also, so long as it is relatable to the marriage.  The expression “at or about the time of marriage” has to be properly construed to include such property which is given at the time of marriage as also the property given before or after marriage to the parties become their “joint property”, implying thereby that the property can be traced to have a connection with the marriage.  All such property is covered by section 27 of the Act.[1]  It does not extent to articles of dowry given to and exclusively owned by the wife.[1]  [1] Vinod Kumar v. State of Punjab AIR 1982 P&H 372. 
  • 27. What property is covered under Section 27.  However the property which is not covered under this section can also be disposed of between the parties in a petition under this Act by exercising inherent power under section 151 of the Code of Civil Procedure in the interest of justice in exceptional cases.[1]  [1] Sangeeta B. Kadam v. Bal Krishna R. Kadam AIR 1994 Bom 1 at 9.
  • 28. What property is covered under Section 27.  However ornaments given to the wife by her father in marriage is her stridhan and the husband holds it as a trustee and he is liable to return it to her after the decree of divorce.[1] The dowry on the other hand includes not only the property presented during marriage jointly to husband and wife but also articles presented to wife as well.[2]  [1] Surendra Dixit v. Seema Dixit (1997) 1 MPLJ 78.  [2] Shashikant Malviya v.Smt. Parvati Malviya, II (2000) DMC 348 (M.P.).
  • 29. Presents after marriage.  The Matrimonial Court has no jurisdiction to make order in respect of the property presented subsequent to the marriage.[1] [1] M.D. Krishnan v. M.C. Padma AIR 1968 Mys 225.
  • 30. Exclusive properties  The words ‘which may belong jointly to both the husband and wife’ in the section show conferment of an enabling power to deal with jointly owned properties also but do not restrict the Court’s power to such properties alone.  It was also held that in the view of section 21 all, powers of a Civil Court are available while dealing with the proceedings under the Act. Hence can pass an order under Order 6, Rule 7 read with section 151 of the code of civil procedure.[1]   [1] Shukla v. Brij Bhushan AIR 1982 Del 223-Dissenting from Kamla Prasad v. Smt. Oma Wati, AIR 1972 All 153.
  • 31. Reasons for the Allahabad High Court in the Sangeeta Kadam case.  The Bench gave very cogent arguments:  the Hindu Marriage Act imposes no bar on the Courts regarding the disposal of other forms of property,  it is hardly fair to the parties to drive them to file another case, nor is it fair to the Courts in view of the volume of litigation pending.  Filing one more case seems unnecessary and superfluous.[1]  [1] AIR 1994 Bom 1 paras 13-14 (DB).
  • 32. Thank you Varun Vaish (2008-74)