Law Commission's recommendations on Changes in Personal Laws: A Critique

Bar & Bench September 16 2018
personal laws

Satyajeet  A  Desai

A recent report of the Law Commission of India, which essentially started off as an endeavour to consider yet another attempt to have a Uniform Civil Code, ultimately ended with the Commission recommending changes to various personal laws.

At the outset, kudos to the Law Commission for undertaking the exercise.

Having said that, in this article, my lament is at the manner in which the Commission did not stop when it correctly recommended that a Uniform Civil Code is a far reality, but went on to recommend some unusual changes in personal laws.

On March 20, 2018, I was asked by the Chairman, Law Commission via an email, to give my views in writing on the impact of some judgments of the Supreme Court on Mitakshara coparcenary. I obliged to the said request.

After reading the final report of the Commission, my focus is to principally comment upon two major aspects of the recommendations on Hindu Law, which according to me are not well reasoned.

As regards Hindu Coparcenary, the Commission, referred to the decision of the Supreme Court In Uttam v. Saubhag Singh &Ors (AIR 2016 SC 1169), under old Section 6 of the Hindu Succession Act, which has since been amended, which held that when Section 8 comes into picture the property would devolve by intestacy and not by survivorship.

The Court added that on a conjoint reading of Sections 4, 8 and 19 of the Act 1956, it is found that once Section 8 is pressed into service and property devolves by the principles of intestacy, the joint family property loses its character as such and those who succeed, hold it as tenants-in-common, not as joint tenants.

The Court concluded that the case would attract the proviso to Section 6 in the presence of a Class I female heir and a notional partition must be assumed to have taken effect and devolved by succession under Section 8 of the Act 1956, thereby losing its character of a joint family property, held by his widow and other coparceners as tenants-in-common, not as joint tenants.

This judgment has been extensively analysed by me in Mulla's Hindu Law (23rd edition), where I have opined that the judgment needs to be relooked at. In fact, in my opinion to the Law Commission, I had also pointed out the comments in Mulla's Hindu Law on the judgment, which do not find a place, even by way of analysis, in the Law Commission’s report.

It is important to mention here that the Hindu Succession Act was amended in 2005. Section 6 was amended by which daughters were given the status of coparceners. I may mention here that I was part of the deliberations then, at a workshop to look in imminent changes to the Hindu Succession Act, to merit equal shares to daughters in a coparcenary.

The current Law Commission, however, surprisingly stated that "Making daughters coparceners has decreased the shares of other Class I female heirs, such as the deceased‘s widow and mother, since the coparcenary share of the deceased male from whom they inherit stands reduced.

The Commission has, therefore, recommended that “…the coparcenary be abolished at the Central level and the right in a property by birth be extinguished, by opting for "tenancy-in-common‟, instead of joint tenancy‟.

It is really surprising that when the legislature thought it fit to merit equal status to daughters, who had till the amendment, been excluded as coparceners, how could the Commission have arrived at a conclusion that by the inclusion of daughters, the shares of other coparceners would stand reduced? The Commission seems to have ignored the ethos of Article 14 of the Constitution.

The question to be asked here is whether the Commission, in a roundabout way, is seeking to undo the amendment granting equal status to daughters. How can there be a case of reverse or inverse Article 14, which seems to be exactly what the Commission has done.

When any person is added to a category on the basis that their exclusion infringes Article 14, how can such inclusion be faulted on the inverse logic that others will get less shares by such inclusion?

This reasoning of the Commission and its ultimate recommendation that coparcenary be abolished and it be made tenancy-in-common or joint tenancy is unpalatable, given the reasoning.

Having recommended the above, the Commission has gone ahead and made yet another very startling recommendation. It has recommended the abolition of Hindu Undivided Family (HUF). The reasoning of the Commission is that "the special status given to the entity of HUF, was only for the purpose of taxation. Now, this status is being used for the evasion of tax only. 

 The Commission has further stated that  "However, today when it has been seventy-two years since independence, it is high time that it is understood that justifying this institution on the ground of deep-rooted sentiments at the cost of the country's revenues may not be judicious."

This reasoning of the Commission is unusual and defies logic. Every citizen of India has a right to arrange his or her financial affairs in such a way that by way of tax planning, such citizen pays appropriate tax, and yet stands to benefit not only the State but himself or herself too.

The Income Tax Act itself sets out exemptions. Gone are the days when tax planning was considered tax avoidance or evasion. Consider a case where a HUF, which has income amenable to Income Tax, is paying that tax without resorting to tax planning. Consider another HUF, which does have income, but is not amenable to tax as its income is below the taxable limit, or is liable to pay tax at a lower rate, either due to less income or judicious tax planning.

Can the latter HUF be pulled up as per the recommendation of the Commission for proper tax planning? The Commission seems to have ignored the decision of the Supreme Court in Commissioner Of Income-Tax  vs A. Raman & Co. (1968 AIR 49, 1969 SCR (1) 10 which held that " "A taxpayer may resort to a device to divert the income before it accrues or arises to him. Effectiveness of the device depends not upon considerations of morality, but on the operation of the Income-tax Act. Legislative injunction in taxing statutes may not, except on peril of penalty, be violated, but it may lawfully be circumvented". 

Given the current tax regime and taxing statutes, can it be said that a HUF which plans its affairs judiciously and within the legitimate framework of the Income Tax Act, has resorted to tax evasion or avoidance? The Supreme Court or the Income Tax Act, certainly do not think so. This recommendation of the Law Commission does not seem to be in sync with the current scenario and defies reason and logic.

The Commission has also recommended what is known as a 'No fault divorce'. Such divorces are found in several states of the United States of America. We must understand that American society differs greatly from Indian society. The concept of 'Marital Property' prevalent in that country has a different meaning.

In America, the norm is that mostly both spouses work and contribute to the household. They even live apart from the paternal home and not in joint families or with parents. That is not the norm in India, yet. If the history and statistics of no-fault divorces had been examined closely by the Commission, I believe it would not have made that recommendation. Mooting the concept of no-fault divorce, especially when the earlier draft legislation as regards amendments to marriage laws has long since lapsed, is therefore not conducive to Indian society.

The above recommendations of the Commission strike, without appropriate palatable logic, at the very ethos and roots of coparcenary and HUF's. The recommendation for introducing 'no-fault divorces' is faulty. It must be remembered that the Courts of this great Country have time and again said that 'what cannot be done directly, cannot be done indirectly’.

Having failed to gather consensus on a Uniform Civil Code, the Commission should have stopped there, instead of recommending such changes, to the detriment of a large segment of citizens.

I hope that the Central Government will take the recommendations of the Commission, regarding the abolition of coparcenary and HUF's, as also the recommendation regarding the introduction of no-fault divorces, with a pinch of salt.

 

The author is an Advocate practicing in the High Court of Gujarat and revising author of Mulla's Hindu Law and Desai on Partnership. He can be reached at satyajeet_law@hotmail.com.

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