Will SC verdict on coparcenary lead to more disputes among biz families?

A  three-member bench of the Supreme Court of India gave a clear verdict on August 11 which gave an equal share of the coparcenary rights in the Hindu Undivided Family (HUF) property to the daughters like a son. Even if the father wasn't alive on September 9, 2005, when the amendment to the Hindu Succession Act was effectuated, daughter will still have property rights. Lawyers say this judgment can open a can of worms as women in many business families can now assert their right to an equal share in inheritance

Here are few important cases:

In June this year, the Punjab and Haryana High Court had upheld a Chandigarh court’s order awarding 37.5 per cent share each in Rs 20,000-crore property of Maharaja Faridkot Harinder Singh Brar to two daughters. The court said the descendents of Manjit Inder Singh, brother of the Maharaja, would get their mother Mohinder Kaur’s 25 per cent share.  

Murugappa group: The low-profile promoters of the Rs 37,000-crore Murugappa Group saw a public spat over asset settlement following the death of the senior-most member and family patriarch, M V Murugappan, two years ago. Valli Arunachalam, the older of Murugappan’s two daughters, told Business Standard that she was hopeful of a settlement soon, but would have no option but to “adopt other means available to me if we can’t make this work. Despite her mother and sister holding 8.15 per cent share in AIL, they were not provided with a board seat in the holding company of Murugappa Group, the Murugappa scion had alleged. "It is a great day for all Indian women. The judgment further reinstates faith in the judicial system by making it loud and clear that daughters can no longer be deprived of their rights to ancestral property, no matter when they were born," she said.

Hinduja group: Vinoo Hinduja, daughter of Srichand Hinduaja, the eldest brother among the Hinduja brothers, moved the London courts seeking control over the assets of her father. The other three Hinduja brothers relied on a July 2014 letter signed by the four brothers which said the brothers appoint each other as their executors, and that assets held in any single brother's name belong to all four. The case is now pending.

This is a very progressive and much needed judgement and we support the SC’s view. The intent and spirit of the 2005 amendment was always to equalise the rights of daughters and sons - so this judgement corrects the confusion that was caused by earlier judgements which only made it prospective after a certain date. It will now make families and daughters think about their succession and ancestral rights deeply and either amend existing succession plans, or create new ones. It will be interesting to see if any old settlements created under the previous approach will be reopened or questioned now.

Rishabh Shroff, Partner, Cyril Amarchand Mangaldas

“The Judgement clarifies equal coparcenary  rights of a daughter. The judgment should spur family owned businesses to have a structured succession plan by way of a will or a family trust keeping in mind the rights of the daughter.” ~ Varghese Thomas, Partner, J Sagar Associates

Additional reporting: TE Narasimhan