Law Explainer: Transfer of property to Beneficiaries under a Will or to Properties inherited under Succession laws

This write up addresses questions as to, (1) How beneficiaries under a Will, will get title to the property they have obtained under the Will; (2) In cases where there is No will, and properties devolve upon legal heirs under respective succession laws, how legal heirs can perfect their title to the property; (3) Who will transfer property to beneficiaries under the Will or to Legal heirs who have succeeded such properties; (4) What would be the nature of transfer Instrument, (5) What would be the stamp duty payable on any such transfer Instrument; and of course the Registration to complete title.

This write up only talks for Immovable properties and not Movable properties, like shares and securities, moneys lying in banks, FDs, and so on.

There are two ways a person succeeds (inherit) to Immovable property, (1) either under the applicable succession law, like we have Hindu succession Act, and other succession laws applicable to Parsis, Christians and Muhammadans and of other religions, or (2) under the Will.

In cases of Nominations before cooperative housing societies or commercial premises societies, it is well settled law that such Nominees are always trustee; and after the death of member of the society, the concerned Nominee holds the property, in trust, for the legal heirs. Nominee may be one of the legal heirs or may be a beneficiary under a Will, but being a Nominee, he/ she is a trustee and doesn’t get right, title or interest in the subject property.

1.    In cases where there is no Will being made by a deceased owner of the property, Legal heirs acquire right, title and interest in the subject properties, according to applicable succession laws. The Legal heirs acquires such rights immediately on the death of the concerned person. However, further steps are needed to complete title in favour of the heirs.

1.1 In these cases, one of the Legal heirs may have to apply for Letters of Administration without Will, by filing appropriate legal proceedings before competent court of Jurisdiction. The person who applies for Letters of Administration is called the “Administrator”. Any such Application for Letters of Administration must include “all such properties” (a) which the deceased possessed of at the time of his / her death, and to which he / she has proprietary rights, and (b) entitled to at the time of his /her death.

1.2 Once Letters of Administration is obtained, all “such properties” referred hereinabove, may be transferred by executing Transfer deed, by the Administrator in favour of Legal heirs, in accordance to their entitlement recognized under the applicable succession laws. After execution of transfer deed, such deeds must be registered before sub-registrar of Assurances, in the same manner like any other property registration, so as to perfect the title of the legal heir.

1.3 These Transfers are provided under Article 59(c) of the Maharashtra stamp Act, 1958. Readers may check other State Stamp Act to find out applicable Article which provides for such transfers. The Maharashtra Act provides stamp duty at Rs.500/- and Registration charges at Rs.1000/ for such transfer deed.

1.4 It may be argued that, whether such Transfer deed may be executed without obtaining Letters of Administration. The answer is, No. Article 59(c) requires compliance to section 22 of the Administrator General Act, 1963; and said section 22 obligates obtaining of Letters of Administration; and therefore, obtaining Letters of Administration is must before executing and registering such Transfer deed.

2.    Now, coming to Succession to properties under a Will. Properties, both Movables and Immovables, are bequeathed / bestowed under a Will. In many cases, Executors are appointed in the Will, and in many cases, Executors are not appointed.

2.1 After the death of Testator (who has had made the Will), the properties of the Testator vests in the Executor, if so appointed in the Will. Section 104 of the Indian succession Act, 1925, also says that if the legacy is given in general terms, without specifying the time when it is to be paid, the legatee (beneficiary) has a vested interest in it from the day of the death of the testator. Vests / vesting means ownership. However, vesting in the hands of Executor, here it means, Vesting as trustee to the properties.

2.2 The Executor or the Legal heirs / beneficiaries under the Will, have the responsibility for the distribution of the properties in accordance to the wishes of the Testator, expressed in the Will. In many cases, the Executors may be the Legal heirs and even they are beneficiaries under the Will.

 2.3 In cases where Executor is appointed in the Will, the Executor may have to apply for probate of the Will before competent court of jurisdiction. If there is no Executor named in the Will, then one of the Legal heirs / Legatee (beneficiary under the Will) may have to apply for Letters of Administration with Will, before competent court of jurisdiction. The person who applies for Letters of Administration is called the “Administrator”. Any such Application for probate or the Letters of Administration must include “all such properties” (a) which the deceased Testator possessed of at the time of his / her death, and to which he / she has proprietary rights, and (b) entitled to at the time of his /her death.

2.4 Once probate or the Letters of Administration is obtained, “all such properties” referred hereinabove, may be transferred by executing Transfer deed.

2.5 Such Transfer deed will be executed by Executor or the Administrator, as the case may be, in favour of the beneficiaries under the Will. After execution of transfer deed, such deeds must be registered before sub-registrar of Assurances, in the same manner, like any other property registration, so as to perfect the title of the beneficiary under the Will.

2.6 These Transfers are also provided under Article 59(c) of the Maharashtra stamp Act, 1958. Readers may check other State Stamp Act to find out applicable Article which provides for such transfers. The Maharashtra Act provides stamp duty at Rs.500/- and Registration charges at Rs.1000/ for such transfers.

2.7 It may be argued that, whether such Transfer deed may be executed without obtaining probate / Letters of Administration. The answer is, No. Article 59(c) requires compliance to section 22 of the Administrator General Act, 1963; and said section 22 obligates obtaining of probate / Letters of Administration; and therefore, obtaining probate / Letters of Administration is must before executing and registering such Transfer deed.

2.8 If Executor and beneficiary are one and the same person, then also, such Transfer deed can be executed. Section 335 of the Indian Succession Act, 1925 deals with the situation where Executor and the beneficiary under the Will are one and the same person. The above section indicates that Assent by the Executor to his own Legacy is required, in the same manner as if the Assent is given to another person / beneficiary under the Will.

3.    It is also argued that section 213 of the Indian succession Act, 1925, which warranted obtaining of probate, is deleted, and therefore probate is not required. Kindly note that section 213 is deleted but section 22 of the Administrator General Act, 1963 is not amended and the said section still requires obtaining of probate / Letters of Administration.

3.1 The deletion of section 213 implies that obtaining of probate / Letters of Administration is relaxed, but parties may still obtain probate/ Letters of Administration to complete their title to the property.

 3.2 Also note that, when section 213 was in existence, Muhammadans were relaxed from obtaining of probate / Letters of Administration. But when it comes to completing title in their name, Muhammadans were also required to obtain probate / Letters of Administration.

3.3 Obtaining of probate / Letters of Administration cannot be relaxed because absence of probate of the Will / Letters of Administration may lead to mischievous situations where purported beneficiaries under the Will, will get the property transferred in their names without even the knowledge of Legal heirs, who are purportedly excluded and not given properties in the Will.

3.4 In the process of obtaining probate / Letters of Administration from competent court of jurisdiction, Notices are duly served upon all the heirs of the deceased, calling upon them, if they have any objection to the grant of probate / Letters of Administration, they can register their objection by filing caveat. This is the safeguard against mischievous and fraudulent transfers; and therefore, obtaining of probate or the Letters of Administration is must to prevent mischief and complete the title.

4.    Depending on the consensus among the Legal heirs, Release deed may also be executed. Release deed also attracts stamp duty and requires Registration. However, the amount of stamp duty and Registration charges will depend upon, who is releasing rights and in whose favour.

5.    Further, Tenancies are not subject matters of succession and Wills. Rights under Tenancies do not devolve upon Legal heirs by reasons of succession. Rights under Tenancies, after the death of Tenant, devolve in accordance to provisions of respective State Rent Act.

 

 

Sandeep Jalan

Advocate.

https://www.litigationplatform.com/