Partitioning "Estate of the Deceased" By Court Order - Tool for Inheritance Transfer in India
September 02, 2021
Santosh K. Pawar, Esq.
Partition/Transfer of assets left behind by the Deceased is not an option but legal necessity,
Hence, transfer process must begin with assistance of experienced legal professional at the earliest possible moment to avoid civil, criminal and tax consequences.
No successor acquires any ownership rights in any asset of the deceased till ownership transfers.
What all legal heir must know, is that by operation law, upon demise of any asset owner, separate legal and taxable entity comes into existence, known as "The Estate of the Deceased".
The Estate of the Deceased automatically becomes sole owner of all assets owned by the Deceased on the date of his/her demise.
It is "the Estate of Deceased" that transfers assets of the Deceased, now owned by "The Estate" to successors in compliance with law.
"The Estate" operates through its duly appointed legal representative (LR), who is obligated to immediately obtain separate tax ID, i.e., PAN (Permanent account number), open separate bank account, deposit all cash assets, whether at home or in bank, in the Estate account, and conduct transactions on behalf of the Estate.
LR is obligated to collect, manage, and preserve all assets till the same are lawfully transferred.
Any income generated by any asset of "the Estate of the Deceased" is income of the Estate and is subject to income tax.
"The Estate is mandated to file its separate income tax return every year from the date of its existence (date of death of asset owner) till assets are transferred to successors in compliance with law.
To clarify few misconceptions -
a. Nominee and/or Joint bank account holder is not owner of any asset of the deceased. The Estate of the Deceased owns all cash assets, whether at home, in bank, or owed by third party.
Nominee and Joint Account Holder is permitted to settle bank account of the deceased, but is required to deposit entire cash proceeds left behind by the deceased in bank account of the "Estate of the Deceased".
Depositing cash assets of the Estate in anyone's personal account is unlawful and is subject to civil as well as criminal prosecution.
b. Similarly, person in possession and occupation of any asset of the deceased has no right in the asset. Asset owned by the deceased, upon his/her death, is owned by his/her Estate.
In order to avoid civil, criminal and tax consequences, and protect one's rights in the Estate, legal heirs MUST initiate process to transfer assets from "the Estate of the Deceased" to successors immediately after death of any asset owner.
Any legal heir may initiate the process. If partition of "the Estate" is not possible by mutual agreement, for any reason whatsoever, legal heir(s) must seek judicial assistance by filing court proceedings immediately.
Let us review what legal proceedings to file, what documents to submit, and cost involved followed by sample format for "Suit for Declaration & Partition.......".
I. Suit for Declaration & Partition of Estate of the Deceased in India
Suit for "Declaration & Partition of the Estate of the Deceased" is one type of legal proceedings (other being "Administration of the Estate of the Deceased") that any legal heir/successor may file in courts in India.
This type of proceeding is adjudicated in two stages.
First Stage is "Declaration of rights of Plaintiff/Petitioner in the Estate of the deceased and determination of his/her share in assets of the Estate.
Second Stage is execution stage, where actual share of petitioning legal heir is partitioned from the Estate.
The process begins by filing petition in court, called "Plaint". It may be filed at any time after death of asset owner. Assets of the deceased stay locked in "the Estate" till process begins.
Any legal heir may serve (and is recommended) legal notice upon other legal heirs to explore possibility of settlement by mutual agreement. If other legal heirs refuse or do not respond, legal heir may file court action by filing plaint known as Plaint for "Suit for Declaration, Partition, Rendition of Accounts, and appointment of Legal Representative of The Estate of the Deceased".
As the Estate Assets are required to be collected, managed, and preserved AND The Estate of the Deceased is required to file income tax returns, till matter is adjudicated by court, legal heir must file application for appointment of interim legal representative of the Estate.
Legal action is filed either in District Court or High Court of the State where asset(s) of the Estate of the Deceased is located or where deceased domiciled at the time of his death. Monetary value of the assets determines whether action shall be filed in District Court or High Court.
Summons and copy of plaint/petition, supporting documents, and application are served upon all remaining legal heirs and interested parties, who are known as Defendants. Defendants file their response. Courts frames issues, trial occurs, where both parties present evidence in support of their case, testimony is recorded, evidence presented, and court enters order declaring rights of each legal heir and partition of the Estate.
If any Plaintiff or Defendant claims partition of the Estate based on some document, i.e., “Will”, he/she presents evidence before court in support of validity and proper execution of claimed document.
No partition on the basis of claimed document may occur till Court declares claimed document valid and properly executed.
II. Documents required to initiate Court Proceedings
The Plaintiff is required to submit following two primary documents with Plaint (Petition):
1. Death Certificate of the Deceased; and
ii. Evidence establishing relationship of Plaintiff/Petitioner with Deceased, i.e., birth certificate/ marriage Certificate, etc.
Legal heir may also file evidence of ownership of Assets, if available. If he/she is seeking partition based on any legal document, i.e., “Will”, he/she must submit original “Will” in court and seek determination that his/her claimed document is valid and properly executed.
III. Cost Involved
Court fee for any legal action is calculated on the basis of reliefs sought by the Plaintiff.
As Suit for Declaration & Partition is adjudicated in two stages, fee is payable in two stages as well.
Court fee for first stage of declaration and partition is nominal.
Court fee for execution stage, where actual share of Plaintiff is separated from the Estate, is set percentage (which varies from state to state in India) of value of his/her share in the Estate, which is calculated first.
Legal professional would assist in calculating how much court fee is required to be paid on the suit and supporting applications.
Sample Format
Suit for Declaration, Partition, and Rendition of Accounts of The Estate of Deceased
IN THE HIGH COURT OF _______ AT ______
CIVIL ORIGINAL JURISDICTION
CS(OS) NO. OF 20__
IN THE MATTER OF:
....Plaintiff
Versus
… Defendants
SUIT FOR DECLARATION, PARTITION, RENDITION OF ACCOUNTS, APPOINTMENT OF LEGAL REPRESENTATIVE OF THE ESTATE OF LATE _________ AND PERMANENT INJUNCTION
THE PLAINTIFF, NAMED ABOVE, MOST RESPECTFULLY SHOWETH, AS UNDER:
1. That the above-named Plaintiff is filing the present proceedings seeking declaration, partition, rendition of accounts, appointment of legal representative of the Estate of Late ____________, and permanent injunction.
2. That the Plaintiff is surviving spouse/biological child and Class-I legal heir of _______________________. Copy of her birth certificate is enclosed as Exhibit “A”.
3. That Late Sh./Smt./Miss _________, a Hindu Male/Female, passed away on __________ (date of death) at his/her permanent place of residence in _______ (place of death). Copy of his/her death certificate is enclosed as Exhibit “B”.
4. That the Defendants, named above are Class-I legal heirs of the deceased, _________, pursuant to Section 10 of Hindu Succession Act, 1956.
5. That no one else is entitled to claim any share in the estate of the deceased, besides Plaintiff and Defendants.
6. That, to the best of Plaintiff’s knowledge, Late______________, during his/her life acquired some immovable and moveable assets out of his/her earnings, savings and sources and he/she remained sole, lawful and absolute owner of his/her self-acquired properties till the date of his/her demise on _____________.
7. That by operation of law, upon his/her death, all assets owned by ____________ became assets of separate legal and taxable entity, “The Estate of _____________.”
8. That “the Estate of late _____________” has not been partitioned till today.
9. That no individual or entity has been appointed as legal representative of “The Estate of late ______________ till today.
10. That the Estate of _____________ is mandated to obtained its own tax ID, i.e., permanent account number (PAN) and bank account to conduct its financial operations, and no one has complied with the said legal requirement till today.
11. That no court of competent jurisdiction, till today, has declared that Late ___________________left behind any valid and properly executed last “Will” for distribution of his/her estate.
12. That as per knowledge and belief, the estate of late _____________ consists of the following assets:
i. _____;
ii. Any other property which Plaintiff discovers in future, suit property no. ___.
13. That the following assets of the estate of __________, have been generating and/or capable of generating income, the exact amount of the same is unknown to Plaintiff, which is subject to distribution equally among his/her ______ legal heirs, i.e. Plaintiff and _____ Defendants:
a. Suit property no. 1,
b. Cash assets in various banks, safe deposit boxes, and at home. The exact details and amount of interest are presently unknown to Plaintiff, as Defendants refuse to provide any specific details to Plaintiff.
14. That Section 168(3) of Income Tax Act mandates Estate of the Deceased, ____________ to file its Income Tax Return every year from _____________ (date of death of deceased) till it transfers assets. No individual or entity has filed income tax return for the Estate of late __________ on income generated by assets of the Estate in compliance with law till today
15. That the Plaintiff has made numerous efforts requesting Defendants to appoint an individual or entity as legal representative of the Estate of ______, and partition her ___th share in the Estate by mutual agreement, but in vain. The Plaintiff was constrained to serve legal notice for partitioning her ____th share in the estate on _________, but to no effect.
16. That to the best of Plaintiff’s knowledge, none of the legal heirs of the decedent, Late _______________________, has ever initiated any legal action for Probate, Letter of Administration, Succession Certificate, or Suit for Partition (except the present proceedings) for partitioning assets of the Estate of Late __________, and hence the present suit.
17. To the best of Plaintiff’s knowledge, no Court of competent jurisdiction, till today, has entered any order declaring shares of Plaintiff and Defendants in the estate of Late __________, and hence the present suit.
18. That the cause of action for filing the present Suit firstly arose in favor of the Plaintiff and against the Defendants on _________, i.e., when legal entity, “The Estate of _______” came into existence upon death of ___________. The cause of action further arose on different dates from __________ to present, when the defendants refused to appoint any individual or entity as legal representative of the Estate of _______ and partition assets of the estate of the deceased, The cause of action still subsists in favor of the Plaintiff and against the Defendants.
19. That the value of the Suit for the purpose of Court Fee and jurisdiction is more than Rs. ________________ being the market value of the suit properties and the Plaintiff undertakes to pay appropriate and proper Court Fee on his/her _____ share in the suit properties once his/her share is determined by this Hon’ble Court. However, the Plaintiffs have affixed the nominal court fee of Rs. 1000/- for the relief of partition. Similarly value for the rendition of accounts regarding FDRs, Cash deposits, interest income, rental income is tentative calculated as Rs.____________/- on which the prescribed court fee of Rs.________/- has been paid, as the plaintiff at this stage cannot say with exactitude as to what would be found due to him/her as his/her share in the estate at the time of passing the final decree. However, the plaintiff undertakes to pay the prescribed court fee on whatever amounts that are found due to him/her at the time of passing the final decree of rendition of accounts. The value of the suit for the purposes of mesne profits is Rs. ___________/- (the approximate monthly rent of _____________ is Rs. ________/-) wherein 1/4th share of plaintiff comes to Rs. ________/- (approximately) on which the advalorum court fee of Rs.___________ has been paid. The value of the suit for the relief of permanent injunction is Rs._____/- on which proper court fee has been affixed. The Suit valued for the relief of the declaration and permanent injunction at Rs.___ /- each on which Court Fee of Rs. ___/- is affixed.
20. That this Hon’ble Court has the territorial jurisdiction to try and entertain the present suit since the suit properties no. ______ and ____ are situated in ______ only and the cause of action arose at ______.
PRAYER
It is, therefore, most respectfully prayed that this Honorable Court may graciously be pleased to:
(a) pass a preliminary decree of partition in favor of the plaintiff and against the Defendants holding that the Plaintiff and defendants have ____th share each in the estate of the deceased, late _________, which consists of suit properties bearing number – (i) ___________; (ii) ______________________________; (iii) cash assets; and (iv) jewellery, household items, etc., each having share in its ownership in the proportion mentioned above. It is further prayed that this Honorable Court further hold an inquiry under Order 20 Rule 12 CPC as to at what rate the Defendants are liable to pay damages / mesne profits per month to the plaintiff in proportion to his/her share in the suit properties pendent lite and future with interest @ 18% per annum till the date of actual physical partition of property by metes and bounds and each of the co-owners is placed in actual physical possession of the property which comes to his / her lot as exclusive and sole owner of that portion and the plaintiff undertakes to pay prescribed court fee upon the amount found due to them.
(b) Appoint Plaintiff/Defendant as legal representative of the Estate of ____________________;
(c) Pass a Final Decree of partition in favor of plaintiff and against the Defendants dividing assets of the Estate of __________, as mentioned in Prayer (a) ________________ of the Plaint in equal shares by metes and bounds amongst the Plaintiff and defendants no. 1 to ___ in the suit and thereafter a local commissioner may kindly be appointed with a direction to suggest modes for partitioning the suit property in ___ equal shares by metes and bounds. However, in case this Honorable Court is of the opinion that the suit properties are not susceptible to being physically divided in proportion to the extent of the shares of the co-owners by way of independent portions, in that event, the same may be sold by public auction or by another mode with vacant possession if this Honorable Court deems it proper, and the proceeds thereof may be distributed among the co-owners in proportion to their shares after deducting the incidental expenses, if any.
(d) Pass a decree of rendition of accounts in favor of plaintiff and against the Defendants _____ regarding all cash assets belonging to the estate and all rental and interest income generated by estate assets from ________ (date of death of the deceased) and after going into the unsettled accounts, a decree for the amount actually found due be also passed in favor of the plaintiff & against defendant no.1 to ___.
(e) Pass a Decree of permanent injunction in favor of the Plaintiff and against the Defendants thereby restraining the Defendants their assignee, representative, attorney, transferee or associates etc. from selling, alienating, assigning, disposing of, or creating any third party interest in any manner whatsoever in the suit property no.1 (i) Suit property no. 1 ________________________; (ii) suit property no. 2 ________________________; (iii) cash assets; and (iv) Jewelry and other assets left behind by late _______________;
(f) Pass a Decree of Permanent Injunction in favor of the Plaintiff and against the Defendants thereby directing the Defendants no. 1, 2 & 3 to pay to the Plaintiff the Costs of the present suit, including attorney fee, expert fee, appraisal, etc.;
(g) Pass such other, further order in the facts and circumstances of the case as this Honorable Court may deem just and equitable in favor of the Plaintiff and against the Defendant.
Plaintiff
Through
Name of Attorney
Address of Attorney
VERIFICATION:
I, _____________________, S/o/D/o Late Sh./Smt. ________________, R/o _______________________, the Plaintiff herein do hereby verify that the contents of the above Suit from Para No.1 to ___ are true and correct to the best of my knowledge and from para no.___ to___ on the basis of legal advice received and believed to be true and correct. Rest is the prayer to this Honorable court.
Plaintiff
Author: Santosh K. Pawar is managing attorney of Law Firm of Santosh K. Pawar. She is licensed to practice in India and U.S. She specializes in U.S. Immigration and NRI property matters and provides consulting and assistance to NRIs for transfer of inherited assets located in India. For more information and assistance, contact by WhatsApp at (585) 474-0935 or email at santosh@attorneypawar.com.
