Partition of property in India is the process of dividing one piece of land from another. This property division usually occurs among members of an undivided family. The Partition Act of 1893 grants the authority to individuals to claim their rights over their respective shares. In India, there are multiple laws governing the partition and transfer of property whereas the Non-Resident Indians (NRIs) commonly inherit land, buildings, and bank accounts from their families.

In brief, a property partition involves the separation of a property jointly owned by co-owners or co-proprietors into individual portions. This allows each owner to independently own and hold their respective share.

Types of properties for NRI’s 

People who live outside of India for work, commerce, profession, or any other reason that makes it obvious they intend to remain outside of India for an ambiguous amount of time are referred to as non-resident Indians. In a December 8, 2003 circular, the Reserve Bank of India made it clear that even students who travel outside to further their education are considered non-resident Indians.

The definition of a non-resident Indian is stated in Section 2(w) of the Foreign Exchange Management Act, 1999. In a similar vein, a non-resident individual (NRI) is defined by Section 2(30) of the Income Tax Act of 1961. Accordingly, the NRIs can hold the following types of properties in India:   

Ancestral property 

The personal laws based on religion control the inheritance of ancestral property by non-resident Indians (NRIs) in India. Laws governing succession vary throughout religions, as does the allocation of property among rightful heirs. For example, the Hindu Succession Act governs families of Hindu, Jain, Sikh, and Buddhists; Sharia law governs Muslim families; and the Indian Succession Act governs Christian families. NRIs have the same rights to ancestral property as Indian residents because they are legal heirs. Under the inheritance laws that apply to their faith, they are entitled to a portion of the property. These regulations guarantee that non-resident Indians (NRIs) living abroad can still legally claim their portion of ancestral property.

Self- acquired property 

Self-acquired property is the one which a person acquires with his/her own money and is not inherited. Farmhouses, plantations, or agricultural property in India cannot be purchased by NRIs. Purchasing immovable property in India does not require special clearance for NRIs or OCIs. It is permissible to purchase the property with Indian rupees (INR), and in accordance with the Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) regulations, the money must be kept in a non-resident account. As an NRI, one can purchase a property independently or jointly either with a Resident Indian (RI) or an NRI/OCI.

Laws governing the partition of NRI property in India

Hindu Succession Act, 1956

Property owned by people who identify as Hindu is governed by the Hindu Succession Act, 1956. Previously, a person could not assert their claim to ancestral property if they abandoned their Hindu faith or converted to another faith. However, the Caste Disability Removal Act brought about this shift, and as a result, these individuals are currently not given enough legal protection.

Indian Succession Act, 1925

According to the Indian Succession Act, 1925, there are two methods for property succession: testamentary succession, in which the assets are divided in accordance with a formal document called a “Will,” and intestate succession, in which the assets are transferred in accordance with the deceased person’s religious beliefs in the event that no Will is left. The Indian Succession Act shall take effect if person law is not applicable.

Partition Act, 1893

The Court may direct the sale of a property and divide the revenues among the shareholders in accordance with the Partition Act, 1893. In addition, the Court may permit a shareholder to acquire the interests of other shareholders at the property’s market value. Furthermore, the Act has organized clauses for shareholder dispute settlement.

How to partition ancestral property in India

  • The division of inherited property among family members can be accomplished through either a contested process by initiating a partition lawsuit or, if uncontested, through a partition deed or family settlement.
  • When disagreements persist among legal heirs regarding the terms and conditions of property division, a partition lawsuit is typically filed to resolve the issue.
  • On the other hand, when mutual agreement exists among family members regarding property division, they can opt for a partition deed or a family settlement to formalize the division.

How to partition Self-acquired Property in India?

  • Self-acquired property refers to assets obtained through one’s own hard-earned income or received as gifts or through a will, and the same is not inherited from ancestors. 
  • Self-acquired property can’t be divided and is not subject to partition until the owner is alive. However, the owner can create a will during their lifetime and can designate someone who will inherit the property. 
  • In case there is no will, the Self-acquired property goes to the owner’s Class 1 heirs after their death.

Steps to file a partition suit for property division 

  1. Filing of suit/ claim – The Partition suit is filed in the Court having jurisdiction over the property. Once a suit is lodged after paying the appropriate court fee, the court will schedule a “Hearing” date when it will consider the suit for the partition of immovable property and determine whether it should move forward or not. The suit will either be allowed or denied by the court based on its merits and discretion. Thereafter, a notice will be issued to the other party and a specific time period will also be given to respond to the Notice along with the next date of hearing. 
  2. Submission of Written Statement – The Respondent must file its Written Statement in addition to appearing in court upon receipt of the notice. This written response serves as the Respondent’s defense and is a response to the plaint. 
  3. Replication or Rejoinder – A replication is a written response to the statement that the opposing party or parties have submitted. All false charges made by the opposing party or parties shall likewise be expressly disputed in this replication, and any such allegation that is not specifically denied will be presumed to be admitted. The pleadings are considered finished after a replication is submitted.
  4. Evidence by Parties – Following the conclusion of the pleadings, the court provides both parties with a chance to submit all pertinent and required documentation/evidence supporting their claims. 
  5. Framing of Issues – After the aforementioned steps are finished, the court decides the case’s subject matter by framing a number of issues whereas in the final order, the court will deal with each such issue separately.
  6. Final Hearing – During the final hearing, both parties will present their arguments and will also place reliance on the evidence and witnesses presented earlier. Accordingly, the Court will pass a final order after hearing the arguments from both the parties. 

Conclusion

Many years of a person’s life are wasted in arguments over property, and only some family members can profit from the ancestral property. Therefore, understanding how someone could obtain their share of the property is crucial. NRIs need to make an effort to decide on a good strategy to defend their share of Indian property. The most recommended approach, however, is to draft a memorandum of family settlement because it is cost-effective for the family and legally enforceable. 

FAQs

What are the documents required for a partition suit?

Certified copies of all title deeds of the property (including the description of the property), Valuation of property, Birth proof and residence proof of the legal heir, Death certificate of the deceased owner (in original) will be required for a partition suit. 

Which of the property is not liable for partition?

Self-acquired property of any person is not subject to partition as it belongs to the owner itself. Self-acquired property is owned by a person’s hard earned money, gift or will.

Which act is required for a partition deed?

Under Section 17 of the Indian Registration Act, 1908, it is mandatory to register your partition deed. 

Can a joint owner gift his property?

Yes, jointly held property can be gifted to the other joint holder through a gift deed.

What are the methods of transfer of property?

There are various methods of transferring ownership of property such as Permanently by way of relinquishment, sale, gift and/or temporarily by way of mortgage,  lease and, leave and license agreement.