Rajinder Kaur (Deceased) through Legal Heir Usha vs. Gurbhajan Kaur (Deceased) through LRs. Upinder Kaur [July 23, 2024]
Citation: 2024 INSC 552; Civil Appeal Nos. 7946-7947 of 2024; Supreme Court of India
Background and Facts
This case arose from a long-standing partition dispute regarding a commercial property in Chandigarh, jointly owned by multiple co-sharers, including Rajinder Kaur (represented by her legal heir Usha) and Gurbhajan Kaur (represented by LRs, including Upinder Kaur). The property, originally divided among ten co-sharers, saw subsequent sales and transfers, resulting in a complex ownership structure. Rajinder Kaur filed a suit in 2005 seeking partition by metes and bounds or, if not feasible, sale by auction, and an account of rents collected by certain defendants who had let out portions of the property to tenants.
During the proceedings, the Trial Court passed a preliminary decree for partition and directed that the property be sold by auction, as physical partition was not possible under the Chandigarh (Sale of Sites and Buildings) Rules, 1960. The court also ordered all co-sharers to render accounts of rent collected or to contribute rent for their share. This decision was partially challenged, leading to appeals and conflicting findings by the First Appellate Court and the High Court.
Supreme Court’s Analysis and Findings
Obligation to Render Accounts:
The Supreme Court held that all co-sharers in a joint property, whether they are in occupation or have rented out their share, are obliged to render accounts or contribute rent for their respective shares. The Court overturned the High Court’s finding that had exempted certain co-sharers (notably defendant No. 3(a), S.C. Bhalla) from this obligation, clarifying that personal use or self-occupation does not absolve a co-sharer from accounting for benefits derived from the property.
Assessment of Rent and Sham Transactions:
The Court scrutinized the evidence regarding rent receipts and found that some rent notes produced by defendant No. 3(a) were sham transactions, as the market rent was much higher than what was claimed. Offers made by the plaintiff to rent the property at higher rates further highlighted the underreporting of actual rental value. The Court directed the Trial Court to reassess the share of such co-sharers and ensure fair contribution to the common pool for distribution among all co-sharers.
Equitable Distribution and Future Course:
The Supreme Court emphasized that equitable distribution of income and sale proceeds is fundamental in partition suits. If any co-sharer fails to contribute their determined share to the common pool, their share in the sale proceeds shall be reduced accordingly. The Court directed the Trial Court to expedite the proceedings and dispose of the case within nine months.
Conclusion and Significance
The Supreme Court allowed the appeal, setting aside the High Court’s exemption for certain co-sharers and reaffirming that all co-sharers must render accounts or contribute rent, regardless of whether they occupy or lease out their portion.
The judgment clarifies that personal use does not exempt a co-sharer from financial obligations to other co-owners, ensuring fairness and transparency in partition and distribution of jointly owned property.
The Court’s directions are expected to streamline similar partition disputes and reinforce the principle of equitable sharing among co-owners.
In summary: The Supreme Court ruled that all co-sharers in a partition suit must render accounts or contribute rent for their share, regardless of occupation or tenancy arrangements, and directed expedited completion of the proceedings for fair and equitable distribution.
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