Succession is a very sensitive and complex issue in a multi-diverse society and culture such as ours. A uniform system of inheritance (the legacy of the Portuguese) is only present in the state of Goa, and the rest of the states in India are governed by the law of the Indian Succession Act, 1925 ("Indian Succession Act"), wherein for the first time various customs, beliefs and practices were codified and given the sanction and sanctity of law.
Succession, on the death of a person may follow either: (a) testamentary succession (i.e. a Will), or (b) intestate succession (i.e. without a Will).
A person is considered to have passed away intestate in respect of property (a) which he has not disposed under a Will, or (b) the disposition under the Will is not capable of taking effect (i.e. invalid bequest, illegal bequest etc). Intestacy may either be total intestacy or partial intestacy.
It is generally understood as per the private international law, that intestate succession of a movable property follows the law of domicile of the intestate at the time of his/ her demise, and in case of immovable property, the law of situs (the place to which a property belongs) would apply, no matter where his/her domicile may have been.
Who can stake claim in intestate succession
In cases where there is no Will, or no valid Will, succession follows the intestate succession route as enshrined under the provisions of the Indian Succession Act, however vesting takes effect under personal law, which is different for Hindus (sometimes different for Sikh, Buddhist and Jain), Muslims, Christians and Parsees who inherit the estate of a person dying intestate. In matters of intestate succession, a court may, either issue Letters of Administration or Succession Certificate.
In cases where a person has passed away without making a Will or prepared a Will but the executor either refuses to take responsibility or is incapable or deceased, Letters of Administration is granted by a competent court for distributing the estate of the deceased among the legal heirs. Generally administration of the estate is granted to the legal heir who is entitled to the whole or any portion of the estate of the deceased, or in case of more than one person making such application the court may at its discretion grant it to any one or more of them, or in the absence of any of them, it may be granted to the creditor of the deceased.
A Succession Certificate is a document issued to a person claiming a right with respect of any debt or security, which forms a part of the estate of the deceased (except where the law requires Probate or Letters of Administration).To simplify, Succession Certificate may be obtained in cases where
(e) In case of a joint family property under Hindu Law.
Succession Certificate is only in respect of movables and cannot be obtained for immovable property. Merely obtaining a Succession Certificate does not vest the property absolutely in favour of the holder of the Certificate; but it only gives him the right to distribute the property of deceased under the personal laws of inheritance of the deceased.
As per Hindu Law, intestate succession follows as per Class I heirs, Class II heirs, Agnates and Cognates. This succession is as per the codified law of Hindu Succession and the share of each member is defined according to a pre calculated formula. Succession for Mohammadens is as per the Shariat Laws read with the Indian Succession Act, likewise intestate succession among Parsees and Christians is under the Indian Succession Act.
In the modern day, it is important to have a comprehensive inventory of assets together with an efficient plan to manage and protect them. A person may have assets in the nature of movables such as investments in shares, mutual funds, bonds, stocks, bank balances, other instruments, as well as interest immovable property either as a co-owner, or owner or in any other capacity as may be legally permissible in law. Often times, the security and / or debt may be difficult to ascertain, especially if the person has not kept a proper record.
Consolidation helps to create a proper and complete picture, especially if succession is through the intestate route, or if certain assets are not included under the Will, as the nature of application and grant of either Probate, Letters of Administration, Succession Certificate will depend on the nature of the asset together with its estimated value and the location of the asset.
Movable Property is generally understood to mean property of every description, except immovable property, and therefore may include assets in the nature of jewellery, cars, bank balances, deposits, units of mutual funds, bonds, stocks etc. Once the assets are consolidated and movable property is ascertained, Letters of Administration or Succession Certificate (as the case may be) may be granted by a court of competent jurisdiction upon satisfactory proof produced by the person claiming a right to such asset. As already highlighted, the general rule for intestate succession to movable assets is that movables follow the domicile of the person at the time of his demise.
The definition of an immovable property is generally understood to mean, land, benefits arising out of the land, things attached to the earth and/or permanently fastened to anything attached to the earth but does not include grass or standing timer. Thus land or building or premises form a part of the immovable assets and are generally the bone of contention in cases of disputes arising out of succession (both testate and intestate). Immovable property or assets follow the law of situs, and does not take into consideration the domicile at the time of death.
The personal laws i.e. Hindu succession laws, Shariat laws, succession laws applicable to Christians and Parsees under the Indian Succession Act govern the method and manner in which the immovable asset would devolve for the benefit of the legatees.
In case of immovable assets, only Letters of Administration may be obtained from a competent court as Succession Certificate is only to facilitate collection of a debt on succession and afford protection to parties paying debts to representatives of a deceased intestate.
The effect of nomination in case of immovable property is that, the immovable property (in case of say a flat or apartment in Co-operative Society) does not automatically vest in the name of the nominee to the exclusion of all other legal heirs. The rules of succession are very clear and distinct as the code is self-contained and no other third mode of succession is open for intestate succession to immovable assets.
To briefly summarise, succession (testate or intestate) in India is as per the body of personal laws codified either under specific personal laws or the Indian Succession Act, and generally, in case of intestate succession, the Letters of Administration or Succession Certificate may be obtained for the purpose of administration of the estate of the deceased.The writer is Associate Partner with Rajani Associates