Mere Execution of Family Arrangement Does Not Amount to Admission of Suit Properties as HUF Assets: Bombay High Court

The matter arose from a partition suit instituted by the plaintiffs, Arti Varun Kejriwal and others, who sought a declaration that certain immovable properties constituted the assets of the alleged ‘Jotumal and Sons HUF’. The plaintiffs prayed for partition of those properties, cancellation of certain gift deeds and transfer documents, and interim protection restraining the defendants from alienating or dealing with the suit properties during the pendency of the suit. They contended that the properties had been acquired from an ancestral nucleus and relied, in support of their claim, on a Deed of Dissolution dated 1956 and a Family Arrangement executed on 15 February 2010. The plaintiffs argued that these documents demonstrated that the defendants themselves had treated the properties as HUF assets.

Court’s Observations on the Burden of Proof

Justice Farhan P. Dubash, hearing the interim application, began by noting that there is no legal presumption that every Hindu family necessarily holds joint family property or that every asset standing in the name of a family member is automatically HUF property. The Court emphasised that the burden lies on the party asserting the existence of an HUF to first establish the existence of a joint family nucleus of sufficient strength and to demonstrate a reasonable nexus between that nucleus and the acquisition of the properties sought to be impressed with HUF character.

The Court observed that mere assertions that the family was engaged in multiple businesses or that income was generated from those businesses cannot substitute for legal proof when no contemporaneous evidence capable of even prima facie establishing that the acquisitions were made from joint family funds is produced. In the present case, the plaintiffs failed to produce any such foundational evidence.

Treatment of the Family Arrangement

Turning to the Family Arrangement dated 15 February 2010, the Court held that the mere execution of such an arrangement does not, by itself, determine the juridical character of the properties dealt with therein. It explained that the fact that parties chose to settle their disputes amicably cannot be elevated into proof of the existence of an HUF, particularly when no foundational evidence has been adduced to establish the existence of such an HUF. The Court quoted its own observation: “mere execution of a family arrangement does not, by itself, determine the juridical character of the properties dealt with therein. Whether parties chose to settle disputes amongst themselves cannot be elevated into proof of the existence of an HUF, particularly in the complete absence of foundational evidence establishing the existence of such HUF.”

Assessment of Ancillary Claims

The Court also examined the plaintiffs’ allegations of fraud, coercion and undue influence in relation to the gift deed and transfer documents. It found that the plaintiffs had failed to substantiate these allegations. Consequently, the plaintiffs had not established a prima facie right that would warrant the grant of interim protection, such as an injunction restraining the defendants from alienating the suit properties.

Disposition of the Interim Application

Having considered the foregoing, the Court held that the plaintiffs had failed to make out a prima facie case. Accordingly, the interim application seeking injunctions against the defendants was dismissed. The matter remains pending for further adjudication on the main suit.

Implications of the Ruling

The decision reinforces the principle that documents recording family settlements, while useful for evidencing intra‑family agreements, do not automatically confer HUF status on the properties covered. Litigants seeking to impress property with HUF character must first prove the existence of a joint family nucleus and a clear link between that nucleus and the acquisition of the property. The ruling serves as a caution to parties who rely solely on family arrangements or deeds of dissolution to establish HUF claims without corroborative evidence of joint family property or ancestral property.

By clarifying the evidentiary threshold, the Bombay High Court aims to prevent the facile conversion of private family settlements into proof of HUF ownership, thereby preserving the integrity of the legal tests governing Hindu Undivided Family property.