You can apply for probate even without a copy of will

My father had inherited some land from his father, who passed away two years ago. But he has lost the copy of the original will and his brother is trying to claim right over the property. Is there any way to nullify this claim?
—Sarvesh
While answering this query, we are assuming that your grandfather was a Hindu and was governed by the provisions of Hindu Succession Act, 1956, on the date of his demise and that your father and your uncle (your father’s brother) were the only surviving class I heirs of your grandfather at the time of his demise. We are further assuming there was no probate of your grandfather’s will applied for/granted by a competent court.
If your father has a copy or a draft of the original will executed by your grandfather, section 237 of the Indian Succession Act, 1925, will be applicable, which reads as follows: “When a will has been lost or mislaid since the testators death, or has been destroyed by wrong or accident and not by any act of the testator, and a copy or draft of the will has been preserved, probate may be granted of such copy or draft, limited until original or properly authenticated copy of it is produced.”
Thus, if your father has a copy or draft of the will executed by your grandfather, he may apply for a probate by annexing the said copy or draft. If your father obtains a probate from a court of competent jurisdiction, no right can be claimed by your uncle over any property bequeathed to your father under the said will.
Further, section 238 of the said Act reads as follows: “When a will has been lost or destroyed and no copy has been made nor the draft preserved, probate may be granted of its contents if they can be established by evidence.”
Thus, if your father does not have a copy or draft of the will executed by your grandfather, he can nevertheless apply for a probate. However, the grant of a probate by a competent court is subject to your father having evidence that your grandfather executed a will and also having evidence with regard to the contents of the said will (specifically that the said land was bequeathed to your father under the said will).
If your father does not have a copy or draft of the said will or is not in a position to prove the contents of a will in order to obtain a probate from a competent court, he can apply for letters of administration as if your grandfather had died intestate or without a will. However, it must be noted that if your father applies for letters of administration, the entire property of your grandfather will be divided and there is no guarantee that your father to the exclusion of your uncle will inherit the said land (the land bequeathed to him under the said will). Please note that in such a case, the entire estate of your grandfather shall be equally divided among your father and your uncle.

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Sale deed not mandatory if property bought from builder

What is the difference between an agreement for sale and a sale deed? I bought an apartment in Mumbai and have entered into an agreement for sale which is duly registered. Should we make a sale deed after full payment? —Jigar Shah

We are assuming that you have purchased the apartment under the provisions of the Maharashtra Ownership of Flats (regulation of the promotion of construction, sale, management and transfer) Act, 1970, (MOFA) and that you have paid 20% or more of the purchase consideration till date and that you have executed a MOFA agreement—an agreement for sale with the builder with respect to the said apartment. Further we are assuming that the said agreement for sale is adequately stamped in accordance with the relevant article contained in schedule I of the Maharashtra Stamp Act, 1958, and that the agreement for sale is registered with the applicable office of the sub-registrar of assurances.

Section 4 of MOFA requires a builder to execute an agreement for sale containing inter-alia the terms as prescribed therein with its purchasers upon receipt of consideration as stated therein with respect to the apartment agreed to be sold by the builder. Thus there is no requirement to execute a sale deed, once the agreement for sale has been executed. However, it is to be noted that in the event that you have paid only part consideration to the builder while executing the agreement for sale, you must ensure that upon payment of the balance consideration the builder gives you receipts. If you pay the balance consideration in instalments, then you must ensure that the builder issues you a receipt for every instalment.

Further you must ensure that on completion of the construction of the building and upon such number of persons as prescribed under section 10 of MOFA having purchased the flats, the builder takes steps to constitute a society or any other organization as contemplated under MOFA agreement. You must also ensure that upon formation of such organization, the builder duly executes a deed of conveyance within such time as contemplated under the MOFA agreement and if not prescribed therein then the time as prescribed under section 11 of MOFA in favour of the organization formed conveying the land on which the said building has been constructed along with the building in favour of the organization. It is also very critical not to take possession of the said apartment without an occupation certificate being obtained by the builder. You must also ensure that upon formation of the society, a share certificate is issued to you by the society stating that you are the owner of a certain number of shares. The said share certificate is to be signed by the chairman of the newly formed society.

Please note that it is only in this situation, that is upon purchase of a flat directly from the builder by executing a MOFA agreement, in accordance with the provisions of MOFA that it is not necessary for you to execute a sale deed subsequent to the execution of the MOFA agreement.

In the event that you are not purchasing a property from a builder, and are purchasing the property from a prior owner of the flat, that is either an individual or a company, it is essential that you execute a deed of transfer (or a sale deed) after the execution of an agreement for sale by the transferee and the builder. This is imperative as the deed of transfer will be your title document. In that situation, it is also advisable that you pay the full stamp duty on the deed of transfer and get the same registered with the office of the sub-registrar of assurances. It is also imperative to inter-alia take custody of the share certificates given to the owner (transferor) of the apartment and the original agreement for sale executed by the transferor and the builder and a no objection certificate from the society in which the said apartment is situated for the sale of the apartment to you and to admit you as a member of the society.

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Intergenerational transfer of assets: will or gift deed?

Circa 1963: Devraj Gupta was a leading and astute businessman in Mumbai. Not only had he created a reputed business but also he had created assets and properties for his family. With age not on his side, he had a justified and growing concern: “If something were to happen to me, I should be able to ensure that these properties transfer smoothly to my wife and the next generation.”

On 28 March 1964, Devraj Gupta registered his will bequeathing his properties to his wife and sons in equal measure. He was a satisfied man that he has done what most Indians don’t do—made a will and ensured a smooth transition of his assets. But he couldn’t have been more wrong. It would take almost 50 years after his death for his wish to be fulfilled.

Circa 1969: After his demise in October 1965, as required under law his widowed wife filed a probate petition for the will. Four years later after following the due process, the Bombay high court on 12 March 1973 granted the probate to the will.

On 10 May 2013, the Bombay high court dismissed subsequent petitions filed by other members of the family seeking to revoke the probate and petitions disallowing the respondents in anyway dealing in the said properties. (You can read the complete high court order here: http://bit.ly/WillProb)

This is an exceptional example that demonstrates the need of using the right vehicles for different asset classes during the process of transfer of wealth from one generation to another and also avoiding legally locking up of assets in this process. Effectively the transfer of wealth in such cases skips the generation where it is intended to benefit but the benefits go to the generation after next—the grandchildren—thus delaying the economic value added.

India will see the initiation of intergenerational transfer of assets of over Rs.10 trillion in the next decade. Such a large transfer of wealth from one generation to another will lead to two challenges: Need for tax-efficient low-cost vehicles for this transfer and ensuring effective time-bound transfers to beneficiaries.

A will or testament is a relatively simple way of intergenerational transfer of wealth and given its importance, everyone should have a will irrespective of their age or net worth. On the positive side, it is relatively easy to write and it can be revoked with a new will or amended through a codicil as many times as one wants. Over the years, variants such as video wills and online wills have emerged and are acceptable in India. On the negative side, a will as an instrument is more liable to be challenged thus prolonging the process of transfer of wealth to the rightful owners than other instruments. Another important facet is that law of limitation may not always be applicable for challenging a will thus leading to litigation even after an undefined period especially in the case of immovable properties. Legal disputes could even reduce the resale value of assets or leave heirs to bear hefty fees, eroding the value of inherited assets.

Gift deed as a tool for transfer of wealth

A gift deed is a much more efficient instrument for transferring immovable properties from one generation to another. A gift deed can be used for all asset classes. However, it derives its utility in the case of immovable properties due to the significant benefits it gives to the next generation. The positives of a gift deed are that the transfer of assets happens during the life-time of the testator (donor) and the transfer happens immediately compared with using a will which is a much longer process. The other alternative of formulating a trust—used by a lot of high net worth individuals—for transfer of assets is a legal process which takes some time before the actual transfer can take place. Additionally, a gift deed for immovable properties needs to be registered for it to be effective and by virtue of being registered is difficult to be post-facto challenged by other parties thus making it virtually litigation free. The taxation for gift deeds in being tax-free for both the donor and donee when in favour of defined relatives is also beneficial.

On the flip side, a gift deed is irrevocable once executed and thus does not allow for any changes even if one changes his mind. On the other hand, a will is a living document and any changes can be made till the testator is alive. There are also cost implications in the case of a gift deed for immovable properties in the form of stamp duty for registration. The stamp duty for registration of a gift deed varies from state to state but in most cases is significantly lower than the normal stamp duty and is payable usually at the circle rate or ready reckoner rates as published. Thus the effective cost of executing a gift deed is marginal given the significant benefits it offers.

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Gift deed is considered valid when it is made voluntarily

I want to gift a commercial property in a co-operative housing society to my daughter. However, my sale deed is not registered. Is it possible to gift the flat to my daughter? What is the procedure and what are the documents required?
—Krishna Kumar
While answering this query we are assuming that you purchased the said commercial property over 30 years ago. We are further assuming that full stamp duty has been paid on the said sale deed in accordance with the provisions of the Stamp Act applicable to the state where the said commercial property is located.
Section 54 of the Transfer of Property Act, 1882 defines sale as a transfer of ownership in exchange for a price paid or promised or partly paid and partly promised. This section also states that the transfer of tangible immovable property of the value of Rs.100 or more must be by way of registered instrument.
Section 17 of the Registration Act, 1908 lays down the documents, of which, registration is compulsory.
Section 17(1)(b) of the Registration Act inter alia provides that any non-testamentary instrument which creates, or declares whether in present or in future, any right, title or interest, of the value of Rs.100 or more to or in immovable property is a compulsorily registerable document. The sale deed by virtue of which you are entitled to the said commercial property is thus a compulsorily registerable document.
Section 49 of the Registration Act inter alia states that no document which requires compulsory registration either under section 17 of the Registration Act or under any provision of the Transfer of Property Act, shall affect any immovable property comprised therein, or confer any power to adopt, or be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. Which means that the transaction desired to be effected by the document will be inoperative so far as the immovable property is concerned.
Thus, as the sale deed in question has not been registered, it does not affect any immovable property comprised therein, i.e. the said commercial property. However, you may execute a gift deed in favour of your daughter, if a period of 30 years have elapsed since you have been in possession of the said commercial property and no claim can be raised against you, as the maximum period of time within which a person can file a suit in a competent court with respect to an immovable property, as per the provisions of the Limitation Act, 1963, is a period of 30 years. Thus, since we are assuming that you have been in possession of the said commercial property for more than a period of 30 years, no claim can be raised against you.
For the gift to be valid it must be made by you voluntarily, without any exchange of money and it needs to be accepted by your daughter. It is to be noted that the said gift deed is to be executed by you and your daughter and attested by two attesting witnesses.
Further in the event the original vendor (i.e. the person who sold you the said commercial property) is alive it would be advisable, to execute an agreement with him stating that neither he nor anyone claiming through him has any right, title and interest in the said commercial property and that you are the sole owner of the same. You may annex the said agreement to the gift deed. It is also to be noted that stamp duty is payable on a gift deed in accordance with the provisions of the Stamp Act applicable to the state within which the said commercial property is situated. A gift deed is a compulsorily registerable document in accordance as per section 17 of the Registration Act.
Lastly, it is to be noted that the title of your daughter will always be subject to the aforementioned lacuna (i.e. the defect in your title due to non-registration of the sale deed).

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Sale deed not mandatory if property bought from builder - Livemint

What is the difference between an agreement for sale and a sale deed? I bought an apartment in Mumbai and have entered into an agreement for sale which is duly registered. Should we make a sale deed after full payment? —Jigar Shah

We are assuming that you have purchased the apartment under the provisions of the Maharashtra Ownership of Flats (regulation of the promotion of construction, sale, management and transfer) Act, 1970, (MOFA) and that you have paid 20% or more of the purchase consideration till date and that you have executed a MOFA agreement—an agreement for sale with the builder with respect to the said apartment. Further we are assuming that the said agreement for sale is adequately stamped in accordance with the relevant article contained in schedule I of the Maharashtra Stamp Act, 1958, and that the agreement for sale is registered with the applicable office of the sub-registrar of assurances.

Section 4 of MOFA requires a builder to execute an agreement for sale containing inter-alia the terms as prescribed therein with its purchasers upon receipt of consideration as stated therein with respect to the apartment agreed to be sold by the builder. Thus there is no requirement to execute a sale deed, once the agreement for sale has been executed. However, it is to be noted that in the event that you have paid only part consideration to the builder while executing the agreement for sale, you must ensure that upon payment of the balance consideration the builder gives you receipts. If you pay the balance consideration in instalments, then you must ensure that the builder issues you a receipt for every instalment.

Further you must ensure that on completion of the construction of the building and upon such number of persons as prescribed under section 10 of MOFA having purchased the flats, the builder takes steps to constitute a society or any other organization as contemplated under MOFA agreement. You must also ensure that upon formation of such organization, the builder duly executes a deed of conveyance within such time as contemplated under the MOFA agreement and if not prescribed therein then the time as prescribed under section 11 of MOFA in favour of the organization formed conveying the land on which the said building has been constructed along with the building in favour of the organization. It is also very critical not to take possession of the said apartment without an occupation certificate being obtained by the builder. You must also ensure that upon formation of the society, a share certificate is issued to you by the society stating that you are the owner of a certain number of shares. The said share certificate is to be signed by the chairman of the newly formed society.

Please note that it is only in this situation, that is upon purchase of a flat directly from the builder by executing a MOFA agreement, in accordance with the provisions of MOFA that it is not necessary for you to execute a sale deed subsequent to the execution of the MOFA agreement.

In the event that you are not purchasing a property from a builder, and are purchasing the property from a prior owner of the flat, that is either an individual or a company, it is essential that you execute a deed of transfer (or a sale deed) after the execution of an agreement for sale by the transferee and the builder. This is imperative as the deed of transfer will be your title document. In that situation, it is also advisable that you pay the full stamp duty on the deed of transfer and get the same registered with the office of the sub-registrar of assurances. It is also imperative to inter-alia take custody of the share certificates given to the owner (transferor) of the apartment and the original agreement for sale executed by the transferor and the builder and a no objection certificate from the society in which the said apartment is situated for the sale of the apartment to you and to admit you as a member of the society.

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Probate

What is it?

It is a copy of the will of a deceased person which has been certified under the seal of a court having the competent jurisdiction. The jurisdiction to probate a will lies concurrently with high courts and district courts. Once a probate is granted by the competent court, the will is validated and can be then executed by the executor. A probate is granted to the executor implied in the will, if there is no executor then the court grants a probate on the beneficiary’s demand and appoints an executor to execute the will on behalf of the beneficiaries. It cannot be granted to any person who is a minor or is of unsound mind, nor to any association of individuals unless it is a company that satisfies the conditions that may be prescribed by state government rules.

The Process

The beneficiary or the executor has to approach the court within whose jurisdiction the matter falls by filing a petition. The petition generally mentions the relation of the petitioner with the deceased, the time of the testator’s death, the assets he has left behind and the details of legal heirs and other beneficiaries. The petition is supported by attaching a copy of the last will that is to be probated, the death certificate of the testator and a supporting affidavit of at least one witness. On receipt of the petition, the court issues a notice to the relatives of the testator so that they can file objections, if any. A general notice is also published in a newspaper.

If the will is not contested, then the petitioner has to prove that the testator is dead by producing a death certificate and that the will is valid. The court then grants the probate.

Is it compulsory?

Succession law is included in the state list in the Indian constitution. Thus, the regulations pertaining to a probate are different in every state. A probate is not compulsory in all states.
For Hindus, Buddhists, Sikhs and Jains, a probate is compulsory if the will is made in West Bengal, Bihar, Jharkhand, Orissa and Assam and territories subject to the ordinary original civil jurisdiction of Bombay and Madras high courts. It is also applicable to Parsis if immoveable property is situated within the limits of the high courts of Calcutta, Madras and Bombay. If the will is made outside these regions but bequeaths immoveable property, which is located in any of the specified places, then a probate is compulsory. For a will made outside these places, a probate is not required even if it includes immoveable assets as long as the property is not located in any of the specified regions.

What it costs?

Apart from the lawyers’ fee, the courts levy 2-8% of the value of the assets. However, the upper limit is usually fixed. For instance, in the Bombay high court, the maximum fees is Rs75,000. A simple uncontested will takes about five to seven months to be probated.

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Registering a will and obtaining a probate are mutually exclusive

What is the maximum time limit for getting a probate and the chances of its success if the will is registered? Is it necessary to call witnesses of the registered will? If the distribution of assets is already made as per a registered will, is it necessary to get a probate as the same may involve stamp duty and other expenses? If a registered will says the Hindu Undivided Family (HUF) be dissolved and be distributed among coparceners who are also members, can married daughters, not shown as members in bank records, lay claim?
—B. Kumar

There is no time limit for applying for a probate or obtaining the probate. A registered will merely certifies the authenticity of the will. Against this, a probate is granted to an executor appointed in the will for the purpose of determining whether the will of a testator was duly executed and attested and whether at the time of such execution, the testator was of sound mind and was capable of comprehending the nature and extent of his actions, and establishes the genuineness of the will. So, registration of a will and obtaining a probate are mutually exclusive and your chances of getting a probate do not increase by presenting a registered will for obtaining probate.

Courts have wide powers in matters of grant of probate. If a will is challenged or disputed, the court would generally call the witnesses of a will, irrespective of whether it is registered or not, though it is not absolutely necessary to do so.

If a will has been administered, i.e. if the assets of the deceased person who made the will have already been distributed as per the will, it is not always necessary to get a probate. However, if a probate is obtained even after the distribution of assets as per the will, the acts of the executor of the will in respect of the distribution will be validated. Obtaining a probate will attract payment of court fees and not stamp duty.
One of the things to bear in mind in respect of probate proceedings is to ensure that all the evidence needed to prove the will in court is in place and that the witnesses of the will are able to testify with respect to the execution and attestation of the will. It is important to note that the court would generally also examine the witnesses to prove the soundness of the mind of the testator at the time of executing the will and the circumstances in which the will was made and executed.

Effective 9 September 2005, all daughters of coparceners in an HUF shall be coparceners in their father’s HUF if their father was alive at the time the amending provisions of the Hindu Succession Act came into force. However, if the testamentary disposition or distribution or partition of the assets of the HUF has been effected before 20 December 2004, the same shall not be affected by the amendment. So, even if the names of the daughters, married or otherwise, do not appear in the bank records, they will by birth be entitled to and can lay claim on their father’s HUF property if their father was alive at the time of the amendment of the Act in 2005.

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