A relinquishment deed would be created and registered for enabling the co-owners to legally transfer their property's share to another co-owner of the property. The co-owners of a joint Hindu property can give up their right to this immovable asset by relinquishing their ownership.
The following issues are being decided in the case:
Is an unregistered relinquishment deed valid if it relates to individual assets?
Is declaring a relinquishment deed null and void barred by limitation?
The Supreme Court has observed that the deed of relinquishment, if it is in respect of the individual interests of three brothers in the assets of the original firm, in favour of the Trust, does not require registration, even though the assets of that firm included immovable property. The deed was therefore valid without registration.
The Supreme Court held that the suit to declare the relinquishment deed null and void would be barred by limitation as it was filed in 1994, nearly 24 years after the relinquishment deed was executed.
Supreme Court of India
Commissioner Of Income-Tax, West ... vs Juggilal Kamalapat on 7 October, 1966 Equivalent citations: 1967 AIR 401, 1967 SCR (1) 784
Author: V Bhargava
Bench: Bhargava, Vishishtha
PETITIONER: COMMISSIONER OF INCOME-TAX, WEST BENGAL, CALCUTTA
Vs.
RESPONDENT: JUGGILAL KAMALAPAT
BENCH: BHARGAVA, VISHISHTHA SHAH, J.C. RAMASWAMI, V.
CITATION: 1967 AIR 401 1967 SCR (1) 784 CITATOR INFO : RF 1971 SC2486 (7) E&D 1974 SC1066 (4)
ACT: Income-tax Act (11 of 1922), is. 26A and 66-Registration of firm Legal validity of existence of firm-Question of law referable to High Court.
HEADNOTE:
Three brothers and J entered into a partnership business. The firm owned both movable and immovable properties. Later, the three brothers created a Trust, with themselves as the first three trustees. They also executed an unregistered deed of relinquishment by which they relinquished their rights in and claims to all the properties and -assets of the firm, in favour of J. and of themselves in the capacity of trustees. A new partnership firm was constituted between J. and the Trust by means of a partnership deed which specified the shares of the two partners in the profits and losses. The Trust introduced a sum. of Rs. 50,000 as its capital in the new firm. For the assessment year 1943-44 the new firm applied for registration under s. 26A of the Indian Income-tax Act, 1922 but the Income-tax Officer, Appellate Assistant Commissioner 'and the Appellate Tribunal rejected the application. The Tribunal relied mainly on the ground that the deed of relinquishment being unregistered could not legally transfer the rights and the title to the immovable properties owned by the -original firm, to the Trust and that as the immovable properties were not separable from the other business assets there was no legal transfer of any portion of the business assets of the original firm in favour of the Trust. On a reference to the High Court, as to whether the new partnership legally came into existence and, as such, should be registered, it was contended on behalf of the Commissioner that the Tribunal had recorded a finding of fact that the firm seeking registration was not a genuine one and had never come into existence. The High Court, after calling for further statements, held that the Tribunal had not recorded any such finding of fact, that the firm did in fact come into existence, and that there was no impediment to its registration. in appeal to this Court
HELD : (i) The existence of a firm could be challenged on two alternative grounds; (a) that a firm had not come into existence at all, and (b) that though it came into existence in fact, its existence was not valid in law. In the present case it was only the second question that was referred to the High Court. The first could not at all be referred to the High Court as it would be a pure question of fact; and if the Appellate Tribunal had in fact recorded a finding of fact that the firm had not come into existence, the question of law referred to the High Court, would not arise at all. Therefore, the new firm did in fact come into existence.
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A relinquishment deed is governed by the Registration Act, 1908. As per Section 17(1)(b) of the Registration Act, 1908, an instrument using which a right is either created or transferred concerning immovable property must necessarily be registered. Hence, a relinquishment deed should mandatorily be recorded to give the required legal validation.
A relinquishment deed is a legal document/instrument where a legal heir gives up or releases his legal rights in an inherited parental property for another legal heir such as his mother, son, daughter, brother, sister, etc. It is a complicated document and must be prepared and filed with the help of a documentation lawyer to avoid any discrepancies.
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