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All You Need To Know About Sale Of Property In Case Of Partition

All You Need To Know About Sale Of Property In Case Of Partition

All You Need To Know About Sale Of Property In Case Of Partition
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For various reasons, a court of law may come to a conclusion that a partition suit may not be able to lead to a successful partition of the property. It may then direct the sale of such property following rules as laid out in the Partition Act, 1893.

A court can mandate the sale only under the following circumstances:

1)   The partition suit had been filed before 1893,

2)   The nature of the property is such that it cannot be partitioned,

3)   A large number of shareholders,

4)   A decree for partition has been made before, or

5)   Any special circumstance recognised by the court.

In the event of any of the above, the court may deem fit that distribution of proceeds may be beneficial to the concerned parties. In some cases, the shareholder might feel the need for sale of the said property and may request for it.

Now there can be many situations once the decision to sell and distribute the proceeds has been taken:

When a sharer undertakes to buy:  If a shareholder says that they would like to buy, the court can order a valuation of the share/s and sell it at an ascertained price.

When there are multiple shareholders willing to buy: Suppose there are two or more shareholders who want to buy, the court will order the sale to the shareholder who is ready to pay the highest price for the property. This amount would be higher than the price ascertained after the valuation is conducted.

If no shareholder is willing to buy: It may so happen that none of the shareholders may be willing to buy the property. In such a case, the applicant will be liable to bear the costs incident to the application.

If the transferee files a partition suit: If the property share of an undivided Hindu family had been sold to someone who is not a member of this family and if this non-member (transferee) files a partition suit, the court can direct a willing shareholder (family member) to buy this property after a valuation. All necessary directions in this regard are also overseen by the court. Likewise, if there are multiple shareholders willing to buy this property in question, the party that is willing to pay the highest will be preferred as a purchaser.

Request for sale/application to buy on behalf of a member: You can always authorise any capable person to act on your behalf and file a partition suit. However, a court of law is not bound to accept such a request, application or an undertaking unless it recognises that it is for the benefit of the party.

Court reserves the bidding amount: All kind of sale is subject to a reserved bidding and the amount is fixed by the court. This may vary from time to time. Shareholders can also bid at such a sale citing non-payment of deposit or setting off the purchase-money or accounting for the purchase money.

The shareholder, however, is always at an advantage if a non-member has bid the same sum at such a sale.

Rules behind sale dependent on jurisdiction

The Registrar will oversee the sale of the property if it is sold after an order from the High Court of Calcutta, Madras of Bombay. If the property is sold under the order of any other court, then the sale of property shall be conducted on the basis of rules prescribed in the Code of Civil Procedure or rules formed by the High Court from time to time.

Those partition suits (pending suits) that were filed before the commencement of the Partition Act and in which partition has not been finally approved also come under this Act.

Can the property be partly sold?

In any partition suit, if the Court deems it fit, the property can be partly partitioned and partly sold as well. The Court will order a decree to this effect.

Note that the Partition Act applies to all of India except Jammu and Kashmir. However, if there are any local laws of any state that monitors the partition of immovable property, these would be adhered to without compromise.

Last Updated: Sat Aug 29 2020

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