The Karnataka High Court held that the transfer of property by way of settlement deed is permissible among Muslims.

The Court further held that the Muslim Personal Law (Shariat) Application Act, 1937 does not override Section 2(q) and Article 48 of the Karnataka Stamp Act 1957, which deals with the contract of “settlement”.

The Court held thus in an appeal filed against the judgment of the Trial Court by which it held that the transfer of property through settlement deed is impermissible among Mohammadans.

A Single Bench of Justice Anant Ramanath Hegde observed, “When the Act of 1937 was brought into force, the Indian Stamp Act, 1899 (for short Act of 1899) was in force. The said Act of 1899 also recognised the “settlement”. The term “settlement” defined in Section 2(24) of the Act of 1899 is in substance similar to the definition of the term “settlement” in Section 2(q) of the Act of 1957. This being the position, the Court has to hold that the Act of 1937 does not override the provisions of the Act of 1957. Thus, the transfer of property by way of “settlement” as defined under the provisions of the Act of 1957 is very much permissible even among the Mohammadans.”

The Bench said that any contract that is neither recognised nor forbidden in Sharia law; and which is expressly recognised in a Law that is religion-neutral, then such contract should be held permissible under the religion-neutral law, irrespective of their religious faith including Mohammadans.

Advocate Manu Kulkarni appeared on behalf of the appellants while Senior Advocate Vikram Huligal appeared on behalf of the respondents.

Facts of the Case -

The suit was one for partition and separate possession by which the plaintiff claimed 1/4th share out of 7/8th share in the property. The suit was decreed as prayed and being aggrieved by the same, the defendants approached the High Court. A man named T.A. Abdul Jabbar was the propositus and he had three wives. When he died in 1968, his first wife was divorced, his second wife was not alive, and his third wife was alive. A suit was filed by his daughters from his third wife and the defendants were his son’s (T.A. Abdul Rasheed) sons. The deceased man had executed a deed of settlement in 1965 in favour of his grandsons and all were children of Abdul Rasheed.

Thereafter, he executed another settlement deed in favour of his son and Rs. 5,000/- were given to his third wife. One more settlement deed was executed by him in favour of his minor daughters (plaintiffs). All the settlement deeds were registered under the Registration Act, 1908 and the suit was filed, claiming a share in the properties covered by the second settlement deed. The defendants resisted the suit and contended that the same was barred by limitation. The Trial Court held that there is no concept of transfer by way of ‘settlement’ to settle the properties among Mohammadans. Accordingly, the suit was decreed, ordering partition of all the properties covered under the settlement deed.

The High Court in the above context of the case noted, “It may be true that a contract resembling a “settlement” or a transaction which squarely falls within the definition of a “settlement” under Section 2(q) of the Act of 1957 may not find reference in the Quran, or any other religious prescription for that matter. The Shariat law which is believed to be the divine instructions of the Almighty may not envisage all types of contracts which are recognised under contemporary law. That does not mean that the contract entered through a ‘deed of settlement’ is impermissible among the Mohammadans.”

The Court added that what is not expressly recognised in Shariat law is not necessarily something which is forbidden and it may still be in tune with the philosophy of the Quran.

“Section 2 of the Act of 1937 provides that on the matters specified in the said Section, the Muslim Personal Law (Shariat) will prevail over any usage or customs to the contrary. In other words, the overriding effect is only in respect of any usage or customs contrary to the Shariat Law and not on any Statute passed by competent legislature”, it said.

Furthermore, the Court observed that the transaction namely the "contract of settlement" is not covered in Section 2 of Act of 1937, though reference is made to gifts, trusts, and trust properties and wakfs other than charities and charitable institutions and charitable and religious endowments.

“In other words "settlement of property through a settlement deed" other than gift and trust is kept out of the ambit of Section 2 of the Act of 1937. Assuming that there is anything in Shariat law forbidding the contract of settlement, then also same is not saved under the Act of 1937. … There is yet another angle to the point involved. The Act of 1957 has conferred the right to enter into transactions referred to in the said Act including the ‘Contract of settlement’ on all persons (subject to fulfillment of other criteria) irrespective of their religious faith or belief. The interpretation that the Mohammadans cannot enter into ‘Contract of Settlement’ recognised under the Act of 1957 violates the right guaranteed under Article 14 of the Constitution of India”, it also enunciated.

The Court, therefore, said that T.A. Abdul Jabbar, who settled his properties vide settlement deeds, was competent to execute the same and the Trial Court erred in holding that the settlement deeds were not recognised among the Mohammadans.

“Out of the three settlement deed executed by their father, having received the benefits under one of the settlement deeds, the plaintiffs have selectively chosen to assail the other settlement deed executed by their father which does not confer benefit to them. Thus, the plaintiffs cannot be permitted to assail another settlement deed by their father which does not confer benefit to the plaintiffs. … In the present case, the deed of settlement in question cannot be construed the one executed in apprehension of illness which is the cause of death of the settler”, it held.

The Court concluded that the settler died 2 years 10 months after the execution of the settlement deed and there is nothing on record to hold that it was an instrument executed on a death bed.

Accordingly, the High Court allowed the appeal and set aside the impugned judgment and decree.

Cause Title- Sultan Mohiyuddin & Ors. v. Habeebunnissa & Ors.


Appellants: Advocates Manu Kulkarni, Kesthur Sudarshan, and Amrita Aryendra.

Respondents: Senior Advocate Vikram Huligal and Advocate Mohammed Tahir.

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