Jurisdiction - India
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India – Guide To Private Wealth.

 14 September, 2012

 

  

1 Is a will a public document in your jurisdiction?

 
A Will only becomes a public document once probate is granted.
 
Under section 18 of the Indian Registration Act 1908, it is optional to register a Will. However, even if a Will is registered, it is still not open to the public.
 
2 What are the principal formal requirements for a valid Will or other testamentary disposition in your jurisdiction? Please include in your answer any special requirements relating to execution. 
 
Hindu Testator: The Indian Succession Act 1925 (“the Succession Act”) and the Hindu Succession Act 1956 determine the formal requirements of a Will for all Hindus.
 
Muslim Testator: The requirements for a valid Muslim Will are derived from Sharia law, and fall into two broad streams: the Shia law of succession and the Sunni law of succession. A Muslim Will can be made orally or in writing and does not require any signature or attestation. However, if a Muslim is married under the Special Marriage Act 1954, the requirements of a valid Will are governed by the Succession Act. 
 
Christian Testator: The Succession Act governs the requirements of a valid will for a Christian testator. 
 
Pursuant to the Succession Act, a Will must:
 
  • (i) Contain a legal declaration of the testator’s intention;
  • (ii) Relate to the disposition of the testator’s personal property in favour of certain persons;
  • (iii) Be reduced to writing, subject to the exceptions noted in section 3 and for Muslim Wills;
  • (iv) With the exception of a Muslim Will, be signed or marked by the testator or by some other person in his or her  presence and at his or her direction (a thumb impression or name of the testator written by a scribe, accompanied by some act or words on the part of the testator which show that it was made at the testator’s request, would be acceptable marks in this regard); and 
  • (v) Be attested by at least two witnesses who have seen the Will being signed or marked in the form noted above, or have received from the testator a personal acknowledgment that the mark or signature is his or her own or made as per his or her instructions (except Muslim Wills).
 
The table below summarises the relevant laws applicable to Hindus, Muslims and Christians.
 
  Religion  
General Law
of
Succession
Hindu
The Succession Act
The Hindu Succession Act 1956
(i) Certain aspects of succession in certain circumstances
Muslim
The Succession Act
(i) Succession for Muslims married under the Special Marriage Act 1954 
 
Sharia Law
(i) Shia Law of Succession
(ii) Sunni Law of Succession
Christian The Succession Act
 
3 In what circumstances will a court in your jurisdiction regard a Will as duly executed even though it does not fulfil these formal requirements (for example, because it fulfils the requirements for the execution of a Will in another jurisdiction)?
 
There are limited circumstances in which a Will executed in India which does not fulfil the requirements noted in section two above may be held to be valid. For example, a Privileged Will may be made either by soldiers or airmen who are employed in an expedition or are engaged in warfare, or by mariners who are at sea (section 65 to 66 of the Succession Act). Such a Will may be oral or written. An oral Privileged Will would have to be declared before two witnesses and a written Privileged Will would not usually require the signature of the testator. However, if the Will is written by a person other than the testator, it must be signed by the testator (unless it is shown that it was written at the direction of the testator or the testator recognises it as his Will). The provisions related to Privileged Wills do not
apply to Hindus.
 
4 How can a Will be amended or revoked, and what is the effect of marriage and divorce in this regard?
 
Any alterations to a Will must fulfil the requirements noted in section two above. An alteration must be signed by the testator and two witnesses in the margin or on some other part of the Will opposite or near the alteration. Codicils are also permitted in India (being a short document amending a Will). A Will may be revoked or altered by the testator at any time while he is competent to dispose of his property by Will (i.e. s/he has full testamentary capacity). 
 
An Unprivileged Will or codicil may be revoked (in part or whole) in the following ways:
 
  • (i) By execution of another Will or codicil;
  • (ii) By a written declaration expressing the intention to revoke an existing Will or codicil, and such written declaration is
  • executed in the same manner as required for a Will detailed in section two above; or
  • (iii) Burning, tearing or otherwise destroying the Will or codicil by the testator (or some other person in his presence and by his direction) with the intention of revoking the same. An Unprivileged Will that has been revoked in any manner can only be revived by the re-execution of the Will or by a codicil executed in the manner prescribed for the execution of a Will.

 

A Privileged Will or codicil can be revoked by:

 

  • (i) A subsequent Unprivileged Will or codicil;
  • (ii) Any act of the testator expressing an intention to revoke the same accompanied by such formalities as would be
  • sufficient to give validity to a Privileged Will; or
  • (iii) Burning, tearing or otherwise destroying the Will by the testator, or some other person upon the testator’s instruction, with the intention of revoking the same.
 
Marriage automatically revokes all Wills made by a person prior to the marriage. However, this provision is not applicable to a Will made by Hindus or Muslims.
 
5 Can an overseas Will govern movable and immovable assets in your jurisdiction?
 
Pursuant to section 5 of the Succession Act, a Will made by a person domiciled outside of India that relates to movable property in India must conform to the requirements of a valid Will in the testator’s country of domicile at their time of death, irrespective of where the Will is executed. However, a Will that governs immovable property in India, wherever the testator’s domicile may be, must be executed in accordance with the formal requirements found in Indian law as detailed in section two above. Also, once a foreign Will is proved in a court of competent jurisdiction, even if it does not fulfil all the requirements enumerated in our response to section two above, will be recognised by the courts in India.
 
6 Would an executor or administrator appointed in another jurisdiction be recognised in your jurisdiction as having the power to collect in assets?
 
Where a grant of probate has been issued in a court of competent jurisdiction outside of India and a properly authenticated copy of the Will is produced before an Indian court, the Indian court will re-seal the grant of probate, unless it is proven that the foreign judgement was not validly obtained. Equally, there is a similar procedure for re-sealing a grant of letters of administration. 
 
Once letters of administration or the grant of probate have been re-sealed, an executor or administrator appointed under another jurisdiction would be recognised in India as having power to execute the foreign Will.
 
7 Are there forced heirship rules in your jurisdiction?
 
There are no forced heirship rules for Hindus and Christians in India. However, Muslims recognise forced heirship rules. A Muslim can only dispose of by Will one-third of their estate, unless all heirs agree to the contrary following the death of the testator. The other two-thirds are distributed according to forced heirship rules. The intestate succession laws applicable to various communities are discussed in further detail below.
 
8 In what circumstances can an executor, administrator or equivalent be
removed?
 
Under the Succession Act, on an application by a person interested in the estate of the testator, an executor or administrator may be removed and replaced by any other person by the relevant court. However, the Succession Act does not provide for specific grounds for such removal. Indian courts require “a proper case” to be made. The courts have granted an application for removal of an executor or administrator where they are:
 
  • (i) Acting contrary to the interests of a beneficiary;
  • (ii) Acting mala fide: being guilty of misconduct, dishonesty, misappropriation of funds or gross negligence;
  • (iii) Not capable of performing their duties;
  • (iv) Claiming title to the property in conflict with the claims of the estate or the beneficiary; and
  • (v) Dispersing the property to the detriment of the interest of the beneficiary.
 
9 Other than the failure to observe the formal requirements, how else can a Will be challenged?
 
A Will can be challenged if it can be established that it was prepared and executed under circumstances which raise a “reasonable suspicion” that the testator did not express his mind under the Will. “Reasonable suspicion” depends on the facts and circumstance of a given case but Indian courts have held the following to be suspicious circumstances:
 
  • (i) Where the genuineness of the testator’s signature(s) may be in question;
  • (ii) Where the condition of the testator’s mind may be very feeble and debilitated at the relevant time;
  • (iii) Where the disposition may be unnatural, improbable or unfair in the light of relevant circumstances such as the exclusion of or absence of adequate provisions for the natural heirs without any reason;
  • (iv) Where the dispositions may not appear to be the result of the testator’s free will and mind (for example, as a result of fraud and coercion);
  • (v) Where the person benefitting from the Will takes a  rominent part in the execution of the Will;
  • (vi) Where the testator was in the habit of signing blank papers;
  • (vii) Where there is a delay in propounding the Will; or
  • (viii) Where incorrect recitals form a part of the Will.
 
10 If someone dies intestate, how are the assets administered and distributed?
 
The intestate succession of Hindus is governed by the Hindu Succession Act 1956.
In relation to Muslims in India, intestate succession is governed by Islamic law and there is no codified statute for the same. There are two principle Muslim sects in India: Sunni and Shia. The succession laws of these two sects are not entirely the same but both sects follow two basic principles:
 
  • (i) Each class of heirs excludes the next; and
  • (ii) The share of each class is determined by the rules laid down by the Quran.
 
Under Sunni Law, there are two types of heirs: principal and subsidiary. The principal class of heirs can be divided into three sub classes:
 
  • a) Quaranic heirs or sharers;
  • b) Agnatic heirs or residuaries; and
  • c) Uterine heirs or distant kindred
 
These sub-classes can be further divided into various groups and sub-groups of heirs who have specified shares of share in the property. Heirs of the subsidiary class succeed to the property only if there are no heirs from the principal class. Subsidiary class heirs can be divided into four classes: (i) successors by contract; (ii) acknowledged kinsman, (iii) sole legatee; and (iv) the State, by escheat. 
 
Under the Shia law of inheritance (which is simpler than the Sunni law of inheritance) there are three classes of heirs. Class I the heirs are parents, children and lineal descendants. Class II heirs are grandparents and siblings. Class III heirs are maternal uncles and aunts of the deceased and their lineal ascendants and descendants.
 
The classes of heirs are further divided into various groups and sub-groups of heirs.
 
Intestate
Succession
Hindu
The Hindu Succession Act 1956
The property of a male Hindu devolves in the following order of priority:
(i) Class 1 heirs (son, daughter, widow, mother); then
(ii) Class 2 heirs (father, brother, sister); then
(iii) Those related by blood or adoption wholly through males; and
(iv) If no qualified heir then the estate devolves to the State.
Muslim
Sharia Law
(i) If the deceased leaves behind heirs, the estate will be distributed in accordance with either Sunni or Shia law; and
(ii) If there are no heirs, property transfers to the State by way of bait-ul-mal (public treasury) for the benefit of Muslims only.
Christians
The Succession Act
(i) If there is no spouse or lineal descendant, the estate passes to the State according to the doctrine of escheat;
(ii) If the deceased leaves behind a spouse and lineal descendants, the spouse will be entitled to one third of the estate, while the remaining two thirds will be divided between the lineal descendants;
(iii) If there is more than one child, this portion shall be divided equally amongst the children;
(iv) If the child of the deceased has passed away, his/her portion shall pass to the grandchildren of the deceased, if s/he has any;
(v) If the deceased leaves a spouse but no lineal descendant and only persons who are kindred to him/her, the spouse inherits half of the estate (and those who are kindred shall inherit the other half); and (vi) If the deceased leaves behind a spouse but no lineal descendants or persons who are of kindred to him/her, then the whole estate passes to the spouse.
 
11 If a Will is valid, can someone who feels they have been inadequately provided for bring a claim?
 
Under the Succession Act, any person interested in the estate of the deceased can lodge a caveat with the court against the grant of probate or letters of administration. A caveat is a formal application to the court requesting the court not to grant the probate or letters of administration until the caveator is heard.Thus, a caveat gives the caveator a right to challenge the Will when the Will is produced before the court for the grant of probate. In practice, the courts give effect to the testator’s intention, as contained in the Will, after adjudicating the challenge raised by the caveator.
 
Please see our responses under section nine above, in relation to the circumstances under which a Will can be challenged. Accordingly, a Will can be challenged where the disposition is unnatural, improbable or unfair in the light of relevant circumstances like exclusion of or absence of adequate provisions for the natural heirs without any reason (this would also include forced heirship rules).
 
12 Is there inheritance tax (or equivalent such as stamp duty) in your jurisdiction?
 
No: as of the date of publication, there is no inheritance tax in India. Recent news reports have suggested that the Indian government is considering the reintroduction of inheritance tax, but the chances of this being implemented in the near future appear to be remote.
 
13 Does your jurisdiction recognise trusts or other separation of legal and
beneficial ownership?
 
Yes. India recognises the concept of a trust, and the trust regime is based upon common law principles. A private trust, under the Indian Trusts Act 1882 (the “Trusts Act”), is an arrangement whereby property is settled for the benefit of ‘beneficiaries’ and is administered by ‘trustees’. Whilst private trusts are governed by the Trusts Act, public/charitable trusts are governed by separate laws, which differ from state to state.
 
14 Is your jurisdiction a party to the Hague Convention on the Law Applicable to
Trusts and on their Recognition?
 
No.
 
15 Does a professional executor or trustee (or equivalent) in your jurisdiction
require a licence?
 
Generally speaking, no licence is required for a professional executor or trustee. Professional trustees may require certain licences, registrations or approvals depending upon the scope of activities undertaken by them. For instance, certain statutes, like the Securities and Exchange Board of India (Mutual Funds) Regulations 1996 and the Securities and Exchange Board of India (Portfolio Managers) Regulations 1993, require registration and prior approval of the
relevant authority.
 
16 What are the duties of a trustee (or equivalent) in your jurisdiction?
 
The Trusts Act imposes certain duties on a trustee. A trustee must:
 
  • (i) Fulfil the purpose of the trust, and obey the directions of the author of the trust given at the time of its creation;
  • (ii) Ensure that they are informed about and understand the nature and circumstances of the trust property;
  • (iii) Protect the title of property held by the trust;
  • (iv) Not set up a title adverse to the beneficiaries (the trustee can only claim title to the trust property in his capacity as the “trustee” of the trust);
  • (v) Deal with the trust property as carefully as a man of ordinary prudence would have dealt with such property if it was his own; and
  • (vi) Keep clear and accurate accounts of the trust property and, at all reasonable times, furnish the beneficiary with full and accurate information as to the amount and state of the trust property at his/her request.
 
Additional duties can be imposed on a trustee under the trust deed, as long as they are not contrary to the provisions of the Trusts Act. Furthermore, as a trustee is in a fiduciary position, a trustee would be obliged to act in good faith and in the best interest of the beneficiaries.
 
17 In what circumstances can a trustee (or equivalent) be removed?
 
Under the Trusts Act, a trustee can be removed in the following circumstances:
 
  • (i) By such means as may be prescribed by the trust deed;
  • (ii) By appointment of a new trustee in his place under the Trusts Act;
  • (iii) By consent, between both himself and the beneficiaries; and
  • (iv) By the court after petition pursuant to the Trusts Act.
  • Courts have recognised several grounds for the removal of trustees:
  • (i) Failure to keep accounts and furnish information;
  • (ii) Becoming insolvent;
  • (iii) Misappropriation of trust property;
  • (iv) Using trust property for the trustee’s own profit;
  • (v) Neglecting their duties as trustee and/or causing waste of trust property;
  • (vi) Setting up a title adverse to the beneficiary;
  • (vii) Being convicted or absconding because of a criminal charge;
  • (viii) Obstructing the management of the trust;
  • (ix) Becoming physically incapacitated; and
  • (x) Accepting a position as a trustee of an inconsistent trust.
 
18 To what extent can a trustee limit its liability in a trust deed?
 
Any restriction on the liability of trustees arising from a breach of the duties contained in the Trusts Act and common law would be invalid and unenforceable. A trust may limit the liability of a trustee arising from a breach of those duties which are imposed by the trust deed over and above the duties imposed by law. A trustee may seek an indemnity from the beneficiaries for the bona fide acts done by him/her for the benefit of the trust. An indemnity for a breach of duty by the trustee may be given at the discretion of either the courts or the beneficiaries.
 
19 How can a trustee protect itself if it needs to bring or defend proceedings?
 
As stated above, a trustee can seek an indemnity for the bona fide acts done by him/her for the benefit of the trust, to the extent that it is not contrary to law. Furthermore, the trustee can ensure that the beneficiaries authorise him/her to bring or defend proceedings. 
 
Under the Trusts Act, a trustee is entitled to recover the monies that s/he spends on litigation which s/he bona fide believes to be in the interest of the beneficiaries of the trust, provided s/he is not guilty of misconduct.
 
20 What regime is there in your jurisdiction if someone loses capacity e.g. a Guardianship Board?
 
A person is said to have lost capacity where s/he is of unsound mind. Whilst the eventuality of a person losing capacity is not governed by a single statute, various statutes make provision for situations where a person is said to lose capacity. If an Indian court finds that a person has lost legal capacity, that person will lose their right to make certain decisions.
 
For instance, the Code of Civil Procedure 1908 provides that a minor or a person of unsound mind can sue in a court of law through a guardian or next friend. Further, the court will appoint a guardian to represent a minor or a person of unsound mind in case a legal proceeding is initiated against that person.
 
The Trusts Act requires the trustees to get the approval of the court before dealing with the property of the trust in certain situations, such as where the beneficiaries include minors or persons of unsound mind. Likewise, a natural guardian under the Hindu Minority and Guardianship Act 1956 cannot deal with the property of the minor in the manner stated therein unless permission of the court is obtained. 
  
 
For further information, please contact:

 

Cyril Shroff, Partner, Amarchand & Mangaldas & Suresh A. Shroff & Co.
cyril.shroff@amarchand.com

  

Rishabh Shroff, Amarchand & Mangaldas & Suresh A. Shroff & Co.
rishabh.shroff@amarchand.com
   

Amarchand & Mangaldas & Suresh A Shroff & Co Dispute Resolution Practice Profile in India

 

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