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Project Report
On:
HINDU GAINS OF LEARNING
Submitted to:
Submitted by:
Sarika Munje
Associate Professor
VI Trimester
Family Law
2012BALLB01
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TABLE OF CONTENTS
Contents
TABLE OF CONTENTS...........................................................................................................2
INTRODUCTION......................................................................................................................3
MEANING OF GAINS OF LEARNING..................................................................................3
SIGNIFICANCE IN HINDU JOINT FAMILY.........................................................................4
REASON FOR CONFLICTING VIEWS..................................................................................5
CLASSICAL POSITION...........................................................................................................5
JUDICIAL POSITION BEFORE 1930.....................................................................................6
CASE ANALYSIS.................................................................................................................7
Durvasula Gangadharudu v. Durvasula Narasammah and Ors.(1872)..............................7
Amar Nath And Gokulchand vs Hukam Chand Nathu Mal (1921)...................................8
PASSING OF HINDU GAINS OF LEARNING ACT, 1930....................................................9
FEATURES OF THE ACT........................................................................................................9
JUDICIAL POSITION AFTER THE ACT..............................................................................10
Chandrakant Manilal Shah And Another Vs. Commissioner Of Income-Tax(1992)......10
Balbir Singh Uppal and Another Vs. Gurmeet Singh Uppal and Others(2012)...............11
Shri Raj Kumar Singh Hukam Chandji Vs. Commissioner of Income-tax, Madhya
Pradesh(1971)..................................................................................................................12
CRITICAL ANALYSIS...........................................................................................................14
CONCLUSION........................................................................................................................15
BIBLIOGRAPHY....................................................................................................................16
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INTRODUCTION
Gains of learning or the acquisition of property by means of learning renders confusion with
regard to the Hindu Undivided Family which is a peculiar and general feature of Indian
society. Whether the property acquired because of the learning funded by and to the detriment
of the joint family funds accrues to the joint family property or the separate property of the
coparcener was much debated.
This confusion was sought to be solved by early classical texts and later through the
interpretation of such texts by the Courts. The position was not clear yet because of the
presence of a large number of texts with conflicting views and also different interpretations of
the same by the courts. This question affected a large number of people in enjoying the gains
of their learning or to gain the returns from their investment. This led to the passing of the
Hindu Gains of Learning Act, 1930.
The position became clear to a large extent as the gains of learning were declared as the
exclusive property of the acquirer. But still certain confusions loomed large which has been
seen through a few cases and decided by the courts by applying their discretion.
The features of this Act and their application has been seen along with its critical analysis.
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CLASSICAL POSITION
Even in the ancient times there are conflicting views with regard to the treatment of Gains of
Learning as a Separate Property or Coparcenery Property. While Narada expressly provided
that1:
He who maintains the family of a brother while that brother was engaged in study, shall get
a share from the latters money that he makes with the help of this learning.
Some Shastric texts provided that what is acquired at the expense of the joint family funds
would be partible at the instance of the family members, while providing for distinction
between general and special learning.2
A different view altogether has been put forward in these words by Manu, Mayukha,
Jimutvahana:
What a brother has acquired by his labour without using the patrimony, he need not give up
to co-heirs; nor what has been gained by science.
Also it has been given by Vyasa that what a man gains by his own ability without relying on
the patrimony, he shall not give up to the co-heirs, nor what he gained by learning.
3 Prime Minister (Luximon Row Sadasew v. Mullar Row Bajee (1831) 2 Khapp 60
4 Ghalakonda Alasani v. Chalakonda Ratnachalam (1864) 2 M.H.C.B. 56
5 Lachmin Kaur v Debi Prasad (1898) ILR 20 All 435
6 Jugmohan Das v Mangaldas (1886) ILR 10 Bom 528
7 Burga Bat Joahi v. Ganesh Dat Joshi (1910) I.L.K. 34 All. 305
8 Lachman Kuar v. Bebi Prasad (1897) I.L.R. 2 All 435
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CASE ANALYSIS
Durvasula Gangadharudu v. Durvasula Narasammah and
Ors.9(1872)
Facts:
This case came in appeal before the Madras High Court against the decision of Civil Judge of
Vizagapatam on the issue of whether the professional earnings of a Vakil were generally his
self-acquisition and impartible. The lower court held the acquisition out of professional
earnings to be impartible on the ground that the deceased brother- Latsanna received nothing
further than an ordinary general education from his parents; that he was not indebted in any
other way to the family means for his position, but on the contrary that by his management of
the family affairs he had been able in reality to increase the common stock, and had in no way
been a burden upon it.
Decision:
Kindersley, J gave the decision in favor of the appellant and held that the question must be
decided upon the facts in each case, how far the common family means were instrumental in
enabling the professional man to earn the property which is claimed as subject to partition.
Although it has been found that the deceased received from his father nothing more than a
general education but it does not appear that he was distinguished by his professional
learning; and it would be difficult to presume that a Vakil would probably be possessed of
much learning or skill.
The fair presumption would be that such attainments as the Vakil possessed had been
acquired with the assistance of the family means, and this presumption does not seem to be
rebutted in this case by evidence of the acquisition of such attainments without such
assistance. He was, therefore, of opinion that the professional earnings of the Vakil in the
present case would be subject to partition.
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It is retrospective in operation, and all gains of learning whether made before or after the
said date, constitute the self-acquired property of the person acquiring them.
Moreover, under the said Act, the term learning is given a wide meaning to mean all types
of education, whether elementary, technical, scientific, special or general, and training of
every kind for pursuing any trade, industry, profession or avocation in life.
The gains of learning includes all acquisitions of property, made substantially by means of
learning, whether such acquisitions be the ordinary or extraordinary results of such learning.
Thus the source of learning was made irrelevant.
Decision:
The court dealt with the question that whether skill and labour can be equated with
property. It reiterated the position with regards to gain of learning that at the detriment of
the joint family property was to be a part of joint family property before the
commencement of the Hindu Gains of Learning Act of 1930.
The definition of the term "learning" in the Act is very wide and almost encompasses
within its sweep every acquired capacity which enables the acquirer of the capacity "to
pursue any trade, industry, profession or avocation in life." It cannot be denied that skill
and labour involve as well as generate mental and physical capacity, varying from
individual to individual. It is by utilisation of this capacity that an object or goal is
achieved by the person possessing the capacity which is a benefit. This benefit accrues in
favour of the individual possessing and utilising the capacity which can be utilised even for
the benefit of some other individual.
When an individual contributes cash asset to become a partner in a partnership firm in
consideration of a share in the profits of the firm, such contribution helps and, at any rate,
is calculated to help the achievement of the purpose of the firm, namely, to earn profit. The
same purpose is, undoubtedly, achieved also when an individual in place of cash assets
contributes his skill and labour in consideration of a share in the profits of the firm. Skill
and labour are by themselves possessions. Therefore, the mental and physical capacity
generated by skill and labour of an individual and indeed the skill and labour by
themselves would be the property of the individual possessing them. They are certainly
assets of that individual and there seems to be no reason why they cannot be contributed as
a consideration for earning profit in the business of a partnership firm. They certainly are
not the properties of the Hindu undivided family but are the separate properties of the
individual concerned. The partnership was therefore held to be valid.
Balbir Singh Uppal and Another Vs. Gurmeet Singh Uppal and
Others12(2012)
Facts:
Late Hakim Dewan Singh Uppal was residing in an area which is now Pakistan and owned
ancestral properties there. On his retirement from government service in the year 1934,
Dewan Singh, who had knowledge about herbal medicine started practicing as a Hakim. As
the practice expanded, Arjan Singh, the defendant started assisting him. On partition of the
country in the year 1947, Dewan Singh migrated to India and settled in Delhi and expired on
11.05.1955. Sometime before his death, Dewan Singh had gifted a sum between Rs.10,000/to Rs.15,000/- to Arjan Singh for setting up the family business i.e. of Hakim as also for
purchasing some properties. Utilizing a part of the said sum, he started the family business of
12 RFA(OS) 73 OF 2010
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Hakim under the name and style of M/s Sewak Pharmacy and was assisted by his younger
brother Amar Singh.
The business of Hakim carried on by Arjan Singh flourished and yielded good income and in
due course of time the plaintiffs also joined the said family business. Between the years 1969
to 2005 Arjan Singh acquired other properties from the income derived by him from the
aforesaid family business and the compensation received by him from the ancestral properties
left behind in Pakistan.
The question was that whether it could be said that income earned by Arjan Singh from the
business of Hakim was joint family business since he had started the said business with the
capital given to him by his father?
Decision:
The answer to this question was given as a NO by the Delhi High Court for the reason that
Arjan Singh earned his income from the learning of herbal remedies acquired by him, and
capital if any, given to him by his father only facilitated him to earn an income from the
learning acquired by him. In fact, the use of the word 'business' for the work of Hakim carried
on by him is a misnomer. He was practicing the profession of Hakim, in that, he was
rendering service of medical advice relating to herbal remedies to the people suffering from
diseases. In a profession, the capital of a professional is his competency and specialized
knowledge of his profession.
In every business there is a use of learning. What needs to be seen is the dominant source of
the earning from a business: Whether it is from learning or from the capital. If the capital is
the dominant factor for the earning derived from the business and such capital was given
from the joint family funds, the earnings from the business would be the income of the joint
family. While in case where dominant source of the earnings derived from the business is
learning, such earning would be the income of the acquirer, irrespective of the fact whether
the learning was acquired or business was started by the acquirer from the joint family funds.
Shri Raj Kumar Singh Hukam Chandji Vs. Commissioner of Incometax, Madhya Pradesh13(1971)
Facts:
The assessee in this case is a Hindu Undivided Family. Previously a Hindu Undivided Family
was carrying on several business under the name and style of Sarupchand Hukamchand. That
family disrupted on March 30, 1950. On March 31, 1950, a company under the name and
style of Sarupchand Hukamchand Private Ltd. was incorporated for the purpose of
acquisition from M/s. Sarupchand Hukumchand, certain managing agencies, businesses,
factories and property by assessee which is the branch of that family
13 AIR1971SC1454
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CRITICAL ANALYSIS
The passing of the Hindu Gains of Learning Act, 1930 has removed the confusion with regard
to the nature of acquisition made from the learning of the individual to be his separate
property and not joint family property even if the learning was made from and to the
detriment of the joint family funds.
However the need for such legislation was not only to protect the interest of the individual
but also that of the joint family which makes the expenses on the individual with an
expectation of returns in future. Thus the Act does not provide blanket permission to a
coparcener to invest the joint family funds, after learning, into an establishment and make
that his exclusive source of living. But the interest of the coparcener in application of his
knowledge and efforts is also protected. So to protect the dual interest, the following scheme
came to be accepted:
A private enterprise set up by the coparcener with the help of joint family funds, the
profits or gains of such establishment shall be joint family property.
If in the same establishment, the coparcener receives salary or emoluments for
rendering services, then it will be distinct from the income of the business or
establishment and will be his separate property.
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The test to determine whether the salary is in the nature of individual or joint family property
is that whether there is a nexus between emoluments to the coparcener and detriment to the
joint family property. This instils an application of discretion by the courts to determine such
nexus.
As seen in the above cases, the courts have applied this principle differently. While in one
case of profits from family business of a Hakim was considered to be his separate property
irrespective of the fact that the funds were contributed by the joint family funds.
The tendency of the courts has gone in a completely different direction from that followed
prior to the Act. The Act has now come to be applied more in the favour of individual rather
than the family. The courts therefore need to be vigilant in the application of the Act to ensure
the balance of interests of both the contending parties.
CONCLUSION
The Hindu Gains of Learning Act, 1930 has crystallized the position with regard to the nature
of acquisition made from the learning of the individual to be his separate property and not
joint family property even if the learning was made from and to the detriment of the joint
family funds.
It has further provided for safeguards to ensure that the interest of the joint family property is
not prejudiced irrationally. Thus the Act is a welcome step which has removed doubts and
provided an equitable solution. The learning by a person, apart from funds, also requires
mental and physical capability and efforts, sincerity and dedication on the part of the learner.
Also the talent to utilize this learning into earnings is dependent on a number of other factors
which is not sure in all cases. The efforts of the individual coparcener should therefore accrue
to him even if the learning was financed by the joint family funds. On the other hand, an
establishment funded from the joint family funds should, on account of investment made by
them; the profits should accrue to them.
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The Act and its interpretation by the court have therefore balanced the dual interest of the
joint family and the individual which is an appreciable step.
BIBLIOGRAPHY
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