A will is a legal document that allows the testator to plan his succession by distribution and manner of distributing his wealth among his beneficiaries after his demise. Therefore, making a will is a responsibility owed by the testator for himself and his family. Having a well-prepared will in advance serves many purposes such as –affording financial protection to your family, saving time & costs from legal disputes and avoiding family disputes, and bringing peace.
However, unfortunate events like death could come at any time, and sometimes a person may die without preparing a will. Therefore, if the owner/testator dies without preparing any will, the distribution of wealth shall be administered by the Indian Succession Act 1925 that could be challenged and any further dispute may complicate and elongate the process of distribution even more.
The succession laws depend upon various factors such as the jurisdiction of the testator or the beneficiaries, marital status, etc. It may also happen that one of the beneficiaries doesn’t wish to claim his share in the wealth and hence desires to relinquish his claims. Then a person may do so by executing a Relinquishment Deed in favor of any co-owner under the Indian succession laws.
Relinquishment Deed- Meaning & Definition
The literal meaning of “Relinquishment” means “giving up” or “to release” something. However, in legal terms, it implies the abandonment of rights/title/claim or any interest by one co-owner of the property on behalf of other co-owner/s, thus leading to an increase in the share of wealth on the other co-owner. A Relinquishment deed is a legal document executed between any two or more co-owners of the property leading to release in the ownership or claim of ownership in the property inherited by such co-owner and transferring such ownership legal rights in favor of another legal heir be it their mother, son, daughter, brother, sister, etc.
Unlike in the case of other conveyance deeds such as a sale deed or a gift deed, relinquishment deeds are executed solely between the legal heirs of properties. Additionally, consideration is not an essential condition for the legality of a relinquishment deed. Therefore, a relinquishment deed acts as a binary contract with complex collateral for the person who is though a legal heir but decides to waive off his rights from any such claim.
Such co-owners hold legal rights are through inheritance and the deed so executed between parties –releasor & releasee. Releasor is a person who gives up his legal rights /claim he holds over the wealth & inheritance and Releasee is the person in whose favor the legal rights are being released/transferred. A releasor could be any person who has a valid claim in the property and in the case of more than one co-owners, any of the co-owner could relinquish his claim over the property subject to the condition that the releasee must be one of the co-owners/co-sharer and not any third person. For instance, Mr. A died leaving his wife B and his four sons as his legal heirs (i.e. C, D, E, and F). F desires not to claim his share and to relinquish his claim in the favor of his dear friend X. This shall not be valid as for a valid relinquishment he shall have to relinquish his share in favor of the remaining legal heirs.
Therefore, to create a valid relinquishment deed following must be kept in mind-
i. The releasor must have a valid claim in the property/wealth that he intends to relinquish in favor of the other co-owner.
ii. Such property must be owned by a joint Hindu family (membership by birth) excluding in case of property self-acquired by the father (no membership rights during the life of father).
iii. Once created, a relinquishment deed is irrevocable and cannot be revoked except in the case of certain special circumstances.
iv. A relinquishment deed could also be made in favor of a minor which shall be governed under the provisions of the Indian Contract Act, 1872.
v. A relinquishment deed can never be created in the favour of a person who is not a beneficiary or co-owner by virtue of inheritance. If such a claim is relinquished in favor of any third party, the transaction shall be considered as a gift and shall be treated as the same.
vi. The relinquishment deed so created must be express written and clear, especially in case of immovable property shall be witnessed by at least two witnesses.
vii. It is compulsory to register a relinquishment deed concerning relinquishment of rights in an immovable property. As per the provisions of Section 17 of the Indian Registration Act 1908, it is compulsory to register a relinquishment deed for the release of rights in the immovable property in the office of the sub-registrar in whose jurisdiction the property is located.
Key conceptual Differences
i. Relinquishment vs. NOC –
A NOC (no objection certificate) is a document that certifies that the signatory of the NOC has no objection towards the transfer of the property to any other person. On the other hand, Relinquishment Deed is a legal document under which a person notifies to relinquish his interest in the property in favor of any other person who should not be a person other than a co-owner of the property.
ii. Relinquishment Deed vs. Gift Deed-
Though there are some similarities between a relinquishment Deed and a gift deed, both are not the same. While a Gift Deed is created when one person gifts something(wealth, property, or anything) as a token of mutual love & respect to any person, who may or may not be a legal heir in the property, a valid relinquishment deed could only be made in favor of one or more of the existing co-owners of the property.
Secondly, it may be optional to register a gift deed depending upon the will of the parties, but it is mandatory to register a gift deed. Finally, the cost of registration of a relinquishment deed is much lesser as compared to registration of a gift deed without any kind of consideration.
What are the necessary particulars of a Relinquishment deed?
The necessary particulars of a Relinquishment Deed are as follows-
i. Description of Title
The preliminary section of the deed must include the words ‘Relinquishment deed/deed’ with the details of “date of signed and location” in the deed.
ii. Description of Parties
Since the objective of a relinquishment deed is to release the interest /claim of one co-owner and pass it to the other co-owner, it must mention the name and details (age, address, father’s name, etc.) of each of the parties (Releasor & Releasee), which may be either one or more co-owners.
iii. Details of the Property/wealth
While drafting a relinquishment deed, it is important to enter the details of the property or wealth inherited along with the name of the previous absolute owner. Further, all details related to the property such as the complete address, registration details, survey number, Sub-registrar office details like volume number, book number, office name, etc. must be mentioned.
iv. Objective or Purpose
A relinquishment deed must mention the purpose of its creation and the intention of Releasor. It may be due to the reason that the previous absolute owner of the property died “intestate” or any other reason for such relinquishment. “Releasor/Executant” releasing his claim in the property in the “favor” of Releasee out of his “natural love” and affection for the Releasee is an important clause in the Deed.
The relinquishment deed should also contain a declaration stating that the Releasor is releasing his share in the property out of his free will and his legal heirs shall have no claim in the property.
v Particulars of Legal Heir-
Next, the names and particulars such as age, address, relationship with the deceased, etc. of all the legal heirs having their rights on the property/wealth through inheritance must be mentioned.
vi. Share Particulars
The property/wealth subject to distribution among the legal heirs shall be in accordance with the Indian Succession Act 1956. However, if there is no will, the proportion of share held by each heir must be stated exclusively along with the Releasee only in the cases where all the existing heirs release their share in favor of anyone heir.
What are the advantages of registration of a Relinquishment Deed?
i. Seamless process of transfer-
Unlike in the case of other deeds, the process of transfer of property is seamless, smooth, and faster.
ii. Secure manner of transfer
The process of transfer of property through a relinquishment deed is the most secure process of transfer in case the person dies intestate and results in saving of time and costs for co-owners.
iii. Protects rights of other heirs
A relinquishment deed allows the transfer of ownership of the inherited property from a legal heir to the additional legal heirs ultimately leading to the protection of their rights.
iv. Avoid Legal Disputes
A Distribution of property through a relinquishment deed helps to avoid any legal disputes in a court of law.
What are the documents required for the registration of a relinquishment deed?
- Legal Documents related to the property
- A written statement describing the intention of relinquishment
- Details of all the co-owners of the property through inheritance
- Name and details of both parties Releasor and Releasee;
- Description of Property;
- Details on consideration involved, if any;
- Proof of identification i.e. Aadhaar Card, Driving License, Passport, etc
- PAN card of the Releasor & Releasee;
- Any other agreements entered into concerning the property in the past;
- Any other documents if required;
How to register a Relinquishment Deed in India?
It is important to register a relinquishment deed as an unregistered one is not valid and cannot be contested in a court of law unless registered. Whereas, the process of registration of a Relinquishment deed is a simple process which could be completed in a few steps as provided below-
i. The first step towards the creation of a Relinquishment Deed is drafting a relinquishment deed that has to be drafted with precision with a legal expert having his expertise and experience in the area.
ii. The drafted relinquishment deed has then to be printed on a stamp paper of a certain amount (Rs. 100 or more) after carefully mentioning every detail.
iii. Next, the relinquishment deed is to be presented before the sub-registrar of assurance having appropriate jurisdiction over the location where the property is situated. Additionally, the registration fee shall have to be paid along with the deed for which the amount varies from state to state.
iv. The sub-registrar may assess the application for registration and may fix a date of registration of the relinquishment deed.
v. On the fixed date, both parties may come to the office of the sub-registrar with all necessary documents & attachments) with at least two witnesses for the sub-registrar office.
vi. Once the registration is allowed by the sub-registrar, the Relinquishment Deed could be obtained after a week after the completion of the process.
vii. Where the parties wish to obtain registration of relinquishment deed, but one of the parties is physically challenged to be present before the office of sub-registrar. Section 31 of the Indian Registration Act 1908, allows the Registering officer to attend the proceedings at the residence of the person and complete the process of registration.
How can a Relinquishment Deed be challenged?
A relinquishment deed created once is generally irrevocable except under exceptional grounds. Such grounds are similar to the revoking of a contract as provided under the Indian Contract Act 1872, which are as follows-
i. The deed can only be revoked when there is a lack of free consent and cannot be simply set aside on any other grounds as per your whims and wishes Fraud/Misrepresentation/Undue influence/Coercion/ Any other similar grounds
ii. If the deed is to be revoked on any other ground, there must be mutual consent between the parties- the Releasor & Releasee. However, in situations where the Releasee is unwilling to cancel the relinquishment deed, he may approach the civil court for the cancellation of the agreement.
iii. A cause of action for the cancellation of a relinquishment deed must be brought within a period of three years as per the Indian Limitation Act 1963.
Conclusion
Thus, a relinquishment deed is one of the easiest ways to relinquish rights by one or more co-owners in favor of the other co-owner in the case when the original owner dies without executing a will.
