Doctrine of Escheat

Why in news?

Recently, the Supreme Court of India has delivered a landmark judgment clarifying  that states cannot invoke Doctrine of Escheat against a valid will with probate.

• Escheat – It is the right of the government to own unclaimed property and assets.
• Doctrine of Escheat - Ensures no property is left without ownership, reverting it to the state if the original owner dies without legal heirs or fails to make a will.
• Origin - Escheat originates from the Old French word “eschete,” meaning “to fall to,” referring to property that reverts to the feudal lord in the absence of legal heirs.
• The doctrine addresses two primary situations -
  • When a person dies intestate (without a will) and without heirs, and
  • When property remains unclaimed or abandoned for a specific period.
• Governing laws - In India, escheat is governed by both personal laws and statutory provisions, including the Hindu Succession Act, 1956 and Article 296 of the Indian Constitution.

Article 296 deals with property accruing to the state through escheat, lapse, or bona vacantia (ownerless goods or property).

• Types of Property Subject to Escheat -
  • Real Estate (Land, buildings, and other forms of immovable property);
  • Dormant bank accounts
  • Securities and Investments (Shares, bonds, and other financial assets that remain unclaimed)
  • Insurance Policies (Unclaimed life insurance benefits).
• Case laws governing the Doctrine of Escheat –
  • Collector of Masulipatam v. Cavaly Vancata Narrainappah (1860)
  • State of Punjab v. Balwant Singh (1991)
  • Kutchi Lal Rameshwar Ashram Trust v. Collector, Haridwar (2017)

• • State of Rajasthan v. Lord Northbrook and Others (2019)
• Raja Sardar Singh  vs State of Rajasthan case –
  • In an appeal filed by the State of Rajasthan against the judgment passed by the Delhi High Court, wherein the Court upheld the validity of the Will of Late Raja Bahadur Sardar Singh of Khetri.
  • The Supreme Court held that the State Government has no locus standi to intervene in probate proceedings or succession matters when testamentary succession exists through a Will.
  • The Court clarified that Section 29 of the Hindu Succession Act (which allows for escheat of property to the Government) would apply only in the event of a failure of heirs upon intestate succession.

Reference

Legal Affair | Doctrine of Escheat