Event of Fadak

After his victory at Khayber the Holy Prophet (S) decided to destroy the remaining strongholds of the Jews and thus end the danger to Islam. He therefore turned his attention to the Jewish village of Fadak, which was a fertile territory 180 kilometres north of Madina.
He sent an envoy to the elders of Fadak. The chief of the village, preferred peace and surrender to fighting. In return for the protection of the Muslims, he agreed to give half of the produce of the region to the Holy Prophet (S).
According to the rules of Islam, the lands conquered through war and military power are the property of all the Muslims and their administration lies with the ruler of the Muslims. However, those lands that are submitted to the Muslims without war, as in the case of Fadak, belong to the Holy Prophet (S) and after him, to the Holy Imam (A) of the time. They have the right to distribute such properties as they see fit. This is evident from the following verse: 
Whatever God has bestowed on His Prophet from the people of the towns is for God and the Prophet and his relatives and the orphans and the needy and the wayfarer, so that it may not circulate among the rich ones of you...
Surae Hashr, 59 : 7(Part)
The land of Fadak thus came into the possession of the Holy Prophet (S), and when the following verse was revealed, 
And give the kinsman his due, and the needy and the wayfarer...
Surae Bani Israa'il, 17 : 26(Part) 
he made a gift of Fadak to his dear daughter Bibi Fatima (A).
He did this for several reasons. Firstly, he was commanded to give his near ones their due. The Holy Prophet (S) and all the Muslims were indebted to Bibi Khadija (A) who sacrificed her entire wealth for the sake of the early Muslims. Her money had been used to spread Islam, free those Muslims who were slaves and support them in their times of trouble as in the three years of social boycott that they had faced in Makka. Now the Holy Prophet (S) could return her favours by gifting her daughter the rich land of Fadak. He also knew that after him, Imam Ali (A) would need Fadak as a source of income to safeguard his position as Caliph.
Finally, he wanted to leave some provision for his daughter and grandchildren so that they could live with dignity after his death.
However, after the Holy Prophet (S) passed away, Abu Bakr, who had stolen the right of Imam Ali (A) to the Caliphate, took Fadak away from Bibi Fatima (A). He did this to ensure that Imam Ali (A) would not have the means to regain his rights.
When her agents informed her that they had been replaced by the Caliph's men at Fadak, Bibi Fatima (A) decided to contest her right by legal means.
Abu Bakr refused to acknowledge her claim, and asked her to provide witnesses. Although she already possessed the property of Fadak and there had never been any doubt about her ownership, she brought two witnesses. These were Imam Ali (A) and a woman named Umme Ayman, about whom the Holy Prophet (S) had guaranteed that she would go to heaven.
Even then, Abu Bakr would not agree and he quoted a fake tradition saying, 
"The Holy Prophet has said, `We the group of Prophets do not inherit, nor are we inherited and what we leave is for alms.'"
This was a blatant lie and moreover no one but Abu Bakr claimed to have heard it.
Bibi Fatima (A) then gave an eloquent lecture in which she first explained about the Oneness of Allah and the nature of the mission of her father. She then proved that Abu Bakr was lying by quoting the following verse: 
And Sulaiman inherited Dawood... 
Surae Naml 27 : 16(Part)
Although Abu Bakr was ashamed of his conduct and decided to return Fadak to her, she never forgave him for his actions. She did not speak to him again as long as she lived and at her funeral six months after her father died, he was not allowed to take part as per her will.
Eventually, Abu Bakr wrote a certificate to the effect that Fadak was the absolute property of Bibi Fatima (A) and gave it to her. However, when she was going back to her house, Umar al-Khattab chanced to meet her and came to know the contents of the certificate. He brought it back to Abu Bakr saying, 
"As Ali is a beneficiary in this case, his evidence is not acceptable. As for Umme Ayman, being a woman, her testimony is also of no value on its own."
Saying this, he tore up the certificate in the presence of Abu Bakr. This action grieved Bibi Fatima (A) so much that she cursed him saying, 
"May Allah cause your abdomen to be torn in the same way."
This prayer proved fateful, because in 24 A.H., Umar was stabbed thrice in the stomach by his killer, Abu Lulu.
After this, Fadak remained in the hands of successive rulers until the time of the Umayyad Caliph Umar bin Abdul Aziz, who returned it to Imam Muhammad al-Baqir (A). However, the next Caliph took it away and it remained with the Bani Umayyah Caliphs until their rule ended. During the rule of the Bani Abbas it was returned briefly, but then taken away forever.