INDEX
|
S.
NO. |
CONTENT |
PAGE
NO. |
|
1. |
BACKGROUND OF
THE CASE |
4 |
|
2. |
BRIEF
FACT OF THE CASE |
5 |
|
3. |
ISSUE |
6 |
|
4. |
CONTENTIONS
OF THE PARTY |
6-8 |
|
5. |
JUDGMENT |
8 |
|
6. |
ANALYSIS
|
9-10 |
|
7. |
CONCLUSION |
11 |
BACKGROUND OF THE CASE
Sections 19 [1]and
21 [2]of
the Transfer of Property Act, 1882, establish a number of rules to ensure that
the beneficiaries' interests are protected by a trust. A beneficiary's interest
may be contingent, i.e., contingent on the occurrence or non-occurrence of a
subsequent condition, or it may be vested. When a judgement-debtor is governed
by or vests his authority in a determinate deed of trust that is contrary to a
situation contingent, the judgement-debtor may be governed by Sections 19 and
21 of the Transfer of Property Act, 1882, as well as Section 120 of the Indian
Succession Act, 1925.[3]
In general, the
legality of vested interests is determined under Section 19 of the Transfer of
Property Acts. Vested interest can be characterized as an interest that is
based on a person's benefit, but the circumstances for fulfilling it are
conditional. It was noted in the case of In the case of Lachmanv. Baldeo [4]It
was discovered that when an individual was given a gift deed, the same objected
and saw the deed through to completion when certain obligations were met. The
sort of transfer and interest held by the transferee in this case is contingent
and vested, and thus comes under Section 19 of the Transfer of Property Act,
1882.
Section 20 of the Transfer
of Property Act of 1882 discusses vesting a property in the name of an unborn
child, and it has been noted that in order to do so, a prior life interest must
be established. According to classification, the Transfer of Property Act
primarily deals with the alienation of property and prohibits the buildup of
property.[5]
The case of Rajesh Kanta Roy v. Shanti Debi [6]expands
and clarifies the scope of Sections 19 and 21 of the Transfer of Property Act
of 1882.
FACTS
In
this case, the Appellant, Ramani Kanta Roy, had his name emblazoned on multiple
properties. RajesKanta Roy, Rabindra Kanta Roy, and RamendraKanta Roy were the
names of the Appellant's three children. Rabindra Kanta Roy, one of the
offspring, died without a legal representative in the early 1930s, leaving
behind his wife, Santi Debi. Ramani Kanta discovered and created a separate
fund in the name of the properties owned by her relatives in the early
1930s.Rabindra's widow initiated a civil suit against the rest of the family
following his death, claiming that because there were no legal representatives,
she was entitled to Shebait after her husband died.
The
Civil Suit was decided in favor of Rabindra's wife. However, in the late 1900s,
Ramani and his two children, Rajesand Ramendra, filed a lawsuit against the
widow of Rabindra Kanta Roy, requesting that the above-mentioned order be set
aside as null and void. The suit of Rajesh and Ramendra was founded on the fact
that the marriage rituals between Rabindra Kanta Roy and his wife lacked legitimacy
and were performed inside prohibited relationships[7].Ramani
used a registered trust deed in lieu of all the properties owned by the parties
and the family in the civil suit while the case was still ongoing. Rajesh was
then offered the position of sole trustee for the properties, subject to
certain conditions.
Ramani
died shortly after the trust deed was registered and put into effect. Ramani's
death certificates did not match those listed on the registered sale deed. In
the civil case, the widow chose to forego her rights under the conflicting
executed decision in exchange for a monthly maintenance payment. The decree was
executed on the contingent condition, that if the widow does not secure the
monthly maintenance, she would be moving forward with the execution of the
previous sale deed.Her monthly maintenance payment was late, so she filed a
decree with the court, requesting that proper actions be taken to ensure
justice. Under Section 47 of the Code of Civil Procedure, 1908, the execution
of the deed was requested to be secured by the attachment of existing
properties. Ramendra used restraint and refused to carry out the decree.[8]
The
Subordinate Court issued an order declaring Rajes's objections to be unlawful
since they were contrary to the provisions of the law. The prior decree was
overturned when an appeal was filed in the High Court of Calcutta against the
same order. As a result, in the succeeding case, Rajes is the Appellant in
front of the Hon'ble Court, while Shanti Debi and Ramendra are the Respondents.
ISSUES
Following
are the pertinent issues in the given course of appeal:
· Whether
Ramani should be entitled to the monthly maintenance?
· Whether
the previous sale deed can be executed?
· Are
the objections raised by Rajes valid i.e. the civil decree herein passed has
beenpassed by ultra vires means?
·
whether the interest of the two sons was
vested or contingent?
CONTENTIONS OF THE PARTIES
The
contentions raised are that, on a genuine development of the terms of. the
trust deed the interest of the judgment-debt holder, Rajes, (1) in the
properties covered by the trust deed, and (2) specifically, in property No.
44/2, Lansdowne Road looked to be appended, is just an unforeseen one and thus
not connectable. That a simple unforeseen interest however adaptable entomb
vivos isn't connectable is very much settled since the Privy Council choice in
PestonjeeBhicajee v. P. H. Anderson[9].
The inquiry regarding whether the interest of the judgment-account holder,
Rajes, for this situation is vested or unforeseen, is one not completely
liberated from trouble. Yet, it is well to see at the start that this point has
not been brought up in the appeal documented by the judgment-indebted person,
Rajes, under section 47 of the Code of Civil Procedure.[10]
What is expressed in that is simply the accompanying "Under the said deed
of trust, the judgment borrower cares very little about the property aside from
that of a trustee and as such the announcement holder can't continue for
acknowledgment of her supposed contribution against the said property."
The
protest in this structure is clearly illogical and has not been encouraged in
any of the court’s underneath. To be sure, if under the trust deed the
judgment-account holder has a useful premium, it isn't questioned that such
gainful premium would be append able given it is personal stake and not an
unforeseen interest.
The
judgment of the executing court, in any case, shows that what was managed there
is the conflict that the interest under the trust deed was a simple
anticipation rather than a personal stake.
The
Court held that the interest which the judgment-borrowers had in the property
by ethicalness of the deed of trust was not a simple hope. On appeal to the
High Court, none of the grounds set out in the allure reminder thereto
identifies with this inquiry. The High Court, notwithstanding, managed the
matter on the balance that the inquiry is whether the interest of the
judgment-debt holder under the deed of trust is a vested instead of an unexpected
interest. It doesn't appear to us that inquiry in this structure ought to have
been permitted to be raised. Its assurance might well rely on the inquiry
whether as a reality the possibility recommended has vanished by ideals of resulting,
vents. Nonetheless, since the point has been permitted to be raised and the
choice of the High Court is given on the balance of the matter being
exclusively one of development of the report, we continue to think about it.
The
assurance of the inquiry as, to whether an interest made by such is deed is
vested or unexpected must be directed for the most part by the standards
perceived under sections 19 and 21 of the Transfer of Property Act, 1882, and
sections 119 and 120 of the Indian Succession Act, 1925. The learned Judges of
the High Court depended on outline (v) to section 119 of the Indian Succession
Act and the choice in Ranganatha Mudaliar v. A. Mohana Krishna Mudaliar[11].
The learned Solicitor General showing up for the appealing party before us has
asked that there is no such unbendable law and order as is expected by the High
Court, viz., that " disregarding a condition requiring installment of
obligations before the property arrives because of the donee, the gift is a vested
one." He caused us to notice the way that both section 19 of the Transfer
of Property Act and section 119 of the Indian Succession Act obviously
demonstrate that if "an opposite goal shows up" from the report that
will win.
JUDGEMENT
The
Supreme Court held that under the trust deed the interest conferred upon the
two sons was a vested interest. The Supreme Court observed that the scheme of
the trust deed was that the enjoyment was to be restricted until the debts are
discharged. What was postponed was not the vesting of the property but the
income thereof burdened with certain monthly payments and with the obligation
to discharge debts there from. The Court further observed that since it was
provided in the deed that if either of the two sons died before full payment of
debts, his heirs were entitled to get their shares the interest of the sons was
a heritable interest. And, since the interest conferred upon the two sons was
made heritable, their interest was vested.
Therefore,
the interest taken by Rajes and Ramendra under the trust deed was vested not
contingent. It is nothing but sort of spes succession and the interest of the
life estate holder in the property during his life time was vested interest.
ANALYSIS
We
are clearly of the opinion that the objection raised to the execution on the
ground that the properties charged are to be proceeded against, in the first
instance, and on the ground that the interest which Rajes gets under the trust
deed either as regards the general properties covered by the deed or as regards
premises No. 44/2, Lansdowne Road, is contingent, are untenable. If, as a fact,
either the debts remain undischarged or the alternative accommodation has not
so far been provided, how the rights of persons affected thereby are to be
safeguarded is not a matter that arises for consideration before us and we
express no opinion thereupon.
800/-
and Rs. 700/- to Ramendra per month.” a sum of only Rs. 1,500/- out of the
income is set aside for the benefit of the members of the family and hence by
implication the rest of the income is to be applied towards discharge of the
debts. For payments out of the income in the event of death either of Rajes or
of Ramendra before the liquidation of debts. Clause 10 provides for residence
of the family as long as debts are not fully paid off. Clause 11 authorizes the
trustee to sell, mortgage, or give a long lease of any of the properties for
payment of the debts.
The
determination of the question as, to whether an interest created by such is deed
is vested or contingent has to be guided generally by the principles recognizedunder-.
19 and 21 of the Indian Succession Act clearly indicate that if “a contrary
intention appears” from the document that will prevail. He has also drawn our
attention to the case in Bernard v. Montague (2) in which it was held, on a
construction of the terms of the trust, that the payment of the debts was a
condition precedent to the vesting of the interest devised therein.
It
is, permissible, therefore, Under cl. 14
of the trust deed the settlor provides for the devolution of the trusteeship in
case his son, Rajes, died before the liquidation of the debts and says that on
the death of Rajes, Rajes's wife and Ramendra, are to become joint trustees and
that on the death of either of them the surviving trustee shall be the sole
trustee. There is no provision for any further devolution of trusteeship in the
contingency of such sole trustee also dying before the liquidation of the
debts. The absence of any such provision may well be taken to indicate that, in
the contemplation of the settlor, the debts would be discharged and the trust
would come to an end, in any case, before the expiry of the three lives
mentioned therein, i.e., Rajes, his wife and Ramendra,. While, therefore, the
settlor does appear to have attached considerable importance to the liquidation
of debts, there is nothing to show that he was apprehensive that the debts
would remain undischarged out of his properties and its income and that he
contemplated the ultimate discharge of his debts to be such an uncertain event
as to drive him to make the accrual of the interest to his sons under the deed
to depend upon the event of the actual discharge of his debts.
In this context there are also other
provisions in the trust deed which are of great significance.
1.
The two sons, Rajes and Ramendra, are not completely excluded from any benefit
out of the settlor's estate until the debts are discharged and the trust comes
to an end. It is provided that each of them has to be paid a specific amount
per month out of the properties, i.e., Rs. 300/- and Rs. 200/- during the
settlor's lifetime and Rs. 800/- and Rs. 700/- after the settlor's death.
The
net result of the provision, therefore, is that whenever the alleged
contingency of discharge of debts may disappear the person on whom the interest
95 would devolve would, in the normal course, be the very heir (the lineal
descendant then surviving or the widow) of Rajes. The actual devolution of the
interest, therefore, would not be affected by the alleged contingency. That
being so, it is more reasonable to hold that the interest of Rajes under the
deed is vested and not contingent.
This
view is confirmed by the fact that under the compromise decree which is now
sought to be executed both the judgmentdebtors, Rajes and Ramendra, created a
charge for the monthly payment to Santi Debi and agreed to such charge being
presently executable. This shows clearly that they themselves understood the
interest available to them under the trust as a vested interest.
In
the course of the discussions before us a number of other possibilities which
may arise with reference to the actual terms of the deed were closely examined
with a view to test how far they fit in with one view or the other of the
nature of interest in question. But even such an elaborate consideration of the
possibilities did not throw any further light on the question at issue. We are,
therefore, of the opinion that in so far as the interest of Rajes is concerned
in lots I to IV under the trust deed, it is vested and not contingent.
CONCLUSION
When
a property is transferred it involves transfer of interest, if the interest
transferred are immediately it is vested interested. From the point of view of
time of accruing. In a vested interest as soon as transfer is complete the
interest accurse to transferee with immediate effect and the transferee title
is complete. Vested interest should without any condition. A transfer of
property an interest therein is created in favor of a person without specifying
the time when it is to take effect or in terms specifying that it is to take
effect. Forthwith or on the happening of an event must happen, such interest is
vested unless a contrary intention appears from the terms of her transfer.
[1] The Transfer of Property Act
1882 § 19
[2] The Transfer of Property Act
1882 § 21
[3] The Indian Succession Act 1925 §
120.
[4] 68 Ind Cas 944.
[5] The Transfer of Property Act
1882 § 20
[6] (1919) 21 OC 312
[7] The Hindu Marriage Act 1955 § 5
cl iv
[8] The Code of Civil Procedure 1908
§ 47
[9]
[1938] UKPC 58.
[10] The Code of Civil Procedure 1908
§ 47
[11] (1926) A.I.R. 1926 Madras 645.
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