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P. Narayana Menon Vs. P. Bhageerathi Amma - Court Judgment

LegalCrystal Citation
CourtKerala High Court
Decided On
Case NumberA.S. No. 79 of 1978
Reported inAIR1985Ker14
ActsTrusts Act, 1882 - Sections 82; Evidence Act, 1872 - Sections 101 to 104
AppellantP. Narayana Menon
RespondentP. Bhageerathi Amma
Appellant Advocate V.P. Mohan Kumar and; K.P. Sreekumar, Advs.
Respondent Advocate P.N.K. Achan,; K. Vijayan and; N.N. Sugunapalan, Adv
DispositionAppeal allowed
Cases Referred and Indranarayanan v. Roop Narayan
property - gift - sections 101 to 104 of evidence act, 1872 and trust act, 1882 - dispute regarding gift of money lying in savings account of defendant - defendant claimed such amount gifted to her by plaintiff - testimony of interested defence witness cannot be relied upon - discrepancies in defendants statement regarding date of deposit - deposit cannot be treated as gift by plaintiff to defendant. - - he was not bestowing that love and affection expected of a husband. 11. it is well settled law that there is no presumption of advancement in indian laws. there is no reason to think that in 1946 a father with large sums of money in his hands when he took promissory note in the name of his daughter who was not sufficiently well-to-do did not intend to make a gift of that money to the..........pillai, j. observed :'in marumakkathayam law, when a husband purchased property in the name of his wife a presumption was being raised that it was intended for the benefit of the sub-tarwad consisting of her and children.'16. in 1960 ker lj 970, a division bench consisting of two eminent judges of this court, m. s. menon and t. k. joseph, jj. observed : --'if was also contended that the rule that the equitable principle of the presumption of advancement in english law does not apply to india (which was first laid down over a hundred years ago in gopeekrist gosain v. gungapersaud gosain (1854) 6 moo ind app 53 requires reconsideration in view of the conditions in modern times. it is true that whatever may have been the position in 1854 and later years, benami transactions are not very.....

Varghese Kalliath, J.

1. Plaintiff in O. S. 30 of 1977 on the file of theSubordinate Judge's Court, Manjeri is theappellant. Respondent is his wife. The suitis for partition.

2. The masthead of the case is the question is C schedule property a gift by the plaintiff to the defendant.

3. The trial court found that C schedule property is a gift to the defendant by the plaintiff and not liable to be partitioned in this suit. Hence it dismissed the suit in respect of plaint C schedule.

4. There is no dispute between the parties as regards their respective shares. The plaintiff admits that in any case the defendant is entitled to 1/11th share in plaint C schedule property. C schedule property is two deposits of Rs. 20,000/-each in State Bank of Travancore in its Manjeri Branch. The defendant claims that it belongs to her exclusively and so not liable to be shared. She admits that out of this Rs. 40,000/- a sum of Rs. 34,6507-constituted the sale consideration received by the plaintiff and defendant together when they sold an item of property which belonged to them jointly and the overplus of Rs. 5350/- was her own private savings. She further alleges that the amount of Rs. 34,650/- was given to her by way of gift by the plaintiff and so the whole of C schedule property belongs to her and is not partible.

5. The property belonging to the husband and wife was sold for Rs. 34,650/-on 13-3-1976. This is an admitted case. The defendant states that she was given the entire sale consideration as a gift on the date of sale itself. It is said that she, through her son-in-law deposited the amount in Savings Bank Account in Stale Bank's Branch at Manjeri on 13-3-1976. Ext. B1 pass book produced in the case shows that the deposit was on 20-3-1976. It is seen that the amount deposited is Rs. 40,500/- Subsequently out of this Rs. 40,500/- an amount of Rs. 40,000/- was deposited in her name in the same Bank as fixed Deposit for 60 months under two Fixed Deposits evidenced by Exts. B2 and B3 receipts. Ext. B2 is dated 26-4-1976 and Ext. B3 is dated 4-5-1976.

6. Defendant says that of late, her husband was cruel to her. He was not bestowing that love and affection expected of a husband. She was thrown to the 'valley of weeping' the valley of sorrow and pain. They became increasingly unhappy and reached a stage that the defendant was not able to continue her residence in their matrimonial home. The plaintiff insisted that the defendant should live separately. The defendant asked the plaintiff where she should live, obviously indicating that she has no other place of residence. Plaintiff in that entourage agreed to give her the necessary funds for purchasing a house. On this understanding part of the residential compound was sold and the amount obtained by the sale was given to her as a gift. So the amount representing the sale consideration exclusively belongs to her. Plaintiff refuted all these allegations.

7. Plaintiff contends that though the amount in deposit stands in the name of his wife, 10/11 share of the beneficial ownership of the amount continues with him. He has not parted with his share of the amount to his wife and he had not intended to give a gift in favour of his wife when the amount was deposited in the Bank.

8. The issue to be decided is, whether the plaintiff intended to give as a gift to his wife the amount, under the deposit receipts exts. B2 and B3. Admittedly the amount represents the sale consideration of a property belonging to the husband and wife, the wife having only 1/11 share. Counsel for the plaintiff argued that there is a resulting trust in favour of the plaintiff in regard to the amount in deposit insofar as he had no intention to benefit the wife when the deposit was made.

9. The defendant has set up the case of gift. She has to prove the fact of gift. The query is whether the defendant has discharged this burden satisfactorily. The defendant relies on certain circumstances and probabilities and also the evidence of herself and her daughter.

10. The counsel for the respondent at the nascency of his argument cited certain reported decisions canvassing the application of presumption of advancement to rebut the presumption of resulting trusts. It is to be noted thai the Privy Council has in many cases acknowledged the existence of the doctrine of resulting trusts. The doctrine of advancement, the Privy Council with equal regularity said does not exist in India. The counsel for the respondent submits that conditions have changed -- changed radically -- since the days of (1854) 6 Moo Ind App 53 (Gopeskrist Gosain v. Gungapersaud Gosain) and this court should apply the principle of presumption of advancement in this case.

11. It is well settled law that there is no presumption of advancement in Indian laws. A deposit made by a person of his money in the joint names of himself and his wife on condition that it is payable to either or surviver or a deposit in the name of his wife alone does not constitute a gift by him to his wife. In such a case without any declaration of trust, there is a resulting trust in favour of that person who had the beneficial ownership of the amount, in the absence of any contrary intention or unless it can be proved that actual gift of the amount, was, intended. (See 1974 KLT 822 Padmanabhan Bhavani v. Govindan Bhargavi). The principle of English Law that a gift to a wife is presumed where money belonging to the husband is deposited in a Bank in her name or where the deposit is made in the joint names of both husband and wife has no application in India. There is no presumption of intended advancement applicable under the Indian Law.

12. Since there is no presumption of advancement unless it is established by evidence that there was an intention on the part of the transferor to benefit the transferee in whose name the money has been deposited, the person in whose name the deposit is made could not become the owner of it. The onus of proof to establish the intention to benefit the transferee is on the transferee himself.

13. The learned counsel Shri Krishnankutty Achan cited the following decisions to support his upward looking and high reaching submission hinged on to the presumption of advancement.

1) Malligai Sundaram Ammal v. Krishnaswamy AIR 1957 Mad 573;

2) Kutty Raman v. Muthu Pankajakshy AIR 1952 Trav Co. 426;

3) Vensadan Kunhammad v. Amina 1958 Ker LT 902;

4) Kuttappan Nair v. Commr. of Wealth Tax 1969 Ker LT 427 and

5) Janu v. Cheeru 1960 Ker LJ 970.

14. In AIR 1957 Mad 573 the court observed that as a matter of practice in this country, the principle of not applying the doctrine of advancement has been in vogue for nearly a century. At the time it was held that there was no presumption of advancement in India, the conditions were very different from what is obtaining now-a-days. There is no reason to think that in 1946 a father with large sums of money in his hands when he took promissory note in the name of his daughter who was not sufficiently well-to-do did not intend to make a gift of that money to the daughter. It has to be noted that in this case also, the court is more concerned with the intention of the father to make a gift of the money to the daughter. The court finally held that from the circumstances of the case, a conclusion was possible that the father had the intention to give a gift of the money secured by the promissory note.

15. The counsel referred to us AIR 1952 Trav Co. 426 wherein it has been held that the intention of the husband when he made the purchase in favour of his wife is the real question involved in the case and if that intention was to benefit the wife, the transaction cannot be held to be benami. Two other decisions were cited for the same proposition -- Vide 1958 Ker LT 902 and 1969 Ker LT 427. In 1958 Ker LT 902 this court held :

'Under the general law in India there is no presumption of an intended advancement as there is in England. But the universal application of the principle of benami in every case in India does not appear to be correct. The exception may have to be admitted, in respect of cases arising under the Marumakkathayam law, where the circumstances of the nominee being the wife or the children is held to operate by rebutting the resulting trust.'

In 1969 Ker LT 427, Narayana Pillai, J. observed :

'In Marumakkathayam law, when a husband purchased property in the name of his wife a presumption was being raised that it was intended for the benefit of the sub-tarwad consisting of her and children.'

16. In 1960 Ker LJ 970, a Division Bench consisting of two eminent Judges of this Court, M. S. Menon and T. K. Joseph, JJ. observed : --

'If was also contended that the rule that the equitable principle of the presumption of advancement in English law does not apply to India (which was first laid down over a hundred years ago in Gopeekrist Gosain v. Gungapersaud Gosain (1854) 6 Moo Ind App 53 requires reconsideration in view of the conditions in modern times. It is true that whatever may have been the position in 1854 and later years, benami transactions are not very common, at any rate, in this part of the country. However, the rule has been well-established by decisions of the Privy Council and we do not feel justified in making a departure until the question is authoritatively decided by the Supreme Court.'

The weighty opinion of their Lordships bears heavily on us. We respectfully adopt what their Lordships had said in that well considered decision.

17. The presumption of advancement in normal circumstances can never he used to rebut the presumption of a resulting trust under Section 82 of the Indian Trusts Act. In our opinion, section 82 of the Indian Trusts Act, when considered carefully, says no more than, that the court has to be satisfied of two things before a resulting trust can be declared; first that someone other than the actual transferee provides the purchase money or the fund for the defendant and secondly that that person did not intend the property or the fund to be a gift. The section gives no indication how the court is to be satisfied. It does not give any tip, as to on whom the onus of proving it is to lie. The resultant position is that having arrived at the conclusion that the money belonged to some person other than the transferee the court has to consider whether that person intended it as a gift or not. It is at this point, the established doctrine of the resulting trust at once comes into full and immediate operation, and if there is no other evidence, in the case that doctrine, as the Privy Council has pointed out, must apply. Then to displace it, the actual transferee has to prove, if he can, that the money was intended as a gift.

18. In 1818 Lord Elden said in Marlees v. Franklin, 'the general rule that on a purchase by one man in the name of another, the nominee is trustee for the purchaser is subject to exception where the purchaser is under a species of natural obligation to provide for the nominee'. Here we see the genesis of the presumption of advancement. In England, the presumption is weak in the case of husband and wife. It is stronger with parent and child, but may be rebutted. In 1944 in Warren v. Gurney (1944) 2 All ER 472, a father bought a house for his daughter, who was shortly to get married, to live in. The conveyance was taken in the name of the daughter, but the father retained the title deeds. On his death 15 years later, the daughter claimed to be the beneficial owner of the house. The Court of Appeal held that there was a presumption of advancement in her favour, but that it had been rebutted by the fact of the retention of the title deeds, accompanied by evidence contemporaneous with the purchase in 1929. Retention of the deeds by itself is probably insufficient evidence, however. The court also rejected as inadmissible a document prepared by the father in 1953.

19. The observations in the House of Lords decision in Pettitt v. Pettitt (1970) AC 777 would show that the influence of the presumption of advancement has been much reduced in modern times. Now the law in England is, where the legal title is in both spouses, the beneficial interest will prima facie also be shared. They will hold as joint tenants if the purchase money was provided in equal shares and as tenants in common if it is provided unequally. There may of course be a contrary provision, which will govern. And the presumption of resulting trust to determine proportions will apply, and also for what it is worth, the presumption of advancement. The principle of presumption of advancement in its home country has been now devalued. Its extent of application in the changing conditions can best be understood from the opinions of Lord Reid, Lord Hodson and Lord Diplock in the above decision. They have observed in clear terms the relevance of the presumption of advancement in modern social conditions. Lord Reid (Page 793)

'It was argued that the present case could be decided by applying the presumption regarding advancement. It was said that if a husband spends money on improving his wife's property, then, in the absence of evidence to the contrary, this must be regarded as a gift to the wife. I do not know how this presumption first arose, but it would seem that the judges who first gave effect to it must have thought either that husbands so commonly intended to make gifts in the circumstances in which the presumption arises that it was proper to assume this where there was no evidence, or that wives' economic dependence on their husbands made it necessary as a matter of public policy to give them this advantage. I can see no other reasonable basis for the presumption. These considerations have largely lost their force under present conditions, and, unless the law has lost all flexibility so that the courts can no longer adapt it to changing conditions, the strength of the presumption must have been much diminished. I do not think that it would be proper to apply it to the circumstances of the present case.'

Lord Hodson (Page 811)

'Reference has been made to the 'presumption of advancement' in favour of a wife in receipt of a benefit from her husband. In old days when a wife's right to property was limited, the presumption, no doubt, had great importance and today, when there are no living witnesses to a transaction and inferences have to be drawn, there may be no other guide to a decision as to property rights than by resort to the presumption of advancement. I do not think it would often happen that evidence had been given, the presumption would today have any decisive effect.'

Lord Diplock (Page 824)

'The consensus of judicial opinion which gave rise to the presumptions of 'advancement' and 'resulting trust' in transactions between husband and wife is to be found in cases relating to the propertied classes of the nineteenth century and the first quarter of twentieth century among whom marriage settlements were common, and it was unusual for the wife to contribute by her earnings to the family income. It was not until after World War II that the courts were required to consider the proprietary rights in family assets of a different social class. The advent of legal aid, the wider employment of married women in industry, commerce and the professions and the emergence of a property-owning, particularly a real-property-mortgaged-to-a-building-society-owning, democracy has compelled the courts to direct their attention to this during the last 20 years. It would, in my view, be an abuse of the legal technique for ascertaining or imputing intention to apply to transactions between the post-war generation of married couples 'presumptions' which are based upon inferences of fact which an earlier generation of judges drew as to the most likely intentions of earlier generations of spouses belonging to the propertied classes of a different social era.'

We may also give the differing opinion of Lord Upjohn. (Page 813)

'But the document may be silent as to the beneficial title. The property may be conveyed into the name of one or other or into the names of both spouses jointly in which case parol evidence is admissible as to the beneficial ownership that was intended by them at the time of acquisition and if, as frequently happens as between husband and wife, such evidence is not forthcoming, the court may be able to draw an inference as to their intentions from their conduct. If there is no such available evidence then what are called the presumptions come into play. They have been criticised as being out of touch with the realities of today but when properly understood and properly applied to the circumstances of today I remain of opinion that they remain as useful as ever in solving questions of title.'

The above decision (1970) AC 777 was followed in (1970) 1 WLR 1333 (Folconer v. Falconer). Lord Denning M. R. and Megaw L. J. expressed their opinion to the effect that there could be no presumption of advancement in respect of the husband's substantial contribution to the building of the house, which raised the inference of a trust for him. Lord Denning M. R. observed :

'In the notice of appeal the wife says that 'the judges erred in not applying the presumption of advancement when all the relevant transactions were in the wife's name.' If this case had come up for decision 20 years ago, there would undoubtedly have been a presumption of advancement: beca use at that time whenever a husband made financial contributions towards a house in his wife's name, there was a presumption that he was making a gift to her. That presumption found its place in the law in Victorian days when a wife was utterly subordinate to her husband. It has no place, or, at any rate, very little place in our law today.'

Megaw L., J.

'Miss Wilkin's submission on that point was really based upon the proposition that there is a presumption of advancement in relation to any contributions that may have come from the husband's side towards the. building. I think that presumption of advancement in cases of this sort can rarely apply now.'

Later in Cawcher v. Cawcher (1972) 1 WLR 425 it was held that there will be a purchase money resulting trust in favour of a spouse who has contributions the purchase price. Beneficial ownership will be enjoyed in the proportion in which the purchase money has been provided. If the purchase money is provided equally, the spouses are beneficial joint tenants. If the contributions are unequal, they are tenants in common.

20. The learned counsel for the appellant relying on Guran Ditta v. T. Ram Ditta AIR 1928 PC 172. Shambunath v. Pushkar Nath AIR 1945 PC 10 and Indranarayanan v. Roop Narayan AIR 1971 SC 1962 urged that the general principle of equity applicable in India is that in the case of a voluntary conveyance of property by a grantor, without any declaration of trust, there is a resulting trust in favour of the grantor, unless it can be proved that an actual gift was intended. In AIR 1945 PC 10 it has been held : -

'The deposit by a Hindu of his money in a bank in the joint names of himself and his wife and on terms that it is payable to either or survivor does not on his death constitute a gift by him to his wife. There is a resulting tust in his favour in theabsence of proof of a contrary intention,there being in India no presumption of snintended advancement in favour of hiswife.

21. Approving the decisions in AIR 1928 PC 172 and AIR 1945 PC 10, their Lordships of the Supreme Court. K. S. Hegde and A. N. Grover, JJ. in AIR 1971 SC 1962 held that in the case of transfer made by a Hindu of his money in a Bank to the joint names of himself and his son on the terms that it is payable to either himself or the survivor, the son can successfully put forward a plea of advancement in his favour if he proves that the transfer is genuine and that the father intended that the money should go to the son exclusively after his death. It was held in this case that it is for the party in whose name the deposit stands to prove the intention of the transferor that the transfer is to benefit the transferee. It is clear from his decision AIR 1971 SC 1962 that the burden is always on the person who claims a gift of the properly of the money standing in his/her name to establish it.

22. In the backdrop of the above principles we are examining the evidence in this case. The respondent claims that part of the amount now in deposit in the Bank is her own private acquisition. She has deposed as D. W. 1 that she was keeping some amount in one of the almirahs in the house of the. plaintiff. Two days prior to the date of sale, she went to the house of the plaintiff and took away an amount of Rs. 7,000/- and part of that amount has been deposited together with the sale proceeds Rs. 34,650/-. She asserted that she has got documents to show that she had the said funds. No document has been produced in the case. Counsel for the respondent after some discussion at the bar very fairly and rightly submitted that there is no convincing and acceptable evidence to show that the defendant had Rs. 7,000/- with her. But he strongly argued that the whole amount of Rs. 40,000/- has to be treated as a gift by the husband. There is difficulty for us to accept this contention. In the written statement, there isa clear averment to the effect that part of the amount is her own private acquisition. She has not claimed any gift in respect of that amount. In the light of the clear averments in the written statement, it is arduous to take her present case that her husband the plaintiff made a gift of Rs. 5,350/-. Thus in regard to part of the amount, no claim of gift is pleaded and so no evidence of any gift. What is pleaded and deposed before court, does not admit a case of gift in Tega rd to Rs. 5,350/-.

23. As stated earlier, defendant's case is that plaintiff himself wanted to provide a house for the defendant's residence. The plaintiff denied the whole story when he was examined as P. W. 1. The defendant has to rely on the evidence of herself as D. W. 1 and D. W. 2 to establish her case of gift. D. W. 2 is her daughter. The evidence of D. W. 1 is an interested testimony. D. W. 1 has stated differently and inconsistently in regard to certain crucial facts. Since we a re not in a position to support our decision on presumption of advancement, we have to rely entirely on the evidence of D. Ws. 1 and 2 to reach a correct conclusion on the question of intention. D. W. 1 has stated :-- (.....)*

The second part of the quoted portion did not spell out any clear intenlion on the part of the husband to make a gift to his wife. He only said : '(Vernacular)'. The amount according to this defendant was given on 13-3-1976. So the conversation might have taken place on 9-3-1976. Suma is D. W. 2. She said, before the court:

(.....)* It is difficult to believe D. W. 1 on this important aspect. D. W. I has said that she was residing with her daughter in Manjeri for two years. She deposed it before court on 3-1-1978. So it is clear that she was in Manjeri from 3-1-1976. She has said : --(.....)*

D. W. 2 has said that she saw plaintiff handing over the money to the defendant in the Registry Office. She states : (.....)*

We cannot accept this statement as a true Statement. There is no apparent reason for (sic) this daughter to go to the registry office since she had absolutely no interest in the property sold. Normally she is not expected to go to the registry office. The definite case of the defendant is that she deposited the amount in question on 13-3-1976. In the pass book, it is seen that the deposit is made on 20-3-1976, but no explanation is forthcoming. The court below has brushed aside the inconsistencies and con traditions in the evidence of D. Ws. 1 and 2. The fact that the deposit receipts are with the defendant is not of much significance; she is living with the son-in-law, who is employed in the Manjeri Branch of State Bank of Travancore. The evidence of D. Ws. 1 and 2 is not convincing. We feel that it is unsafe to base our conclusion that the plaintiff had an intention to gift the amount in question to the defendant on the interested testimony of D. W. 1 and the unconvincing evidence of D. W. 2.

24. The intention of the plaintiff to benefit the wife, the amount in deposits, has not been proved in this case. We hold that the beneficial ownership of the deposits continues with the plaintiff and the defendant in proportion to their share in the property.

25. From what we have said, it will be seen that despite counsel-for-respondent's strenuous efforts, we have been unable to see any good reason why the judgment under appeal should be confirmed in regard to C schedule property. The appeal is allowed holding that the plaintiff is entitled to 10/11 share in plaint C schedule property. In all other respects, the judgment of the trial court is confirmed. No order as to costs.

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