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Kurunjilikattil Appu Alias Raman Vs. Mary and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKerala High Court
Decided On
Case NumberSecond Appeal No. 704 of 1960
Judge
Reported inAIR1965Ker27
ActsTransfer of Property Act, 1882 - Sections 11, 14 and 100
AppellantKurunjilikattil Appu Alias Raman
RespondentMary and anr.
Advocates: V. Sankara Menon, Adv.
DispositionAppeal allowed
Cases ReferredMatlub Hasan v. Mt. Kalawati
Excerpt:
- .....the reservation of the right to recover the annuity was not inconsistent with the nature of the right transferred under ex. p.2. the lower appellate court on appeal by the defendants, came to the conclusion that the reservation of the right to recover the annuity by the vendor was inconsistent with the nature of the grant and that under section 11 of the transfer of property act it was invalid. it therefore dismissed the suit.3. it was contended that the reservation of the right for annuity was not inconsistent with the nature of the grant and therefore the reservation although perpetual was valid. it was also submitted for the appellant that the reservation of a right to annuity in perpetuity would not offend section 14 of the transfer of property act. ext. p.2 is clear that what was.....
Judgment:

Mathew, J.

1. This is an appeal preferred by the plaintifffrom the decree in a suit for recovery of a sum ofRs. 115,11. The plaintiff also claimed a chargeon the plaint property for the amount. The plaintiff's father had a leasehold interest in the plaintschedule property which belonged in jenmom toa Mana. The plaintiff's father assigned the leasehold interest to the 1st defendant under Ext. P.2subject to the payment of an annuity of 6 parasof paddy by the assignee to the plaintiff's familyin perpetuity. The annuity was also made acharge on the property. The plaintiff claimed theright to the annuity on the basis of Ext. p.1, will,executed by the plaintiff's father on 10-3-1950.The 1st defendant's right in the property underExt P.2 was assigned under Ext. p.1 in favourof defendants 2 and 3 who are now in possession of the property. The plaintiff alleged that the defendants defaulted in the payment of the annuity from 1127 onwards and that in spite of the demand they have not paid the same. Defendants 2 and 3 contended that the plaintiff had no right to claim any amount as the purchase by the defendants was of the entire interest in the property, that the reservation of the right to recover an annuity in perpetuity was repugnant to the nature of the grant and was therefore invalid, that the liability created by Ext. P.2 was a liability in the nature of rent, and that they were entitled to relief under Act 1 of 1957.

2. The trial Court decreed the plaintiff's suit finding that the reservation of the right to recover the annuity was not inconsistent with the nature of the right transferred under Ex. P.2. The lower appellate Court on appeal by the defendants, came to the conclusion that the reservation of the right to recover the annuity by the vendor was inconsistent with the nature of the grant and that under Section 11 of the Transfer of Property Act it was invalid. It therefore dismissed the suit.

3. It was contended that the reservation of the right for annuity was not inconsistent with the nature of the grant and therefore the reservation although perpetual was valid. It was also submitted for the appellant that the reservation of a right to annuity in perpetuity would not offend Section 14 of the Transfer of Property Act. Ext. P.2 is clear that what was sold was the entire property subject to a right in the vendor to claim 6 paras of paddy annually from the transferee, and that was made a charge on the property. The document shows that the liability for payment of the rent to the jenmi and the annuity at the rate of 6 paras of paddy was assumed by the 1st defendant and that it was subject to these liabilities that the property was purchased. A reading of Ext. P.2 is enough to show that what was transferred was the interest of the transferor subject to the right to claim 6 paras of paddy annually by the transferor or his descendants. I think that the right to recover 6 paras of paddy annually with the security of a charge for the same on the property was not repugnant to the nature of the grant.

The second point is whether the doctrine of perpetuity will render the reservation invalid. Section 14 of the Transfer of Property Act can only come into play when there is a transfer of an interest in property. The creation of a charge is not a transfer of an interest in property. In Raja Rajeswara Dorai v. Sundara Pandiyasami Tevar, 49 Ind Cas 704 : (AIR 1918 PC 156) it was held that the creation of an annuity in perpetuity with a charge on property would not offend Section 14 of the Transfer of Property Act as there is no transfer of any interest in immovable property. There, the suit was to enforce a covenant to pay an annuity in perpetuity as a charge on property. Their Lordships held that since there was no transfer of any interest in immovable property, section 14 of the Transfer of Property Act has no application. In Bhupathi Bhusan Tribedi v. Birendra Mohan Singha ILR (1948) 1 Cal 492 it was held:

'But as the parties intended to create a liability in perpetuity not capable of being redeemed at any time, the agreement amounted to a perpetual charge and not a mortgage, as no transfer of an interest in property was involved, and would bind a subsequent transferee for value with notice or a volunteer with or without notice...... The testto determine whether the rule against perpetuity as embodied in Section 14 of the Transfer of Property Act applies or not is whether the covenant creates or seeks to transfer an interest in land. What the rule applies to is right to property or any future limitation of such right and where, as in the present case, the covenant does not seek to create or limit any such right the rule has no application.'

4. To the same effect is the decision in Matlub Hasan v. Mt. Kalawati, AIR 1953 All 934. That is a decision by a Bench of which Sulaiman C. J., was a party. He said:

'When the intention of the parties is to create a liability in perpetuity not capable of being redeemed absolutely at any time, the transaction cannot possibly be a mortgage. An agreement to pay maintenance allowance to a person and to continue to pay to his descendants from generation to generation making it a charge over property, creates a charge and not a mortgage. The rule against perpetuity would not apply to a charge of this kind which does not amount to a transfer of interest within the meaning of Sections 13 and 14.'

5. I therefore think that the covenant to pay the amount in perpetuity and as a charge on the property sold does not offend Section 14 of the Transfer of Property Act. It has therefore to be held that the plaintiff was entitled to recover the amount claimed.

6. In the result, the decree of the lower appellate Court is set aside and that of the trial Court restored with costs in the lower Courts. I make no order as to costs in this Court as there was no appearance for the respondents. It was submitted by the Advocate appearing for the respondents that he has no instruction from his clients.


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