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G. Ramakrishniah and anr. Vs. Dasaratharama Reddiar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 1153 of 1965
Judge
Reported inAIR1970Mad484
ActsTransfer of Property Act, 1882 - Sections 14
AppellantG. Ramakrishniah and anr.
RespondentDasaratharama Reddiar
Appellant AdvocateT.R. Gopalakrishnan and ;K.S. Varadachari, Advs.
Respondent AdvocateV. Somasundaram and ;P. Kothandaraman, Advs.
DispositionAppeal dismissed
Cases ReferredCadell v. Palmer
Excerpt:
.....of property act, 1882 - perpetuity period under section 14 consists of lifetime of one or more persons living at time transfer takes effect and period of minority of person in existence at close of person living at time of transfer - for valid settlement it must be clear even at outset of settlement that beneficiaries would necessarily be ascertained - any contingency or vesting specified by settlement would also necessarily be satisfied within that period - such requisites does not place any restriction as to who can be living person whose existence can postpone vesting. - - 1. a short but interesting question in the application of the rule against perpetuities embodied in section 14 of the transfer of property act arises for consideration in this second appeal. for a valid..........been settled on the minors ravana and sundararama and other sons that may be born to duraiswamy reddy. sons of duraiswamy reddy in existence at the time of the settlement and sons that may be born to him thereafter, take the property absolutely in equal shares on the attainment of majority of the last born son.the effect of the disposition in the settlement deed is to vest properties even on sons that may be born to duraiswamy reddy after the death of the sons in existence at the time of the settlement and the minority of other sons who might be in existence at the time of their death. for instance ignoring the existence of the plaintiff for the purposes of envisaging a possibility, one cannot rule out duraiswamy reddy surviving sriramulu and having a minor son after the death of.....
Judgment:

Natesan, J.

1. A short but interesting question in the application of the rule against perpetuities embodied in Section 14 of the Transfer of Property Act arises for consideration in this Second Appeal. The appeal is directed against a preliminary decree for partition and separate possession of an one-fourth share in the suit properties. One Pattabirama Reddy, pursuant to a family arrangement, under the registered settlement deed Ex. A-1 dated 5-1-1931, settled the suit properties in favour of the sons of one Duraiswamy Reddy, two sons then in existence and sons that may be born subsequently. Duraiswamy Reddy was the son of Pattabirama Reddy's wife's sister and on the date of the settlement Duraiswamy Reddy had two sons, Ravana, aged two years and Sundararama, aged four months. The settlement referred to the two minor sons then in existence and provided that the father Duraiswamy Reddy shall be the guardian of the minor sons in existence and that may be born and that he shall look after them, maintain proper accounts of the income and safeguard the properties without effecting alienation.

After the end of the minority of the last son that may be born to Duraiswamy Reddy, the sons were to take the properties in equal shares. The minor son Sundararama died in 1931 itself. Subsequently about the year 1933 another eon Sriramulu was born. The last son of Duraiswamy Reddy. Dasaratharama Reddiar, the plaintiff in the suit out of which the Second Appeal arises, was born in the year 1941. Notwithstanding the prohibition against alienation, Duraiswamy Reddy executed a sale deed Ex. B-2 dated 14-7-1941 on behalf of the minors of Items 2 to 5 in the suit properties, in favour of one Jayalakshmi Ammal for a sum of Rs. 200. He executed on the same day another sale deed also, Ex. B-3 in her favour. Under Ex. B-l dated 21-8-1945 Jayalakshmi Ammal sold the suit Items 2 to 5 to the second defendant in the case, the present second appellant The first defendant in the case is a purchaser of the first item under Ex. B-5 dated 5-5-1946 from Sundararaju to whom Duraiswamy Reddv had conveyed the properties under Ex. B-6 dated 30-9-1943.

Duraiswamy Reddy died in the year 11949 and his wife Seshammal died in 1951. Duraiswamy Reddy and his wife were survived by their three sons Ravana, Sriramulu and the plaintiff. The son Ravana died in the year 1950, when aged about 22. Sriramulu died in the year 1951 after just becoming a major. An earlier suit filed by the present plaintiff claiming only possession was permitted to be withdrawn by this Court in Second Appeal No. 1018 of 1955 with liberty to file a fresh suit on the same cause of action under certain terms. The suit, out of which this second appeal arises, has been filed after due compliance with the conditions laid down by this Court in S. A. No. 1018 of 1955 the plaintiff here seeking to have the sale deeds Exs. B-2. B-3 and B-6 set aside. He claimed title to and possession of the entire suit properties. The plaintiff has been given a decree only for an one-fourth share in the suit properties. Ravana had died at the age of 22 without seeking to set aside the alienation within three years of becoming a major.

So far as Sriramulu is concerned, he died within three years of attaining majority. The Courts below denied his share to the plaintiff on the ground that the right to avoid the transfer was a personal privilege of the minor. As regards the share of Sundararama which had been Inherited by Ms mother, here again, it was held that the plaintiff could claim no part therein. The plaintiff has not preferred any second appeal or come up with any Memos of Cross objections questioning the limitation on the share he could have in the suit properties. The Second Appeal has been filed by the alienees defendants 1 and 2 in the suit contending that the plaintiff's claim must be dismissed in toto on the ground that recognition of any interest in his favour would be a violation of the Rule against perpetuities.

2. Mr. T. P. Gopalakrishnan, learned Counsel appearing for the appellants submits that the provisions of the settlement deed are manifestly opposed to Section 14 of the Transfer of Property Act which prohibits any transfer of property that can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong. The argument of Mr. T. P. Gopalakrishnan learned Counsel for the appellants based on Section 14 of the Act runs thus: Under the terms of the settlement the properties have been settled on the minors Ravana and Sundararama and other sons that may be born to Duraiswamy Reddy. Sons of Duraiswamy Reddy in existence at the time of the settlement and sons that may be born to him thereafter, take the property absolutely in equal shares on the attainment of majority of the last born son.

The effect of the disposition in the settlement deed is to vest properties even on sons that may be born to Duraiswamy Reddy after the death of the sons in existence at the time of the settlement and the minority of other sons who might be in existence at the time of their death. For instance ignoring the existence of the plaintiff for the purposes of envisaging a possibility, one cannot rule out Duraiswamy Reddy surviving Sriramulu and having a minor son after the death of Sriramulu. It is submitted that if such an event is possible, the settlement offends Section 14 of the Transfer of Property Act, and in the circumstances the operation of the settlement deed, should under Section 15 of the Act be limited to Ravana and Sundararama, persons in existence at the time of the settlement. Learned Counsel urged that the validity of the settlement must be considered in relation to the time when the document creating it takes effect and if at the relevant time there is the slightest possibility that the perpetuity period may be exceeded, the settlement is void.

It is apparent that the learned counsel in presenting the case this way, takes the lives of Ravana and Sundararama in existence at the time of the settlement and the minority of any son that may be born during their lives as the measurement of the perpetuity period.

3. In my view the arguments proceed on an erroneous assumption. It is overlooked that the persons living at the date of the settlement, whose outstanding lives may be taken into consideration in applying the perpetuity rule, need not necessarily be persons having or taking an interest under the settlement. The per petuity period under Section 14 of the Act consists of the lifetime of one or more persons living at the time the transfer takes effect, and the further period of the minority of a person in existence at the close of the person living at the time of the transfer. For a valid settlement all that is necessary is that it must be clear even at the outset of the settlement, that the beneficiaries will necessarily be ascertained, if at all within the perpetuity period and any contingency or vesting specified by the settlement will also necessarily be satisfied within the period. It is a requisite for not offending the perpetuity rule that the identity of the beneficiary and the quantum of the beneficiary's interest are all ascertainable and ascertained within the period limited-Section 14 of the Act however does not place any restriction as to who can be the living person whose existence can postpone the vesting. It allows the settlor to use any life for the purpose. But as has been pointed out in English text books dealing with the rule against perpetuities no life can be of the slightest use for postponing the vesting, unless they somehow restrict the period of time within which the interest under the transfer is to be capable of vesting according to the terms laid down by the settlor. Any life can help if it has something to do with the conditions appointed by the settlor for vesting of the gift.

4. In English Rule against Perpetuity, the perpetuity period consists of lives in being at the creation of the interest plus the age of majority twenty one years in gross plus the actual periods of gestation. The lives in being need not be beneficiaries or relations of the settlor; they may be selected at random. As Morris and Leach put it in their Rule Against Perpetuities, 2nd Edition at Page 62, the lives in being must be either specified in the instrument or 'necessarily involved in limitations contained therein'. Megarry and Wade in their Modern Law of Real Property (2nd Edn. P. 229) would state:

'that only lives in being which can be of assistance for the purposes of perpetuity rule are those which in some way or other govern the time when the gift is to vest.'

In the Manual of Law on Real Property by Megarry, 2nd Edn. Page 150, the learned author gives the example of gifts by a testator to such of his descendants as are living 21 years after the death of the last survivor of the members of a given school at the testator's death. In Cheshire's Modern Real Property, 10th Edn. the position is thus stated at page 241:

'The lives in being must be designated either expressly, as in Cadell v. Palmer, (1833) 1 Cl & F 372 or by implication. Lives are designated by implication only if, according to the terms of the instrument of gift, they serve to measure the time within which the vesting contingency must occur. They must form a possible part of the apparatus for determining the moment at which the interest is to vest.' The learned author points out that the Settlor need not choose persons who have interests in the settled property or a connection with the family and he has full liberty of action with regard to the number of persons he may select. Even so is the rule embodied in Section 14. I see nothing in Section 14 of the Transfer of Property Act to place a restriction on the persons whose lives are to be taken to prolong the period of vesting. May be the language of the Section at the close is somewhat involved, but the section uses language in this regard without any limitation 'after the lifetime of one or more person living at the date of such transfer.' It may be any person or any number of persons,' but the person or persons must be living at the date of such transfer. True, one must infer from the document itself the person or persons whose life has to be considered. Here it is Duraiswamy Reddy's sons that have to take. The gift is to a class and it cannot be said that, the quantum or the share in the property to be taken by each member of the class is not ascertainable within the perpetuity period.

The last of the persons to take is the last minor son of Duraiswamy Reddy. The exact share of each beneficiary would depend upon the number of male children that may be born. The settlor intends that the shares diminish in amount according to the number of the sons that may be born to Duraiswamy Reddy. But the share of each member of the class is definitely and finally ascertainable within the perpetuity period. The class closes within the perpetuity period. In the instant case the vesting is postponed utmost to the birth of the last son of Duraiswamy Reddy. Duraiswamy Reddy's lifetime is part of the apparatus for determining the moment at which the interest is to vest A reading of the settlement deed shows that it does not look upon the lives of Ravana and Sundarama 'as lives in being' for the purpose of calculating the perpetuity period. They along with the other sons that may be born have to share the property and the settlor obviously expects all the sons to be alive when the distribution and vesting in possession takes place.

Possession is postponed till the minority of the last son of Duraiswamy Reddy. Cheshire (page 242) taking a case where the testator bequeaths a fund to such of his grand-children as attain the age of twenty one years, points out that his children who survive him are effective lives in being, since the ascertainment of the beneficiaries requires a reference to their parents. 'The gift, therefore, is good, for the grandchildren must all become of age within twenty-one years after the, death of their parents, and the parents must, all have been born (or begotten) in the testator's life time.'

5. It follows that the settlement in question does not offend the rule against perpetuities The prohibition of Section 14 of the Transfer of Property Act is not evaded by the settlement in question. Vesting of interest has necessarily to be within the minority of a person in existence at the death of Duraiswamy Reddy.

6. In the result, the Second Appeal fails and is dismissed with costs. No leave.


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