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Raja Padmanand Singh Bahadur Vs. Rama Prasad Malvi - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in17Ind.Cas.284
AppellantRaja Padmanand Singh Bahadur
RespondentRama Prasad Malvi
Cases ReferredLucas v. Harris
Excerpt:
maintenance - right to receive money--interest in estate out of which annuity paid--personal right or interest in property--saleable property--civil procedure code (act v of 1908), section 60, clouse (n), proviso--restraint on alienation--involuntary sale--payer's property vested in court of wards--whether manager under court compellable to bring money to court month by month--whether receiver may be appointed. - .....applied for execution thereof. they prayed for recovery of the judgment-debt by attachment of the monthly allowance of rupees four thousand from the date of application to the date of realisation. the judgment-debtor objected that the allowance could not be attached before it became due. the subordinate judge overruled this objection, and issued a prohibitory order upon the manager under the court of wards, directing him to withhold payment of the monthly allowance to the judgment-debtor and to deposit the amount in court as it accrued due from month to month, till the decretal amount was satisfied. upon appeal to this court by the judgment-debtor, the order of the subordinate judge was discharged on the 23th june 1911, on the ground that an annuity not yet due, is not garnishable under.....
Judgment:

1. This appeal is directed against an order in execution proceedings. The antecedent history of the litigation may be briefly stated. On the 25th September 1905, the appellant conveyed all his properties in favour of his son for the payment of his debts. The conveyance provided that the purchaser would pay the vendor a monthly sum of rupees four thousand, the first payment to be made on the 1st October 1905, and the payment for every succeeding month, on the first day of the month following, between the hours of 1 A.M. and 6 A.M. The conveyance also provided for the payment of further sums of rupees two thousand and rupees twelve hundred annually in two equal instalments for specified purposes. The deed further contained a provision that the vendor would not, by mortgage or otherwise, seek to charge or alienate the allowance payable to him, and that, on no account and under no circumstances, was the allowance to become payable to or demandable by any person other than the vendor or his duly constituted attorney. There was also a provision that, so far as was consistent with the then subsisting mortgages executed by the vendor himself, the allowance payable was to be a first charge upon a specified share of the estate. The purchaser died sometime after this transaction, whereupon the properties transferred to him vested in his widow, Sashirama Kumari, and are now under the management of the Court of Wards on her behalf. On the 4th April 1910, the respondents before us, who held a decree for a large sum of money obtained against the appellant on the 13th November 1908, applied for execution thereof. They prayed for recovery of the judgment-debt by attachment of the monthly allowance of rupees four thousand from the date of application to the date of realisation. The judgment-debtor objected that the allowance could not be attached before it became due. The Subordinate Judge overruled this objection, and issued a prohibitory order upon the manager under the Court of Wards, directing him to withhold payment of the monthly allowance to the judgment-debtor and to deposit the amount in Court as it accrued due from month to month, till the decretal amount was satisfied. Upon appeal to this Court by the judgment-debtor, the order of the Subordinate Judge was discharged on the 23th June 1911, on the ground that an annuity not yet due, is not garnishable under the provisions of the law. Raja Padmanand Singh v. Ramaprosad Malvi 14 C.L.J. 127 : 16 C.W.N. 14 : 11 Ind. Cas. 22. Thereupon, the decree-holders presented an application to the Court below on the 11th September 1911, in which they prayed that the right, title and interest of the judgment-debtor in the monthly allowance payable from and charged upon the estate of his daughter-in-law might be attached and sold. The judgment-debtor objected that the right to the annuity was not saleable property within the meaning of Section 60 of the Civil Procedure Code of 1908 and was, consequently, not liable to be attached and sold. The Subordinate Judge has overruled this contention, and has not only directed attachment of the annuity but also issued a prohibitory order upon the manager under the Court of Wards directing him to bring into Court, month by month, the amount of allowance payable to the judgment-debtor. We are invited in this appeal to set aside this order as contrary to law.

2. The determination of the question raised before us, depends upon the nature of the right created in favour of the judgment-debtor by the indenture of the 25th September 1905. The deed recites the previous history of the family and the embarrassment of Raja Padmanand Singh when he found himself unable to pay his creditors, secured as well as unsecured. Under these circumstances, he conveyed to his son all his properties for consideration. The transferee assumed payment of specified debts, and agreed, as we have already stated, to pay to his father, the vendor, during his life, a monthly sum of rupees four thousand and two annual sums of rupees two thousand and rupees twelve hundred respectively. These sums were made first charges upon the estate in the hands of the son, subject to the then existing mortgages executed by the vendor himself. The deed contained a covenant that the allowances were payable to the vendor personally and would be absolutely incapable of transfer in any form whatever. On behalf of the appellant it has been argued that the vendor had no saleable interest in the annuity, that it was purely personal, and that it is in essence a right to future maintenance within the meaning of Clause (n) of the proviso to Section 60 of the Civil Procedure Code of 1908. On behalf of the respondents, it has been argued, on the other hand, that this right to receive the annuity, the payment whereof was secured by a first charge on the estate in the hands of the son, is a valuable interest in property, that the restraint upon alienation imposed thereon is contrary to law, and, that, in any event, a creditor of the annuitant is entitled, notwithstanding the clause against alienation, to seize the property in execution. This is the substantial point in controversy in this appeal. There is a subordinate point, which would require consideration, if the argument of the judgment-debtor fails, namely, if the right to receive the annuity be deemed saleable property liable to be attached and sold, it is not competent to the Court to issue a prohibitory order upon the manager and to direct him to deposit in Court the allowance as it falls due from month to month.

3. In so far as the primary question in the appeal is concerned, we have arrived at the conclusion, after anxious consideration of the matter, that the right of the judgment-debtor to receive the annuity is saleable property within the meaning of Section 60 of Code of 1908 and cannot be regarded as a right to future maintenance within the meaning of Clause (n) of the proviso to that section. The question whether a right to maintenance is assignable or not, was considered by this Court in the cases of Asad Ali Molla v. Haider Ali 12 C.L.J. 130 : 38 C. 13 : 14 C.W.N. 918 : 6 Ind. Cas. 826 and Tara Sundari v. Saroda Charan 12 C.L.J. 146 : 7 Ind. Cas. 80. The judicial decisions on the subject, which are by no means easy to reconcile, will be found reviewed in these cases. As was pointed out there, a well marked distinction has been recognised between a right to receive a sum of money for purposes of maintenance properly so called, end a right or interest in property which really forms a fund or estate out of which an annuity is periodically paid to the grantee; in the former case, a purely personal right is created which may be properly deemed inalienable; in the latter case, an interest in property is created which can rightly be deemed alienable. Whether a particular grant falls within the scope of the one principle or the other, must depend upon its terms. In the case before us, the substance of the transaction embodied in the indenture of the 25th September 1905, was that, although the appellant conveyed his entire estate to his son, he retained a substantial interest therein, namely, a right to receive therefrom rupees fifty-one thousand two hundred annually. It may be conceded that there was a personal undertaking by the son to pay this money to the father; but it cannot be overlooked that the due payment of the money was secured by a first charge upon the estate, a charge which, if necessary, could be enforced by sale of the estate. This plainly is not a mere right to future maintenance but a valuable interest in property. It has been contended, however, that the indenture states explicitly that the right to receive allowance is inalienable and that the allowance shall, on no account and under no circumstances, be payable to or demandable by any person other than the vendor or his duly constituted attorney. In our opinion, the clause mentioned seeks to impose a restraint on alienation, which must be deemed illegal, on the same principle on which it has been ruled that where the income of trust property is to be paid to A. during his life, a direction that it shall be paid into his own hands or that he shall not alienate or anticipate it or that it shall not be liable for his debts, is void; Brandon v. Robinson (1811) 18 Ves. 429 : 11 R.R. 226; Graves v. Dolphin (1826)1 Sim. 66 : 5 L.J. (o.s.) Ch. 45 : 27 R.R. 166; Barton v. Briscoe (1812) Jac. 603; Woodmeston v. Walker (1831) 2 Rus. and M. 197 : 9 L.J. (o.s.) Ch. 257 : 34 R.R. 56 : Jones v. Salter (1815) 2 Rus. and M. 208 : 34 R.R. 60 and Brown v. Pocock (1833) 2 Rus. and M. 210 : Coop. t. Borough 10 : 4 L.J. Ch. 15. It may be conceded that there are observations in some of the cases on the subject in the books which may be difficult to reconcile, Twopeny v. Peyton (1840) 10 Sim. 487: 9 L.J. Ch. 172 : 4 Jur. 456 : 51 R.R. 301; In re Coleman; Henry v. Strong (1888) 39 Ch. D. 443; 58 L.J. Ch. 226 : 60 L.T. 127; In re Bullock; Good v. Lickorish (1891) 60 L.J. Ch. 341 : 64 L.T. 736 : 39 W.R. 472 but the principle recognised by the decisions is that whatever rights, legal or equitable, in property, a man has, those rights are alienable; whatever a man can demand from his trustees, that his creditor can demand from him. This view is not opposed to the observation of Lord Hatherley in Chambers v. Smith (1878) 3 App. Cas. 795 where he did not mean to affirm that an alimentary provision is good in England, but that by the law of England, if a trustee has a right to charge the trusts of a fund against a cestui que trust, he has the same right against the cestui que trust's creditor. No doubt, alimentary funds, that is, spend thrift trusts, are recognised in the law of Scotland, as appears from the authorities mentioned in the judgment of this Court in Raja Padmanund Singh v. Rama Prasad 14 C.L.J. 127 : 16 C.W.N. 14 11 Ind. Cas. 22. There can be no question that they are not recognised in England, and Lord Justice Stirling observed, in In re Fitzgerald; Surman v. Fitzgerald (1904) 1 Ch. 573 at p. 593 : 73 L.J. Ch. 4 6 : 90 L.T. 266 : 52 W.R. 432 : 20 T.L.R. 332 that he could not appreciate why the English owner of an alimentary provision, created by Scotch law, should be held to be incapable of making a disposition of it when it comes to his hands, inasmuch as the law of England does not in general recognise any restraint as regards the property of a man of full age. It is unnecessary, for our present purpose, to consider whether the English or the Scotch view ought to be deemed consistent with rules of justice, equity and good conscience. The indenture in the present case cannot as we have already stated, be deemed as a provision for maintenance, and its object clearly is to place property beyond the reach of creditors. I am not unmindful that spend-thrift trusts have been vigorously defended, and probably the most forcible presentation of the doctrine of spend-thrift trusts is to be found in the judgment of Mr. Justice Miller in Nichols v. Eaton (1875) 91 U.S. 715 : 1 Otto. 716 : 23 Law. Ed. 254. The learned Judge maintains that the doctrine that the power of alienation is a necessary incident to a life-estate in real property, or that the rents and profits of real property and the interest and dividends of personal property may not be enjoyed by an individual without liability for his debts being attached to it as a necessary incident to such enjoyment, is a modern doctrine engrafted upon the Common Law by the Court of Chancery for the benefit of creditors. But if the doctrine is modern, it is only because such trusts themselves are modern; the doctrine is merely an application of a principle older than Taltarum's case. As Professor Gray observes, these decisions are 'a part of the struggle of the law against feudalism and against the attempt to give the enjoyment of wealth without its responsibilities; they are modern only because the special form of dishonesty, family pride and sentimental ism at which they aim, is modern.' Gray on Restraints, Section 168. In the case before us, it is further worthy of note that there is no provision in the indenture, against involuntary sale of the right to receive allowance, and it cannot be disputed that a restraint on voluntary alienation, even if validly imposed, does not necessarily imply a restraint against involuntary alienation; Rochford v. Hackman (1852) 9 Hare 475 : 21 L.J. Ch. 511 : 16 Jur. 212 : 89 R.R. 539; Joel v. Mills (1857) 3 K. and J. 458 at p. 468 : 112 R.R. 231 and the restraint, in our opinion, does not bar a compulsory sale at the instance of the creditors; Hatton v. May (1876) 3 Ch. D. 148 : 24 W.R. 754; Hunt Foulston v. Furber (1876) 3 Ch. D. 285 : 24 W.R. 756; Roper v. Roper (1876) 3 Ch. 714 at p. 721 : 35 L.T. 155 : 24 W.R. 1013. We must hold, therefore, that the right of the appellant to receive the allowance is liable to be attached under Section 60 of the Civil Procedure Code of 1908. The substantial ground on which the appeal is based cannot, consequently, be supported.

4. It has been urged, however, on behalf of the appellant, that the Subordinate Judge had no jurisdiction to direct the manager under the Court of Wards to pay into Court, month by month, the allowance as it fell due. In our opinion, this contention is well founded and must prevail. The decree-holder is entitled to attach and to sell the right to receive the allowance; the purchaser at the sale will acquire the right of the judgment-debtor; but before that event lakes place, the manager cannot be called upon to pay the money into Court month by month. If this were permissible, a decree-holder who has attached land might claim that the profits from the date of attachment be paid into Court. In fact, the direction that the money be paid into Court is directly contrary to our previous decision in this matter; Raja Padmanand v. Rama Prasad 14 C.L.J. 127 : 16 C.W.N. 14 11 Ind. Cas. 22; nor can a Receiver be appointed to receive the money month by month Lucas v. Harris (1886) 18 Q.B.D. 127 : 56 L.J.Q.B. 15 : 55 L.T. 658 : 35 W.R. 112 : 51 J.P. 261 as might have been done if it had been held that the amount of allowance payable for any month was liable to be attached before it fell due. We direct, accordingly, that the sums deposited by the manager be paid out to the appellant, because they have been brought into Court in contravention of the previous orders of the High Court.

5. The result is that this appeal is allowed in part; the sums deposited by the manager will be returned to the appellant, but the decree-holder will be at liberty to bring to sale the right of the judgment-debtor to receive the allowance of Rs. 4,000 a month under the indenture of the 25th September 1905. As the victory has been a divided one, there will be no order for costs in this Court.


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