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Sewdayal Ramjeedas Vs. Official Trustee of Bengal - Court Judgment

LegalCrystal Citation
Subject Trusts and Societies
CourtKolkata
Decided On
Reported inAIR1931Cal651
AppellantSewdayal Ramjeedas
RespondentOfficial Trustee of Bengal
Cases ReferredIn Ranganadha Mudaliar v. Baghirathi Ammall
Excerpt:
- panckridge, j.1. this originating summons was filed on 8th march of this year. it is taken out by sewdayal eamjeedas, described as a firm carrying on business in copartnership or coparcenary as members of a joint hindu mitaksbara family at no. 130, machuabazar street. originally the only defendant was the official trustee of bengal, who is now sole trustee of three deeds of trust executed by a settlor of the name of chandicharan das, who died intestate on 19th july 1928, leaving him surviving his widow sm. sarengabala dasi, two minor sons, and a minor married daughter.2. the deeds of trust are dated 27th april 1921, 10th may 1924 and 20th december 1926. the deed of 27th april 1921, gives a life interest to the settlor and directs that after his death the trustee or trustees for the time.....
Judgment:

Panckridge, J.

1. This originating summons was filed on 8th March of this year. It is taken out by Sewdayal Eamjeedas, described as a firm carrying on business in copartnership or coparcenary as members of a joint Hindu Mitaksbara family at No. 130, Machuabazar Street. Originally the only defendant was the Official Trustee of Bengal, who is now sole trustee of three deeds of trust executed by a settlor of the name of Chandicharan Das, who died intestate on 19th July 1928, leaving him surviving his widow Sm. Sarengabala Dasi, two minor sons, and a minor married daughter.

2. The deeds of trust are dated 27th April 1921, 10th May 1924 and 20th December 1926. The deed of 27th April 1921, gives a life interest to the settlor and directs that after his death the trustee or trustees for the time being shall, after paying Rs. 20 a month to the daughter or each of the daughters of the settlor for their lives from the date of their marriage, pay the balance of the income to the widow for life for the maintenance of herself and her children, and thereafter hold the trust fund for the use and benefit of the son or sons, of the settlor, if more than one, in equal shares, to be made over to him or them on the attainment by him or them of the ago of 21 years, with power in the meantime to the trustee or trustees to spend such sum or sums out of the income for the maintenance, education, advancement or benefit of such son or sons as the trustee or trustees shall think fit, and accumulate the balance (if any) to form part of the corpus to be dealt with as thereinbefore directed. This is followed by a power to the settlor to vary by will subject to certain limitations.

3. The deed of 10th May 1924, also gives a life interest in the trust fund to the settlor and directs the trustee, after making provision for a monthly payment of Rs. 30 to the widow for life, to hold the rest of the trust estate, moveable or immovable, for the use and benefit of the son or sons of the settlor. The language of the first trust deed, as to the interest of such son or sons, is repeated. There then follows a proviso that in case of failure of issue in the direct male line of the settlor and, in default of any disposition by will by the settlor, the trust estate shall be applied in the founding of beds in a recognized hospital or towards some similar charitable object.

4. A power to vary by will similar to that in the first trust deed follows. The provisions of the deed of 20th December 1926, are similar to those of the deed of 10th May 1924. I am informed that the trust funds covered by the deeds of 1921 and 1924 have almost or entirely disappeared, and that the important fund is that covered by the deed of 1926. It is admitted that among the immovable properties covered by the deed of 1926 is one situated outside the local limits of the ordinary original civil jurisdiction of the Court.

5. The plaintiff firm claim to be interested in the trust estate in the following way. They are the payees of two promissory notes executed by the settlor on 27th January 1927 and 15th November 1927, for Rs. 1,500 and Rs. 2,000, respectively.

6. There has been no actual payment in respect of these notes, but, according to the plaintiff firm, there was an agreement with the settlor that the firm would be at liberty to appropriate the rent of the Strand Bank Press, premises of which the firm wore tenants and the settlor part owner, against the amount due on the notes. Such appropriations were made during the settlor's lifetime, but the official trustee maintains that this arrangement ceased to operate after the settlor's death, when his interest in the premises came to an end. This dispute is the subject of a separate suit instituted by the official trustee and there is also a prior originating summons taken out by the official trustee for construction of the three deeds of trust.

7. Broadly, the points at issue on the merits are these. The plaintiff firm maintain that the monthly payment to the daughters and the dispositions in favour of the sons are bad as infringing the rule against perpetuities formulated in Section 14, T.P. Act, 1882, and that there is in consequence a resulting trust to the settlor's estate. The defendants maintain that the gift to the sons at any rate is not hit by the rule, and as an alternative defence they submit that Hindus are exempt from the operation of Section 15 of the unamended Act, which gives statutory expression to what is called the rule in Leake v. Robinson [1817] 2 Mer. 363 and is as follows:

If, on a transfer of property, an interest therein is created for the benefit of a class of persons, with regard to some of whom such interest fails by reason of any of the rules contained in Sections 13 and 14, such interest fails as regards the whole class

8. I have not been told whether the two sons of the settlor ware born prior to the date of the execution of all or any of the deeds of trust, but I understand that it is not disputed that they will both, if they live, attain the age of 21 years in less than 18 years from the death of the settlor.

9. The defendants have, before me, raised two preliminary points: first that the summons is misconceived and that the proceedings are beyond the scope of Chap. 13 of the Rules and Orders of this Court; and secondly, that with regard to the third deed at any rate this is a suit for land situated partly outside Calcutta, and therefore since no leave has bean asked for or obtained under Clause 12, Letters Patent, the Court has no jurisdiction to entertain it.

10. In my opinion, it is not, in the circumstances of the particular case, open to the defendants now to take the first point; as I have said, the summons was filed on 8th March 1930. In due course, it came into the list of Lort-Williams, J., and was adjourned from time to time. On 12th May, an order was passed for making the widow and the three minor children of the settlor parties to the summons and for consequential amendments. After the widow and her children had bean duly made parties the summons again appeared in the list on several occasions. I understand that one of such occasions was 26th June 1930, when counsel for all parties, including counsel for the added defendants, were present. Lort-Williams, J., apparently made certain suggestions with a, view to consolidate the various proceedings, and on the same day the attorney for the plaintiff firm wrote to the attorney for the official trustee proposing a certain course:

which I hope will commend itself to you and the other parties.

11. Among the proposals was:

(4) That the Court should be invited to construe the various deeds of trust and express its opinion in terms of both the originating summonses.

12. A copy of the letter was forwarded to the attorney for the added defendants. The official trustee's attorney replied specifically agreeing to the plaintiff firm's suggestion, but the attorney for the added defendants did not communicate Ids views. On 30th June, all parties again appeared before Lort-Williams, J. There was another adjournment and on .10th July, the summons, together with the other proceedings, was transferred to the list of Remfry, J.

13. There is nothing on record to show that, on any occasion subsequent to 26th June, the added defendants indicated that they had any objection to the matter being disposed of in the way suggested in the letter of that date, and in my opinion this, coupled with their failure to reply to the letter, clearly indicates that they were prepared to consent to the plaintiff firm's suggestion as to the manner in which the matters at issue should be disposed of and I hold it is not now competent for them to take exception to the form of the proceedings.

14. The next point for decision is whether, having regard to the fact that part of the immovable property disposed of by the deed of 1926 is outside Calcutta, I have jurisdiction to deal with the summons, leave not having been obtained in terms of Clause 12, Letters Patent; or in other words, whether this is a suit for land or other immovable property within the meaning of that clause.

15. It is elementary that if the Court has no jurisdiction having regard to the subject-matter of the suit and the failure of the plaintiff to obtain the necessary leave of the Court, no consent, express or implied on the part of the defendants, can cure the defect.

16. Further, it is clear that for the purpose of Clause 12, an originating summons is a 'suit:' Galstaun v. Diana Sarkies : AIR1929Cal227 and Provas Chandra Sinha v. Ashutosh Mukherji : AIR1930Cal258 . Of recent years there appears to have been a tendency in the other High Courts to place a narrower construction on the words 'suits for land' than finds favour in the Calcutta High Court. In Provas Chandra Sinha v. Ashutosh Mukherji : AIR1930Cal258 , Page, J., re-stated the definition previously formulated by him in Gokuldas v. Chaganlal : AIR1927Cal768 which was to the following effect:

In my opinion suits for land or other immovable property in Clause 12, Letters Patent, means suits in which having regard to the issues raised in the pleadings the decree or order will affect directly the proprietary or possessory title to land or other immovable property.

17. Now it must be conceded that the passage in Gokaldas v. Chaganlal : AIR1927Cal768 , where Page, J. formulated the definition set out above is in a sense obiter, since he decided that the case did not fall within the definition but held that the Court had no jurisdiction on other grounds. But even if I am not disposed to assent to the definition without further examination, I see no reason to think that Provas Chandra Sinha v. Ashutosh Mukherji : AIR1930Cal258 was wrongly decided. That case resembled the present case in this that the plaintiff sought in the summons to have it decided inter alia whether certain testamentary dispositions of immovable properties outside Calcutta were void for remoteness.

18. What is it that the plaintiffs seek here? Surely to have it established that, on the death of the tenant for life, the title to the immovable property no longer remained in the official trustee in trust for the sons as they attain the age of 21 years, but reverted to the estate of the settlor, and that the property accordingly has become available to satisfy the claims of their creditors.

19. I do not think that the suit is not a suit for land because the plaintiff does not claim a proprietary title for himself. That appears to me to follow from the decision of this Court in the Delhi and London Bank v. Wordie [1876] 1 Cal. 249. That was a suit to compel the sale of certain lands which had been conveyed by two persons to trustees on a trust for sale for the benefit of their creditors. It is true that one of the alleged transferors denied the validity of the transfer, but this aspect of the case was not made the ground for the decision by Phear, J., and in my opinion there is nothing in the judgment of Garth, C.J., to warrant the conclusion that the view of the Court on appeal would have boon different had the validity been admitted.

20. I think that to hold that this is not a suit for land would be tantamount to holding that Provas Chandra Sinha v. Ashutosh Mukherji : AIR1930Cal258 was wrongly decided. I agree with the view taken by Page, J. in that case, and I hold that this is a suit for land arid as no leave has been given I have no jurisdiction to try or determine it, at any rate, as far as the deed of 1926 is concerned.

21. I do not consider that the two authorities upon which Mr. H. D. Bose relies have any application to the present case.

22. In Juggodumba Dossee v. Puddomoney Dossee [1875] 15 Beng. L.R. 318, lands outside Calcutta, had been given by way of debuttar to certain idols ; the plaintiffs who claimed to be shebaits complained that they had boon ousted by their coshebaits the defendants, and .sought a declaration that they were entitled to be shebaits jointly with the defendants, ancillary reliefs such as the appointment of a receiver, an injunction and settlement of a scheme were also prayed for. It was held that the suit was not one for land or other immovable property. In that ease, as pointed out by Markby, J., no decree bearing directly upon land or any interest in land was sought, it being common-ground that the property was vested in the idol and that neither plaintiffs nor defendants had any beneficial interest in the land. Nagendra Nath v. Eraligool Co. Ltd. A.I.R. 1922 Cal. 443 appears to me to amount to no more than this: it re-affirmed the familial-decision in the Land Mortgage Bank v. Sudurudeen Ahmed [1892] 19 Cal. 358 to the effect that a vendor's suit for the specific performance of an agreement to sell immovable property is not a suit for land within the meaning of Clause 12, and laid it down that such a suit does not become a suit for land, because the defendant denies the title of the plaintiff to some portion of the land that the latter has contracted to convey. Neither case, as I have said has anything in common with the case before me.

23. Although this ground appears to ma sufficient to dispose of the summons at any rate in its present form I propose to deal with the merits of the questions raised, a course which I was invited to take by all parties during the hearing.

24. The main question is that relating to the gift to the sons. The so-called rule against perpetuity is thus formulated in Section 14, T.P. Act:

No transfer of. property can operate to create an interest which, is to take effect after the lifetime of one or more persona living at the date of such transfer and the minority of soma 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;

and it is pointed out that the longest period to which the gift could be postponed without violating the terms of the section is 18 years from the death of the settlor. Assume, with regard to the deed of 1926, a son to be born to the settlor in 1927 and the settlor to die in 1928, the son would attain majority in 1945 but the deed attempts to postpone the operation of the disposition until 1948.

25. The rule it is said is therefore infringed and owing to the operation of Section 15 (as unamended), the gift to the whole class fails.

26. The defendants however contend that the gift became vested at the death of the tenant-for-life being covered by Section 19 of the Act, and they also say that even if the gift does in terms infringe the rule nevertheless the settlor's two sons will take, since they will, in fact, attain the age of 21 within 18 years from the settlor's death. They say that Section 15 has no application to Hindus. It may hero be convenient to consider what has been the history of the law as regards this matter. Undoubtedly, under Hindu law, a gift cannot be made to a person who is not in . existence at the date of the gift. Jatindra Mohan Tagore v. Ganendra Mohan Tagore [1872] 9 Beng. L.R. 377. The Transfer of Property Act which carne into force on 1st July 1882, although providing for gifts to unborn persons under certain limitations : see Section 13, left the rule untouched, since under Section 2 of the Act, nothing in Chap. 2 thereof was to be deemed to affect any rule of Hindu, Mahomedan, or Buddhist law.

27. In 1916, that is to say, prior to the data of any of the deeds with which this summons is concerned, it was enacted by the Hindu Disposition of Property Act, which extends to the whole of British India except the province of Madras that, subject to the limitations and provisions therein specified, no disposition of property by a Hindu, whether by transfer inter vivos or by will shall be invalid by reason only that any parson, for whose benefit it shall have been made, was not in existence at the date of such disposition. Section 8 enacts that, in respect of dispositions by transfer inter vivos, the limitations and provisions shall be those contained in Sections 13, 14 and 20, T. P. Act, 1832.

28. The all-important question is the date of the vesting of the gifts. To take the deed of 1926 first--since, from a practical point of view, this is the deed of greatest importance--do the gifts to the sons vest on the death of the tenant for life subject to a possibility of being divested in the case of those sons who fail to attain the age of 21? If so, the gift is good. Or, is the operation of the gift postponed till the age of 21, i.e., three years beyond the attainments of majority? If so it is a 'Contingent gift to a class dependent in the case of each member on his attaining 21, and, if the provisions of Section 15 apply, bad as regards the whole class.

29. The law as regards vested and contingent interests is contained in Sections 19 and 21 of the Act read with Sections 20 and 22:

19. Whore, on a transfer of property, an interest therein is created in favour 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 which must happen, such interest is vested, unless a contrary intention appears from, the terms of the transfer.

A vested interest is not defeated by the death al the transferee before he obtains possession.

Explanation.--An intention that an interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other persons, or whereby income arising from the property is directed to be accumulated until the time o enjoyment arrives, or from a provision that, if a particular event shall happen the interest shall pass to another person.

21. Where, on a transfer of property an interest therein is created in favour of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property. Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter, when the happening of the event becomes impossible.

Exception.--Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from, such interest before he roaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent.

30. Now, with regard to Section 19, it is, I think, important to notice that the burden of proving the contrary intention is on those that assert it, and the weight of the burden is aggravated by the elimination, in the explanation, of circumstances which might, apart from the explanation, be thought sufficient to discharge it.

31. Now, when we look at the language of this deed, we find that the settlor has directed that, after the death of the tenant for life, and after making (which I suppose means subject to making), provision out of the trust found for the payment of Rs. 30 per month to the widow for life, the trustee is to hold the rest of the trust estate for the use and benefit of his son or sons to be made over to him or them on the attainment of 21 years. I have not found, nor could I expect to find, any case in which the language is the same, but, in my opinion, the words 'to hold, for the use and benefit of' strongly support an immediate vesting of the interest disposed of, and I also think that the Words 'to be made over' are more consistent with the postponement of a vesting in possession of that which is vested in interest than with the postponement of the vesting in interest itself, I think Chance v. Chance [1853] 16 Beav. 572, strongly relied on by Mr. H.D. Bose, can be distinguished. There the words were:

I give and bequeath and will, and direct the principal sum to be divided into two equal half parts or shares and one such half part or share to be transferred or paid unto and equally divided between all the children of C at the age of 25 years.

32. It is significant that there are no words of gift purporting to operate on the death of the life tenant and, in my opinion, the words 'to be transferred' differ from the words 'to be made over,' inasmuch as the former import a postponement of vesting in interest.

33. The legislature has not thought fit to furnish illustrations to Section 19, T. P. Act, and I am doubtful how far, if at all, it is permissible to refer to illustrations in one statute for the purpose of construing another in similar terms. However this may be, I think it right to draw attention to the language of Illus. (v), Section 119, Succession Act, 1925 (the vesting sections):

(v) A bequeaths the whole of his property to B upon trust to pay certain debts out of the income, and then to make over the fund to C. At A's death the gift to C becomes vested in interest to him.

34. The defendants, moreover, contend that, if the language of the gift primarily connotes a contingency, the gift is however vested by reason of the exception to Section 21:

Where under a transfer of property a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent.

35. Mr. H.D. Bose relies on certain English cases in support of the proposition that the exception cannot apply where all that is given by the instrument is a discretionary power to the trustee to spend such sum or sums out of the income for the maintenance, education, and advancement or benefit of such son or sons as the trustee shall think fit. I think the proposition is certainly correct as far as English law is concerned: In re Parker; Barker v. Barker [1880]16 Ch. D.44, In re Mervin; Mervin v. Crossman [1891] 3 Ch. 197 . Now it is pointed out in Ratanbai Rustaimji v. Cawasji Edalji A.I.R. 1923 Bom. 96 that the words of the exception to Section 107 (the corresponding section of the Succession Act, 1865), are wider than the English law, but, even reading the words of the exception to Section 21 without reference to English authorities, I feel compelled to hold that in the instruments with which I am dealing there is no direction within the meaning of the exception but merely a power. I am of opinion therefore that unless I am right in holding that the disposition in favour of the sons is covered by Section 19, it is contingent, and the vesting in interest is postponed to a period longer than that permissible under Section 14.

36. The final matter for decision is whether if the rule against perpetuities has been, violated, the interest fails as to all the sons by reason of the provisions of Section 5 as unamended or whether, the parties being Hindus, that section has no application. Mr. S.M. Boss points out that although the Hindu Disposition of Property Act, 1916, expressly makes the dispositions thereby rendered valid subject to the limitations provided by Sub section 13 and 14, nothing is said of Section 15.

37. On this point reference is also made to Ram Lal Sett v. Kanai Lal Sett [1886] 12 Cal. 663 when in dealing with a deed of 1871, Garth, C.J., and Wilson. J., held that where a gift was in favour of a class some of whom were not in existence at the date of the will and therefore being Hindus were incapable of taking the gift inured for the benefit of those members of the class who were capable of taking, or in other words, that the principle of Leake v. Robinson [1817] 2 Mer. 363, as explained in Pearks v. Moseley [1880] 5 A.C. 714 did not apply. The judgment of Wilson, J., was approved in emphatic language by Lord Macnaghten in Bhagabati Barmanya v. Kalicharan Singh [1911] 38 Cal. 468 a case concerned with a will of 1868. It must be observed that in neither of these eases was there the type of 'remoteness' contemplated by Section 14, T.P. Act, but a remoteness peculiar to Hindu law based on the rule existing till 1916, forbidding gifts or bequests to unborn persons. It appears to me fallacious to argue that because the principle of Leake v. Robinson [1817] 2 Mer. 363 did not apply to a gift to a class avoided as to some of its members by the Hindu law there is therefore a rule of Hindu law within the meaning of Section 2(d) of the Act, which excludes gifts to a class covered by Section 14 from the operation of Section 15. It is significant to note that the late Sir Asutosh Mookerjee in his 'Law of Perpetuities in British India' (Tagore Law Lectures, 1898), p. 178 wrote:

I am not aware of any decision in which the doctrine of Leake v. Robinson [1817] 2 Mer. 363 has been repudiated when the gift to a class fails as regards some of its members by reason of the rule against perpetuities.

38. In Rojomoyee Dassee v. Troylukho Mohiney Dassee [1901] 29 Cal. 260 Stanley, J., applied that doctrine to the will of a Hindu dated 1892, observing that it seemed to him consonant with Hindu law and a convenient rule to follow. In Ranganadha Mudaliar v. Baghirathi Ammall [1906] 29 Mad. 412 the Court was of opinion that the particular gift in the settlement did not infringe 8, 14, but 'they also clearly considered that had it done so, Section 15 would have applied. Further, I do not think any inference should be drawn from the absence of reference to Section 15 in the Act of 1916. That Act while giving validity to dispositions by Hindus previously invalid by reason of the rule in the Tagore case [1892] 19 Cal. 358, made such dispositions when inter vivos subject to the limitations of Section 14, T. P. Act. In a case therefore infringing those limitations, the disposition will lie covered by than language of Section 15, although it is not expressly mentioned in the Act of 1916 subject to its being shown there is some rule of Hindu law at variance with that section.

39. I hold therefore that, if I am wrong in ray view as to the vesting of the gift to the sons, and, if by reason of the postponement of the period of distribution to the age of 21, there is a possible failure in the case of any son, Section 15 (as unlamented) applies and the gift fails as regards the whole class.

40. This disposes of the main points raised in the summons. 1 therefore answer the questions as follows subject to what I have said as to the absence of jurisdiction in the Court to entertain the summons at any rate as far as the property covered by the dead of 1926 is concerned:

Question (1)--Whether on a true construction of the said three several deeds of trusts, there is a resulting trust in favour of the estate of the settlor Chandicharan Das, to which the heirs of the settlor are entitled subject to payment of his debts.

Answer.--No.

Question (-2)--Whether the defendant is holding the, estates, covered by the said three deeds of trust, or the residue thereof or any portion of the said estate on behalf of the heirs of the settlor, Chandicharan Das, subject to payment of his debts aunt-liabilities.

Answer.--No.

Question, (3) --As to the deed of trust, dated 27th April 1921, I hold that the gift of Rest. 20 a mouth to the daughters on marriage is invalid by reason of Ss. 14 and 13, T. P. Act, and I hold that each of the sons of the deceased settlor obtained a vested interest in a .moiety of the trust found on the death of the widow subject to being divested if such son died before attaining the age of 21.

(b) As to the deeds of 10th May 1924, and 20th December 1926, subject to the provision of the monthly payments to the settlor's widow therein specified, each of the sons of the settlor obtained a vested interest in a moiety of the trust found on the death of the settlor subject to being divested if such son died before attaining the age. of 21.

41. As to the costs, the plaintiff firm must pay the costs of all the defendants taxed as of a hearing on Scale No. 2, but only one sot of costs to be allowed to the added defendants. The official trustee is entitled, in the first instance, to take his costs oat of the trust property taxed as between attorney and client on Scale, No. 2.


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