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1911 DIGILAW 251 (CAL)

Chamaru Sahu v. Sona Koer

1911-06-30

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JUDGMENT Mookerjee, J. - The substantial question of law in this appeal relates to the Validity of a clause for restraint upon alienation in a deed of family settlement between two Hindu widows and the reversionary heirs of their husbands who were two brothers. The circumstances under which the question in controversy has arisen are not disputed, and may be briefly narrated. The Plaintiff-Respondent, Sona Koer, is the widow of Matukdhari Lal, and the 8th Defendant, Mahatab Koer, is the widow of Ayodha Prasad. Shortly after the death of their husbands a dispute arose between them as to the title to certain landed properties. The result was that the widows and the reversioners entered into an arrangement for settlement of these disputes. The terms of the compromise were embodied in two instruments executed on the 21st December 1894 and 15th January 1895. It not necessary for our present purpose to examine in minute detail all the provisions of these deeds. It is sufficient to state that the widows and the reversioners agreed that the properties should become vested in the reversioners; that a portion of the landed property and a sum of Rs. 6,000 should be dedicated for the construction of a temple and other specified religious and charitable purposes: that the widows should each receive annually a sum of Rs. 500 as maintenance out of the income of the estate of her husband vested in the reversionary heirs ; and that during the life-time of the widows, the reversionary heirs should have no right to transfer any immoveable property left by their husbands. It appears that shortly after the execution of these documents, the reversionary heirs, on the 26th August 1904, 29th August 1905 and 28th November 1905, successively executed simple and usufructuary mortgages in respect of the properties taken by them under the settlement. On the 4th September 1907, the Plaintiff Sona Koer as the widow of Matukdhari Lal commenced the present action for declaration that these alienations were invalid and inoperative in law because made in contravention of the ekrarnama of the 21st December 1894 and the subsequent solenama of the 10th January 1895. She joined as parties Defendants the transferees (the first four Defendants), the reversioners (the next three Defendants) and the widow of Ayodha Prasad (the eighth Defendant). She joined as parties Defendants the transferees (the first four Defendants), the reversioners (the next three Defendants) and the widow of Ayodha Prasad (the eighth Defendant). The claim was resisted by the transferees principally on the ground that the restraint upon alienation was void in law and that the Plaintiff was not entitled to claim any declaration. The Court of the first instance held that as the estate had vested absolutely in the reversionary heirs and as there was no clause for forfeiture upon alienation, the restraint upon alienation was illegal and unenforceable. In this view the Subordinate Judge dismissed the suit. Upon appeal, the learned District Judge has held that the restraint upon alienation was valid in view of the decisions in Lalit Mohun Singh v. Chukkun Lal Roy I. L. R. 24 Cal. 834 (1897) and Kuldip Singh v. Khetrain Koer I. L. R. 25 Cal. 869 (1898). The District Judge has therefore reversed the decision of the original Court and remanded the case for trial on the merits. The mortgagees Defendants have appealed to this Court, and on their behalf, the decision of the District Judge has been challenged substantially on the ground that the restraint upon alienation is invalid in law, and that the Plaintiff is not entitled to any declaration in the suit as framed. On behalf of the Respondent, it has been argued that, even if the restraint upon alienation be treated as invalid, the Plaintiff is entitled to a declaration that the alienations impeached do not affect her right to receive maintenance out of the estate of her husband whether that estate continues in the hands of the reversioners or a portion thereof has been included in the mortgages. In so far as the question of the validity of the restraint on alienation is concerned, our attention has been invited to secs. 10 and 11 of the Transfer of Property Act. Sec. 10 provides that where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void except in the two cases of lessees and married women. 10 and 11 of the Transfer of Property Act. Sec. 10 provides that where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void except in the two cases of lessees and married women. Sec. 11 provides that where on a transfer of property, an interest therein is created absolutely in favour of any person, and the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction. If the restraint in the case before us is tested with regard to provisions of sec. 10 of the Transfer of Property Act, the question arises whether the transferee has been absolutely restrained within the meaning of that section. It has been argued that as the restraint is limited in point of time it does not fall within the mischief of the rule enunciated in sec. 10. It may be conceded that this view may possibly be supported upon a strict construction of the language used by the Legislature in that section. It is not improbable that the framers of the section had in view the judgment of Sir George Jessel, M. R., in In re Macleay L. R. 20 Eq. 186 (1875), in which that learned Judge observed as follows :--" The test is whether the condition takes away the whole power of alienation substantially; it is a question of substance and not of mere form. You may restrict alienation in many ways ; you may restrict it by prohibiting it to a particular class of individuals or you may restrict alienation by restricting it to a particular time." This exposition perhaps tends to support the view that a restraint on alienation qualified as to time may be valid. Now it cannot be disputed that a condition or conditional limitation upon alienation of a contingent interest before it vests is good, as first held in Large's case (1587) 2 Leon 83 ; 3 Leon 182 and as repeatedly affirmed in subsequent decisions: Churchill v. Marks (1844) 1 Coll. 441, and Barnett v. Blake 2 Dr. and Sm. 117 (1862). Now it cannot be disputed that a condition or conditional limitation upon alienation of a contingent interest before it vests is good, as first held in Large's case (1587) 2 Leon 83 ; 3 Leon 182 and as repeatedly affirmed in subsequent decisions: Churchill v. Marks (1844) 1 Coll. 441, and Barnett v. Blake 2 Dr. and Sm. 117 (1862). But it does not necessarily follow that a condition or conditional limitation upon alienation limited in time is good when attached to a vested interest. In Renaud v. Tourangaen L. R. 2 P. C. 4 (18) ; 5 Moo. P. C. N. S. 5. (1867), their Lordships of the Judicial Committee held that a restraint upon the devisees of lands from alienating them for a period of twenty years from the testator's death was not valid either by the old law of France which was directly applicable to the case or by the general principles of jurispudence. This view is consistent with that expressly or impliedly held in Ware v. Caun 10 B. and C. 433 : 34 R. R. 409 (1830), Bradley v. Peixoto (1797) 3 Ves. 324 : 4 R. R. 7, Willis v. Hiscox (1839) 4 Myl. and Cr. 197 ; 48 R. R 69, Rishton v. Cobb (1839) 5 Myl. and Cr. 145 : 48 R. R. 256, In re Jones's Will 23 L. T. N. S. 211 and In re Manchu 21 Ch. D. 838 (1882). The contrary view, however, has been assumed as correct, without investigation, in some decisions, for instance, Kiallmark v. Kiallmark 26 L. J. Ch. 1 (1856), Kearsley v. Woodcock 3 Hare. 185 (1843), Churchill v. Marks (1844) 1 Coll. 441 and Fearson v. Dolmon L. R. 3 Eq. 315 (1866), which last case is based upon a singular misapprehension of the accurate statement of Turner, V. C., in Rochford v. Hackman 9 Hare. 475 (1852), that a life-estate could be determined by an alienation. The prevailing view in England, therefore, undoubtedly is that a condition restraining alienation of an estate in fee is bad even though it is qualified as to time. In support of this proposition, it is sufficient to refer to the elaborate opinion of Mr. Justice Pearson in In re Rosher 26 Ch. D. 801 (1884), [see also Dugdale v. Dugdale 38 Ch. D. 176 (1888)]. But in a later case [In re Porter [1892] 3 Ch. In support of this proposition, it is sufficient to refer to the elaborate opinion of Mr. Justice Pearson in In re Rosher 26 Ch. D. 801 (1884), [see also Dugdale v. Dugdale 38 Ch. D. 176 (1888)]. But in a later case [In re Porter [1892] 3 Ch. 481], Mr. Justice North questioned if there was any distinction in principle, so far as the present matter is concerned, between a contingent interest and an interest which is vested but is liable to be divested. It must be remembered, however, that a provision for forfeiture attached to a contingent estate is a condition precedent, while when attached to an estate vested although liable to be divested, it is a condition subsequent, and consequently the distinction between the two cases is essentially the fundamental distinction between conditions precedent and conditions subsequent. In so far therefore as the English Courts are concerned, the preponderance of judicial opinion is in favour of the view that a condition or conditional limitation upon alienation, limited in time, is bad when attached to a vested interest. In the American Courts also, there has been considerable divergence of judicial opinion and it has been often assumed without discussion that a condition against alienation when attached to a vested interest is good if confined to a limited period. But the better view is in the opposite direction. The judgment of Mr. Justice Christiancy in Mandlebaum v. Macdonell (1874) 29 Michigan 78 ; 18 Am. Rep. 61 is the fullest argument against the validity of such conditions and conditional limitations to be found in the books and it may now be taken as settled in the American Courts that a restriction on the alienation of a fee simple, though limited in time, is void [see the decision of the Supreme Court of the United States in Porter v. Couch (1890) 141 N. S. 296]. In so far, therefore, as what is described by their Lordships of the Judicial Committee as "the general principles of jurisprudence" is concerned, the position is plain. But a difficulty is apparently created by the language used by the Legislature in sec. 10 of the Transfer of Property Act which is possibly based upon the view of Sir George Jessel, M. R., in In re Macleay L. R. 20 Eq. 186 (1875), subsequently, as we have explained, repudiated in England. But a difficulty is apparently created by the language used by the Legislature in sec. 10 of the Transfer of Property Act which is possibly based upon the view of Sir George Jessel, M. R., in In re Macleay L. R. 20 Eq. 186 (1875), subsequently, as we have explained, repudiated in England. We, therefore, do not propose to rest our decision on the ground that sec. 10 invalidates the restraint upon alienation in the case before us. We have next to examine the provisions of sec. 11 of the Transfer of Property Act. This section recognises the elementary principle that a transferee of property who takes an absolute interest, as for instance, a donee or purchaser, cannot be restrained in his enjoyment or disposition of it by any condition inserted in the transfer. Such a condition deprives the property of its legal incidents and is inconsistent with or repugnant to the main purpose of the transfer. It is consequently arbitrary and not enforceable in a Court of law [Krishna v. San Manga 6 Mad. H. C. R. 248 (1871) and Anantha Nagamuthu I. L. R. 4 Mad. 200 (1881)]. In the first of these cases Mr. Justice Holloway defended the doctrine on the broad ground that every right capable of enforcement must have for its contents some conceivable human interest but not necessarily a pecuniary one. The same view was approved by their Lordships of the Judicial Committee in McLean v. McKay L.R..5 P. C. 327 (1873). In our opinion, there is no room for serious controversy that the restraint on alienation in the case before us is bad in view of the principle recognised in sec. 11 of the Transfer of Property Act. The question which finally arises for consideration is, whether the Plaintiff is entitled to any relief at all in the suit as framed. Now the deeds of family settlement make it reasonably plain that the object of the proposed restraint on alien; action by the reversioners was the protection of the right of the widows to receive maintenance from what had been the estate of their husbands. To this extent, the object was perfectly legitimate, and we are of opinion that on the principle recognized in the case of Ali Hasan v. Dherja I. L. R. 4 All. To this extent, the object was perfectly legitimate, and we are of opinion that on the principle recognized in the case of Ali Hasan v. Dherja I. L. R. 4 All. 518 (1882), the Plaintiff ought to have a declaration that the Appellants who have accepted mortgages contrary to the provisions of the deeds of settlement have acquired rights subject to the right of maintenance possessed by the Plaintiff. In the case just mentioned, it was ruled that a transfer of mortgaged property in breach of a condition against alienation is valid, except in so far as it encroaches upon the right of the mortgagee, and that this reservation does not bind the property so as to prevent the acquisition of a valid title by the transferee. A useful analogy is also furnished by the principle recognised in one of the American States, Lousiana, where the Roman Law through Spanish sources is still regarded as the foundation of the jurisprudence, and where it has been held that if there is an agreement in a mortgage that the mortgagor would not alienate the equity of redemption, an alienation in contravention thereof is so far void as against the mortgagee that the latter can carry on his execution proceedings of seizure and sale without making the purchaser a party or taking any notice of a change of ownership (Kent, Commentaries, Vol. IV, 185; Burge, Colonial and Foreign Law, Vol. III, p. 197 ; Avegens v. Schmidt (1887) 113 U. S. 293 and New Orleance National Banking Association v. Le Breton (1885) 120 U. S. 765, where the effect of the pact de non alienando is explained). The Plaintiff here can have no grievance if her right to receive maintenance is protected and declared unaffected by the mortgage transactions; the Defendants also cannot complain of such declaration, because they must be taken to have notice of all the covenants in the title-deeds of their mortgagors, and if they have taken the mortgages with notice, actual or constructive, of the right of the Plaintiff to receive maintenance, their own rights must be subordinated to that extent. In this view, the decree made by neither of the Courts below can be supported on principle. 2. The result, therefore, is that this appeal is allowed, and the order of the District Judge discharged. In this view, the decree made by neither of the Courts below can be supported on principle. 2. The result, therefore, is that this appeal is allowed, and the order of the District Judge discharged. The suit will stand decreed in the manner following, namely, the Plaintiff will have a declaration that her right to receive maintenance under the deeds mentioned has in no way been affected by the transactions under which the Appellants have derived title. Each party will pay his own costs throughout this litigation. Carnduff, J. I agree. Mookerjee, J.