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1967 DIGILAW 95 (KER)

Arumugham Pillai v. Bhagavathi Amma

1967-04-04

K.K.MATHEW, K.SADASIVAN

body1967
JUDGMENT K.K. Mathew, J. 1. The suit, out of which this appeal arises, was instituted by the plaintiff the appellant, for a declaration that a hypothecation bond executed by the 1st defendant in favour of the 2nd defendant is valid only to the extent of the interest of the 1st defendant in the property in question. The property was purchased in the name of the 1st defendant, the second wife of one Arumugham Pillai Sivantha Perumal; the plaintiff being his son by his first wife. It was recited in the sale deed Ext. P-1 that the consideration for it has proceeded from the husband of the 1st defendant, that the 1st defendant is to have a life interest in the property and that after her death the full interest in the property shall devolve on the plaintiff and his male children. The case of the plaintiff was that according to the provisions in the recital the 1st defendant has only a life interest in the property, that the remainder vested in the plaintiff and that the hypothecation bond was valid only to the extent of the interest of the 1st defendant. 2. The 1st defendant contended that she obtained an absolute interest in the property under Ext. P-1. 3. The learned Munsiff accepted the contention of the 1st defendant for the reason that the sale deed by its operative portion conveyed an absolute interest to the 1st defendant and that the later recital in it extracted below being repugnant to the absolute interest created in favour of the 1st defendant was inoperative. The specific provisions of the recital are: xxx xxx xxx The learned Munsiff, therefore, dismissed the suit. There was an appeal from the decision to the District Court. That court reversed the decision holding that the intention of the concerned parties as evidenced by the recital was to purchase the property in the name of the 1st defendant but to confer on her only a life interest over it. The learned District Judge was of opinion that the recital in the sale deed indicating that intention having been agreed to by the 1st defendant by accepting the sale deed, she could not be heard to contend otherwise. Against this decree, there was a second appeal to this court and a learned Judge reversed the decision and restored the decree passed by the learned Munsiff. Against this decree, there was a second appeal to this court and a learned Judge reversed the decision and restored the decree passed by the learned Munsiff. The learned Judge held that under the sale deed the 1st defendant obtained an absolute interest in the property and that the interest sought to be created by the recital in favour of the plaintiff was repugnant to the absolute interest already created in favour of the 1st defendant and was therefore inoperative. It is against this decree that the appeal has been filed. 4. The learned Judge in taking this view was largely influenced by the operative portion of the sale deed which runs as follows: xxx xxx xxx He said that so long as there is a conveyance by the vendor of the full interest in the property in favour of the 1st defendant by the sale deed, a recital in it by the vendor that the consideration has proceeded from the husband of the 1st defendant, who was not a party to the sale deed, with the intention that the 1st defendant should have only a life interest in the property and that the remainder should vest in the plaintiff and his male children has no legal consequence. 5. We think, that normally when a sale deed is taken, the operative portion of the deed governs the construction of the quantum of interest conveyed to the vendee. If absolute interest is conveyed by the operative part of the deed, a subsequent provision repugnant to the absolute interest already created would be void. But, we fail to see how that proposition alone can be applied undiluted to the facts of the present case. The recital in Ext. P-1 makes it clear and there is no evidence to the contrary that the consideration for the sale deed proceeded from the husband of the 1st defendant and father of the plaintiff. The averment in the plaint that the consideration proceeded from the husband of the 1st defendant has no doubt been denied in the written statement of the 1st defendant. But, the 1st defendant has not given any evidence that she had the means to pay the consideration or that the consideration was paid by her. The plaintiff has gone to the box and has sworn that it was his father who paid the consideration. But, the 1st defendant has not given any evidence that she had the means to pay the consideration or that the consideration was paid by her. The plaintiff has gone to the box and has sworn that it was his father who paid the consideration. Therefore, as matters stand, we have to take it that the consideration for the sale deed proceeded from the husband of the 1st defendant. 6. The principle behind section 82 of the Indian Trusts Act is that a person advancing consideration and taking a. sale deed in the name of another will be the beneficial owner of the property unless the intention of the person advancing the consideration to benefit the person in whose name the sale deed is taken is clear from the terms of the document or the surrounding circumstances. In other words the transferee under the deed will have to hold the property for the benefit of the person advancing the consideration notwithstanding the fact that the full interest in the property has been conveyed to the transferee and that he is to all intents and purposes the full legal owner, unless the person advancing the consideration intended to benefit the transferee and then only to the extent of the actual benefit intended to be conferred. It is clear from the recital that the husband of the 1st defendant intended to benefit the 1st defendant only to tire extent of conferring upon her a life interest in the property notwithstanding the fact that by operative portion of the sale deed the full legal ownership was conveyed to her. To say that since the operative portion of the sale deed conferred an absolute interest upon her is to say nothing but that she became the full legal owner of the property. But, can she hold the property as absolute owner notwithstanding the intention of her husband, who provided the consideration for the sale deed, that she should have only a life interest? We think not. Why? Because the husband intended it to be so and he is the master of the situation. But, can she hold the property as absolute owner notwithstanding the intention of her husband, who provided the consideration for the sale deed, that she should have only a life interest? We think not. Why? Because the husband intended it to be so and he is the master of the situation. "If A pays the whole of the purchase price intending to make a gift to B of a share of the property, or of a limited interest in the property, B takes for his own benefit the share or interest which A intended to give him, but holds the property upon a resulting trust for A as to the balance." (Scott on Trusts Vol. IV, Page 3051). At page 3028 of the same volume, it is observed: "The inference of a resulting trust may be rebutted in part. Thus where A pays the whole of the purchase price and the title is taken in the name of B. it may be shown that the intention of the parties was that B should have the beneficial interest in a share of the property and that A should have the remaining share. In such a case A can enforce a resulting trust as to his share of the property, the resulting trust being rebutted as to the other share." These passages would show that it will be open to the person providing the consideration to confer either the full or a limited beneficial interest in the transferee. In the case at hand, the recital makes it clear that the husband of the 1st defendant who advanced the consideration for the sale deed in favour of the 1st defendant intended that the 1st defendant should have only a life interest in the property and if there was no further indication of his intention as to the remainder, the 1st defendant would have to hold it for the benefit of her husband. Therefore, the further question for consideration is what was his intention as regards his beneficial interest in the remainder. Therefore, the further question for consideration is what was his intention as regards his beneficial interest in the remainder. The learned Judge was of opinion that under section 82 of the Indian Trust Act, a trust can result only to the person advancing the consideration and that since it is the plaintiff who claims the beneficial interest in the property after the death of the 1st defendant, and not the husband of the 1st defendant, section 82 can be of no assistance to the plaintiff. He was also of the view that a trust can be created only by the owner of the property and the owner of the property was the 1st defendant and that she has not created any trust in favour of the plaintiff in respect of the remainder. As we have said, we have no doubt that the husband of the 1st defendant intended to give the beneficial interest in the remainder to the plaintiff. That was the understanding on the basis of which he paid the consideration. But the question is has he succeeded in effectuating his intention? In other words, has he employed the legal machinery to carry out his intention? It was said that when it seen that the 1st defendant can claim only a life interest in the property and that there is a resulting trust in favour of her husband of the remainder and that the intention of the husband was that the beneficial interest in the remainder should vest in the plaintiff, the first defendant must hold that interest as trustee for the plaintiff. We think that that would have been the result. The vendor in making the recital in the sale deed as to the disposal of the beneficial interest in the remainder resulting to the husband was acting as his agent. It would look as though the husband of the 1st defendant said to the vendor, "I am advancing the consideration for the sale deed in the name of the 1st defendant. Although she would become the legal owner under it, she should have only a life interest in the property. The remainder which results to me I intend to give to my son (the plaintiff). Although she would become the legal owner under it, she should have only a life interest in the property. The remainder which results to me I intend to give to my son (the plaintiff). You insert the appropriate recital in the sale deed to give effect to my intention." The author of the trust then would be the husband of the first defendant, the trust property, the beneficial interest in the remainder which resulted to him under section 82 of the Indian Trust Act; and the document by which the trust was created, Ext. P-1 sale deed, where the vendor of the property acting as agent of the husband of the first defendant, the author of the trust, by the recital aforesaid, imposed an obligation upon the 1st defendant and annexed to the legal ownership of the property to hold the remainder to the plaintiff. By accepting the sale deed with the recital, the 1st defendant would have become the trustee for the plaintiff of the beneficial interest in the remainder resulting to the husband of the 1st defendant, and in that capacity as beneficiary the plaintiff would have been entitled to pray for the declaration that the hypothecation bond was valid only to the extent of the 1st defendant's interest in the property. But section 8 of the Indian Trusts Act, 1882, Act II of 1882 says: "The subject-matter of a trust must be property transferable to the beneficiary. It must not be a merely beneficial interest under a subsisting trust." As the interest which resulted to the husband of the 1st defendant under section 82 was a beneficial interest he could not have created a trust in favour of the plaintiff of that beneficial interest, and therefore, his agent, the vendor could not have done so. We therefore think that no trust of the beneficial interest of the husband of the 1st defendant could have been created. There are no words of transfer of that interest in favour of the plaintiff by the vendor acting as agent of the 1st defendant's husband in the sale deed and the plaintiff was also not a party to the sale deed. Therefore, we hold that the plaintiff did not get any interest in the property under the sale deed, either by way of direct transfer or by way of trust. 7. Therefore, we hold that the plaintiff did not get any interest in the property under the sale deed, either by way of direct transfer or by way of trust. 7. It is not necessary to consider the argument of counsel for the appellant based on the recital in Ext. P-2, the receipt executed by the vendor to the 1st defendant for payment of the balance of consideration, that the consideration for the sale deed Ext. P-1 proceeded from the money gifted to the 1st defendant by her husband under the condition that the plaintiff would have the beneficial interest in the money after the death of the 1st defendant and that a property purchased with that money would have same character as the money and that the plaintiff would be entitled to the remainder in the property, as such a case has not been pleaded in the plaint. So, we would have been inclined to dismiss the appeal. But the plaintiff has prayed for amending the plaint, on the ground that he is the sole legal representative of his father, the husband of the 1st defendant and that beneficial interest in the remainder has devolved upon him after the death of the father, and therefore, he is entitled to the declaratory relief on that basis. In the plaint as framed, the plaintiff claimed the beneficial interest in the remainder under Ext. P-1 sale deed only, and so there was no issue whether the plaintiff is the sole legal representative of his father and the question was not gone into. Since as a matter of law there was resulting trust in favour of the husband of the 1st defendant of the remainder, the plaintiff would be entitled to get it on his death, if the plaintiff is his legal representative. We think that in the interests of justice the prayer for amendment should be allowed. We therefore allow the prayer to amend the plaint. We set aside the decrees of the courts below and remand the case to the trial court for a decision of this question and for passing the proper decree. The costs hitherto incurred by the defendants will be paid by the plaintiff, irrespective of the result.