Research › Browse › Judgment

Madras High Court · body

1977 DIGILAW 415 (MAD)

Pankajammal v. The Official Trustee of Madras

1977-09-27

RAMAPRASADA RAO, RATNAVEL PANDIAN

body1977
Judgment :- RAMAPRASADA RAO, J. 1. On appeal from a judgment of N. S. Ramaswami, J. who was moved on the Original Civil jurisdiction of our Court to interpret the scope, content and purport of certain settlement deeds executed by one Namberumal Chetti and after obtaining the answer to the question raised therein unfavourably to themselves the appellants have come up in appeal against the said judgment. Namberumal Chetti whose deeds of settlement are to be scrutinised in this case dealt with liquid cash which he was possessed of under six deeds of settlement, the first of which commencing from 27th July 1950 and the last of which ending with 20th November 1972. The pattern of the documents and the manner in which he effected settlements and the mode by which he appointed the Official Trustee, Madras, to manage the funds over which he created certain charities as well are similar. It may be however necessary to refer to a later settlement deed, later than the settlement deed, d. 27th July 1950 for the purposes of fuller appreciation of the intention of the donor. We shall first take up the settlement deed, d. 27th July 1950. Under this settlement deed a sum of Rs. 10,000 was dealt with by the donor. It was transferred to the Official Trustee, Madras, for him to invest the sum in Government securities and pay out of the income from the said investments to the kith and kin of the donor and a moiety of such income to the various charities mentioned by the donor in the trust deeds. To be more precise, the Official Trustee was directed to pay out of the net income every half year— “half of the net income to the settlors wife Pankajamma, who is the first plaintiff herein, for life and after her life to his only son, S. Ramakrishnan, who is the second plaintiff herein, for lift if he survives the said Pankajammal and then to Suseela, the third plaintiff herein, who is his daughter-in-law, for life if she survives the said S. Ramakrishnan”. Thereafter, he nominated four charities and directed the Official Trustee to distribute the other moiety of the income amongst the four named charities, such as the Pachiappas Trust Board, Ramakrishna Mission Students Home, Mylapore, Chennapuri Annadana Samajam and the S.P.C.A., Madras. Thereafter, he nominated four charities and directed the Official Trustee to distribute the other moiety of the income amongst the four named charities, such as the Pachiappas Trust Board, Ramakrishna Mission Students Home, Mylapore, Chennapuri Annadana Samajam and the S.P.C.A., Madras. He followed up such dispositive clauses by more precise delineations so that there could not be any controversy in the matter of the implementation of his avowed object in the creation of the trust. Clauses 2 and 3 of t he settlement deeds have to be read together and cannot be read disjunctively or dissociatedly. Clauses 2 and 3 in so far as they are relevant to our case are cited— Clause 2: On the termination of the life interests referred to in paragraph 1 (a) above, to distribute the entire corpus of the estate in equal shares among the children of the setters son, S. Ramakrishna” Clause 3: Should, however, the said S. Rama” krishanan died issueless, the trustee shall, on the termination of the life interest aforesaid, hold the funds in trust and utilise the not income for purposes of increased distribution of such income to the four named charities as above”. By reason of the defeasance clause, if clause (3) could be characterised as one, the donor wanted to increase the legacy in favour of each of the nominated trusts by one eighth. The result is that if Ramakrishnan died issueless and after the termination of the life interest enumerated above, then each one of the four charities would get one-fourth of the net income. It is in this perspective that this deed has to be interpreted. 2. We referred to the necessity to refer to a later settlement deed though the pattern under which the settlements were effected are the same. One such deed is the trust deed, d. 20th November 1952. Clause (3) therein is more explanatory and is indicative of the primary intention of the testator. 2. We referred to the necessity to refer to a later settlement deed though the pattern under which the settlements were effected are the same. One such deed is the trust deed, d. 20th November 1952. Clause (3) therein is more explanatory and is indicative of the primary intention of the testator. Inter alia clause (3) of the trust deed, d. 20th November 1952 provides— “Should however the said S. Ramakrishnan have no issues after the above life interest, which, by the grace of Almighty and Merciful God, is not the case at present and it is hoped will not be the case hereafter, the corpus may be held in perpetual trust by the Government Maternity Hospital in the city of Madras for providing beds.” There is a similar clause in the trust deed, d. 13th August 1952 also. The only difference is that different charities have been nominated as the ultimate beneficiaries on the happening of the contemplated contingency. Whilst the Official Trustee was managing the estate in accordance with the intentions of the donor, it appears that plaintiffs 1 to 3, viz., the wife, the son and the daughter-in-law of Namberumal Chetti surrendered their life interests as set out above in favour of the grandson of Namberumal Chetti who is figuring as the 4th plaintiff herein and after having so surrendered their life interest, all the plaintiffs have come to court seeking for directions of this Court to the Official Trustee for delivery of the entire corpus of the trust deeds to the fourth plaintiff as there has been an extinction of the life interest contemplated in the various trust deeds. As the lis originated as an originating summons which is also numbered as an original suit, the plaintiffs prayed for relief by seeking for an answer to the question posed by them, whether in view of the surrender deeds executed by plaintiffs 1 to 3 in favour of the fourth plaintiff, the defendant, viz., the Official Trustee is not liable to deliver possession of the entire corpus of funds in his possession as per the settlement deeds executed by Namberumal Chetti. The learned single Judge sitting on the Original Side answered the question against the plaintiffs. The learned single Judge sitting on the Original Side answered the question against the plaintiffs. He held that the 4th plaintiff cannot claim a vested right in himself to the prejudice of the trusts created eo nomine by the donor and seek for the delivery of the corpus of the estate to him. He was also of the view that by reason of the surrender Lakshmipathi got the right to collect the income earmarked for the benefit of the first, second, and the third plaintiffs by himself and secured no more rights. He also held that as a contingent interest is involved in the subject matter in question, the content of such contingent interest can be worked out only after the happening of the contingency. It is as against this the present appeal has been filed. 3. Mr. Appu Rao, learned counsel for the appellants strenuously contends that by reason of the surrender of their right to collect a portion of the income as per the deeds of settlement, the first three plaintiffs have surrendered their right, title and interest in favour of the 4th plaintiff and this by itself is sufficient for the 4th plaintiff to ask for the entirety of the corpus of the estate. The analogy of a Hindu widow surrendering her life interest in favour of the reversioner for acceptable reasons is brought into limelight and relied upon. It is also said that by reason of the surrender of the so-called life estate of the first three plaintiffs in favour of the 4th plaintiff, there is an extinction of whatever rights that the three plaintiffs have and a contemporaneous vesting of an absolute estate in Lakshmipathi, the 4th plaintiff, and therefore, the question raised in the originating summons has to be answered in favour of the plaintiffs. Contending contra , learned counsel for the respondent would say that the surrender deed and the scope of it cannot be understood without that being placed in juxtaposition to the main trust deed, and as the rights of the first three plaintiffs spring only from the trust deed their supervening acts, such as deeds of surrender have to be interpreted in the light of the provisions of file trust deed, and ultimately the question has to be answered in the light of such disclosed facts and circumstances and the clauses of the original trust deed or trust deeds. 4. 4. We have already referred to the relevant clauses in the deeds of trust. Clauses (2) and (3) of the trust deed of 27th July 1950 which is taken up as the primary deed for the purpose of our discussion refer to the termination of life interest. Whilst in clause (2) the trust deed says that on such termination the Official Trustee shall distribute the entire corpus of the estate in equal shares amongst the children of the second plaintiff who in this case is the fourth plaintiff, the clause (3) says that on the termination of the life interest it should be seen whether Ramakrishnan is alive or not. Therefore, the provision in clause (3) of the trust deed which has an impact upon the life of Ramakrishnan, controls clause (2) also, and the result is that the distribution of the corpus of the estate should await Ramakrishnans death and at that point of time it should be ascertained as to who are the heirs of Ramakrishnan alive for purposes of the distribution of the corpus. These specific intents and objectives of the testator cannot be circumvented by the life estate holders executing inter vivos certain documents styled as surrender deeds so as to accelerate the interests of the children of Ramakrishnan even during his lifetime. That this is a contingent interest was contemplated by the donor himself. In one other settlement deed to which also reference was made before us and a portion of which was excerpted by us already, the testator made it clear that “if Ramakrishna has no issues after the above life interest, which by the grace of Almighty and Merciful God, is not the case at present and it is hoped will not be the case hereafter the corpus will be held in trust” This clarification made by the trustee though in a later deed is really the primary intention of the donor; whilst in the earlier deed of 1950, clauses (2) and (3) therein have to be read together and thus interpreted it should be said that clause (3) controls clause (2), in the later deeds he made the position very clear by expressly stating what his intention was. We are of the view that what was given to the son of Ramakris hnan is only a contingent interest within the meaning of S. 21 of the Transfer of Property Act. We are of the view that what was given to the son of Ramakris hnan is only a contingent interest within the meaning of S. 21 of the Transfer of Property Act. It should also be such a legacy which would squarely come within the meaning of S. 102 of the Indian Succession Act as well. In S. 21 of the Transfer of Property Act, a contingent interest is defined thus— “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 cast, on the happening of the event, in the latter, when the happening of the event becomes impossible. The fourth plaintiff would acquire an absolute interest only if he survives Ramakishnan. Though the death of any one is a certain event, the point of time when one is likely to die is uncertain. In that view, the interest which the fourth plaintiff might acquire in the estate of Namberumal Chetti has to be construed only as a contingent interest. We have already referred to the intention of the donor himself when he elucidated and clarified this issue in his Settlement deeds. Intelligence can also be gai ned by a reference to S. 120 of the Indian Succession Act. Under this section a legacy bequeathed in case a specified uncertain event shall happen does not vest until that event happens. Illustration (e) to this Section is as follows— “An estate is bequeathed to A for life, and after his death to B if B shall then be living but it B shall not be then living to C, A, B and C survive the testator. B and C each takes a contingent interest in the estate until the event which is to vest in one or in the other has happened”. 5. We have referred to clauses (2) and (3) in the trust deed, d. 27th July 1950 and expressed our view that clause (3) controls clause (2), and clauses (2) and (3) cannot be read distinctively or without one being associated and read in conjunction with the other. 5. We have referred to clauses (2) and (3) in the trust deed, d. 27th July 1950 and expressed our view that clause (3) controls clause (2), and clauses (2) and (3) cannot be read distinctively or without one being associated and read in conjunction with the other. This is because a reference is made to the termination of the life interest in both these clauses, and therefore, both these clauses have to be read together, and the events judged as to whether the fourth plaintiff by reason of the recitals in the trust deed and by reason of the supervening surrender deeds executed by plaintiffs 1 to 3, had acquired an absolute estate. We are unable to agree with Mr. Appu Rao that by reason of the deeds of surrender based on the analogy of surrender of a Hindu widows estate and the acceleration of such estate in favour of the reversioner, plaintiff obtained such a vested absolute right. Analogies cannot automatically be invoked without reference to the facts of a particular case. Whether the interest is cotingent or vested, in the instant case, has to be judged not in the vacuum but with reference to the specific recitals in the trust deed written up by the donor. Every precaution should be taken to give effect to the primary intention of the donor, who intended to benefit certain charities and also vest in his grand children an absolute interest if ultimately it becomes so necessary. By reason of the surrender the rights of four named institutions in the trust deed are jeopardised. Their consent was not obtained when the surrender deeds were made. Such unilateral deeds of surrender without reference to contemporary beneficiaries who are entitled to share a portion of the net income are prima facie not enforceable in the eye of law. Even otherwise, the bequest in favour of the fourth plaintiff is subject to the contingency that he survives his father. The father is still alive. No one can predicate as to what will happen. Unless the issue of Ramakrishna survived him the question as to who would be entitled to the corpus or the income cannot easily be found. As the learned Judge poses for himself, supposing the fourth plaintiff who is the only issue of Ramakrishnan predeceased his father, in that event Ramakrishnan would be dying issueless even though he begot an issue. Unless the issue of Ramakrishna survived him the question as to who would be entitled to the corpus or the income cannot easily be found. As the learned Judge poses for himself, supposing the fourth plaintiff who is the only issue of Ramakrishnan predeceased his father, in that event Ramakrishnan would be dying issueless even though he begot an issue. In fact, this contingency was contemplated by the donor himself, when he made an alternative provision in case such a contingency arose. All these factors, therefore, were rightly considered by N. S. Ramaswami, J., who answered the question against the plaintiff, and we concur with him and hold that the fourth plaintiff, by reason of the surrender deeds did not acquire a vested interest, and if at all he has secured any benefit thereunder he could collect all the properties and income which plaintiffs 1 and 3 could get from the Official Trustee by himself and no more right he has by reason of the deeds of surrender. The original side appeal is dismissed. There will be no order as to costs. 6. The fee of the advocate appearing for the Official Trustee is fixed at Rs. 250.