1. S. Ramasamy 2. S. Loganathan vs Raman and Others

K. Sampath, J.—The legal representatives of the first defendant in O.S. No. 802/81 on the file of the District Munsif Court, Villupuram,

who came on record before the lower appellate Court namely, Sub Court, Villupuram in A.S. No. 79/85 on its file, on the death of the first

defendant pending appeal, are the appellants in this Second Appeal. Respondents 1 to 4 herein filed the said suit for declaration on the following

averments: The suit property originally belonged to one Chinnammal. She had settled the suit property and other properties in favour of the second

defendant one Iyyamperumal and Natesa Gounder on 2.9.1952 giving life interest to the settlees and vested remainder to the male issue of the

settlees. The plaintiffs, who were the sons of one of the settlees were entitled to the suit property. The first defendant Narayanasamy who knew

fully well about the existence of the settlement deed, got a sale deed executed by the father of the plaintiffs. The other defendants/defendants 2 to 5

were impleaded as per the statement of the first defendant Narayanasamy. There was no need for the plaintiffs family to alienate the suit property.

The truth and validity of the sale deed executed by the father of the plaintiffs in favour of Narayanasamy were denied, Natesa Gounder had no

power to alienate the suit property. The plaintiffs had issued a notice to the first defendant Narayanasamy on 25.7.1960. He had sent a reply

containing false allegations.

The case of the first defendant Narayanasamy as set out in the written statement and the additional written statement was as follows: The

settlement deed was not true or valid. It was not accepted and acted upon. Chinnammal had executed a mortgage in respect of the suit property, in

order to discharge the mortgage, Natesa Gounder sold the suit property to one Arumugam on 11.5.1956. On the same day he got a resale

agreement. On 27.10.1961 he repurchased the property. In order to purchase the property and also to discharge the promissory note debt and for

the maintenance of the minor plaintiffs. Natesa Gounder said the property to Narayanasamy on 27.10.1961. In the said sale deed the plaintiffs 1

and 2 were economies parties. Plaintiffs 3 and 4 were not in existence at the time of the sale. They were not entitled to question the sale deed. The

suit was barred by limitation and bad for non-joinder of necessary parties. The suit property had not been correctly described and the suit had not

been properly framed. Even conceding that the settlement deed was true the plaintiffs were not entitled to claim the northern 74 172 cents. They

had to file a suit for partition alones. Ayyamperumal Gounder and the father of the plaintiffs were necessary parties to the suit. Chinnammal

executed a mortgage to one Murugesa Gounder for a sum of Rs. 200/-. As per the settlement deed. Ayyamperummal and Natesa Gounder should

discharge the mortgage. The plaintiffs father sold the property to one Arumugam on 11.5.1956 and Arumugam sold the property to one Sengeni

Ammal. The plaintiffs father obtained the said sale deed from Sengeni Ammal. In order to discharge the promissory note dept and for the

maintenance of the minor plaintiffs 1 and 2, he sold the property to Narayanasamy. He was treating the properties as his absolute properties.

Narayanasamy had managed the properties in his own right against the interest of the plaintiffs and had prescribed for"" title by adverse possession.

The trial Court framed the necessary issues and on the basis of the oral and documentary evidence decreed the suit by judgment and decree

dated 4.7.1984. The said Narayanasamy filed an appeal in A.S. No. 79/85 and pending appeal he having died, the present appellants came on

record as appellants 2 and 3 before the lower appellate Court.

The lower appellate Court found that the settlement deed was true and valid and came into force and was accepted and acted upon by the

settless. The suit was not barred by time since the plaintiffs were entitled to the property only after the death of the father, the right to recover

would arise only after the death of their father and the suit also having been filed within three years from the date the plaintiffs 1 and 2 attained

majority, it was in time. Consequently, by judgment and decree dated 6.1.1987 the learned Subordinate Judge dismissed the appeal. As against

that the present Second Appeal has been filed. At the time of admission the following substantial question of law was framed for decision:

Whether the suit of 1980 to set aside the sale deed of the year 1961 is within time and properly framed without the representation through natural

guardian/father?

Mr. R. Saseetharan, learned counsel for the Appellante submitted that this is a case where the provisions of Section 10 of the Transfer of

Property Act will come into play and whatever plaintiff''s father got under the settlement deed must be taken to have been given to him absolutely

that he had absolute powers of alienation and the sale deed in favour of the first defendant could not be questioned. Besides relying on the

provisions of Section 10 of the Transfer of Property Act, learned counsel also relied on the following decisions:

Trichinopoly Varthaga Sangam Ltd. v. T.N. Shanmugasundaram (A.I.R. 1939 Madras 769)

Mummareddi Nagi Reddi and others v. Pitti Durairaja Naidu and others (A.I.R. (39) 1952 S.C. 109 = 65 L.W.519)

Narayana Menon and Others Vs. Kochuvareed and Others,

Jagdeo Sharma Vs. Nandan Mahto and Others,

Fatima Sarohini Suresh and Others Vs. K. Saraswathi Amma and Others,

State of Uttar Pradesh and others Vs. Dr. Anupam Gupta, etc.,

The last of the decisions relied on by the learned counsel is for the proposition that a new plea, which is a pure question of law arising from record,

though not raised before the High Court can be considered for the first time in appeal by the Supreme Court. When that is the position even with

regard to the Supreme Court, it is the contention of the learned counsel that the same principle should apply to Second Appeals heard by the High

Court. On the basis of this contention it has become necessary to frame an additional question of law, which is to the following effect:

Whether as per Section 10 of the Transfer of Property Act where property is transferred subject to a condition or limitation absolutely restraining

the transferred or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void?

The contention of the learned counsel based on Section 10 is a formidable one and the contention is supported by several decisions cited by the

learned counsel. But then the whole thing will depend on how the document reads. Ex.A-1 is the settlement deed. As per the terms of the

settlement deed, the settlees are to enjoy the properties set out in the schedule during their life lime, without powers of alienation and after their life

time their male issue have to take the properties. The settlement deed also directs the settless to discharge certain liabilities of the settlor, with

which we are not as at present concerned. We have to see whether the terms of the settlement deed are in conflict with the provisions of Section

10 of the Transfer of Property Act. Let us have a look at the several decisions relied by the learned counsel. The first of the decisions is by a

Special Bench of this Court where the matter arose as follows:

A partition deed among father and his sons provided that certain houses which had been used as the family residence should be held by them as

tenants in common. The deed restrained the sons during as well as after the lifetime of the father from alienating their share to stranger to the family

but gave a right to sell within the family at a maximum price which was far below the real value of the share of each son. There was no obligation to

buy at that price. It was held that the restriction on alienation amounted to an absolute restriction and therefore was void u/s 10. The terms of the

present settlement deed are different and in my considered view the decision of the Special Bench does not apply to the facts of the present case.

The next decision is Jagdeo Sharma Vs. Nandan Mahto and Others, In that case before the Patna High Court there was a stipulation in the gift

deed that the gifted land would be held by the donee and after her death it would be held by her heirs generation after generation, but neither the

donee nor her heirs would ever have the right of alienating the same either by way of sale, exchange or mortgage rate. It was father stipulated that

in case the gifted land was alienated in any manner either by the donee herself or by the heirs of the donee then the effect of such alienation would

be that the deed of gift would stand automatically cancelled and the donor would get the right to come in possession of the gifted property. The

learned single Judge of the Patna High Court held that Section 126 is a general Section which is controlled by Section 10 and therefore, Section

126 could not be read in isolation and has to be read with Section 10 which says that any stipulation completely restraining the donee. from

transferring the gifted property is void and therefore, the gift deed would not stand conceited due to the alienation of the gifted land as the

stipulation in the gift deed restraining alienation was void in view of Section 10.

The next decision is Fatima Sarohini Suresh and Others Vs. K. Saraswathi Amma and Others, . In this case a Division Bench of the Kerala

High Court construing the Clause in a family settlement restraining the alienation of property held that such a Clause was void and hit by the

provisions of Sections 10 to is of the Transfer of Property Act. In the cast-before the Nerala Bench the family settlement opened with the recital

that its object was to put and end to the ""joint rights"" in respect of the family properties and ended with the declaration that the object was being

achieved by the execution of the document. Therefore, the intention of the parties was to become separate by allotment of separate shares and to

divide the properties of the deceased into four, three of the children walking away with their separate shares and the fourth son taking his share

subject to the restrictions specified. The restrictions were two-fold: (i) The fourth son could not alienate the two items comprised in his share, and

(ii) the items should devolve on his descendants for successive generations. In those circumstances, the Bench held that the provisions of the

settlement deed had to be understood as allotting a share to the fourth son and then creating conditions repugnant to the estate so created. In other

words, he had taken it like the others wish power to transfer. But the facts are clearly distinguishable from the facts of the present case.

In Narayana Menon v. Kochuvareed (AIR 1973 Ker (FB) a member of a second tavazhi having life interest in property purported to alienate

absolute rights in it, the possession of the alienees was traceable to the life interest of that member. It was held that the possession of the alienees

was not adverse to the reversioners from the date of alienation but became so only on the death of the transferor having life interest. To such a

situation, the rule that available alienation coupled with transfer of possession makes possession adverse from the date of the transfer would not

apply. So the suit for recovery of possession by the members of the first tavazhi in capacity as reversioner when filed immediately after the death of

the transferor does not get barred by adverse possession. From this it will follow that the present suit by the absolute owners is rather premature

and that is the contention of the learned counsel for the appellant. But we must remember the suit itself is only for declaration and no recovery of

possession is sought.

The next decision is the one by the Supreme Court in Mummareddi Nagi Reddi and others v. Pitti Durairaja Naidu and others (AIR (39) 1952

S.C. 109). That was a case where the reversioner filed a suit for recovery of possession of the property alienated by a widow. The Supreme

Court decided that the suit in such a case was governed by Article 141 of the Limitation Act, 1908 and as it was not necessary that the transfer

should be set aside before any decree for possession was made, all that was necessary was that the reversioner should file a suit for possession

within 12 years from the death of the widow and a decree passed in such a suit must be on the basis that possession of the transfers was useful

ever since the widow died. This decision has been relied upon for the purpose of showing that the present suit was barred by limitation. What the

Supreme Court has decided in the said case is that the reversioner should file a suit for recovery of possession within 12 years from the date of

death of the widow, then only the reversioner would get a right of possession. It does not say that the suit if filed earlier would be barred. In my

opinion, this has no application to the facts of the present case.

We have already noticed the terms of the settlement deed in the present case. It is now settled law that a gift which is a transfer of property is

subject to the rules enacted in Chapter II of the Transfer of Property Act. If an absolute gift is made subject to a condition restricting alienation, the

condition would be void u/s 10 of the Transfer of Property Act. It has also been so held in Dugdale v. Dugdale (1888) 38 Ch. D. 176). Rosher v.

Rosher ((1884) 26 Ch. D. 801), and In re Elliot Kelly v. Elliot ((1896) 2 Ch. 353). It was held in Mudara and Others Vs. Muthu Hengsu and

Others, that where the properties are given absolutely to a member or branch of a family under a partition arrangement, a provision therein that

member or branch shall not alienate them without the consent of the other members or without the consent of the members of the other branches is

repugnant to Section 10 of the Transfer of Property Act and hence void and unenforceable. In Mt. Brij Devi Vs. Shiva Nanda Prasad and Others,

a donor made a gift of certain property and in the deed of gift it was mentioned that the donor had removed himself from the possession of the

property and put the donee in proprietary possession of the same. The gift further recited that the donee or his successor had no right to transfer

the property and that if they did transfer, the same would be invalid and the donor or his successor would have a right to revoke the gift. The

Division Bench of the Allahabad High Court held that on reading the deed as a whole it was found that it conferred upon the donee full proprietary

title to the property gifted and hence the condition restraining the doner''s right of alienation being a condition repugnant to the estate created in him

was void and inoperative. In P.V.S. Vencatachellum Vs. P.V.S. Kabalamurthy Pillai, there was a restraint on alienation for a specified period

provided in a consent decree. The further facts in that case were as follows S, A joint family consisting of father S, two sons A and B and a

grandson C by a deceased son owned various properties and also an ancestral business of manufacturing condiments. By a consent decree of

1922 it was agreed between the parties that S was to enjoy the income of the condiment business for his life time and after his death A, B and C

were to conduct the business jointly. It was also provided that the premises in which the business was carried on should be taken possession of by

A but he was to clause it to S for carrying on the business for a period of 5 years at a certain rental, with an option of renewal for another 5 years.

The remaining house properties were taken by B. It was also agreed that A and B would have no power to alienate the house properties in their

possession except with the written consent of S. After the death of S. disputes arose between A, B and C which resulted in a partition decree of

1937 under which C became the sole and absolute owner of the condiment business together with its goodwill and assets and A and B became the

absolute owners of the house properties in their possession. Till the year 1949, C continued in possession or the premises belonging to A as his

tenant but in that year A obtained an order of eviction against C on the ground of default in payment of rent under S. 7, Madras Buildings (Lease

and Rent) Control Act 15 of 1946. C thereupon sued A for a declaration that he was not a bare tenant from month to month but had become a life

tenant of the premises and therefore could not be ejected under the Rent Control Act. It was held by the learned single judge that the compromise

decree of 1922 had imposed only partial restraints on alienation by A and that the life tenancy coterminous, with the extinction of the business

claimed by C on the basis of that decree would be illegal under Sections 10 and 11 of Transfer of Property Act and inequitable on the facts of the

case. The learned Judge further held that Section 10 to 17 of Transfer of Property Act have been enacted to encourage free alienation and

circulation of property. Entire transfers are not vitiated simply because there may happen to be some clauses in the deeds which are repugnant to

the free transfer and circulation of property, such restrictive clauses are to be treated as void. So gift of income without providing for the corpus

must be taken as gift of the corpus. The principle is of universal application and there is nothing in the Hindu or Mahomedan law inconsistent with it

and so it applies to Hindus and Mahomedans.

In Nallajerla Krishnayya v. Vuppala Raghavulr (A.I.R. 1958 A.P. 658) it has been held that the test for deciding whether the property allotted

to a widow or to some other persons for maintenance or for any other purpose comes within the ambit of Section 6(d) or not is whether the deed

conferred any right against the properties comprised therein or whether the intention was to give her for her maintenance a personal right to

appropriate the profits in the property assigned to her. The answer to this question depends upon the facts of each case and the interpretation of

the relevant document. If, on a construction of the relevant terms of the instrument, the Court comes to the conclusion that the rights were created

against the property the matter is taken out of the purview of Section 6(d) of the Transfer of Property Act. Thus where the relevant Clauses in a

document creating life interest in favour of a Hindu widow ran an under:

The schedule property worth Rs. 300/- is given to you for maintenance and put in our possession this day. From now onwards, you may keep the

said property in your possession and enjoy the income therefrom for your life. I and my heirs shall take possession of the property given to you for

your maintenance after your death, you should pay the Circar Cist due on the land. You should not alienate the property in any manner, nor

contract any debt thereon. You should enjoy the produce of this property and should not claim enhanced maintenance.

It was held that what was bestowed upon the widow was a life estate and her enjoyment or the property was not confined to her personally. There

is nothing in the language of the document to indicate that what was given was limited to her personal enjoyment falling short of a life estate. It was

held further that the subsequent Clauses imposing a condition or limitation restraining the transfer came within the mischief of Section 10 and

consequently void since the right of transfer was incidental to the beneficial enjoyment of the property for life. In the instant case the settlees have

been given the right to enjoy the properties during their life time and if during their life time, for more beneficial enjoyment they are compelled to sell

the property, then such sale would be followed during their life time and after their life time the purchasers have to give up the property in favour of

the absolute owners namely, male issues of the settlees. As I said earlier, there is nothing repugnant to any law in the various provisions of the

settlement deed. Section 10 is not at all attracted. As already noticed the plaintiffs had sought for only a declaration. Consequently) I hold that the

declaration sought for has been rightly granted by the Courts below. A view similar to the one I have taken has been taken by a learned single

Judge of the Karnataka High Court in Badigera Veeravva and Others Vs. Badigera Bhadrachari and Another, almost under similar circumstances.

When a person with only life interest in property transfers it, title that transferee gets is, no better than that of transferor and the ultimate owner is

entitled to possession after the life time of transferor. In the case before the learned Judge of the Karnataka High Court the suit was for injunction

against alienation by the life interest holder and the relief of injunction was refused. It was held that life interest could be alienated, but that would be

subject to the right of the ultimate owner, who would be entitled to possession after the life time of the life interest holder. So far as the first

question of law framed at the time of admission is concerned, the answer is that the suit is within time and that the representation either by the

mother or the guardian or the father is immaterial. So far as the second question of law framed now is concerned, the answer is that Section 10 is

not attracted and the Courts below have rightly held against the appellants. The Second Appeal falls and it is dismissed.