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Analysis of K Naina Mohammed v/s AM Vasudevan Chettiar

Material Facts
Material facts of the case are:
  • The dispute is regarding a property by one Mrs Ramakkal Ammal. In 1951, she had created a life interest in favor of her two sisters. With a condition that after their death their male heirs will acquire the absolute right of the properties
  • The property was divided in two parts, A and B. and these were transferred to her two sisters Savitri and Rukumani respectively.
  • The will contained a provision which stated that, her sister can enjoy the properties given to them during them lifetime; after death of both her sisters, their male heirs would get the impugned properties.
  • Clause 11 of the stated that both the male heirs can sell their properties to only each other and that to only at market price
  • In 1981, Mrs.Rukumani and her son sold their share of property to the one Mr.AM Vasudevan Chettiar to which Respondents objected stating that clause 11 which read that they could sell the property only to them and no one else.
  • Rukumani contested the suit in the trial court by asserting that clause 11 of the will was void and that had the option of selling it to anybody they want and if otherwise it would have been against the rule of perpetuity. They also claimed that selling of the property became a necessity and thus resulting in the alienation of the property
  • After the trial court stage, Mrs. Rukumani and her son died and thus Mr. AM Vasudevan had filed an appeal in the court of sessions challenging the civil courts decree.
  • The Sessions court gave the decision in Vasudevans favor, which was overturned by the honorable High Court and thus this appeal has been filed before the honorable Supreme Court of India.

Issues Raised
  1. Whether the second appellate court is correct in holding that the restriction, namely the pre-emption clause in the Will is valid?
  2. Whether the second appeal filed by respondent Nos.1 and 2 stood abated due to their alleged failure to bring on record the legal representatives of Rukmani Ammal and her son A.B.M?
  3. Whether the restriction enshrined in clause 11 of the Will executed by Rukumani Ammal can be declared as void on the ground that it violates the rule against perpetuity?

Arguments Advanced
Following contentions are presented by the parties to the case before the supreme court:
Arguments On Behalf Of The Appellant
  • Rukmani Ammal and her son, A.B.M. Ramanathan Chettiar died during the pendency of the second appeal before the High Court and thus the same stood automatically abated because legal representatives of the deceased were not brought on record.
  • High Court committed serious error by granting relief to respondent Nos.1 and 2 without insisting on the impleadment of the legal representatives of Rukmani Ammal and her son, A.B.M. Ramanathan Chettiar.[1]
  • The restriction contained in clause 11 on alienation of the property was to operate only within the respective branches and it was not obligatory for the male heirs of one branch to sell the property to the male heirs of the other branch.
  • The restriction contained in clause 11 of the Will against alienation of the property is ex facie violative of the rule against perpetuity and the trial Court and the High Court committed serious error by relying upon the same for the purpose of nullifying the sale deed executed by Rukmani Ammal and her son A.B.M. Ramanathan Chettiar.[2]
  • In view of the compromise arrived at between the parties in OS No.473 of 1981, Rukmani Ammal and her son became absolute owner of `B' property and their rights cannot be regulated or restricted by the conditions enshrined in the Will.

Arguments On Behalf Of The Respondent:
  • The appellant is not entitled to seek a declaration that the second appeal filed by respondent Nos.1 and 2 stood abated on account of non-impleadment of the legal representatives of Rukmani Ammal and her son, who died during the pendency thereof.[3
  • Rules contained in Order XXII of the Code of Civil Procedure are required to be interpreted liberally so as to avoid abatement of the pending matters.
  • The second appeal did not abate on account of death of Rukmani Ammal and her son, A.B.M. Ramanathan Chettiar because in terms of the Will executed by Smt. Ramakkal Ammal, Rukmani Ammal got life interest only and her son, who became absolute owner neither challenged the decree passed by the trial Court nor contested the second appeal.[4]
  • The appellant, who had purchased the suit property will be deemed to be legal representative of the deceased because he represented their estate.[5]
  • The restriction contained in clause 11 of the Will was not absolute inasmuch as it was open to the male heirs of Savithiri Ammal and Rukmani Ammal to transfer the property within the family
  • The object of the restriction on alienation of the properties to strangers was to protect the interest of the family and there was no violation of the rule against perpetuity.

Decision
The Supreme Court after hearing the issues raised, arguments advanced and authorities cited stated that the following points dealing with all the questions of law as well of the fact.
The Honorable Court held that clause 11 of the Will executed by Smt. Ramakkal Ammal is violative of the rule against perpetuity.

If that clause is read in conjunction with clauses 4 and 10 of the Will, it becomes clear that two sisters of the testator, namely, Savithiri Ammal and Rukmani Ammal were to enjoy house properties jointly during their life time without creating any encumbrance and after their death, their male heirs were to get the absolute rights in `A' and `B' properties.

The male heirs of two sisters could alienate their respective shares to other sharers on prevailing market value. It can thus be said that Smt. Ramakkal Ammal had indirectly conferred a preferential right upon the male heirs of her sisters to purchase the share of the male heir of either sisters.

This was in the nature of a right of pre-emption which could be enforced by male heir of either sister in the event of sale of property by the male heir of other sister. If the term `other sharers' used in clause 11 is interpreted keeping in view the context in which it was used in the Will, there can be no manner of doubt that it referred to male heirs of other sister. The only restriction contained in clause 11 was on alienation of property to strangers.

Further in the Lordships view, the restriction which was meant to ensure that the property bequeathed by Smt. Ramakkal Ammal does not go into the hands of third party was perfectly valid and did not violate the rule against perpetuity evolved by the English Courts or the one contained in Section 114 of the Indian Succession Act, 1925. As a corollary, we hold that the trial Court and the High Court did not commit any error by relying upon clauses 10 and 11 of the Will for granting relief to respondent Nos.1 and 2.

The argument of the learned counsel for the appellants that the restriction enshrined in clause 11 was limited to the shares of the male heirs of two sisters sounds attractive in the first blush but a careful and conjoint reading of clauses 4, 10 and 11 makes it clear that the testator had intended to prevent transfer of property to anyone other than the heirs of her two sisters. In terms of clause 4, the two sisters were to enjoy the house property jointly without encumbering the same during their lifetime.

After their death, the male heirs of Savithri Ammal were to get `A' property in equal shares and male heirs of Rukmani Ammal were to get `B' property subject to the condition specified in clause 11 which envisages that in case of alienation, the male heirs of either sister had to sell the property to other sharers as per the prevailing market value and not to strangers. Since the intention of the testator was to impose a restriction on alienation of property, clauses 10 and 11 cannot be interpreted in a manner which would permit violation of that condition.

The Court did not find any substance in the argument of Shri Balakrishnan that in view of the compromise decree passed in O.S. No.473/1981, Rukmani Ammal became owner of the property in her own right and respondent Nos.1 and 2 were not entitled to invoke the Will executed by Smt. Ramakkal Ammal for questioning the sale deed executed in favour of the appellant.

The record of the case does not show that any such plea was raised in the written statement filed in O.S. No.226/1983. From the impugned judgment it is not clear that any such argument was raised before the High Court. Therefore, it is extremely doubtful that whether the appellant can be allowed to raise such a plea first time before this Court.

Moreover, for the reasons best known to him, the appellant did not produce before the trial Court, copy of the compromise decree passed in O.S. No.473/1981 and without going through the same it is not possible to hold that Rukmani Ammal had acquired independent right to sell the suit property to the appellant.

The hon’ble Apex court held that clause 11 of the will was perfectly legal and the Trial court and High Court were correct in their findings and decision and thus the court dismissed the appeal by the appellants.

Rationale
The honorable Supreme Court interpreted various questions of law in this case these are:
  1. Whether the second appeal filed by respondent Nos.1 and 2 stood abated due to their alleged failure to bring on record the legal representatives of Rukmani Ammal and her son A.B.M?

    Reading of the judgment under challenge shows that neither the factum of death of Rukmani Ammal and her son was brought to the notice of the learned Judge who decided the appeal nor any argument was made before him that the second appeal will be deemed to have abated on account of non impleadment of the legal representatives of the deceased. The reason for this appears to be that Rukmani Ammal and her son A.B.M. Ramanathan Chettiar, who had also signed the sale deed as one of the vendors did not challenge the judgment and decree of the trial Court and only the appellant had questioned the same by filing an appeal. A.B.M. Ramanathan Chettiar did not even contest the second appeal preferred by respondent Nos.1 and 2. Before this Court, the issue of abatement has been raised but the memo of appeal is conspicuously silent whether such a plea was raised and argued before the High Court.[6]

    Therefore, we do not think that the appellant can be allowed to raise this plea for frustrating the right of respondent Nos.1 and 2 to question alienation of the suit property in violation of the restriction contained in clause 11 of the Will. Here, it is necessary to mention that by virtue of the Will executed by her sister, Rukmani Ammal got only life interest in the property of the testator and her male heir, A.B.M. Ramanathan Chettiar got absolute right after her death. Therefore, during her life time, Rukmani Ammal could not have sold the property by herself. This is the precise reason why she joined her son in executing the sale deed in favour of the appellant.[7]

    Therefore,[8] the proposition laid down therein cannot be made basis for declaring that the second appeal preferred by respondent Nos.1 and 2 stood automatically abated due to non- impleadment of the legal representatives of Rukmani Ammal and her son, A.B.M. Ramanathan Chettiar, despite the fact that the appellant, who represented the estate of the deceased in his capacity as a purchaser had not only challenged the judgment of the trial Court by filing an appeal but also contested the second appeal.[9]

     
  2. Whether the restriction enshrined in clause 11 of the Will executed by Rukumani Ammal can be declared as void on the ground that it violates the rule against perpetuity?
    When clause 11 is read in conjunction with clauses 4 and 10 of the Will, it becomes clear that two sisters of the testator, namely, Savithiri Ammal and Rukmani Ammal were to enjoy house properties jointly during their life time without creating any encumbrance and after their death, their male heirs were to get the absolute rights in `A' and `B' properties. [10]

    The male heirs of two sisters could alienate their respective shares to other sharers on prevailing market value. It can thus be said that Smt. Ramakkal Ammal had indirectly conferred a preferential right upon the male heirs of her sisters to purchase the share of the male heir of either sisters.

    This was in the nature of a right of pre-emption which could be enforced by male heir of either sister in the event of sale of property by the male heir of other sister. [11]If the term `other sharers' used in clause 11 is interpreted keeping in view the context in which it was used in the Will, there can be no manner of doubt that it referred to male heirs of other sister.

    The only restriction contained in clause 11 was on alienation of property to strangers. In our view, the restriction which was meant to ensure that the property bequeathed by Smt. Ramakkal Ammal does not go into the hands of third party was perfectly valid and did not violate the rule against perpetuity evolved by the English Courts or the one contained in Section 114 of the Indian Succession Act, 1925.[12]

Critical Analysis of the Case
The court in the present case dealt with two matters. Firstly, whether the clause 11 was valid and secondly, whether the Appellant is the legal representative of the deceased owners of the property.

The researcher feels that the Court has correctly dealt with the second issue but needs reconsideration. The Second issue of legal representation was not dealt by any earlier courts. The original plaintiffs had died during the appeal stage and thus the Appellants pleaded that the decision of the High Court got abated as the appeal had nowhere seen the legal representative coming on record and it was the Appellant who had filed the appeal.

The Court correctly laid that as Appellant is the legal representative of the deceased as he was the one who had represented the estate of the deceased in his capacity as a purchaser had not only challenged the judgment of the trial Court by filing an appeal but also contested the second appeal. [13]

But the researcher begs to disagree with the Courts view on the issue of legality of clause 11 of the will. The court said that as the deceased was allowed to transfer it among his family so it is not a restriction on alienation of the property.

But the researcher feels that as the deceased had the option to sell it only to the sharers of the property and no other and this was a restraint on alienation of the property. Also as both the sisters had executed the sale deed the sons became the absolute owners of the property and should have the full liberty to do whatever they want to do with the property.

Conclusion
A perpetuity, in the primary sense of the word, is a disposition which makes property inalienable (incapable of being transferred) for an indefinite period. The object of the rule against perpetuity is to ensure free and active circulation of property both for purposes of trade and commerce as well as for the betterment of the property itself. A transfer which renders property inalienable for an indefinite period is detrimental to the interests of its owners who are unable to dispose it of even in urgent needs or for any higher value.

In the present case the main dispute was whether the clause 11 of the will creates restraint on the alienation of the property and the court held that such type of clause allowed some liberty to the owner to sell it to anybody in the family and not only limiting it to his cousin. Thus it was only a partial restraint. Secondly, the court said that as the Appellant had bought the property through a sale deed and also had filed appeals after the death of the owners, He became the legal representative of the deceased and thus the appeals were perfectly legal and did not get abated.

Bibliography
Books
  • RK Sinha, Transfer of Property Act 1882, 2012, Central Law Agency, Fourteenth edition
  • Sir Dinshaw Mulla, The Transfer of Property Act ,2013,11th Edition
  • Mulla, The Transfer of Property Act, 9th Ed., LexisNexis Butterworths, 2004.
  • Nandi, N., The Transfer of Property Act, 1882, 2nd Ed., Dwivedi Law Agency, Allahabad, 2010.
Online Sources:
  • http://www.vuhelp.net/law-transfer-property/
  • http://www.advocatekhoj.com/library/bareacts/transferofproperty
End-Notes:
  1. State of Punjab v. Nathu Ram AIR 1962 SC 89
  2. Deokuer and another v. Sheoprasad Singh and others AIR 1966 SC 359
  3. Mohd. Arif v. Allah Rabbul Alamin AIR 1982 SC 948
  4. Zila Singh v. Hazari AIR 1979 SC 1066
  5. Ghafoor Ahmad Khan v. Bashir Ahmed Khan AIR 1983 SC 123
  6. Ram Baran Prasad v. Ram Mohit Hazra AIR 1967 SC 744
  7. Supra at 2
  8. Supra at 5
  9. Supra at 3
  10. Ghafoor Ahmad Khan v. Bashir Ahmed Khan AIR 1983 SC 123.
  11. Ibid
  12. Ibid
  13. Supra at 6

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