Kanti Lal and Others vs Deepchand and Others

Dr. Vineet Kothari, J.—The present first appeal has been filed by the plaintiffs having lost before the learned trial court in the present suit filed for cancellation of sale deed executed by the plaintiff''s father Maanmal in favour of defendant No. 1 Deep Chand for the consideration of Rs. 20,000/-, which was borrowed by Maanmal purportedly for the joint family business under the name and style of M/s. Bagrecha Brothers and/or M/s. Navneet Chand Ashok Kumar.

The plaintiffs Kanti Lal @ Navneet Chand and Ashok Kumar are sons of seller Maanmal and Smt. Laxmi Bai @ Vijay Laxmi - plaintiff No. 3 is one of the daughters of Maanmal, who is wife of defendant No. 1 Deep Chand, whereas, defendant No. 1 and 2 - Deep Chand and Dhirajmal are purchasers of the suit property, a residential house situated at Bali and defendant No. 3, Smt. Shobha Kumari is another daughter of Maanmal, defendant No. 4 Roopchand is elder brother of Maanmal and defendant No. 5 - Vijay Chand s/o Chunnilal is another close relative being brother of maternal grand father of plaintiff No. 1, Kanti Lal.

The case set up by the plaintiff before the learned trial court is that the residential house in question was an ancestral property and a Trust was created for the benefit of the plaintiff No. 1 and 2, Kanti Lal and Ashok Kumar by their father Maanmal in the year 1957 and three trustees, his elder brother Roop Chand and defendant No. 5 - Vijay Chand and one Shiv Lal were made trustees vide Trust Deed dated 23/12/1957 and in view of the said Trust Deed, the father of the plaintiffs, Maanmal could not sell the said residential house on 21/9/1971 in favour of son-in-law Deep Chand and his brother Dhirajmal, defendant Nos. 1 and 2 respectively.

The learned trial court, however, held that the said Trust could not be created as the same was in violation of Section 8 of the Indian Trust Act, 1882 as the property being ancestral was not transferable in favour of the beneficiaries sons by the father Maanmal alone and, therefore, as a Karta of the family, said Maanmal could transfer the residential house for consideration in favour of defendant No. 1 and 2 by the registered sale deed and, therefore, the cancellation of the sale deed was refused and the suit came to be dismissed by the learned trial court on 15/5/1986. the relevant findings of the learned trial court in this regard are quoted below for ready reference:--

Learned counsel for the appellant-plaintiffs, Mr. Manish Shishodia and Mr. Vikram Singh submitted that the court below has erred in not believing the creation of said Trust Deed, which was by a registered document and since the father Maanmal had created the Trust in favour of his sons only, who were minor at the time of creation of Trust in the year 1957, therefore, the Trust was a valid one and, therefore, power to sell the property exclusively with the father was not there and even being the Karta of the joint family, he could not transfer the said property as the consideration of Rs. 20,000/- was never received by the business firm M/s. Navneet Chand Ashok Kumar for which the said money was said to have been advanced by the defendant No. 1 - Deep Chand to the seller Shri Maanmal. Learned counsels for the appellants also urged that by a separate document executed on the same date i.e. 23/12/1957, the elder brother of the seller Maanmal, Roop Chand has relinquished his right in the said suit property, a residential house, by a document known as and, therefore, the said Maanmal could validly create the Trust for his sons, the present plaintiffs and, therefore, the sale deed dated 21/9/1971 deserves to be cancelled and plaintiffs were entitled to the possession of the said residential house.

Per contra, Mr. L.R. Mehta and Mr. V.L. Thanvi, learned counsels appearing for the respondent-defendants-purchasers submitted that the defendant No. 1 and 2 are bonafide purchasers for consideration without notice of creation of Trust and the Trust so created was not a valid Trust and was hit by Section 8 of the Indian Trust Act, 1882, which clearly provides that the subject matter of the Trust must be the property transferable to the beneficiaries and it must not be merely beneficial interest under the subsisting Trust. Mr. L.R. Mehta, therefore, submitted that though the plaintiffs by birth could be said to have a share in the suit property as a co-parcener but for their beneficial interest in the suit property precisely prohibited the creation of Trust in their favour for the suit property which is hit by Section 8 of the Indian Trusts Act, 1882. Without there being a partition of the joint family property by metes and bounds, the share of the transferor cannot be ascertained and, therefore, the transferor could not create a Trust in favour of the beneficiaries, namely his sons and, therefore, such a Trust purportedly created in favour of the plaintiffs on 23/12/1957 was hit by Section 8 of the Indian Trusts Act, 1882.

Learned counsels for the defendants also drew the attention of the Court towards the statements of defendant No. 5, Vijay Chand, who stated before the court below that he never signed the said Trust Deed nor the possession of the Trust property was ever taken in possession by the Trustees nor any meeting of Trustees ever took place. Learned counsels for the respondent-defendants submitted that the so called Trust created on 23/12/1957 was never made effective and was still born and, therefore, the transfer of property by the father as Karta of the Joint Hindu Family for a consideration of Rs. 20,000/- in favour of defendant No. 1 and 2 was perfectly legal and valid and the learned trial court was justified in dismissing the suit for cancellation of sale deed filed by the plaintiffs.

Learned counsels for the respondents, Shri L.R. Mehta also relied on an old judgment in the case of Harilal Bapuji and Ors. v. Bai Mani - decided on 6/2/1905 reported in 7 Bombay L.R. 25. The relevant extract of which is quoted below for ready reference:--

"(351) APPELLATE CIVIL

Before Mr. Justice Russell and Mr. Justice Aston. Harilal Bapuji and Ors. (Original Defendants), Appellants, v. Bai mani (Original Plaintiff), Respondent (6th February, 1905)

............

It was argued before us for the appellants-trustees that there was a valid appointment of themselves as guardians of the minor son of the deceased and that certain legacies were validly bequeathed. The will, so far as it is material, begins by saying that in order that the property acquired from the testator''s father, which was belonging to him (the testator), might not be wasted after his death, and in order to make a disposition of the same after his death, he made his testamentary writing. After giving particulars of his moveable and immoveable property, the will goes on to appoint in the event of the testator''s death, his son Ranchhod to be the heir of his whole property; and it appoints the three appellants trustees in order to administer his property until his son Ranchhod reaches the age of majority. It goes on to say, "my trustees shall take the whole of the property in their possession and administer the same, as if with full power, and get my son Ranchhod married; and as to any outlay that may be required for the education and training of my son Ranchhod, my trustees shall make the same and increase the same, if necessary, in addition to what he has mentioned for the expenses of my son and his mother," Then it continues that when his son Ranchhod shall reach the age of 21 years, his trustees may hand over to him whatever property there may be belonging to the testator, and that his son is to do whatever he likes with the property that there may be belonging to him (testator). From these extracts from the will it is apparent that the testator did not appoint the appellants the guardians of his son eo nomine but appointed them trustees of his property till his son should come of age. The property was clearly ancestral and the question arises, whether the testator could appoint trustees in the way he was done.

In the first place, it must be remembered, that by section 8, Indian Trusts Act (II of 1882), the subject matter of the trust must be property transferable to the beneficiary. It is impossible to say that the property comprised in this will come within such category.

As said by Mr. Mayen, at page 537 (6th edition)," a member of an undivided family cannot bequeath even his own share of the joint property because, at the moment of death, the right by survivorship, is at conflict with the right by devise. Then the title by survivorship, being the prior title, takes precedence to the exclusion of that by devise". Accordingly, therefore, at the moment of the testator''s death, the whole of his property was and became the property of his son, and was not property transferable to the son."

I have heard the learned counsels at length and perused the evidence on record.

In the considered opinion of this Court, the present first appeal of the plaintiffs has no force and the same is liable to be dismissed for the simple reason that the incapacity to sell the ancestral residential house of Maanmal claimed by the plaintiffs - sons on the ground of creation of a Trust in their favour way back on 23/12/1957 is not tenable as the creation of such Trust is clearly hit by Section 8 of the Indian Trusts Act, 1882 and the same was an illegal or void Trust.

The Trust could not be created by the father Maanmal on 23/12/1957 in favour of his minor sons, since the property in question was admittedly an ancestral and a joint family property and even with the relinquishment of right by the elder brother Roop Chand in the said suit house in favour of Maanmal by the second document of relinquishment deed () on 23/12/1957, the said joint family property vested in the Hindu Undivided Family of which Maanmal was the Karta. Without the partition taking place between the father, mother and the sons, the definite share of the father was not ascertainable on 23/12/1957 and the Trust by father in favour of minor children as beneficiaries in respect of joint property could not be created, as the indeterminate share of father in the joint property was not transferable by father in favour of his minor children and unless the property is transferable to the beneficiaries, the Trust of that property cannot be created. Having a beneficial interest in the property as a minor children did invalidate the creation of Trust and that precisely is the purport of Section 8 of the Act, 1882, which is quoted below for ready reference:--

"8. Subject of Trust- The subject-matter of a trust must be property transferable to the beneficiary.

It must not be merely beneficial interest under a subsisting trust."

Section 6 of the Transfer of Property Act, 1882 specifies what may be transferred and the provisions of Section 6 of the Transfer of Property Act are also reproduced hereunder for ready reference:--

"6. What may be transferred.- Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force,--

(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred;

(b) A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby;

(c) An easement cannot be transferred apart from the dominant heritage;

(d) All interest in property restricted in its enjoyment to the owner personally cannot be transferred by him;

(dd) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred;

(e) A mere right to sue cannot be transferred;

(f) A public office cannot be transferred, nor can the salary of a public officer, whether before or after it has become payable;

(g) Stipends allowed to military, naval, air-force and civil pensioners of the Government and political pensions cannot be transferred.

(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest affected thereby, or (2) for an unlawful object or consideration within the meaning of section 23 of the Indian Contract Act, 1872 or to a person legally disqualified to be transferee;

(i) Nothing in this section shall be deemed to authorise a tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate, under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee."

A reference may also be made to the judgment of Bombay High Court in Pestonji Jalbhoy Chichgar Vs. Jalbhoy Jehangir Chichgar, in which the Division Bench of Beaumont, C.J. and Blackwell, J. held that what Section 8 prohibits is a Trust upon a Trust or in other words, a Trust cannot be created only for a beneficial interest. The relevant extract is quoted below for ready reference:--

"What the S. 8 forbids is a trust upon a trust a trust - a trust of a mere right of the beneficiary to proceed against the trustee, and if the Will of Gulbai amounts to a declaration of a trust of her beneficial interest, that is, of her right to go against the trustees of Kaka''s will, then the trust offends against S.8.

The trust does not operate until the property, which no doubt at the date of the Will and of the death of the testatrix, was a mere beneficial interest vested in the testatrix, has come home and been received by the estate of the testatrix from the trustees in whom it was vested at the date of the Will. That being so, it seems to me that the trust is not a trust of a mere beneficial interest; it is a trust of the actual property given by the will of Kaka to Gulbai receivable by her on the death of her mother. I think, therefore, that the construction which the learned Judge put upon the will was not justified and that we must declare that the trust in Cl. 3 is valid. Costs of all parties as between attorney and client to come out of the estate."

As far as the question raised by the plaintiffs about the consideration not received for the joint family business firm is concerned, suffice it to say that the consideration having been received by the seller Maanmal is sufficient to uphold the sale of house in question by the registered sale deed dated 21/9/1971 and how that money was utilized by him whether for joint family business of old shop M/s. Bagrecha Brothers or new joint family shop in the name of M/s. Navneet Chand Ashok Kumar is not a ground to upset the said sale. Obviously, in 1971 since the plaintiffs were minor or very young and the money in question was admittedly received by seller Maanmal having been borrowed from Deep Chand for business purposes, the denial to this effect by the plaintiffs without any contrary evidence brought on record cannot upset such sale by a registered document by the Karta of the joint family. The evidence on record establishes the family need for which funds of Rs. 20,000/-were borrowed from the defendant son-in-law Deep Chand and his own wife plaintiff No. 3 Smt. Laxmi Bai in her letter Ex. 17 has admitted this fact.

This Court, therefore, fully concurs with the findings of the learned trial court recorded in this regard as quoted above.

The present first appeal filed by the plaintiffs under Section 96 CPC is, therefore, found to be devoid of merit and the same is hereby dismissed. No costs. Copy of this order be sent to the parties concerned and court below forthwith.