# P.K. MOHAN RAM v. B.N. ANANTHACHARY AND ORS

- **Citation:** [2010] 3 S.C.R. 401
- **Court:** Supreme Court of India
- **Decided:** 2010-03-15
- **Case number:** Civil Appeal No. 6412 of 2002
- **Bench:** G.S. Singhvi, Asok Kumar Ganguly
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/p-k-mohan-ram-v-b-n-ananthachary-and-ors-26705
- **Pages:** 28

## Headnote

Deeds and Documents - Deed executed in respect of
A
B
suit property - Will or Settlement Deed - Held: The form, or
nomenclature of the deed is not conclusive - Court has io
C
vel}' carefully examine the document as a whole, look into the
substance thereof, treatment of the subject by setUorl
executant, .. intention appearing both by the expressed
language employed in the document and by necessary
implication and prohibition, if any, contained against D ·
revocation thereof - On facts, by executing .the deed in
question, the original owner expressed his intention, in no ·
uncertain terms, to settle the suit property in favour of 16
persons, in praesenti - The language of the deed clearly
shows that all the beneficiaries were to enjoy the property
E
· along with original owner during his lifetime and affer his .
death, each of the beneficiaries was to get a specified share
- In the concluding portion of the deed, the original owner also
made it clear that he will have no right to ca~cel the Deed for ·
any reason whatsoever or to alter the terms thereof.- Read
F
as a whole, it is clear that the deed in question. was a
'Settlement Deed' and not a 'Will'.
Transfer of Property Act, 1882- ss.19 and 21 - "Vested
interest" and "contingent interest" - Difference between -
Discussed.
G
The original owner of the suit property executed
document Ex. A-2, titled and described as "Settlement
Deed", in favour of the appellant, respondent nos.1 and
401
H
402
SUPREME COURT REPORTS
[2010] 3 S.C.R.
A 2, and 13 others i.e. in total 16 beneficiaries.
After the death of the original owner, the appellant
filed suit for partition of his share in the suit property.
Respondent nos.1 and 2 filed written statement
8 contending that the appellant obtained the 'Settlement
Deed' by playing fraud, and on discovery thereof, the
original owner executed 'Revocation Deed' Ex. B-2 and
then executed a 'Will' Ex. B-3 whereby he bequeathed the
property in their favour.
C
Th~ trial Court passed preliminary decree in favour
of appellant holding that Ex. A-2 was "Settlement Deed"
and the same was not executed as a result of fraud or
misrepresentation and that the settlor did not have the
right to execute 'Revocation Deed' Ex. B-2 and 'Will' Ex.
D B-3. The judgment was upheld by the first appellate court.
On second appeal, the High Court held that even
though Ex.A-2 was titled and described as 'Settlement
Deed', in reality it was a 'Will' and that the appellant had
E no right in the suit property because the settlor had
bequeathed the same in favour of respondent Nos.1 and
2.
In appeal to this Court, it was contended by the
appellant that the High Court misinterpreted Ex.A-2 as a
F 'Will' ignoring the specific stipulation contained therein
that it was a 'Settlement Deed'. With reference to s.19 of
the Transfer of Property Act, 1882, it was contended that
the transfer of the property rights was in praesenti, which
coupled with an unequivocal inhibition in Ex.A-2 against
G cancellation/amendment thereof, clearly shows that Ex.A2 was a 'Settlement Deed' and not a 'Will'.
Allowing the appeal, the Court
HELD: 1. 1. Sections 19 and 21 of the Transfer of
H
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
403
ORS.
Property Act, 1882 elucidate the expressions "vested A
interest" and "contingent interest" in the context of
transfer of property. A reading of the plain language of
the above sections makes it clear that an interest can be
said to be a vested interest where there is immediate right
of present enjoyment or a present right for future B
enjoyment. An interest can be said to be contingent if the
right of enjoyment is made dependent upon some event
which may or may not happen. On the happening otthe
event, a contingent interest becomes a vested interest.
[Para 10] [412-G; 413-H; 414-A-B]
c
1.2. Although, no strait-jacket formula has been
evolved, while interpreting an instrument to find out
whether it is of a testamentary character, which will take
effect after the life time of the

## Text

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·'·
[2010] 3 S.C.R. 401
P.K. MOHAN RAM
v.
B.N. ANANTHACHARY AND ORS.
(Civil Appeal No. 6412 of 2002)
MARCH 15, 2010
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Deeds and Documents - Deed executed in respect of
A
B
suit property - Will or Settlement Deed - Held: The form, or
nomenclature of the deed is not conclusive - Court has io
C
vel}' carefully examine the document as a whole, look into the
substance thereof, treatment of the subject by setUorl
executant, .. intention appearing both by the expressed
language employed in the document and by necessary
implication and prohibition, if any, contained against D ·
revocation thereof - On facts, by executing .the deed in
question, the original owner expressed his intention, in no ·
uncertain terms, to settle the suit property in favour of 16
persons, in praesenti - The language of the deed clearly
shows that all the beneficiaries were to enjoy the property
E
· along with original owner during his lifetime and affer his .
death, each of the beneficiaries was to get a specified share
- In the concluding portion of the deed, the original owner also
made it clear that he will have no right to ca~cel the Deed for ·
any reason whatsoever or to alter the terms thereof.- Read
F
as a whole, it is clear that the deed in question. was a
'Settlement Deed' and not a 'Will'.
Transfer of Property Act, 1882- ss.19 and 21 - "Vested
interest" and "contingent interest" - Difference between -
Discussed.
G
The original owner of the suit property executed
document Ex. A-2, titled and described as "Settlement
Deed", in favour of the appellant, respondent nos.1 and
401
H
402
SUPREME COURT REPORTS
[2010] 3 S.C.R.
A 2, and 13 others i.e. in total 16 beneficiaries.
After the death of the original owner, the appellant
filed suit for partition of his share in the suit property.
Respondent nos.1 and 2 filed written statement
8 contending that the appellant obtained the 'Settlement
Deed' by playing fraud, and on discovery thereof, the
original owner executed 'Revocation Deed' Ex. B-2 and
then executed a 'Will' Ex. B-3 whereby he bequeathed the
property in their favour.
C
Th~ trial Court passed preliminary decree in favour
of appellant holding that Ex. A-2 was "Settlement Deed"
and the same was not executed as a result of fraud or
misrepresentation and that the settlor did not have the
right to execute 'Revocation Deed' Ex. B-2 and 'Will' Ex.
D B-3. The judgment was upheld by the first appellate court.
On second appeal, the High Court held that even
though Ex.A-2 was titled and described as 'Settlement
Deed', in reality it was a 'Will' and that the appellant had
E no right in the suit property because the settlor had
bequeathed the same in favour of respondent Nos.1 and
2.
In appeal to this Court, it was contended by the
appellant that the High Court misinterpreted Ex.A-2 as a
F 'Will' ignoring the specific stipulation contained therein
that it was a 'Settlement Deed'. With reference to s.19 of
the Transfer of Property Act, 1882, it was contended that
the transfer of the property rights was in praesenti, which
coupled with an unequivocal inhibition in Ex.A-2 against
G cancellation/amendment thereof, clearly shows that Ex.A2 was a 'Settlement Deed' and not a 'Will'.
Allowing the appeal, the Court
HELD: 1. 1. Sections 19 and 21 of the Transfer of
H
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
403
ORS.
Property Act, 1882 elucidate the expressions "vested A
interest" and "contingent interest" in the context of
transfer of property. A reading of the plain language of
the above sections makes it clear that an interest can be
said to be a vested interest where there is immediate right
of present enjoyment or a present right for future B
enjoyment. An interest can be said to be contingent if the
right of enjoyment is made dependent upon some event
which may or may not happen. On the happening otthe
event, a contingent interest becomes a vested interest.
[Para 10] [412-G; 413-H; 414-A-B]
c
1.2. Although, no strait-jacket formula has been
evolved, while interpreting an instrument to find out
whether it is of a testamentary character, which will take
effect after the life time of the executant or it is an
instrument creating a vested interest in praesenti in D
favour of a person, the Court has to very carefully
examine the document as a whole, look into the
substance thereof, the treatment of the subject by the
settlor/ executant, the intention appearing both by the
expressed language employed in the instrument and by E
necessary implication and the prohibition, if any,
contained against revocation thereof. The form or
nomenclature of the instrument is not conclusive and the
Court is required to look into the substance thereof. [Para
13] [418-G-H; 419-A-B]
F
1.3. A careful reading of Ex.A-2 shows that in the title
itself the document has been described as Settlement
Deed. By executing that document, the orikiinal owner
expressed his intention, in no uncertain terms, to settle G
the property in favour of 16 persons who were none else
than his own relatives and declared that 'from this day
onwards I and you shall enjoy the land and house without
creating any encumbrance or making any alienation
whatsoever.' This was an unequivocal creation of right
H
404
SUPREME COURT REPORTS
[2010] 3 S.C.R.
A
in favour of 16 persons in praesenti. Though, the
beneficiaries were to become absolute owners of their
respective shares after the death of the settler, the
language of the document clearly shows that all of them
were to enjoy the property along with settler during his
B
lifetime and after his death, each of the beneficiaries was
to get a specified share. In the concluding portion, the
settler made it clear that he will have no right to cancel
the Settlement Deed for any reason whatsoever or to alter
the terms thereof. The mere fact that beneficiary Nos. 1
C and 2 and after them their heirs were to receive honours
at the temple or that shares were to be divided after
disposal of the property cannot lead to an inference that
Ex.A-2 was a 'Will'. If Ex.A-2 is read as a whole; it becomes
clear that it was a 'Settlement Deed' and the trial Court
and the lower appellate Court did not commit any error
D by recording a finding to that effect. As a sequel to this,
it must be held that the High Court committed serious
error by setting aside the concurrent judgments and
decrees of the two courts. [Para 21] [427-F-H; 428-A-D]
E
1.4. Although, in their written statement respondent
Nos.1 and 2 did plead that Ex. A-2 was executed by the
original owner due to fraud or misrepresentation, no
evidence was led by them to·substantiate that allegation.
Therefore, no valid ground or'-justification was found to
F
entertain that plea. [Para 23] [428-E-F]
Sagar Chandra Manda/ v. Digamber Manda/ and others
(1909) 9 CLJ 644; Ramaswami Naidu and another v.
Gopc.lakrishna Naidu and others AIR 1978 Madras 54;
G Ponnuchami Servai v. Balasubramanian and others AIR 1982
Madras 281 and Poongavanam v. Perumal Pillai and
another (1997) 1 MLJ 169, distinguished.
H
Rajes Kanta Roy v. Santi Debi 1957 SCR 77; Usha
Subbarao v. B.N. Vishveswaraiah (1996) 5 SCC 201 and
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
405
ORS.
Kokilambal v. N. Raman (2005) 11 SCC 234, relied on.
A. Sreenivasa Pai and another v. Saraswathi Ammal
alias G. Kamala Bai (1985) 4 SCC 85; Namburi Basava
Subrahmanyam v. Alapati Hymavathi and others (1996) 9
SCC 388; Gangaraju v. Pendyala Somanna AIR 1927
Madras 197; Venkatasubramaniya Iyer v. Srinivasa Iyer AIR
1929 Madras 670 and Ramaswami Naidu v. M.S. Velappan
and others (1979) 2 M.L.J.88, referred to.
Vynior's case Trin 7 Jae. 1 Rot. 2629, (English Reports,
Vol. LXXVll, Kings Bench Division VI), referred to.
Case Law Reference:
1957 SCR 77
relied on
Para 7
(1985) 4 sec 85
referred to
Para 7
(1996) 9 sec 388
referred to
Para 7
AIR 1927 Madras 197 referred to
Para 7
AIR 1929 Madras 670 referred to
Para 7
Vynior's case Trin
referred to
Para 8
7 Jae. 1 Rot. 2629
(English Reports,
Vol. LXXVll,
Kings Bench Division VI)
(1909) 9 CLJ 644
distinguished
Para 8
AIR 1978 Madras 54
distinguished
Para 8
AIR 1982 Madras 281
distinguished
Para 8
(1997) 1 MLJ 169
distinguished
Para 8
(1996) 5 sec 201
relied on
Para 12
(2005) 11 sec 234
relied on
Para 12
A
B
c
D
E
F
G
H
406
SUPREME COURT REPORTS
[2010) 3 S.C.R.
A
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6412 of 2002.
B
c
From the Judgment & Order dated 27.2.2001 of the High
Court of Judicautre at Madras in S.A. No. 1090 of 1983.
R. Sundaravaradhan T.R.B. Sivakumar, K.V. Vijayakumar
for the Appellant.
M.S. Ganesh, R. Ayyam Perumal, K. Seshachary, V.N.
Raghupathy for the Respondents.
The Judgment of the Court was delivered by
G.S. SINGHVI, J. 1. This is an appeal for setting aside
judgment dated 27.2.2001 passed by the learned Single Judge ·
of Madras High Court in Second Appeal No. 1090/1983 and
D Civil Miscellaneous Petition No.8137/1983 whereby he
reversed the judgments and decrees of the trial Court and the
lower appellate Court and dismissed the suit filed by the
appellant for partition of his 1/17th share in the suit property.
E
2. Shri K. Perumal Iyer, who owned the suit property,
executed Settlement Deed dated 27.3.1969 in favour of the
appellant, respondent Nos.1 and 2 and 13 others and declared
that from the date of execution he and the beneficiaries shall
enjoy the land and house etc. without creating any encumbrance
F
or making any alienation whatsoever. He further declared that
during his life, he will collect the rental income from the land and
house and after paying the municipal taxes, remaining income
wo_uld be spent by him according to his choice; that after his
death, the property shall be sold at the prevailing market price
by all 16 b~neficiaries and out of the sale proceeds, a religious
G trust should be created by paying Rs.4,000/- to Devasthanam.
of Sri Prasanna Venkatesa Perumal in the office of the
H
· Saurashtra Sabha at Madurai for the purpose of t~king out
annual procession of Perumal in the sacred -streets on
Amavasai day in the month of Margazhi; that the honors of the
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
407
ORS. [GS. SINGHVI, J.]
temple should be bestowed upon beneficiary Nos.1 and 2 and,
A
after them, upon their heirs; that from the sale proceeds, the
beneficiaries shall purchase an immoveable property of
Rs.4,000/- in the name of Balu G. Perumal Iyer Feeding
Charities and all 16 trustees shall provide for feeding of his
relatives on the day of the procession of the deity (Perumal)
B
and that if there is delay in purchasing the immovable property,
the beneficiaries shall be free to advance the money on interest
for the purpose of generating income which could be used for
feeding; that his last rites shall be performed by beneficiary
Nos.1 and 2 and all 16 persons shall together spend Rs.2000/ c
- from their personal funds for that purpose. The settlor also
indicated that he had mortgaged the land and house to
Ramaseshan and Co. vide Mortgage Deed dated 24.3.1969
for a sum of Rs.1500/- which shall be redeemed by him and in
the event of death before redemption, all 16 beneficiaries shall
D
discharge the debt. The settler further ordained that after
deducting Rs.8,000/- from the sale price, the balance amount
should be divided into 17 shares of which beneficiary Nos.1
and 2 shall take three shares and beneficiary Nos.3 to 16 shall.
take one share each. If any one of 16 beneficiaries was to die
E
before sale of the property, the remaining persons were to get
absolute right to sell the property. The settlor finally recorded
that he shall have no right whatsoever to. cancel the 'Settlement
Deed' for any reason whatsoever or alter .the terms thereof,
3. Shri K Perumal Iyer died on 4.12.1972. After his death,
F
the appellant filed a suit (O·.S. No.626/1 ~72) for appointment
of receiver to carry out the direc;:tions mentioned in the
'Settlement Deed'. The trial Court decreed the suit, but on
appeal, the High Court reversed the decree of the trial Court
and.dismissed the suit with an observation that the same shall
G
not operate as res judicata against the fresh suit .which may
be filed by the plaintiff (a.ppellant herein). After disposal of the
appeal, the appellant filed O.S. No.858 of 1979 for partition of
his 1/17th share in the suit property and for grant of a
declaration that in view of the negative covenant contained in
H
408
SUPREME COURT REPORTS
[2010) 3 S.C;R.
A the ·Settlement Deed', the settler had no right to execute
Revocation Deed dated 27.2.1970 or Will dated 30.7.1972. In
the written statement filed by defendant Nos.1 and 2
(respondent Nos.1 and 2 herein), it was claimed that the
appellant and his brothers and sisters obtained the 'Settlement
B Deed' by playing fraud and on discovery thereof, Shri K.
Perumal Iyer executed . Revocation Deed' and then executed
the 'Will' whereby he bequeathed the property in their favour.
They also pleaded that the suit filed by the plaintiff (appellant ·
herein) is barred by Order II Rule 2 of the Code of Civil
c Procedure (CPC) because _the earlier suit filed by him for
appointment of receiver for carrying out the directions contained .
in the ·settlement Deed' was dismissed by the High Court in
A.S. No. 374/1974.
.
.
.
.
4. On the pleadings of the parties, the trial Court framed
D as many as 12 issues including the following:
·
E
F
1.
Whether the will in favour ofdefendants 1 and 2 is
valid and binding?
2.
3.
4.
5.
Whether the suit is barred under Order II Rule 2 of ·
C.P.C.?
6.
Whether the settlement deed was brought into
.G
existence due to fraud and misrepresentation?
5. After considering the pleadings and evidence of the· ·
parties and hearing their advocates, the trial Court vide its
judgment dated 24.4.1982 held that document marked Ex.A-2
. H 'was 'Settlement Deed' and not 'Will' and t
1hat the same was
1,.
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
409
· ORS. [G.S. SINGHVI, J.]
not executed as a result of fraud or misrepresentation and that
A
the settler did not have the right to execute 'Revocation Deed'
Ex.B-2 and 'Will' Ex.B-3. The trial Court further held that the
second suit filed by the plaintiff is not barred by res judicata or
Order II Rule 2 CPC. In the end, the trial Court declared that ··
the plaintiff is entitled to partition of th.e suit property and . 8' ·
accordingly passed a preliminary decree in his favour.
6. Respondent Nos.1 and 2 challenged the judgment and
decree of the trial Court in Appeal Suit No.102/1982, which was
dismissed by the lower appellate Court vide judgment and
C
decree dated 10.3.1983. However, the second appeal
preferred by them was allowed by the learned Single Judge,
who held that even though Ex.A-2 was titled and described ~s
'Settlement Deed', in reality it was a 'Will' executed by late Shri
K. Perumal Iyer. The learned Single Judge further held that the
appellant herein has no right in the suit property because the
D
settler had bequeathed the same in favour-of respondent Nos.1
and 2 herein.
'
7. Shri R. Sundaravaradhan, learned senior counsel
appearing for the appellant submitted that the impugned
E
judgment is liable to be set aside because the learned Single
Judge misinterpreted Ex.A-2 and held it to be a 'Will' ignoring
the specific stipulation contained therein that it was a
'Settlement Deed'. Learned senior counsel referred to Section
19 of the Transfer of Property Act and argued that the transfer
F
of the property rights in praesenti coupled with an unequivocal
inhibition against cancellation/amendment thereof clearly shows
that Exhibit A-2 was a 'Settlement Deed' and not a 'Will'. In
support of his arguments, Shri Sundaravaradhan relied upon
the judgments of this Court in Rajes Kanta Roy v. Santi Debi G
1957 SCR 77, A. Sreenivasa Pai and another v. Saraswathi
Ammal alias G. Kamala Bai (1985) 4 SCC 85 and Namburi
Basava Subrahmanyam v. Alapati Hymavathi and others
(1996) 9 SCC 388 and of Madras High Court in Gangaraju v.
Pendyala
Somanna
Al R
1927
Madras
197, · H
410
SUPREME COURT REPORTS
[2010] 3 S.C.R.
A
Venkatasubramaniya Iyer v. Srinivasa Iyer AIR 1929 Madras
670.
> 8. Shri M.S. Ganesh, learned senior counsel appearing for
the respondents supported the impugned judgment and argued
8 that the learned Single Judge rightly treated Ex.A-2 as a 'Will'
because the settlor did not create any right in praesenti in
favour of the appellant and the prohibition contained therein
against cancellation/modification of 'Settlement Deed' was not
inconsequential. Shri Ganesh emphasized that the rights
C -created in favour of the beneficiaries were contingent and were
to become operative after the death of the settlor and, as such,
the learned Single Judge rightly treated Ext. A-2 to be a Will.
Learned senior counsel placed reliance on the judgment in
Vynior's case, Trin. 7 Jae. 1 Rot. 2629 {printed in the English
Reports, Volume LXXVll, King's Bench Division VI), as also the
D judgments of Calcutta and Madras High Courts in Sagar
Chandra Manda/ v. Digamber Manda/ and others (1909) 9
CLJ 644, Ramaswami Naidu and another v. Gopalakrishna
Naidu and others AIR 1978 Madras 54, Ponnuchami Servai
v. Ba/asubramanian and others AIR 1982 Madras 281 and
. E Poongavanam v. Perumal Pillai and another (1997) 1 MLJ
169 and argued that interpretation placed by the learned Single
Judge on Ex.A-2 is in consonance with the law laid down by
this Court and different High Courts. Shri Ganesh also referred
to the judgment of this Court in Rajes Kanta Roy v. Santi Debi
F (supra) and submitted that the contingent right, if any,, created
in favour of the plaintiff-appellant could not be made basis for
treating Ex.A-2 as 'Settlement Deed'.
9. For deciding the question raised in this appeal, it will
G be useful to notice the contents of Ex.A-2. The English
translation of the document produced by Shri M.S. Ganesh,
learned senior counsel for the respondents, which was
accepted by learned senior counsel appearing for the appellant
as correct, reads thus:
H
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
411
ORS. [G.S. SINGHVI, J.]
"Document No. 75311969
A
Settlement Deed of land and house property of the value
of Rs.20,0001xxxxxxxxxxxxxxx
The settlement deed executed by me in respect of the
land and house etc. in favour of these 16 persons is as
follows: I did not beget any male or female issue. My wife
Ponnammal died about 3 years ago. In accordance with
B
the terms of the partition deed dated 29.1.1937, bearing
C
Ramanthapuram R.0.1 162.43 to 48. 701/1937 between
my brothers Balu K. Ramaswamy Iyer and Balu K.
Nannaiyer and me, I got as my share the undermentioned
land and house etc. valued at Rs.20,000/-. Since then I
have been in uninterrupted possession and enjoyment of o
the same on payment of municipal taxes and so on. You
16 persons being my relatives and considering your
welfare and mine and out of my love and affection for you,
I settle this property on you 16 persons by executing this
settlement deed. From this day onwards I and you shall
E
enjoy the under mentioned land and house etc. without
creating any encumbrance or making any alienation
whatsoever. During my lifetime I shall collect the rental
income from the under mentioned land and house etc. and
after paying the municipal taxes, with the remaining income
F
I shall spend my life as I wish till the end of my days. After
my death, you 16 persons shall become eligible and have
absolute right to sell the under mentioned land and house
. at the prevalent market price. Out of the sale proceeds thus
received, ·you should create a religious trust by paying
Rs.4,000/- to the Devasthanam of Sri Prasanna
G
Venk~~esa Perumal in the office of the Saurashtra Sabha
at Madurai for the purpose of taking out annual procession
of Perumal in the sacred streets on Amavasai day in the
month of Margazhi. The honors at the temple should be
bestowed upon persons 1 and 2 among you and after them
H
' '
A
B
c
D
E
F
G
H
41'2
. SUPREME COURT REPORTS
(2010] 3 S.C.R.
..
upon their heirs. Further, from the sale proceeds, you
, shoCJld purchase an immoveable property for Rs.4,000/- in
the name of Balu G. Perurnal Iyer Feeding Charities and
you t6,p.ersons as trustees·should provide for feeding of
my relations on the day of the procession of the deity
(Perumal). Should there be any delay in purchasing the
immovable property, you 16 persons would be fully entitled
to advance money on interest or by mortgage to generate
income for the feeding. Upon my death, ,whoever among
1 and 2 of you is present shall perform my last rites and
all you 16 persons shall together spend upto Rs.2,000/-
from your personal funds for that purpose. During my life
time, .1 myself shall redeem the mortgage of the
undermentioned land and house which I had mortgaged
to Rameseshan & Co. of Madurai by a mortgage deed
dated 24.$.1969 for a sum of Rs.1500/-. In the event I die
before redeeming the mortgage, you 16 persons -shall
discharge that debt. As mentioned above, after deducting
Rs.8,000/- from the sale price, the balance amount should
be divided into seventeen shares. 1 and 2 among you shall
take three $hares, 3 to 16 among you shall take one share
each. 1 and 2 among you shall divide the three shares
equally between you. If anyone of you 16 persons dies
before the sale of the property, the remaining persons
excluding the deceased shall have the absolute right to sell
the property. I shall have no right whatever to cancel this
settlement deed for any reason whatsoever or to alter
these terms. I execute this settlement deed of my own
free will."
(emphasis supplied)
10. Sections 19 and .21 of the Transfer of Property Act,
1882 (for short, 'the 1fe2 Act') which elucidate the expressions
"vested interest" an-a· "contingent interest" in the context of
transfer of property read as under:
"19. Vested interest.-Where, on a transfer of
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
413
ORS. [G.S. SINGHVI, J.]
property, an interest therein is created in favour of a person
A
without specifying the time when it is to take effect, or in
terms specifying that it is to take effect forthwith or on the
happening of an event which must happen, such ·interest
is vested, unless a contrary intention appears from the
terms of the transfer.
B
A vested interest is not defeated by the death of the
transferee before he obtains possession.
Explanation.- An intention that an interest shall not be
vested, is not to be inferred merely from a provision
C ·
whereby the enjoyment thereof is postponed, or whereby
a prior interest in the same property is given or reserved
to some other person, or whereby income arising from the
property is directed to be accumulated until the time of
enjoyment arrives, or from a provision that if a particular
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event shall happen the interest shall pass to another
·person.
21.Contingent interest. - Where, on a transfer of property,
an interest therein is created in favour of a person to take
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effect only on the happening of a specified uncertain event,
or if a specified uncertain even shall not happen, such
person thereby acquires a contingent interest in the
property. Such interest becomes a vested interest, in the.
former case, on the happening of the event, in the latter,
when the happening of the event becomes impossible.
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Exception. - Where, under a transfer of property, a person
becomes entitled to an interest therein upon attaining a
particular age, and the transferor also gives to him
absolutely the income to arise from such interest before
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~El- reaches that age, or directs the income or so much'
thereof as may be necessary to be applied for his benefit,
such interest is not contingent."
'
A reading of the plain language of the above reproduced
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sections makes it clear that an interest can be said to be
a vested interest where there is immediate right of present
enjoyment or a present right for future enjoyment. An
interest can be said to be contingent if the right of
enjoyment is made dependent upon some event which
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may or may not happen. On the happening of the event, a
contingent interest becomes a vested interest.
11. In Rajes Kanta Roy v. Santi Debi (supra), this Court
considered the distinction between 'vested interest' and
C 'contingent interest' in the backdrop of dispute between the
widow and two sons of Ramani Kanta Roy, who possessed
considerable properties. Two suits filed by the parties in relation
to the suit property ended in compromise decrees. On account
of the alleged violation of compromise decree, Santi Debi filed
an application for execution and prayed for issue of a direction
D for release .of the arrears of her monthly allowances. She also
prayed for attachment and sale of the immovable properties.
Appellant, Rajes Kanta Roy filed objections under Section 47
of the Code of Civil Procedure. The same were rejected by the
Subordinate Judge. Appeal filed by him was dismissed by the
E Calcutta High Court. One of the questions considered by this
Court was whether the interest created by the deed executed
by Ramani Kanta Roy was a vested or contingent interest. The
Court referred to Sections 19 and 21 of the Transfer of Property
Act and Sections 119 and 120 of the Indian Succession Act,
F Williams on Executors and Administrators (13th Edition) Vol.2,
p.658, Jarman on Wills (8th Edition) Vol.II, p.1390 and p.1373
and observed:
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"Apart from any seemingly technical rules which may be
gathered from English decisions and text-books on this
subje6t, there can be no doubt that the question is really
one of intention to be gathered from a comprehensive
view of all the terms of a document. Learned SolicitorGeneral frankly admitted this, and also that a court has
to approach the task of construction in such cases with a
P.K. MOHAN RAM v. B.N. ANAN;y-HACHARY AND
415
ORS. [G.S. SINGHVI, J.]
bias in favour of a vested interest unless the intention to
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the contrary is definite and clear. It is, therefore, necessary
to consider the entire scheme of the deed of trust· in the
present case, having regard to the terms therein, and to
gather the intention therefrom."
·
The Court then referred to different portions of the deed
executed by Ramanai Kanta Roy and observed:
'
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"Now, there can be no doubt about the rule that where the
enjoyment of the properly is postponed but the present
income thereof is to be applied for the benefit of the
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donee the gift is vested and not contingent. (See
Explanation to s.19 of the Transfer of Property Act,
Explanation to s.119 of the Indian Succession Act. See
also Williams on Executors and Administrators, 13th Ed., ·
Vol.2, p.663, para.1010, and Jarman on Wills, 8th Ed.,
D
Vol.II, p.1397). This rule operates normally where the entire
income. is applied for the benefit of the donee. The
distinguishing feature in this case is that it is not the entire
income that is available to the donee for their actual use
but only a portion thereof. But it is to be observed that
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according to the scheme of the trust deed, th,e reason for
limiting the enjoyment of the income to a specified sum
. thereof, is obviously in order to facilitate and bring about
the discharge of the debts. As already explained the
underlying scheme of the trust deed is that the enjoyment
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is to be restricted until the debts are discharged. Whatever
may be said of such a provision where a donee is not
himself a person who is under any legal obligation aliunde
to discharge such debts, the position in this case is
different. The two sons are themselves persons who, if the
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settler died intestate, would be under an obligation to
discharge his debts out of the properties which devolve .
upon them. It is only the surplus which would be legally
available for division between them. In such a case, the
balance of the income which is meant to be applied for
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the discharge of the debts is also an application of the .
income for the benefit of the donees. It follows that the
er.tire income is to be applied for the benefit of the donee
and only the surplus, if any is available to the donees.
Hence the provision in the trust deed that lots I to IV are to
devolve on Rajes and lot V on Ramendra and that the
surplus income of each of these lots after the discharge
of the debts is also to devolve in the same way, clearly
_ operates as nothing more than the present allotment of
these properties themselves to the donees subject to the
discharge of debts notionally in the same proportion. Thus,
taking the substance of the entire scheme of this division
between the two sons the position that emerges is as
follows. (1) Specified lots are ear-marked for each of the
two sons. (2) The present income out of those Jots is to
be applied for the discharge of the debts after payment
of specified sums therefrom by way of monthly payments
to the two sons and presumably such application is to be
notionally pro rata: (3) Any surpluses which remain from
out of the income of each of the lots are to go to the vel}'
person to whom the corpus of the Jot itself is to belong
on the termination of the trust. (4) In the event of any of
the two sons dying before the termination of the trust, his
interest in the monthly payments out of the income is to
devolve on his·heirs. These arrangements_ taken together
clearly indicate that what is postponed is not the vel}'
vesting of the property in the lots themselves but that the
enjoyment of the income thereof is burdened with certain
monthly payments and with the obligation to discharge
debtt: ti'1erefrom notionally pro rata, all of which taken
together constitute application of the income for his
benefit.
It may be noticed at this stage that one of the ·
features of a contingent interest is that if a person dies
before the contingency disappears and before the vesting
occurs, the heirs of such a person do not get the benefit
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
417
ORS. [G.S. SINGHVI, J.]
of the gift. But the' trust deed in question specifically
A
provides in the case of Rajes - with whose interest alone
we are concerned - that even in the event of his death it
is his heirs (then surviving) that would take the interest. It
has been urged that the provision in cl.12(a) in favour of
the heirs then surviving is in the nature of a direct gift in
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favour of the heir or heirs who may be alive at the date
when the contingency disappears. But even so, this would
make no practical difference.' It is to be remembered that
in this case the parties belong to the Dayabhaga school
of Hindu Law - and this is admitted before us. It is also to c
be remembered that up to the third degree in the male line
the principle of representation under the Hindu Law
operates. The net result of the provision, therefore, is that
whenever the alleged contingency of discharge of debts
may disappear the person on whom the interest would 0
devolve would, in the normal course, be the very heir (the
lineal descendant then surviving or the widow) of Rajes.
The actual devolution of the interest, therefore, would not
be affected by the alleged contingency. That being so, it
is more reasonable to hold that the interest of Rajes
under the deed is vested and not contingent.
E'
This view is confirmed by the fact that under the
compromise decree which is now sought to be executed,
both the judgment-debtors, Rajes and Ramendra,
created a charge for the monthly payment to Santi Devi · F
and agreed to such charge being presently executable.
This shows clearly that they themselves understood the
interest available to them under the trust ris a vested
interest."
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(emphasis supplied)
12. In Usha Subbarao v. B.N. Vishveswaraiah (1996) 5
sec 201, a two-Judge Bench was called upon to consider
whether the appellant is entitled to share of her husband in the
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A properties left by her father-in-law, Dr. N.S. Nanjundiah on the
basis.of a Will executed by him. The appellant pleaded that the
respective shares of the sons of the testator including her
husband vested in them as per the Will and after the death of
her husband, she is entitled to the share of her husband. The
B trial Court held that the succession opened on the death of the
testator by virtue of which all his sons became entitled to equal
shares in the properties and the recital in the Will that the
partition should take place amongst the surviving children after
the death of Smt. Nadiga Nanjamma is really intended to refer
c to the children surviving the testator. This view of the trial Court
was reversed by the High Court and the suit was dismissed.
This Court referred to Sections 19 and 21 of the 1882 Act,
Sections 119 and 120 of the Indian Succession Act and
reiterated one of the propositions laid down in Rajes Kanta
D Roy v. Santi Devi (supra) by making the following
observations:
"Although the question whether the interest created is a
vested or a contingent interest is dependent upon the
intention to be gathered from a comprehensive view of
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a// the terms of the document creating the interest, the
court while construing the document has to approach the
task of construction in such cases with a bias in favour
of vested interest unless the intention to the contrary is
definite and clear."
F The ratio of the above noted two judgments was followed in
another two-Judge Bench in Kokilambal v. N. Raman (2005)
11 sec 234.
13. Having noticed the distinction between vested interest
G and contingent interest, we shall now consider whether Ex.A-2
was a Settlement Deed or a Will. Although, no strait-jacket
formula has been evolved for construction of such instruments,
the consistent view of this Court and various High Courts is that
while interpreting an instrument to find out whether it is of a
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P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
419
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testamentary character, which will take effect after the life time
A
of the executant or it is an instrument creating a vested interest
in praesenti in favour of a person, the Court has to very carefully
examine the document as a whole, look into the substance
thereof, the treatment of the subject by the settlor/executant, the
intention appearing both by the expressed language employed
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in the instrument and by necessary implication and the
prohibition, if any, contained against revocation thereof. It has
also been held that form or nomenclature of the instrument is
not conclusive and the Court is required to look into the
substance thereof.
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· 14. Before proceeding further, we may notice the
judgments on which reliance was placed by learned counsel for
the parties. In Gangaraju v. Pendya/a Somanna (supra), the
learned Single Judge was called upon to construe deed datE;ld
27 .2.1917 executed by one Kristnamma. The learned Single
D
Judge referred to the contents of the document and observed:
'The document on the face of it is of a non-testamentary
character. It was so stamped and so registered. It is called
a dakal dastaveju, which means a conveyance or E
settlement deed. It is true that a document which is not a
Will in form, may yet be a Will in substance and effect; but
as was held in Mahadeva Iver v. Sankarasubramania Iyer
(1 ), if an instrument is a deed in form, in order to hold th.at
it is testamentary or in the nature of a Will, there must be
F
· ... something very special in the case; and unless there are
circumstances which compel the Court to treat an
instrument in the form of a deed as a Will, the Court will
not do so. The leading argument of the appellant is that
the document created no estate in praesenti. A more literal
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translation of the fourth sentence in para 2 of the document
is:
Therefore, on account of my affection for you, I have
arranged that after my death the property shall
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belong to you.
It is certainly very difficult to derive from these words any
immediate interest crated in favour of the plaintiff. But the
line between a Will and a conveyance reserving a life
estate is a fine one, and it would be hard to define in some
cases where the document has been held to be nontestamentary, wherein the personal interest which was
transferred consists. A more easily applied test is that of
revocabi/ity. There is nothing in the suit document to
show that Kristnamma reserved the right to revoke it. On
the contrary there is an undertaking not to alienate ·any
part of the property during his lifetime. I consider that this
is equivalent to a promise not to revoke the instrument,
because if the executant intended to reserve that right he
could not consistently have parted with the right to
alienate. The same intention to give finality to the
depositio11 is suggested by Ex.3, which is a conveyance
of a portion of the property executed jointly by Kristnamma
and the plaintiff. The fact that the plaintiff was required to
join is significant, and in the schedule the property _is
described as that which was conveyed by Kristnamma fo
him. This document seems also to lend some colour to
the view that an immediate conveyance of interest was
intended in Ex.F. I think that Kristnamma had the
intention not to revoke the conveyance and this has
always been regarded as one of the most important tests."
(emphasis supplied)
15. In Venkatasubramaniya Iyer v. Srinivasa Iyer (supra),
the question considered was whether the dt>cument marked
G Exhibit - C is a Settlement or a Will. The learned Single Judge
answered the question in the following words:
" .... A question of that kind is one that has to be decided
primarily on the terms of the document itself. It was
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executed by a widow, the mother of the plaintiff, and is
P.K. MOHAN RAM v. B.N. ANANTHACHARY AND
421
ORS. [G.S. SINGHVI, J.]
styled a settlement in favour of the plaintiff. It recites certain
A
family arrangements by which certain moveables are
divided between the widow and the plaintiff, and the widow
retains certain immovable property for herself. It deals with
property to an extent of over three velis left to her by her
husband under his will absolutely and recites that, in
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respect of that on account of the request made to her by
her son for the benefit of his minor son, the present
defendant and. out of favour to himself and in
consideration of the arrangement that he would not
during her lifetime encumber or alienate the rights that c
would come. ta him in the property after her death, she
on her side undertakes to meet all her own expenses till
her death out of the income and not to alienate the
property. Thus the document prohibits both parties from
alienating the rights retained or giveh thereby. It directs
0
that after the widow's death, the plaintiff and his heirs shall
enjoy the property with all absolute rights. It further provides
that if the widow fails to pay the kist on the property, the
plaintiff shall pay and may recover from her out of her
income, and that the pattah for the property shall be
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transferred to the plaintiff. The document is styled a
settlement and registered.
It is contended by the appellant that the document is a
will since the only operative portion of it is that which
bequeaths the property to the plaintiff and his heirs after
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the death of the widow. Both the lower Courts have
rejected this contention and held the document to be a
settlement. I think it is clear from the tenor of the
document that it is not a will. It mentions considerable
property which is not disposed of by it at all. It does more
G
than bequeath property to the plaintiff after the widow's
death. He obtains by it certain rights in presenti, fpr .
example, the right as covenanted with him that the widow
will not alienate the property during her lifetime. He
himself is given the right to recover the unpaid kists from
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her income and to have the pattah transferred to his
name.