REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION   

CIVIL APPEAL NO.6412 OF 2002      

P.K. Mohan Ram ……Appellant

Versus

B.N. Ananthachary and others ……Respondents

J U D G M E N T

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  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.  

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 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 would 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 beneficiaries and out of the sale proceeds, a  

religious trust should be created by paying Rs.4,000/- to Devasthanam of Sri  

Prasanna  Venkatesa  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;  that the honors of  

the  temple  should  be  bestowed upon beneficiary  Nos.1  and  2  and,  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) 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  

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by beneficiary Nos.1 and 2 and all 16 persons shall together spend Rs.2000/-  

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  

discharge  the  debt.   The  settlor  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 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, the appellant  

filed a suit (O.S. No.626/1972) for appointment of receiver to carry out the  

directions 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 not operate as res  

judicata against the fresh suit which may be filed by the plaintiff (appellant  

herein).   After disposal  of the appeal,  the appellant  filed O.S. No.858 of  

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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  the  

`Settlement Deed’, the settlor 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 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  

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 as many as 12  

issues including the following:

1. Whether the will in favour of defendants 1 and 2 is valid  and binding?

2. Whether  the  document  dated  27.3.1969  is  not  a  

settlement?

3. Whether  the  cancellation  deed  dated  27.2.1970  is  true  

and valid?

4. Whether the suit is barred by res judicata?

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5. Whether  the  suit  is  barred  under  Order  II  Rule  2  of  

C.P.C.?

6. Whether the settlement deed was brought into 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 was ‘Settlement Deed’ and not ‘Will’  

and that 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.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 the  

suit property and 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 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 as `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  

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suit  property  because  the  settlor  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 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 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 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 AIR  

1927 Madras 197, Venkatasubramaniya Iyer v. Srinivasa Iyer AIR 1929  

Madras 670.

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8. Shri  M.S.  Ganesh,  learned  senior  counsel  appearing  for  the  

respondents supported the impugned judgment and argued 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 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 Jac. 1 Rot. 2629 (printed in the English  

Reports,  Volume  LXXVII,  King’s  Bench  Division  VI),  as  also  the  

judgments of Calcutta and Madras High Courts in Sagar Chandra Mandal  

v. Digamber Mandal and others (1909) 9 CLJ 644,  Ramaswami Naidu  

and another v. Gopalakrishna Naidu and others AIR 1978 Madras 54,  

Ponnuchami Servai v. Balasubramanian and others AIR 1982 Madras  

281 and 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 (supra) and submitted that the contingent right, if  

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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  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:

        “Document No.753/1969 Settlement Deed of land and house property of the value  

of Rs.20,000/- xxxxxxxxxxxxxxxx

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 the terms of the partition  deed dated 29.1.1937, bearing Ramanthapuram R.O.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 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 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 I shall spend my life as I wish  till the end of my days.  After my death, you 16 persons shall  

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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  Venkatesa  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 upon their heirs.  Further,  from  the  sale  proceeds,  you  should  purchase  an  immoveable  property  for  Rs.4,000/-  in  the  name of  Balu  G.  Perumal Iyer Feeding Charities and you 16 persons 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, I  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  24.3.1969  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 shares, 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)

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10. Sections 19 and 21 of the Transfer of Property Act, 1882 (for short,  

`the  1882  Act’)  which  elucidate  the  expressions  “vested  interest”  and  

“contingent interest” in the context of transfer of property read as under:

“19.  Vested interest.– Where,  on a transfer of property,  an  interest  therein  is  created  in  favour  of  a  person  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.

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  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 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 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.

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 he 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.”

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A reading of the plain language of the above reproduced 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 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  ‘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 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 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  

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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,  

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:

“Apart  from  any  seemingly  technical  rules  which  may  be  gathered from English decisions and text-books on this subject,  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  Solicitor-General  frankly  admitted this, and also that a court has to approach the task of  construction in  such cases  with  a  bias  in  favour of  a  vested  interest unless the intention to 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:

“Now,  there  can  be  no  doubt  about  the  rule  that  where  the  enjoyment of the property is postponed but the present income  thereof is to be applied for the benefit of the 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., 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 according to  the  scheme  of  the  trust  deed,  the  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  

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trust deed is that the enjoyment 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  settlor  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 the discharge of the  debts is also an application of the income for the benefit of the  donees.  It follows that the entire 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 lots 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 very person  to  whom  the  corpus  of  the  lot  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  very 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 debts therefrom notionally pro rata, all  of which taken together constitute application of the income for  his benefit.

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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 of the gift.  But the trust  deed in question specifically 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 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 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  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.

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  and  agreed  to  such  charge being presently executable.  This shows clearly that they  themselves understood the interest available to them under the  trust as a vested interest.”

(emphasis supplied)

12. In  Usha Subbarao v.  B.N.  Vishveswaraiah (1996)  5  SCC 201,  a  

two-Judge  Bench  was  called  upon  to  consider  whether  the  appellant  is  

entitled to share of her husband in the properties left by her father-in-law,  

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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 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 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 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 all  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.”

The ratio of the above noted two judgments was followed in another two-

Judge Bench in Kokilambal v. N. Raman (2005) 11 SCC 234.

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13.  Having noticed the distinction between vested interest 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  

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  

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  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.

14. Before  proceeding further,  we may notice  the judgments  on which  

reliance was placed by learned counsel for the parties.  In  Gangaraju  v.  

Pendyala Somanna (supra), the learned Single Judge was called upon to  

construe deed dated 27.2.1917 executed by one Kristnamma.  The learned  

Single Judge referred to the contents of the document and observed:

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“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 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  Iyer v. Sankarasubramania Iyer (1), if an instrument is a deed in  form, in order to hold that it is testamentary or in the nature of a  Will,  there  must  be  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  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 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 non-testamentary,  wherein the  personal interest which was transferred consists.  A more easily  applied test is that of revocability.  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 deposition 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 to 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)

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15. In Venkatasubramaniya Iyer v. Srinivasa Iyer (supra), the question  

considered was whether the document marked 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 executed  by  a  widow,  the  mother  of  the  plaintiff,  and  is  styled  a  settlement  in  favour  of  the  plaintiff.  It  recites  certain  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 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 would come to 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 given thereby. It  directs 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 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  the  death  of  the  widow. Both the lower Courts have rejected this contention and  

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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  than  bequeath  property  to  the  plaintiff  after  the  widow's death. He obtains by it certain rights in presenti,  for  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 her income and  to have the pattah transferred to his name. There is no language  indicating that the widow was retaining with her any power to  revoke  the  document,  while  the  surrender  of  her  right  to  alienate during her lifetime indicates that she did not reserve  any power to revoke. These points combined with the facts that  the parties intended the document to be a settlement and styled  it as such and that it was handed over to the plaintiff and not  retained  with  the  widow  are  sufficient  to  indicate  that  the  widow was merely retaining a life-interest in the property and  was transferring to the plaintiff the vested remainder. It is not of  much help to refer to reported rulings in a case of this  kind  when  the  decision  has  to  be  based  on  the  wording  of  a  particular  document,  but documents of very similar  wordings  were  held  to  be  settlements  and  not  wills  in  Rajammal  v.  Authiammal [1910] 33 Mad. 304 and in Gangaraju v. Somanna  A.I.R. 1927 Mad. 197. These come nearer to the present case  than those in Venkatachala Chetty v. Govindaswamy Naicker  A.I.R.  1924  Mad.  605,  Thakur  Ishri  Singh  v.  Baldas  Singh  [1884] 10 Cal. 792 quoted by the appellant. I can see no ground  for holding that the lower appellate Court made any error of law  in regarding Ex. C. on the face of it as a settlement and not a  will.”

(emphasis supplied)

16. In  Ramaswami Naidu v.  Gopalakrishna Naidu  (supra),  the High  

Court laid down the following broad test for construction of document:

“The broad tests or characteristics as to what constitutes a will  and what constitutes a settlement have been noticed in a number  of decisions. But the main test to find out whether the document  

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constitutes a will or a gift is to see whether the disposition of  the  interest  in  the  property  is  in  praesenti  in  favour  of  the  settlees or whether the disposition is to take effect on the death  of the executant.  If the disposition is to take effect on the death  of the executant, it would be a will. But if the executant divests  his interest in the property and vests his interest in praesenti in  the  settlee,  the  document  will  be  a  settlement.  The  general  principle also is that the document should be read as a whole  and it is the substance of the document that matters and not the  form or the nomenclature the parties have adopted. The various  clauses in the document are only a guide to find out whether  there  was  an  immediate  divestiture  of  the  interest  of  the  executant or whether the disposition was to take effect on the  death of the executant.”

“If  the  clause  relating  to  the  disposition  is  clear  and  unambiguous, most of the other clauses will be ineffective and  explainable  and  could  not  change  the  character  of  the  disposition  itself.  For  instance,  the  clause  prohibiting  a  revocation of  the deed on any ground would not  change the  nature of the document itself, if under the document there was  no disposition in praesenti.”

(emphasis supplied)

17. In  Ramaswami  Naidu  v.  M.S.  Velappan  and  others  (1979)  2  

M.L.J.88,  the  Division  Bench  of  the  Madras  High  Court  referred  to  the  

documents  which  were  subject  matter  of  consideration  before  it  and  

observed:

“In the instant case the first plaintiff was already in charge of  the  properties  as  trustee  to  perform  the  obligations  created  under  it  and continued them after  the  lifetime of  Meenakshi  Ammal.  There are  also positive  words whereby it  was made  

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clear that the properties should be vested in Velappan and his  heirs for them to enjoy the same absolutely.……

These two dispositive clauses  create  an interest    in praesenti  .    The question is whether the postponement of such proprietary  rights already vested in Velappan and his heirs, to the lifetime  of  Meenakshi  Ammal,  would  make  any  difference.  The  Explanation   to  Section  19  of  the  Transfer  of  Property  Act,    providing that a vested interest is not defeated by the death of  the  transferee  before  he  obtains  possession,  makes  the  legislative intent clear that such a vested interest, merely for the  reason that it becomes vested after the lifetime of the settlor,  would not make it a settlement not being   in praesenti  . We are    therefore unable to agree with the contention that the interest  that Velappan, the first plaintiff, obtained under the instrument  is not a vested one and that it could be defeated because it is  postponed till after the lifetime of Meenakshi Ammal.

In the instant case the document itself is styled as a settlement  deed. It has been registered. The right to enjoy the properties  and secure the benefits and the temple honours as trustee under  it  have  become  a  fait  accompli even  during  the  lifetime  of  Meenakshi  Ammal.  There  is  therefore  no  ambulation  in  the  matter of the vesting of the interest in the first plaintiff by any  declaration or use of words either express or implied.”  

(emphasis supplied)

18. In  A. Sreenivasa Pai and another v. Saraswathi Ammal alias G.  

Kamala Bai (supra), this Court considered whether by virtue of Settlement  

Deed executed by appellant A. Sreenivasa Pai in favour of his mother-in-law  

Padmavathi  Ammal,  the  latter  became  absolute  owner  of  the  properties  

described in the plaint  ‘A’ schedule and upon her death,  her daughter S.  

Lakshmi  Ammal  acquired  title  to  the  said  properties  under  the  law  of  

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inheritance being the sole heir of the deceased.  While dealing with the issue,  

the  Court  referred  to  the  terms  of  Settlement  Deed  and  held  that  A.  

Sreenivasa Pai desired to give the properties to V. Sreenivasa Pai absolutely  

subject to the life interest conferred on Padmavathi Ammal and he had no  

intention to give the properties to be enjoyed by Padmavathi Ammal and by  

her heirs from generation to generation.

19. In  Namburi  Basava  Subrahmanyam v.  Alapati  Hymavathi  and  

others (supra), this Court observed that the nomenclature of the document is  

not conclusive and the Court has to find whether the document confers any  

interest  in  the  property  in  praesenti  so  as  to  take  effect  intra  vivos  and  

whether an irrevocable interest thereby is created in favour of the recipient,  

all those to be gathered from the recitals of the documents as a whole and  

observed:

“The said recital clearly would indicate that the settlement deed  executed on that date is to take effect on that day. She created  rights  thereunder  intended  to  take  effect  from that  date,  the  extent  of  the  lands  mentioned  in  the  Schedule  with  the  boundaries mentioned thereunder. A combined reading of the  recitals in the document and also the Schedule would clearly  indicate that on the date when the document was executed she  had created right, title and interest in the property in favour of  her second daughter but only on her demise she was to acquire  absolute right to enjoyment, alienation etc. In other words, she  had created in herself a life interest in the property and vested  the remainder in favour of her second daughter. It is settled law  that  the  executant  while  divesting  herself  of  the  title  to  the  

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property could create a life estate for her enjoyment  and the  property would devolve on the settlee with absolute rights on  the settlor’s demise. A reading of the documents together with  the Schedule would give an indication that she had created right  and interest in praesenti in favour of her daughter Vimalavathy  in respect of the properties mentioned in the Schedule with a  life estate for her enjoyment during her lifetime. Thus, it could  be  construed  rightly  as  a  settlement  deed but  not  as  a  Will.  Having divested herself  of the right and title  thereunder,  she  had, thereafter, no right to bequeath the same property in favour  of  her  daughter  Hymavathy.  The  trial  court  and  the  learned  Single Judge rightly negatived the claim. The Division Bench  was not, therefore, correct in law in interfering with the decree  of the trial court.”

20. In Vynior’s case (supra) Lord Coke said “if I make my testament and  

last will irrevocable, yet I may revoke it, for my act or my words cannot alter  

the judgment of the law to make that irrevocable which is of its own nature  

revocable.”  This statement of law was relied upon by the Division Bench of  

Calcutta High Court in Sagar Chandra Mandal v. Digamber  Mandal and  

others (supra).  In that case, the court was called upon to consider the true  

character of the instrument which was described as a Will.  After noticing  

the contents of the documents, the Division Bench referred to Vynior’s case  

and observed:

“As to the true character of the instrument propounded by the  appellant we think there can be no reasonable doubt that it is a  will.  A will is defined in section 3 of the Indian Succession Act  as  the  legal  declaration  of  the  intention  of  the  testator  with  respect to his property which he desires to be carried into effect  after his death.  Section 49 then provides that a will is liable to  be revoked or altered by the maker of it, at any time when he is  

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competent to dispose of his property by will.  If therefore an  instrument is on the face of it of a testamentary character, the  mere circumstance that the testator calls it irrevocable, does not  alter its quality, for as Lord Coke said in Vynior’s Case.  “If I  make my testament and last will irrevocable, yet I may revoke  it, for my act or my words cannot alter the judgment of the law  to make that irrevocable which is of its own nature revocable.”  The principal test to be applied is, whether the disposition made  takes effect during the lifetime of the executant of the deed or  whether it takes effect after his decease.  If it is really of this  latter  nature,  it  is  ambulatory  and  revocable  during  his  life.  [Musterman v. Maberley, and in Bonis v. Morgan].  Indeed, the  Court has sometimes admitted evidence, when the language of  the paper is insufficient, with a view to ascertain whether it was  the  intention  of  the  testator  that  the  disposition  should  be  dependent  on his death.  [Robertson v.  Smith].   Tested in the  light  of  these  principles,  there  can  be  no  doubt  that  the  instrument now before us is of a testamentary character.  It is  described as a will and states explicitly that as after the death of  the  testator,  disputes  might  arise  among  his  relations  with  regard to the properties left by him, he made the disposition to  be  carried  into  effect  after  his  demise.   The  terms  and  conditions are then set out, paragraph by paragraph, and in each  paragraph the disposition is expressly stated to take effect after  his  demise.   Against  all  this,  reliance  is  placed  on the  sixth  paragraph, in which the testator says that he would be at liberty  to  mortgage  the  properties  and  not  to  sell  them  absolutely.  Such a restraint as this upon his own power of alienation during  his lifetime would be obviously void.  It does not indicate any  intention to make the deed irrevocable.”   

21. In  the  light  of  the  above,  we shall  now consider  whether  the  trial  

Court and lower appellate Court rightly treated Ex. A-2 to be a Settlement  

Deed and the contrary finding recorded by the learned Single Judge of the  

High Court is legally unsustainable.  A careful reading of  Ex.A-2 shows  

that in the title itself the document has been described as Settlement Deed.  

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By executing that document, Shri K. Perumal Iyer expressed his intention, in  

no uncertain terms, to settle 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 in favour of 16 persons in praesenti.  Though, the beneficiaries were to  

become absolute  owners  of  their  respective  shares  after  the  death  of  the  

settlor, the language of the document clearly shows that all of them were to  

enjoy the property along with settlor during his lifetime and after his death,  

each of the beneficiaries was to get a specified share.  In the concluding  

portion,  the settlor 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 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  

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.

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22. The judgments in Vynior’s case and those of the Calcutta and Madras  

High Courts on which reliance was placed by the learned senior counsel for  

the  respondents  turned on their  own facts  and cannot  be relied  upon for  

declaring that Ex. A-2 was a `Will’.

23. Although, in their written statement respondent Nos.1 and 2 did plead  

that  Ex.  A-2  was  executed  by  Shri  K.  Perumal  Iyer  due  to  fraud  or  

misrepresentation,  no  evidence  was  led  by  them  to  substantiate  that  

allegation.  Therefore, we do not find any valid ground or justification to  

entertain that plea.

24. In the result, the appeal is allowed.  The impugned judgment is set  

aside and those of the trial Court and the lower appellate Court are restored.  

The parties are left to bear their own costs.

….……………… ….…J.

[G.S. Singhvi]

…..…..………………..J. [Asok Kumar Ganguly]

New Delhi March 15, 2010

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