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CASE NO.: Appeal (civil)  197 of 1999

PETITIONER: Subbegowda (Dead) by LR.

RESPONDENT: Thimmegowda (Dead) by LRs.

DATE OF JUDGMENT: 16/04/2004

BENCH: R.C. LAHOTI & ASHOK BHAN.

JUDGMENT: J U D G M E N T

R.C. Lahoti, J.

       Thimmegowda, the sole respondent herein, has died  during the pendency of these proceedings and his widow and  one daughter (major and unmarried) are on record as legal  representatives of the deceased. Thimmegowda and  Subbegowda were real brothers.  Thimmegowda did not have  any son.  His family consisted of his wife and four daughters.   Narayani (or Narayana), impleaded as appellant No.2, is the son  of Subbegowda.  Subbegowda, the appellant No.1, has also died  during the pendency of these proceedings.

       Thimmegowda, having no male issue, adopted Narayani,  the son of his younger brother Subbegowda.  A deed of adoption  dated 4.6.1965 was executed and registered.  On 1.8.1969,  another deed came to be executed and registered by  Thimmegowda and this deed is the subject matter of controversy  in these proceedings.  The deed is styled as ’Settlement Deed’.   The contents of the deed reveal what had impelled  Thimmegowda to execute the deed. Thimmegowda had  agricultural land but was unable to carry out agricultural  operations.  Out of his four daughters, he had performed the  marriage of the two and the remaining two, respectively aged 10  and 4 years at that time, were yet to be married and were  residing with the parents.  The deed goes on to state ___  

"I have not given right of any kind over my  properties to you, my adopted son Narayani.   You represented to me that in case I hand over  the total responsibility of the family properties  to you, you together with your natural father  and brothers would manage the properties and  discharged the existing dates of the family and  further that you would require the power  through written records, I am today executing  this settlement deed in your favour, my  adopted son Narayani.  I have made this  arrangement so that hereafter you may in a  wise manner alongwith your natural father  improve my property and manage the same as  per your wish without any obstruction.   Hereafter I shall have no objection for your  management of the family properties. You shall  look after my welfare and that of my wife and  children and you shall get my daughters  married. Since you have taken the

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responsibility of my welfare and that of my  wife and since the responsibility of protecting  us has been taken over by you and further  since you have to discharge the debts incurred  by me till now for the family, I have handed  over the possession of schedule properties  under this settlement deed to you.  In case  either my wife or I incur any further debt  hereafter you shall not be responsible for the  same.  You shall not violate any one of the  above said conditions.  In case you violate any  condition, I shall have the right to cancel this  settlement deed.  You shall have the right to  enjoy hereafter all the treasure, trove, water,  plants etc. in the schedule property and you  shall have the right to sell, gift and alienate the  same and may enjoy the same from generation  to generation peacefully."

(emphasis supplied)

The above statement is followed by a schedule wherein six  landed properties are listed.  Below the schedule there is yet  another endorsement made by the executant Thimmegowda as  under:-         "I have settled the six items of properties  as mentioned above and therefore have  executed this settlement deed.    

Sd/- on behalf of minor Narayani his  natural father, Subbegowda as guardian.   

Since you, Narayani have been under my  care and custody since the beginning and since  I wanted to give you something for yours  livelihood, I have through this settlement deed  entrusted the schedule properties to you.  The  approximate value of the schedule properties is  Rupees one thousand (Rs.1000/).

               Sd/-  Thimmegowda

               Sd/-  Witnesses"

(emphasis supplied)

       On 9.11.1970, Thimmegowda filed a suit against Narayani  and his natural father Subbegowda seeking setting aside of the  settlement deed dated 1.8.1969 on the ground of fraud and  misrepresentation and the consequential relief of restoration of  possession over the suit schedule properties.  The trial Court  dismissed the suit on the finding that any circumstances vitiating  the voluntary execution and registration of the deed were not  made out.  Fraud and misrepresentation, as alleged by the  plaintiff, were not proved.  First appeal preferred by the plaintiff  was dismissed.  A second appeal was preferred.  The High Court  framed and dealt with a single substantial question of law ___  "Whether a deed purported to be a settlement deed could be  validly executed with a term enabling the settler to have the  deed set aside and in such a case whether such a deed could  convey valid title to the settlee?"  In a brief judgment, dealing  with the question of law as framed, the High Court formed an

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opinion that the power of revocation of settlement deed was  expressly reserved to himself by the settler in the deed itself  and, therefore, the settler was fully justified in law to invoke the  revocation clause.  Other issues were of no significance.  It was  open for the executant to cancel the deed of settlement and that  having been done the suit was liable to be decreed.  The High  Court set aside the judgments and decrees of the trial Court and  the first appellate Court and passed a decree in favour of the  plaintiff.  Feeling aggrieved, the defendants namely Narayani,  the adopted son, and his natural father Subbegowda are in  appeal of whom, as already stated, Subbegowda has died.

       The singular substantial question to be decided in the case  is what is the true nature of the deed dated 1.8.1969?  Though  called a Settlement Deed, what was the intention of the  executant behind executing the deed?  The question of  construction of a document is to be decided by finding out the   intention of the executant, firstly, from a comprehensive reading  of the terms of the document itself, and then, by looking into ___  to the extent permissible ___ the prevailing circumstances which  persuaded the author of the document to execute it. If the  executant intended to transfer property the Court would lean in  favour of holding the transferee having been vested with interest  in the property.  Where an intention to transfer property within  the meaning of Section 5 of Transfer of Property Act, 1882  cannot be spelled out,  the document will be given effect to as it  reads and as is explicit from what is set out in the deed itself.

       In Raj Bajrang Bahadur Singh Vs. Thakurain Bakhtraj  Kuer, AIR 1953 SC 7, this Court was called upon to examine  what the testator had intended the legatee to take under a will in  the context of the expressions like Malik Kamil (absolute owner)  and Naslan bad naslan (generation after generation)  having  been used in the will in reference to the interest which was  sought to be demised.  This Court held that such words, though  descriptive of a heritable and alienable estate in the donee and  connoting full propriety rights, may not have been used with the  intention of conferring absolute rights if there could be  something in the context or in the surrounding circumstances to  permit such an inference being drawn. "In cases where the  intention of the testator is to grant an absolute estate, an  attempt to reduce the powers of the owner by imposing restraint  on alienation would certainly be repelled on the ground of  repugnancy; but where the restrictions are the primary things  which the testator desires and they are consistent with the whole  tenor of the will, it is a material circumstance to be relied upon  for displacing the presumption of absolute ownership implied in  the use of the word "malik".   

For the interpreter of documents it is common knowledge  that a transfer of property or a creation of interest therein may  be accompanied by conditions, covenants or restraints.   Condition may be condition precedent ___ a condition which must  be performed before the grant or alienation takes effect to  create an interest in property, or may be  condition subsequent  ___ a condition which has an effect of enlarging or defeating the  interest already created or vested. In either case the condition  will be annexed with the estate and would run with the same.  In  Philip John Vs. CIT Calcutta \026  AIR 1964 SC 587, vide para  14, this Court has dealt with conditions __ precedent and  subsequent, in the context of gift of shares. A covenant is not  annexed with the estate and runs independently of it which may  give rise to a cause of action for specific performance or for an  action in damages.  A restraint or a limitation has the effect of  curtailing the quantum of the estate affected thereby.

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       The contents of the deed dated 1.8.1969 reveal the  relevant circumstances.  The executant himself had filed the suit  and deposed to in support of plaint averments.  The deed is  subscribed to by Subbegowda too, who affixed his thumb mark  on the deed.  Narayani was minor and Subbegowda was acting  for himself and for Narayani too as his guardian ___ being the  natural father. Thus, the deed dated 1.8.1969 is a bi-party  document in a way.  Narayani was taken in adoption more than  4 years before the date of execution of the deed dated 1.8.1969,  the reason being that Thimmegowda had no male issue of his  own.  Whatever interest in the property may have been created  in favour of Narayani by virtue of his having been born into the  family by virtue of adoption, Thimmegowda had not specifically  created any interest in favour of his adopted son in any of the  properties owned by him. The principal anxiety of  Thimmegowda, which also was working as consideration for  execution of document, was to see that his agricultural lands  were properly managed so that the debts payable by him could  be discharged and his minor unmarried daughters could be taken  care of by being married.  Narayani was minor.  Thimmegowda  was obviously acting upon the assurance given by Subbegowda,  his own brother, that the adopted son Nayarani with  Subbegowda would manage the property and fulfil the  expectations of Thimmegowda, as set out in the deed.  A  comprehensive reading of the document shows that the  settlement as per the terms of the document was not a transfer  of property in favour of the adopted son; it was merely an  arrangement or at best an entrustment of the scheduled  property to his adopted son and the latter’s natural father for the  purpose of proper management without obstruction by anyone  else including himself so that the welfare of himself, his wife and  his children ___ specially the unmarried daughters ___ was  assured.  It is clear from the oral evidence adduced by the  plaintiff that his wishes were not fulfilled.  Though the pleas of  fraud and undue influence vitiating the execution of deed are not  substantiated, yet there can be no denying of the fact that  Nayarani and his natural father did not come up to those  expectations of Thimmegowda which had persuaded him as  primary and essential considerations for the execution of the  deed.  Nothing prevented Thimmegowda from cancelling such  settlement and depriving Narayani and his natural father from  management over the scheduled property.  Though at the end of  the main document Thimmegowda has used the expression like  permitting the settlee to enjoy the property and also for the right  of sale and gift relating to property being conferred and the  settlee and his heirs also  going on enjoying the property but  this stray sentence at the end of the document cannot be read   in isolation dissected from the earlier part of the document which  in very many words clearly demonstrates the intention of the  executant of entrusting the management only of the scheduled  property to Narayani and his natural father.  May be if the  settlee would have come up of the expectations of the settlor,  the latter would not have objected to the settlee continuing in  the enjoyment of the property and dealing with the same as if  owner thereof.  This is further clarified from the additional  statement made by settlor just before  concluding the execution  of the document where he said that Narayani having been  entrusted to the care and custody, as adopted son, of  Thimmegowda, he was executing the deed with an intention to  maintain the settlee for his life.  There is no recital in the deed  which may be read or be capable of being construed as a demise  in praesenti  vesting absolute title in the property in Nayarani in  present or in future.   Whatever was given to Narayani and his

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natural father by the deed was capable of being cancelled or  revoked under the power of revocation expressly reserved by  Thimmegowda to himself.   

       The deed dated 1.8.1969 does not amount to transferring  the scheduled property to Narayani.  It was only an  arrangement, called ’settlement’ with the power of revocation  expressly reserved to the author, subject to which reservation  the arrangement was intended to come in effect.  It has not  been the case of the appellant before us, nor could it have been,  that the scheduled property was gifted by Thimmegowda to  Narayani.  Had it been so, the question of testing validity of gift  by reference to Section 126 or holding it to be onerous gift  within the meaning of Section 127 of the Transfer of Property  Act 1882 could have arisen. We need not dwell further on this  aspect of the issue.

       A conditional transfer or a settlement accompanied by  conditions is not unknown to the law of real property.  It is  permissible in law to annex or encumber any grant or alienation  with condition or limitation which will operate and the court will  give effect to it unless there is some provision of law which  annuls or invalidates such condition, restraint or limitation.   None has been brought to our notice.

       The High Court has rightly formed an opinion that the deed  could be revoked.  Nothing has been brought to our notice to  take a view to the contrary and hold that such a power of  revocation could not have been reserved by Thimmegowda to  himself.

       The appeal is dismissed.  The judgment and decree passed  by the High Court is maintained.  No order as to the costs.