Time Limit for Registration of Documents

Saji Koduvath, Advocate, Kottayam.

Introspection:

  • What is the time-limit for the registration of documents executed within India? Answer – Four Months. 
  • Is there provision for extension paying fine, after the 4 months? Answer – Yes. (within further 4 months)
  • Can a document already executed and registered by some (alone) can again be re-registered after signing by others who were left out? Answer – Yes. (within four months from the date of each execution)
  • Can a document be re-presented for improper earlier presentation? Answer – Yes.

Time Limit for Registration of Documents (executed within India)– Four Months

Time limit for registration of documents before a Sub-Registrar is four months under section 23 of the Registration Act, 1908. Time is calculated from the date of execution (signature) of the deed.

  • 23. Time for presenting documents. Subject to the provisions contained in sections 24, 25 and 26, no document other than a will shall be accepted for registration unless presented for that purpose to the proper officer within four months from the date of its execution:
  • Provided that a copy a of a decree or order may be presented within four months from the day on which the decree or order was made, or, where it is appealable, within four months from the day on which it becomes final.

Re-registration of certain documents not duly Presented

If a person not duly empowered to present a document registers a document the defect can be cured by re-registration of the document within four months of becoming aware of the defect, under Sec. 23A.

  • 23A. Re-registration of certain documents. Notwithstanding anything to the contrary contained in this Act, if in any case a document requiring registration has been accepted for registration by a Registrar or Sub-Registrar from a person not duly empowered to present the same, and has been registered, any person claiming under such document may, within four months form his first becoming aware that the registration of such document is invalid, present such document or cause the same to be presented, in accordance with the provisions of Part VI for re-registration in the office of the Registrar of the district in which the document was originally registered; and upon the Registrar being satisfied that the document was so accepted for registration from a person not duly empowered to present the same, he shall proceed to the re-registration of the document as if it has not been previously registered, and as if such presentation for re-registration was a presentation for registration made within the time allowed therefore under Part IV, and all the provisions of this Act, as to registration of documents, shall apply to such re-registration; and such document, if duly re-registered in accordance with the provisions of this section, shall be deemed to have been duly registered for all purposes from the date of its original registration.

Documents executed by several persons at different times.

A document already executed and registered by some (alone) can again be re-registered after signing by others who were left out. But, it must be within four months from the date of each execution, according to Sec. 24..

  • 24. Documents executed by several persons at different times. Where there are several persons executing a document at different times, such document may be presented for registration and re-registration within four months from the date of each execution.

Document Executed out of India – can be registered

A document executed outside India can be registered in India. Sec. 23 of the Registration Act allows it.

Registration of Documents Executed out of India – Four Months from Receipt in India

The period of four months for registration (stated above) will be counted from the date of receipt of that document in India, as per Sec. 26 of the Registration Act. Sec. 26 of the Registration Act is the relevant provision. It reads as under:

  • “26. Documents executed out of IndiaWhen a document purporting to have been executed by all or any of the parties out of India is not presented for registration till after the expiration of the time hereinbefore prescribed in that behalf, the registering officer, if satisfied—
    (a) that the instrument was so executed, and
    (b) that it has been presented for registration within four months after its arrival in India,
    may, on payment of the proper registration-fee accept such document for registration.”

Unavoidable Delay – Registration with Fine – within Eight Months

After four months, document can be presented within another four months to the District Registrar. The District Registrar may impose a penalty up to a maximum of ten times the registration fees and grant permission to Sub-Registrar to register the document (as per Sec. 25 – quoted below).

  • 25. Provision where delay in presentation is unavoidable. (1) If, owing to urgent necessity or unavoidable accident, any document executed, or copy of a decree or order made, in India is not presented for registration till after the expiration of the time hereinbefore prescribed in that behalf, the Registrar, in cases where the delay in presentation does not exceed four months, may direct that, on payment of a fine not exceeding ten times the amount of the proper registration-fee, such document shall be accepted for registration.
  • (2) Any application for such direction may be lodged with a Sub-Registrar, who shall forthwith forward it to the Registrar to whom he is subordinate.

Registering authority cannot cancel registration

Our Apex Court has held in Satya Pal Anand vs. State of M.P, 2016 (10) SCC 767, as under:

  • “21. The role of the Sub-Registrar (Registration) stands discharged, once the document is registered (see Raja Mohammad Amir Ahmad Khan (supra). Section 17 of the Act of 1908 deals with documents which require compulsory registration. Extinguishment Deed is one such document referred to in Section 17(1)(b). Section 18 of the same Act deals with documents, registration whereof is optional. Section 20 of the Act deals with documents containing interlineations, blanks, erasures or alterations. Section 21 provides for description of property and maps or plans and Section 22 deals with the description of houses and land by reference to Government maps and surveys. There is no express provision in the Act of 1908 which empowers the Registrar to recall such registration. The fact whether the document was properly presented for registration cannot be reopened by the Registrar after its registration. The power to cancel the registration is a substantive matter. In absence of any express provision in that behalf, it is not open to assume that the Sub-Registrar (Registration) would be competent to cancel the registration of the documents in question. Similarly, the power of the Inspector General is limited to do superintendence of registration offices and make rules in that behalf. Even the Inspector General has no power to cancel the registration of any document which has already been registered.”

Read in this Cluster:

Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land LawsTransfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act and Registration

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Registration of Documents Executed out of India

Saji Koduvath, Advocate, Kottayam.

Introspection:

  • Can foreign Documents (documents executed outside India) can be registered in India? Answer – Yes
  • What is the time-limit for the registration of documents executed within India? Answer – Four Months.
  • Is there provision for extension paying fine, after the 4 months? Answer – Yes. (within further 4 months)

Document Executed out of India – can be registered

A document executed outside India can be registered in India. Sec. 23 of the Registration Act allows it.

Time Limit for Registration of Documents (executed within India)– Four Months

Time limit for registration of documents before a Sub-Registrar is four months under section 23 of the Registration Act, 1908. Time is calculated from the date of execution (signature) of the deed.

  • 23. Time for presenting documents. Subject to the provisions contained in sections 24, 25 and 26, no document other than a will shall be accepted for registration unless presented for that purpose to the proper officer within four months from the date of its execution:
  • Provided that a copy a of a decree or order may be presented within four months from the day on which the decree or order was made, or, where it is appealable, within four months from the day on which it becomes final.

Re-registration of certain documents not duly Presented

If a person not duly empowered to present a document registers a document the defect can be cured by re-registration of the document within four months of becoming aware of the defect, under Sec. 23A.

  • 23A. Re-registration of certain documents. Notwithstanding anything to the contrary contained in this Act, if in any case a document requiring registration has been accepted for registration by a Registrar or Sub-Registrar from a person not duly empowered to present the same, and has been registered, any person claiming under such document may, within four months form his first becoming aware that the registration of such document is invalid, present such document or cause the same to be presented, in accordance with the provisions of Part VI for re-registration in the office of the Registrar of the district in which the document was originally registered; and upon the Registrar being satisfied that the document was so accepted for registration from a person not duly empowered to present the same, he shall proceed to the re-registration of the document as if it has not been previously registered, and as if such presentation for re-registration was a presentation for registration made within the time allowed therefore under Part IV, and all the provisions of this Act, as to registration of documents, shall apply to such re-registration; and such document, if duly re-registered in accordance with the provisions of this section, shall be deemed to have been duly registered for all purposes from the date of its original registration.

Documents executed by several persons at different times.

A document already executed and registered by some (alone) can again be re-registered after signing by others who were left out. But, it must be within four months from the date of each execution, according to Sec. 24..

  • 24. Documents executed by several persons at different times. Where there are several persons executing a document at different times, such document may be presented for registration and re-registration within four months from the date of each execution.

Registration of Documents executed out of India – Four Months from Receipt in India

The period of four months for registration (stated above) will be counted from the date of receipt of that document in India, as per Sec. 26 of the Registration Act. Sec. 26 of the Registration Act is the relevant provision. It reads as under:

  • “26. Documents executed out of India. When a document purporting to have been executed by all or any of the parties out of India is not presented for registration till after the expiration of the time hereinbefore prescribed in that behalf, the registering officer, if satisfied—
    (a) that the instrument was so executed, and
    (b) that it has been presented for registration within four months after its arrival in India,
    may, on payment of the proper registration-fee accept such document for registration.”

Unavoidable DelayRegistration with Fine – within Eight Months

After four months, document can be presented within another four months to the District Registrar. The District Registrar may impose a penalty up to a maximum of ten times the registration fees and grant permission to Sub-Registrar to register the document (as per Sec. 25 – quoted below).

  • 25. Provision where delay in presentation is unavoidable. (1) If, owing to urgent necessity or unavoidable accident, any document executed, or copy of a decree or order made, in India is not presented for registration till after the expiration of the time hereinbefore prescribed in that behalf, the Registrar, in cases where the delay in presentation does not exceed four months, may direct that, on payment of a fine not exceeding ten times the amount of the proper registration-fee, such document shall be accepted for registration.
  • (2) Any application for such direction may be lodged with a Sub-Registrar, who shall forthwith forward it to the Registrar to whom he is subordinate.

Registering authority cannot cancel registration

Our Apex Court has held in Satya Pal Anand vs. State of M.P, 2016 (10) SCC 767, as under:

  • “21. The role of the Sub-Registrar (Registration) stands discharged, once the document is registered (see Raja Mohammad Amir Ahmad Khan (supra). Section 17 of the Act of 1908 deals with documents which require compulsory registration. Extinguishment Deed is one such document referred to in Section 17(1)(b). Section 18 of the same Act deals with documents, registration whereof is optional. Section 20 of the Act deals with documents containing interlineations, blanks, erasures or alterations. Section 21 provides for description of property and maps or plans and Section 22 deals with the description of houses and land by reference to Government maps and surveys. There is no express provision in the Act of 1908 which empowers the Registrar to recall such registration. The fact whether the document was properly presented for registration cannot be reopened by the Registrar after its registration. The power to cancel the registration is a substantive matter. In absence of any express provision in that behalf, it is not open to assume that the Sub-Registrar (Registration) would be competent to cancel the registration of the documents in question. Similarly, the power of the Inspector General is limited to do superintendence of registration offices and make rules in that behalf. Even the Inspector General has no power to cancel the registration of any document which has already been registered.”

Read in this Cluster:

Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land LawsTransfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Rule Against Perpetuity – Simplified

Restrictions on Transfer of Property & ‘Rule Against Perpetuity’

Saji Koduvath, Advocate, Kottayam.

Prologue

  • ‘Perpetuity’ or constancy is not the rule, in all spheres of life.
  • In law of transfer of property, the rule is ‘rule against perpetuity or permanency’. 
  • The Acts on Transfer of Property and Succession expressly disfavor  ‘perpetuity’; and, stand against stagnancy in transference.

Our Apex Court has said in R. Kempraj v. Barton Son & Co, AIR 1970 SC 1872 as under:

  • “It is well known that the rule against perpetuity is rounded on the principle that the liberty of alienation “shall not be exercised to its own destruction and that all contrivances shall be void which tend to create a perpetuity or place property for ever out of the reach of the exercise of the power of alienation”.

Part – I

Section 10 and 11, TP Act

Sec. 10. Condition absolutely restraining alienation – Analysed

  • Sec. 10 of the TP Act (Condition absolutely restraining alienation) directs that if there is a condition in a transfer of property ‘absolutely restraining the transferee from disposing of his interest’, that condition is void.

Instances of “Absolute Restraint” and “Reasonable Restraint” 

  • Sale or gift (transfer) with direction – transferee should not sell (absolute restraint). The direction is void.
  • Sale or gift (transfer) with direction – transferee should sell to a particular person alone (in-effect absolute restraint). The direction is void.
  • Sale or gift (transfer) with direction – transferee should not sell outside family (in-effect absolute restraint). The direction is void.
  • Sale or gift (transfer) with direction – transferee should not sell for 3 years (reasonable restraint). The direction is valid.
  • Direction to members of Zoroastrian Housing Society – not to sell property other than Zoroastrians (reasonable restraint). The direction is valid.

In Gayasi Ram v. Shahabuddin, AIR 1935 All 493, the sale deed contained a clause that the vendee shall not transfer the house by mortgage, gift or sell to any one except the vendor or his heirs and if in contravention of the clause, the property is sold the vendor or his heir would have a right to get back the house by paying Rs. 175/- and if the property was to be sold in court auction sale, the sale would be invalid. The sale consideration for the house was Rs. 150/-. It was held (relying on Dal Singh v. Khub Chand, AIR 1921 All 97, Asghari Begam v. Maula Bakhsh, AIR 1929 All 381, and Gomti Singh v. Anari Kuar, AIR 1929 All 492) that this impugned clause in a sale between strangers was an absolute restraint on alienation; and therefore the same was void, in view of Section 10 of Transfer of Property Act; and that in such cases question of pre-emption did not arise. (See also: Manohar Shivram Swami v. Mahadeo Guruling Swami, AIR 1988 Bom 116)

In Trichinopoly Varthaga Sangam Ltd. v. T. N. Shanmughasundaram, AIR 1939 Mad. 769, the Clause in the Partition deed – the property should not be sold to any stranger; and lease only to brothers or their heirs for a sum not exceeding Rs. 1000/-. The court found that there was “no obligation” for a member to buy “even at Rs. 1000/-“. Hence it was held – Restriction is ‘absolute’, and hence, void. (See also: Rosher v. Rosher, (1884) 26 Ch D 801).  

Similarly, it was held in Manohar Shivram Swami v. Mahadeo Guruling Swami, AIR 2008 Bom 116, that the condition in the Sale Deed prohibiting sale ‘outside family’ was void – as it was absolute restraint.

Reasonable Restraint is Allowed in Law

The words ‘absolute restraint‘ in Sec. 10 of the TP Act makes it clear that ‘reasonable restraint’ is allowed in law. Hence, it is clear that the cases in this subject has to be dealt with on the facts of each case.

Therefore, it is not possible to place a hard and fast rule on the validity of the restrictions of enjoyment for a particular period, enjoyment in a particular manner, restrictions on transfer etc. In Renand v. Tourangeaon, (1867) LR 2 PC 4, it was held that a condition prohibiting transfer the property for twenty years was held to be an absolute restraint and hence void. But it was opined that if it were for a period of 3 years, it would have been a partial restraint and valid. This decision is referred to in Athmaram Rao v. Shanthan Phawar (2018 Madras High Court).

Our Apex Court held in Zoroastrian Co-operative Housing Society Ltd. v. District Registrar, Co-operative Societies (Urban ), AIR 2005 SC 2306, that in the matter of a Housing Society, the restriction imposed in the light of the byelaws of the Society that the property should not be sod to others, other than Zoroastrians, was a valid condition.

Sec. 11. Restriction repugnant to Absolute interest created  – Analysed

  • Sec. 11 of the TP Act (Restriction repugnant to Absolute interest created) cautions that the terms, in an absolute transfer, that direct enjoyment of interest in a particular manner, is invalid.
  • But the direction for securing the beneficial enjoyment of another piece of such property is valid.

Instances of ‘Absolute Sale & Enjoyment in a Particular Manner’ in S. 11, TP Act

  • Absolute sale or gift with direction – transferee should reside there. The direction is invalid.
  • Absolute sale or gift with direction – transferee should not cut trees. The direction is invalid.

Instances of ‘No Absolute Transfer in S. 11, TP Act

  • On a ‘Harmonious Construction’ of the deed, sale or gift subject to a condition – transferee should reside there, or look after transferor (that is, no absolute transfer). The direction is valid.
  • In a transfer, life interest alone is created (that is, no absolute transfer) and a direction – assignee should not cut trees. The direction is valid.

In Bhavani Amma Kanakadevi v. CSI, Dakshina Kerala Maha Idavaka, AIR 2008 Kerala 38, the question came for consideration was whether a provision in a sale deed that in the event of failure to construct a private college in the property sold thereunder, the property shall be re-conveyed by the vendee to the vendor for the same sale consideration is barred under the provisions of Sections 10 or 11 of Transfer of Property Act. Observing that (though) Ext.A2 did not contain a specific clause prohibiting respondent from alienating the property to third parties, the implied clause – that in the event of failure to construct a college, the property shall be reconveyed to the assignor at the same price – shut out any other option. The High Court held that it was an absolute restraint on the right of respondent to deal with the property including alienation, which was void as provided under Section 10. 

The court referred to the following decisions:

  • Jatru Pahan v. Mahatma Ambikajit Prasad ( AIR 1957 Patna 570),
  • Gayasi Ram v. Shahabuddin (AIR 1935 All. 493)
  • Manohar Shivram Swami v. Mahadeo Guruling Swami (AIR 1988 Bombay 116)
  • Fatima v. Saraswathi Amma (AIR 1986 Kearla 56).
  • Thomas v. AA Henry, 2008(2) KLT 63, ILR 2008(2) Ker. 12
  • Trichinopoly Varthaga Sangam Ltd. v. T. N. Shanmughasundaram, AIR 1939 Mad. 769.

Contingent Interest and Contingent Remainders

Read Blog: Transfer of Property with Conditions & Contingent Interests

Part – II

RULE AGAINST PERPETUITY

Rule against perpetuity, in Indian law, is applicable when property is transferred to an ‘unborn’ person. Sec. 14 of the Transfer of property Act directs that such (unborn) person must have born within the life-time of ‘one or more persons’ named in the transfer deed (who must be one living at the date of such transfer).

Under the English jurisprudence, it is pertaining to and for ‘controlling the duration of private trusts‘. The Rule Against Perpetuities Applied to Trusts, 9 ST. LOUIS L. REV. 286 (1924) speaks as under:

  • “Under the rule against perpetuities, private trusts may be created for the life of the last survivor of any number of designated persons, in being at the commencement of the trust, and for period of 21 years thereafter.”

Indian law specifies, and limits, the doctrine to the transfer of property to ‘unborn’ persons. Sections 13 and 14 of the TP Act are the relevant provisions.

Sec. 13. Transfer for benefit of Unborn Person

(Similar provision in Section 113 of the Indian Succession Act, 1925)

Sections 13 and 14 of the TP Act are worded in a tiresome manner. It is too difficult to understand the purport of the Section, in its correct perspective, without a thorough exploration. Both these sections says about transfer of property to unborn persons.

Sec. 13 of the TP Act reads as under:

  • 13. Transfer for benefit of unborn person. Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

As articulated in Sec. 5 of the Transfer of Property Act, ‘Transfer of Property’ must be by a living person, to another living person. Sec. 13 is an enabling provision to transfer property to an unborn person. It directs that following conditions must be satisfied for a valid transfer to an unborn person:

  • (i) Prior interest must have been created in ‘someone’:
    • The interest in the property (referred to in this Section as prior interest), for the period between the transfer and the birth of the unborn person, must have been created (in someone), by the same transfer.
      • [The aforesaid proposition can be deduced from the clause in Sec. 13 – “subject to a prior interest created by the same transfer”];
  • (ii) Whole of the remaining interest of the transferor must be created in the unborn person – purport and principle:
    • The ‘prior interest-holder’ must have been directed (by the transferor) to create/transfer the whole remaining interest (directly) to such unborn person.
    • The transfer under Sec. 13 cannot be limited to ‘life interest’ alone (as in English law) of the ‘unborn’ (Life-interest is the interest that remains only in his/her life time – thereafter it will go to a named person or another ‘unborn’).
    • The transfer under Sec. 13 must be definite in nature; it cannot be unlimited or ‘perpetual’.
    • That is, if a life-interest stands created, or continues, on an intermediary, (after the birth of the said ‘unborn’) it will nottake effect.
      • [These can be deduced from the clause in Sec. 13 – “the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property”; and from the illustration in Sec. 13.]
    • Note: 1. ‘Whole of the remaining interest of the transferor in the property may by be the the whole fractional interest of the transferor (originally he had).
    • 2. Though it may appear worded otherwise, it can also be the fractional interest (of the whole interest) that is intended to be transferred to the ‘unborn’.

The Illustration in Sec. 13 of the TP Act reads as under:

  • Illustration: A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.

For the benefit of” – Implies ‘TRUST’

Sec. 13 begins with the words – “Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence”. The words ‘for the benefit of‘ definitely brings-in the concept of ‘trust’.

  • Note: Trust is ‘an obligation’ upon the trustee to administer the trust property, as if he is its owner and as required by the author, for the benefit of the beneficiaries.

Read Blogs: What is Trust in Law

Trustees and Administration of Public Trusts

Transfer to Unborn can only be made by a Machinery of Trust

Mulla, on The Transfer of Property Act, in commentary to Sec, 122, Gifts, it is stated:

  • “A gift may be made by the equitable machinery of a trust; and the interposition of the trustees enables a gift to be made to a person not yet in existence and, therefore, incapable of being the donee of a direct gift.” (See: Controller of Estate Duty, Bombay v. Bhagwandas Velji Joshi, 1983-139 ITR 316 (Bom); 1981-6 TAXMAN 202; Saraswathi v. Devaki Amma, ILR 1986-1 Ker 550; 1985 KLT 217.)

In Mathen Mathew v. Kunjika Bharathi: AIR 1968 Ker 12, it is held as under:

  • “18. The gift can be to the named donees as representing the group of persons composed of the wife and children including children to be born. Such a gift can be made only through the machinery of a trust, the named donees holding as trustees for themselves and the other beneficiaries.”

In The Commissioner of Income Tax v. Brig. Kapil Mohan, [2001] 252 ITR 830: 118 Taxman 430 (Delhi ) observed as under:

  • “5. A transfer cannot be made directly to an unborn person, for the definition of transfer in Section 5 is limited to living persons. Such transfer can only be made by the machinery of trusts. Possibly, to express this distinction, the expression “for the benefit of” has been used, since trustees being the transferees hold the property for the benefit of the unborn person.”

The Madras High Court in T Subramania Nadar v. T Varadharajan, AIR 2003 Mad 364, pointed out as under:

  • “12. Under Section 13 of Transfer of Property Act transfer cannot be made directly to an unborn person as the definition of transfer in Section 5 of Transfer of Property Act is limited to living persons. The transfer in favour of an unborn person can be made by a machinery. It is intended to express this distinction by the words “for the benefit of, the trustees being the transferees who hold the property for the benefit of the unborn persons. The estate must vest in some person between the date of the transfer and the coming into existence of the unborn person. The interest of the unborn person must therefore be in every case preceded by a prior interest. Section 13 says that the interest of the unborn person must be the whole remainder.” 

“TRANSFER OF PROPERTY” and ‘CREATION OF INTEREST’ in Sec. 13

It is clear that the words, ‘transfer of propertyandan interest created therein’ are used in Sec. 13 to denote two different notions. Transfer of property to the ‘unborn’ should take place on his/her birth. Creation of interest can be done only on attaining his/her majority.

Can a limited ‘beneficial enjoyment’ be allowed to ‘prior-interest-holder’

It appears that there is no impediment in giving a limited ‘beneficial enjoyment’ (like appropriating income derived; right to reside in the building) to the ‘prior-interest-holder’- up to the birth of the ‘unborn’ person. If it is not so specifically provided, the prior-interest-holder will be a mere ‘trustee’ for the unborn person (the beneficiary). These propositions are made from the following:

  • Sec. 13 only directs -‘the whole of the remaining interestmust have been directed to be vested in the (unborn) person (when he/she born). The word ‘remaining’ persuades only one reasoning.
  • The prohibition in Sec. 13 is that ‘life interest’ (interest that remains only in his/her life time) alone can be conferred upon the ‘unborn’; that is, creation of life-interest alone is bad in law.
  • Sec. 13 speaks about ‘Transfer of Property’ to the ‘unborn’ on his/her birth, and, therefore, it can also be a ‘conditional transfer’.
  • Generally speaking, the question of ‘trust’ comes only on birth of the ‘unborn’. Though property can be given to ‘unborn’, it is only because of specific enacted provisions (Section 9 of the Indian Trusts Act; Section 14 of the TP Act). Since those provisions do not expressly prohibit, the aforesaid ‘conditional transfer’ can be made validly (provided it does not be bad under Sec. 11 of the TP Act – as shown above.
  • The owner of a property is free to deal with his property in any manner he wishes, unless expressly or impliedly restricted by law. ‘Conditional transfer’ is permitted by the TP Act itself.
  • If a ‘conditional transfer is made, it can only be upto the birth of the ‘unborn’. [It is clear from the words in Sec. 13 – “the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property”; and from the illustration in Sec. 13.]

In either case, the ‘the whole of the remaining interestmust have been directed to be vested in the (unborn) person (when he/she born).

Even if no trustee is appointed, and it does not come out from the deed of transfer as to who should be the trustee, the court will appoint a trustee, on the principle – ‘no trust will fail for want of trustees’.

Sec. 13 does not specifically refer to Prior Interest “HOLDERS”. Why?

  • The (main) object of this section is to provide – ‘whole remainder interest … in the unborn person‘.
  • The creation of interest, in a prior interest HOLDER, for the period between the transfer and the birth of such unborn person, is an inevitable coincident.
  • As stated earlier, a limited ‘beneficial enjoyment’ could be given, to the prior interest HOLDER, up to the birth of the ‘unborn’ .
  • For the above, only an indication as to creation of prior interest was apposite.

Sec. 14. Rule against Perpetuity – Analysed.

(Similar provision in Section 114 of the Indian Succession Act, 1925)

Sec. 14 of the TP Act reads as under:

  • 14. Rule against perpetuity. No transfer of property can operate to create an interest which is to take effect after the life-time of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

Sec. 14 of the TP Act lays down the following:

  • Property can be transferred to an unborn person.
  • Sec. 14 basically declares the maximum period (perpetuity period) for creating an interest in an unborn person as regards an immovable property.
  • For transferring property to an unborn person, such (unborn) person must have born within the life-time of ‘one or more persons’ named in the transfer deed (who must be one living at the date of such transfer).
  • The interest in the property can be created in favour of such (unborn) person only on attaining majority by such (unborn) person (i.e., 18 years).
    • Therefore, the maximum period (perpetuity period) for creating the interest in the property in favour of such (unborn) person will be the remaining (after transfer) ‘life-time‘ of such ‘one or more persons(who were living at the date of such transfer) plus (+) the ‘minority’ of such (unborn) person (i.e., 18 years).
    • It is clear – such (unborn) person must have born at least on the day of death of such ‘one or more persons‘.
  • Sec. 14 allows the transferor to name any ‘one or more persons‘ whose ‘life-time’ is to be taken into consideration for Sec. 14.
  • Who are such ‘one or more persons‘ has to be inferred from the transfer deed.
  • As stated in Sec. 13, the interest in the property, for the period between the transfer and the birth of such unborn person (referred to as prior interest), must have been created in ‘some’ (prior interest) holder.
    • Note: The prior interest holder in Sec. 13 need not necessarily be the ‘one or more persons‘ stated in Sec. 14.

G. Ramakrishniah v. Dasaratharama Reddiar, AIR 1970 Mad 484 ( Natesan, J.), vividly explains these matters, as under:

  • “The perpetuity period under Section 14 of the Act consists of the lifetime of one or more persons living at the time the transfer takes effect, and the further period of the minority of a person in existence at the close of the person living at the time of the transfer. ….. Section 14 of the Act however does not place any restriction as to who can be the living person whose existence can postpone the vesting. It allows the settlor to use any life for the purpose…… It may be any person or any number of persons, but the person or persons must be living at the date of such transfer. True, one must infer from the document itself the person or persons whose life has to be considered.”

Status of the one or more personswhose ‘life-time’ is to be taken into consideration

  • As stated earlier, the prior interest holder in Sec. 13 need not necessarily be the ‘one or more persons‘ stated in Sec. 14.
  • They are not ‘trustees’ inasmuch as no property is entrusted for their administration, and no obligation is casted upon them.

Therefore, they are persons merely chosen by the transferor of property (to an unborn), for the purpose of Sec. 14.

Part – III

The exceptions to the rule against perpetuity

  1. Transfer for Public Benefit (Not for private trusts): Read Blog: Dedication of Property in Public Trusts
  2. Covenants of Redemption of mortgage.
  3. Personal Contracts
  4. Pre-emption: Read Blog: Preemption is a Very Weak Right; For, Property Right is a Constitutional & Human Right
  5. Perpetual Lease

End Notes

Sec. 10 to 15 of the TP Act

Sec. 10. Condition restraining alienation.

  • Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: provided that property may be transferred to or for the benefit of a women (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.

Sec. 11. Restriction repugnant to interest created.

  • Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.
  • Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.

Sec. 12. Condition making interest determinable on insolvency or attempted alienation.

  • Where property is transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is void. Nothing in this section applies to a condition in a lease for the benefit of the lessor or those claiming under him.

Sec. 13. Transfer for benefit of unborn person.

  • Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.
  • Illustration: A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.

Sec. 14. Rule against perpetuity.

  • Rule against perpetuity.No transfer of property can operate to create an interest which is to take effect after the life-time of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

Sec. 15. Transfer to class some of whom come under sections 13 and 14.

  • If, on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails 1[in regard to those persons only and not in regard to the whole class].

Sec. 16. Transfer to take effect on failure of prior interest.

  • Where, by reason of any of the rules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails.

Read in this Cluster:

Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land LawsTransfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Suits and Criminal Complaints By and Against a Company

Saji Koduvath, Advocate, Kottayam

Key Takeaways

  • Company is a Juristic Person.
  • It can sue and be sued in its own name.
  • A natural person has to represent the Company.
  • Proper authorisation is essential for signing a plaint.
  •  A person may be authorised to sign pleadings by a resolution.
  • Procedural defects should not be permitted to defeat a just cause.
  • Secretary or any Director or other Principal Office can sign pleadings.
  • Any Authorised Person Can Continue the proceedings for the Company.
  • A person may be authorised to sign pleadings by a power of attorney also.
  • If pleadings were signed by officers, a Company can ratify it; impliedly also.
  • Even if there was initially no authority, the Company can rectify that defect ‘by sending a competent person’.

Suits by a Company

Company is a Juristic Person. Under Order 29 Rule 1 of the CPC, Secretary or any Director or other Principal Officer of a Company can sign pleadings by virtue of his office.

A Company can ratify the act of signing the pleading, also.

It is held by our Apex Court in United Bank of India Vs. Naresh Kumar, AIR 1997 SC 3 that a Court can, after taking all the circumstances of the case, come to the conclusion that the Company must have ratified the act of signing the pleading. It is pointed out that the courts below must have, in any case, directed the company to produce a proper power of attorney, or they must have allowed a competent person to be examined to prove the apparent ratification. The Court’s own words in United Bank of India Vs. Naresh Kumar, AIR 1997 SC 3, read as under:

  • “10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement or its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. ”

In a subsequent decision, in State Bank of Travancore Vs. Kingston Computers, 2011-11 SCC 524, it is held by our Apex Court as under:

  • “14. In our view, the judgment under challenge is liable to be set aside because the Respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a Director of the company and a resolution was passed by the Board of Directors of the company to file suit against the Appellant and authorized Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K. Shukla to authorise another person to file suit on behalf of the company.”

In this decision (of Kingston Computers) there had been no scope to ponder on the doctrines as to ‘technical or procedural defects’ (as done in the earlier decision in Naresh Kumar, AIR 1997 SC 3). The decision, in Kingston Computers may be distinguishable from Naresh Kumar on the ground that there was no evidence in Kingston Computers to show that the signatory was a Director of the Company, and no resolution of the Board of Directors was produced to prove that the signatory was authorised to file the suit.

See Blogs:

A De Facto Complainant to Represent the Company in Criminal Proceedings

Pointing out that a complaint can be filed in the name of a juristic person because it is also a person in the eye of law, it is observed in Associated Cement Co. Ltd. v. Keshavanand, 1998-1 SCC 687: AIR 1998 SC 596, as under:

  • “Section 200 (CrPC) as the starting provision of that chapter (Chapter XV) enjoins on the magistrate, who takes cognizance of an offence on complaint, to examine the complainant on oath. Such examination is mandatory as can be discerned from the words ‘shall examine on oath the complainant…’ The magistrate is further required to reduce the substance of such examination to writing and it ‘shall be signed by the Complaint’. ….. The above scheme of the new Code makes it clear that complainant must be a corporeal person who is capable of making physical presence in the court. Its corollary is that even if a complaint is made in the name of an incorporeal person (like a company or corporation) it is necessary that a natural person represents such juristic person in the court and it is that natural person who is looked upon, for all practical purposes to be the complainant in the case. In other words, when the component to a body corporate it is the de jure complainant, and it must necessarily associate a human being as de facto complainant to represent the former in court proceedings.”

Proper authorisation is essential for signing a plaint

Proper authorisation is essential for signing a plaint on behalf of a Company.  Though, the Secretary or any Director or other Principal officer can sign pleadings by virtue of their office, as per Order 29 Rule 1 of the CPC, the view taken in some decisions was that neither the directors nor the managing director would have the right to represent the Company, in a suit unless they were duly authorised by a resolution taken by the Board of Directors at a meeting duly constituted for the said purpose. B. Mookerjee Vs State Bank of India: AIR1992 Cal 250; Nibro Limited Vs National Insurance Co:  AIR 1991  Del 25.

The Delhi High Court, in Nibro Limited Vs. National Insurance Company Ltd., AIR 1991 Delhi 25 (Quoted in: United India Periodicals Pvt. Ltd.  Vs. CMYK Printech Ltd.: 2018-248 DLT 227), it is observed, with regard to the source of power of the Directors, as under:

  • “25. It is well-settled that under Section 291 of the Companies Act except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting-in all others cases the Board of Directors are entitled to exercise all its powers. Individual directors have such powers only as are vested in them by the Memorandum and Articles. It is true that ordinarily the court will not unsuit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far-reaching effects. It often affects policy and finances of the company. Thus, unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say that such a power can be conferred by the Board of Directors only by passing a resolution in that regard.”

It was observed by in Nibro Limited that a director or a secretary of a Company could certainly give the authority to institute a suit to another person, as provided under Order III Rule 1 CPC, if the director or secretary was authorised by law to file a suit on behalf of the company.

Order III Rule 1 provides that ‘any appearance, application or act in or to any Court, required or authorised by law to be made or done by a party in such Court, may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognised agent, or by a pleader appearing, applying or acting, as the case may be, on his behalf. Provided, that any such appearance shall, if the Court so directs, be made by the party in person’. 

If an authority is given to a pleader or a recognised agent, under Order III Rule 1, that recognised agent or pleader can, certainly, file an appearance as authorised.

The Bombay High Court, in Alcon Electronics Pvt. Ltd Vs. Celem (2015), 2015-1MhL852, observed, with respect to the source of power of the Directors, as under:

  • “The essential requirement of this provision is that the Company which is a juristic person must itself decide to sue. Once that is done, it would authorise one of its Directors who is the agent of the Company or its principal officers the Secretary of the Company or the Managing Director to file the Suit. The suing in each case is a separate act. The Company acts only through its meetings. Hence the Board of Directors in the day to day management of the company must decide and resolve to sue or not to sue. A blanket authority cannot be given to a particular Managing Director or Director to sign the papers and document/s, including the power to sue. The power to sue requires application of mind upon the particular cause of action. It requires the Company to pay the requisite Court fee. It requires the Company to be represented by a legal officer being an Advocate of the Court. It is an act which, therefore, is not a part of the day to day management of the Company. A Company would decide in a given case upon legal advice or otherwise whether or not it would sue upon a given cause of action. Such exercise is imperatively required to be performed if the intention of the Company, which is only a juristic person, is to be deciphered. That act, of course, may be undertaken even after the filing of the Suit and ratified by the Board as all other acts of management. However, the seminal requirement is to see the act of the Company though its Board or members (dependent upon whether the resolution is passed in the Board meeting or a general meeting) or is given by the Company itself (under its Articles of Association).”

The Delhi High Court pointed out in Radico Khaitan Limited Vs. JD Wines (2020), 2020-2 AD(Del)  421, that the impropriety, if any, in signing the pleadings by the officers of a Company can be ratified.

Even if Initially No Authority, the Company can Rectify the Defect

A Company being a juristic entity, Board of Directors can authorise any person to sign pleadings, by passing a resolution or giving a power of attorney, by virtue of Order 6 Rule 14 read with Order 29 Rule 1 CPC. If pleadings have been signed by one of its officers, the Company can ratify it. Such ratification can be express or implied.

In Parmeshwari Prasad Gupta Versus Union of India AIR 1973 SC 2389 (See also: Punjab University Vs. VN Tripathi: AIR 2001 SC 3672), it is held by Our Apex Court that the ratification would relate back to the date of the act ratified.

It is held in United Bank of India Vs. Naresh Kumar, AIR 1997 SC 3, as under:

  • “In absence thereof and in cases where pleadings have been signed by one of its officers, a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer.”

In Bhupesh Rathod v. Dayashankar Prasad Chaurasiya, (2022) 2 SCC 355, held as under:

  • “Not only that, even if there was initially no authority, the Company can at any stage rectify that defect by sending a competent person.”

Effect of Complaint in the name of MD followed by the post (MD)

In Bhupesh Rathod v. Dayashankar Prasad Chaurasiya, (2022) 2 SCC 355, in a Criminal Complaint under Sec. 138 of the NI Act, name of the Managing Director was stated first followed by the post (Managing Director) he held in the Company. An affidavit was filed by the Managing Director stating that the Company had authorised him to file the complaint. A copy of the Board Resolution was also presented. In the body of the complaint it was not stated that he was the MD. The respondent contended that the complaint was filed in the personal capacity not on behalf of the Company. It is pointed out in Bhupesh Rathod v. Dayashankar Prasad Chaurasia that there cannot be a fundamental defect merely because the name of the Managing Director was stated first; and that the format itself cannot be said to be defective though it may not be perfect (The Apex Court followed: Associated Cement Co. Ltd. v. Keshavanand, (1998-1 SCC 687: AIR 1998 SC 596).

The Supreme Court held as under:

  • “The body of the complaint need not be required to contain anything more in view of what has been set out at the inception coupled with the copy of the Board Resolution.”
  • “It would be too technical a view to take to defeat the complaint merely because the body of the complaint does not elaborate upon the authorisation. The artificial person being the Company had to act through a person/official, which logically would include the Chairman or Managing Director. Only the existence of authorisation could be verified.”

Our Apex Court explained that a Manager or a Managing Director ordinarily by the very nomenclature can be taken to be the person in-charge of the affairs Company for its day-to-day management and within the activity would certainly be calling the act of approaching the court either under civil law or criminal law for setting the trial in motion.

Any Authorised Person Can Continue the proceedings for the Company

It is observed in Associated Cement Co. Ltd. v. Keshavanand, 1998-1 SCC 687: AIR 1998 SC 596, as under:

  • “Be that so, we suggest as a pragmatic proposition that no magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. There may be occasions when a different person can represent the company e.g. the particular person who represents the company at the first instance may either retire for, the company’s service or may otherwise cease to associate therewith or he would be transferred to a distant place. In such cases it would be practically difficult for the company to continue to make the same person represent the company in the court. In any such eventuality it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court.” (Referrd to in Bhupesh Rathod v. Dayashankar Prasad Chaurasiya, 2022-2 SCC 355)

Procedural Defects Should Not Defeat a Just Cause

It is trite law that one should not be non-suited for technical reasons, and that the procedural defects or procedural irregularities which are curable, or which do not go to the root of the matter, should not be permitted to defeat a just cause. (United Bank of India Vs. Naresh Kumar: AIR 1997 SC 3; Uday Shankar Triyar Vs. Ram Kalewar Prasad Singh: AIR  2006 SC 269; VarunPahwa Vs. Mrs. RenuChaudhary: AIR  2019 SC 1186: 2019-3 JT 109.) 

It is pointed out in United Bank of India Vs. Naresh Kumar, AIR 1997 SC 3, by our Apex Court that there is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case.

How to Establish the Validity of Resolutions of a Company: Are Minutes Essential?

  • Yes. Relevant provision is Section 118 of Companies Act, 2013.

Section 118 reads as under:

  • 118:  Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot.
  • .(1) Every company shall cause minutes of the proceedings of every general meeting of any class of shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the conclusion of every such meeting concerned, or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.
  • (2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.
  • (3) All appointments made at any of the meetings aforesaid shall be included in the minutes of the meeting.
  • (4) In the case of a meeting of the Board of Directors or of a committee of the Board, the minutes shall also contain–
    • (a) the names of the directors present at the meeting; and
    • (b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring with the resolution.
  • (5) There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting,–
    • (a) is or could reasonably be regarded as defamatory of any person; or
    • (b) is irrelevant or immaterial to the proceedings; or
    • (c) is detrimental to the interests of the company.
  • (6) The Chairman shall exercise absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in sub-section (5).
  • (7) The minutes kept in accordance with the provisions of this section shall be evidence of the proceedings recorded therein.
  • (8) Where the minutes have been kept in accordance with sub-section (1) then, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and the resolutions passed by postal ballot to have been duly passed and in particular, all appointments of directors, key managerial personnel, auditors or company secretary in practice, shall be deemed to be valid.
  • (9) No document purporting to be a report of the proceedings of any general meeting of a company shall be circulated or advertised at the expense of the company, unless it includes the matters required by this section to be contained in the minutes of the proceedings of such meeting.
  • (10) Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government.
  • (11) If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
  • (12) If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

Only way to prove a resolution is proving the Minutes Book

In Escorts Ltd. v. Sai Autos , (1991) 72 Comp Cas. 483 (Delhi); 42(1990) DLT 446, it was held, referring Section 194 of Companies Act, 1956, that the only way to prove a resolution at a meeting of Board of Directors of a Company is proving the minutes book in which said Resolution was recorded, and it should have been produced in the court. (Referred to in: Havells India Ltd.  v. Dilip Rathi, 16 Feb 2018, Delhi High Court;  Manoj Kumar Kanuga v. Marudhar Power Pvt.  Ltd. , 23 Apr 2013, AP High Court).

In Shri Kishan Rathi v. Mondal Bros, and Co. (Private) Ltd. [1967] 37 Comp Cas 256 (Cal), it is held as under:

  • “Whether there was a resolution by the board of directors delegating power on the manager to borrow money is a fact which is within the special knowledge of the company and its directors. They can easily produce the resolution book or the minute book and show that there was no such delegation. If they do not do so an adverse inference must be drawn against them that had they produced them, the books would have shown such delegation to the manager.” (Quoted in: Hoshiarpur Azad Transport Co. Ltd.  v. Sutlej Land Finance Pvt. Ltd., 2001-103 CC 969; 1995-109 PLR 506 (P&H).

Shri Kishan Rathi v.  Mondal Brothers And Co. (Private) Ltd. , AIR 1967 (Cal) 75, it is held as under:

  • “The minute books and the book of resolution of the board of directors are books of the company and are not open to strangers and outsiders. This was also within the special knowledge of the defendant company. If the defendant company was trying to prove that its manager and director had no authority to borrow money, then it was for the company to prove from its own books of minutes and resolutions that no authority was given to Naresh Chandra Mondal, its manager and director. Section 106 of the Evidence Act says that when any fact is specially within the knowledge of any person, the burden of proving that fact is upon him. It is strange that neither the defendant company nor its witness, director Sambhu Nath Mondal, produced the minute book or the book of resolutions in this case. The only inference that can be drawn from such non-production on the facts and circumstances of this case is that, had they been produced, they would have shown that there was good authority and resolution in favour of Naresh Chandra Mondal. That presumption is irresistible in this case. Articles 103 and 114 of the articles of association of this company cast a mandatory duty upon the directors to record minutes of the proceedings of all meetings of the directors in the minute book. The defendant company or its director witness, Sambhu Nath Mondal, being in possession of such minute book and being in special knowledge of the contents of that minute book, it was their duty to produce them and not the duty of the plaintiff.”

Cheque Dishonour Case against a Company, Firm or Society

Sec. 141 of the NI Act is the relevant provision. It reads as under:

  • 141 Offences by companies — (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
  • Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
  • Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
  • (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
  • Explanation.— For the purposes of this section,—
  • (a) “company” means any body corporate and includes a firm or other association of individuals; and
  • (b) “director”, in relation to a firm, means a partner in the firm.

Following are clear from Sec. 141 of the NI Act-

  • Company, Firm and Society are treated alike (under Sec. 141).
  • A partner in a firm or Governing Body member in a Society is treated like a director in a Company.
  • Every person (director, partner or Governing Body member) who, at the time the offence was committed, was in charge of, and was responsible (to the company, firm or society for the conduct of its business), shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
  • Apart from the director, partner or Governing Body member, the company, firm or society shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
  • The company, firm or society shall be a necessary party.
  • If the director, partner or Governing Body member proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence, such person will not be liable to punishment.
  • The nominated Director of a Government  company or a financial corporation shall not be liable for prosecution.
  • If the offence has been committed by a company, firm or society and it is proved that the offence has been committed with the consent or connivance of any any director, manager, secretary or other officer, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished.

Relevant Decisions

  • Pawan Kumar Goel v. State of U.P., (2022) SCC OnLine SC 1598,
  • Sunita Palita v. Panchami Stone Quarry, 2022 SC OnLine SCC 945,
  • Secretary to Govt of Kerala v. james Varghese, (2022) 9 SCC 593,
  • S.P. Mani v. Dr. Snehalatha Elangovan, (2022) SCC Online SC 1238,
  • Sunita Palita v. Panchami Stone Quarry, (2022) 10 SCC 152
  • P. Saravana Kumar v. S.P. Vijaya Kumar, (2022) SCC Online Mad 1387,
  • P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258,
  • Dr. Shah Faesal v. Union of India, (2020) 4 SCC 1,
  • Peerless General Finance v. Commissioner of IT, (2020) 18 SCC 625,
  • Surinder Singh Deswal v. Virender Gandhi (2020) 2 SCC 514,
  • G.J. Raja v. Tejraj Surana (2019) 19 SCC 469,
  • Surinder Singh Deswal v. Virender Gandhi (2019) 11 SCC 341,
  • Nandkishor Prallhad Vyvhare v. Mangala, (2018) 3 MhLJ 913,
  • Rodger Shashoua v. Mukesh Sharma, (2017) 14 SCC 1,
  • Eerra Through Dr. Manjula v. State (NCT of Delhi), (2017) 15 SCC 133,
  • South Central Railway Employees Coop. Credit Society v. B. Yashodabai (2015) 2 SCC 727,
  • Rathod v. State of Maharashtra, (2014) 9 SCC 129,
  • Pooja Ravinder Devidsani v. State of Maharashtra, (2014) 16 SCC 1,
  • Sundeep Kumar Bafna v. State of Maharashtra, (2014) 16 SCC 623,
  • Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd., (2012) 5 SCC 661,
  • Hada v. Godfather Travels & Tours, 2012-5 SCC 661,
  • National Small-Scale Industries v. Harmeet Singh, (2010) 3 SCC 330,
  • K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48,
  • N. Harihara v. J Thomas, (2008) 13 SCC 663,
  • Maruti Udyog Ltd. v. Ram Lal, (2005) 2 SCC 638,
  • S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) SCC 89,
  • S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2007) 4 SCC 70,
  • Oriental Insurance Co. Ltd v. Meena Variyal, (2007) 5 SCC 428,
  • Steel Authority of India v. National Union Waterfront, (2001) 7 SCC 1,
  • Special Officer , Urban Land Ceilings v. P.S. Rao, (2000) 2 SCC 451,
  • Nedungadi Bank Ltd. v. K.P. Madhavankutty, (2000) 2 SCC 455.

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Title, ownership and Possession

Principles and Procedure

Land LawsTransfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Who are Necessary Parties, Proper Parties, and Pro Forma Parties, in Suits

Saji Koduvath, Advocate, Kottayam.

Introduction

The leading case, Udit Narain Singh Malpaharia v. Addl. Member, Board of Revenue, Bihar, AIR 1963 SC 786, beholds the whole law on the topic.

  • Key Takeaways from this Decision, Udit Narain
  • Necessary Party
    • A necessary party is one without whom no order can be made effectively.
    • The parties whose rights are directly affected are the necessary parties.
    • A tribunal exercising a judicial or quasi-judicial act cannot decide against the rights of one person without giving him a hearing or an opportunity to present his case in the manner known to law.
    • If the provisions of a particular statute or rules made thereunder do not provide for it, principles of natural justice demand it.
    • Any order that may be issued behind the back of such a party can be ignored by the said party.
    • Any such order made without hearing the affected parties would be void.
  • Proper Party
    • A proper party is one whose presence is not necessary for making an effective order; but whose presence is necessary for a complete and final decision on the question involved in the proceeding, or whose presence may facilitate the settling of all the questions that may be involved in the controversy.
    • The question of making such a person as a party to a writ proceeding depends upon the judicial discretion of the High Court in the circumstances of each case.
    • Either one of the parties to the proceeding may apply for the impleading of such a party or such a party may suo motu approach the court for being impleaded therein.

Udit Narain Singh Malpaharia v. Addl. Member, Board of Revenue, Bihar

In Udit Narain Singh Malpaharia v. Addl. Member, Board of Revenue, Bihar AIR 1963 SC 786 our Apex Court held, in para 7 and 9, as under:

  • “7. To answer the question raised it would be convenient at the outset to ascertain who are necessary or proper parties in a proceeding. The law on the subject is well settled: it is enough if we state the principle. A necessary party is one without whom no order can be made effectively’; a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding.”   
  • “A tribunal, therefore, exercising a judicial or quasi-judicial act cannot decide against the rights of one party without giving him a hearing or an opportunity to represent his case in the manner known to law. If the provisions of a particular statute or rules made thereunder do not provide for it, principles of natural justice demand it. Any such order made without hearing the affected parties would be void.
  • 9. The next question is whether the parties whose rights are directly affected are the necessary parties to a writ petition to quash the order of a tribunal. As we have seen, a tribunal or authority performs a judicial or quasi- judicial act after hearing parties. Its order affects the right or rights of one or the other of the parties before it. In a writ of certiorari, the defeated party seeks for the quashing of the order issued by the tribunal in favour of the successful party. How can the High Court vacate the said order without the successful party being before it? Without the presence of the successful party the High Court cannot issue a substantial order affecting his right. Any order that may be issued behind the back of such a party can be ignored by I the said party, with the result that the tribunal’s order would be quashed but the right vested in that party by the wrong order of the tribunal would continue to be effective. Such a party, therefore, is a necessary party and a petition filed for the issue of a writ of certiorari without making him a party or without impleading him subsequently, if allowed by the court, would certainly be incompetent. A party whose interests are directly affected is, therefore, a necessary party. In addition, there may be parties who may be described as proper parties, that is parties whose presence is not necessary for making an effective order but whose presence may facilitate the settling of all the questions that may be involved in the controversy. The question of making such a person as a party to a writ proceeding depends upon the judicial discretion of the High Court in the circumstances of each case. Either one of the parties to the proceeding may apply for the impleading of such a party or such a party may suo motu approach the court for being impleaded therein.”

Following are the recent Supreme Court Judgments that followed Udit Narain Singh

  • (1) Vishal Ashok Thorat v. Rajesh Shrirambapu Fate, 2019 AIR SC 3616
  • (2) Swapna Mohanty v. State of Odisha, 2018 17 SCC 621
  • (3) Kanaklata Das v. Naba Kumar Das, 2018 AIR SC 682
  • (4) Poonam v. State of U. P. , 2016 2 SCC 779
  • (5) Asstt. G.M State Bank of India v. Radhey Shyam Pandey, 2015 (3) SCALE 39
  • (6) Sh Jogendrasinhji Vijaysinghji VS State of Gujarat, 2015 AIR SC 3623
  • (7) Census Commissioner v. R. Krishnamurthy, 2015 2 SCC 796
  • (8) H. C. Kulwant Singh v. H. C. Daya Ram, 2014 AIR SC 3083,
  • (9) Ranjan Kumar v. State Of Bihar, 2014 16 SCC 187
  • (10) State of Rajasthan v. Ucchab Lal Chhanwal, (2014) 1 SCC 144
  • (11) Manohar v . State of Maharashtra, 13 Dec 2012
  • (12) Vijay Kumar Kaul v. Union of India, (2012) 7 SCC 610
  • (13) Delhi Development Authority v. Bhola Nath Sharma, AIR 2011 SC 428
  • (14) State of Assam v. Union of India, 30 Sep 2010
  • (15) Competition Commission of India v. Steel Authority of India Ltd. , (2010) 10 SCC 744
  • (16) Public Service Commission v. Mamta Bisht, (2010) 12 SCC 204       
  • (17) JS Yadav v. State of UP (2011) 6 SCC 570
  • (18) T. Vijendradas v. M. Subramanian , 09 Oct 2007
  • (19) Avtar Singh Hit v. Delhi Sikh Gurdwara Mangt. Comte., (2006) 8 SCC 487
  • (20) Assam Small Scale Ind. Dev. Corp. v. J. D. Pharmaceuticals, 2005 (13) SCC 19

Necessary Party” and “Proper Party

The fundamental distinction between a “necessary party” and a “proper party” was explained in Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay  (1992) 2 SCC 524, wherein it is held as under:

  • “6. A necessary party is one without whom no order can be made effectively. A proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding.” (Quoted in: NAK Engineering Company Pvt. Ltd. v. Tarun Keshrichand Shah, 2026 INSC 8)

In Mumbai International Airport (P) Ltd. v. Regency Convention Centre & Hotels (P) Ltd. (2010) 7 SCC 417, it is held as under:

  • “A ‘necessary party‘ is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a ‘necessary party’ is not impleaded, the suit itself is liable to be dismissed.
  • A ‘proper party‘ is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made.
  • If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.” (Quoted in: NAK Engineering Company Pvt. Ltd. v. Tarun Keshrichand Shah, 2026 INSC 8)

In Vidur Impex & Traders (P) Ltd. v. Tosh Apartments (P) Ltd.  (2012) 8 SCC 384, the broad principles governing impleadment were summarized:

  • “41.2. A necessary party is the person who ought to be joined as party to the suit and in whose absence an effective decree cannot be passed by the court.
  • 41.3. A proper party is a person whose presence would enable the court to completely, effectively and properly adjudicate upon all matters and issues, though he may not be a person in favour of or against whom a decree is to be made.
  • 41.4. If a person is not found to be a proper or necessary party, the court does not have the jurisdiction to order his impleadment against the wishes of the plaintiff.” (Quoted in: NAK Engineering Company Pvt. Ltd. v. Tarun Keshrichand Shah, 2026 INSC 8)

In Kasturi v. Iyyamperumal (2005) 6 SCC 733, this Court crystallized the twin tests for a necessary party:

  • “The question of jurisdiction of the court to invoke Order 1 Rule 10 CPC to add a party who is not made a party in the suit by the plaintiff shall not arise unless a party proposed to be added has direct and legal interest in the controversy involved in the suit. two tests are to be satisfied for determining the question as to who is a necessary party. The tests are:
  • .(1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings;
  • (2) no effective decree can be passed in the absence of such party.” (Quoted in: NAK Engineering Company Pvt. Ltd. v. Tarun Keshrichand Shah, 2026 INSC 8)

Dominus Litis and Non Joinder of a Necessary Party at the Plaintiff’s Risk

In NAK Engineering Company Pvt. Ltd. v. Tarun Keshrichand Shah (Pankaj Mithal, Prasanna B. Varale J.) 2026 INSC 8, the Supreme Court pointed out that the appellant was not a necessary party to the suit as there was no material to indicate that the relief, if granted, would be implemented against the appellant. It was also found that the appellant was not a proper party also for the appellant was not a successor to the defendant. Thereafter the Apex Court concluded as under:

  • “39. This apart, the respondent Nos.1 and 2 who have instituted the suit are dominus litis and it is for them to choose their adversaries. If they do not array the proper and necessary parties to the suit, they do it at their own risk. However, they cannot be compelled to add a party to defend a suit against their wishes. The decree, if any, passed in the suit would be binding only between the parties to the suit and would not infringe upon any right of a third party, much less of the appellant that is not a party to the suit.”

The Apex Court relied on the fundamental principle as to dominus litis laid down in Kanaklata Das v. Naba Kumar Das, (2018) 2 SCC 352, wherein it had been observed as under:

  • “11.4. the plaintiff being a dominus litis cannot be compelled to make any third person a party to the suit, be that a plaintiff or the defendant, against his wish unless such person is able to prove that he is a necessary party to the suit and without his presence, the suit cannot proceed and nor can be decided effectively. In other words, no person can compel the plaintiff to allow such person to become the coplaintiff or defendant in the suit. It is more so when such person is unable to show as to how he is a necessary or proper party to the suit and how without his presence, the suit can neither proceed and nor it can be decided or how his presence is necessary for the effective decision of the suit.
  • 11.5. a necessary party is one without whom, no order can be made effectively, a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding.”

Non-joinder of a Party – Relevant Provision of CPC

Section 99 of the CPC reads as under:

  • 99. No decree to be reversed or modified for error or irregularity not affecting merits or jurisdiction: No decree shall be reversed or substantially varied, nor shall any case be remanded in appeal on account of any misjoinder or non-joinder of parties or causes of action or any error, defect or irregularity in any proceedings in the suit, not affecting the merits of the case or the jurisdiction of the Court.
  • Provided that nothing in this section shall apply to non-joinder of a necessary party.

Rule 9 of Order I CPC reads as under:

  • 9. Misjoinder and nonjoinder: No suit shall be defeated by reason of the misjoinder or nonjoinder of parties, and the Court may in every suit deal with the matter in controversy so far as regards the rights and interests of the parties actually before it:
    Provided that nothing in this rule shall apply to nonjoinder of a necessary party.

Non-joinder or misjoinder of Parties – Objection

  • 13. Objections as to non-joinder or misjoinder.
    All objections on the ground of non-joinder or misjoinder of parties shall be taken at the earliest possible opportunity and, in all cases where issues are settled, at or before such settlement, unless the ground of objection has subsequently arisen, and any such objection not so taken shall be deemed to have been waived.

Necessary Party – for Effectually and Completely settle the questions

In Razia Begum vs. Anwar Begum,  AIR 1958 SC 886, our Apex Court observed as under:

  • “The only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action and the question to be settled, therefore, must be a question in the action which cannot be effectually and completely settled unless he is a party. The line has been drawn on a wider construction of the rule between the direct interest or the legal interest and commercial interest. It is, therefore, necessary that the person must be directly or legally interested in the action in the answer, i.e., he can say that the litigation may lead to a result which will affect him legally that is by curtailing his legal rights.” Quoted in: Poonam VS State of UP, 2016-2 SCC 779

Court has Discretion to add a Necessary Party or Proper Party

Order I Rule 10. Suit in name of wrong plaintiff.

  • .(1) Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the suit, if satisfied that the suit has been instituted thought a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as the Court thinks just.
  • (2) Court may strike out or add parties– The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name, of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.
  • (3) No person shall be added as a plaintiff suing without a next friend or as the next friend of a plaintiff under any disability without his consent.

The court has no Discretion to add Unless a Necessary Party or Proper Party

In Mumbai International Airport Pvt. Ltd. v. Regency Convention Centre & Hotels Pvt. Ltd., (2010) 7 SCC 417, it is held  as under:  

  • “15. The said provision makes it clear that a court may, at any stage of the proceedings (including suits for specific performance), either upon or even without any application, and on such terms as may appear to it to be just, direct that any of the following persons may be added as a party: (a) any person who ought to have been joined as plaintiff or defendant, but not added; or (b) any person whose presence before the court may be necessary in order to enable the court to effectively and completely adjudicate upon and settle the question involved in the suit. In short, the court is given the discretion to add as a party, any person who is found to be a necessary party or proper party.”

After explaining the difference between the necessary party and proper party (stated above), it is held as under:

  • “If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.”

It is pointed out in Mumbai International Airport Pvt. Ltd.   v. Regency Convention Centre & Hotels Pvt. Ltd. that the Apex Court held in Kasturi v. Iyyamperumal, 2005 (6) SCC 733, that a purchaser of the suit property subsequent to the suit agreement would be a necessary party as he would be affected if he had purchased it with or without notice of the contract, but a person who claims a title adverse to that of the defendant-vendor will not be a necessary party. If the owner of a tenanted property enters into an agreement for sale of such property without physical possession, in a suit for specific performance by the purchaser, the tenant would not be a necessary party.

No Pleading – who are necessary parties; suit cannot be dismissed

In Laxmishankar Harishankar Bhatt v. Yashram Vasta, AIR 1993 SC 1587, it was observed that the suit for recovery of possession-plaintiff purchaser claiming to have acquired entire ownership of suit property and the plea by defendant-tenant that suit is liable to be dismissed for non-joinder of co-owners. No averments, however, in written statement as to who are other co-owners and what rights they claim the suit cannot be dismissed for non-joinder on such vague plea. (Referred to (1991) 4 SCC 17, AIR 1989 SC 758, AIR 1977 SC 1599, AIR 1976 SC 2335, AIR 1973 Gujarat 131 (FB).

In Meghavaranam v. Md. Mohideen Sahib, AIR 1936 Mad. 782, Wadsworth, J., also held that if the defendants wish to object to a suit on the ground of non-joinder of parties, it is incumbent upon them to state who are the parties. (Referred to in : Durvasula Dakshina Murthy v. Vajjala Vijaya Kumari, 2008 1 AndLD 347)

Defendant Pleaded the land belonged to Municipal Council. It became a necessary party

In Subbaraya v. Seetha Ramaswami, AIR 1933 Mad. 664, Walsh, 1., the learned Judge of the Madras High Court, observed that if a person has a right to defend, it is the same thing as saying that he is a necessary defendant, for it is not within the discretion of the Court to say whether it will add him or not. Plaintiff brought a suit to eject the defendant from a site and to remove a pial erected by him thereon. The plea of the defendant was that the land belonged to the Municipal Council, that he put up a pial with its permission and that the Municipal Council was a necessary party to the suit. The trial Court held that, as plaintiff claimed the suit property as his, it was unnecessary to implead the Municipality on the contention of the defendant, and it was held that the Municipality was a necessary party to the suit and not having been made one, in spite of objection taken from the staI1, the suit must be dismissed.

Non-Joinder Of A Necessary Party Cannot, By Itself, Be A Ground For Dismissing

In Mt. Zabaishi Begam v. Naziruddin Khan, AIR 1935 All. 110, the Division Bench of Allahabad High Court observed that the non-joinder of a necessary party cannot, by itself, be a ground for dismissing the suit, and the Court is bound to adjudicate on the rights of the parties actually before it. A Court will refrain from passing a decree which would be ineffective and infructuous and the reason for this rule is obvious. It would be idle for a Court to pass a decree which would be of no practical utility to the plaintiff, and be a waste paper in the sense that the relief that it purports to grant to the plaintiff cannot be vouchsafed to him because of the objection of some person who is not bound by that decree. But this rule has no application to cases in which, notwithstanding the fact that some of the persons interested in the subject-matter of the suit are not parties to the suit, the Court is in a position to pass a decree that is capable of execution and cannot be rendered nugatory at the instance of persons not made parties to the suit. . (Referred to in : Durvasula Dakshina Murthy v. Vajjala Vijaya Kumari, 2008 1 AndLD 347)

Plea As To Non Joinder Not Allowed To Be Raised At Later Point Of Time

In Ramachandran v. Valliammal, 1992 (1) MLJ 188, Srinivasan, J., the learned Judge of Madras High Court, observed that where the defendant has not raised a specific plea as to existence of co-owners at the time of filing suit and raising the said question at later point of time should not be allowed.

Necessary Party – Persons Likely to be Affected must be parties

In Udit Narain Singh Malpaharia v. Addl. Member, Board of Revenue, Bihar AIR 1963 SC 786

  • “35. ……….  It is well-settled principle consistent with natural justice that if some persons are likely to be affected on account of setting aside a decision enuring to their benefit, the Court should not embark upon the consideration and the correctness of such decision in the absence of such persons.” (Quoted in Poonam VS State of U. P. , 2016 2 SCC 779; State of Assam v. Union of India [2010] 12 S.C.R. 413)

The Court of Appeal of California in California C.C. Corp. v. Superior Court, (1932) 122 Cal.App. 404 it is held as under:

  • “In Powell v. People (1905), 214 Ill. 475 [105 Am. St. Rep. 117, 2 Ann. Cas. 551, 73 N.E. 795], it is directly held that mandamus will not lie where it appears upon the face of the petition or the face of the record that a necessary party, or a party whose interests are directly affected has been omitted, the court of its own motion will decline to issue the writ. There, as here, the want of the necessary party appeared upon the record, and it was there held that a plea of such want of the necessary party was not necessary to bring the fact to the attention of the court.”  

In Ranjan Kumar v. State of Bihar, 2014-16 SCC 187, it is held as under:

  • 4. On a perusal of the orders impugned, we find that only 40 persons were made respondents before the High Court and hardly a few appointees filed applications for intervention. It is well settled in law that no adverse order can be passed against persons who were not made parties to the litigation.

The court referred the following decisions:

  • Prabodh Verma and others v. State of UP, (1984) 4 SCC 251;
  • Indu Shekhar Singh and others v. State of UP, (2006) 8 SCC 129;  
  • Km. Rashmi Mishra v. M.P. Public Service Commission, (2006) 12 SCC 724;
  • Tridip Kumar Dingal and others v. State of West Bengal, (2009) 1 SCC 768; 
  • Public Service Commission, Uttaranchal v. Mamta Bisht, (2010) 12 SCC 204, referred to – Udit Narain Singh Malpaharia v. Board of Revenue, AIR 1963 SC 786, Gulabchand Chhotalal Parikh v. State of Gujarat, AIR 1965 SC 1153, Babubhai Muljibhai Patel v. Nandlal Khodidas Barot, (1974) 2 SCC 706, Sarguja Transport Service v. STAT, (1987) 1 SCC 5;
  • State of Rajasthan v. Ucchab Lal Chhanwal, (2014) 1 SCC 144;
  • Vijay Kumar Kaul v. Union of India, (2012) 7 SCC 610;    
  • J.S. Yadav v. State of Uttar Pradesh, (2011) 6 SCC 570;      
  • Union of India v. S. Vinod Kumar,  AIR 2008 SC 5;
  • Chandra Prakash Tiwari and others v. Shakuntala Shukla, (2002) 6 SCC 127;
  • Madan Lal v. State of J & K, (1995) 3 SCC 486;      
  • Om Prakash Shukla v. Akhilesh Kumar Shukla, 1986 (Supp) SCC 285.

Easement – owners of properties who obstruct alone are necessary parties

If easement right is claimed over a way that passes through various (servient) properties, the owners of properties who obstruct the way alone are necessary parties; and those who do not raise any obstruction are not necessary parties.

  • Madan Mohan Chakravarthy v. Sashi Bhusan, AIR 1915 Cal 403  (19 Cal WN 1211);
  • Lal Mohammad Biswas v. Emajuddin Biswas, AIR 1964 Cal 548;
  • Varkey Joseph v. Mathai Kuriakose, (1992) 2 Ker LJ 135; (1992) 2 Ker LT 169.

Owners Of Other Servient Fields Are Not Necessary Parties

In K.Palaniappa Moopan v. Angammal, (1967) I M.L.J. 177, it was held as under:  

  • “It may be that the owners of other fields over which the channel flows are proper parties, but certainly they are not necessary parties. Their non- joinder cannot be fatal to the suit. There are several servient tenements over which the channel passes, but the defendants alone have obstructed according to the plaintiffs. There has been no obstruction from the State or from the owner of field S.No.15 of the exercise of the right claimed by the plaintiffs. I am unable to appreciate the contention that the plaintiffs cannot have effectual relief in their absence. If any of them should interfere with the mamool flow of water or at any subsequent period, that would give a fresh cause of action to the plaintiffs and a cause of action to the defendants also if they are inconvenienced and injured. In my view, it would be unreasonable to compel the plaintiffs to implead the owners of the servient lands all along the course of the channel whether they had any cause of action against them or not and even though there was no obstruction to or denial of the plaintiffs right by these persons. “

All persons interested in Easement are not Necessary Parties

In S. Narain Bera v. Chandra Bera, AIR 1924 Cal. 1050, the Division Bench of Calcutta High Court observed that all persons interested in the right of easement are not necessary parties to the suit where the cause of action on the pleadings is against those persons only who are alleged to have interfered with the plaintiffs right. The persons who have the right of easement cannot be held to be necessary parties so long as their right is not interfered with. In order to determine whether a suit is maintainable and whether certain parties are necessary parties or not, it is necessary to ascertain the nature of the plaintiffs case as set out in the plaint. . (Referred to in : Durvasula Dakshina Murthy v. Vajjala Vijaya Kumari, 2008 1 AndLD 347)

In Mukherjj v. Kalipada Bhattacharji, A. I. R. 1936 Cal. 534, it was held that every owner of servient tenement denying the plaintiffs right and every person obstructing the use of the right were necessary parties. (Referred to in: Ram Singh Sharma v. Parmod Kumari, 1992-102 PujLR 396)

Not Necessary To Add Who Are Not Parties To Obstruction

Justice B.K.Mukherjea in Kedaruddin Ahamad v. Sm. Samsur Mata, (41 Cal.WN 769) took the view that it was not necessary to add as defendants those persons who are not parties to the act of obstruction complained of.

In Varkey Joseph v. Mathai Kuriakose, 1992-2 KerLJ 135; 1992-2 KerLT 169, it is held as under:

  • “The said decision (Kedaruddin Ahamad v. Sm. Samsur Mata) also took note of the decision reported in Surja Narain V. Chandra Bera (AIR 1924 Cal.1050) to hold that the absence of other servient owner is in no way fatal to the plaintiffs suit complaining of obstruction by a servient land owner. These authorities were considered elaborately by his Lordship P.B. Mukharji, J. in the decision reported in Lal Mohd. v. Emajuddin (AIR 1964 Cal.548). After noticing the conflict of authorities the learned judge preferred to follow the view expressed in the decision reported in 19 Cal.WN 1211 which was affirmed by a Division Bench of which Chief Justice Jenkins himself was a party and that of B.K. Mukherjea, J. in the decisions reported in 41 Cal WN. 769. His Lordship Justice P.B. Mukharji observed:
  • “The actual complaint in this case against the defendants is that they put two obstructions at two places on the road over which a right of way was claimed by the plaintiffs. The real nature of the suit is for removal of those obstructions. The persons who obstruct in my judgment are the only proper and necessary persons to be joined as defendants in such a suit, Hundred and thousand of villagers who have done nothing to obstruct such a way are neither necessary nor proper parties.
  • If that were so then a single obstruction by a single villager will make it necessary to make the whole village,. i.e., all the villagers, parties. In that view a person who suffers has to join all other numerous persons as defendants although they have done nothing and there is no cause of action or grievance against them. I do not think that is the law….”
  • Read in the light of 0.1 R.9 of the Code of Civil Procedure and the practical considerations put forward by Mr. Justice P.B. Mukharji I respectfully agree with the view taken by Mr. Justice P.B. Mukharji in the decision reported in AIR 1964 Cal.548.”

Owner Of The Servient Tenement – Not Necessarily a Party

In Varkey Joseph v. Mathai Kuriakose, 1992-2 KerLJ 135; 1992 2 KerLT 169, it is observed as under:

  • In Thayappan v. Kunhahammed (S.A, No.629 of 1986) considered this question in the light of the decision reported in AIR 1964 Cal. 548 and the decision of the Hon’ble Supreme Court reported in Udti Narain Singh Malpharia v. Additional Member, Board of Revenue, Bihar (1963(1) SCR 676) and has held as follows:
  • “…The learned counsel for the appellant raised a contention that the suit is bad for non joinder of necessary parties, as the owner of the servient tenement is not made a party to the suit and therefore it is contended that no effective decree for declaration could be passed in this case and the lower appellate court erred in reversing the findings of the trial court. The respondent’s counsel contended that the owner of the servient tenement is not a necessary party and it is pointed out that the appellant has not raised this contention in the written statement. Who is a ‘necessary party’ has been explained by the Supreme Court in Udit Narain Singh Malpaharia v. Additional Member, Board of Revenue, Bihar (1963-1 SCR 676) wherein it was held,
  • “Necessary party is one without whom no order can be made effectively; a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding”.
  • It is true that if the owner of the servient tenement is a necessary party and whose presence is necessary for passing an effective decree, he is to be impleaded as a party and the non-joinder of such a party may entail the dismissal of the case. I do not think that the owner of the servient tenement is a necessary party in all cases where a declaration of easement right is claimed by the plaintiff. In the present case the real dispute is between the plaintiff and the defendant. Defendant is the owner of an adjacent property and according to the plaintiff he is causing obstruction to the pathway. The plaintiff has no case that the owner of the servient tenement caused any obstruction to the use of the pathway. Even if the court passed a declaration of his easement right in respect of the plaint schedule pathway it would bind only the defendant, who allegedly caused the obstruction. Therefore, the owner of the servient tenement is not a necessary party in all suits for declaration of easement right. An effective decree can be passed even without impleading the owner of the servient tenement as a party to the suit,…”

Necessary Party – Person Likely to Suffer has to be Impleaded

Census Commissioner v. R. Krishnamurthy, 2015-2 SCC 796, it is observed as under:

  • 19. As we evince from the sequence of events, the High Court in the earlier judgment had issued the direction relating to carrying of census in a particular manner by adding certain facets though the lis was absolutely different. The appellant, the real aggrieved party, was not arrayed as a party-respondent. The issue was squarely raised in the subsequent writ petition where the Census Commissioner was a party and the earlier order was repeated. There can be no shadow of doubt that earlier order is not binding on the appellant as he was not a party to the said lis. This view of ours gets fructified by the decision in
  • H.C. Kulwant Singh v. H.C. Daya Ram JT 2014 (8) SC 305 wherein this Court,
    • after referring to the judgments in
      • Khetrabasi Biswal v. Ajaya Kumar Baral, (2004) 1 SCC 317
      • UditNarain Singh Malpaharia v. Board of Revenue, AIR 1963 SC 786
      • Prabodh Verma v. State of U.P. (1984) 4 SCC 251 and
      • Tridip Kumar Dingal v. State of W.B. (2009) 1 SCC 768
    • has ruled thus:      
  •  ‘….. if a person who is likely to suffer from the order of the court and has not been impleaded as a party has a right to ignore the said order as it has been passed in violation of the principles of natural justice’.”

Necessary parties in suit on Partial destruction of Stair Case and its Removal

Smt. Subhra Sinha Roy v. Iman Kalyan Dey, (2011) 2 CalHN 959, considered it and stated as under:

  • “In CWN (19) 1211 (Sir Lawrence Jenkins, C.J., Justice D. Chatterjee Madan Mohan Chakravarty v. Sashi Bhusan Mukherji, (1915) 31 Ind. Cas. 549 : 19 C.W.N. 1211) it is held, inter alia, that a dominant owner has no cause of action against servant owners who have neither caused obstruction nor raised any objection to the exercise of his right of easement. In a suit for declaration of his right of way he is not bound to make parties any servant owners other than those who have so obstructed or challenged his right. The said case relates to a suit for declaration of right of way, for restoration of the path to its former condition and for perpetual injunction. The said suit was decreed against which appeal was preferred with the contention that the suit ought to have failed as the owners of all the servant tenements over which the way is claimed have not been made parties to the suit. The instant case relates to removal of partial obstruction from the existing pathway in terms of a compromise decree which has been waived or relinquished. There is no denial of the fact that the said staircase is now in occupation of the tenants inducted by co-sharers. If such a staircase is to be removed affecting the rights of all the co-owners, they must be treated as necessary party and in such case in absence of all the co-owners no effective decree can be passed. From this point of view the learned Trial Court as well as the Hon”ble Division Bench has not committed any error apparent on the face of record which may be reviewed and the ratio in the aforesaid case is not applicable in the facts and circumstances of the case.”

Claim of possessory right over Govt. land: State need not be a party

In Vavvakkavu Muslim Thaikkavupally v. Narayanan Purushan, ILR 1992-1 Ker 221; 1991-2 KLJ 526; 1991-2 KLT 477, it was held as under:

  • “Regarding the first question it is clear from the pleadings and evidence in the case that the plaintiffs have not claimed either possession of the plaint B schedule property or even an easement right over it as against the State. The gist of their claim in the plaint is that as the owners of the property abutting plaint B schedule property they are using the same as a passage to have access from their residential house in plaint B schedule property to N.H. 47. Of course they have also stated that they have no other pathway to have access to any public road. However, they have not even alleged and proved any of the ingredients to establish an easement right of way through the plaint B schedule property. Learned counsel for the respondents has also not advanced any such contention before me. Probably being land kept for the purpose of N.H. 47 State has also not chosen to obstruct the plaintiffs in the matter of using plaint B schedule property as a passage so far. In these circumstances, I do not think that it was necessary for the plaintiffs to have impleaded the State as a party to the suit. In a more or less similar case, a Division Bench of the Orissa High Court in the decision reported in Girish Chandra v. Nagendranath (AIR 1978 Orissa 211) has held that the owner of land is not a necessary party to the suit so long as none of the parties to the suit have claimed any right specifically against the owner. In the said decision, the Division Bench has actually referred to two earlier decisions of the Calcutta High Court reported in Sabirer Ma v. Behari Mohan Lai (AIR 1928 Cal. 23) and in Kedaruddin v. Asrafali (AIR 1937 Cal. 355) in support of thier view. In AchutKalsai v. MadhuKalsai (1972) 38 Cut.LT 105) the Orissa High Court in a more or less similar case has held thus:
  • “In this case there is no allegation of any resistance from the State of Orissa to the flow of Avatar over the Government land intervening between the plaintiffs premises and the channel by the side of the village road. The entire obstruction came from the defendants and the plaintiffs really aggrieved by the defendants action. There may be cases where the owner of the servant tenement would not resist and the resistance would come from quite a different quarter. In such cases the Owner of the servant tenement would certainly not be required to be before the Court as a necessary party to the litigation. The present case seems to be one of that type and the State of Orissa which is the owner of the intervening plot not being before the Court would not affect the suit in any manner”.
  • I am in agreement with the view expressed in the above decisions and would hold that the State is not a necessary party to the suit and the suit is not liable to be dismissed on that ground.”

In Ramachandran v. Omanakuttan, 2021-4 KLJ 204, it is held as under:

  • “In Vavvakkavu Muslim Thaikkavupally v. Narayanan Purushan, 1991 (2) KLT 477, Packiyam Ammal v. Pattu Ammal, 1999 KHC 3552, and Appukuttan Chettiyar v. Lathikadevi Amma, 2005 (1) KLT 260, it was held that the possessory right can be claimed as between persons who assert rival claims over Government land and that in such actions the State need not be a party subject to the rider that the Government will not be bound by any such decrees.
  • Such being the legal position, the view of the first appellate court that the Government ought to have been made a party to the suit is untenable particularly in view of the decisions in Philip’s case (supra), Kuttan Narayanan v. Thomman Mathai, 1966 KLT 1, Rev.Fr.K.C.Alexander v. N.S.S. Ltd., 1966 KLT 333,  Rame Gowda v. M.Varadappa Naidu, (2004) 1 SCC 769, Pathukutty v. Aisakutty, 2014 (2) KHC 212, and Poona Ram v. Moti Ram, AIR 2019 SC 813. All the above cases, dealing with dispossession of the persons in occupation of the property without title by trespassers, considered and affirmed the above legal position. Hence it is settled law that even before the acquisition of statutory title by adverse possession for the requisite period under the Limitation Act, the possessory owner has well defined rights in the property. This possessory right is heritable, divisible and transferable as distinct from proprietary title. The Land Conservancy Act, 1957 prohibits only regarding matters for in the Act and the Rules. In Packiyam Ammal’s case (supra) this position has been unmistakably clarified in paragraph 14 of the judgment as hereunder:-
  • “14. In regard to item No.10, the only reason for dismissing the suit was that the family is not having title to the property. Under Ext.A2, it is found that the family is in possession. It could be a Government land. The possessory right continues in the family. Any arrangement between the members of the family may not bind the Government. But, as between them, it has to be treated as a family asset and available for partition. A preliminary decree also will have to be passed with regard to item No.10.”

Order behind the back, in Violation of Natural Justice, can be ignored

JS Yadav v. State of UP, (2011) 6 SCC 570, it is held as under:

  • “32. No order can be passed behind the back of a person adversely affecting him and such an order if passed, is liable to be ignored being not binding on such a party as the same has been passed in violation of the principles of natural justice. The principles enshrined in the proviso to Order I Rule 9, of the Code of Civil Procedure, 1908 provide that impleadment of a necessary party is mandatory and in case of non-joinder of necessary party, the plaintiff/petitioner may not be entitled for the relief sought by him. The litigant has to ensure that the necessary party is before the Court, be it a plaintiff or a defendant, otherwise the proceedings will have to fail. In Service Jurisprudence if an unsuccessful candidate challenges the selection process, he is bound to implead at least some of the successful candidates in representative capacity. In case the services of a person is terminated and another person is appointed at his place, in order to get relief, the person appointed at his place is the necessary party for the reason that even if the plaintiff/petitioner succeeds, it may not be possible for the Court to issue direction to accommodate the petitioner without removing the person who filled up the post manned by plaintiff/petitioner. (Vide:
    • Prabodh Verma v. State of U.P. , AIR 1985 SC 167;
    • Ishwar Singh v. Kuldip Singh, 1995 (supp) 1 SCC 179; 
    • Tridip Kumar Dingal v. State of WB, (2009) 1 SCC 768;
    • State of Assam v Union of India, (2010) 10 SCC 408; and 
    • PSC, Uttaranchal v. Mamta Bisht , AIR 2010 SC 2613.)”

Who are Entitled to Defend the Orders, are Necessary Parties

In Sh Jogendrasinhji Vijaysinghji v. State of Gujarat, 2015 AIR SC 3623, it is observed as under:

  • “Every adjudicating authority may be nomenclatured as a tribunal but the said authority(ies) are different that pure and simple adjudicating authorities and that is why they are called the authorities. An Income Tax Commissioner, whatever rank he may be holding, when he adjudicates, he has to be made a party, for he can defend his order. He is entitled to contest. There are many authorities under many a statute. Therefore, the proposition that can safely be culled out is that the authorities or the tribunals, who in law are entitled to defend the orders passed by them, are necessary parties and if they are not arrayed as parties, the writ petition can be treated to be not maintainable or the court may grant liberty to implead them as parties in exercise of its discretion. There are tribunals which are not at all required to defend their own order, and in that case such tribunals need not be arrayed as parties.”

In Poonam v. State of UP, 2016-2 SCC 779, referring Savitri Devi Vs. District Judge, Gorakhpur, AIR 1999 SC 976, it is held as under:

  • “17. The term “entitled to defend” confers an inherent right to a person if he or she is affected or is likely to be affected by an order to be passed by any legal forum, for there would be violation of natural justice. The principle of audi alteram partem has its own sanctity but the said principle of natural justice is not always put in strait jacket formula. That apart, a person or an authority must have a legal right or right in law to defend or assail.
  • 34. … If a non-selected candidate challenges the selection, he is under legal obligation to implead the selected candidates as they are necessary parties and there can be no two opinions as regards such a proposition of law.”

Representative action

In Poonam v. State of UP, 2016-2 SCC 779, it is observed as under:

  • “39. The aforesaid decisions do not lay down as a proposition of law that in every case when a termination is challenged, the affected person has to be made a party. What has been stated is when one challenges a provision as ultra vires the persons who are likely to be affected, some of them should be made parties in a representative capacity. That has been the consistent view of this Court in service jurisprudence.”

Necessary Party – Each case has to be understood in proper perspective

In Savitri Devi Vs. District Judge, Gorakhpur, AIR 1999 SC 976, the Court took exception to courts and tribunals being made parties. It is apposite to note here that propositions laid down in each case has to be understood in proper perspective. (Referred to in Poonam v. State of UP, 2016-2 SCC 779)

In Sh Jogendrasinhji Vijaysinghji v. State of Gujarat, 2015 AIR SC 3623, referring Hari Vishnu Kamath v. Syed Ahmad Ishaque, AIR 1955 SC 233, Udit Narain Singh (supra) and Savitri Devi (supra) it is observed as under:

  • “It is apposite to note here that propositions laid down in each case has to be understood in proper perspective. Civil courts, which decide matters, are courts in the strictest sense of the term. Neither the court nor the Presiding Officer defends the order before the superior court it does not contest. If the High Court, in exercise of its writ jurisdiction or revisional jurisdiction, as the case may be, calls for the records, the same can always be called for by the High court without the Court or the Presiding Officer being impleaded as a party. Similarly, with the passage of time there have been many a tribunal which only adjudicate and they have nothing to do with the lis.  We may cite few examples;
    • the tribunals constituted under the Administrative Tribunals Act, 1985,
    • the Custom, Excise & Service Tax Appellate Tribunal,
    • the Income Tax Appellate Tribunals,
    • the Sales Tax Tribunal and such others.
  • Every adjudicating authority may be nomenclatured as a tribunal but the said authority(ies) are different that pure and simple adjudicating authorities and that is why they are called the authorities. An
    • Income Tax Commissioner,
  • whatever rank he may be holding, when he adjudicates, he has to be made a party, for he can defend his order. He is entitled to contest. There are many authorities under many a statute. Therefore, the proposition that can safely be culled out is that the authorities or the tribunals, who in law are entitled to defend the orders passed by them, are necessary parties and if they are not arrayed as parties, the writ petition can be treated to be not maintainable or the court may grant liberty to implead them as parties in exercise of its discretion. There are tribunals which are not at all required to defend their own order, and in that case such tribunals need not be arrayed as parties. To give another example:-in certain enactments, the
    • District Judges function as Election Tribunals
  • from whose orders a revision or a writ may lie depending upon the provisions in the Act. In such a situation, the superior court, that is the High Court, even if required to call for the records, the District Judge need not be a party. Thus, in essence, when a tribunal or authority is required to defend its own order, it is to be made a party failing which the proceeding before the High Court would be regarded as not maintainable.”

In Poonam v. State of UP, 2016-2 SCC 779, it is observed as under:

  • “40. In this regard, we may refer to the rule stated by Lord Halsbury in Quinn v. Leathem[37]:-
  • “Every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law but govern and are qualified by the particular facts of the case in which such expressions are to be found.”
  • 41. A three-Judge Bench in Union of India and others v. Dhanwanti Devi and others[38] while discussing about the precedent under Article 141 of the Constitution, held that:
  • “….. 10. Therefore, in order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and therefore, Judges are to employ an intelligent technique in the use of precedents……”

Pro forma Party

A pro forma party to a litigation is one against whom no relief is sought for in a legal proceeding (at its beginning) on the posit that he is a proper party. It is usually done with a view to seek reliefs in future, amending the pleading, if the changed situation so warrants.

Plaintiff claims Ownership; Suit against Trespasser – Not Necessary to Implead ‘Previous Owners’ (Alleged by the Defendants)

R. K. S.  Builders v. Bhupinder Kumar , 2001-2 Punj LR 804, 2001-2 RCR (Civil) 497.

Facts of the Case

  • Plaintiff alleged that he is owner of the property and that the said property is in the illegal possession of the defendants.
  • The defendants contended that they have purchased the same from its rightful owners.
  • During the pendency of the suit, the defendants have further sold the property to various persons.
  • Application under Order 1 Rule 10 CPC read with Order 6 Rule 17 CPC was filed.

This application was resisted by the defendants, inter alia, on the ground that the plaintiff had not added the previous owners of the property from whom the defendants purchased it. The trial court allowed the Petition.

The High Court, dismissing the Revision Petition, held as under:

  • When the case of the plaintiff is that he is the owner of the property which has been illegally occupied by the defendants, it is not necessary to implead previous (rightful) owners (alleged by the defendants).

Land Reforms Act Conferred Title on Tenants: Previous Owners, Not Necessary Parties

Bir Singh v. Kishan Chand, AIR  2007 HP 24

  • Non-joinder of the previous owners, divested of their ownership by virtue of the Land Reforms Act, and the ownership rights stood conferred upon the tenants, are not necessary parties.

Original Owner Not Necessary Party, When Dispute is Solely Between Purchaser and another

Kaleem Pasha v. Chief Secretary, Government of Karnataka Vidhana, ICC 2018 4 810,

  • In the absence of the plaintiff claiming any relief against the previous owners of a vehicle nor their participation in the suit was in any manner of help in the proper adjudication of the matter and also the disputed fact was solely between the plaintiff and defendant in the original suit, the original owner and the auction purchaser were not necessary parties.

Agreement for sale – Prior owner Necessary Party

Pamujula Narayana v. Ramachandruni Malakondaiah,  2006-3 ALD 278, ALT 2006 4 247.

Facts of the case

  • Suit was for specific performance.
  • Agreement was executed by the defendant as Power of Attorney holder of the Owner.
  • Owner died even prior to the filing of the suit.
  • Plaint was silent about the owner; and read as if PoA was the owner.

Court held:

  • It is well known that the owner of the property agreed to be sold is a necessary party to the suit (and PoA not sufficient).

Suit dismissed if Prior owner, a Necessary Party, is not impleded within Limitation

In the above case, Pamujula Narayana v. Ramachandruni Malakondaiah,  2006-3 ALD 278, ALT 2006 4 247, it was further held –

  • The suit will be barred, in view of Sec. 21 of Limitation Act, if prior owner (or successor) is not  impleaded within time prescribed. 

Vendee Becomes the Sole Owner

In Hardeva v. Ismail, AIR 1970 Raj 167, it was held – if it is possible to determine the rights and interests of the parties, not to dismiss a suit. It was also observed as under:

  • “When the vendor has sold his property and has delivered the possession of the property to the vendee, the vendee becomes the sole owner of the property and it is upto the vendee to defend his title against any person who claims any right in the property. The vendor may be a proper party, but he is not a necessary party inasmuch as an effectual decree can be passed in favour of third person against the vendee.”

Two tests for determining who is a necessary party

It was laid down in the Benares Bank Ltd. v. Bhagwan Das, AIR 1947 All 18 (FB), there were two tests –

  • Firstly, there must be a right to some relief against the defendant, and
  • Secondly, in the absence of such a party it could not be possible to pass an effective decree. (Approved in Deputy Commissioner, Hardoi v. Rama Krishna Narain, AIR 1953 SC 521)

It was further pointed out in the Benares Bank Ltd. v. Bhagwan Das, AIR 1947 All 18 (FB) – where the plaintiff files a suit against a defendant who is not the full owner of the property and has only a limited right, the owner is a necessary party as no effectual decree could be passed against the defendant (Subbaraya Sastri v. Seetha Rama-swami, AIR 1933 Mad 664; Rahima Bi v. Vellore Municipal Council, AIR 1954 Mad 495, Brojanath Bose v. Durga Prosad Singh. (1907) ILR 34 Cal 753, Narahari Mohanti v. Ghanshyam Bel, AIR 1963 Orissa 186, Chenthiperumal Pillai v. D. M. Devasa-hayam, AIR 1956 Trav-Co. 181 (FB), and Chandra Nath Sarma v. Guna Ram Kalita, AIR 1949 Assam 21).


Foot Note

Section 99, and Rule 9 to 13 of Order I, CPC are the relevant provisions. They read as under:

Section 99 of the CPC reads as under:

  • 99. No decree to be reversed or modified for error or irregularity not affecting merits or jurisdiction: No decree shall be reversed or substantially varied, nor shall any case be remanded in appeal on account of any misjoinder or non-joinder of parties or causes of action or any error, defect or irregularity in any proceedings in the suit, not affecting the merits of the case or the jurisdiction of the Court.
  • Provided that nothing in this section shall apply to non-joinder of a necessary party.

Rule 9 to 13 of Order I CPC read

  • 9. Misjoinder and nonjoinder: No suit shall be defeated by reason of the misjoinder or nonjoinder of parties, and the Court may in every suit deal with the matter in controversy so far as regards the rights and interests of the parties actually before it:
    Provided that nothing in this rule shall apply to nonjoinder of a necessary party.
  • 10. Suit in name of wrong plaintiff
  • (1) Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the suit, if satisfied that the suit has been instituted thought a bona fide mistake, and that it is
  • necessary for the determination of the real matter in dispute so to do, Order any other person to be substituted or added as plaintiff upon such terms as the Court thinks just.
  • (2) Court may strike out or add parties.-
  • The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, Order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name, of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in Order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.
  • (3) No person shall be added as a plaintiff suing without a next friend or as the next friend of a plaintiff under any disability without his consent.
  • (4) Where defendant added, plaint to be amended-
  • Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copies of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant.
  • (5) Subject to the provisions of the Indian Limitation Act, 1877 (15 of 1877), section 22, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons.
  • 11. Conduct of suit The Court may give the conduct of 1[a suit] to such persons as it deems proper.
  • 12. Appearance of one of several plaintiffs or defendants for others
  • (1) Where there are more plaintiffs than one, any one or more of them may be authorized by any other of them to appear, plead or act for such other in any proceeding; and in like manner, where there are more defendants than one, any one or more of them may be authorized by any other of them to appear, plead or act for such other in any proceeding.
  • (2) The authority shall be in writing signed by the party giving it and shall be filed in Court.
  • 13. Objections as to non-joinder or misjoinder.
  • All objections on the ground of non-joinder or misjoinder of parties shall be taken at the earliest possible opportunity and, in all cases where issues are settled, at or before such settlement, unless the ground of objection has subsequently arisen, and any such objection not so taken shall be deemed to have been waived.


Read in this Cluster:

Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land Laws/ Transfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

A Registered Society is Not a Legal Person; How to File a Suit by or against a Society?

Saji Koduvath, Advocate, Kottayam.

Abstract

1. An unregistered society or a club is not a legal person;
                and therefore, it has to sue or be sued
                only in the name of all its members.
                It can be done by invoking Order I Rule 8CPC.
2. For ordering notice under OI r 8 CPC, by a court,
the following two essential conditions are to be satisfied.
                i. numerous persons
                ii. having same (or common) interest
                (or community of interest).
3. A society registered under the Societies Registration Act,
                does not become distinct from its members
                and does not become a separate legal person
                like a company.
4. Even a (registered) society cannot sue or be sued
                in its name. It is peremptory that the suit
                by or against a registered society should be brought
                as provided under Sec. 6 of the So. Regn. Act.
5. Sec. 6 enables ‘to sue or be sued‘ every registered society
                in the name of its president, secretary, etc.,
                as shall be determined by the rules and regulations
                of the society (or through such person
                as shall be appointed by the governing body
                for the occasion)

How to Sue an Unregistered Society or a Club

An unregistered society or a club is not a legal person; and therefore, it has to sue or be sued only in the name of all its members. It can be done by invoking Order I Rule 8 CPC which enables one or more of ‘numerous’ persons having common (community of) interest to sue or be sued in a representative character. (Board of Trustees, Ayurvedic & Unani Tibia College, Delhi Vs. The State, AIR 1962 SC 458; Illachi Devi Vs. Jain Society Protection of Orphans India, AIR 2003 SC 3397; Tata Vs. Tata,  AIR 2010 SC 2943.)

When an Association be represented by the Plaintiff; when by the Defendants?

When a suit is filed by a member seeking reliefs concerning the society or a club, relating to a matter common to all members, he has to file it (also) as representing other members of the society other than the defendants (usually office-bearers of the society or club); and if it is a personal matter of the plaintiff, seeking relief against all other members, the plaintiff has to sue against one or two members (usually office-bearers) as representatives of others.

Order I Rule 8 CPC

The objective of the enabling provision, Order I Rule 8 CPC, is avoidance of multiplicity in litigation; and the decision in such a suit binds all present and future members. (TN Housing Board Vs. TN Ganapathy, (1990) 1 SCC 608: AIR 1990 SC 642; Jamiat Ulama Vs. Maulana Mahmood Asad Madni: ILR 2008-17 Dlh 1950).

TN Housing Board Vs. TN Ganapathy, (1990) 1 SCC 608, was a case where the suit was filed by allottees of plots of low-income groups against the appellant-Housing Board seeking injunction from demanding and collecting any additional price and the suit was held maintainable under Order I Rule 8, even though separate demand notices were issued to each allottees (Referred to in Manish Kumar v. Union of India, 2021-5 SCC 1).

Decision Binds all Represented, and Constitute Res Judicata

The condition necessary for the application of Order I Rule 8 is that the persons on whose behalf the suit is brought must have the same interest and the decision in a representative suit would bind all the persons sought to be represented, and constitute res judicata, under Section 11, CPC. (Mahboob Sahab Vs. Syed Ismail: AIR1995 SC 1205; T N Housing Board Vs. T N Ganapathy, (1990) 1 SCC 608: AIR 1990 SC 642; Venugopala Naidu Vs. Venkatarayulu: (1989) Supp 2 SCC 3 56: AIR 1990 SC 444. Ahmed Adam Sait Vs. M. E. Makhri AIR 1964 SC 107. C Arumughathan Vs. S Muthusami Naidu: 1993-1 CivCC 79: 1992-1 Mad LJ 532

Registration does not Confer Juristic Personality

In Board of Trustees, Ayurvedic & Unani Tibia College, Delhi Vs. The State, AIR 1962 SC 458, it is held that the registration of Societies under the Central or State Societies Registration Act does not give the society a corporate status.

In Illachi Devi Vs. Jain Society Protection of Orphans India: AIR 2003 SC 3397, it is held that a society registered under the Societies Registration Act as a society even after registration does not become distinct from its members and does not become a separate legal person like a company. (Referred to in Vivek Narayan Sharma Vs. Union of India, 2023-3 SCC 1)

In Illachi Devi Vs. Jain Society Protection of Orphans India, AIR2003 SC 3397, says as under: 

  • i) The mere fact of registration will not make a society distinct from association of persons. (Para 20)
  • ii) A Society registered under the Societies Registration Act is not a body-corporate as is the case in respect of a company registered under the Companies Act. In that view of the matter, a Society registered under the Societies Registration Act is not a juristic person.  (Para 21)
  • iii) A society, whether registered or unregistered, may not be prosecuted in criminal court, nor is it capable of ownership of any property or of suing or being sued in its own name. (Para 22) Vesting of property does not take place in the Society. Similarly, the society cannot sue or be sued. It must sue or be sued through a person nominated in that behalf. (Para 26)

Society is the Compendium of its Members

A society or a club, both registered and unregistered, is the compendium of its members. When it sues or is sued all its members should be made parties. Registration of Societies under the Central or State Societies Registration Act does not give the society a corporate status. (Board of Trustees, Ayurvedic & Unani Tibia College, Delhi Vs. The State: AIR 1962 SC 458. Illachi Devi Vs. Jain Society Protection of Orphans India: AIR 2003 SC 3397; Tata Vs. Tata, AIR 2010 SC 2943)

Property Belonging to a Society’, “Merely Describes” Property Vests in Gover. Body

Expressions in the Societies Registration Act, ‘property belonging to a society’ (Societies Registration Act: Sec. 5) and  ‘property of the society’, (Societies Registration Act: Sec. 8 and 10) do not give the society a corporate status; and it “merely describes the property which vests in trustees or Governing Body”. (Board of Trustees, Ayurvedic & Unani Tibia College, Delhi Vs. The State: AIR 1962 SC 458)

‘Suit By or Against a Regd. So.’ is Virtually Suit By or Against Entire Members

Following the above propositions, it can be legitimately concluded that the common expression, ‘suit by or against a society’, legally and virtually denotes suit by or against its entire members.

How Sec. 6 is an Enabling Provision

The earlier view taken by various courts in India was that the registered societies were legal persons and they could sue or be sued in their own name; and that Sec. 6 was only an enabling (or added) provision to sue or be sued in the name of the president, secretary, etc.. (Shanti Sarup Vs. Radhaswami Satsang Sabha, Dayalbagh Agra: AIR 1969 All. 248; K.C. Thomas Vs. R.B. Gadaook, AIR 1970 Pat 163;  Khiri Ram Gupta and Another versus Nana Lal:  AIR 1964 Pat. 114, Satyavart Sidhantalankar Vs. Arya Samaj, Bombay : AIR 1946 Bom. 516; Nabadwip Bhajan Asram Vs. Commissioner of Nabadwip Municipality : AIR 1959 Cal 361; Sonar Bangala Bank Vs. Calcutta Engineering College: AIR 1960 Cal 409)

This view does not hold good in the light of Unani Tibia College case, AIR 1962 SC 458, Illachi Devi case,  AIR 2003 SC 3397, and Tata Vs. Tata,  AIR 2010 SC 2943.

Suing entire members of the society, either in person or invoking Order I Rule 8 CPC, is the normal rule. But, Sec. 6 enables ‘to sue or be sued’ every registered society in the name of its president, secretary, etc., as shall be determined by the rules and regulations of the society (or through such person as shall be appointed by the governing body for the occasion).

Suit shall be in the Personal Name of President, Chairman, etc.

From the expression in Sec. 7 of the Societies Registration Act that ‘proceedings shall be continued in the name of or against the successor of such person’, it is clear that the words in Sec. 6 of the Societies Registration Act, ‘sue or be sued in the name of President, Chairman, or Principal Secretary, or Trustees,’ refers to filing suit by or against the President, Chairman, Principal Secretary or Trustees in their ‘personal name’; and not in their ‘official status’ as President, Chairman, Principal Secretary or Trustees.

Sec. 6 Impliedly Bars Filing a Suit in the Name of Society

As already stated, our Apex Court has repeatedly  made it clear that Sec. 6 of the Societies Registration Act provides that a registered society must sue or be sued through the office bearer or a nominee, as provided in that section. Therefore, it can be concluded that Sec. 6 impliedly bars filing a suit in the name of the society, otherwise than through its President, Secretary or the nominated person. (Board of Trustees, Ayurvedic & Unani Tibia College, Delhi Vs. The State: AIR 1962 SC 458; Illachi Devi Vs. Jain Society Protection of Orphans India AIR 2003 SC 3397; Tata Vs. Tata,  AIR 2010 SC 2943.)

Procedural Defects Should Not Defeat A Just Cause

It is trite law that one should not be non-suited for technical reasons, and that procedural defects or curable procedural irregularity which is curable or which does not go to the root of the matter should not be permitted to defeat a just cause. (United Bank of India Vs. Naresh Kumar: AIR 1997 SC 3; Uday Shankar Triyar Vs. Ram Kalewar Prasad Singh: AIR  2006 SC 269; Varun Pahwa Vs. Mrs. Renu Chaudhary: AIR  2019 SC 1186: 2019-3 JT 109.)

It was pointed out in United Bank of India Vs. Naresh Kumar, AIR 1997 SC 3, by our Apex Court that there is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case.  

Supreme Court Expanded Powers of Authorities of Companies in Filing Pleadings

Under Order 29 Rule 1 of the CPC, Secretary or any Director or other Principal officer of a Corporation can sign pleadings by virtue of their office. A company being a juristic entity, Board of Directors can authorise any person to sign pleadings by passing a resolution or giving a power of attorney, by virtue of Order 6 Rule 14 read with Order 29 Rule 1 CPC. If pleadings have been signed by one of its officers, a Company can ratify it. Such action can be express or implied.

It is held in United Bank of India Vs. Naresh Kumar (1997), AIR 1997 SC 3, that a Court can, after taking all the circumstances of the case, come to the conclusion that the company must have ratified the act of signing the pleading. It was pointed out that the courts below should have, in any case, directed the company to produce a proper power of attorney or they must have allowed a competent person to be examined to prove ratification.

United Bank of India Vs. Naresh Kumar (1997), AIR 1997 SC 3, reads as under:

  • “10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement or its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer.”

Proper Authorisation Essential

It is beyond doubt that a proper authorisation is essential for filing suit by a Company. Though, Secretary or any Director or other Principal officer can sign pleadings by virtue of their office, as per Order 29 Rule 1 of the CPC, the view followed in some earlier decisions was that neither the directors nor the managing director would have the right to represent the Company in the suit unless duly authorised by a resolution taken by the Board of Directors to that effect, at a meeting duly constituted for the said purpose.(B. Mookerjee Vs State Bank of India: AIR 1992 Cal 250; Nibro Limited Vs National Insurance Co:  AIR 1991  Del 25)

In State Bank of Travancore Vs. Kingston Computers, 2011-11 SCC 524, it is held by our Apex Court as under:

  • “14. In our view, the judgment under challenge is liable to be set aside because the Respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a Director of the company and a resolution was passed by the Board of Directors of the company to file suit against the Appellant and authorised Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K. Shukla to authorise another person to file suit on behalf of the company.”

In this decision (State Bank of Travancore Vs. Kingston Computers) there was no scope to ponder on the doctrines as to ‘technical or procedural defects’ as done in the earlier decision in United Bank of India Vs. Naresh Kumar,  AIR 1997 SC 3.

The decision, State Bank of Travancore Vs. Kingston Computers may be distinguishable from United Bank of India Vs. Naresh Kumar. In State Bank of Travancore Vs. Kingston Computers there was no evidence to show that the signatory was a Director of the Company, and no resolution of the Board of Directors was produced to prove that the signatory was authorized  to file the suit. 

It was observed by Delhi High Court in Nibro Limited Vs National Insurance Co., AIR 1991  Del 25, that if a director or a secretary was authorised by law to file a suit on behalf of a company, then he could certainly give the authority to another person as provided under Order III Rule 1 CPC. Order III Rule 1 provides that ‘any appearance, application or act in or to any Court, required or authorised by law to be made or done by a party in such Court, may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognised agent, or by a pleader appearing, applying or acting, as the case may be, on his behalf. Provided, that any such appearance shall, if the Court so directs, be made by the party in person’. However, if there is an express provision of law, then that will prevail. Thus, if an authority is given to a pleader or a recognised agent as provided by law, the recognised agent or pleader can file an appearance or file a suit in court if the party himself is not in a position to file it.

The Bombay High Court held, in Alcon Electronics Pvt. Ltd Vs.  (2015), 2015-1 Mh L 852, with respect to the source of power of the Directors, as under:

  •  “The essential requirement of this provision is that the Company which is a juristic person must itself decide to sue. Once that is done, it would authorise one of its Directors who is the agent of the Company or its principal officers the Secretary of the Company or the Managing Director to file the Suit. The suing in each case is a separate act. The Company acts only through its meetings. Hence the Board of Directors in the day to day management of the company must decide and resolve to sue or not to sue. A blanket authority cannot be given to a particular Managing Director or Director to sign the papers and document/s, including the power to sue. The power to sue requires application of mind upon the particular cause of action. It requires the Company to pay the requisite Court fee. It requires the Company to be represented by a legal officer being an Advocate of the Court. It is an act which, therefore, is not a part of the day to day management of the Company. A Company would decide in a given case upon legal advice or otherwise whether or not it would sue upon a given cause of action. Such exercise is imperatively required to be performed if the intention of the Company, which is only a juristic person, is to be deciphered. That act, of course, may be undertaken even after the filing of the Suit and ratified by the Board as all other acts of management. However, the seminal requirement is to see the act of the Company though its Board or members (dependent upon whether the resolution is passed in the Board meeting or a general meeting) or is given by the Company itself (under its Articles of Association).”

In Nibro Limited Vs. National Insurance Company Ltd., AIR 1991 Delhi 25, it is observed, with regard to the source of power of the Directors, as under:

  • “25. It is well-settled that under Section 291 of the Companies Act except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting–in all others cases the Board of Directors are entitled to exercise all its powers. Individual directors have such powers only as are vested in them by the Memorandum and Articles. It is true that ordinarily the court will not unsuit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far-reaching effects. It often affects policy and finances of the company. Thus, unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say that such a power can be conferred by the Board of Directors only by passing a resolution in that regard.” Quoted in: United India Periodicals Pvt. Ltd.  Vs. CMYK Printech Ltd. : 2018-248 DLT 227

The law as to the authority of ratification of the act of the officers in signing pleadings, by a Company is detailed by the Delhi High Court in Radico Khaitan Limited Vs. J D Wines,  2020-2 AD(Del)  421, .

Persons Represented need not have “same cause of action“; must have “common interest”

In Chairman, Tamil Nadu Housing Board, Madras vs. T. N. Ganapathy, (1990) 1 SCC 608, it was held by this Court that the persons who may be represented in a suit under Order 1 Rule 8 of Civil Procedure Code need not have the same cause of action and all that is required for application of said provision is that the persons concerned must have common interest or common grievance. What is required is sameness of interest. Paragraphs 7 and 9 of the decision says as under:

  • 7. On the question of maintainability of the suit in a representative capacity under Order I, Rule 8 of the Code of Civil Procedure, it has been contended that since the injury complained of is in regard to demand of money and that too by a separate demand against each of the allottees, giving rise to different causes of action, Rule 1 has no application. … The provisions of Order I of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity of litigation. The condition necessary for application of the provisions is that the persons on whose behalf the suit is being brought must have the same interest. In other words either the interest must be common or they must have a common grievance which they seek to get redressed. In Kodia Goundar v. Velandi Goundar (ILR 1955 Mad 339: AIR 1955 Mad 281) a Full Bench of the Madras High Court observed that on the plain language of Order I Rule 8, the principal requirement to bring a suit within that rule is the sameness of interest of the numerous persons on whose behalf or for whose benefit the suit is instituted. The court, while considering whether leave under the rule should be granted or not, should examine whether there is sufficient community of interest to justify the adoption of the procedure provided under the rule. The object for which this provision is enacted is really to facilitate the decision of questions, in which a large number of persons are interested, without recourse to the ordinary procedure. The provision must, therefore, receive an interpretation which will subserve the object for its enactment. There are no words in the rule to limit its scope to any particular category of suits or to exclude a suit in regard to a claim for money or for injunction as the present one. … … …
  • 9. It is true that each of the allottees is interested individually in fighting out the demand separately made or going to be made on him and, thus, separate causes of action arise in the case, but, that does not make Order I Rule 8 inapplicable. Earlier there was some doubt about the rule covering such a case which now stands clarified by the Explanation introduced by the Code of Civil Procedure (Amendment) Act, 1976, which reads as follows:
  • “Explanation.— For the purpose of determining whether the persons who sue or are sued, or defend, have the same interest in one suit, it is not necessary to establish that such persons have the same cause of action as the persons on whose behalf, or for whose benefit, they sue or are sued, or defend the suit, as the case may be.” (Quoted in: Anjum Hussain Vs. Intellicity Business Park Pvt.  Ltd., 2019-6 SCC 519)

Doctrine of Substantial Representation

Sec. 6 of the Societies Registration Act provides that a registered society must sue or be sued through the office bearer or a nominee, as provided in that section. Therefore, as shown above, it can be concluded that Sec. 6 impliedly bars filing a suit in the name of the society, otherwise than through its President, Secretary or the nominated person.

It is noteworthy that the diktats in Sec. 6 of the So. Registration Act are not invariably followed by our courts; but, adopted the doctrine of ‘substantial representation’ (Subramania Pillai Vs. Masterly, AIR1976 Mad 303). 

In Singhai Lal Chand Jain Vs. Rashtriya Swayamsewak Sangh, Panna, AIR 1996 SC 1211, the High Court had held that the objection was sustainable as to the maintainability of representative suit for eviction against an unregistered association, Rashtriya Swayamsewak Sangh (RSS), without Order 1 Rule 8 CPC steps; and that the decree was a nullity and non est; and the execution was not maintainable. Our Apex Court observed as under:

  • “Procedure is the handmaid to the substantive justice. …. It is true that no permission of the Court was taken to be sued in a representative capacity by or on behalf of the Sangh. But Clause (b) of Order 1, Rule 8 indicates that it may sue or be sued, or may defend such suit, on behalf of, or for the benefit of all persons so interested. Clause (b) clearly applies to the facts in this case. The President of the Sangh, the Manager of the Sangh and a Member have duly represented the Sangh and defended the suit for the benefit of all the persons so interested in the Sangh.”

It was also pointed out:

  • “Thus it could be held that the Sangh having been duly represented in the previous proceedings and conducted the litigation on behalf of the Sangh bona fide and were unsuccessful in the suit, no one on behalf of the Sangh can lay any objection in the execution nor plead nullity of the decree. The doctrine of res judicata prohibited the members of the Sangh to obstruct the execution of the decree. The decree of ejectment binds every member of the Sangh and, therefore, the appellant is entitled to have the decree executed and possession taken.”

In this decision the following passage from Surayya Begum Vs. Mohd. Usman, (1991) 3 SCC 114, was quoted:

  • “The principle of representation of the interest of a person, not impleaded by name in a judicial proceeding, through a named party is not unknown. A karta of a Joint Hindu Family has always been recognised as a representative of the other members of the Joint Hindu Family, and so has been a trustee. In cases where the provisions of Order 1, Rule 8 of the Civil Procedure Code are attracted a named party in a suit represents the other persons interested in the litigation, and likewise a receiver appointed in one case represents the interest of the litigating parties in another case against a stranger. Similarly the real owner is entitled to the benefits under a decree obtained by his benamidar against a stranger and at the same time is also bound by the decision. Examples can be multiplied. It is for this reason that we find Explanation VI in the following words in Section 11 of the Code of Civil Procedure: ‘Explanation VI. – Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigating’.”
  • Note:
    • 1. RSS was a defendant in Singhai Lal Chand Jain Vs. Rashtriya Swayamsewak Sangh, Panna (supra); and the suit was for eviction of RSS through its Manager, its President; and the Head Master of Saraswati Shishu Mandiras a member of the Sangh.
    • 2, It is not legitimate to take this decision as an authority for ‘substantial representation’ in an internal matter of an association in which all members of the association may be ‘interested’ or ‘affected’.

In Ramubai v. Jiyaram Sharma, AIR 1964 Bom  96, it was held as under:

  • “18. Another aspect of the question may be considered so far as the facts of the case are concerned. The interest claimed is an interest in the leasehold property. That interest is claimed by defendants 9 to 11 who are admittedly residing out of the town in which the premises are located. The nexus which creates a relationship between the lessors and the defendants claiming interest in the leasehold is the leasehold property which is occupied by defendants 1 to 8. The question is whether there could be implied in such circumstances a jointness in interest which would clothe the persons in occupation the capacity to receive notice or to do acts which will be binding on all those joint tenants. It is urged on behalf of the defendants that the moment it is held that the leasehold interest is inherited as ten-ants-in-common with defined shares inter se among them, the capacity of any one of those tenants-in-common to represent the other is at an end. Such a capacity to represent others could only be assumed or inferred in the case of persons who own only as joint tenants, but never in case of persons who hold as tenants-in-common. I find it difficult to accept this interpretation. If there is a unity of interest, common enjoyment and possession of the property, if all these joint tenants hold qua landlord as one tenant, if each of these joint tenants had an interest in the whole of the leasehold, if the acts of any one of them are the acts of all such tenants, such as act of re-entry or act of wrongful conversion, then it is difficult to hold why a notice received by one of them should not have the effect of a valid notice in respect of all on whom the notice is meant to operate. There is sufficient community of interest and joint interest inter se in them which clothes everyone of them with a representative, character vis-a-vis the landlord. I therefore hold agreeing with the Court below, that notice to one ; of them was enough and served as a good notice I to all as the notice was meant to be/ operative against all the joint tenants.”

Who is a Necessary Party

The ‘necessary party’ is not defined in the Code of Civil Procedure. But, from the judicial dicta following are the matters that come for consideration:

  • There must be a right to some relief against such party in respect of the matter involved in the proceedings in question, and
  • It will not be possible to pass an effective decree in the absence of such a party (The Banaras Bank Ltd. Vs. Bhagwan Das: AIR 1947 All 18; Udit Narain Singh, Malpatharia vs. Additional Member Board of Revenue, Bihar, AIR 1963 SC 786).
  • Whether such a party is directly affected by the decision (Udit Narain Singh, Malpatharia vs. Additional Member Board of Revenue, Bihar, AIR 1963 SC 786).

In Udit Narain Singh, Malpatharia vs. Additional Member Board of Revenue, Bihar, AIR 1963 SC 786, the Constitution Bench held as under:

  • “7. A necessary party is one without whom no order can be made effectively; a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding.
  • 9. The next question is whether the parties whose rights are directly affected are the necessary parties to a writ petition to quash the order of a tribunal. … Without the presence of the successful party the High Court cannot issue a substantial order affecting his right. Any order that may be issued behind the back of such a party can be ignored by the said party, with the result that the tribunal’s order would be quashed but the right vested in that party by the wrong order of the tribunal would continue to be effective. Such a party, therefore, is a necessary party and a petition filed for the issue of a writ of certiorari without making him a party or without impleading him subsequently, if allowed by the court, would certainly be incompetent. A party whose interests are directly affected is, therefore, a necessary party.”

Suit to protect or recover property

The Privy Council in Jagadinadra Nath Vs.  Hemanta Kumari Debi, (1904) 31 Ind App 203 (PC), and our Apex Court in Vemareddi Ramaraghava Reddi Vs. Kondaru Seshu Reddi,  AIR 1967 SC 436, (Referring: Pramathanath Nath Vs. Pradyumna: AIR 1925 PC 139) held that Shebait of a temple has the authority to institute a suit in his own name to protect and recover property belonging to the deity. (Also see: Kishore Joo Vs. Guman Behari Joo Deo, AIR  1978  All  1 – Referring: Jagadindra Nath Vs. Hemanta Kumari, (1904) 31 Ind App 203.)

By various authoritative decisions, it is made clear that when the trust is admitted, or where the right or title over the property is not in dispute the deity will not be a necessary party, in suits for protection of the property and the rights of the trust (Hangi Mal Vs. Panna Lal:  AIR 1957 All 743).

The same is the case for framing a scheme also (Bimal Krishna Vs. Iswar Radha Ealla:  AIR 1937 Cal 338).

In Monindra Mohan Vs.  Shamnagar Jute Factory, AIR 1939 Cal 699, a Division Bench held that the deity is not a necessary party in a suit filed on behalf of the Hindu public for declaration that the land in question was a debasthan of the idol and that it is a public place of warship.

It is appropriate to import this analogy to matters of societies also. Where the right or title over the property is not in dispute, and the suit is filed by a person who is bound to protect the property of a society, it can be concluded that the suit is not liable to be dismissed holding that the society as such (that is, all its members) is a necessary party.

It is observed in Latin Archdiocese of Trivandrum Vs. Seline Fernandez, 2013(4) Ker LT 283, that, though, as per the Canon Law the church property vests in the hands of the Bishop or the Vicar, the parish being by law a public juridic person, and the plaintiffs (the elected representatives of the parishioners entrusted with the administration of the church) were entitled to represent the juridic person, the plaintiffs were competent to initiate civil proceedings (with the ultimate  aim of  protecting  the  property belonging  to  the church) before a Civil Court. 

Is Society, a Necessary Party?

Kania, J., in AS Krishnan Vs. M. Sundaram,  AIR 1941 Bom. 312, laid down (earlier view) as under:

  • “In my opinion as the position of the members of this society is similar to that of the share holders of the company and as the acts of the defendants which are challenged are in respect of the society it is necessary that the society should be a party to this litigation. I do not think it is competent to the plaintiff either alone or representing himself and the other members of the society other than defendants to bring a suit. …… In the absence of the society as a party to this litigation, I am of opinion that the suit as framed is not maintainable and the Court has no jurisdiction to try the suit in the absence of the society.”

Since it is unequivocally held by our Apex Court in Illachi Devi case, AIR 2003 SC 3397, that a (registered) society cannot sue or be sued in its name, it is peremptory that the suit by or against a society should be brought as provided under Sec. 6 of the So. Regn. Act.

Notice to a Society, Notice to all Members

The notice to a Co-operative Society will be deemed as notice to all its members. In Daman Singh Vs. State of Punjab and Haryana, AIR1985 SC 973, it is pointed out by our Apex Court, with respect to a Co-operative Society, that S. 13(9)(a) provides for the issue of notice to the societies and not to individual members and that S. 13(9)(b), however, gives the members an opportunity to be heard.

It is legitimate to maintain that, in appropriate cases, it may be proper to extend these principles as to service of notice, to both registered and unregistered societies, and a club also, with regard to the matters-touching-rights-or-duties of the society ‘as a body’; for example, notice as to nonpayment of tax or revenue. The notice to the society or a proper office bearer will be deemed as notice to all its members.

Our Law Does Not Favour ‘Corporation Sole’  

Our law does not favour characterising a ‘Corporation Sole’ as a Juristic Person except officials such as President of India, District Collectors, Secretaries/Office-Heads of various Departments of Government, Village Officers, etc.  [See: Samatha Hyderabad Abrasives And Minerals Vs. State of AP: AIR 1997 SC 3297; T.K. Santhanagopala Chettiar Vs. Thimmi M. Seetharama Chettiar 1968-2 Mad LJ  41; S Govinda Menon Vs. Union of India: AIR 1967 SC 1274; S C Sreemanavikraman Raja Vs. Controller of Estate Duty: 1957-2 Mad LJ  226].

S Govinda Menon Vs. Union of India: AIR 1967 SC 1274

Our Apex Court held in S Govinda Menon Vs. Union of India: AIR 1967 SC 1274 as under:

  • “It was also contended by the appellant in this connection that as the Commissioner was made a Corporation sole under s. 80 of the Act as a separate and independent personality, he was not subject to the control of the Government and no disciplinary proceedings ‘Could be initiated against him. We do not think there is any substance in this argument. It is true that the Commissioner has been made a Corporation sole under s. 80 of the Act which states that the Commissioner shall have perpetual succession and a common seal and may sue and be sued in his corporate name. Section 81(1) of the Act provides for the establishment of a Fund called ‘The Madras Hindu Religious and Charitable Endowments Administration Fund’ and further states that the Fund shall vest in the Commissioner. It was argued for the appellant that the corporate entity created by s. 80 of the Act has a separate legal personality. But there is a juristic distinction between a Corporation sole and a Corporation aggregate, and the Corporation sole is not endowed with a separate legal personality as the Corporation aggregate. As Maitland said:
    • “If our corporation sole really were an artificial person created by the policy of man we ought to marvel at its incompetence. Unless custom or statute aids it, it cannot (so we are told) own a chattel, not even a chattel real. A different and an equally inelegant device was adopted to provide an owning ‘subject’ for the ornaments of the church and the minister thereof-adopted at the end of the Middle Ages by lawyers who held themselves debarred by the theory of corporations from frankly saying that the body of parishioners is a corporation aggregate. And then, we are also told that in all probability a corporation sole ‘Cannot enter into a contract except with statutory authority or as incidental to an interest in land ………. Be that as it may, the ecclesiastical corporation sole is no juristic person‘; he or it is either natural man or juristic abortion.” (See ‘Selected Essays of’ Maitland” pp. 100 & 103).
  • Keeton has also observed as follows
    • “It was a device for transmitting real property to a, succession of persons without the necessity for periodic. conveyances. It was never intended that this device should’ be erected into a psychological person with a developed existence of its own In dealing with a corporation sole, the courts have never treated it as a conception similar in essential characteristics to a corporation aggregate. They have restricted its utility to the transmission of real, or exceptionally, by custom, as in Byrd v. Wilford, and now by statute, personal property from one holder of an office, lay or ecclesiastical, to his successor” (See ‘Elementary Principles of Jurisprudence’ by Keeton, 2nd Edn. pp. 155 & 162).”
  • We accordingly reject the contention of the appellant that the Commissioner has a separate legal personality as corporation sole under s. 80 of the Act and that he is exempt from disciplinary proceedings for any act or omission committed in his capacity as. Commissioner. In our opinion, the object of the legislature in enacting ss. 80 and 81 of the Act was to constitute a separate Fund and to provide for the vesting of that Fund in the Commissioner as a corporation sole and thereby avoid the necessity of periodic conveyances in the transmission of title to that Fund.”

Read in this Cluster:

Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land Laws/ Transfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Interpretation of Inconsistent Clauses in a Will

Saji Koduvath, Advocate, Kottayam.

PART – 1

‘Irreconcilable/Inconsistent’ clauses in a Will

Section 88 of the Indian Succession Act says:

  • “88. The last of two inconsistent clauses prevails.–Where two clauses of gifts in a Will are irreconcilable, so that they cannot possibly stand together, the last shall prevail.

The Illustrations given in this Section make it clear what is an ‘inconsistent clause‘. It reads as under:

  • (i) The testator by the first clause of his Will leaves his estate of Ramnagar “to A”, and by the last clause of his Will leaves to “to B and not to A”. B will have it.
  • (ii) If a man, at the commencement of his Will gives his house to A, and at the close of it directs that his house shall be sold and the proceeds invested for the benefit of B, the latter disposition will prevail.”

Section 138 of Indian Succession Act, which reads as under:

  • Direction that fund be employed in particular manner following absolute bequest of same to or for benefit of any person.
  • Where a fund is bequeathed absolutely to or for the benefit of any person, but the will contains a direction that it shall be applied or enjoyed in a particular manner, the legatee shall be entitled to receive the fund as if the will had contained no such direction.”

From the above, it comes out that when a Will is construed, it must be considered:

  • Whether ‘on a whole-reading‘, there is irreconcilable inconsistency between two provisions (as stated in the illustration of Sec. 88 – the last of two inconsistent clauses prevails – in earlier clause property was given to A; latter clause, to B) so that harmonious interpretation is not possible?
  • Contingent transfers are legal and valid. Example – A transfers property to his wife; but, in case she should die in his life-time, transfer to B (Illustration in Sec. 27, TP Act)
  • Under Sec. 11 of the TP Act also, the latter condition is taken into consideration if only there is an ‘absolute‘ transfer. Under Sec. 11 of the TP Act (which reads: 11. Restriction repugnant to interest created– Where transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, …. ) the earlier ‘irreconcilable’ clause will prevail.
  • An attempt should always be made to read the two parts of the document harmoniously, if possible. It is only when this is not possible, e.g, where an absolute title is given is in clear and unambiguous terms and the later provisions trench on the same, that the later provisions have to be held to be void. (Ramkishore Lal v. Kamal Narain, AIR 1963 SC 890.).

Reconciliation of Apparent Inconsistent Provisions’ and ‘Harmonious interpretation

Section 11 of Transfer of Properties Act makes it clear that where a property is transferred absolutely, subsequent restraints are invalid. Therefore, the questions in such matters would be (i) whether the transfer effected stands ‘absolute’ or not and (ii) whether the restriction brings-up is one that canvases the section or not.

Section 11 of Transfer of Properties Act reads as under:

  • 11. Restriction repugnant to interest created– Where transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.
  • Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.

Vested Remainder and Contingent Remainder

What is ‘Legal Remainder’ is explained in “Modern Law of Real Property” by Chesire, Twelfth Edition as under:

  • Legal Remainders. Common law permitted future interests, called remainders, to be carved out of a legal estate, though as we shall see presently, there were several restrictive rules which had to be observed. If a stellar decided to create two or more successive estates in his land, and drafted the desired limitations in one instrument, as for instance by a fulfilment to A for life and then to B, for life and then to C, in fee simple, the first estate which preceded the next following remainder was called the “particular estate” and those which followed were denominated “remainders”. (Quoted in Bomi Munchershaw Mistry v. Kesharwani Co-Operative Housing Society, 1993 (2) BomCR 329.)

Vested Remainder and Contingent Remainder in TP Act

Transfer of Property Act does not specifically speak about ‘Legal Remainder’. But, the illustrations in Sections 13, 24, 27 and 126 (mentioned below) clearly lay down this right. Indian courts apply the doctrine of ‘legal remainder’, inasmuch it hold – both the reversioner (future right that accrues by operation of law) and the legal remainder (future right that accrues by act of persons – executing documents) have the right to protect their (future) right, through court [Yellarayhala Surayya v. Yellaraghahs Subbamma, (1920) ILR 43 Mad 4].

See Blog: Transfer of Property with Conditions & Contingent Interests

Can a property be ‘transferred’ (successively) to one, and after his death (or on happening an event) to another?

Yes. It is clear from the following illustrations in the TP Act.

No.Sec.Illustration
 113. Transfer for benefit of unborn person  A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.
 224. Transfer to such of certain persons as survive at some period not specifiedA transfers property to B for life, and after his death to C and D, equally to be divided between them, or to the survivor of them. C dies during the life of B. D survives B. At B’s death the property passes to D.
 327. Conditional transfer to one person coupled with transfer to another on failure of prior dispositionA transfers property to his wife; but, in case she should die in his life-time, transfer to B that which he had transferred to her. A and his wife perish together, under circumstances which make it impossible to prove that she died before him. The disposition in favour of B does not take effect.
4126. When gift may be suspended or revoked.A gives a field to B, reserving to himself, with B’s assent, the right to take back the field in case B and his descendants die before A. B dies without descendants in A’s lifetime. A may take back the field.
  • Note: Illustration in Sec. 24 given above lays down ‘Vested Remainder’; and that in Sec. 27 lays down lays down an instance of ‘Contingent Remainder’.

Vested Remainder

Example – A transfers property to his wife; but, in case she should die in his life-time, transfer to B …. (Illustration in Sec. 27, TP Act)

  • A ‘vested remainder’ has to satisfy following ingredients:
    • (i) the person to whom the property is given must be a living person,
    • (ii) the estate must be (when the transfer is effected) with another,
    • (iii) the (actual) transfer is to take effect as soon as the estate with whom its remained (when the transfer is effected) is terminated,
    • (iv) the person in enjoyment (when the transfer is effected) holds the property subject to the rights of ‘vested remainder’ (in other words, it is one which is ready from its commencement to its end).

In Law of Property by Strahan – 4th Edition at page 152, it is observed as follows:

  • A vested remainder is a remainder of the more ancient kind, that is, one of the owner which is living and ascertained, and which is an actual estate in the land, complete in interest though deferred to the precedent estate in enjoyment. Being complete, it is ready, and must continue ready, from its commencement as a vested remainder till its expiration in natural course, to come into possession immediately on the determination of the preceding interest, the existence of which is the  only thing which prevents it being complete not merely in interest, but also in enjoyment. It is true it may fail, or, rather, determine before the period arrives, when it would vest in possession, but such determination must arise from its own natural expiration, not from any outside event or contingency.
  • Thus, take a limitation to A. for life and then to B. for life – B. being a living person. If B. predeceases A., his life estate will never become an interest in possession; but as long as B. lives, his estate is ready to come into possession the moment A.’s life estate determines.” (quoted in Nikhil v. Sarojini (2014-3 Ker LT SN 36)

In Law of Property by GC Venkata Subbarao – 2nd Edition, at page 130, it is observed as under:

  • Vested Remainder is Heritable.- Vested remainders and reversions are treated as future interests only for the reason that they do not carry immediate possession of the property. They are for all practical purposes present proprietary interests. As such they are heritable. Even if the person entitled to the vested remainder dies before the determination of the particular estate, his interest does not lapse but is transmitted to his heir. Of course, if the remainderman’s estate is a life-estate this rule can have no application. Where, he has an estate of inheritance, notwithstanding his death, before the estate falls in possession, his representative in interest can claim possession as soon as it becomes vacant by the expiration of the precedent interests. In this respect the vested estate resembles the reversion which is also a heritable or transmissible interest in property.” (quoted in Nikhil v. Sarojini (2014-3 Ker LT SN 36)

Contingent Remainder

Example – A transfers property to his wife; but, in case she should die in his life-time, transfer to B ….. (Illustration in Sec. 27, TP Act)

The principle of ‘Contingent Remainder’ is seen applied extensively, in India. It is usually applied in the following instances:

  1. Property is given to A for life; then to B, if A dies unmarried.
  2. Property is given to A (with saleable rights), then to B if property (or any part) remains unsold/un-transferred by A.
  • A ‘contingent remainder’ must have the following ingredients:
    • (i) the person to whom the property has to reach, finally, must be a living person,
    • (ii) the estate must be (when the transfer is effected) with another,
    • (iii) there will be a chance only to get the property to the (final) transferee; the transfer being contingent upon the stipulations or conditions (in other words, it is one which is not ready from its commencement to its end),
    • (iv) the (actual) transfer takes effect
      • (a) only on satisfying the conditions, and
      • (b) as soon as the estate with whom it is remained is terminated.

It is clearly laid down in Nikhil v. Sarojini (2014-3 Ker LT SN 36) it is observed in Para 32, 38 and 41 as under:

  • “32. The principle that can be carved out from the above literature is that a vested remainder is one which is ready from its commencement to its end, to take effect as soon as a particular estate shall determine. … … In the case of vested interest, the distribution is predetermined while in contingent interest, it may or may not. A contingent remainder is one which is not ready from its commencement to its end and it is to take effect as soon as particular estate is terminated.”
  • “38. In the decision reported in Narayani v. Sreedharan (2011(4) K.L.T. SN 107) it is held as follows:
  • “Even if by a document, the property which exclusively belongs to the executant is settled in favour of another, retaining his life interest in the property and providing that on his death the other would get absolute right in the property, it cannot be said that there was no transfer of interest in praesenti because of the retention of the life interest of the executant as there was divesting of the rights of the executant, except his life interest.”
  • “41. … But certain propositions emerge from a reading of the above decisions (Namburi Basava Subrahmanyam v. Alapati Hymavathi, 1996 Ker HC 1200, Kokilambal v. N. Raman. AIR 2005 SC 2468) and they are ;
    • i) There is no straight jacket formula to ascertain the nature of interest created.
    • ii) Each case depends upon the facts of that case and the deed that comes up for interpretation.
    • iii) Merely because the enjoyment or possession is postponed by itself is not a ground to hold that no vested interest is created.
    • iv) If interest in praesenti is created with condition, the transfer becomes effective immediately. But the interest is to take effect after the condition is satisfied, then it becomes a contingent (sic – vested) interest.”

PART – 2

Discordant Knots

It is a serious question – whether the observation in the following decisions as to ‘conflict between the earlier clause and the later clauses’ (in Wills) stand unsusceptible to (i) the doctrine of ‘harmonious interpretation’ and (ii) the following illustration in Sec. 27 of the TP Act: A transfers property to his wife; but, in case she should die in his life-time, transfer to B

The decisions are:

  • Mauleshwar Mani v. Jagdish Prasad, AIR 2002 SC 727
  • Sadaram Suryanarayana v.  Kalla Surya Kantham, AIR 2011 SC 294
  • Madhuri Ghosh v. Debobroto Dutta, AIR 2016 SC 5242.

I. In Mauleshwar Mani v. Jagdish Prasad, AIR 2002 SC 727 (two Judge Bench) considered a will containing the following provision –

  • “The first part of the Will provided that after the death of the testator or author of the Will, his wife whose name is Smt. Sona Devi would be entitled to the entire assets and properties of Jamuna Prasad with the right of transfer.
  • The second part of the Will is that after the death of Smt. Sona Devi nine sons of daughters’ would inherit the property.”

The Apex Court held that latter clause will not take effect observing as under:

  • “Where a testator having conferred an absolute right on anyone, the subsequent bequest for the same property in favour of other persons would be repugnant to the first bequest in the will and has to be held invalid.”

The Apex Court referred to Radha Sundar Dutta v. Mohd. Jahadur Rahim wherein it was held that where there was conflict between the earlier clause and the later clauses and it was not possible to give effect to all of them, then the rule of construction was well established that it was the earlier clause that must override the later clauses and not vice versa. It was also pointed out that in Rameshwar Bakhsh Singh v. Balraj Kuar it was laid down that where an absolute estate was created by a will in favour of devisee, the clauses in the will which were repugnant to such absolute estate could not cut down the estate; but they must be held to be invalid. The Court held:

  • “In Ramkishorelal and another vs. Kamalnarayan, 1963 Suppl. (2) SCR 417, AIR 1963 SC 890, it was held that in a disposition of properties, if there is a clear conflict between what is said in one part of the document and in another where in an earlier part of the document some property is given absolutely to one person but later on, other directions about the same property are given which conflict with and take away from the absolute title given in the earlier portion, in such a conflict the earlier disposition of absolute title should prevail and the later directions of disposition should be disregarded. In Radha Sundar Dutta Vs. Mohd. Jahadur Rahim & others (AIR 1959 SC 24 ), it was held where there is conflict between the earlier clause and the later clauses and it is not possible to give effect to all of them, then the rule of construction is well established that it is the earlier clause that must override the later clauses and not vice versa.” 

II. In Sadaram Suryanarayana v.  Kalla Surya Kantham, AIR 2011 SC 294, the two Judge Bench had to find whether the following clause in the will expressed an unequivocal intention of the Testatrix to make an absolute bequest in favour of her daughters. The relevant clause read as under:

  • “2nd item … shall devolve to my 2nd daughter …  and the Western wing 2 rooms shall devolve upon my elder daughter … with absolute rights of Sale, Gift, Mortgage etc., and this will come into force after my demise. After demise of my daughters the retained and remaining property shall devolve upon their female children only.”

Referring (i) Mauleshwar Mani v. Jagdish Prasad (supra – AIR 2002 SC 727) (ii) Ramki shore lal v. Kamalnarayan (supra – AIR 1963 SC 890) and (ii) Radha Sundar Dutta v. Mohd. Jahadur Rahimheld (supra – AIR 1959 SC 24), it is held in Sadaram Suryanarayana v.  Kalla Surya Kantham as under:

  • “We are, on the contrary, dealing with a case where the intention of the Testatrix to make an absolute bequest in favour of her daughters is unequivocal. Secondly, the expression “after demise of my daughters the retained and remaining properties shall devolve on their female children only” does not stricto sensu amount to a bequest contrary to the one made earlier in favour of the daughters of the Testatrix. The expression extracted above does not detract from the absolute nature of the bequest in favour of the daughters. All that the Testatrix intended to achieve by the latter part of clause 6 was the devolution upon their female offsprings all such property as remained available in the hands of the legatees at the time of their demise. There would obviously be no devolution of any such property upon the female offsprings in terms of the said clause if the legatees decided to sell or gift the property bequeathed to them as indeed they had every right to do under the terms of the bequest. Seen thus, there is no real conflict between the absolute bequest which the first part of clause 6 of the Will makes and the second part of the said clause which deals with devolution of what and if at all anything that remains in the hands of the legatees.”

III.  Madhuri Ghosh v. Debobroto Dutta AIR 2016 SC 5242 (Two Judge Bench): The testator bequeathed his property jointly to his wife and daughter. It was provided that in the event of the death of his wife the property would stand vested with the daughter as “exclusive owner”; and, in the event of the death of his daughter the property would stand vested with the wife as “exclusive owner”.  Thereafter, it was provided that various other lineal descendants would become owners of specified parts of the property. The Apex Court held that the will provided for ‘absolute’ bequest and not ‘limited interest’. Therefore, the direction that the lineal descendants would become owners of specified parts had no effect. The Court, inter alia, relied on Mauleshwar Mani v. Jagdish Prasad (2002) 2 SCC 468.

Analysis of the Above Three Decisions

Following doubts, legitimately, come up for Consideration:

  1. The common law in India requires reading the whole document, and give effect to the provisions on a harmonious interpretation. The apparent conflict mooted in the above cases can be harmonised on reading the document as a whole.
  2. Illustrations in Sections 24 and 27 make it clear that Indian law recognises ‘vested remainder’ and ‘contingent remainder‘. (See illustrations given in these Sections.)
  3. It is also beyond doubt that such a transfer is not hit by Sec. 10 and 11 of the TP Act; inasmuch as Sec. 10 and 11 cumber only when ‘conditions’ impose ‘Absolute Restraint’ or ‘Enjoyment in a Particular Manner’. It does not invite Sec. 138 of the Indian Succession Act also, for the same reasons.
  4. Following decisions relied on in Mauleshwar Mani v. Jagdish Prasad, AIR 2002 SC 727 (and the subsequent decisions followed it) were not applicable in the fact-situation (that emerged) inasmuch as they dealt with independent earlier transfers; and not two parts of the same deed. The decisions are:
    1. Ramkishore lal v. Kamalnarayan, AIR 1963 SC 890 (Constitution Bench)
    2. Radha Sundar Dutta v. Mohd. Jahadur Rahim, AIR 1959 SC 24 (three judge bench)
  5. It is noteworthy that the Apex Court (in Mauleshwar Mani – in the matter of a Will) considered cases (Ramkishore lal and Radha Sundar Dutta) in which Sec. 11, TP Act is attracted- for Sec. 138 of the Indian Succession Act is pari materia to Sec. 11 of the TP Act.
  6. In K. S.  Palanisami v. Hindu Community Citizens of Gobichettipalayam, AIR 2017  SC 1473 (Ashok Bushan, J.) the joint Will executed by a couple created a Trust; but, it had been indicated that after the death of one of the spouse, the other (survivor) had Absolute right to deal with the property and there was no embargo on the right of survivor to dispose of the same.  Certain alienations were made by the wife after death of the husband. Our apex Court held as under:
    • “49. The intention in testamentary disposition has to be primarily found out from the actual words used in the Will. The court is not entitled to ignore clear words or add something of its own or dilute the meaning of any clear word used in the Will. The solemn duty of the court is to find out the intention of testator and thereafter to give effect to such intention.
    • 57. We, thus, are of the view that giving absolute right to the survivor during his lifetime to deal with the properties in no manner cannot be said to be right given in disregard of object of trust. The charitable purpose of the Will is not lost even if survivor is given absolute right.”

Why Ramkishore lal and Radha Sundar Dutta Do Not Apply

In Ramkishore lal v. Kamalnarayan, AIR 1963 SC 890 (Constitution Bench), dealt with the matter of a partition-award and the question arose was as to independent earlier dedication of property to a temple. It was held as under:

  • “We are inclined to agree with the contention of the learned Attorney-General that Mr. Bagchi’s award gives the property to Ramsaran Lal absolutely with only a charge on the property for the expenses of the temple and did not make an absolute dedication of the village to the temple. We are of opinion however that Mr. Bagchi’s award can have no legal effect in respect of the dedication already made. Once an absolute dedication of the property had been made in December 1896 in favour of Shri Ramchandra Swamy temple the former owners of the property had no legal authority to go behind that dedication.”

Similarly, in Radha Sundar Dutta v. Mohd. Jahadur Rahim, AIR 1959 SC 24 (three judge bench), considered was an independent earlier grant. It was held as under:

  • “But it is open to the parties to agree that the Chaukidari Chakaran lands should form a new and distinct Patni, and the result of such an agreement will be that while the grantee will hold those lands in Patni right, that is to say, the tenure will be permanent, heritable and alienable so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there is any default in the payment thereof are concerned, the now grant will be an entity by itself independent of the original Patni.”

‘Reconciliation of Apparent Inconsistent Provisions’ and ‘Repugnant Provisions’

As stated already, if only there is irreconcilable inconsistency between two provisions (as stated in the illustration of Sec. 88 – that is, in earlier clause, property was given to A; latter clause, to B – whereby a harmonious interpretation is not possible) then only the principle, ‘once granted cannot next be taken away‘ (or, the last of two inconsistent clauses prevails), be applied. It is emphasised by our Supreme Court (Constitution Bench consisting of BP Sinha (CJ), KC Das Gupta, PB Gajendragadkar, KN Wanchoo, JC Shah, JJ.) in  Ramkishore Lal v. Kamal Narain, AIR 1963 SC 890, as under:

  • “Sometimes it happens in the case of documents as regards disposition of properties, whether they are testamentary or non-testamentary instruments, that there is a clear conflict between what is said in one part of the document and in another. A familiar instance of this is where in an earlier part of the document some property is given absolutely to one person but later on, other directions about the same property are given which conflict with and take away from the absolute title given in the earlier portion. What is to be done where this happens? It is well settled that in case of such a conflict the earlier disposition of absolute title should prevail and the later directions of disposition should be disregarded as unsuccessful attempts to restrict the title already given (See: Sahebzada Mohd. Kamgar Shah v. Jagdish Chandra Deo Dhabal Deo, (1960) 3 SCR 604. It is clear, however, that an attempt should always be made to read the two parts of the document harmoniously, if possible. It is only when this is not possible, e.g, where an absolute title is given is in clear and unambiguous terms and the later provisions trench on the same, that the later provisions have to be held to be void.” (quoted in : H B Yeshwant Rao Ghorpade v. The Commissioner of Wealth Tax, Bangalore, AIR 1967 SC 135)

In Ramachandra Shenoy v. Mrs. Hilda Brite, AIR 1964 SC 1323, our Apex Court (N. Rajagopala Ayyangar, S.K. Das, A.K. Sarkar, JJ) observed with respect to a will as under:

  • 5. If the said Julia does not marry or if she has no issues, the said Julia should enjoy the said property up to her deathand thereafter this property of mine should be enjoyed by my eldest daughter, Severina obina Coelho and after her by her male descendants with permanent rights”.
  • “It is one of the cardinal principles of construction of wills that to the extent that it is legally possible effect should be given to every disposition contained in the will unless the law prevents effect being given to it. Of course, if there are two repugnant provisions conferring successive interest, if the first interest created is valid the subsequent interest cannot take effect but a Court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the will. It if for this reason that where there is a bequest to A even though it be in terms apparently absolute followed by a gift of the same to B absolutely “on” or “after” or “at” A’s death, A is prima facie held to take a life interest and B an interest in remainder, the apparently absolute interest of A being cut down to accommodate the interest created in favour of B.”

It is held in Navneet Lal alias Rangi v. Gokul, AIR 1976 SC 794, as under:

  • “It is one of the cardinal principles of construction of wills that to the extent that it is legally possible effect should be given to every disposition contained in the will unless the law prevents effect being given to it. Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a Court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the will.”

In K. S.  Palanisami v. Hindu Community Citizens of Gobichettipalayam, AIR 2017  SC 1473 (Ashok Bushan, J.), Palaniappa Chettiar and his wife by registered Will created a Trust. The Will indicated that after the death of one of the testators, the survivor had Absolute right to deal with the property and there was no embargo on the right of survivor to dispose of the same.  Certain alienations were made by Rangammal after death of Palaniappa Chettiar.  Relying on Navneet Lal alias Rangi v. Gokul, AIR 1976 SC 794 it is held that the solemn duty of the court is to find out the intention of testator and thereafter to give effect to such intention. The Court held as under:

  • “41. The above in plain words provides that on the death of any of the spouse, survivor shall enjoy the entire properties absolutely with all the rights. What is the connotation of words ‘absolutely with all the rights?’, whether the above provision in the Will can be read as only life estate i.e. right of enjoyment and receiving of rent, income or absolute right indicates the exercise of all the rights including the right of alienation.”
  • 42. The High Court after noticing the contention of Learned Counsel for the defendants formed the opinion that expression ‘absolutely’ should be read to mean that the surviving testator, namely, Rangammal would have only the life interest.
  • 50. We do not find any word or any indication in the Will to give a life estate to survivor. The Will clearly intended that survivor shall have absolute right to the properties and after his/her death; the charity shall be carried out from the income of the properties without alienation of the properties.
  • “57. We, thus, are of the view that giving absolute right to the survivor during his lifetime to deal with the properties in no manner cannot be said to be right given in disregard of object of trust. The charitable purpose of the Will is not lost even if survivor is given absolute right. The obligation of survivor to act in furtherance of object as agreed by both the testators survives and binds the survivor. Although the Will was irrevocable after the death of survivor but the Will expressly granted absolute right to survivor.
  • 58. In view of the foregoing discussion, we endorse the view of High Court that the Will dated 27.9.1968 was a joint and mutual Will, but with a rider that said joint and mutual Will was with an express condition that survivor shall have absolute right to deal with the property keeping the object of trust alive.”

Followed in : Prabhakumari v. S.  Mohanarajan 2021-4 Ker HC 514

PART – 3

If only ‘Absolute‘ Bequest or Transfer, then only Adversities in S. 11 TP Act and S. 138 Succn. Act Attracted

‘Inconsistency’ and ‘absolute transfer’ are explained in Sec. 88 of the Indian Succession Act. First illustration reads as under:

  • “The testator by the first clause of his Will leaves his estate of Ramnagar “to A”, and by the last clause of his Will leaves to “to B and not to A”. B will have it.”

The law on this point is eruditely explained in Rajinder Singh Chowdhary v. Sardar Manjit Singh Chowdhary, AIR 2002 Del 135 (Vijender Jain, J.). The facts of the case, in a nutshell, are the following:

  • (a)  The father of the parties executed a Will bequeathing all his properties in favour of his wife ‘as the sole and absolute (in the sense, saleable) owner with full powers of disposal in any manner she likes’.
  • (b) The will further provided how the properties were to be distributed ‘in case she expires intestate and without disposing of the properties’.
  • (c) The mother died intestate.
  • It was contended by the plaintiff that the bequest to the mother was ‘absolute and anything which was repugnant to the absolute bequest was void and inconsequential under Section 138 of Indian Succession Act.
  • Plaintiffs relied on
    • Gopala Menon v. Sivaraman Nair, AIR 1979 SC 1345
    • Lalit Mohan Mondal v. Profulla Kumar Mondal, AIR 1982 Cal 52.
    • Shantilal babubhai v. Bai Chhani, AIR 1973 Gujarat 146,
  • The defendants contended that will had to be read as a whole and different parts of the will should be considered harmoniously. The defendants further contended that provision of Section 138 of the Act was not applicable to the present case and further contended that even if there was inconsistency, Section 88 of the Indian succession Act saves such inconsistency as the last clause prevails.  Section 88 of the Indian succession Act reads as under:  
  • “The last of two inconsistent clauses prevails. Where two clauses of gifts in a will are irreconcilable, so that they cannot possibly stand together, the last shall prevail.”
  • Defendants relied on following decisions:
    • Gopala Menon v. Sivaraman Nair, (1981) 3 SCC 586
    • Lt. Col. Kanwaljet Singh Chowdhary v. Chowdhary Harnam Singhand, 60 (1995) DLT 827.

Finally the court held as under:

  • “The principles enunciated in Gopala Menon s case (supra), Shantilal Babubhai (supra) and Lalit Mohan Mondal s case (supra) are well established principles that once a bequest has been made which is absolute and anything which is inconsistent would be repugnant and that has to be ignored.
  • But can it be said that the present case while interpreting the will at hand in view of the concern and anxiety of the testator with regard to his two sons and his intention to bequeath the property after the demise of Smt. Ved Kaur and words which are used signifying the concern and well being of aforesaid two sons are superfluous it is in this context court has to see as to whether bequest made in favour of Smt. Ved Kaur was absolute?
  • The answer is in the negative.
  • From the well laid down principle regarding interpretation of will and harmonious construction of the same, I hold that what was intended by the testator was to create a life estate in favour of Smt. Ved Kaur and not an absolute interest. The issue is answered accordingly.”

Theory of ‘Dominant Intention’

The will considered in Ramasreenivasa Iyengar v. Padmasani Ammal, (1973) 1 MLJ 34, provided that the two daughters of the testator should take the properties in equal shares with absolute (in the sense, saleable) rights, but the share of the lady without issues would, however, after her death, be taken by the daughter with issues along with her children. It was found that the testator intended only a life estate if no issue to anyone. It was held that the dominant intention was to preserve the estate to his grandchildren.

Deeds must be read as a whole

House of Lords (Lord Davey) in North-Eastern Railway Company v. Hastings, (1900) AC 260, held as under:

  • “The deed must be read as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed if that interpretation does no violence to the meaning of which they are naturally susceptible.”

After quoting the House of Lords, our Supreme Court held in Provash Chandra Dalui v. Biswanath Banerjee, AIR 1989 SC 1834, as under:

  • “In construing a contract the Court must look at the words used in the contract unless they are such that one may suspect that they do not convey the intention correctly. If the words are clear, there is very little the Court can do about it. In the construction of a written instrument’ it is legitimate in order to ascertain the true meaning of the words used and if that be doubtful it is legitimate to have regard to the circumstances surrounding their creation and the subject matter to which it was designed and intended they should apply.”

After referring Namburi Basava Subrahmanyam v. Alapati Hymavathi, 1996 Ker HC 1200, and Kokilambal v. N. Raman. AIR 2005 SC 2468, it is observed in Nikhil v. Sarojini (2014-3 Ker LT SN 36) that there is no straight jacket formula to ascertain the nature of interest created and that each case depends upon the facts of that case and the deed that comes up for interpretation.

If onlyAbsolute Transfer’ or ‘Irreconcilable Inconsistency’, the doctrine ‘once granted cannot be taken away’, applied

Same principles as to ‘irreconcilable inconsistency’ apply to ‘absolute’ transfer, when the doctrine, ‘once granted cannot next be taken away’, is applied.

The Supreme Court has explained in Sahebzeda Mohammad Kamgarh Singh v. Jagdish Chandra Deo Dhabal Deb, AIR 1960 SC 953, that if only there is irreconcilable inconsistency between two provisions (as stated in the illustration of Sec. 88 – that is, in earlier clause, property was given to A; latter clause, to B – whereby a harmonious interpretation is not possible) then only the principle, ‘once granted cannot next be taken away‘, be applied.

  • “The task being to ascertain the intention of the parties, the cases have laid down that that intention has to be gathered by the words used by the parties themselves. In doing so the parties must be presumed to have used the words in their strict grammatical sense. If and when the parties have first expressed themselves in one way and then go on saying something, which is irreconcilable with what has gone before, the courts have evolved the principle on the theory that what once had been granted cannot next be taken away, that the clear disposition by an earlier clause will not be allowed to be out down by later clause. Where there is ambiguity it is the duty of the Court to look at all the parts of the document to ascertain what was really intended by the parties. But even here the rule has to be borne in mind that the document being the grantor’s document it has to be interpreted strictly against him and in favour of the grantee.”

PART – 4

Absolute‘ Transfer with stipulation: ‘if property remains’ on death of transferee, it will go to another – If Valid?

Yes.

Following important points gain consideration in this regard:

  1. In Indian practice, though the words used in the deeds might be ‘absolute transfer’, on a true construction, on a reading of entire document, it might only be a salable/transferable right during life time; and the left-over property might be given to another.
  2. The common law in India requires reading the whole document altogether, and give effect to the document on a harmonious interpretation, rather than giving effect to the legal terms used in a deed.
  3. Illustrations in Sections 24 and 27 make it clear that Indian law recognises ‘vested remainder’ and ‘contingent remainder‘ (as detailed in the notes above).
  4. It is also beyond doubt that such a transfer is not hit by Sec. 10 and 11 of the TP Act; inasmuch as Sec. 10 and 11 cumber only when ‘conditions’ impose ‘Absolute Restraint’ or ‘Enjoyment in a Particular Manner’.
  5. First illustration in Sec. 88 of the Indian Succession Act reads as under:
    • “The testator by the first clause of his Will leaves his estate of Ramnagar “to A”, and by the last clause of his Will leaves to “to B and not to A”. B will have it.”

Various court decisions make it clear that one can validly transfer or bequeath a property to another, with absolute (in the sense, saleable) rights, with the stipulation that after that (first) transferee’s lifetime, if whole or any part remains, it (contingent remainder) may go to another.

In K. S.  Palanisami v. Hindu Community Citizens of Gobichettipalayam, AIR 2017  SC 1473 (Ashok Bushan, J.), Palaniappa Chettiar and his wife by registered Will created a Trust. The Will indicated that after the death of one of the testators, the survivor had Absolute right to deal with the property and there was no embargo on the right of survivor to dispose of the same.  Certain alienations were made by Rangammal after death of Palaniappa Chettiar.  It is held as under:

  • “49. The intention in testamentary disposition has to be primarily found out from the actual words used in the Will. The court is not entitled to ignore clear words or add something of its own or dilute the meaning of any clear word used in the Will. The solemn duty of the court is to find out the intention of testator and thereafter to give effect to such intention. On the reading of the Will, the intendment of testator/testatrix is clear that survivor shall have absolute right of enjoyment of properties. There is no reason not to give effect to said intendment on the ground that the testator and testatrix have mutually intended to set apart the property for charity and holding that survivor shall have right of disposition be not in the interest of the trust.”

Other Erudite Decisions on the Topic

In Sanford v. Sanford, (1901) 1 Ch. 939, the gift to the wife conferred a power of disposal limited explicitly to her lifetime. But, the gift-over to son was of a quite absolute estate. The gift did not include a power of disposition by will, but allowed power of disposition inter vivos. It was provided in the gift deed that if any property remained at her death it was to pass ‘from father to son, from generation to generation’.   Therefore, it was held that the widow was conferred with only a limited right; and the gift-over, which was ‘the will of the testator’ was to ‘settle its destination’. (This decision is referred to in Nataraja Mudaliar v. Panduranga Mudaliar, 1976-2 MLJ 381.)

In Nataraja Mudaliar v. Panduranga Mudaliar, (1976) 2 MLJ 381, the Madras High Court rendered a well-read decision in this topic. The facts of this case, in a nutshell, are as under:

  • (i) The settlement deed considered in the case provided:
  • (a)  the wife of the settlor should enjoy the properties with absolute (in the sense, saleable) rights.
  • (b) the respondent should take the properties remained at the time of her death, with absolute rights.
  • (ii) the appellant contended that the clause providing for the respondent taking absolutely such of the properties as at the time of the death of the settler’s wife was repugnant to the earlier clause conferring an absolute estate on her, and has, therefore, to be ignored as void.
  • (iii) the respondent contended that if the settlement deed had to be read as a whole  and the effect would be:
    • there was no absolute transfer to the wife of the settler as stated in Sec. 11 of the TP Act.

It is seen that the High Court accepted the contentions of the respondent that the settlement deed was to be read as a whole and that the respondent had taken absolutely such of the properties covered by the settlement deed as remained undisposed of by the settlee, the wife of the settlor; as she had only a right to enjoy the properties with absolute (in the sense, saleable) powers of disposal during her lifetime. The clause as to acquiring property by respondent was not repugnant and void.

The High Court relied on the following cases. The facts of these were ‘very near’ to the facts of that case.

  • Thayalai Achi v. Kannammal, AIR 1935 Mad 704,
  • S.M. Hara Kumari v. Mohim Chandra Sarkar, (1908) 12 CWN 412,
  • Anantnasayana v. Kondappe AIR 1940 Mad 479,
  • Lakshmi Ammal v. Allauddin Sahib, AIR 1962 Mad 247,
  • Ramasreenivasa Iyengar v. Padmasani Ammal, (1973) 1 MLJ 34.

In Lakshmi Ammal v. Allauddin Sahib, AIR 1962 Mad 247, it was held, as regards a Will, as under:

  • “After giving an absolute estate to his wife over the two items of scheduled properties, he provided that these scheduled properties, after the wife’s lifetime should devolve – item 1 on the first daughter and item 2 on the second daughter – who would have absolute rights. When the testator took care to indicate that the properties without any distinction even after his wife’s lifetime should go to each of the daughters, it should be presumed that it was clearly in his mind that the wife’s estate was only to be a limited estate or life estate, and not an absolute one.” (Quoted in: Nataraja Mudaliar v. Panduranga Mudaliar, (1976) 2 MLJ 381).

Read in this Cluster:

Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land Laws/ Transfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Vested Remainder and Contingent Remainder

An Inquisition under Transfer of Property Act.

Saji Koduvath, Advocate, Kottayam.

Abstract of the Contents

  1. Legal Remainders arise when two or more future successive estates are created in a land (E.g. transfer to A for life and then to B).
  2. Transfer of Property Act does not specifically speak about ‘Legal Remainder’. But, the illustrations in Sections 13, 24, 27 and 126 clearly lay down this right.
  3. A ‘Transfer’ with Right of Alienation and a stipulation: ‘If property remains’ on death of transferee, it will go to another – Valid.

PART – 1

Vested Remainder and Contingent Remainder

What is ‘Legal Remainder’ is explained in “Modern Law of Real Property” by Chesire, Twelfth Edition as under:

  • Legal Remainders. Common law permitted future interests, called remainders, to be carved out of a legal estate, though as we shall see presently, there were several restrictive rules which had to be observed. If a stellar decided to create two or more successive estates in his land, and drafted the desired limitations in one instrument, as for instance by a fulfilment to A for life and then to B, for life and then to C, in fee simple, the first estate which preceded the next following remainder was called the “particular estate” and those which followed were denominated “remainders”. (Quoted in Bomi Munchershaw Mistry v. Kesharwani Co-Operative Housing Society, 1993 (2) BomCR 329.)

Vested Remainder and Contingent Remainder in TP Act

Transfer of Property Act does not specifically speak about ‘Legal Remainder’. But, the illustrations in Sections 13, 24, 27 and 126 (mentioned below) clearly lay down this right. Indian courts apply the doctrine of ‘legal remainder’, inasmuch it hold – both the reversioner (future right that accrues by operation of law) and the legal remainder (future right that accrues by act of persons – executing documents) have the right to protect their (future) right, through court [Yellarayhala Surayya v. Yellaraghahs Subbamma, (1920) ILR 43 Mad 4].

See Blog: Transfer of Property with Conditions & Contingent Interests

Can a property be ‘transferred’ (successively) to one, and after his death (or on happening an event) to another?

Yes. It is clear from the following illustrations in the TP Act.

No.Sec.Illustration
 113. Transfer for benefit of unborn person  A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.
 224. Transfer to such of certain persons as survive at some period not specifiedA transfers property to B for life, and after his death to C and D, equally to be divided between them, or to the survivor of them. C dies during the life of B. D survives B. At B’s death the property passes to D.
 327. Conditional transfer to one person coupled with transfer to another on failure of prior dispositionA transfers property to his wife; but, in case she should die in his life-time, transfer to B that which he had transferred to her. A and his wife perish together, under circumstances which make it impossible to prove that she died before him. The disposition in favour of B does not take effect.
4126. When gift may be suspended or revoked.A gives a field to B, reserving to himself, with B’s assent, the right to take back the field in case B and his descendants die before A. B dies without descendants in A’s lifetime. A may take back the field.
  • Note: Illustration in Sec. 24 given above lays down ‘Vested Remainder’; and that in Sec. 27 lays down lays down an instance of ‘Contingent Remainder’.

Vested Remainder

Example – A transfers property to his wife; but, in case she should die in his life-time, transfer to B …. (Illustration in Sec. 27, TP Act)

  • A ‘vested remainder’ has to satisfy following ingredients:
    • (i) the person to whom the property is given must be a living person,
    • (ii) the estate must be (when the transfer is effected) with another,
    • (iii) the (actual) transfer is to take effect as soon as the estate with whom its remained (when the transfer is effected) is terminated,
    • (iv) the person in enjoyment (when the transfer is effected) holds the property subject to the rights of ‘vested remainder’ (in other words, it is one which is ready from its commencement to its end).

In Law of Property by Strahan – 4th Edition at page 152, it is observed as follows:

  • A vested remainder is a remainder of the more ancient kind, that is, one of the owner which is living and ascertained, and which is an actual estate in the land, complete in interest though deferred to the precedent estate in enjoyment. Being complete, it is ready, and must continue ready, from its commencement as a vested remainder till its expiration in natural course, to come into possession immediately on the determination of the preceding interest, the existence of which is the  only thing which prevents it being complete not merely in interest, but also in enjoyment. It is true it may fail, or, rather, determine before the period arrives, when it would vest in possession, but such determination must arise from its own natural expiration, not from any outside event or contingency.
  • Thus, take a limitation to A. for life and then to B. for life – B. being a living person. If B. predeceases A., his life estate will never become an interest in possession; but as long as B. lives, his estate is ready to come into possession the moment A.’s life estate determines.” (quoted in Nikhil v. Sarojini (2014-3 Ker LT SN 36)

In Law of Property by GC Venkata Subbarao – 2nd Edition, at page 130, it is observed as under:

  • Vested Remainder is Heritable.- Vested remainders and reversions are treated as future interests only for the reason that they do not carry immediate possession of the property. They are for all practical purposes present proprietary interests. As such they are heritable. Even if the person entitled to the vested remainder dies before the determination of the particular estate, his interest does not lapse but is transmitted to his heir. Of course, if the remainderman’s estate is a life-estate this rule can have no application. Where, he has an estate of inheritance, notwithstanding his death, before the estate falls in possession, his representative in interest can claim possession as soon as it becomes vacant by the expiration of the precedent interests. In this respect the vested estate resembles the reversion which is also a heritable or transmissible interest in property.” (quoted in Nikhil v. Sarojini (2014-3 Ker LT SN 36)

Contingent Remainder

Example – A transfers property to his wife; but, in case she should die in his life-time, transfer to B ….. (Illustration in Sec. 27, TP Act)

The principle of ‘Contingent Remainder’ is seen applied extensively, in India. It is usually applied in the following instances:

  1. Property is given to A for life; then to B, if A dies unmarried.
  2. Property is given to A (with saleable rights), then to B if property (or any part) remains unsold/un-transferred by A.
  • A ‘contingent remainder’ must have the following ingredients:
    • (i) the person to whom the property has to reach, finally, must be a living person,
    • (ii) the estate must be (when the transfer is effected) with another,
    • (iii) there will be a chance only to get the property to the (final) transferee; the transfer being contingent upon the stipulations or conditions (in other words, it is one which is not ready from its commencement to its end),
    • (iv) the (actual) transfer takes effect
      • (a) only on satisfying the conditions, and
      • (b) as soon as the estate with whom it is remained is terminated.

It is clearly laid down in Nikhil v. Sarojini (2014-3 Ker LT SN 36) it is observed in Para 32, 38 and 41 as under:

  • “32. The principle that can be carved out from the above literature is that a vested remainder is one which is ready from its commencement to its end, to take effect as soon as a particular estate shall determine. … … In the case of vested interest, the distribution is predetermined while in contingent interest, it may or may not. A contingent remainder is one which is not ready from its commencement to its end and it is to take effect as soon as particular estate is terminated.”
  • “38. In the decision reported in Narayani v. Sreedharan (2011(4) K.L.T. SN 107) it is held as follows:
  • “Even if by a document, the property which exclusively belongs to the executant is settled in favour of another, retaining his life interest in the property and providing that on his death the other would get absolute right in the property, it cannot be said that there was no transfer of interest in praesenti because of the retention of the life interest of the executant as there was divesting of the rights of the executant, except his life interest.”
  • “41. … But certain propositions emerge from a reading of the above decisions (Namburi Basava Subrahmanyam v. Alapati Hymavathi, 1996 Ker HC 1200, Kokilambal v. N. Raman. AIR 2005 SC 2468) and they are ;
    • i) There is no straight jacket formula to ascertain the nature of interest created.
    • ii) Each case depends upon the facts of that case and the deed that comes up for interpretation.
    • iii) Merely because the enjoyment or possession is postponed by itself is not a ground to hold that no vested interest is created.
    • iv) If interest in praesenti is created with condition, the transfer becomes effective immediately. But the interest is to take effect after the condition is satisfied, then it becomes a contingent (sic – vested) interest.”

PART – 2

Reconciliation of Apparent Inconsistent Provisions’ and ‘Harmonious interpretation

Section 11 of Transfer of Properties Act makes it clear that where a property is transferred absolutely, subsequent restraints are invalid. Therefore, the questions in such matters would be (i) whether the transfer effected stands ‘absolute’ or not and (ii) whether the restriction brings-up is one that canvases the section or not.

Section 11 of Transfer of Properties Act reads as under:

  • 11. Restriction repugnant to interest created– Where transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.
  • Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.

‘Irreconcilable/Inconsistent’ clauses in a Will

Section 88 of the Indian Succession Act says:

  • “88. The last of two inconsistent clauses prevails.–Where two clauses of gifts in a Will are irreconcilable, so that they cannot possibly stand together, the last shall prevail.

The Illustrations given in this Section make it clear what is an ‘inconsistent clause‘. It reads as under:

  • (i) The testator by the first clause of his Will leaves his estate of Ramnagar “to A”, and by the last clause of his Will leaves to “to B and not to A”. B will have it.
  • (ii) If a man, at the commencement of his Will gives his house to A, and at the close of it directs that his house shall be sold and the proceeds invested for the benefit of B, the latter disposition will prevail.”

Section 138 of Indian Succession Act, which reads as under:

  • Direction that fund be employed in particular manner following absolute bequest of same to or for benefit of any person.
  • Where a fund is bequeathed absolutely to or for the benefit of any person, but the will contains a direction that it shall be applied or enjoyed in a particular manner, the legatee shall be entitled to receive the fund as if the will had contained no such direction.”

From the above, it comes out that when a Will is construed, it must be considered:

  • Whether ‘on a whole-reading‘, there is irreconcilable inconsistency between two provisions (as stated in the illustration of Sec. 88 – the last of two inconsistent clauses prevails – in earlier clause property was given to A; latter clause, to B) so that harmonious interpretation is not possible?
  • Contingent transfers are legal and valid. Example – A transfers property to his wife; but, in case she should die in his life-time, transfer to B (Illustration in Sec. 27, TP Act)
  • Under Sec. 11 of the TP Act also, the latter condition is taken into consideration if only there is an ‘absolute‘ transfer. Under Sec. 11 of the TP Act (which reads: 11. Restriction repugnant to interest created– Where transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, …. ) the earlier ‘irreconcilable’ clause will prevail.
  • An attempt should always be made to read the two parts of the document harmoniously, if possible. It is only when this is not possible, e.g, where an absolute title is given is in clear and unambiguous terms and the later provisions trench on the same, that the later provisions have to be held to be void. (Ramkishore Lal v. Kamal Narain, AIR 1963 SC 890.)

In K. S.  Palanisami v. Hindu Community Citizens of Gobichettipalayam, AIR 2017  SC 1473 the joint Will executed by a couple created a Trust and indicated further that after the death of one of the spouse, the other (survivor) had Absolute right to deal with the property and there was no embargo on the right of survivor to dispose of the same.  Certain alienations were made by the wife after death of the husband. It is held in the decision as under:

  • “41. The above in plain words provides that on the death of any of the spouse, survivor shall enjoy the entire properties absolutely with all the rights. What is the connotation of words ‘absolutely with all the rights?’, whether the above provision in the Will can be read as only life estate i.e. right of enjoyment and receiving of rent, income or absolute right indicates the exercise of all the rights including the right of alienation.”
  • 42. The High Court after noticing the contention of Learned Counsel for the defendants formed the opinion that expression ‘absolutely’ should be read to mean that the surviving testator, namely, Rangammal would have only the life interest.
  • 50. We do not find any word or any indication in the Will to give a life estate to survivor. The Will clearly intended that survivor shall have absolute right to the properties and after his/her death; the charity shall be carried out from the income of the properties without alienation of the properties.
  • “57. We, thus, are of the view that giving absolute right to the survivor during his lifetime to deal with the properties in no manner cannot be said to be right given in disregard of object of trust. The charitable purpose of the Will is not lost even if survivor is given absolute right. The obligation of survivor to act in furtherance of object as agreed by both the testators survives and binds the survivor. Although the Will was irrevocable after the death of survivor but the Will expressly granted absolute right to survivor.
  • 58. In view of the foregoing discussion, we endorse the view of High Court that the Will dated 27.9.1968 was a joint and mutual Will, but with a rider that said joint and mutual Will was with an express condition that survivor shall have absolute right to deal with the property keeping the object of trust alive.”

Discordant Knots

It is a serious question – whether the observation in the following decisions as to ‘conflict between the earlier clause and the later clauses’ stands unsusceptible to (i) the doctrine of ‘harmonious interpretation’ and (ii) the following illustration in Sec. 27 of the TP Act: A transfers property to his wife; but, in case she should die in his life-time, transfer to B

The decisions are:

  • Mauleshwar Mani v. Jagdish Prasad, AIR 2002 SC 727
  • Sadaram Suryanarayana v.  Kalla Surya Kantham, AIR 2011 SC 294
  • Madhuri Ghosh v. Debobroto Dutta, AIR 2016 SC 5242.

I. In Mauleshwar Mani v. Jagdish Prasad, AIR 2002 SC 727 (two Judge Bench) considered a will containing the following provision –

  • “The first part of the Will provided that after the death of the testator or author of the Will, his wife whose name is Smt. Sona Devi would be entitled to the entire assets and properties of Jamuna Prasad with the right of transfer.
  • The second part of the Will is that after the death of Smt. Sona Devi nine sons of daughters’ would inherit the property.”

The Apex Court held that latter clause will not take effect observing as under:

  • “Where a testator having conferred an absolute right on anyone, the subsequent bequest for the same property in favour of other persons would be repugnant to the first bequest in the will and has to be held invalid.”

The Apex Court referred to Radha Sundar Dutta v. Mohd. Jahadur Rahim wherein it was held that where there was conflict between the earlier clause and the later clauses and it was not possible to give effect to all of them, then the rule of construction was well established that it was the earlier clause that must override the later clauses and not vice versa. It was also pointed out that in Rameshwar Bakhsh Singh v. Balraj Kuar it was laid down that where an absolute estate was created by a will in favour of devisee, the clauses in the will which were repugnant to such absolute estate could not cut down the estate; but they must be held to be invalid. The Court held:

  • “In Ramkishorelal and another vs. Kamalnarayan, 1963 Suppl. (2) SCR 417, AIR 1963 SC 890, it was held that in a disposition of properties, if there is a clear conflict between what is said in one part of the document and in another where in an earlier part of the document some property is given absolutely to one person but later on, other directions about the same property are given which conflict with and take away from the absolute title given in the earlier portion, in such a conflict the earlier disposition of absolute title should prevail and the later directions of disposition should be disregarded. In Radha Sundar Dutta Vs. Mohd. Jahadur Rahim & others (AIR 1959 SC 24 ), it was held where there is conflict between the earlier clause and the later clauses and it is not possible to give effect to all of them, then the rule of construction is well established that it is the earlier clause that must override the later clauses and not vice versa.” 

II. In Sadaram Suryanarayana v.  Kalla Surya Kantham, AIR 2011 SC 294, the two Judge Bench had to find whether the following clause in the will expressed an unequivocal intention of the Testatrix to make an absolute bequest in favour of her daughters. The relevant clause read as under:

  • “2nd item … shall devolve to my 2nd daughter …  and the Western wing 2 rooms shall devolve upon my elder daughter … with absolute rights of Sale, Gift, Mortgage etc., and this will come into force after my demise. After demise of my daughters the retained and remaining property shall devolve upon their female children only.”

Referring (i) Mauleshwar Mani v. Jagdish Prasad (supra – AIR 2002 SC 727) (ii) Ramki shore lal v. Kamalnarayan (supra – AIR 1963 SC 890) and (ii) Radha Sundar Dutta v. Mohd. Jahadur Rahimheld (supra – AIR 1959 SC 24), it is held in Sadaram Suryanarayana v.  Kalla Surya Kantham as under:

  • “We are, on the contrary, dealing with a case where the intention of the Testatrix to make an absolute bequest in favour of her daughters is unequivocal. Secondly, the expression “after demise of my daughters the retained and remaining properties shall devolve on their female children only” does not stricto sensu amount to a bequest contrary to the one made earlier in favour of the daughters of the Testatrix. The expression extracted above does not detract from the absolute nature of the bequest in favour of the daughters. All that the Testatrix intended to achieve by the latter part of clause 6 was the devolution upon their female offsprings all such property as remained available in the hands of the legatees at the time of their demise. There would obviously be no devolution of any such property upon the female offsprings in terms of the said clause if the legatees decided to sell or gift the property bequeathed to them as indeed they had every right to do under the terms of the bequest. Seen thus, there is no real conflict between the absolute bequest which the first part of clause 6 of the Will makes and the second part of the said clause which deals with devolution of what and if at all anything that remains in the hands of the legatees.”

III.  Madhuri Ghosh v. Debobroto Dutta AIR 2016 SC 5242 (Two Judge Bench): The testator bequeathed his property jointly to his wife and daughter. It was provided that in the event of the death of his wife the property would stand vested with the daughter as “exclusive owner”; and, in the event of the death of his daughter the property would stand vested with the wife as “exclusive owner”.  Thereafter, it was provided that various other lineal descendants would become owners of specified parts of the property. The Apex Court held that the will provided for ‘absolute’ bequest and not ‘limited interest’. Therefore, the direction that the lineal descendants would become owners of specified parts had no effect. The Court, inter alia, relied on Mauleshwar Mani v. Jagdish Prasad (2002) 2 SCC 468.

Analysis of the Above Line of Decisions

  1. The common law in India requires ‘reading the document as a whole‘, and give effect to the provisions on a harmonious interpretation. The apparent conflict mooted in the above cases can be harmonised reading the document as a whole.
  2. Illustrations in Sections 24 and 27 make it clear that Indian law recognises ‘vested remainder’ and ‘contingent remainder‘. (See illustrations given in these Sections.)
  3. It is also beyond doubt that such a transfer is not hit by Sec. 10 and 11 of the TP Act; inasmuch as Sec. 10 and 11 cumber only when ‘conditions’ impose ‘Absolute Restraint’ or ‘Enjoyment in a Particular Manner’. It does not invite Sec. 138 of the Indian Succession Act also, for the same reasons.
  4. Following decisions relied on in Mauleshwar Mani v. Jagdish Prasad, AIR 2002 SC 727 (and the subsequent decisions followed it) were not applicable in the fact-situation (that emerged) inasmuch as they dealt with independent earlier transfers; and not two parts of the same deed. The decisions are:
    1. Ramkishore lal v. Kamalnarayan, AIR 1963 SC 890 (Constitution Bench)
    2. Radha Sundar Dutta v. Mohd. Jahadur Rahim, AIR 1959 SC 24 (three judge bench)
  5. It is noteworthy that the Apex Court (in Mauleshwar Mani – in the matter of a Will) considered cases (Ramkishore lal and Radha Sundar Dutta) in which Sec. 11, TP Act is attracted- for Sec. 138 of the Indian Succession Act is pari materia to Sec. 11 of the TP Act.
  6. In KS  Palanisami v. Hindu Community Citizens of Gobichettipalayam, AIR 2017  SC 1473 (Ashok Bushan, J.) the joint Will executed by a couple created a Trust; but, it had been indicated that after the death of one of the spouse, the other (survivor) had Absolute right to deal with the property and there was no embargo on the right of survivor to dispose of the same.  Certain alienations were made by the wife after death of the husband. Our apex Court held as under:
    • “49. The intention in testamentary disposition has to be primarily found out from the actual words used in the Will. The court is not entitled to ignore clear words or add something of its own or dilute the meaning of any clear word used in the Will. The solemn duty of the court is to find out the intention of testator and thereafter to give effect to such intention.
    • 57. We, thus, are of the view that giving absolute right to the survivor during his lifetime to deal with the properties in no manner cannot be said to be right given in disregard of object of trust. The charitable purpose of the Will is not lost even if survivor is given absolute right.”

Why Ramkishore lal and Radha Sundar Dutta Do Not Apply

In Ramkishore lal v. Kamalnarayan, AIR 1963 SC 890 (Constitution Bench), dealt with the matter of a partition-award and the question arose was as to independent earlier dedication of property to a temple. It was held as under:

  • “We are inclined to agree with the contention of the learned Attorney-General that Mr. Bagchi’s award gives the property to Ramsaran Lal absolutely with only a charge on the property for the expenses of the temple and did not make an absolute dedication of the village to the temple. We are of opinion however that Mr. Bagchi’s award can have no legal effect in respect of the dedication already made. Once an absolute dedication of the property had been made in December 1896 in favour of Shri Ramchandra Swamy temple the former owners of the property had no legal authority to go behind that dedication.”

Similarly, in Radha Sundar Dutta v. Mohd. Jahadur Rahim, AIR 1959 SC 24 (three judge bench), considered was an independent earlier grant. It was held as under:

  • “But it is open to the parties to agree that the Chaukidari Chakaran lands should form a new and distinct Patni, and the result of such an agreement will be that while the grantee will hold those lands in Patni right, that is to say, the tenure will be permanent, heritable and alienable so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there is any default in the payment thereof are concerned, the now grant will be an entity by itself independent of the original Patni.”

‘Reconciliation of Apparent Inconsistent Provisions’ and ‘Repugnant Provisions’

As stated already, if only there is irreconcilable inconsistency between two provisions (as stated in the illustration of Sec. 88 – that is, in earlier clause, property was given to A; latter clause, to B – whereby a harmonious interpretation is not possible) then only the principle, ‘once granted cannot next be taken away‘ (or, the last of two inconsistent clauses prevails), be applied. It is emphasised by our Supreme Court (Constitution Bench consisting of BP Sinha (CJ), KC Das Gupta, PB Gajendragadkar, KN Wanchoo, JC Shah, JJ.) in  Ramkishore Lal v. Kamal Narain, AIR 1963 SC 890, as under:

  • “Sometimes it happens in the case of documents as regards disposition of properties, whether they are testamentary or non-testamentary instruments, that there is a clear conflict between what is said in one part of the document and in another. A familiar instance of this is where in an earlier part of the document some property is given absolutely to one person but later on, other directions about the same property are given which conflict with and take away from the absolute title given in the earlier portion. What is to be done where this happens? It is well settled that in case of such a conflict the earlier disposition of absolute title should prevail and the later directions of disposition should be disregarded as unsuccessful attempts to restrict the title already given (See: Sahebzada Mohd. Kamgar Shah v. Jagdish Chandra Deo Dhabal Deo, (1960) 3 SCR 604. It is clear, however, that an attempt should always be made to read the two parts of the document harmoniously, if possible. It is only when this is not possible, e.g, where an absolute title is given is in clear and unambiguous terms and the later provisions trench on the same, that the later provisions have to be held to be void.” (quoted in : H B Yeshwant Rao Ghorpade v. The Commissioner of Wealth Tax, Bangalore, AIR 1967 SC 135)

In Ramachandra Shenoy v. Mrs. Hilda Brite, AIR 1964 SC 1323, our Apex Court (N. Rajagopala Ayyangar, S.K. Das, A.K. Sarkar, JJ) observed with respect to a will as under:

  • 5. If the said Julia does not marry or if she has no issues, the said Julia should enjoy the said property up to her deathand thereafter this property of mine should be enjoyed by my eldest daughter, Severina obina Coelho and after her by her male descendants with permanent rights”.
  • “It is one of the cardinal principles of construction of wills that to the extent that it is legally possible effect should be given to every disposition contained in the will unless the law prevents effect being given to it. Of course, if there are two repugnant provisions conferring successive interest, if the first interest created is valid the subsequent interest cannot take effect but a Court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the will. It if for this reason that where there is a bequest to A even though it be in terms apparently absolute followed by a gift of the same to B absolutely “on” or “after” or “at” A’s death, A is prima facie held to take a life interest and B an interest in remainder, the apparently absolute interest of A being cut down to accommodate the interest created in favour of B.”

It is held in Navneet Lal alias Rangi v. Gokul, AIR 1976 SC 794, as under:

  • “It is one of the cardinal principles of construction of wills that to the extent that it is legally possible effect should be given to every disposition contained in the will unless the law prevents effect being given to it. Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a Court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the will.”

In K. S.  Palanisami v. Hindu Community Citizens of Gobichettipalayam, AIR 2017  SC 1473 (Ashok Bushan, J.), Palaniappa Chettiar and his wife by registered Will created a Trust. The Will indicated that after the death of one of the testators, the survivor had Absolute right to deal with the property and there was no embargo on the right of survivor to dispose of the same.  Certain alienations were made by Rangammal after death of Palaniappa Chettiar.  Relying on Navneet Lal alias Rangi v. Gokul, AIR 1976 SC 794 it is held that the solemn duty of the court is to find out the intention of testator and thereafter to give effect to such intention. The Court held as under:

  • “57. We, thus, are of the view that giving absolute right to the survivor during his lifetime to deal with the properties in no manner cannot be said to be right given in disregard of object of trust. The charitable purpose of the Will is not lost even if survivor is given absolute right. The obligation of survivor to act in furtherance of object as agreed by both the testators survives and binds the survivor. Although the Will was irrevocable after the death of survivor but the Will expressly granted absolute right to survivor.”

Followed in : Prabhakumari v. S.  Mohanarajan 2021-4 Ker HC 514

PART – 3

If only ‘Absolute‘ Bequest or Transfer, then only Adversities in S. 11 TP Act and S. 138 Succn. Act Attracted

‘Inconsistency’ and ‘absolute transfer’ are explained in Sec. 88 of the Indian Succession Act. First illustration reads as under:

  • “The testator by the first clause of his Will leaves his estate of Ramnagar “to A”, and by the last clause of his Will leaves to “to B and not to A”. B will have it.”

The law on this point is eruditely explained in Rajinder Singh Chowdhary v. Sardar Manjit Singh Chowdhary, AIR 2002 Del 135 (Vijender Jain, J.). The facts of the case, in a nutshell, are the following:

  • (a)  The father of the parties executed a Will bequeathing all his properties in favour of his wife ‘as the sole and absolute (in the sense, saleable) owner with full powers of disposal in any manner she likes’.
  • (b) The will further provided how the properties were to be distributed ‘in case she expires intestate and without disposing of the properties’.
  • (c) The mother died intestate.
  • It was contended by the plaintiff that the bequest to the mother was ‘absolute and anything which was repugnant to the absolute bequest was void and inconsequential under Section 138 of Indian Succession Act.
  • Plaintiffs relied on
    • Gopala Menon v. Sivaraman Nair, AIR 1979 SC 1345
    • Lalit Mohan Mondal v. Profulla Kumar Mondal, AIR 1982 Cal 52.
    • Shantilal babubhai v. Bai Chhani, AIR 1973 Gujarat 146,
  • The defendants contended that will had to be read as a whole and different parts of the will should be considered harmoniously. The defendants further contended that provision of Section 138 of the Act was not applicable to the present case and further contended that even if there was inconsistency, Section 88 of the Indian succession Act saves such inconsistency as the last clause prevails.  Section 88 of the Indian succession Act reads as under:  
  • “The last of two inconsistent clauses prevails. Where two clauses of gifts in a will are irreconcilable, so that they cannot possibly stand together, the last shall prevail.”
  • Defendants relied on following decisions:
    • Gopala Menon v. Sivaraman Nair, (1981) 3 SCC 586
    • Lt. Col. Kanwaljet Singh Chowdhary v. Chowdhary Harnam Singhand, 60 (1995) DLT 827.

Finally the court held as under:

  • “The principles enunciated in Gopala Menon s case (supra), Shantilal Babubhai (supra) and Lalit Mohan Mondal s case (supra) are well established principles that once a bequest has been made which is absolute and anything which is inconsistent would be repugnant and that has to be ignored.
  • But can it be said that the present case while interpreting the will at hand in view of the concern and anxiety of the testator with regard to his two sons and his intention to bequeath the property after the demise of Smt. Ved Kaur and words which are used signifying the concern and well being of aforesaid two sons are superfluous it is in this context court has to see as to whether bequest made in favour of Smt. Ved Kaur was absolute?
  • The answer is in the negative.
  • From the well laid down principle regarding interpretation of will and harmonious construction of the same, I hold that what was intended by the testator was to create a life estate in favour of Smt. Ved Kaur and not an absolute interest. The issue is answered accordingly.”

Theory of ‘Dominant Intention’

The will considered in Ramasreenivasa Iyengar v. Padmasani Ammal, (1973) 1 MLJ 34, provided that the two daughters of the testator should take the properties in equal shares with absolute (in the sense, saleable) rights, but the share of the lady without issues would, however, after her death, be taken by the daughter with issues along with her children. It was found that the testator intended only a life estate if no issue to anyone. It was held that the dominant intention was to preserve the estate to his grandchildren.

Deeds must be read as a whole

House of Lords (Lord Davey) in North-Eastern Railway Company v. Hastings, (1900) AC 260, held as under:

  • “The deed must be read as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed if that interpretation does no violence to the meaning of which they are naturally susceptible.”

After quoting the House of Lords, our Supreme Court held in Provash Chandra Dalui v. Biswanath Banerjee, AIR 1989 SC 1834, as under:

  • “In construing a contract the Court must look at the words used in the contract unless they are such that one may suspect that they do not convey the intention correctly. If the words are clear, there is very little the Court can do about it. In the construction of a written instrument’ it is legitimate in order to ascertain the true meaning of the words used and if that be doubtful it is legitimate to have regard to the circumstances surrounding their creation and the subject matter to which it was designed and intended they should apply.”

After referring Namburi Basava Subrahmanyam v. Alapati Hymavathi, 1996 Ker HC 1200, and Kokilambal v. N. Raman. AIR 2005 SC 2468, it is observed in Nikhil v. Sarojini (2014-3 Ker LT SN 36) that there is no straight jacket formula to ascertain the nature of interest created and that each case depends upon the facts of that case and the deed that comes up for interpretation.

If onlyAbsolute Transfer’ or ‘Irreconcilable Inconsistency’, the doctrine ‘once granted cannot be taken away’, applied

Same principles as to ‘irreconcilable inconsistency’ apply to ‘absolute’ transfer, when the doctrine, ‘once granted cannot next be taken away’, is applied.

The Supreme Court has explained in Sahebzeda Mohammad Kamgarh Singh v. Jagdish Chandra Deo Dhabal Deb, AIR 1960 SC 953, that if only there is irreconcilable inconsistency between two provisions (as stated in the illustration of Sec. 88 – that is, in earlier clause, property was given to A; latter clause, to B – whereby a harmonious interpretation is not possible) then only the principle, ‘once granted cannot next be taken away‘, be applied.

  • “The task being to ascertain the intention of the parties, the cases have laid down that that intention has to be gathered by the words used by the parties themselves. In doing so the parties must be presumed to have used the words in their strict grammatical sense. If and when the parties have first expressed themselves in one way and then go on saying something, which is irreconcilable with what has gone before, the courts have evolved the principle on the theory that what once had been granted cannot next be taken away, that the clear disposition by an earlier clause will not be allowed to be out down by later clause. Where there is ambiguity it is the duty of the Court to look at all the parts of the document to ascertain what was really intended by the parties. But even here the rule has to be borne in mind that the document being the grantor’s document it has to be interpreted strictly against him and in favour of the grantee.”

PART – 4

Absolute‘ Transfer with stipulation: ‘if property remains’ on death of transferee, it will go to another – If Valid?

Yes.

Following important points gain consideration in this regard:

  1. In Indian practice, though the words used in the deeds might be ‘absolute transfer’, on a true construction, on a reading of entire document, it might only be a salable/transferable right during life time; and the left-over property might be given to another.
  2. The common law in India requires reading the whole document altogether, and give effect to the document on a harmonious interpretation, rather than giving effect to the legal terms used in a deed.
  3. Illustrations in Sections 24 and 27 make it clear that Indian law recognises ‘vested remainder’ and ‘contingent remainder‘ (as detailed in the notes above).
  4. It is also beyond doubt that such a transfer is not hit by Sec. 10 and 11 of the TP Act; inasmuch as Sec. 10 and 11 cumber only when ‘conditions’ impose ‘Absolute Restraint’ or ‘Enjoyment in a Particular Manner’.
  5. First illustration in Sec. 88 of the Indian Succession Act reads as under:
    • “The testator by the first clause of his Will leaves his estate of Ramnagar “to A”, and by the last clause of his Will leaves to “to B and not to A”. B will have it.”

Various court decisions make it clear that one can validly transfer or bequeath a property to another, with absolute (in the sense, saleable) rights, with the stipulation that after that (first) transferee’s lifetime, if whole or any part remains, it (contingent remainder) may go to another.

In K. S.  Palanisami v. Hindu Community Citizens of Gobichettipalayam, AIR 2017  SC 1473 (Ashok Bushan, J.), Palaniappa Chettiar and his wife by registered Will created a Trust. The Will indicated that after the death of one of the testators, the survivor had Absolute right to deal with the property and there was no embargo on the right of survivor to dispose of the same.  Certain alienations were made by Rangammal after death of Palaniappa Chettiar.  It is held as under:

  • “49. The intention in testamentary disposition has to be primarily found out from the actual words used in the Will. The court is not entitled to ignore clear words or add something of its own or dilute the meaning of any clear word used in the Will. The solemn duty of the court is to find out the intention of testator and thereafter to give effect to such intention. On the reading of the Will, the intendment of testator/testatrix is clear that survivor shall have absolute right of enjoyment of properties. There is no reason not to give effect to said intendment on the ground that the testator and testatrix have mutually intended to set apart the property for charity and holding that survivor shall have right of disposition be not in the interest of the trust.”

Other Erudite Decisions on the Topic

In Sanford v. Sanford, (1901) 1 Ch. 939, the gift to the wife conferred a power of disposal limited explicitly to her lifetime. But, the gift-over to son was of a quite absolute estate. The gift did not include a power of disposition by will, but allowed power of disposition inter vivos. It was provided in the gift deed that if any property remained at her death it was to pass ‘from father to son, from generation to generation’.   Therefore, it was held that the widow was conferred with only a limited right; and the gift-over, which was ‘the will of the testator’ was to ‘settle its destination’. (This decision is referred to in Nataraja Mudaliar v. Panduranga Mudaliar, 1976-2 MLJ 381.)

In Nataraja Mudaliar v. Panduranga Mudaliar, (1976) 2 MLJ 381, the Madras High Court rendered a well-read decision in this topic. The facts of this case, in a nutshell, are as under:

  • (i) The settlement deed considered in the case provided:
  • (a)  the wife of the settlor should enjoy the properties with absolute (in the sense, saleable) rights.
  • (b) the respondent should take the properties remained at the time of her death, with absolute rights.
  • (ii) the appellant contended that the clause providing for the respondent taking absolutely such of the properties as at the time of the death of the settler’s wife was repugnant to the earlier clause conferring an absolute estate on her, and has, therefore, to be ignored as void.
  • (iii) the respondent contended that if the settlement deed had to be read as a whole  and the effect would be:
    • there was no absolute transfer to the wife of the settler as stated in Sec. 11 of the TP Act.

It is seen that the High Court accepted the contentions of the respondent that the settlement deed was to be read as a whole and that the respondent had taken absolutely such of the properties covered by the settlement deed as remained undisposed of by the settlee, the wife of the settlor; as she had only a right to enjoy the properties with absolute (in the sense, saleable) powers of disposal during her lifetime. The clause as to acquiring property by respondent was not repugnant and void.

The High Court relied on the following cases. The facts of these were ‘very near’ to the facts of that case.

  • Thayalai Achi v. Kannammal, AIR 1935 Mad 704,
  • S.M. Hara Kumari v. Mohim Chandra Sarkar, (1908) 12 CWN 412,
  • Anantnasayana v. Kondappe AIR 1940 Mad 479,
  • Lakshmi Ammal v. Allauddin Sahib, AIR 1962 Mad 247,
  • Ramasreenivasa Iyengar v. Padmasani Ammal, (1973) 1 MLJ 34.

In Lakshmi Ammal v. Allauddin Sahib, AIR 1962 Mad 247, it was held, as regards a Will, as under:

  • “After giving an absolute estate to his wife over the two items of scheduled properties, he provided that these scheduled properties, after the wife’s lifetime should devolve – item 1 on the first daughter and item 2 on the second daughter – who would have absolute rights. When the testator took care to indicate that the properties without any distinction even after his wife’s lifetime should go to each of the daughters, it should be presumed that it was clearly in his mind that the wife’s estate was only to be a limited estate or life estate, and not an absolute one.” (Quoted in: Nataraja Mudaliar v. Panduranga Mudaliar, (1976) 2 MLJ 381).


Read in this Cluster:

Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land Laws

Evidence Act – General

Contract Act

Easement

Stamp Act

Will

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India