2004 Supreme(SC) 505

2004(3) Supreme 331
SUPREME COURT OF INDIA
(From Karnataka High Court)
R.C. Lahoti & Ashok Bhan, JJ.
Subbegowda (Dead) by Lr. -Appellant
versus
Thimmegowda (Dead) by Lrs. -Respondents
Civil Appeal No. 197 of 1999
Decided on 16-4-2004
Counsel for the Parties :
For the Appellant : S.N. Bhat, D.P. Chaturvedi, Advocates.
For the Respondents : S.K. Kulkarni, M. Gireesh Kumar, Ankur S. Kulkarni, Ms. Sangeeta Kumar, Advocates.

IMPORTANT POINT
It is permissible in law to annex or encumber any grant or alienation with condition or limitation which will operate and Court will give effect to it unless there is some provision of law which annuls or invalidates such condition, restrain or limitation.

Headnote:Transfer of Property Act, 1882-Section 5-"Settlement Deed" executed by respondent in favour of appellant, son of his brother-Suit seeking setting aside of settlement deed on ground of fraud and misrepresentation and restoration of possession-Trial Court dismissed suit holding that circumstances vitiating voluntary execution were not made out-1st appeal was dismissed-High Court found that power of revocation of settlement deed was expressly reserved to himself by appellant-settler in the deed itself and he was justified to invoke revocation clause-Appeal-Question of construction of document-To be decided by finding out intention of executant, firstly from comprehensive reading of terms of document and then prevailing circumstances which persuaded author to execute it-Comprehensive reading showed that settlement was not a transfer of property in favour of adopted son but merely an arrangement-No recital in deed which could be read or be capable of being construed as a demise in praesenti vesting absolute title in property inadopted son-High Court rightly held that deed could be revoked.

       Held : The question of construction of a document is to be decided by finding out the intention of the executant, firstly, from a comprehensive reading of the terms of the document itself, and then, by looking into - to the extent permissible - the prevailing circumstances which persuaded the author of the document to execute it. If the executant intended to transfer property the Court would lean in favour of holding the transferee having been vested with interest in the property. Where an intention to transfer property within the meaning of Section 5 of Transfer of Property Act, 1882 cannot be spelled out, the document will be given effect to as it reads and as is explicit from what is set out in the deed itself. (Para 4)

       For the interpreter of documents it is common knowledge that a transfer of property or a creation of interest therein may be accompanied by conditions, covenants or restraints. Condition may be condition precedent - a condition which must be performed before the grant or alienation takes effect to create an interest in property, or may be condition subsequent - a condition which has an effect of enlarging or defeating the interest already created or vested. In either case the condition will be annexed with the estate and would run with the same. (Para 6)

       A comprehensive reading of the document shows that the settlement as per the terms of the document was not a transfer of property in favour of the adopted son; it was merely an arrangement or at best an entrustment of the scheduled property to his adopted son and the latter s natural father for the purpose of proper management without obstruction by anyone else including himself so that the welfare of himself, his wife and his children - specially the unmarried daughters - was assured. It is clear from the oral evidence adduced by the plaintiff that his wishes were not fulfilled. Though the pleas of fraud and undue influence vitiating the execution of deed are not substantiated, yet there can be no denying of the fact that Narayani and his natural father did not come up to those expectations of Thimmegowda which had persuaded him as primary and essential considerations for the execution of the deed. Nothing prevented Thimmegowda from cancelling such settlement and depriving Narayani and his natural father from management over the scheduled property. Though at the end of the main document Thimmegowda has used the expression like permitting the settlee to enjoy the property and also for the right of sale and gift relating to property being conferred and the settlee and his heirs also going on enjoying the property but this stray sentence at the end of the document cannot be read in isolation dissected from the earlier part of the document which in very many words clearly demonstrates the intention of the executant of entrusting the management only of the scheduled property to Narayani and his natural father. May be if the settlee would have come up of the expectations of the settlor, the latter would not have objected to the settlee continuing in the enjoyment of the property and dealing with the same as if owner thereof. This is further clarified from the additional statement made by settlor just before concluding the execution of the document where he said that Narayani having been entrusted to the care and custody, as adopted son, of Thimmegowda, he was executing the deed with an intention to maintain the settlee for his life. There is no recital in the deed which may be read or be capable of being construed as a demise in praesenti vesting absolute title in the property in Narayani in present or in future. Whatever was given to Narayani and his natural father by the deed was capable of being cancelled or revoked under the power of revocation expressly reserved by Thimmegowda to himself. (Para 7)

       A conditional transfer or a settlement accompanied by conditions is not unknown to the law of real property. It is permissible in law to annex or encumber any grant or alienation with condition or limitation which will operate and the court will give effect to it unless there is some provision of law which annuls or invalidates such condition, restraint or limitation. None has been brought to our notice. (Para 9)