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1923 Supreme(SC) 26
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD SUMNER, LORD PHILLIMORE, SIR JOHN EDGE, AND MR. AMEER ALI
ANNADA MOHAN ROY - Appellant
Versus
GOUR MOHAN MULLICK - Respondents
On Appeal from the High Court of Calcutta.
Decided On : June 4. 1923
Solicitors for appellant:Chapman-Walker & Shephard. Solicitors for respondent: Watkins & Hunter.
A contract to transfer the fruits of an expectancy of inheritance (spes successionis) is void and unenforceable, as it would defeat the statutory prohibition against the transfer of the expectancy itself under Section 6(a) of the Transfer of Property Act.
Headnote:(A) Transfer of Property Act, 1882 - Section 6(a) - Agreement to transfer an expectancy (spes successionis) - A contract to transfer the fruits of an expectancy is void and unenforceable if the transfer of the expectancy itself is prohibited by law - It would be futile to forbid the transfer of a mere chance of succession while permitting a contract to achieve the same result.
(B) Indian Contract Act, 1872 - Section 65 - Recovery of money under void agreement - Discovery of illegality - A party who has deliberately abandoned issues regarding the timing of the discovery of a contract's illegality cannot subsequently seek to reopen those issues to circumvent limitation.
Facts of the case:
An individual entered into agreements with the expectant heirs of a deceased person, providing monthly payments in exchange for the heirs' promise to convey their rights to the estate once established, whether through a will or by reversionary rights. The will was subsequently found to be a forgery. After the heirs eventually acquired shares in the property through other means, the individual sued for specific performance of the agreements or, alternatively, for the recovery of the sums advanced.
Findings of Court:
The agreements were held to be void and inoperative in law as they constituted a transfer of an expectancy. Consequently, the suit for specific performance was not maintainable.
Issues: Whether an agreement to transfer an expectancy of inheritance is void under the Transfer of Property Act and whether the appellant was entitled to a refund of advances under the Indian Contract Act.
Ratio Decidendi: The court held that the prohibition against transferring a spes successionis under Section 6(a) of the Transfer of Property Act extends to agreements to transfer the fruits of such an expectancy. Allowing a contract to transfer the eventual interest would defeat the statutory prohibition against transferring the chance itself. Furthermore, such contracts are not performable until the expectation is realized, rendering them unenforceable.
Result: Appeals fail.
Key Points: - The judgment discusses enforceability of agreements to transfer expectancies under the Transfer of Property Act and Hindu law (!) (!) (!) . - It addresses the concept of discovery of illegality and its effect on limitation or action under the Indian Contract Act regarding recoveries for advances (!) (!) . - It concludes that contracts to transfer expectancies are not enforceable and specific performance cannot be granted; consideration of remedies and limitation is discussed (!) (!) (!) . - It references authoritative opinions on whether such contracts can be sustained, including Sri Jagannada Raju v. Sri Rajah Prasada Rao and related discussions (!) (!) . - The conclusion of the Board: on all points the appeals fail; transfer of such expectancies is not upheld under the Act or Hindu law (!) .
What is the enforceability of contracts to transfer expectancies under Hindu law and the Transfer of Property Act?
What is the significance of the time of discovery of illegality for contracts to transfer expectancy under the Indian Contract Act?
What are the rights and remedies when agreements for transfer of expectancies are void or unenforceable?
Legal Category Hierarchy
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property law
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transfer of property
- spes successionis
- specific performance
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transfer of property
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contract law
- void agreements
Judgement
Consolidated Appeal (No. 10a of 1921) from a judgment three decrees of the High Court in its appellate jurisdiction (April 22, 1921) affirming decrees of the Court in its original-jurisdiction.
The three suits giving rise to the consolidated appeal were brought by the appellant in the High Court against the respondents severally in the following circumstances.
Gopal Lal Seal, a Hindu governed by the Dayabhaga, died childless in 1902 leaving two widows and five nephews, including among them the three respondents. After his death a will was propounded by which the greater part of the property of the deceased was devised to his nephews, including the respondents. That will was pronounced by the High Court to be a forgery.
On May 7, 1908, while an appeal to the Privy Council was pending, the appellant and the respondents severally entered into agreements now sued on. These agreements were to the same effect, and it is sufficient to refer to that with the first respondent. In consideration of payments of Rs. 300 a month, which the appellant had been making to the respondent and agreed to continue, the agreement provided "I, Gour Mohan Mullick, shall convey in your favour whatever rights I have to the estate of Gopal Lal Seal deceased (that is to say, rights under the will or reversionary rights) immediately upon the same being established." It was further provided that if the appeal failed, the respondent within three months of getting any share of the property would sell to the appellant for the consideration already stated; also that if the widows of the deceased should relinquish their life interest, either jointly or severally, or sell the same to the appellant, then the respondent becoming owner of a share by inheritance would within three months transfer it to the appellant.
The appeal to the Privy Council was dismissed in 1909.
One of the widows died in 1917, and in 1918 one of the respondents having brought a suit against the other widow claiming the property, the parties to that suit entered into a compromise whereby the nephews obtained half the entire property in equal shares.
The appellant by his plaints in the present suits claimed a conveyance from each of the respondents of the share which he had received, or alternatively to recover the sum advanced to him. The respondents by their written statements pleaded (inter alia) that the agreement was void and inoperative in law as being for a transfer of an expectancy.
Four issues arising upon that pleading were tried as preliminary issues by Greaves J., the trial of the remaining issues, which included issues as to the plaintiffs alternative claim and whether it was barred by limitation, stood over.
The learned judge held that the agreement was void and the suit for specific performance not maintainable.
That decision was affirmed on appeal by Mookerjee and Fletcher JJ., the remaining issues not being tried.
1923. June 4. De Gruyther K.G. and Abdul Majid for the appellant. If the agreement was unenforceable the appellant nevertheless was entitled under s. 65 of the Indian Contract Act to recover the money which he had advanced. Whether that cause of action was barred by limitation depends upon when it was "discovered" that the agreement was void ; that date may have been later than the date of the agreement Harnath Kuar v. Indar Bahadur Singh. (L. R. 501. A. 69.) If necessary the suit should be remitted in order that evidence may be adduced on that question. But it is submitted that the property having come to the hands of the defendant the agreement is enforceable. Sect. 6 (a) of the Transfer of Property Act prohibits merely a transfer of an expectancy, but does not prohibit an agreement to transfer one ; there is nothing in Hindu law which prohibits an agreement of that nature, and its validity is recognized by the Contract Act Ram Wirunjun Singh v. Prayag Singh (( 1881) I. L. R. 8 C. 138, 145.); Pindiprolu Sooraparaja v. Pindiprolu Veerabhadrudu (( 1907) I. L
