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1920 Supreme(SC) 59
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BUCKMASTER, LORD ATKINSON, SIR JOHN EDGE AND MR. AMEER ALI.
KERWICK - Appellant
Versus
KERWICK - Respondents
On appeal from the Chief Court of Lower Burma.
Decided On : Aug. 3. 1920.
Important Points
Subject
Civil Law - Property Law
Act Referred
Headnote
(B) Presumption of advancement - While the presumption that a husband intends a transfer to his wife as an advancement is generally excluded in the jurisdiction due to widespread benami practices, such presumption applies to parties subject to the laws of the home jurisdiction, regardless of their place of birth or residence.
(C) Rebuttal of presumption - A mere denial of intent to make a gift is insufficient to rebut the presumption of advancement; the transferor must establish with reasonable clearness other rational motives for the transaction, such as the evasion of administrative rules or the intention to provide for the family.
Facts of the case:
A husband purchased two houses in the name of his wife. He contended that the properties were transferred benami to evade government rules prohibiting civil servants from acquiring immovable property. The wife claimed the properties were an advancement for her benefit. Following a separation, the husband sought a declaration of true ownership and an order for the transfer of the properties.
Findings of Court:
The court found that the husband's financial position and the existence of administrative rules he believed he was evading provided a rational explanation for the transaction. The husband's management of the properties as his own and the financial risk associated with a gift further supported his claim.
Issues: Whether the presumption of advancement applies to persons of English descent residing in the jurisdiction and whether the husband had discharged the burden of rebutting said presumption.
Ratio Decidendi: The presumption of advancement is applicable to parties subject to English law even when residing in the jurisdiction. This presumption is rebutted when the evidence shows a rational motive for the nominal transfer, such as the evasion of official restrictions, particularly when a gift would be financially reckless given the transferor's obligations to other family members.
Result: Decree appealed from was reversed and the judgment of the trial judge restored.
Legal Category Hierarchy
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property law
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trusts
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resulting trusts
- benami transactions
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resulting trusts
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trusts
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equity
- presumption of advancement
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private international law
- application of english law
Solicitors for appellant :Wontners & Son. Solicitors for respondent: Bramall & White.
Judgement
Appeal from a judgment and decree of the Chief Court of Lower Burma (June 19, 1918) reversing a decree of Young J.
The appellant instituted the suit in the Chief Court against his wife, the respondent, praying for a declaration that two houses known as " Kildare " and " Kerry " in Rangoon were transferred to the respondent benami, and that the appellant was the true owner of them ; and for an order that the respondent should transfer the properties into the name of the appellant. By his plaint the appellant alleged that he had the two properties in question transferred into the respondents name benami, under the mistaken view that the rules of the Government department in which he was employed fettered his free action in the purchase of land, and that he had purchased the properties with the object of making provision for his children. The respondent by her written statement denied that either of the properties had been bought benami, and alleged that the appellant had bought the land and built the houses thereon for the purpose of making provision for her.
The trial judge (Young J.) delivered judgment for the plaintiff (appellant) as prayed, but that decision was reversed upon appeal.
The facts of the case, and the basis of the decisions of the case in Burma, appear from the judgment of their Lordships.
1920. June 21, 22, 24, 25. De Gruyther K.C. and Kenworthy Brown for the appellant. It was rightly found by the trial judge upon the evidence that the land and houses were not acquired and built by the appellant with the intention that the respondent should be the beneficial owner. The appellate Court erroneously placed the burden of proof upon the present appellant. The doctrine applied in the English Court of Chancery, under which an intended advancement in favour of the wife would be presumed, is not applicable; is excluded in India by the decision of the Board and by s. 82 of the Indian Trusts Act (II. of 1882). But if the onus was upon the appellant it was discharged. [Reference was made to Gopeekrist v. Gungapersaud (( 1854) 6 Moo. I. A. 53.); Uzhur Ali v. Bebee Ultaf Fatima (( 1869) 13 Moo. I. A. 232.) ; Bad Motivahoo v. Purshatham Dayal ([ 1904] I. L. R. 29
B. 306.) ; Decoy v. Devoy (( 1857) 3 Sm. & G. 403.) ; Forrest v. Forrest . (( 1865) 11 L. T. 763.)]
Dunne K.C. and G. S. Sanders for the respondent. The equitable principle of advancement as applied in England is applicable to these parties. The cases in which the Board has held that that principle does not apply to benami transactions between Hindus or Mahomedans are not relevant. Sect. 82 does not affect the matter, as it leaves open the question of intention. There was consequently a pre sumption that the transaction was intended for the benefit of the respondent Marshal v. Crutwell (( 1875) L. R. 20 Eq. 328.); Kishen Koomar Morito v. Stevenson . (( 1865) 2 Suth. W. R. 141.) But in any case the evidence showed that the intention was that the respondent should take the beneficial interest.
De Gruyther K.C. replied.
Aug. 3. The judgment of their Lordships was delivered by
LORD ATKINSON. This is an appeal from a decree dated June 19, 1918, of the Chief Court of Lower Burma (Civil Appeal side) reversing a decree of the original side of the said Court dated November 29, 1917. The suit out of which the appeal arises was brought by the appellant, who is the husband of the respondent, to have it declared, first, that two houses, named respectively " Kildare " and "Kerry," situated at Rangoon, were held by her as his benamidar and that he was the true owner of the same ; and second, that the respondent might be ordered to convey these houses to the appellant within such time as to the Court might seem fit. The houses in question had been erected by the appellant at his own expense upon sites which he had purchased out of his own or borrowed capital, and had caused to be conveyed to the respondent by two deeds. The respondent by her answer admitted that the si
