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1920 Supreme(SC) 82
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BUCKMASTER, LORD PHILLIMORE, MR. AMEER ALI, AND SIR LAWRENCE JENKINS.
MAHARAJ BAHADUR SINGH - Appellant
Versus
BALCHAND - Respondents
On Appeal From The High Court at Patna.
Decided On : Dec. 10. 1920.
Important Points
Subject
Property Law - Transfer of Property
Act Referred
Headnote
(B) Rule against perpetuities - An interest that vests at the expiration of an indefinite time, extending beyond the proper period, is void.
Facts of the case:
A religious body claimed possession of a small parcel of land based on a compromise agreement made decades prior. The agreement provided that if the body required land for building a temple and dharamsala, the owner and his heirs would provide it free of cost, or the body could take it. Subsequently, the owner leased the land to another party, who further leased it to the respondents. The claimants sought possession, asserting the agreement bound the owner's assignees.
Findings of Court:
The agreement did not create any present estate or interest in the land. The owner retained control of the property. The covenant was not one that could run with the land and thus was not enforceable against assignees.
Issues: Whether the agreement created a present interest in the land that would prevent the owner from granting leases to others, and whether the provision for future land grants was valid or void under the rule against perpetuities.
Ratio Decidendi: The court held that the agreement was not a grant in perpetuity but a conditional promise. Since the date for the potential grant was uncertain and the interest would not vest immediately, the provision violated the rule against perpetuities. Furthermore, such a personal covenant does not run with the land and cannot bind subsequent assignees.
Result: Appeal dismissed with costs.
Legal Category Hierarchy
-
property law
-
transfer of property
- rule against perpetuities
- covenants running with the land
- creation of interest in immovable property
-
transfer of property
Solicitors for appellant:Barrow, Rogers & Nevill. Solicitor for respondents: H. S. L. Polak.
Judgement
Appeal (No. 13 of 1919) by special leave from a judgment and decree of the High Court (May 5, 1916) reversing a decree of the Judicial Commissioner of Chota Nagpur (June 27, 1912) on appeal from the Munsif of Giridh.
The suit was brought in the Munsifs Court in 1910 by the appellant as representing the Sitambri Society of Jains for possession of a small parcel of land between two and three cottahs in extent situate on a hill called Parasnath Hill. The plaintiff claimed under an agreement made on May 16, 1872, between the society and the Raja of Palgunga, the defendants being in possession under a lease from the Rani to whom the Raja had granted the hill after the date of the agreement. The agreement had been made in compromise of litigation as to the possession of .the hill, and the material passage relied on is set out in the judgment of the Judicial Committee.
The plaintiff by his plaint alleged that on September 20, 1907, the Society had given a written notice to
59 Law. Rep. 48 Ind. App. 376 ( 1920- 1921)
Maharaj Bahadur Singh V. Balchand 160
the Raja to the effect that a site on the hill, defined in the notice, was required by them for the purpose of building a temple. They also alleged that they had taken possession of the land shortly after giving the notice.
The Munsif dismissed the suit. He held that the agreement conferred no title upon the Society. He also found that delivery of the alleged notice was not proved, and that it was not proved that the Society had obtained possession.
On appeal the Court of the Judicial Commissioner reversed the decision of the Munsif and made a decree in the plaintiffs favour. The learned Judicial Commissioner held that the Society was entitled under the agreement to take possession of the site for the purpose of building a temple, and that they had done so ; that accordingly the plaintiff was entitled to the relief sought, whether or not the notice was sufficient.
Upon a second appeal to the High Court (Chamier C.J. and Jwala Prasad J.) the decision of the Munsif was restored and the suit dismissed.
Chamier C.J., referring to the provision in the agreement set out in the judgment of the Judicial Committee, said " If that provision should be regarded as an attempt to create an interest in favour of future generations of Sitambris it is void for remoteness, whether the case is governed by general principles, or by s. 14 of the Transfer of Property Act, 1882, or by Hindu law (if the operation of s. 14 is excluded by s. 2 (d) of the Act). If however the provision was no more than a personal contract to convey land to the Sitambris it is not affected by the rule against perpetuities. In my opinion the provision was not intended to create an interest in favour of the Sitambris, and, further, such a provision cannot in India be regarded as creating an interest in favour of the other party to the transaction. Sect. 54 of the Transfer of Property Act, 1882, which, as I understand, reproduced the previously existing law on the subject, provides that a contract for the sale of immovable property does not of itself create any interest in the property, and it would seem to follow that a contract to give immovable property does not itself create any interest in the property. The plaintiff, however, contends that the contract is binding upon the Raja and his assignees, including the appellants, under s. 40 of the Transfer of Property Act, 1882. It was pointed out that Act was passed before the decision in South-Western By. Co. v. Gomm (( 1882) 20 Ch. D. 562.), and urged that s. 40 was intended to reproduce the existing English law and accordingly is not confined to restrictive covenants, but applies to every obligation arising out of a contract and annexed to the ownership of immovable property. .... Assuming that that contention was correct we have to consider next whether the plaintiff is entitled to maintain the suit. The principle of Walsh v. Lonsdale (( 1882) 21 Ch. D. 9.) has been ap
