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1941 Supreme(SC) 4
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD THANKERTON, SIR GEORGE RANKIN, AND CLAUSON L.J.
MERLA RAMANNA - Appellant
Versus
CHELIKANI JAGANNADHA RAO - Respondents
On appeal from the High Court at Madras.
Decided On : March 18, 1941.
A nominal or sham sale deed between coparceners, not intended to affect their actual rights, does not effect a division of status or terminate the right of survivorship, regardless of whether the document refers to fractional shares.
Headnote:(A) Hindu Law (Mitakshara) - Right of survivorship - Joint family property - Recovery of debt from assets of a deceased coparcener - Whether a nominal sale deed between brothers effects a division of status and terminates the right of survivorship.
(B) Indian Evidence Act, 1872 - Section 92 - Admissibility of oral evidence - Where a deed is found to be a nominal conveyance not intended to affect the rights of the parties inter se, it cannot operate as a division of status between coparceners.
(C) Division of Status - Reference to fractional shares in a sham document - Coparceners who intend to remain joint and undivided do not become divided simply because, for purposes of pretence, they refer to their interests as fractional shares in a nominal document. Such language does not warrant an inference of a previous or independent agreement to hold property in divided shares.
Facts of the case:
A creditor of a deceased individual sought to recover a debt from certain immovable properties attached before judgment. The descendants of the deceased's brother contended that they were coparceners with their uncle in a joint Hindu family governed by Mitakshara law and that, upon the uncle's death, the properties devolved upon them by right of survivorship. The creditor argued that the deceased and his brother had ceased to be undivided in respect of the properties due to a sale deed whereby the brother purported to sell his one-tenth interest to the deceased.
Findings of Court:
The court found that the sale deed was a nominal transaction and not intended to have effect upon the rights of the parties. Evidence suggested the deed was a pretence to prevent the brother from dissipating property due to perceived extravagance. The court held that the deed did not operate as a division of status, and the properties remained joint family property.
Issues: Whether a nominal sale deed, which was not the expression of an agreement and not intended to be effective between the parties, could legally divide the interests of coparceners and end the right of survivorship.
Ratio Decidendi: A document that is not the expression of an agreement and is not intended to have effect upon the rights of the parties cannot change their undivided status. The use of language referring to fractional shares within a sham document does not imply a real partition or an independent agreement to hold property in divided shares, and thus does not terminate the jus accrescendi.
Result: Appeal dismissed.
Legal Category Hierarchy
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family law
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hindu law
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mitakshara
- coparcenary
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mitakshara
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hindu law
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property law
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transfer of property
- sham transactions
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transfer of property
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practice and procedure
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execution of decree
- attachment of property
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execution of decree
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evidence
- admissibility of oral evidence
Judgement
Appeal (No. 11 of 1939) from a judgment and order of the High Court (November 16, 1936) which reversed a judgment and order of the Court of the Subordinate Judge of Cocanada (September 10, 1934).
In suit No. 120 of 1930 of the Subordinate Court, Cocanada, the appellant sued the respondents, as persons in possession of the estate of the late Dharma Rao, for recovery of a promissory note debt due to him by Dharma Rao. The first two respondents were the sons of Dharma Raos brother, Kasibabu; the third respondent was a married daughter of Dharma Rao, and the fourth respondent was another of his relations.
The appellant had, before judgment, attached certain immovable properties as belonging to the late Dharma Rao. The first two respondents (alone concerned in this appeal) contended that they were joint with Dharma Rao, and that on his death the properties devolved on them by right of survivorship and could not be proceeded against for a simple debt of Dharma Rao. The Subordinate Judge reserved those points for decision in execution, and passed a decree on January 27, 1931, directing the respondents to pay a certain sum to the appellant " from out of the assets of the late "Chelikani Dharma Rao in their hands."
The appellant sought to execute his decree by proceeding against the properties attached. On September 12, 1931, the first two respondents filed Execution Application No. 772 of 1931, which gave rise to the present appeal, in the Court of the Subordinate Judge of Cocanada praying for an order establishing their right to the properties in question and setting aside the attachment effected at the instance of the appellant.
The appellant contended that Dharma Rao was a divided member so far as regards the properties in question by reason of a sale deed of March 22, 1900, whereby Kasibabu purported to sell his one-tenth interest therein to his brother Dharma Rao.
The Subordinate Judge rejected the respondents application.
On appeal by the respondents the High Court (Mockett and Lakshmana Rao JJ.) held that the sale deed was a nominal transaction, never meant to be effective, and that it was not acted upon ; that even if it was a real transfer it did not effect a division of status either generally or partially between Dharma Rao and Kasibabu. In the result, they found that the respondents were joint with their uncle, and as such had a right of survivorship. They therefore allowed their application, and set aside the order of the lower Court.
1941. Feb. 6, 7, 27. J. M. Parikh and Ralph Parikh for the appellant. The effect in law of the deed of sale of March 22, 1900, was that the respondents father, Kasibabu, and Dharma Rao, the two brothers, became separate from each other in status. That would be the result whether the sale deed was a real or a sham transaction. If it were a real transaction, Dharma Rao became the owner of a one-fifth share (his own one-tenth and his brothers one-tenth), and if it were a sham transaction, Dharma Rao became the separate owner of his own one-tenth share and the owner in trust for his brother of his brothers one-tenth share. In neither case was Dharma Rao a coparcener with his brother or his nephews, the respondents, who were not born at that time. The deed of sale effected a separation in estate of the respondents father and Dharma Rao. [On the question of admissibility reference was made to s. 92 of the Indian Evidence Act (I. of 1872), and to Balkishen Das v. Legge (( 1899) L. R. 27 I. A. 58.), where it was held that oral evidence of intention is inadmissible for the purpose of construing deeds or of proving the intention of the parties.]
[Sir George Rankin referred to Tyagaraja Mudaliyar v. Vedathanni (( 1935) L. R. 63 I. A. 126, 134, 137, 139.).]
Amirthathammal v. Periasami Pillai (( 1909) I. L. R. 32 M. 325.) deals with the same point, but it cannot stand in view of Tyagaraja Mudaliyar v. Vedathanni (( 1935) L. R. 63 I. A. 126, 134, 137, 139.). The sale deed was put on the reg
