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1917 Supreme(SC) 9
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BUCK MASTER L.C., LORD WRENBURY, AND MR. AMEER ALI.
SURAJ NARAIN - Appellant
Versus
RATAN LAL - Respondents
On Appeal From The Judicial Commissioner of Oudh.
Decided On : January 30, 1917.
Solicitors for appellants:James Gray & Son. Solicitors for respondents: T. L. Wilson & Co.
Professional earnings of a joint family member blended with joint funds become joint property. However, properties purchased in another's name using such funds are held as gifts if the purchaser's intention to benefit the named person is established, overriding the presumption of joint family property.
Headnote:(A) Hindu Law (Mitakshara) - Separate acquisition and blending of funds - Where a member of a joint family blends separate professional earnings with joint family funds, such earnings and subsequent purchases made from the blended fund are presumed to be joint family property. The determination of whether separate acquisition has been blended is to be judged from all the circumstances of the case.
(B) Benami Transactions - Intention of the purchaser - Even if funds are blended, if the purchaser intends to make a gift to a third party by purchasing property in their name, such property is held for the benefit of the named person and not the joint family. A statement made by the purchaser against their own interest serves as strong evidence of an intention to make a gift.
(C) Code of Civil Procedure, 1882 - Section 317 - Claims to properties purchased at execution sales in the name of another are barred by the statutory provisions of the Code.
Facts of the case:
Members of a Mitakshara joint family claimed that various properties and investments made by the deceased karta in the name of his son-in-law, or the son-in-law's son, were benami transactions intended for the benefit of the joint family. The deceased karta had earned professional fees as a pleader and maintained an omnibus account where these fees were mingled with joint family income and used for various purchases.
Findings of Court:
The court found that the deceased karta had blended his professional earnings with the joint family funds, as evidenced by the account books and his own depositions, thereby making those funds joint property. However, regarding properties purchased in the name of the son-in-law, the court held that a statement made by the deceased karta indicated a clear intention to provide for the son-in-law as a gift. Additionally, the court found that claims to certain properties bought at court auctions were barred by the Code of Civil Procedure.
Issues: Whether the professional earnings of the karta were blended with joint family funds; whether properties purchased in the name of the son-in-law were benami transactions for the joint family or gifts; and whether claims to properties bought at execution sales were barred by the Code of Civil Procedure.
Ratio Decidendi: The court ruled that the mingling of separate earnings with joint funds in a common account creates a presumption of joint property. However, this presumption is rebutted if there is evidence of a specific intention to make a gift to the named purchaser. A statement made against the interest of the maker is admissible and sufficient to establish such intention. Furthermore, statutory bars under the Code of Civil Procedure regarding execution sales override claims of benami ownership.
Result: Appeals allowed in part.
Legal Category Hierarchy
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family law
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hindu law
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mitakshara law
- joint family property
- benami transactions
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mitakshara law
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hindu law
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practice and procedure
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civil procedure
- execution sales
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evidence
- blending of funds
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civil procedure
Judgement
Consolidated Appeals from judgments and decrees of the Court of the Judicial Commissioner (October 30, 1909) reversing decrees of the Subordinate Judge of Hardoi.
The suits were instituted in 1903 by members of a Mitakshara joint family (appellants) who claimed that certain purchases of property and other investments made by the deceased karta Ram Narain in the name of his son-in-law Ratan Lai, or in that of the latters son, were ismfarzi (benami) transactions and were made for the benefit of the joint family.
The facts appear from the judgment of their Lordships.
As to part of the properties both Courts decided in favour of the respondents, and no further question arose as to those properties.
With regard to the properties in dispute in the appeal the Subordinate Judge decided in favour of the appellants.
The Court of the Judicial Commissioner reversed that decision, holding that they were acquired by Ram Narain out of his professional earnings, that he had no intention of throwing the amount so expended into the joint family funds, but that from all the circumstances it was to be presumed that he intended the transactions to be for the benefit of Ratan Lal or his wife. It was further held that the claim as to certain properties which had been bought at sales in execution, and of which Ratan Lal was the certified purchaser, was barred by the Code of Civil Procedure, 1882, s. 317.
1916. Nov. 17, 20, 21, 23, 24. Dunne, for the appellants. The properties were acquired benami for the joint family. The onus was upon the respondents Luximon Row v. Mullar Row . ((1831) 2 Knapp, 60.) The case falls within the principle laid down in Lal Bahadur v. Kanhaia Lal (( 1907) L. R. 34 lad. Ap. 65.), as Ram Narain blended his professional earnings in account with the joint family property. The whole fund became joint family property, and it follows that all purchases out of the fund were joint family property. Dhurm Das v. Shania Soondri . (( 1843) 3 Moo. Ind. Ap. 229, 240.) There is in India no presumption in favour of advancement; on the contrary the presumption is in favour of the joint family Gopeekrist v. Gungapersand (( 1854) 6 Moo. Ind. Ap. 53.); Prankishen Paul v. Mothooramohun . (( 1865) 10 Moo. Ind. Ap. 403.) The Code of Civil Procedure, 1882, s. 317, did not afford a defence under the circumstances as to the properties bought at execution sales Sankunni Nayar v. Narayanan (( 1893) I. L. R. 17 Madr. 282.); Bodh Singh v.] Ganesh Chunder Sen. (( 1873) 12Beng.L.R. 317,329.)
De Gruyther, K.C., and Dube, for the respondents. It was not proved that Ram Narain blended his professional earnings with the joint funds so as to make a common stock. The book kept by Ram Narain included items, such as money sent to him for investment, which could not form part of the joint family property. Joint family accounts were kept at Lucknow. In Lal Bahadur v. Kanhaia Lal (L. R. 34 Ind. Ap. 65.) the members of the joint family were father and son, and it was clearly established that there was a common fund. Ram Narain had an absolute power to dispose of his professional earnings. The evidence, including the statement made in 1899, shows that the properties in dispute were acquired by him for the benefit of Ratan Lal and his wife. That intention itself negatives the inference that the purchase price was blended with the joint fund. [Reference was made to Obhoy Churn Mookerjee v. Panchunun Bose (( 1863) Marshall, 364.), Rajah Chundirnath Roy v. Ramjoy (( 1871) 15 Suth. W. R. (P.C.) 7.), Nawat Azimut Ali Khan v. Hurdwaree Mull (( 1870) 13 Moo. Ind. Ap. 395), and Uman Parshad v. Gandharp Singh . (( 1887) L. R. 14 Ind. Ap. 127.)] The decision as to the properties bought at execution sales in any case was right Niamat-un-nissa v. Raza Ali . (( 1905) 8 Oudh Cases, 306.)
Dunne, in reply. The case in Marshalls reports relates to a Dayabhaga family ; the father, therefore, had power to dispose of the money. The statement in 1899 was not against the interes
