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1928 Supreme(SC) 39
Privy Council
Sir Lancelot Sanderson, Carson, Justice Phillimore, JJ.
Deputy Commissioner of Bara Banki -Appellant
Versus
Receiver of the Estate of Choudhry Shafiq-uz-Zaman and others -Resopndent
Privy Council Appeals Nos. 114 and 113 of 1926 : Oudh Appeals Nos. 12 and 11 of 1923
Decided On : 21-05-1928
Watkins and Hunter, Rogers and Nevil, Barrow, B. Dube, L.De Gruyther, L. M. Topling, S. Hyam, A.M. Dunne
The court held that removing an estate from statutory entail does not extinguish family customs of succession. Additionally, it affirmed that bona fide purchasers are protected under Section 41 of the Transfer of Property Act if the real owners impliedly consented to the transferrer's status as an ostensible owner.
Headnote:(A) Oudh Estates Act, 1869 - Sections 8, 13, 15 - Transfer of Property Act, 1882 - Section 41 - Succession to estates - Construction of arbitration award - Absolute ownership vs. life estate - Family custom of primogeniture - Ostensible owner - Where an arbitration award divides estates and debts between two lines of heirs, and the personal law of the parties favors the grant of an absolute estate to the first taker, the award should be construed as granting absolute ownership rather than a life interest.
(B) Oudh Estates Act, 1869 - Section 15 - Effect of taking estate out of statutory entail - The removal of an estate from a statutory entail does not per se render inoperative a family custom of succession recited in the Act. A departure from custom in a particular instance, especially with the consent of the parties, does not destroy the custom for all time.
(C) Transfer of Property Act, 1882 - Section 41 - Ostensible owner - Where interested parties are aware that a person is encumbering an estate and remain silent, they are deemed to have given implied consent to that person acting as the ostensible owner. A transferee who takes reasonable care to ascertain the transferrer's power and acts in good faith is protected from the claim that the transferrer was not authorized to make the transfer.
Facts of the case:
A taluqdar died leaving a will that was not sufficiently registered to be protected by the statutory exceptions of the Oudh Estates Act. A dispute arose between the widow and the brother regarding the devolution of the estates. The parties submitted to arbitration, and an award was made dividing the properties and debts between the two lines. Following the deaths of the original awardees, the grandson of the brother claimed that the widow's share should revert to the brother's line, arguing the widow had only a life interest. Separately, other heirs claimed shares under Mahomedan law, asserting that the arbitration award had destroyed the statutory entail and any existing family custom of primogeniture. The current owner of the estate had mortgaged the property to a bank and was subsequently adjudged insolvent.
Findings of Court:
The court found that the arbitration award granted the widow absolute ownership, as evidenced by the division of debts, the origin of certain properties, and the application of personal law. It further held that the family custom of primogeniture remained applicable despite the estate being taken out of the statutory entail. Regarding the mortgage, the court found that the claimants' silence while the owner dissipated the estate constituted implied consent, making him an ostensible owner under the Transfer of Property Act.
Issues: The main issues were whether the arbitration award created an absolute estate or a life interest; whether the removal of the estate from statutory entail extinguished the family custom of succession; and whether the mortgage to a bank was valid under the doctrine of ostensible ownership.
Ratio Decidendi: The court reasoned that the award's division of debts and the nature of the property indicated an intent to grant absolute ownership. It ruled that statutory entails and family customs are distinct; the end of the former does not terminate the latter. Finally, it held that the claimants, being aware of the owner's actions and receiving allowances, impliedly consented to his status as ostensible owner, thus protecting the bona fide mortgagee under Section 41 of the Transfer of Property Act.
Result: Both appeals dismissed.
Legal Category Hierarchy
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property law
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succession and inheritance
- testamentary succession
- customary succession
- statutory entail
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transfer of property
- ostensible ownership
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succession and inheritance
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practice and procedure
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arbitration
- binding nature of awards
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arbitration
Lord Phillimore. -
One Sarfraz Ahmad, taluqdar of Oudh, was possessed of the Talukas of Khanpur and Sikandarpur and Bhilwal with Hasanpur. His name was in List 2, Oudh Estates Act, 1869, in respect of Bhilwal and Khanpur and in List 5 in respect of Sikandarpur. He died in 1870, having made a will which, however, was not executed or registered sufficiently long before his death to be protected by the exception in S. 13 of the Act, and which would, therefore, be only operative in respect of legacies to persons qualified by the earlier paragraphs of the same section. He left surviving him a brother, Murtaza Husain, a widow Becham-un-nisa, and a daughter Zainad-un-nisa who married, and had a young son who was alive at the time of the testator's death. He purported to deal with the talukdari estates in the following terms :
The Taluqa Hasanpur and Bhilwal in Pargana Haidergarh and the Taluqa Khanpur in Pargana Subeha, which are ancestral and hereditary, and the Taluqa Sikandarpur in Pargans Simrautha, granted by the Government, are in my proprietary possession and occupation without the coparcenership of anyone ; and under the sanad granted by the Government, I have every power to mortgage, sell, gift and transfer (the same). Therefore, after me, the settlement be made, in the first place, with my wife, Mt. Bibi Bechun, after her, with my daughter, Mt. Zainab-un-nisa , and after her, with her issue, whether male of female, and my brother Murtaza Husain in respect of each taluqa, as it is recorded, according to the detail given herein (and they) be considered owners and successors in my place.
Then follow certain special directions concerning the properties, of which the material protions are as follows :
Taluqa Bhilwal, Hasanpur etc. - This Ilaqa was acquired by my father-in-law, Chaudhri Lutf-ul-lah, without any co-parcener. After me, the owner thereof will be my wife Mt. Bibi Bechun. The settlement and the lambar thereof should stand in her name. After her, Mt. Bibi Zainab-un-nisa, her only daughter, will be the owner and successor, and after her issue, whether male or female. The male issue should be the lambardar and reprssentative and the daughters be entitled to maintenance.
* * * * * * * * * * * *
Taluqa Sikandarpur, granted by the Government. - Settlement he made in respect of half with my wife and her issue and in respect of half with my brother, Murtaza Husain. Rs. 500 be allowed every year to my sister, Mt. Bibi Sughra.
Taluqa Khaupur. - After me, the lambar should stand in the name of my wife and my brother-Murtaza Husain. Villages Sharifabad and Alapur, with the villages appurtenant thereto, should remain in the possession and occupation of my wife, and, after her, in that of her issue, male or female. They should pay the revenue assessed by the Government, and they should live upon the profits thereof.
It should be better that whatever ilaqa remains of that half, the management thereof should remain with Murtaza Husain, and the expenses relating to the door and the payment of parole debts should rest with him. - the rendition of accounts to be made yearly. When the grandson Nawasa Mohommad Rafi-uz-zaman, attains the age of discretion, he may take the management in his own hands. During the lifetime of Murtaza Husain this would be a better (arrangment). The rest lies with the heirs.
Upon his death a dispute arose between the brother and the widow. Each claimed to have his or her name put on the register, and mutation proceedings were begun accordingly.
It should be stated that besides the question of the validity of the bequests there were further disputes as to whether each of the legatees should be entered on the register in respect of his or her share, or whether the brother should be entered in respect of the whole, and also as to the force and effect of a clause in the will purposing to restrain alienation.
When serious litigation seemed imminent the parties wore persuaded by a Government officer to submit their disputes to
