The word "property" in Section 128 of the Transfer of Property Act, 1882, should be interpreted in a comprehensive manner and includes all legal rights of a person, except personal rights.

Headnote:
TRANSFER OF PROPERTY ACT, 1882 - SECTION 128 - UNIVERSAL DONEE - GIFT OF WHOLE PROPERTY - INTERPRETATION - LIFE INTEREST - PROPERTY - MEANING.
Fact of the Case:

The plaintiff sued the defendants to recover a debt based on a promissory note executed by the adoptive mother of the 1st defendant. The 2nd and 3rd defendants were impleaded as universal donees under a settlement deed (Exhibit B-4) executed by the adoptive mother. The trial court dismissed the suit against the 2nd and 3rd defendants, holding that they were not universal donees. The plaintiff filed a revision petition challenging this decision.
Finding of the Court:

The court held that the 2nd and 3rd defendants were not universal donees under Exhibit B-4 because the adoptive mother had retained a life interest in another property, which was not included in the gift. The court interpreted Section 128 of the Transfer of Property Act, 1882, which imposes personal liability on a donee for the debts of the donor when the gift consists of the donor's whole property. The court held that the word "property" in Section 128 should be interpreted in a comprehensive manner and includes all legal rights of a person, except personal rights. Since the adoptive mother retained a life interest in another property, the gift under Exhibit B-4 did not constitute a gift of the whole property, and therefore, the 2nd and 3rd defendants were not universal donees.
Issues: 1. Whether the 2nd and 3rd defendants were universal donees under Exhibit B-4. 2. Whether the adoptive mother had gifted her whole property under Exhibit B-4.
Ratio Decidendi: 1. The court interpreted Section 128 of the Transfer of Property Act, 1882, and held that the word "property" should be interpreted in a comprehensive manner and includes all legal rights of a person, except personal rights. 2. The court held that since the adoptive mother retained a life interest in another property, the gift under Exhibit B-4 did not constitute a gift of the whole property, and therefore, the 2nd and 3rd defendants were not universal donees.
Final Decision: The revision petition was dismissed, and the trial court's decision dismissing the suit against the 2nd and 3rd defendants was upheld.

( 1 ) THE petitioner (plaintiff) instituted a suit against the three defendants on the foot of Exhibit A-1, dated 24th April, 1961, for recovery of Rs. 1,900 and odd. This promissory note was executed by the adoptive mother of the 1st defendant. She died before the suit. The 1st defendant was made party as legal representative of the deceased adoptive mother. The 2nd and 3rd defendants were impleaded and liability was sought to be fastened on them on the ground that they are universal donees under Exhibit B-4. Under Exhibit B-4, the adoptive mother had settled one house in favour of the 2nd and 3rd defendants, retaining life-interest for herself. The 1st defendant remained ex parte. The 2nd and 3rd defendants in their written statement denied their liability. They urged that Exhibit B-4 does not make them universal donees, as the adoptive mother had other properties also. Exhibit B-4 was executed on 5th May, 1961, the lower Court dismissed the suit against defendants 2 and 3, but decreed it against the 1st defendant. Defendant 1 has not come in revision. Therefore, the decree against him remains. It is the plaintiff who filed this Revision petition, contending that the suit ought to have been decreed even against defendants 2 and 3, since they are the universal donees under Exhibit B-4. Reliance was placed in this connection on section 128 of the Transfer of Property act. It reads as follows : " Subject to the provisions of section 127, where a gift consists of the donor s whole property, the donee is personally liable for all the debts-due by and liabilities of the donor at the time of the gift to the extent of the property comprised therein. "

( 2 ) IT is not in dispute that on the day when the promissory note was executed, the adoptive mother had two houses. In one house she had life-interest under the settlement-deed executed by her husband. The other house was her " Streedhana" property which she had settled under Exhibit B-4 in favour of the 2nd and 3nd deferrendants, routing With hersach a lnto intrest. Thus she had lite-interest in both the houses. What was setiha under Exhibit B-4 was only one house. It would in, therefore, be. correct to argue that the whole property was settled under exibit B-4. What was argued before me was that since she had only a life-interest in the other property set the. in her favour by her husband . , it can not. be raid that she had any other property within the meaning of section 128. It is difficult to accept that contention,. In tact in both the houses she had only a life-intest. Now section 128 would apply only where the gift is of the donor s "whole property". If any portion of the doners pioperty is excluded from the gift that section will not apply, no matter what the value of the property excluded is. The word property appearing in secticn 128 is not qualified by any expression such as transferable property or movable or immovable. Even in a case where the doner has seme movable or immovable property left after the gift is made, section 128 will not be attracted. It is thus plain that in order to constitute a donee as an universal donee, sum total of donor s rights and liabilities in his entire property is (sic) transferred to the donee.

( 3 ) IT is admitted that in any case the donor had life-interest in the house settled in her favour by her husband. When property is given to a female by a deed, the question may arise as to whether the settlement or the gift passes an estate of inherirance, i. e. , an absolute estate, or merely a limited estate. Broadly speaking if the gift passes an absolute estate she can dispose of the property at her pleasure by act inter vivos or by will, but if the gift passes a limited estate, she can enjoy the usufruct of the property during her life-time, but she will not be able to dispose of the property. Whether a gift passes an absolute or a limited estate depends on the terms of the deed. Whatever may have been the position before in re ga

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1967 Supreme(AP) 70

Andhra Pradesh High CourtJudges : GOPALRAO EKBOLEKothuri Lakshmaiah - AppellantVersusAravapalli Lakshmaiah - RespondentDecided On : 06-30-67

The word "property" in Section 128 of the Transfer of Property Act, 1882, should be interpreted in a comprehensive manner and includes all legal rights of a person, except personal rights.

Andhra Pradesh High Court
Judges : GOPALRAO EKBOLE
Kothuri Lakshmaiah - Appellant
Versus
Aravapalli Lakshmaiah - Respondent
Decided On : 06-30-67