The central legal point established in the judgment is the interpretation of property rights in the context of a gift deed and insolvency proceedings, emphasizing the distinction between a life estate and an absolute estate.

King, J.

1. The appellant here is the 3rd defendant in the Court of the District Munsiff of Karkal. He was a lessee of certain properties under a permanent lease from the first defendant. The first defendant was the widow of one Nagaraja Shetty. In 1926 Nagaraja Shetty made a gift (Ex. II) in favour of his wife, the first defendant, of the properties now in suit. In October, 1926, he was adjudicated insolvent and in March, 1927, the gift deed was set aside. In March, 1928, the adjudication was annulled. Although the gift deed had been set aside it had not been necessary for the Official Receiver to dispose of the property which was dealt with by the gift deed. Between these dates Nagaraja Shetty executed a will on the nth August, 1927. In that will he assumed that as the gift deed had been set aside the property had reverted to himself and he could dispose of it. He bequeathed it to his wife and after his wifes death to their three daughters. The suit was filed in the Munsiffs Court by the first plaintiff, one daughter of Nagaraja Shetty, and other plaintiffs who are the daughters of another daughter, for a declaration that the permanent lease given by the first defendant to the third defendant was not valid beyond the lifetime of the first defendant. The suit has been decreed by the learned District Munsiff and the District Munsiffs decree has been confirmed by the learned Subordinate Judge of South Kanara and the third defendant now appeals to this Court.

2. The first point which requires discussion is whether the property passes under the gift deed Ex. II or under the will. It seems to me that, as argued for the appellant, it must be the gift deed which is here the effective document. No doubt that gift deed was set aside in 1927, but it was set aside not in the interests of the insolvent as a person but in the interests of the insolvents creditors represented by the Official Receiver. As it was unnecessary to dispose of the property covered by Ex. II in order to meet the claims of the insolvents creditors it seems to me that the effect of the annulment of Ex. II must automatically disappear at the conclusion of the insolvency proceedings. It is true that there is no specific provision in the Provincial Insolvency Act to deal with this rather unusual situation and it was argued by the Subordinate Judge that under Section 37, the setting aside of the sale deed was confirmed finally. I am not prepared to hold this. It seems to me that in accordance with the principle of the law in England as referred to in In re Parry: Ex parte Salaman (1904) 1 K.B. 129 the annulment of an alienation of this kind is solely in the interests of an insolvents creditors, and to the extent that those interests do not require the annulment, the annulment is automatically cancelled. I would hold therefore that from March, 1928, onwards any rights which had accrued under Ex. II are automatically restored, and this appeal must be decided upon an examination of the gift deed, Ex. II.

3. On the question of the interpretation of Ex. II the learned District Munsiff held that it conferred a life estate upon the first defendant and an absolute estate after her death upon her three daughters Padmavathi, Sankamma and Shivadevi. The learned Subordinate Judge took the opposite view that it conferred an absolute estate on the first defendant and that that absolute estate could not be defeated by a subsequent reference to the fact that the three daughters would be succeeding their mother on her death. It seems to me that of these views that of the District Alunsiff should prevail. The District Munsiff points out the contrast between the language in which the rights of the first defendant are mentioned and that in which the rights of the three daughters are mentioned later in the document. The donor says:

I have hereby now delivered possession of the undermentioned properties to you as gift subject to the condition set out below;

and near the conclusion of the