FAZLUL RABBI PRADHAN

STATE OF WEST BENGAL March 8, 1965

SQ7

[P. B. GAJENDRAGADKAR, CJ., M. H!DAYA, TULLAH, J. c. SHAH AND B

S. M. SIKRI, JJ.] West Bengal Estates Acquisition Act (Act 1 of 1954), s. 6(l)(i)- "Cliaritab!e purpose", meaning of.

The appellants were the respective mutawallis of two wakfs, in which either the ultimate benefit to the charity was postponed till after the exhaustion of the wakif's family and descenden ts, or the C income from the wakf estate was applied for the maintenance of the family side by side with expenditure for charitable or religious purposes. Notices were issued by the Collector under the West Bengal . Estates Acquisition Act, 1953, to the appellants, calling upon them to hand over possession of the wakf estates, on the ground that under s. 4 of the Act, there was an extinction and cesser of the estate and the rights of the appellants, and that their divested estates and rights vested in the State. The appellants claimed that they were protected D by s. 6(l)(i) of the Act, because, they were holding the properties exclusively for purposes which were charitable or religious or both.

The claim was rejected by the Collector, by the Commissioner on appeal, and by the High Court under Art. 226 of the Constitution.

Iii the appeal to the Supreme Court, HELD: The purposes described in the deeds were not covered by E the expression "religious purpose'', and they were not exclusively for charitable purposes. Mingled with those purposes were some which were secular and some, which were family endowments, of a very substantial character. As the provisions about the family had not become inoperative by the exhaustion of the beneficiaries, the deeds, as they stood, could not be said to come within exemption claimed.

[317 F-H]. • F The provisions of the Act apply notwithstanding anything to the contrary contained in any other law or in any instrument and notwithstanding any usage or custom to the contrary. The Act must, therefore, be construed on its actual words and the exemption cannot be enlarged beyond what is granted there. No doubt, the definition of "Charitable purpose" is not exhaustive like that of "religious purpose" but the expression "public utility" in the definition of "charitable purpose" gives a guidance to the meaning and purpose of the G exemption. It leaves scope for addition but it does not make for enlargement in directions which cannot be described as "charitable". Al provision for the family of the wakif or for himself cannot be regarde~ as "relief of poor", "medical relief" or "the advancement of education" under the definition. It cannot also be regarded as an expendi ture on an object of general public utility. It is true that after the H passing of the Mussalman Wakf Validating Act, 1913 and the Shariat Act, 1937, wakfs, in which the object was the aggrandisement of th!! families of wakifs without any pretence of charity in the ordinary sense, became valid and operative. But, the intention was not to give a new meaning to the word "Charity" which in common parlance is a word denoting a giving to someone in necessitous circumstances and in law, a giving for public good. A private gift to one's own self or kith and kin may be meritorious and pious, but is not a charity in the legal sense and Courts in India have never regarded such gifts as for religious or charitable purposes, even under the Mahomedan Law.

(313 B, H; 314 A; 316 F-H; 317 D].

1,1 B(N; SSOI-7

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 392 and A 393 of 1964.

Appeals by special leave from the judgment and order dated March 26, 1962, of the Calcutta High Court in Civil Revision Nos. 3176 of 1958.

G. S. Chatterjee and S. C. Mazumdar, for the appellant (in B C.A. No .. 392/64).

N. C. Chatterjee and S. C. Mazumdar, for the appellant (in C.A. No. 393/64).

C. K. Daphtary, Attorney-General, B. Sen, S. C. Bose and P. K. Bose, for the respondents (in C.A. 392/ 64).

B: Sen, S. C. Bose and P. K. Bose, for the respondent (in C.A.

No. 393/64). .

The Judgment of the Court was delivered by

Hidayatullah, J.

In these two appeals the appellants seek to displace a common judgment and order of the High Court of Calcutta dated March 26, 1962 by which a Full Bench of the Court, specially constituted to hear and determine certain petitions under Art. 226 of the Constitution involving a common point of law, discharged the Rule issued earlier in them. These cases were concerned with Muslim wakfs in which either the ultimate benefit to charity is postponec'. till after the exhaustion of the wakif's family and descendants or the income from the wakf estate is applied for the maintenance of the family side by sid~ with expenditure for charitable or religious purposes. The common question which arose and still arises is whether these wakfs are affected by the passing of the West Bengal Estates Acquisition Act, 1953 (West Bengal Act I of 1954). That Act, in common with similar Acts of other States in India abolished from a date notlfied by the State Government all intermediaries such as proprietors, tenure-holders etc. between the raiyat and the State and vested the estates and the rights of the intermediaries in the State free from all incumberances. Section 3 of the Act provided that the Act was to have effect notwithstanding anything to the contrary contained in any other law or in any contract express or implied or in any instrument and notwithstanding any usage or custom to the contrary. There were, however, some exceptions and one such exception was that an intermediary was entitled to retain, with effect from the date of vesting, land held in

khas under a trust or endowment or other legal obligation exclusively for a purpose which was charitable or religious or both.

Notices under s. 10(2) of the Act were issued by the Collectors in charge, Estate Acquisitions, to the respective Mutwallis informing them that after the notification issued on November 11, 1954 under s. 4 of the Act there was extinction and cesser of the estate

''AZLUL RABBI PRADHAN v. STATE OF WEST BENGAL (Hich.yaiullah, J.) 309

and rights of these intermediaries and !heir .divested estates and rights vested in. the State. The Mutawalhs were called upon by the said notice or order to give up possession of these estates and interests within 60 days of the service of the order, to the officer empowered by the Collector in this behalf. The orders also specified in schedules appended thereto, the details of such properties, interests and rights. Notices of this kind were issued to Fazlul Rabbi Pradhan, Mutawalli of Abdul Karim Wakf Estate, who is appellant in Civil Appeal No. 392 of 1964 and to Kawsar Alam, Mutawalli of Penda Mohammad Wakf Estate, appellant in Civil Appeal No. 393 of 1964. Similar notices were issued to other mutawa!lis in respect of other wakfs. The mutawallis appeared _in answer to the notices and objected to them. They claimed that they were protect• ed by s. 6(l)(i) of the Act (to which detailed reference will be made presently) as they were holding the properties exclusively for purposes which were charitable or religious or both. This claim was not accepted by the Collector, Estate Acquisitions, and appeals to the Commissioner also failed. The orders of the Collector and tlie Commissioner are dated February 24, 1956 and January 18, 1958 respectively.

The appellants after serving notices of demand for justice filed petitions in the High .Court under Art. 226 of the Constitution. The petitions came up for hearing before D. N. Sinha J. and were referred, on his recommendation, to a Full Bench consisting of Bacha wat, D. N. Sinha and P. N. Mookerjee JJ. These learned Judges by separate but concurring judgments held that the wakfs in question were not protected by s. 6(1)(i) as they were not exclusively for purposes which were charitable or religious or both and discharged che Rule. The cases were, however, certified under Art. l-33(1)(a) and (c) of the Constitution and these two appeals were filed.

It is not necess~1ry to state how the Act is constructed for the only question is whether the wakfs can be said to be exclusively for purposes which are religious or charitable or both and thus exempted from the operation of the Act by virtue of s. 6(1)(i) which reads:

"6. Rights cf intermediary to retain certain lands.

(1) Notwithstanding anything contained in section 4 and 5, au intermediary shall, except in the cases mentioned in the proviso to sub-section (2) but subject to the other provisions of that sub-section, be entitled to ret1in with effect from the date of vesting- * • * * • * * • (i) where the intermediary is a corporation or an institution established exclusively for a religious or a charitable purpose or both, or

310 SUPREME COURT REPOR'rS [J 96o] 3 S.C.R.

ls a person holding under a trust or an endowment or other legal obligation exclusivey for a purpose which is charitable or religious or both land held in khas by such corporation or institution, or person, for such purposes."

Section 2(c) defines "charitable purpose" and s. 2(n) "religious purpose". These definitions are:

"2(c) "charitable purpose" includes the relief of poor, medical relief or the advancement of education or of any other object of general public utility;"

~2(n) "religious purpose" means a purpose connected with religious worship, teaching or service or any performance of religious rites;" lf this concession is not available then the estate must vest in the State Government under ss. 4 and 5 of the Act. The former section invests power in the State Government to notify the date from which the estates and rights of every intermediary are to vest in the State free of all incumberances and the latter says that upon due publication of the notification the vesting takes place from the date notified. This has been done.

The wakfs in these two appeals are dissimilar in their terms but both provide for application or income for the support of the wakifs and their families. In the Abdul Karim Wakf (Civil Appeal 392 of 1964) the value of the property is shown as Rs. 1,00,000 and a ceiling of Rs. 4,500 is placed by the wakif on expenditure per year (cl. 12). The mutawalliship and the Na.ib mutawalliship run in the family 'from generation to generation first in the male line and after exhaustion of the male line in the female line. The charities mentioned specifically or generally require a stated expenditure of Rs. 904 per year. The wakif has, in addition, provided for an expenditure of Rs. 2,000 at a time, for the solace of his own soul and for his burial ceremonies etc. Rs. 25 have been ordered to be spent on Mi/ad every year.

As regards secular expenses the deed directs that 10 per cent of the income is to be kept as a reserve fund and from savings from the income other properties are to be purchased (cl. 19). The mutawalli and the Naib mutawalli are to receive 8 per cent of the income in proportion of 5: 3. Then follow numerous dispositions for the benefit of the family. They are:

"15. My wife Bibi Jainulnessa will get as long as she is alive, Rs. 1,200 annually at the rate of Rs. 100 per month and Bibi Taherankhatun, the widow of my eldest son, will get as long as she is alive, Rs. 480 annually (Rupees four hundred eighty only) at the rate of Rs. 40 per month. Such monthly allowances

l'AZLUL RABBI PRADHAJ! v. STATE OF WEST BENG.O.L (Hidayatullah, J.) 311

will be stopped after their death. After their death their heirs will not get any portion of the aforesaid monthly allowances.

"16. Each of my three sons Shriman Tojammal Hossain Prodhan, Shriman Ahmad Yasin Prodhan and Shriman Azizul Huq Prodhan, will get Rs. 24 per .cent out of the net income of the wakf estates (after payment of revenue, cess etc. which are current at present or will be levied in future and afteT meeting the costs of administration). Shriman Abu Alam Prodhan, the only son born of the loins of my deceased second son will similarly get at the rate of Rs. 7 per cent out of the net income.

"18. A fund will be created with a deposit at the rate of Rs. 3 (Rupees three only) per cent, out of the annual net income for the purpose of educatio.n of the sons of my sons, sons of my daughters, sons of the daughters of my sons and my great-grandsons (in the male line). The Mutawalli and the Naib Mutawalli in consultation with each other will render help as far as possible to the boy amongst them who will be meritorious and has zeal for education according to his standard of education.

If there be any surplus the same will be kept in deposit in the wakf estate for meeting the expenses of education of the future heirs. If after graduation he goes to Englan'cl, France, Germany, America, Japan, Australia and other progressive cou11tries for higher education, then the Mutawalli and the Naib Mutawalli will, in consultation with each other, help him as far as possible. '20. The provision made for allowances for my aforesaid three sons and my grandson Shriman Abu Alam Pradhan in Schedule (Kha) will vest, after their death in the respecti; e sons and grandsons in the male line equally. If any of them has no son or grandson, in that case after his death if his wife lives and continues to follow her own religion, she will get one-eighth share of the aforesaid allowance as long as she is alive. The remaining seveneighth share and in the absence of his wife, sixteen annas share will vest in the wakf estate. Daughters born of them will not get the said allowance (in the female line)." '

In lhc Pcnda Mohammad Wakf Estate (Civil Appeal 393 of 1964) the value of the property is shown as Rs. 40.000. The expenditure on charities and religious purposes is about Rs. 3,700 per year.

These are specified in Schedule Kha. The pay of the Naib Muta- A walli is fixed at Rs. 300 per year. The Mutawalliship and the Naib Mutawalliship 'run in the family and Mutawalli holding office can appoint his successor. The other important clauses of the wakfnamah dealing with the application of the funds are:

"(9) The Mutawalli shall from the income of the wakf B property pay at first revenue and other legitimate government and zamindary dues. "(10) The Mutawalli shal! pay all expenses required for the maintenance of the wakf property and the Mutawalli shal! get ten per cent of such expenses.

The Mutawalli shall pay Rs. 25 (Rupees twenty C five only) per month to the Naib Mutawalli as his remuneration. "(12) The Mutawalli will be entitled to take as his own remuneration the balance remaining after deducting expenses under items Nos. (9) and (I 0) as well.

D expenses under Schedule (ka) and (kha) below from the income of the Wakf property and he will be entitled to spend the sum for his own work.

• • * * In Schedule Ka dispositions are made for the family and the various clauses run as follows:

"(1) My grandson Jaman Ajimuddin Ahmed shall get a sum of Rs. 200 (Rupees two hundred) per month as his tankha (allowance) that is the cost of his maintenance and on his demise his heirs shall get the

said tankha generation after generation and by way F of succession for ever.

(2) My daughter Sreemati Hiramannessa Bibi shall et

, Rs. 25 (Rupees twenty five) per month for her maintenance and on her demise her heirs shall continue to get the said tankha generation after generation for ever by way of succession.

(3) My second wife Srlmati Bibijannessa Bibi shall get

Rs. 30 (Runees thirty) ner month during her life time as tankha that is as costs of her maintenance .and on her demise none of her heirs shall grt the same and it will be included in the Wakf Estate".

It was not claimed before us in these cases that the nrovisions about the family-have become inonerative by the exhaustion of the beneficiaries and we proceed on the assumption th~.t the families ofl

the wakifs do stiU en joy the benefits. In these circumstances, the question is whether these truts can be describd as those exclusively for religious or charitab)e purposes or both. Tf they can he

FAZLUL RABBI PRADHAN v. STATE OF WEST BENGAL (Hidaymullah, J.) 313

so described s. 6(i)(i) would exempt them from the operation of the Act; otherwise, in view of the provisions of ss. 3, 4 and 5 the estates of the inte1mediaries vested in the State on the appointed date.

As already stated the provisions of the Act apply notwithstanding anything to the contrary contained in any other law or in any instrument and notwithstanding any usage or custom to the contrary. The Act must, therefore, be construed on its actual words and the exemption cannot be enlarged beyond what is granted there. The exemption is given to Corporations and institutions established exclusively for a religious or a charitable purpose or both but to this kind of eleemosynary foundations no mutawalli in either deed can lay claim. The matter can thus only come in, if at all, within the words of the exempting clause which read:

" ...... a person holding under a trust or endowment or other legal obligation exclusively for a purpose which is charitable er religious or both." The word "exclusivelf' limits the exemption to trusts, endowments. or other legal obligations which come solely within charitable or religious purposes. These purposes are defined by s. 2(c) and (n) and the definitions have already been reproduced. It is quite clear (and indeed the contrary was not suggested at the Bar) that the expression "religious purpose" cannot cover these two cases. The definition is an exhat1stive one and to satisfy the requirement the purpose must be connected with religious worship, teaching or service or performance of rligious rites. No religious worship, teaching or service or performance of religious rites is involved when the wakif provides for his family or himself even though a person giving maintenance to his family or himself is regarded in Mahomedan Law as giving a sadaqah. But even if regarded as a pious act a sadaqah of thig kind is not a religious worship or rite. In our opinion, neither of the deed makes a disposition coming within the description "exclusively for religion> purposes". This leaves over for consideration whether they come within the expression "charitable purposes".

The definition of "charitable purposes" in the Act follows. though not quite, the well-known definition of charity given by Lord Macnaghten in Com111issioncrs for Special Purposes of Income Tax

v. Pe111se/('). where four principal divisions were said to be comprised-trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community not falling under any of the preceding heads. The definition in this Act makes one significant change when it speaks of "public utility"

and this gives a guidance to the whole meaning and purpose of the exemption. No doubt the definition is not an exhaustive one like the definition of 'religious purposes'. It only speaks of what may be included in it besides the natural meaning of the words. It

(') [1891) A.C. 531 at nS3.

SUPREME COURT REPORTS (1965] 3 S.C.lf,

is quite clear that the provision for the family of the wakif or for himself cannot be regarded as 'relief of poor', 'medical relief' or the

'advancement of education'. It cannot also be regarded as an ex

penditure on an object of general public utility. The definition as it stands cannot obviously comprehend such dispositions.

But it is contended by Mr. N. C. Chatterjee that in giving a meaning to the expression "charitable purposes" we must be guided by the notions of Mahomedan Law and he relies upon the observa. tion of Sir George Rankin in Tribune Press Trustees, Lahore v. l.T.

Commissioner('). Mr. Chatterjee claims that provision for the wakif and the wakif's family is a charitable purpose according to Mahomedan Law. In the Tribune case the Judicial Committee was required to interpret s. 4(3)(i) of the Indian Income-tax Act 1922 (XI ofi

1922). That section provided:

"(3) This Act shall not apply to the following classes of income:-

(i) Any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in case of property so held in part only for such purpose, the income applied, or finally set apart for application, thereto ..

In this sub-section 'charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility."

F In dealing with the will of Sardar Dayal Singh who had constituted a trust to maintain the Press and the Newspaper, "keeping up the liberal policy of the said newspaper and devoting the surplus income ...... in improving the said newspaper ...... ", the question had arisen whether the running of a newspaper was an object of general public utility or whether it was to be treated as a business G concern. The High Court at LJhore was divided in its opinion.

Learned Judges in favour of granting the prayer for exemption were of the opinion that the true test was not what the Court considered to be an object of public utility, but what the testator thought t<? be. The Judicial Committee pointed out that in reaching this view those learned Judges were following what Chitty J. said in H In re Foveaux, etc.(') and further that that case was dissented from in !a!er cases. In these latter. cases it was held that though the private op1mon of the Judge was immaterial, nevertheless for a charitable gift to be valid, it must be shown (!) that the gift was for public benefit, and (2) that the trust was one of which the Court could, ifi

(') L. R. ~~ J. A. 2ll at P. 2.5!.

{1) [J"J5] :1 d1 • . j!)J.,

" FAzLUL RABBI PRADHAN v. STATE OF WEST BENGAL (Hi<foyarulfoh, J.) 315

A necessary undertake and control othei:wise-trusts to promote all ..._ kinds of "fantastic" 9bjects in perpetuity would be establ\sheil. The Judicial Committee acceded to this view but pointed out further: --

"It is to be observed, moreover, that under the Incometax Act the test of general public utility.is applicable not only to trusts in the English sense, but is to be applied to property held under trust "or other legal obligation"-a phrase wh'ich would include Moslem wakfs and Hindu endowments. The true approach to such questions, in "Cases which arise in countries to which English ideas-let alone English t(\Chnicalitiesmay be inapplicable, was consider- ' ed by the Board in Yeap Chealz Neo v. Ong Cheng Neo('), and it was well said by Sir Raymond W.est in Fµtima Bibi

v. Advocate General of Bombay('); "But useful and beneficial iti what sense? The Courts have to pronounce whether any particular object of a bounty falls within the definition; but they must, in general, apply the standard of customary lpw and common opinion amongst the comunity to which the parties interested belong."

.Relying on this passage Mr. Chatterjee contends that if th!l Mahomedari La:w regards gifts for the benefit of the wakif and his family as "charity" it is not for the Courts to say that 'they are not and he claims exemption foNhe wakfs. He relies upon the precept of the Prophet-'!A pious offering to one's family, to.provide against their getting into want, is more pious than giving alms to.beggars.

The i11ost excellent of sadkah is lhafwhich a man liestows upon his family'.

Now it is a matter of legal history that wakfs in which the benefits to charity or religioP were either illuwry or postponed indefinitely, while the property so ddi(ated was being enjoyed from generation to generation by !lie family of the waif, were regard.ed as opposed to the rule against perpctuitks as contained in the Indian Succession arid the Transfrr of Prcperty Acts. This was so declared in a succession of cases by the Judici;!l Co!1nlittee and 'the opinion of Amir Ali expressed Jn his Tagore Lectures as well as in Meer

Mahoml!d lsr'aeli Khan v. Shfl.1fi Chum Chore(') and Bikani Mia v.

Shi1k11/ Poddar"(') 1ya!• not accepted. These cases are referred to in

the ihree ol'inions in the High Court ancl most importa11t of them is Aqul Fata Mahfm1e1! Ishak and Others v. Bussomoy Dlmr Chowdry, and others<'1. In that case Lord Hob house, while emphasising that

(I) [18i;'i1 J •. n. r. I' C. 381.

( 2).{13811 T.J..H.""'{i'lo1n, -:12, !i(I

ril !! ('al. -ti:!.

1•1 :!O f'11.I. 116. (') !?2 I.:\. 'j(i.

Mahomed1n Law ought to govern a purely Mahomedan disposition, declined to hold that disposition in which the benefit was really intended to go to the wakif and his family could be described as charity even under that law. Speaking of the precept above quoted by us Lord Hobhouse observed:

" ...... it would be doing wrong .to the great lawgiver to suppose that he is thereby commenjing gifts for which the donor exercises no self-denial; in which he takes back with one hand what he appears to put away with the other; which are to form the centre of attraction for accumulations of income and further accessions of family property; which carefully protected so-called managers from being called to a-cccunt; which seek to give to the donors and their family the enjoyment of property free from all liability to creditors; and which do not seek the benefit of others beyond the use of empty words."

Similar observations were made by Lord Hobhouse in L.R. 17 I.A. 25 and by Lord Natson in L.R. 19 I.A. 170 in earlier cases.

These cases led to agitation in India and the Mussalman Wakf Validating Act, 1913 (VI of 1913) was passed. It declared the rights of Mussalmans to make settlements of property by way of wakf in

favour of their families, children and descendants. For the purposes of the Validating Act the term 'wakf' was defined to mem "the rermanent dedication by a person professing the Mussalman faith of any property for ny purpose recognized by the Mussalman law as religious, pious or charitable". This gave a wider meaning to the word wakf but only for the purpose of taking them out of the invalidity which would have otherwise existed and which was already authoritatively stated to have so existed.

After the pJssage of these two Acts wakfs in which the object was the aggrandisement of families of wakifs without a pretence of charity in the ordinary sense bcame valid and operative. But the intention of the Validating Act was not to give a new meaning to the word "charity" which in common parlance is a word denotingj a giving to some one in necessitous circumstances and in law a giving for public good. A private gift to one's own self or kith and kin may be meritorious an'.! pious but is not a charity in the legal sense and the Courts in Indi1 have never regarded such gifts as for religious or charitable purposes even under the Mahomedan Law. It was ruled in Syed Mohiuddin Ahmed and Anr. v. Sofia Khatun(') that neither the Wakf Validating Act 1913 nor the Shariat Act 1937 had the effect of aborgating the Privy Council decisions on tho meaning of "charitable purpose" as such.

We do not say that the English authorities should be taken as, the guide as was suggested in soms of these c8ses at one time. For

(1) 44 c.w.x. '974.

FAZLUL RABBI PRADHAN 1.'. c:TArn OF WERT BEJrn.u. (Hida.ya.tullrth, J.) 317

one thing, the law was denlope1 in the Chancery Qiurts without the assistance of any statutory definition. The earliest statµte on the subject is one of 1601 in the forty-third year of the reign of Queen Elizabeth I and in its preamble it gave a list of charitable objects which came within the purview of that Act, and for another, Courts in England extended these insl2nces to others by analogy and the subject is often rendered vague an'.! difficult to comprehend. A clear guide is available to us in India in the interpretation of the almost similar provisions of the Indi<1n Incomet\X Act 1922 already quoted. The observations of Sir George Rank; n in the Tribune CQ1e, on which much reliance is place:i by the appellants were intend2d to convey the same caution about Englis.h c::ses which we have sounded here. The Judicial Committee did nGt intend to lay down that the words of a statute so precise in its definition should be rendered nugatory by leaving room for inclusion in "charitable purposes", objects which by no mecins could be charity in the generally accepted legal sense. No doubt the definition whicb is common is not exhaustive and leaves scop~ for addition but it does not make for enlargement in directions which cannot be described as "charitable".

This view of the definit:on was taken in respect of the amlogous provision Gf the Jn:lian Income-tax Act. In D. V. Arur v. Commissioner of !ncometax(') and in re Merccntile Bank of India (Agency) Ltd.(') it was laid down that for satisfying/ the test of charitable purpose there must always be some clemerJt of p'..lblic benefit. Indeed it must be so, if family endowments which are in effect private trusts are not to pass as charities which, as was observed in Mujibunnissa and Ors. -v. Ahdul Rahim and A/Jd11! Aziz.('), it is superfluous in the present day to say, is net the law.

When the two deeds are examined and their provisions considered in the light of these principles, it is easily seen that they are not exclusively for charitable purposes. They do provide in part for objects which are religious or charitable or both but miQgled with those purposes are some which are secular and some which are family endowments very substantial in character. If the latter bene

fits had ceased or the families had become extinct leaving only the

charitie~ or if the provisions were for poor and needy though belonging to the wakif's family, other considerations might conceivably have arisen, as was stated by Bachawat J. in his opinion. The deeds as they stand cannot, however, be said to come within the exemption claimed.

The appesls must, therefore, fail. They are dismissed but in the circumstanct>s we direct parties to bear their own costs.

(1) J,;\.H.. (l!llfi} ['01". 4t.

(~) [1!112~ 1·111'.1; .. ~Jl'.!

C'l 2l I..\ 1;. ''.1 P 2r;.

Appeals dismissed.

--~ ----~----

FAZLUL RABBI PRADHAN

STATE OF WEST BENGAL

March 8, 1965

P. B. GAJENDRAGADKAR, CJ.

c. SHAH

S. M. SIKRI, JJ.

West Bengal Estates Acquisition Act

s. 6(l)(i)

Estates Acquisition Act, 1953

s. 4

s. 6(l)(i)

Art. 226

Supreme Court

Shariat Act, 1937

India

Calcutta High Court

G. S. Chatterjee

S. C. Mazumdar

N. C. Chatterjee

C. K. Daphtary

S. C. Bose

P. K. Bose

Sen

Hidayatullah

High Court of Calcutta

Art. 226

West Bengal Act

Section 3

s. 10(2)

November 11, 1954

s. 4

Fazlul Rabbi Pradhan

Kawsar Alam

s. 6(l)(i)

February 24, 1956

January 18, 1958

Art. 226

D. N. Sinha

Bacha wat

P. N. Mookerjee

s. 6(1)(i)

s. 6(1)(i)

section 4 and 5

SUPREME COURT REPOR'rS [J 96o] 3 S.C.R.

(1) Notwithstanding anything contained in section 4 and 5, au intermediary shall, except in the cases mentioned in the proviso to sub-section (2) but subject to the other provisions of that sub-section, be entitled to ret1in with effect from the date of vesting-  •   •  * • (i) where the intermediary is a corporation or an institution established exclusively for a religious or a charitable purpose or both, or

310 SUPREME COURT REPOR'rS [J 96o] 3 S.C.R.

ls a person holding under a trust or an endowment or other legal obligation exclusivey for a purpose which is charitable or religious or both land held in khas by such corporation or institution, or person, for such purposes."

Section 2(c)

s. 2(n)

ss. 4 and 5

cl. 12

cl. 19

Bibi Jainulnessa

Bibi Taherankhatun

Shriman Tojammal Hossain Prodhan

Shriman Ahmad Yasin Prodhan

Shriman Azizul Huq Prodhan

Shriman Abu Alam Prodhan

Naib Mutawalli

France

Germany

America

Japan

Australia

Mutawalli

Shriman Abu Alam Pradhan

Naib Muta- A walli

Mutawalliship

Naib Mutawalliship

Mutawalli

Jaman Ajimuddin Ahmed

• •   In Schedule Ka dispositions are made for the family and the various clauses run as follows:

"(1) My grandson Jaman Ajimuddin Ahmed shall get a sum of Rs.

Sreemati Hiramannessa Bibi

Srlmati Bibijannessa Bibi

s. 6(i)(i)

ss. 3, 4 and 5

s. 2(c)

Macnaghten

SUPREME COURT REPORTS (1965] 3 S.C.lf

N. C. Chatterjee

George Rankin

Chatterjee

s. 4(3)(i)

Indian Income-tax Act 1922

Sardar Dayal Singh

High Court at LJhore

Chitty

foyarulfoh

Raymond W.est

Amir Ali

Hobhouse

L.R. 17 I.A. 25

Natson

L.R. 19 I.A. 170

intention of the Validating Act

Wakf Validating Act 1913

Shariat Act 1937

FAZLUL RABBI PRADHAN

England

George Rank

Income-tax Act

Bachawat


S. CHATTANATHA KARAYALAR A v.

THE CENTRAL BANK OF INDIA AND OTHERS

March 9, 1965

[P. B. GAJENDRAGADKAR, C. J., RAGHUBAR DAYAL AND

V. RAMASWAMI, JJ.] B Promissory Note, Letter of continuity and Hypothecation Agreement-Interpretation of-Liability if as surety of co-obligant.

On the basis of a promissory note and a letter of continuity executed by the appellant and respondent Nos. 2 and 3 and a hypothecation agreement executed by the respondent No. 2, the respondent No. I-bank opened on overdraft account. in the name of respondent 2. In the promissory note, the appellant and respondent C Nos. 2 and 3 had "jointly and severally promised to pay" the bank or order; in the letter of continuity sent along with promissory note to the bank, the appellant, respondent Nos. 2 and 3 stated that "the said promissory note is to be a surety to you for the repayment of the ultimate balance or sum remaining unpaid on the overdraft"; and in the hypothecation agreement the bank had agreed to open a cash credit account at the request of respondent No. 2. The D bank filed a suit against the appellant and re;; pondent Nos. 2 and 3 for recovery of the amount due on the overdraft. The appellant and respondent No. 3 pleaded, inter alia, that they had executed the promissory note as a surety for respondent No. 2 and that they are not co-obligants. The Trial Court held the appellant and respondent No. 3. were not merely sureties but were co-obligants and decreed the suit, which was affirmed by the High Court. In appeal by certi- E ficate; HELD: The finding of the High Court was not correct. [324 C-D].

Interpreting the language of the promissory note in the context of the letter and the hypothecation agreement, the status of the apoellant with regard to the overdraft account was that of a surety and not of co-obligant. [324 A].

If the transaction is contained in more than one document bet- F ween the same parties, they must be read and interpreted together and they have the same legal effect for all purposes as if they are one document. [323 C].

Manks v. Whiteley, (1912) I Ch. 735, applied; The pcovisions of Section 92 of the Evidence Act did not app])• in the present case, because the appellant was not attempting to furnish evidence of any oral agreement in derogation of the promissory note but relied on the existence of a collateral agreement in vvritirig the letter and the hypothecation agrment, \Vhich formed parts of the .:;.ame transaction as the promissory note. r325 Hl Case law referred to.

Crv1L APPELLATE JURISDICTION: Civil Appeal No. 405 of 1964. .

Appeal from the judgment and decree dated July 18. 1962 of the Kerala High Court in A. S. No. 561 of 1961.

S. T. Desai. M. S. K. Sastri and M. S. Narasimhan for the appellant. .

G. S. Pathak. B. Dutta, C. Chopra. J. B. Dadachanji, 0. C. l'vfathur and Ravindcr Narain for Respondent No. 1.

s. c. KABAYALAR v. CENTRAL BANK (Ramaswami, J.) 3l9

The Judgment of the Court was delivered by Ramaswami, J.

This appeal by certificate is brought on behalf of the 3rd defendant against the judgment and decree of the High Court of Kerala dated July 18, 1962 in A.S. No. 561 of 1961 which affirmed the. judgment and decree of the Court of the Subord; nate Judge of Alleppey in 0.S. No. 114 of 1957 ..

By a resolution Ex. BD dated November 25, 1946 the Board of Directors of the !st defendant Company authorised the 2nd defendant to obtain financial aocommodation from the plaintiffbank to the extent of Rs. 15 lakhs under different kinds of loans.

Pursuant to this resolution the Company by its Jetter Ex. DE dated November 26, I 946 asked for accommodation for Rs. I Jakh under clean oyrdraft, for Rs. 4 Jakhs under open loan and for Rs. 10 lakhs under out agency and key loans .. On November 26, 1946 all the three defendants executed a prom; ssory note Ex. B in favour of the plaintiff-bank for a sum of Rs. 4 lakhs. The promissory note was sent to the plaintiff-bank along with a letter-Ex .. A styled letter of continuity dated November 26, 1946. Ex. A reads as follows:

"Alleppey, 26th November, 1946..

The Agent, The Central Bank of India Limited, Alleppey.

Dear Sir,

We beg to enclose an on demand pro-note p.

Rs. 4,00,000 (Rupees Four lacs only) s; gned by us which is given to you as security for the repayment of any overdraft which is at present outstanding in our name and also for the repayment of any overdraft to the extent of Rs. 4,00,000 (Rupees four lacs only) which we may avail of hereafter and the said Pro-Note is to be a security to you for the repayment of the ultimate balance of sum remaining unpaid on the overdraft and we are to remain liable to the Pro-Note notwithstanding the fact that by payments made into the account of the overdraft from time to time the overdraft may from time to time be reduced O( extinguished or even that the balance of the said accounts may be at credit.

Yours faithfully, for CASHEW Products Corporation Ltd.

For General Agencies Ltd. (Respondent 2) Sd/- P. S. George Sd/- P. S. George (Respondent 3) Managing Director,

Sd/- S. Cbattanatha Karayalar (Appellant).

Exhibit B states: "Br. Rs. 4,00,000

Managing Agents.

Alleppy, 26th November 1:946.

SUPREME COURT REPORTS [1965] 3 s.c.11.

On Demand we, the Cashew Products Corporation A Ltd., S. Chattanatha Karayalar and P. S. George jointly and severally proinise to pay The Central Bank of India Limited or order the sum of British Rs. Four Lacs only together with interest on such sum from this date at the rate of Two per cent over the Reserve Bank of India rate with a minimum of Five per cent per annum with quar- B terly rests for value received.

For Cashew Products Corporation Ltil.

For General Agencies Ltd.

Sd/- P. S. George (Respondent 2) Managing Director, O . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . Managing Agents.

Sd/-P. S. George (Respondent No. 3).

Sd/- S. Chattanatha Karayalar (Appellant).

On the same day, defendant No. 1 as "Borrower" executed D m favour of the plaintiff-bank Ex. G, a cjeed of hypothecation of its stocks of goods for securing the Demand Cash credit. Ex. G is to the following effect:

"Hypothecat!on of goods to secure a Demand cash Credit.

No.

Amount No. 4,00,000.

Name. The Cashew Products Corporation, Limited, Quilon.

The Central Bank of India, Limited (hereinafter called 'the Bank') having at the request of the Cashew Products Corporation Ltd., Quilon, (hereinafter called 'the Borrowers' opened or agreed to open in the Books of the Bank at Alleppey a Cash Credit account to the extent of Rs. Four lacs only with the Borrowers to remain in force until closed by the Bank and to be secured by goods to be hypothecated with the Bank it is hereby agreed between the Bank and the Borrowers (the Borrowers agreeing jointly and severally) as follows:-

• * • • •

14. The Borrowers agree to accept as conclusive proof of the correctness of any sum claimed to be due from them to the Bank under this agreemrnt a statement of account made out from the books of the Banks of the Bank and signed by the Accountant or other duly authorised officer of the Bank without the production of any other voucher, document or paper.

s. c. KARAYAI.AR v. CENTRAL BANK (Rnmaswami, J.) 321

15. That this Agreement is to operate as a security for the balance from time to time due to the Bank and also for the ultimate balance to become due to on the said Cash Credit Account and the said account is not to be considered to be closed for the purpose of this security and tlie security ofhypothecated goods is not to be con- B sidered exhausted by reason of the said Cash Credit Account being brought to credit at any time or from time to time or of its being drawn upon to the full extent of said sum of Rs. 4,00,000 if afterwards reopened by a payment to credit. c

* * • • * In witness whereof the Borrowers have hereto set, thelr hands this Twenty sixth day of November the Christian Year one thousand nine hundred and fortysix.

For Cashew Products Corporation Ltd., For General Agencies Ltd;

Sd/- Managing Director, Managing Agents

E Sd/-

Schedule of goods referred to in the foregoing instrument, Stocks of cashewnuts, cashew kernels, tin plates, Hoop Iron and other packing materials stored and or to be stored in the factories at Kochuplamood, Chathanoor, Ithikara, Kythakuzhi, Paripalli, Palayamkunnu and anyother factories in which we may. be storing from time to time and at Cochin awaiting shipment.

For Cashew Products Corporation Ltd; For General Agencies Ltd; Sd/- Managing Director, Managing Agents."

On the basis of those documents the plaintiff-bank opened an H overdraft account in the name of defendant No. I. On December 21, 1949, the three documents-Ex. A, B and G were renewed in identical terms by Exs. C, D and F. On January 1, 1950 a sum of Rs. 3,24,645/12/2 became due to the plaintiff-bank and on that date a demand notice-Ex. 'O' was sent by the plaintiff-bank for repayment of the amount. A second notice-Ex. L was sent by the plaintiff-bank on April 26. 1950. On September 8, 1950 the plaintiff. bank brought a suit for the recovery of Rs. 2,86,292/11I11 from

SUPREME COURT REPORTS [1965) 3 s.c.R.

all the three defendants. The suit was contested by all the defend- A ants. The case of defendant No. 1 was that it had sustained Joss on account of sudden termination of credit facilities by the plaintiff-bank and the amount of Joss sustained should be set off against the claim of the plaintiff-bank. Defendants Nos. 2 and 3 pleaded that they had executed the promissory notes only as a surety for the 1st defendant and that they are not co-obligants. It was further alleged that the B plaintiff-bank had granted Joan to the 1st defendant in other forms such as Out Agency loans against goods which were security for the open loan. It was said that the plaintiff-bank had made adjustments in the open loan account and in. the clean over-draft account by debiting and correspondingly crediting in other accounts without the consent of defendants 2 and 3. The plaintiff-hank had also allow- C ed defendant No. 1 to over-draw freely in the clean overdraft and open loan accounts far beyond the limits agreed upon. It was alleged that the plaintiff-bank had converted secured loans into simple loans by releasing goods covered by Bills of Lading against trust .receipts and had thereby deliberately frittered away such securities. They contended that they were discharged from obligation as sureties to D the contract for these reasons. Upon these rival contentions the. learned Subordinate Judge of Alleppey took the view that defendants 2 and 3 were not merely sureties but they were co-obligants, because they had executed the promissory notes-Exs. B & D. In view of this finding the learned Subordinate Judge considered it unnecessary to go into the question whether. defendant No. 3 was E absolved from his liability "for all or any reasons set forth in para 5 of the Consolidated Written Statement filed by him". Agaihst the judgment and decree of learned Subordinate Judge, Alleppey defendant No. 3 presented an appeal in the High Court of Kerala under A. S. 561 of 1961. Defendants 1 and 2 did not appeal. The appeal was dismissed by the High Court of Kerala on July 12, 1962.

F It was held by the High Court that defendant No. 3 was a co-obligant and not a surety. On July 16, 1962 defendant No. 3 filed C.M.P. No. 5032 of 1962 praying that the argument of the appellant with regard to his liability as co-obligant may be expressly dealt with in the judgment of the High Court and complaining that the appellant would be seriously prejudiced if the omission was allowed to remain.

G Thereupon the learned Judges of the High Court wrote a supplementary judgment on July 18, 1962 rejecting the further arguments addressed on behalf of the appellant.

The first question presented for determination in this case is whether the status of the 3rd defendant in regard to the transaction of overdraft account is that of a surety or of a co-obligant. It was H argued by Mr. Desai on behalf of the appellant that the High Court has misconstrued the contents of Exs. A and B in holding that the 3rd defendant has undertaken the liability as a co-obligant. It was submitted that there was an integrated transaction constituted by the various documents-Bxs. A, B and G executed between the parties on the same day and the legal effect of the documents was to confer on the 3rd defendant the status of a surety and not of a

s. c. XAMYALARV. C1'NTltAL BANK (Ramaswami, J.) 323

coobligant. In our opinion, the argument put forward on behalf of the appellant is well-founded and must be accepted as correct.

It is true that in the promissory note-Ex. B all the three defen dants have "jointly and severally promised to pay the Central Bank of India Ltd. or order a sum of Rs. 4 lakhs only together with inter est on such sum from this date", but the transaction between the parties is contained not merely in the promissory note-Ex. B-but also in the letter of continuity dated November 26, 1946--Ex. A which was seilt by the defendants to the plaintiff-bank along with promissory note-Ex. B on the same date. There is another document executed by defendant No. I on November 26, 1946-Ex. G- Hypothecation agreement. The principle is well-established that if the transaction is contained in more than one document between the same parties they must be read and interpreted together and they have the same legal effect for all purposes as if they are one document. In Manks v. Whiteley,(') Moulton, L. J. stated:

"Where several qeeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole."

It should be noted in the present case that the promissory note-Ex. B-was enclosed by the defendants along with the letter of continuity-Ex. A before send; ng it to the plaintiff-bank. In the letter-Ex. A i, is clearly stated that the promissory note Ex. B was given to the plaintiff-bank "as security for the repayment of any overdraft to the extent of Rs. 4,00,000". It is further stated in Ex. A that "the said promissory note is to be a security to you for the repayment of the ultimate balance or sum remaining unpaid on the overdraft". In the hypothecat; on agreement-Ex. G it is stated that the plaintiff-bank has agreed to open a cash Credit account to the extent of Rs. 4 lakhs at the request of the Cashew Products Corporation Ltd., Quilon. According to para 15 of the hypothecation agreement it operates as a security for the balance due to the plaintiff. bank on the Cash Credit account. Para 12 of the hypothecation agreement states that if the net sum realised be insufficient to cover the balance due to the plaintiff-bank, defendant No. 1 should pay the balance of the ac.count on product; on of a statement of account made out from the books of the bank as provided in the 14th Clause.

Under this Clause defendant No. 1 agreed to accept as conclusive proof of the correctness of any sum claimed to be due from it to the bank a statement of account made out from the books of the Bank and signed by the Accountant or other duly authorised officer

(') [1912] 1 Ch. 735.

L/B(N)3SCI-8

324 SUPBEKE COURT llEl'ORTS [1965] 3. s.o.n.

of the Bank without the production of any other document. If the language of the promissory note-Ex. B is interpreted in the context of Exs. A & G it is manifest that the status of the 3rd defendant with regard to the transaction was that of a surety and not of a cir obligant. This conclusion is supported by letters-Exs. AF dated November 27, 1947, AM dated December 17, 1947 in which the Chief Agent of the plaintiff-bank has addressed defendant No. 3 as the "guarantor". There are similar letters of the plaintiff-bank, namely, Exs. CE dated December 28, 1947, CG dated January 13, 1948, AS dated February 23, 1949, V dated October 21, 1949, III dated December 16, 1949, IV dated January 12, 1950 and 'O' dated March 29, 1950 in which defendant No. 3 is referred to either as a "guarantor" or as having furnished a guarantee for the loan. Our concluded opinion, therefore, is that the status of the 3rd defendant with regard to the overdraft account was that of a surety and not of CCK>bligant and the finding of the High Court on this issue is not correct.

On behalf of respondent No. 1 Mr. Pathak stressed the argument that there is no contract of suretyship in the present case in terms of s. 126 of the Contract Act and the plaintiff-bank is not, legally bound to treat the 3rd defendant merely in the character of a surety. Mr. Pathak relied upon the decision of the Madras High Court in Vyravan Chettiar v. Official Assignee of Madras(') in which it is pointed out that persons who are jointly and severally liable on promissory notes are not sureties under s. 126 of the Contract Aci, nor do such persons occupy a position analogous to that of a surety strictly so called to attract the provisions of s. 141 of the Contract Act. Reference was made, in this connection, to the deciSion of the House of Lords in Duncan Fox & Co. v. North & South Wales Bank(') in which Lord Selbourne, L. C. distinguished between three kinds of cases; ( l) those in which there is an agreement to constitute, for a particular purpose, the relation of principal and surety, to which agreement the creditor thereby secured is a party; (2) those in which there is a similar agreement between the principal and surety only, to which the creditor, is a stranger, and (3) those in which, without any such contract of suretyship, there is a primary and a secondary liability of two persons for one and the same debt, the debt being as between the two that of one of those persons only, and not equally of both, so that the other if he should be compelled to pay it, would be entitled to reimbursement from the persons by whom (as between the two) it ought to have been pa!d. It is pointed out by the learned Lord Ch, ancellor that in all these kinds of cases the person who discharged the liability due to the creditor, would be entitled to the benefit of the security held by the creditor though a case of surety ship strictly speaking would. fall only under cl<iss 1, as a contract of guarantee is confined to agreemellts where the surety agrees with the creditor that he would discharge the liability of the principal

(') A.l.R. 1933 Ma<l, 39.

(1) (1881] 6 A.C.I.

s. c. KARAYALARV. CENTl.<AL BANk (Rama.sWami, J.) 325

debtor in case of his default. It is manifest that classes 2 and 3 are not cases of suretyship strictly so called. Lord Selbourne observed that the case before him did not fall within the first or the second class but it fell within the 3rd class in which strictly speaking there was no contract of suretyship. But the Lord Chancellor held in that case that even in the second and third class of cases the surety has some right to be placed in the shoes of the creditor where he paid the amount. The argument of Mr. Pathak was that the position in Indian Law is different and the principles relied upon by Lord Selbourne, L. C. in Duncan Fox & Co. v. North &South Wales Bank(') did not apply to the present case. Mr. Pathak referred, in this connection, to the illustration to s. 132 of the Contract Act in support of his argument. We consider that the legal proposition for which Mr. Pathak is contending is correct, but the argument has not much relevance in the present case. It is true that s. 126 of the Contract Act requires that the creditor must be a party to the con tract of guarantee. It is also true that under s. 132 of the Contract Act the creditor is not bound by any contract between the co, • debtors that one of them shall be liable only on the default .of he other even though the .creditor may have been aware of the existence of the contract between the two co-debtors. In the present ase, however, the legal position is different, because the plaintiff-bank was a party to the contract of guarantee-Ex. A which is contemporaneous with the promissory note-Ex. B. The plaintiff-bank was also a party to the contract of hypothecation executed by defendant No. 1 in which it is stated that the plaintiff-bank had agreed

r.o open a Cash Credit Account to the extent of Rs. 4 lakhs in favour of defendant No. I. It is manifest, therefore, in the present case that the requirements of s. 126 of the Contract Act are satisfied and defendant No. 3 has the status of a surety and not .of a coobligant in the transaction of overdraft account opened in the mme of defendant No. I by the plaintiff-bank. On behalf of respondent No. I Mr. Pathak also referred to the decision in Venkata Krishnayya

v. Karnedan Kothari(') and submitted that defendant No. 3 cannot be permitted to give evidence in regard to a collateral transaction in view of the bar imposed by s. 92 of the Evidence Act and his position is as a co-obligant and that the terms of the promissory note cannot be altered by any other transaction. We are unable to accept this argument as correct. The provisions of s. 92 of the Evidence Act do not apply in the present case, because defendant No. 3 is not attempting to flrnish evidence of any oral agreement in derogation of the promissory note but relying on the existence of a collateral agreement in writing-Exs. A & G which form parts of the same transaction as the promissory note-Ex. B. The decision of the Madras High Court in Venkata Krishnayya v. Karnedan Kothari(') is, therefore, not applicable and Mr. Pathak is not able to make good his submission on this aspect of the case.

(') [1881) 6 A.C.I.

(1) A.J.R. 1935 Had. 643.

SUPREME COURT REPO~TS tl965J 3 s.c.1\,

It was also contended by Mr. Pathak on behalf of respondent A No. 1 that the suit is based on the promissory note-Ex. B against all the three defendants and not on the overdraft account. We <io not think there is any substance in this argument. In this connection Mr. Pathak took us through the various clauses of the plaint but there is no mention about the promissory note. dated December 21, 1949 except in para 6 of the plaint which recites that the defendant executed a promissory note "as security for the repayment of the balance outstanding under the overdraft". We are satisfied, on exam; nation of the language of the plaint, that the suit is based not upon the promissory note but upon the balance of the overdraft account in the books of the plaintiff-bank. In para 11 of the plaint the plaintiff-bank asked for a decree against the defendants jointly and severally "for the recovery of Rs. 2,86,292 / ll / II as per accounts annexed". In the plaint it is stated that the plaintiff had given two notices to the defendants-Ex. 'O' dated January 1, 1950 and Ex. L dated April 26, 1950 but in neither of these not\ces has the plaintiff referred to the promissory' note executed by the defendants or that the suit was based upon the promissory note. On the contrary, the plaintiff-bank referred in Ex. 'O' to the open loan accounts and asked the defendants to pay the amounts due to the bank under these accounts. It is, therefore, not possible for us to accept the contention of Mr. Pathak that the suit is based upon the promissory note and not upon the amount due on the overdraft account. In this connection, we may incidentally refer to the fact that in its statement of the case before this Court, respondent No. 1 has clearly stated that the claim on the overdraft account against the appellant was valid "because the overdraft was treated as in favour of all the tlefendants (appellant and respondents 2 and 3 herein) and that respondent No. 2 was only authorised to operate independently on that account and that the limit under the overdraft was placed at the disposal of respondent No. 2 by an express authority given by all the defendants (the appellant and respondents 2 and 3)". This shows thatTespondent No. l's case is that the suit is based on an overdraft, and since the overdraft was treated

as in favour of all the defendants, the appellant is liable for the balance due on it.

We shall then consider the quest; on whether defendant No. 3

is discharged of his liability as a surety by reason of the alleged conduct of the plaintiff-bank in violating the terms of the agreement-Ex. G or by the alleged fraudulent or negligent conduct of H the plaintiff-bank in other ways. It was submitted on behalf of the appellant that the plaintiff-bank had made adjustments in the open loan account and in the clean overdraft account with the 1st defendant by debiting and correspondingly crediting in other accounts without the consent of the appellant. It was further alleged that the plaintiff-bank had granted loans to the 1st defendant against goods covered by open loan agreement and that it had converted

S, o. KARAYALAR i. CENTRAL l3AN!t (Ilamaswmn.i, J.) 32 7

secured Joans into simple loans by releasing goods covered by the Bills of Lading against trust receipts and had thereby deliberately frittered away such securit'es. The question at issue is a mixed question of law and fact and it is unfortunate that the High Court has not properly dealt with this question or given a finding whether the appellant would be discharged from the liability as a surety for the overdraft account because of the alleged conduct of the plain tiff-bank. We consider it necessary that this case should go back on remand to the High Court of Kerala for deciding the issue and to give proper relief to the parties. In this connection, it is necessary to point out that after the High Court delivered its judgment on July 12, 1962, an application was made by the learned Advocate appearing for the appellant that some grounds which had been urged by him before the High Court had not been considered by it The High Court, threfore, adopted the somewhat unusual course of del'vering a supplemental judgment. Mr. Desai contends that even the supplemental judgment has failed to consider the ap pellant's contention that he had been discharged by reason of the fact that adjustments were made by respondent No. 1 indiscrimi nately in respect of its dealings in three or four different accounts with respondent No. 2 to the prejudice of the appellant. We have broadly indicated the nature of the contention raised by Mr. Desai.

Ordinarily, we do not permit parties to urge that points raised on their behalf in the High Court had not been considered, unless it is estabfohed to our satisfaction that t~ points in question had in fact been urged before the High Court and the High Court, through inadvertence, has failed to consider them. In the present case, we are not prepared to take the view that the grievance made by Mr. Des:1 i is not well-founded. It does appear that after the first judgment was delivered. an application was made by the learned Advocate who argued the appeal himself before the High Court in which he set out his complaint that some of the points which he had argued before the High Court had not been considered by it.

That is why the High Court delivered a supplemental judgment.

Aggrieved by the said judgment. the appellant filed an application for cer\ificate before the High Court, and in this application again he has taken specific grounds, e.g., under paragraph 6(k) and para graph 8 that even the supplemental judgment has failed to consider some of the points urged by him. While granting the certificate, the High Court has made no comment on these grounds. It is to be regretted that when these grounds appear to have been urged before the High Court, the High Court should have failed to deal with them even in its supplemental judgment. That is the reason why we think it is necessary that the matter must go back to the Higl!

Court for disposal of the appeal in the light of this judgment.

Mr. Pathak. no doubt, seriously contested the validity of Mr.

Desai's argument. He urged that the adjustments on which Mr.

Desai has founded his claim for discharge do not really support

328 SUPREME COURT l\EPORTB

[1965] 3 B.C.R,

his case. We. proposed to express no opinion on this point. As we A have just observed, the contention thus raised amounts to a mixed question of fact and law and we do not think it would be expedient for us to deal with it ourselves when the High Court has omitted to conslder it. ·

For these reasons we allow this appeal, set aside the judgment B and decree of the High Court of Kerala dated July 18, 1962 in A.S. 561 of J 961 and order that the case should go back for being reheard and redetermined by the High Court in accordance with the observations made in our judgment. The parties will bear their own costs upto this stage.

Appeal Allowed.

S. CHATTANATHA KARAYALAR

THE CENTRAL BANK OF INDIA AND OTHERS

March 9, 1965

P. B. GAJENDRAGADKAR

RAGHUBAR DAYAL

V. RAMASWAMI, JJ.

Section 92

Kerala High Court

M. S. K. Sastri

M. S. Narasimhan

G. S. Pathak. B. Dutta

C. Chopra

J. B. Dadachanji

Ravindcr Narain

Ramaswami

November 26, 1946

CASHEW Products Corporation Ltd.

P. S. George

Cashew Products Corporation A Ltd.

S. Chattanatha Karayalar

P. S. George

Central Bank of India Limited

Reserve Bank of India

S. Chattanatha Karayalar

Bank of India, Limited

Alleppey

Cashew Products Corporation Ltd.

Kochuplamood

Chathanoor

Ithikara

Kythakuzhi

Paripalli

Palayamkunnu

Cochin

December 21, 1949

January 1, 1950

April 26. 1950

September 8, 1950

High Court of Kerala

S. 561

July 18, 1962

Desai

XAMYALARV. C1'NTltAL BANK

Central Bank of India Ltd.

Moulton

Quilon

December 17, 1947

December 28, 1947

January 13, 1948

February 23, 1949

October 21, 1949

December 16, 1949

January 12, 1950

March 29, 1950

Pathak

s. 126

Pathak

Madras High Court

s. 126

s. 141

Selbourne

Ch

s. 132

s. 126

s. 132

s. 126

s. 92

s. 92

April 26, 1950

Ilamaswmn.i

July 12, 1962

S. 561


INDRA KUMAR KARNANI

ATUL CHANDRA PATITUNDI AND ANR.

March 10, 1965

[P. B. GAJENDRAGADKAR, C. J., M. HIDAYATULLAH AND

V. RAMASWAMI, JJ.] West Bengal Premises Rent Control (Temporary Provi.sions) Act, 1950 (West Bengal Act 17 of 1050) ss. 12(1)(c), 13-Sub-letting- Permission, when necessary-Rights of sub-tenants in violation of agreement-If saved.

Re3pondent No. 2 was a monthly tenant of the appellant on a condition that he would not sublet the premises of any portion thereof. Under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948 the appellant filed a suit against respondent No. 2 for his eviction on the ground that the tenancy had been determined on account of default in payment of rent. While the suit was pending, the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 came into force. The suit was decreed and the appellant took out execution proceedings. The suit was resisted by respondent No. 1 who alleged that he had taken subtenancy from respondent No. 2. Respondent No. 1 also filed a suit impleading the appellant and respondent No. 2 and prayed for a

deolartion that on the termination of the tenancy of respondent No. 2, respondent No. 1 became a direct tenant of the appellant under s. 13(2) of the 1950 Act and he was not liable to be evicted in the execution case. The suit was decreed by the trial court, which was affirmed by the appellate courts. In appeal by special leave: HELD: The appeal must be dismissed. [334 Fl In the case of sut-letting by a tenant of the first degree no consent of the landlord to sub-letting is required as a condition precedent for acquisition by the sub-lessee of the tenant's rights, but in the case of sub-letting by a tenant inferior to the tenant of the first degree the consent of the landlord and also of the tenant of the superior degree above him to the sub-letting is necessary if the sub-lessee is to acquire the rights of the tenant contemplated by s. 13(2). [332 HJ .

The clause "and the sub-lease is binding on the landlord of such last mentioned tenant" in s. 13(2) does not govern both classes of

tenancis. namelv, sub-tenancies created by "tenant of first deee"

and also by "a tenant inferior to the tenant of the first degree' as defined in s. 13(1). [333 Bl

It is not correct to say that the rights mentioned in s. 13(2) are conferred upon the sub-lessee only in a case where sutletting is not in violation of the agreement of lease. The right of. sub-ten":nt even in a case in which the landlord has brought a smt foll ev1e>- tion against the tenant under s. 12(1)(c) are saved and the righ'.s

and obligations of sub-tenants, would be governed by the provisions of s. 13. [334 A]

In Enacting s. 13 of the Act the legislature has deliberately enlarged the class of sub-tenants to be prot_ected frm evi.ction by the land'ords and the language of the sect10n dealing w•th the. sublesso2s has been deliberatelv changed and nroper effect and mterpretation must be given to the language of the new secion, [334 El

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 125 of A 1963.

Appeal by special leave from the judgment and decree dated June 2, 1959 of the Calcutta High Court in Appeal from Appellate Decree No. 536 of 1964.

S. Murthy and B. P. Maheshwari, for the appellant. M. C.

B Chakraborthy and R. Gopalakrishnan, for respondent No. 1.

The Judgment of the Court was delivered by Ramaswami, ; r. The sole question for determination in this appeal is whether respondent No. 2-Atul Chandra Patitundi is protected from being evicted by the landlord from the premises c No. 90A, Harish Mukerjee Road situated in Bhawanipur, District 24-Parganas in view of the provisions enacted in s. 13(2) of the West Bengal Premises Rent Control (Temporary Provisions) Act,

1950 (West Bengal Act XVII of 1950), hereinafter called the 1950 Act.

Some time before 1948, respondent No. 2 was inducted as a n monthly tenant under Rai Sahib Chandan Mal Inder Kumar, the predecessor-in-interest of the appellant. One of the conditions of the lease was that the tenant will not sub-let the premises or any portion thereof. As respondent No. 2 defaulted in the payment of rent the appellant made an application under s. 14 of the Calcutta Rent Ordinance. 1946 for permission to sue him for E eviction. The application was granted by the Second Additional Rent Controller on September 10, 1948. On December I, 1948, the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948 (West Bengal Act XXXVIII of 1948). hereinafter

calld the 1948 Act, came into force. On September 15, 1949 the appellant filed a Title Suit No. 171 of 1949 in the Court of !' the !st Subordinate Judge, Alipore, 24-Parganas against respondent No. 2 for his eviction on the ground that the tenancy had been determined on account of default in payment of rent. While the suit was pending, the 1950 Act came into force on March 31,

1950. The suit was eventually decreed in favour of the appellant on February 25, 1951. The appellant took out execution proceed- G ings being Title Execution Case No. 39 of 1951 of the Court of the First Sub, Jtldge. Alipore. The suit was resisted by respondent Ne I who alleged that he had taken sub-tenancy from respondent Nci. 2. Respondent No. I also filed Title Suit No. 578 of 1951 in the Court of 4th Munsif at Alipore impleadin~ the appellant and respondent No. I and praying for a declaration that on the H termination of the tenancy of respondent No. 2, respondent No. I became a direct tenant of the appellant under s. 13(2) of the 1950

Act and that he was not liable to be evicted in the execution case.

The suit was decreed in the Court of the Subordinate Judge and the decree was affirmed by the District Judge of 24-Parganas in Title Appeal No. 157 of 1953. A Second Appeal was also dismissed by the Calcutta High Court on June 2. 1959.

iNDRA KUMAR KARNANI v. ATUL CHAXJJRA (Ranu; swarni, J.) 331

On behalf of the appellant the argument put forward was that the sub-lease granted by respondent No. 1 in favour of respondent No. 2 was contrary to the agreement of lease and not binding upon the appellant. It was, therefore, submitted that the sub-lessee did not acquire the status of a tenant under s. 13(2) of the 1950 Act and the sub-lessee could not be deemed to be holding directly under the appellant within the meaning of that sub-section. The question at issue depends upon the proper interpretation of s. 13(2) of the 1950 Act which states:

"13. (2) Where any premises or any part thereof have been or has been sub-let by 'a tenant of the first degree' or by 'a tenant inferior to a tenant of the first degree', as defined in explanation to sub-section (!), and the sublease is binding on the landlord of such last mentioned tenant, if the tenancy of such tenant in either case is lawfully determined otherwise than by virtue of a decree in a suit obtained by the landlord by reason of any of the grounds specified in clause (h) of the proviso to subsection (]) of section 12, the sub-lessee shall be deemed to be a tenant in respect of such premises or part, as the case may be, holding directly under the landlord of the tenant whose tenancy has been determined, on terms and conditions on which the sub-lessee would have held under the tenant if the tenancy of the latter had not been so determined :

Provided that it shall be competent for the landlord, or any person deemed under this section to be a tenant holding directly under the landlord, to make an application to the Controller for fixing rent of the premises or part thereof in respect of which such person is so deemed to be a tenant and until the rent is fixed by the Controller on such application such person shall be liable to pay to the landlord the same rent as was payable by him in respect of the premises or part thereof, as the case may be, to the tenant before the tenancy of the tenant therein had been determined. The Controller in fixing the rent shall not determine such rent at the rate which is beyond the limit fixed by paragraph (4) of Schedule A. The rent so fixed shall be deemed to be the standard rent fixed under section 9".

Section 13(1) is also relevant in this connection and it states :

"13. (!) Notwithstanding anything contained in this Act, or in any other law for the time being in force, if a tenant inferior to the tenant of the !st degree sub-lets in whole or in part the premises let to him except with the consent of the landlord and of the tenant of a superior degree above him, such sub-lease hall not be binding

on~ such non-consenting landlord, or on .such non-consenting tenant.

Explanation-In this subsection-

(a) 'a t'.)nant of the first degree' means a tenant who does not hold under any other tenant;

(b) 'a tenant inferior to the tenant of the first degree' means a tenant holding immediately or mediately

under a tenant of the first degree; B

(c) ']andkrd' mears the landlord of a tenant of the first tleg1ee".

It is r1ianifest that s. 13(1) makes a distinction between the two classes of sub-tenancies, namely, (1) sub-tenancy created by a tenant of the fast degree, and (2) sub-tenancy created by "a tenant o inferior to the tenant of the first degree" by which is meant a tenant holding immediately or mediately under a tenant of the first degree. So far as the second ch:ss of sub-tenancy is concerned, the sub-section ei; acts that the sub-letting will not be binding upon the landlord or on the tenant of the superior degree unless each of them h1s consented to :he transaction of sub-lease. There is D no express provision in s. 13(1) that a sub-lease of the 1st class requires previous consent of the landlord or that in the absence of such consent the sub-lease shall not be binding upon the nonconsenting landlord. Section 13(2) refers to both the classes of sub-leases - and states that if the sub-lease has been made by a tenant of the first degree, the sub-lessee shall be deemed to be a E tenant in respect of the premises demised to him if the tenancy of J such tenant is lawfully determined under the provisions of the Act otherwise than by virtue of a decree in a suit obtained by the landlord by reason of ar, y of the grounds specified in cl. (h) of the proviso to sub-section (1) of section 12. In the case of second class of sub-leases, i.e., sub-leases created by a tenant inferior to p the tenant of the 1st degree also the sub-lessee will acquire the status of a tenant as mentioned in the statute but in this -cl'ass of sub-leases the rights of the tenant are conferred on the sub-lessee only if the sub-lease is binding upon the landlord.

In enacting s. 13(1) and (2) of the 1950 Act the legislature has deliberately made a distinction between the two classes of sub-tenancies and G provided that in the case of sub-lease of the first class, namely,

sub-Ieaes created by a tenant. of the first degree, the sub-lessee will acquire the status of the tenant in respect of the premises demised, thou.h the sub-lease is not binding upon the landlord according to the agreement of lease. The legislature has further , provided that in the case of sub-lease of the second ~1ass the B sub-lessee will acquire the status of a tenant of the premises only • if the sub-lease. is binding upcm the "landlord" as defined in s. 13(1\. It follows that in the case of sub-letting by a tenant of the fir:t deree no consent of the landlord to sub-Jetting is required as a condition precedent for acquisition by the sub-lessee of tho tenant's right but in the case of sub-letting by a tenant inferior to the tenant of the first degree the consent of the landlord and

INDRA KUMAR KARNAN! v. ATUL CHAJWRA (Ramaswami, J.) 3~3

also of the tenant of the superior degree above him to the subletting is necessary if the sub-Jessee is to aoquire the rights of the tenant contemplated by s. 13(2). It was argued on behalf of the appellant that the clause "and the sub-lease is binding on the landlord of such last mentioned tenant" in s. 13(2) governs both classes of tenancies, namely, sub-tenancies created by "tenant of the first degree" and also by "a tenant inferior to the tenant of the first degree" as defined in s. 13(1). We do not consider that there is any justification for this argument. Having regard to the grammatical structure and context of the clause it is obvious that it imposes a qualification only upon sub-tenancies of the second class. It was also submitted on behalf of the appellant that if a sub-lease is granted by the tenant of the first degree against the terms of. the contract of lease the landlord is entitled under s. 12(J)(c) of the 1950 Act to bring a suit for eviction of the tenant and that in such a suit the tenant and the sub-lessees are both liable to be evicted from the premises in question. It was submitted, therefore, that the rights mentioned in s. 13 (2) are conferred upon the sub-Jessee only in a case where sub-letting is not in violation of the agreement for lease. In our opinion, there is no substance in this argument. Section 12(1)(c) states:

"12. (!) Notwithstanding anything to the contrary in any other Act or law. rto order or decree for the recovery of possession of any premises shall be made by any court in favour of the landlord against a tenant, including a tenant whose lease has expired :

Provided that nothing in the sub-section shall apply to any suit for decree for such recovery of possession,- r ........................................................................ ..

(c) against a tenant who has sub-let the whole or a

major portion of the premises for more than seven consecutive months:

Provided that if a tenant who has sub-let major portion of the premises agree to possess as a tenant the portion of the premises not sub-let on payment of rent fixed by the Court. the Court shall pass a decree for ejectment from only a portion of the premises sub-let and fix proportionately fa~ rent fo~ the portion kept in possession of such tenant, which portion shall thenceforth constitute premises under clause (8) of section 2 and the rent so fixed shall be deemed standard rent fixed under section 9 and the rights and obligations of the sub-tenants of th~ portion from which the tenant is ejected shall be the same as of sub-tenants under the provision of section 13;".

It is manifest thats. 12(l)(c) saves the right of sub-tenants even in n case in which the landlord has brought a suit for eviction against

the tenant under s. l 2(1)(c) and the rights and obligations of subtenants would be governed by the provisions of s. 13. Counsel on .behalf of the appellant also referred to the provisions of s. 11 (3) of the 1948 Act which states:

"11.(3) Any person to whom any premises or any part thereof have been or has been lawfully sublet by a tenant shall, where the interest of the tenant in such premises or part is lawfully determined otherwise than by virtue of a decree or order obtained by the landlord on any of the grounds specified in clause (f) of the provLo to sub-section (!), be deemed to be a tenant in respect o.f such premises or part, as the case may be, holding directly under the l; tndlord on the terms and. conditions on which such person would have held under the tenant if the interest of the tenant had not been so determined:

• • * . "

It was pointed out that rights are conferred by the statute only upon sub-lessees to whom the premises have .been "lawfully" sublet .by a tenant. It was contended that though the 1948 Act was repealed and substituted by the 1950 Act, the provisions of s. 13(2) of the latter Act have to be construed in the context of the language of s. 11 (3) of the 1948 Act. We are unable to accept this argument as correct. It is manifest that in enacting s. 13 of 1950 Act the legislature has deliberately enlarged the class of sub-tenants to be protected from eviction by the landlords and the language of the section dealing with the sub-lessees has been deliberately changed and proper effect and interpretation must be given to the langu-· age of the new section. ·

For the reasons expressed, we hold that the suit of respondent No. l has been rightly decreed and this appeal must be dismissed with costs ..

Appeal dismissed ..

Ii'

INDRA KUMAR KARNANI

ATUL CHANDRA PATITUNDI AND ANR

March 10, 1965

P. B. GAJENDRAGADKAR

M. HIDAYATULLAH

V. RAMASWAMI, JJ.

West Bengal Act

ss. 12(1)(c), 13

s. 13(2)

s. 13(2)

s. 13(2)

s. 13(1)

s. 13(2)

s. 12(1)(c)

s. 13

s. 13

Calcutta High Court

S. Murthy

B. P. Maheshwari

C.

B Chakraborthy

R. Gopalakrishnan

Ramaswami

Atul Chandra Patitundi

s. 13(2)

West Bengal Act

Rai Sahib Chandan Mal Inder Kumar

s. 14

September 10, 1948

December I, 1948

West Bengal Act

September 15, 1949

March 31,

1950

February 25, 1951

s. 13(2)

June 2. 1959

s. 13(2)

s. 13(2)

section 12

section 9

Section 13(1)

s. 13(1)

s. 13(1)

Section 13(2)

section 12

s. 13(1)

s. 13(2)

s. 13(2)

s. 13(1)

s. 12(J)(c)

s. 13

Section 12(1)(c)

section 2

section 9

section 13

s. 13

s. 11

s. 13(2)

s. 11

s. 13


KARPAGATHACID AND ORS.

NAGARATHINATHACID March 10, 1965

[K. SUBBA RAO, J.C. SHAH AND R. S. BACHAWAT, JJ.] Hindu Law-Partition between co-widows-Whether right of survivorship can be relinquished-If repugnant to Transfer of Pro• perty Act, 1882 (4 of 1882) s. 6(a)-Onus.

Two co-widows divided their husband's property and each entered into separate possession of her share. On the death of one of the widows her daughter the respondent took possession of her mother's share. The appellant the surviving widow filed a suit against '.he respondent claiming possEssion of that share. The Trial Court decreed the suit, which on appeal was set aside by the High Court. In appeal by certificate:

HELD: (i) Under the Hindu Law the widows were competent to partition the properties and allot separate portions each, and incidental to such allotment each could agree to relinquish her right of survivorship in the portion allotted to the other. Such an arrangement was not repugnant to s. 6(a) of the Transfer of Property Act,

1882. [337 C-D].

Case law referred to.

(ii) Mere partition of the estate between the two widows does not destroy the right of survivorship of each to the properties allotted to the other. The party who asserts that there was an arrangement by which the widows agreed to relinquish the right of survivorship must establish this arrangement by clear and cogent evidence.

[338 B].

The respondent, in the instant case, had failed to discharge this onus. [338 B-C].

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 998 of F 1963.

Appeal from the judgment and decree dated January 12. 1962 of the Madras High Court in Appeal Suit No. 292 of 1958.

A. V. Viswanatlza Sastri, V. S. Ramaswami Iyengar and R. Thiagarajan, for the appellants.

G S. V. Gupte, Solicitor General, and R. Ganapathy Iyer, for the respondent.

The Judgment of the Court was delivered by- Bachawat, J. One Sivasubramania Pillai died in the year 1924 leaving him surv; ving his mother, two widows, Thialaiachi H and Karpagathachi, and a daughter. Nagarathinathachi (respondent herein) born of Thialaiachi. The two widows inherited the properties left by Sivasubramania. In July 1927. they divided the bltlk of the properties and each entered into separate pos, ession and enjoyment of the properties allotted to her. The partition is evidenced by two partition lists called parti.tion deeds. Exs A-~ I

and B-45 dated July 14. 1927 and signed by both of them. Under this partition, two ve/is of land were set apart for the maintcnanC'

f Sivasubramania's mother, to be enjoyed by her during her life.

A tune, and on her death, to be taken and enjoyed by the two widows in separate portions as mentioned in the partition lists. On August 26, 1954, Thialaiachi died, and upon her death, the respondent took possession of the properties allotted to Thialaiachi under the partition of July, 1927. On December 8, 1954, Karpagathachi in stituted against the respondent the suit, out of which this appeal B arises, claiming possession of the suit propert'es. The respondent resisted the suit claiming that under the partition each widow gave up her right of survivorship in respect of the properties allotted to the other, and consequently on the death of Th'alaiachi, the respondent as her daughter was entitle\! to take her share as her heir and to en joy the same during the life of Karpagathachi. By his C judgment dated AJgust 18, 1958, the District Judge, East Thanjavur, rejected the defendant's contention. and held that the division between the two w'dows was for convenience of enjoyment only, and decreed the suit in respect of the properties held by Thialaiachi under the partition of July, 1927.

On appeal, the Madras High Court by its judgment dated January, 12, 1962 held D that under the partition each widow gave up her life interest in the properties allotted to the other and 'consequently Karpagathachi was not entitled to recover possession of the properties allotted to Thialaiachi, set aside the decree of the District Judge, and dismissed the suit. Karpagathachi and several other persons impleaded as party respondents in the appeal before the High Court now appeal E under a certificate granted by the High Court to .this court under Art. 133 of the Constitution.

Mr. Viswanatha Sastry appearing on behalf of the appellants contends that: (!) the right of survivorship of each widow in respect of her husband's estate is the chance of the surviving widow to take the entire estate of her husband on the death of the cowidow, and in view of s.6(a) of the Transfer of Property Act, 1882, the w'dows were not competent to enter into an arrangement transferring or relinquishing their right of survivorship; (2) the partition lists, Exs. A-I and B-45 not being registered, are not admissible in evidence; (3) the partit'on between the widows was for con venience of enjoyment only, and the respondent has failed to establish that each co-widow gwe up her right of survivorship in respect of the properties allotted to the other. The learned Solicitor-General appearing on behalf of the respondent disputed these contentions.

We are of op'nion that the first contention of Mr. Viswanatha Sastry should be rejected. Under the Hindu law as it stood in 1924, two widows inheriting their husband's properties took together one estate as joint tenants with rights of survivorship and equal benefi cial enjoyment. They were entitled to enforce a partition of those propert'es so that each could sep3rately possess and enjoy the portion allotted to her, see Bhugwan Deen Doobey v. Myna Baee ('),

(') [1867] ll M.I.A. 487

ILARPAGATIIACHI v. NAflARATIIINA'l'RACl!I (Bachawat, J.) 337

Gawi Nath Kakaji v. Gaya Kuar('). Neither of them could without the consent of the other enforce an absolute partition of the estate so as to destroy the right of , survivorship, see Commissicner

of Income-tax v. Smt. Indira Balakrishna('). But by mutual consent they could enter into any ar; angement regarding their respective rights in the properties during the continuance of the widow's estate, and could absolutely divide the properties, so as lo preclude the right of survivorship of each lo the prn tion ailotted to the

other. See Ramakkal v. Ramasami Nm'ckan('); Sudalai Ammal v.

Gomathi Amma/('). Likewise, two dau:<hters suceedirn• to their ,, father's estate as joint tenants with r'.ghts of survivorship could enter into a similar arrangeme; it. See Kailash Chandi'a Chuckerbutty v. Kashi Chandra Chutkerbuffy(') Subbammal v . . Lakshmana Iyer ('), Ammani Am ma/ v. Per; asami U dayan('). Such an arrangement was not repugnant to s.6fa) of the Transfer of Proper'y Act, 1882. 'f.he interest of eac~1 widow in the properties inherited by her was proputy, and this prC1perty together with the incidental right of survivorsliip could )le law!Qlly transferred. Section 6(a) of the Transfer of Property Ad' pl'l>hibits the transfer of the bare chance of the surviving widow 'tPk.ingi'tie entire estate as th~ ne.>.t heir of her husband on the dea, tll of1he co-widow, but it does not prohibit the transfer by the w1dow ofher present interest in the properties inherited 'by her together with the incidental right of survivorship. The widows were competent to partition the properties and allot separnte portionS'i:l> eacb. and incidental to S11ch an allotment, each could a"ree to inquisli her right of survivorship in the portion allotted to the otlier. The first contention (}f Mr.

Viswanatha Sastry must be rejected.

The secon:i contention of , Mr Vhwanatha Sr"try mu t also be rejected. A partition may ht effected ora!:y. By an oral partition, the two widows could adjust their diverse rights in the entire estate, and as part uf.tl1is arrangement, each could orally ag:ee to relinquish her right of survivmship to the portion aiiotted :o the other. In the trial Court, the suit wc; S t"ried on the footing that the partition was oral. and that the two partilion lists wern mere'y pieces of evidence of the oral partition, and no objection was raised with regard to their admissibility in eyidence. In th\'!_ High Court, the. appellants raised the contention fiJ.f i.he first time that tte two partition lists were required to be registered. The point could not be decided without further inverrigatiot) into questions of fact, ar.d in the circumstances, the High Court r)ghtly ruled that this new contention could not be raised for the 'first -time in appeal. We

(') [1928] L.R. 5.5 I.A. 299.

(') [1960] 3 S.C.R. 513, 517. (') [1899) I.L. ll .. 22 Macl. 522. (') [1912] 23 M.L.J. 3fi5. (') [I 897] I.L.R. 24 Cal. 33~.

(') [1914] 26 M.L.J. 479.

(') [1923] 45 M.L.J. I.

338 'SuPREME COURT REPORTS

(1965] 3 S.C.R,

think that the appellants ought not to be allowed to raise this new contention.

We think that the third contention of Mr. Viswanatha Sastry is sound and should be accepted. Mere partition of the estate between the two widows does not destroy the right of survivorsh'p of each to the properties allotted to the other. The party who asserts that there was an arrangement by which the widows agreed to relinquish the right of survivorship must establish this arrangement by clear and cogent evidence. The respondent has failed to discharge this onus. It is common case that the part'iion is evidenced by Exs. A-1 and B--45. Exhibit B-45 is the list showing the properties allotted to Thialaiachi. The relevant portion of Ex.

B-45 reads : -

"In accordance with the chit cast. Theiyalai Achi, wife of S'vasubramania Pillai, residing at Karuppur, shall take the nanja, punja. house and ground, cattle-shed, cattle, pathway for men, cattle and cart and shed where dried dung cakes are stored mentioned in the list and shall pay the Government kist for the aforesaid properties from the current fasli 1337 and enjoy them." Exhibit A-1 showing the properties allotted to Karpagathachi contains similar words. Now the two lists show that each widow is to "take .and enjoy" the properties allotted to her. The corresponding Tamil words are "adainthu anubavithu." These words do not either expressly or by necessary intendment exclude the right of survivorship of the other widow. the Tamil words "Sarva Swantantra Badyamayum" and "Sant hat hi pravesamoyurn" and bther words indicating relinquishment of the right of survivorship are conspicuous by their absence. The words used in the two partition lists are wholly insufficient to show that the two widows relinquished their right of survivorship inter se. The fact that two separate partition lists were drawn up and each was signed by the two widows does not carry the matter any further. The two partition lists show that the two velis of land kept separately for the maintenance of the mother-in-law were to be divided by metes and bounds on her death between the two widows. The division of the two velis on the death of the mother-in-law was agreed upon to avoid future disputes. The fact that Thialaia{; hi had a daughter and was older than Karpagathachi by 20 years does not show that Karpagathachi mush have agreed that Thialaiachi's daughter should enjoy th.e properties allotted to Thialaiachi after her deat_h. After the yartition, the pattas in respect of all the lands contmued to be m th~

joint names of both the widows. If there. was an absolute par!Ition between the two widows, it is not explained why there was no separate mutation in the name of each widow in respect of the lands allotted to her.

The deeds executed by Thialaiachi, Exs. B-3. B-4. B-6, B-7 and B-8 to B-43 rec'te the partition, but !ey do not use words indicating that there was an absolute part1110n. The sale

IURPAGATIIACHI v. NAGARATHINATHACHI (Bachawat, J.) 339

deeds, Exs. A-3, A-4, and A---6 executed by both the widows are in respect of undivided properties and throw no light on the question at issue. The evidence on the record does not show clearly whether the sale deed, Ex. B--44, executed by both the widows relates to undivided properties, or whether it relates to properties as separately allotted to Thialaiachi. From time to time, Thialaiachi executed three wills, Exs. B-1, B-2 and A-5 giving to the legatees and particularly the respondent certain properties absolutely with full powers of aEenation. The first two wills, Exs. B-1 and B-2, refer separately to Thialaiachi's separate properties and to the properties obtained by her on partition. The recitals in the two wills do not indicate that Thialaiachi obtained her husband's properties on partition with absolute rights. The third will, Ex. A-5, does not purport to dispose of specifically the properties obtained by her on part; tion. Karpagathachi knew that Thialaiachi had iexecuted the wills, but it is not shown that she knew of the contents of the wills. By Ex. A-2, both Thialaiachi and Karpagathachi made a free gift of some of the properties allotted to Thialaiachi. D.W. 1 is unable to explain why Thiala; achi joined in this deed. By sale deed, Ex. B-5, Thialaiachi sold absolutely some of the properties allotted to her and a notice, Ex. A-22, regarding the proposed transfer of the patta in the name of the vendee was served upon Karpagathachi. It is not clear if the patta was actually transferred in the name of the vendee. The explanaton of Karpagathachi that she protested against the transfer and ultimately received one half of the sale price has not been believed. But assuming that Karpagathachi did not object to the transfer, this single circumstance does not establish that at the time of the partit'on, she had agreed to give up her right of survivorship in respect of the properties allotted to Thialaiachi.

Karpagathachi <P.W. I) denied that there was an absolute partition. She was not shaken in cross-examination. Nataraja Pillai

(P. W. 2) said that there was no talk that each should take the properties absolutely and it was agreed taht each would enjoy separately. We find nothing in the evidence of P.W. 2 to show that the a widows agreed to partition the properties absolutely so as to destroy the right of survivorship. Manickam Pillai (D.W. I) said that at the time of the partition, Thialaiachi said that she had a daughter and if what was allotted for her share was given to her ab, solutely she would agree to the partition and Karpagathachi also wanted to have absolute rights. The District Judge rightly rejected H evidence of D.W. I. The partition lists were drawn up after consulting lawyers. D.W. 1 is unable to explain why words indicating absolute partition were not used in the partition lists. D.W. 1 had been in management of the properties of the respondent, yet he falsely denied this fact. He had intimate dealings with Thialaiachi and the respondent. On a meticulous examination of the oral and documentary evidence, the learned District Judge rejected the respondent's case that the widows had orally agreed to relinqu; sh their

L/B(N)3SCI-9

right of survivorship. We think that this finding is correct, and the High Court was in error in reversing this finding.

In the result, the appeal is allowed, the decree and judgment passed by the High Court are set as'de and those of the trial Judge restored. In all the circumstances, we direct that the parties will pay and bear their own costs throughout, in this Court and also in the Courts below. ·

Appeal allowed.

KARPAGATHACID AND ORS

NAGARATHINATHACID

March 10, 1965

K. SUBBA RAO, J

C. SHAH

R. S. BACHAWAT, JJ.

s. 6(a)

s. 6(a)

Transfer of Property Act

A. V. Viswanatlza Sastri

V. S. Ramaswami Iyengar

R. Thiagarajan

G S. V. Gupte

R. Ganapathy Iyer

Bachawat

Sivasubramania Pillai

Karpagathachi

Nagarathinathachi

Sivasubramania

July 14. 1927

August 26, 1954

Thialaiachi

December 8, 1954

Th'alaiachi

AJgust 18, 1958

District Judge, East Thanjavur

Madras High Court

January, 12, 1962

Karpagathachi

Art. 133

Viswanatha Sastry

Transfer of Property Act, 1882

Section 6(a)

Viswanatha Sastry

Vhwanatha Sr"try

[1960] 3 S.C.R. 513

Theiyalai Achi

S'vasubramania Pillai

Karuppur

Thialaia

Thiala

Karpagathachi

Nataraja Pillai

Manickam Pillai