1. In this Originating Summons the Plaintiffs, i.e the executors under the will and testament dt. 13th Sept. 1971 executed by Dharam Singh Suraiya had raised various questions including for determination of the question whether the bequest of shares in Food Specialities Pvt. Ltd. in favour of the defendants was a specific legacy or a general or demonstrative legacy in the facts and circumstances of the case and for other consequential reliefs. In the event this Court held that the bequest of shares in Food Specialities Pvt. Ltd. made under the will of the testator was a demonstrative legacy in that event whether such shares and/or accretions thereto were liable to meet the general cost of administration by the executors at the first instance.
2. Vijay Shroff, Paresh Rajdar and Vijay Merchant were appointed the executors under the will of the testator Dharam Singh Suraiya who died on 4th July, 1972 after making and publishing his last will and testament dt. 13th of Sept. 1971. Probate of the said will had been duly obtained by the executors. Under the said will the testator devised and bequeathed his immoveable and moveable properties in favour of various legatees in the manner provided in the will itself. The immoveable properties belonging to the estate of the deceased had been transferred and/or made over in favour of the legatees and/or beneficiaries as bequeathed under the will who had duly assented to the said transfer. Those immoveable properties did not yield substantial income but have fetched meagre rent. Under the circumstances the executors had to rely upon the dividends collected in respect of the shares.
3. The testator during his lifetime was the owner of 12000 equity shares in Food Specialities Pvt. Ltd. out of which 3000 equity shares were pledged with the United Commercial Bank, Bangalore. 3000 further shares were also pledged with the Syndicate Bank, Bangalore. In Oct., 1976 the Syndicate Bank, Bangalore Branch had sold those 3000 shares pledged in their favour and appropriated the sale proceeds against its dues and the balance amount of Rs. 15.046.48 had been made over to the appropriate authorities towards Estate duty clearance. In July, 1978 the said Food Specialities Pvt. Ltd. issued right shares at the rate of six shares for every five shares held by the shareholders of the company. Under the circumstances the estate of the deceased testator was also entitled to the right shares for the remaining 9000 equity shares. At that time the executors had no sufficient funds available in their hands on the contrary they were saddled with various statutory as also administrative liabilities towards the said estate. As a result they had to surrender the option to purchase the said right shares in the Food Specialities Pvt. Ltd. At that relevant time the executors had in their hands a sum of Rs. 19,000/- available whereas the purchase price of the said 10,800 right shares were of the value of Rs. 1,35,000. In July, 1978 the executors sold the option to purchase the 7200 right shares in the said company to one Stewart & Co. at a price of Rs. 8.25 per share amounting to Rs. 59,400/- and out of the sale proceeds acquired 3600 ordinary right shares for a total consideration of Rs. 45,000/-. The executors also redeemed 3000 shares of (the company pledged with the United Commercial Bank. Thereafter in July, 1980 the Food Specialities Pvt. Ltd. issued bonus shares at the rate of one against one. As a result the executors held 25,200 shares including right shares in the said company.
4. The disposition made by the deceased in respect of Suraiya Brothers Pvt. Ltd. had already been transferred in favour of the legatees named in the will. It was the case of the executors that without the utilisation of the dividend and the sale proceeds of the shares in Food Specialities Pvt. Ltd. it was impossible for the executors to manage the estate.
5. Mr. Ranadeb Chowdhury, the learned lawyer appeared with Shibaji Mitra on behalf of the plaintiffs and submitted that by virtue of Ss. 307 and 308 of the Indian Succession Act the executors were empowered to do the same. He further submitted that the legacy in favour of the respondents Nos. 1, 2 and 3 was not specific legacy but general or at the most demonstrative legacy, as a result whereof the executors were entitled to utilise the shares given by way of general legacy for the purpose of administration of the estate. The bequest was not directly referable to the distinctive share numbers; as a result they could not be distinguished from the entire stock of shares held by the deceased's estate so that could not be treated as specific legacy but as a part of demonstrative legacy or general legacy it was liable to abate. As a result the defendants were entitled to pro rata interest in the legacy subject to the availability of corpus. The bequest of 12,175 shares of Food Specialities Pvt. Ltd. did not tally with and/or fell short of the actual share-holding of 12,000 shares belonging to the estate of the deceased. Under the circumstances such a legacy although termed as specific legacy in the will itself could not be treated as specific legacy.
6. In the will itself it had been provided that the executors should pay all just debts, funeral and testamentary expenses and thereafter provided for payment to specific legacies like “my gold ornaments, my immoveable property consisting of various properties at Spencer Road, Dickenson Road, and East End Road Bangalore”. Thereafter the testator provided for other legacies although mentioned as specific legacies but not prefixed with the expression “my”. Also from the expression used it would be clear that such legacies were general in nature as for example 150 shares, or 860 shares, 25 shares, 20 shares in Suriaya Brothers Pvt. Ltd. Similarly 100 shares, 200 shares in Food Specialities Pvt. Ltd. Under the circumstances from those bequests it appeared that no distinctive numbers had been mentioned but only quantity of the shares had been given in a particular company. Similarly the bequest in favour of Sudhir Asher of 250 snares of Food Specialities Pvt. Ltd. and 250 shares in favour of Miss Usha Asher in Food Specialities Pvt. Ltd. did not bear any particular share scrip numbers nor the expressions ‘My’ were used by the testator in such bequest.
7. A specific legacy must form part of the testator's property and a specified part of it is distinguished from all other parts of his property. Until these three conditions as defined under S. 142 of the Succession Act were satisfied no legacy could be treated as a specific legacy. The illustrations given under S. 142 clearly indicate the nature of specific legacies. Under S. 143 where the bequest of certain sum or stock etc. concerned the legacy is not to be specific merely because the stock funds or securities in which it is invested are described in the will Under S. 144 where a bequest is made in general terms of a certain amount of any kind of stock, the legacy is not specific, merely because the testator at the date of his will possessed the stock of the specific kind or equal or greater amount than the amount bequeathed. In the illustrations given under the said S. 144 of the Succession Act it indicated that even where A bequeathed to B 5000 rupees of 5 per cent government securities when A at the date of the will had 5% per cent Government securities for Rs. 5000/- in spite of that the legacy was not specific. Whereas under the definition of demonstrative legacy given under S. 150 it had been provided that where the testator bequeathed a certain sum of money or certain quantity of any commodity and referred to a particular fund or stock so as to constitute the same the primary fund or stock out of which payment is to be made the legacy should be held to be demonstrative. Under the explanation it had been further made clear that where specific property is given to the legatee the legacy is specific but where a legacy is directed to be paid out of the specified property it is demonstrative. Applying the same test to the facts and Circumstances of this case although it had been provided 250 shares of Food Specialities Pvt. Ltd. it did not specify in the testament itself the specific share script numbers to make it a specific legacy whereas it was directed that out of the shares held by the testator in Food Specialities Ltd. 250 shares to be given by way of legacy to the respondents Nos. 1 and 2 respectively, hence simply because the name of the company and the number of the shares had been specified by way of legacy in their favour it could not be held to be specific legacy, it appeared to be a demonstrative legacy to be paid out of the specific property. Under S. 151, in the order of payment, specific legatees to be paid first and the demonstrative legacy is to be paid out of the residue of the fund and in the event the residue the deficient out of general assets of the testator. Even no creditor under S. 23 had a right or priority over another. The executors are to pay all such debts including his own equally and rateably as far as the assets of the deceased would extend. Debts of every nature should be paid first by the executors before any legacy could be paid. A person who takes a legacy under a will he takes it subject to the debt due from the estate. In the instant case the shares available in the hands of the executors of Food Specialities Pvt. Ltd. were not sufficient to meet the bequest made in respect thereof.
8. In the case reported in AIR 1916 PC 242, Md. Syedol Ariffin v. Yeoh Gark it had been held:—
“On the second point, their Lordships are of opinion that in the construction of the Evidence Act it is the duty of a Court of law to accept if that can be done the illustrations given as being both of relevance and value in the construction of the text. The illustrations should in no case be rejected because they do not square with ideas possibly derived from another system of jurisprudence as to the law with which they or the sections deal. And it would require a very special case to warrant their rejection on the ground of their assumed repugnancy to the sections themselves. It would be the very last resort of construction to make any such assumption. The great usefulness of the illustrations, which have, although not part of the sections, been expressly furnished by the legislature as helpful in the working and application of the statute, should not be thus impaired.”
9. In the case reported in AIR 1918 PC 249, Lala Bala Mal v. Ahad Shah, similarly it was held at P. 250 that illustrations are to be taken as part of the statute.
10. In (1928) 55 Ind App P. 18 (AIR: 1928 PC 2) the guideline laid down was that the Courts must be guided by the statutory provisions in India and should not be guided by the English Case laws where the statutory provisions are specific and clear.
11. In the case reported in (1949) 2 Ch P. 119 and 122 it was held:
“Of course, it is quite competent for a testator to give stock of a certain description as a general legacy, and in Mr. Vaughan Hawkins' book on Wilis, 1st Ed P. 301, the general rule is laid down that “a legacy of stock, of whatever denomination, is not prima facie a specific, but is a general legacy.”
12. In Beaven's Report Vol. 2 1839-40 P. 515 there the question arose whether the legacies of certain shares in the Leeds and Liverson were to be considered as general or as specific legacies. The testator having 15½ leeds and Liverpool canal shares bequeathed 5½ such canal shares to A, 5 such shares to B, and 5 such shares to C. There was no description or reference in the will to show that the testator intended to give those particular shares which he held at the date of his will. At the date of his death he possessed no canal shares. It was held that the legacies were general and not specific. There at P. 519 the learned Master of the Rolls observed that in the gift the testator had used no words of description or reference by which it appeared that he meant to give specific and particular shares. But the testator only meant to give shares. Under these circumstances the Court could not conclude that the legacies were specific. He did not give specific shares which could be distinguished or severed from the rest of the shares. That bequest in question did not appear to the learned Judges of having the qualities of a specific legacy. Under the circumstances these were held to be and considered as general legacies.
13. Mr. P.K Roy on behalf of the respondents referred to various sections of the Indian Succession Act and submitted that the legacies given in favour of his clients were specific legacies and not demonstrative or general as claimed by the executors. He submitted that while construing the will the Court should not strain the language of the will but give effect to the plain meaning of the words used by the testator. He submitted that the legacy created in his client's favour was clear and unambiguous. Under the circumstances it could not be qualified or controlled by any general expression of intention. For the purpose of determining the questions as to the object or subject of the will the Court under S. 75 is to take into consideration as to what person, what property is denoted by any words used in a will. The circumstances and to every effect in knowledge of which may conduce to the right application to the words which the testator has used (Sic). He relied on S. 86 and submitted that in view of the provisions the same words occurring in different parts of the said will should be taken to have been used in the same sense unless a contrary intention appeared. He was aggrieved in as much as the legacies in favour of the executor Vijoy Merchant had been paid under similar circumstances whereas to legacies made in favour of his clients in Food Specialities Pvt. Ltd. have not been given effect to by the executors on the plea that the estate did not have sufficient fund for such payment. According to him discrimination had been made by the executors in their own favour against the claim of respondents. It had further been contended on behalf of the plaintiffs herein that in a criminal proceedings initiated by the defendants Nos. 1 & 2 for breach of trust being Criminal Case No. 1068 of 1982 at Bombay against the executors such Criminal proceedings ended in a judgment by the Bombay High Court delivered on 26th March 1983 justifying the actions of the executors and thereby declaring that the shares given in favour of the respondents were not specific legacies. The action of the executors of offering the shares of Food Specialities Ltd. as security to the Estate Duty Officer was held not to be invalid in as much as the executors under the Indian Succession Act were required to pay all debts of the deceased. Hence while administering the estate the executors were under an obligation to pay the debts of the deceased on first priority basis and in view of the legacies created in favour of the respondents not being specific legacies the executors were within their rights to deal with the shares for the purpose of payment of statutory liabilities. There the learned Judge came to the conclusion that the case did not disclose the offences of breach of trust or any misappropriation of funds and the petitioners were acquitted of the charges levelled against them. Mr. Ranadeb Chowdhury the learned lawyer referred to the judgment passed by the learned Judge of the Bombay High Court and submitted that this Court should also hold that the legacies created in favour of the respondents were not specific legacies, but general legacies. In the case reported in AIR 1971 SC 385 Adi Pherozshah Gandhi v. H.M Seervai it was held by the learned Judges of the Supreme Court that in a civil proceeding the decision of the Criminal Court is not res judicata. The decision of the Criminal Court would not preclude a party from raising the issue before a Civil Court. Under the circumstances the decision of the Bombay High Court was no bar on the part of the respondents from contending that the legacies given in favour of the respondents were specific legacies before this Court.
14. In view of the nature of the disposition and in view of the facts and circumstances of this case as indicated earlier the disposition made in favour of the respondents Nos. 1 and 2 appears to be demonstrative legacy and not specific legacies. Under the circumstances, this Court answers the questions (a) in the manner following:—
That the bequest of shares in the Food Specialities Ltd. made under the will of Dharam Singh Suraiya is demonstrative legacy. In the facts and circumstances of this case, this Court does not think fit to answer the other questions raised in the Summons. Each party to pay and bear their own costs.
15. Executor's costs to come out of the Estate. Certified for two Counsel.
16. Mr. Roy prays for a stay of operation of the order for a fortnight.
Stay granted for a fortnight.
Order accordingly.