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Smart Summary

Factual and Procedural Background

This appeal concerns the construction of the will of Jamnadas Mayaram, who died in 1917. On 1st February 1914, he executed two documents: a deed of gift conveying property worth Rs. 40,000 to the defendants, and a will disposing of thirty-one lands valued at Rs. 16,000 and a house worth Rs. 500. The will directed that Rs. 10,000 from the sale proceeds be paid to his widow Bai Magan, Rs. 4,000 to daughter Bai Kiki, and Rs. 4,000 to daughter Kamla and her son Shantilal. After Jamnadas’s death, his widow Bai Magan died in 1917, having made a will in favor of Bai Kiki concerning her legacy. The plaintiff, Bai Kiki, initiated suit against the executors for the construction of the will. The defendants argued that the legacy to the widow was a life estate, but the High Court held the bequest to Bai Magan was absolute. On remand, the Subordinate Judge held that the Rs. 4,000 legacies should carry interest from the date of the testator’s death, while interest on the Rs. 10,000 legacy should run from the dates on which the lands were sold.

Legal Issues Presented

  1. Whether the legacies in the will are specific or demonstrative legacies.
  2. Whether the plaintiff is entitled to interest on the legacies, and if so, from what date interest should run.
  3. Whether the payments made by defendants to Bai Magan during her lifetime were advances on the legacy or gifts made out of natural affection and maintenance.
  4. Whether the plaintiff should bear the costs of the commissioner appointed to sell the lands.
  5. What rate of interest should apply on the judgment amount.

Arguments of the Parties

Appellant's Arguments

  • The legacies were specific and not demonstrative, entitling the plaintiff to mesne profits from the date of the testator’s death until the sale of the lands.
  • If the legacies are demonstrative, the plaintiff is entitled to interest under Section 351 of the Succession Act, payable from one year after the testator’s death.
  • The legacy of Rs. 10,000 should bear interest from one year after the testator’s death, not from the date of sale proceeds realization as held by the Subordinate Judge.
  • The plaintiff should not be liable for costs of the commissioner who sold the land.
  • The rate of interest on the judgment should be 6% instead of 4% as ordered by the lower court.

Respondents' Arguments

  • The legacy to the widow was a life estate and not absolute.
  • The legacies were payable only upon the sale of the lands, and interest should run from the dates of sale under Section 352 of the Succession Act.
  • The payments made to Bai Magan during her lifetime were gifts made out of natural affection and for her maintenance, not advances on the legacy.
  • The costs of the commissioner are properly chargeable as part of the estate administration.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Calow v. Calow Distinction of specific legacies involving freehold land subject to contract of sale. Distinguished from present case because the will here did not specifically devise land but referred to sale proceeds.
Page v. Leapingwell Intention of testator to create specific legacies. Distinguished as the testator’s intention here was not to create specific legacies of land but demonstrative legacies from sale proceeds.
Fryer v. Morris Relevant to specific legacies. Held not applicable to the facts of the present case.
In re Walford, Kenyon v. Walford Interest on demonstrative legacies payable from one year after testator’s death. Applied to support awarding interest on demonstrative legacy from one year after death.
Administrator-General v. A.D Christiana Indian authority affirming English law on interest on demonstrative legacies. Applied to confirm entitlement to interest on demonstrative legacies under Indian law.
Lord v. Lord Rule that legacy payable at future date bears interest only from that date; if no time fixed, interest runs from one year after testator's death. Followed to determine interest accrual date for legacies without fixed payment date.

Court's Reasoning and Analysis

The court analyzed the nature of the legacies and concluded they were demonstrative, not specific, because the will directed payment out of sale proceeds of certain lands rather than bequeathing the lands themselves. The court relied on provisions of the Succession Act, particularly Sections 142, 145, 150, 351, and 352, and distinguished relevant English cases on specific legacies. It noted that the legacies were payable after realization of the sale proceeds but no fixed payment date was set in the will. Applying the principle from Lord v. Lord and other authorities, the court held that interest on the Rs. 10,000 legacy to the widow should run from one year after the testator's death until payment, while interest on the Rs. 4,000 legacies to the daughters should run from the date of the testator’s death. The court also considered the defendants’ conflict of interest, as they delayed sale while receiving rents, and found it equitable to award interest. Regarding payments made to Bai Magan during her lifetime, the court agreed these were gifts made out of natural affection and not advances on the legacy. The court rejected the appellant’s objection to costs of the commissioner and increased the interest rate on judgment from 4% to 6%.

Holding and Implications

The appeal is allowed in part with respect to interest on the legacy of Rs. 10,000. The plaintiff is entitled to interest on this legacy from the expiration of one year after the testator's death until payment, at a rate of 6% from the date of judgment until payment. Interest on the Rs. 4,000 legacies to the daughters shall run from the date of the testator’s death. The cross-objections by the defendants are dismissed. Payments made by defendants to Bai Magan during her lifetime are not advances on the legacy but gifts. The plaintiff will receive costs of the appeal from the respondents.

The decision clarifies the treatment of demonstrative legacies under the Indian Succession Act, confirming interest entitlement when no fixed payment date is set and affirming the distinction between specific and demonstrative legacies. No new precedent beyond the application of established statutory provisions and case law was created.

    Rajanikant Mansukhlal v. Kiko Ratilal

    Patkar, J.:— This appeal relates to the construction of the will of one Jamnadas Mayaram, who died in the year 1917. On 1st February 1914 he passed two documents: a deed of gift, Ex. 47, and a will, Ex. 45. By the deed of gift, Ex. 47, he gave property worth Rs. 40,000 to the defendants, and by the will Ex. 45 he made a disposition with regard to thirty-one lands, worth Rs. 16,000 and a house worth Rs. 500. Out of the sale proceeds, Ra. 10,000 were directed to be paid to the widow Bai Magan; Rs. 4,000 to the daughter Bai Kiki; and Rs. 4,000 to the daughter Kamla and her son Shantilal. The testator died on 23rd March 1917. After his death his widow, Bai Magan, died after making a will in respect of her legacy in favour of Bai Kiki, the original plaintiff, on 16th December 1917. The plaintiff brought a suit against the executors for the construction of the will. The defendants contended that the legacy to the widow was a life estate. The case came up to the high Court and it was held that the bequest to Bai Magan was absolute. The learned Subordinate Judge on remand held that the legacies of Rs. 4,000 should carry interest from the date of the testator's death, but with regard to the legacy of Rs. 10,000 the interest should run from the dates on which the several amounts were realized by sales of the lands.

    2. It is urged on behalf of the appellant that the legacies were specific and not demonstrative legacies, and therefore she was entitled to the mesne profits of the lands from the date of the death of the testator till the sale of the lands by the receiver under Section 349 of the Succession Act of 1925. The portion of the will relating to these legacies runs as follows:

    “After the amount due in respect of lands, sold under oral agreements has been received, the same is to be given by Ritilal, Thakurdas and Chandulal as mentioned below. The particulars thereof are as follows: Rs. 10,000 (in words ten thousand rupees) should be paid to my wife named Maganbai. Rs. 4,000 (in words four thousand rupees) should be paid to my daughter named Kiki. Rs. 4,000 (in words four thousand rupees) Should be paid to my daughter named Karola for herself and her son named Shantilal together. In all Rs. 18,000 (in words eighteen thousand rupees) should be paid.”

    3. Under Section 150 of the Succession Act:

    “Where a testator bequeaths a certain sum of money, or a certain quantity of any other commodity, and refers to a particular fund or stock 30 as to constitute the same the primary fund or stock out of which payment is to be made the legacy is said to be demonstrative.” The legacies in this case were directed to be paid out of the sale proceeds of the ‘lands with regard to which the testator had made oral agreements of sale and left directions that they should be sold and after the money was received, the payments of the legacies should be made in certain proportions. We therefore think that these legacies did not refer to the lands which were reserved by the testator, but were legacies with regard to money payments which were to be paid out of the sale proceeds of the lands.

    4. Under Section 145 of the Succession Act:

    “a money legacy is not specific merely because the will directs its payment to be postponed until some part of the property of the testator has been reduced to a certain form, or remitted to a certain place,”

    5. And the illustration runs as follows:

    “A bequeaths to B Rs. 10,000 and directs that this legacy shall be paid as soon as A's property in India shall be realized in England. The legacy is not specific.”

    6. The case of Calow v. Calow (1), is distinguishable on the ground that the part of free hold land was specically devised though subject to a contract of sale and the intention of the testator was to pass whatever interest the testator had in the property. In the case of Page v. Leapingwell (2) the intention of the testator was that the legatees should take as specific legatees. The distinction is made clear by the last Illus. (iv) and Illus (vii) in Section 142 of the Succession Act. The last case, Fryer v. Morris (3), cited on behalf of the appellant, does not apply to the facts of the present case. Having regard to the terms of the will, we are of opinion that the legacies which were directed to be paid out of the sale proceeds of the land were demonstrative legacies and fell within Section 150 and not Section 142 of the Succession Act. It is further urged on behalf of the appellant that if these legacies are demonstrative legacies and not specific legacies she is entitled to interest under Section 351 of the Succession Act. Though there is no provision for payment of interest on a demonstrative legacy, it appears that according to the English law, interest is payable on the demonstrative legacy from the expiry of one year from the testator's death: see In re Walford, Kenyon v. Walford (4), and the same is the law in India: of Chinnam v. Tadikonda (5) and Administrator-General v. A.D Christiana (6). If Section 351 of the Succession Act, applies the plaintiff will be entitled to interest from the expiry of one year from the testator's death. But it is contended on behalf of the appellant that the case falls under Section 352 of the Succession Act, for a time has been fixed for the payment of the general legacy, viz., the date of the sale of the lands. The provision runs as follows:

    “After the amount due in respect of lands sold under oral agreements has been received, the same is to be given by Ratilal, Thakurdas, and Chandulal as mentioned below.”

    7. No date has been fixed in the will for the distribution of the legacy, and it appears that the rule has been laid down in Lord v. Lord (7), as follows (p. 789):

    “The rule of law is clear, and there can be no controversy with regard to it, that a legacy payable at a future day carries interest only from the time fixed for its payment. On the other hand, where no time for payment is fixed, the legacy is payable at, and therefore bears interest from, the end of a year after the testator's death, even though it be expressly made payable out of a particular fund which is not got in until after a longer interval.”

    8. The principle is followed in In re Walford, Kenyon v. Walford and Administrator General of Bengal v. A.D Christiana . There appears to be a conflict of duty and interest as far as the defendants are concerned. It was in their interest to postpone the sale as far as possible, but it was their duty to sell the lands within a reasonable time as directed by the testator, and we think that it would not be inequitable if interest is awarded to the plaintiff, as the defendants were in possession of the lands and received the mesne profits from the date of the testator's death till the sale of the lands. Under these circumstances, we think that as there is no date fixed in the will for the distribution of these legacies, Section 351 of the Succession Act, applies, and the plaintiff is entitled to interest on the legacy of Rs. 10,000 in favour of the wife from the expiration of one year from the testator's death to the date of payment. With regard to the legacies in favour of the daughters of Rs. 4,000 each, Cl. 2, S. 351, applies and the legacy shall bear interest from the date of the death of the testator. We think therefore that the appeal must succeed so far as interest is concerned on the legacy of Rs. 10,000 from the expiration of one year from the testator's death to the date of payment. The amount of interest on the amount of Rs. 10,000 should be determined by the lower Court after taking into consideration the fact that the plaintiff purchased certain properties in February 1926 and retained about Rs. 7,270 out of the consideration for the sales out of the amount of Rs. 10,000 payable to her. With regard to the cross-objections, I have already held that the legacies in favour of the daughters fell under Cl. 2, S. 351 and therefore the legacies shall bear interest from the date of the testators' death. With regard to the several items which were paid by the defendants to Bai Magan during her lifetime, we agree with the view of the lower Court that these payments were made by the defendants out of natural affection for their grandmother and for her maintenance and not on account of the legacy which was directed to be paid by the testator. The result therefore is that the cross-objections must be dismissed with costs, and the appeal will be allowed with regard to interest from the expiration of one year from the death of the testator to the date of payment. We would also allow interest at 6 per cent from the date of judgment of the lower Court till payment instead of 4 per cent. The appellant will get the costs of this appeal from the respondents.

    Murphy, J.:— This appeal arises out-of the will of one Jamnadas Mayaram., who made it on 5th February 1914, and died some time in 1917. He had owned immovable property, consisting of a-house and some agricultural land, which he valued at Rs. 18000. As to this land some of it was in the process of being sold, and the direction in his will was-that the house should remain in the possession of his widow Bai Magan till her death and should then go to the defendant, while the sales of the land should be completed, and out of the proceeds Rs. 10,000 should be paid to his wife Magan and Rs. 4,000 each to two of his daughters. There was a litigation over the construction of the will, and its meaning was finally determined by this; Court. The land also was not sold for a long time, and this had to be done-through the Court and by the Commissioner appointed for the purpose. The first point we are concerned with is whether the three legacies in question were specific or demonstrative. The plaintiff now claims Rs. 10,000, which had been left by her mother, as her mother's heir under a will, and also her own Rs. 4,000 The learned Subordinate Judge has held that the legacies-were demonstrative. Mr. Coyajee has relied on the English cases of Calow v. Calow , Page v. Leapingwell and Fryer v. Morris . In the first of these cases the lease was that of all freehold property and was clearly specific. In the second the Court's finding was that the true intention of the testator had been that the gift should be taken by the persons as specific legatees, while the last case does not appear to me to be relevant to the present one. On the construction of the document itself, I think that the mention of the landed property in the will was only by way of an indication whence the legacy should be paid, and not a specific legacy of the land, or a part of it, so as to establish the plaintiff's claim to the mesne profits, or her right to an account. I agree therefore with the conclusion come to by the Court below.

    9. The appellant's second grievance is as to the learned Subordinate Judge's order for the payment of interest. The learned Subordinate Judge has allowed this in the case of the plaintiff's legacy from the date of the death of Jamnadas at 6 per cent, under Section 351(2) of the Succession Act, but on the Rs. 10,000 he has allowed it only from the dates when the several sums were realized by sales instead of from a year after the testator's death. It is also urged that plaintiff should not have been asked to contribute to the costs of the commissioner, who sold the land, and that the rate of interest on judgment should have been 6 per cent, instead of 4 per cent, as has been ordered. As against this, Mr. Thakar has argued that the legacies were only payable from the point when the sales had been effected and completed, under Section 352 of the Succession Act, and he would fix this as the point of time of payment of interest. But I do not think it can be said that this was the time for the payment, as he has argued, for defendants were the executors, and when they sold the lands depended on their own initiative, which since they were receiving the rents, they were naturally unwilling to exercise. I think that the ordinary rule that the time taken must be reasonable should apply, and that the liability to pay interest cannot be evaded on this ground in the circumstances of the case. The grievance about the costs of the commissioner does not seem to me to be substantial, but the ordinary rule for interest on judgment is 6 per cent, and in this case there is no reason to cut it down.

    10. There are cross-objections filed by the defendants. They relate to the amounts claimed as having been paid to Bai Magan and also to the order about interest. With the last I have already dealt and as to the other claim, it is clear that the defendants supplied their grandmother with certain sums and the learned Subordinate judge believes that they did so, not by way of an advance of her Rs. 10,000 due to her under her legacy, but made because of their relationship to her in other words, the payments were gifts. Bai Magan was their grandmother and that they should pay her sums for her maintenance was natural. I agree with the view taken in this matter by the learned Subordinate Judge. I think that the decree proposed by my learned brother is the one that should be made and also his order as to costs.

    K.N/R.K

    11. Order accordingly.

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    Rajanikant Mansukhlal v. Kiko Ratilal
    (Jan 25, 1932)