Nadirshaw J. Vachha v. Times Of India Employees Death Benefit Fund

Beaumont, C.J:— This is an appeal from a judgment of Mirza, J., arising in certain execution proceedings. The appellant-plaintiff is a creditor of a deceased gentleman named Hormasji Bhabha who was employed in the Times of India newspaper office and the defendants in the suit are his executors. On 8th November 1929 the plaintiff obtained a decree for a money payment against the defendants as executors of Hormas Bhabha. On 24th September 1930 the plaintiff applied for attachment; on 26th September a warrant for attachment was issued, and on 6th October a garnishee notice was issued to the Treasured and Secretary of the Times of India Employees Death Benefit Fund.

2. Now the whole question is whether the interest of the deceased Hormas Bhabha in the Times of India Employee Death Benefit Fund is an interest which can be attached by his creditors. I order to answer that question one he to look at the rules governing that fun which have been marked as Ex. A to a affidavit made by Mr. H.W Smith behalf of the Times of India Company. The rules provide in Cl. 2 that the object of the fund is to secure some provision for the family of a member after his death. Cl. 4 provides that the fund shall be managed by a committee composed a therein mentioned. Cl. 5 provides that it shall be compulsory for all person entering the service of the firm, which means the Times of India, to join the Death Benefit Fund as soon as the names appear in the pay abstract. Cl. ??? provides for contributions to the fund being made by the employees in certain proportions. Cl. 8 provides that any gratuities or presents of money by visitors and others to the press shall be paid into the fund. This clause and other later clauses clearly contemplate the addition to the fund of moneys coming from outside sources, but there is not actual provision for any contribution to the fund except by the employees. There Cl. 9 provides that all amounts, from whatever source, shall be banked ??? mediately and invested as soon as ??? sufficient amount has accumulated ??? Indian Government securities in the name of the President or Vice-President of the Committee and the Secretary and the Treasurer as Trustees of the Fund Cl. 10 provides that on the death of a member in Class A and Class B (which classes are defined, though the definition are not material for the purposes of this appeal) the family or nominee of the member shall receive certain amount calculated on the period of service Cl. 11 provides that no one shall be entitled to the full benefit of the fund who shall not have contributed to it for a Page: 301east twenty-four months and in the went of any member dying before that period his family or nominee shall be paid doable the sum he has contributed of the fund. Then Cl. 13 is, I think, mended to provide who the beneficiaries ??? to be, and it is in these terms:

“By the word ‘family’ is intended widow, ???, parents, brothers and sisters. If the ??? person leaves no widow the payment hall be made in the following order, viz., ???, in their absence, parents and in their absence brothers and sisters, afterwards any there relatives: no creditor whatever shall have any claim upon the fund. A member hall be allowed to appoint a nominee from the members of his family or should he have no number of the family living as specified above, any other relative or person on payment of are of Rs. 2. If the deceased fails to appoint nominee as above specified the claim shall avert to the fund, but the committee may ??? the payment of an amount to defray is funeral expenses.”

3. Pausing here, you have got a fund which ??? vested in the trustees under Cl. 9, you have go to the proportion of the fund which he member, his family or nominee is to ??? under Cl. 10, and you have got Cl. 13 which provides in certain events ow the family is to take. I may point ??? in passing that Cl. 13 seems to leave good deal to the imagination. In the perative payt the only event which is in ??? provided for is the event of the debased leaving no widow. If the deceased ??? leaving a widow there is no provtion as to what is to happen to the fund, ortunately in this case we are not cononted with any difficulty under Cl. 13, acause the deceased did not leave a widow ad he did leave two sons, so that under Cl. 13 the sons are the beneficiaries. The aceased had a power of nomination ??? the family defined as widow, ???, parents, brothers and sisters; it that power he did not exercise, and the deceased left two sons the power nominate amongst other persons did not rise. Then continuing with the rules, Cl. 3 provides that on the widow's remarrying, the benefit of the fund will revert to the other members of the family as menoned before. This clause also is rather strange one because the only provision entioned before for the fund going to be family is, as I have pointed out, on be contingency of there being no widow. ??? there is no widow she cannot remarry, ??? that in terms Cl. 15 can never come to operation. Then we come to three ??? on which the learned Advocate General for the appellant relies as showing that they confer upon the deceased some power of disposition over the fund which would make his interest attachable under Section 60 of the CPC 11. 17 provides that any member leaving the service of the firm will be refunded the amount which he has contributed on condition that such refund is applied for within three years from the date of leaving, service.

4. It is to be noticed first that this clause only comes into operation in the particular event of the member leaving the service of the firm, which event did not occur, because the deceased was in the service of the firm when he died and, secondly, the amount which the employee is to get on leaving the service of the firm is not his proportion of the fund but merely the contributions which he has made to the fund. Cl. 18 provides that any member who has served twenty-five years or more, leaving service owing to reduction of staff or is forced to leave service for some cause with the consent of the firm can leave his fund as it stands-and his family will get the benefit of the fund after his death, provided he makes an application as therein mentioned but he is at liberty to receive his own contribution plus half the amount contributed and forfeit all further claims to the benefit of the fund. Cl. 19 provides that any member who has served fifteen to twenty-four years will be refunded his actual contribution plus half of the total amount contributed, and members with less than fifteen years' service will be refunded only their actual contribution. I am disposed to think that this clause is only intended to operate on a member leaving the firm as specified in Cl. 18. It seems to me that all these provisions in Cls. 17, 18 and 19 only confer upon the employee a right to receive a portion of the fund in certain contingencies, none of which has happened, and, I think, therefore that these clauses can be disregarded. The position under the rules therefore is that you have a fund vested in trustees and payable to the two children of the deceased and that the deceased himself never had in the events which have happened any interest in the fund or any disposing power over it. If that is the position, then I think there is a valid trust under Section 5 of the Trusts Act of 1882 which provides:

“No trust in relation to immovable property is valid unless declared by a nontestamentary instrument in writing signed by the author of the trust or the trustee and registered, or by the will of the author of the trust or of the trustee.

No trust in relation to moveable property is valid unless declared as aforesaid, or unless the ownership of the property is transferred to the trustee,”

5. I think here the ownership of the whole fund and therefore of the interest of the deceased which is sought to be attached had been transferred to the trustees of the fund and that therefore there was a valid trust under that section.

6. The learned Advocate-General relies on the English cases of Cleaver v. Mutual Reserve Fund Life Association [1892] 1 Q.B 147 , 61 L.J.Q.B 128 , 66 L.T 220 , 56 J.P 180 , 40 W.R 230 and of Engelbaah's Estate in re, Tibbetts v. Engelbach [1924] 2 Ch. 348, and the decision of this Court in Shankar Vishvanath v. Umaban [1913] 37 Bom. 471 , 19 J.C 736. These cases, I think, establish this that where you have a policy of insurance effected by A which provides that either on the death of A or at the expiration of a particular period, the insurance company will pay the sum assured to B that does not confer any contractual right upon B nor does the taking of the policy in that form operate as a trust in favour of B. Consequently, on the death of A, or on the expiration of the specified period, the executors of A or A himself, as the case may be, are the only persons who can recover the fund from the insurance company, and B has no claim to it. It seems to me that the distinction between those cases and the present case is that in this case you have got an actual fund vested in trustees whereas those cases are cases of contract pure and simple.

7. In my opinion therefore those cases do not apply, and, I think, that the judgment of Mirza, J. was right, the fund is not attachable, and the appeal must therefore be dismissed with costs.

Kemp, J.:— I agree and have nothing to add.

V.B/R.K

8. Appeal dismissed.