Sundararajulu Naidu And Others v. B. Papiah Naidu .

1. This Civil Miscellaneous Appeal has been referred to me in consequence of a difference of opinion between my learned brothers Burn, J. and Abdur Rahman, J. The point in controversy in the appeal is whether the plaintiff is entitled to attach and sell the village of Eroongaud Cottah in execution of a decree in O.S. No. 63 of 1933 obtained against the defendants. The suit which resulted in the decree was laid on a promissory note executed by defendants 1 and 4 and the father of defendants 5 to 7. Defendants 2 and 3 were impleaded in the suit as the sons of the 1st defendant. In execution of the said decree an application was made to attach the suit property under Order 21, Rule 54 and have the same sold under Order 21, Rule 66. The defendants preferred objections both to the attachment and sale on the ground that the property is inalienable and therefore not liable to be attached and sold. -The said village was granted to one Sriram Singama Naick, a Poligar of the district of Tripassore on the 1st of August, 1802, by Lord Clive on behalf of the East India Company by a deed of grant bearing the said date. The object of the grant was to make a permanent provision for the grantee and his heirs as compensation for the loss sustained by resumption of the emoluments attached to the office which was carried out in consequence of a policy enunciated by the then Government of abolishing all emoluments granted in support of the police establishments - (vide Clause 5 of the Permanent Settlement Regulation XXV of 1802). After stating in paragraph 2 that the grant was made to the grantee in pursuance of that policy, it proceeds to indicate the nature of the interest conferred on the grantee and his heirs, and in paragraph 3 the nature of the interest is described thus:

You are entitled to collect those Russooms and Marahs at the rate entered in the dowle of Fasli 1210 and to appropriate the amount to your own use.

2. In paragraph 4 it is distinctly stated that the grant was to the grantee and his heirs. Paragraph 5 is important and it runs thus:

In confirming to you and your heirs as shrotriem the village of Errongaud Cottah you are to understand that the said village is not alienable by gift, sale or otherwise, but in default of legal heirs, that the said village shall revert to the Honourable Company.

3. The word 'You' in the sentence 'You are to understand' will, having regard to the context, include both Singama Naick and his heirs referred to in the previous passage. The confirmation of the grant to the grantee and his heirs is repeated in paragraph 5 so as to emphasise that the restriction on alienation is imposed on both the grantee and his heirs. It appears to me that the intention of the East India Company in conferring this grant was not to make an absolute grant to Singama Naick but to confer on him a limited interest to enjoy the rents and profits of the village for his life and a similar interest on his heirs who will succeed him. It cannot be doubted that it is competent to the Crown to make such a heritable grant providing for a succession of limited interests, each grantee taking the estate for life. In Gulabdas Jugjivandas v. The Collector of Surat (1878) L.R. 6 I.A. 54 : I.L.R. 3 Bom. 186 (P.C.), a similar grant came up for consideration before their Lordships of the Privy Council. In that case the grant was made by the East India Company in 1800 to one Najamooddin, who was the Commander-in-Chief of the forces of the Nawab, and was called the Buckshee.

4. As the administration of the City of Surat was taken over by the East India Company it was thought incumbent and proper that some suitable provision should be made for the said Buckshee and his descendants. In pursuance of this object they made a grant of a jaghir to the said Najamooddin and his children. The grant clearly stated that Najamooddin with his children or descendants after the deduction of the income of the jaghir according to the particulars given at the foot of the sanad shall receive from the Government a certain sum and the mehals which were provided as jaghir was mentioned in the schedule to the sanad. In that case, one of the descendants Moinooddin executed a mortgage of some of the mehals and a suit was filed on the mortgage and a question arose what was the nature of the interest possessed by the said Moinooddin and whether he could bind his descendants or his co-heirs. The Collector who was then in possession of the property denied the liability of the mortgagee to claim any payment of the income of the said property after the death of Moinooddin on the ground that he had only a life interest in the property. Their Lordships upheld the contention. After stating that it was the intention of the East India Company to make a permanent provision for the family of the said Buckshee, their Lordships observed thus:

Their Lordships, having regard to the peculiar character of this grant from the Government under the circumstances which have been related, and with the objects which it expresses have come to the conclusion that the Court of Bombay was right in treating it as conferring upon the descendants of Najamooddin, who would be entitled under it, an estate for life and for life only.

5. In answer to an argument whether it is open to the East India Company to create such an estate, their Lordships made the following observation:

Their Lordships may observe that they are not prepared to affirm that all the considerations applicable to grants from private persons apply to grants from the state.

6. In Nawab Bahadur of Murshidabad v. Karnani Industrial Bank, Ltd (1931) 61 M.L.J. 208 : L.R. 58 I.A. 215 : I.L.R. 59 Cal. 1 (P.C.), a grant of a similar description came up again for consideration before the Privy Council. The grantee in that case was the eldest son of the Nawab Nazim of Bengal, Bihar and Orissa. He agreed to relinquish this title with its appurtenant rights in consideration of his receiving the titles of Nawab Bahadur of Murshidabad and Amir-ul-Omrah and also in consideration of provision being made for the maintenance of the said dignity. There was a contract entered into between the Government and the grantee which was evidenced by an indenture dated the 12th March, 1891. The Secretary of State on behalf of the Government covenanted for the due maintenance and support of the said titles to pay to the grantee and his lineal heirs male in perpetuity a particular sum and agreed that the immovable properties mentioned in the schedule to the indenture should be held and enjoyed by the grantee and such one among his lineal heirs male as may be successively entitled to hold the said titles in perpetuity with and subject to the incidents, powers, limitations and conditions as to inalienability and otherwise. The conditions as to inalienability ran thus:

The said Nawab Bahadur shall not, nor shall any of his successors in the said titles, sell, mortgage, devise or alienate the said properties respectively or any of them otherwise than by lease or demise for a term not exceeding 21 years and under a rent without bonus or salami.

7. This indenture was later confirmed by an act called the murshidabad act (xv of 1891). Their Lordships held that the Act rendered the property inalienable and observed that the Nawab for the time being was only a limited owner with power to draw the rents in question during the period of his life. Though they held the property to be inalienable, they observed that a receiver could be appointed to appropriate the rents and profits for discharging the debts of the creditors as the Nawab was given disposing power over the income. After referring to Section 60 of the Civil Procedure Code, they remarked thus:

While the Murshidabad Act renders the immovable properties to which it relates, inalienable except to the limited extent permitted, it imposes no restriction on the enjoyment of the rents by the Nawab Bahadur for the time being. So long as he is entitled to draw the rents, he may dispose of them as he pleases. The Nawab therefore has a disposing power over the income. Once this is established, no question of public policy is involved and their Lordships are unable to see that either the terms of the statute or the indenture are contravened by aiding the creditors of the appellant to effect payment out of his income of the debts which he has incurred.

8. It will be seen that this case is an authority for the view that it is open to the Crown to create successive life estates or limited interests and the prohibition as to alienation may be imposed by the Crown either by virtue of an enactment or by a grant. And by virtue of the limited nature of the grant, if the immovable property is such as it is not saleable, the rents and profits may be appropriated for the use of the creditors. My learned brother Burn, J., distinguished the Nawab Bahadur of Murshidabad v. Karnani Industrial Bank, Ltd (1931) 61 M.L.J. 208 : L.R. 58 I.A. 215 : I.L.R. 59 Cal. 1 (P.C.), on the ground that a special Act of the legislature was passed to effectuate the purpose intended by the Government and remarked thus:

It needs no argument to show that the Governor-in-Council could not issue a declaration having the force of law, to the effect that the village could never be transferred by the operation of law.

9. With great respect I am unable to agree with him in this view and the difficulty which he felt is sufficiently met by the decision of the Privy Council reported in Sheo Singh v. Raghubans Kunwar (1905) 15 M.L.J. 352 : L.R. 32 I.A. 203 : I.L.R. 27 All. 634 (P.C.). That was a case in which the taluka of Mahewa was granted in 1859 to one Gajraj Singh and his heirs. On his death the property was inherited by his elder son Girwar Singh who was recognised by the Government as Talukdar. In 1861 the Government proposed, in the case of any Talukdar whose eldest son by custom succeeded him, to change the ordinary form of sanad for a sanad stating that primogeniture would be the line of inheritance. Girwar Singh was willing to have the sanad of the nature proposed granted to him and accordingly he received a sanad in 1861. A question arose after the death of the adopted son of Girwar Singh as to the succession of the said Taluka. The contention advanced was that the Government having granted the estate in 1859 to Gajraj and his heirs nothing was left to grant to Girwar at a later date but this objection their Lordships met by saying that it would not apply to a transaction by which Girwar, the person absolutely entitled to inheritance to everything that passed under the earlier grant, surrendered it in consideration of a re-grant of the same estate on new terms. On this a further contention was advanced that the Government had no power by an executive act to change the line of succession and the contention is thus put:

It was suggested that though in the earlier troublous times many things were effectively done by Government as acts of state, still, in or after 1861, no executive act of the Government could have created an estate descending by any rule of inheritance other than that laid down by the law, and the law in the present case would be the Hindu Law.

10. Their Lordships met this contention by observing as follows:

Whatever force such a contention might otherwise have had appears to their Lordships to be removed by the Act to which their retention was called, Act No. XV of 1895 (The Crown Grants Act, 1895).

11. Therefore this case is a distinct authority for the position that it is open to the Crown to create a heritable grant like the one in question, each grantee taking a life interest. Section 3 of the Crown Grants Act is clear on the point. In this case the grantee Singama Naick had only a life interest to enjoy the rents and profits and each of his successive heirs had the same tenure. The only interest which can be made available to the plaintiff for the satisfaction of his debt is the interest of defendants 1 and 4 in the property, the father of defendants 5 to 7 having died.

12. I shall now proceed to deal with some of the cases cited at the bar in support of the contention raised by the respondent. Emphasis was laid on the decision in Rama Rao v. Srinivasiah (1932) 35 L.W. 395 by Curgenven, J., and the decision of Ramesam, J., in Vaidyanatha Aiyar v. Yogambal Ammal (1926) 51 M.L.J. 695 : I.L.R. 50 Mad. 441 both of which, cases were referred to by my learned brother Burn, J., in his judgment. In the course of the judgment, Curgenven, J., makes the following remarks:

It can hardly be disputed that the jaghir is the personal property of the jaghirdar and accordingly there is nothing in the section (Section 60, Civil Procedure Code) which will render it exempt from being proceeded against under a decree.

13. The terms of the jaghir are not given and if, as observed by him that the jaghir is the personal property of the jaghirdar, there can be no question that it is attachable and saleable. The learned Judge makes the following further observation on which much reliance is placed:

Reference has then been made to the Crown Grants Act which provides by Section 2 that the Transfer of Property Act shall not apply to grants from the Crown, including, I suppose, a jaghir of this character. But that is not to say that the operation of the Civil Procedure Code is also rendered inapplicable.

14. With great respect to the learned Judge, I am not able to follow this observation. If under the terms of the grant the jaghirdar takes only a limited interest and is incapable of alienating the property, it is not possible to understand how the operation of the Civil Procedure Code would be rendered inapplicable. The learned Judge omitted to notice Section 3 which expressly mentions that all limitations contained in a Crown Grant shall be valid and take effect according to their tenor notwithstanding any statute or enactment of the legislature which would take in Section 60, Civil Procedure Code. As regards the decision in Vaidyanatha Aiyar v. Yogambal Ammal (1926) 51 M.L.J. 695 : I.L.R. 50 Mad. 441, in my opinion it has no bearing on the facts of the present case. The question in that case was, what is the effect of prohibition indicated under Rule 5, Clause 3 of Inam Rules? Ramesam, J., observed that the object was only to protect the interests of the Government and the prohibition indicated therein can only mean that as against the Government all alienations are inoperative; but it was not the intention of Ramesam, J., to lay down that where under the terms of a particular grant a limited interest is conferred on a grantee the property could still be alienated. As pointed out in Venkatrama Aiyar v. Chandrasekhara Aiyar (1921) 40 M.L.J. 344 : I.L.R. 44 Mad. 632 at 635, it is open to the Government, in spite of the prohibition, to recognise the title of the alienee and Sadasiva Aiyar, J., observed thus in that connection:

This so-called prohibition is therefore not based on any grounds of public policy, except the protection of the rights of the Government and so long as such protection is carried out, there is no reason to consider the prohibition as an absolute prohibition, even if it has the force of law (which is very doubtful).

15. It cannot be said that the prohibition against alienation under the grant in question was intended for the protection of the Government. It was made in pursuance of a policy of preserving intact the property in the family being lost by improvident alienations.

16. I am therefore of the opinion that the interest possessed by defendants 1 and 4 in the property is only the right to enjoy the rents and profits during their lives and they are attachable and saleable; but the proper order in such cases is that passed by my learned brother, Abdur Rahjnan, J. I accordingly agree with him and hold that the appropriate order to be passed in this case is to direct the appointment of a receiver to be in possession and management of the property who will collect the rents and profits thereof and pay the share of the net profits of defendants 1 and 4 in satisfaction of the decree and the share of the net profits appertaining to the deceased father of defendants 5 to 7 to the guardian of defendants 5 to 7.

17. A.A.O. No. 101 of 1935 : A.A.O. No. 220 of 1936.

18. These appeals coming on after the expression of opinion of the 3rd Judge to whom the appeals were referred for opinion and for final orders, the Court made the following ORDER

19. In these appeals we direct that the parties shall pay their own costs throughout.