Report No. 70
41.11. Quantum of interest-"Gifts".-
To revert to section 45, the section as it stands at present, is confined to transfers for consideration, and does not lay down any rule for determining the quantum of interest in cases where there is a gift of property. The question then requires to be considered is, whether such a provision should be inserted. While the first paragraph of the section obviously cannot be extended to gifts-since it is based on consideration-the provision in the second paragraph which is based on the well-known maxim of equity, appears to be of great practical utility.
41.12. Where property is gifted to A and B without specifying the shares which they are to hold, that is to say, without delimiting the quantum of their interest, the question naturally arises how such quantum is to be determined.
41.13. Sections 106-107, Succession Act.-
In the Indian Succession Act,1 certain rules are laid down on the subject and it is sometimes taken for granted that these Rules lean in favour of joint tenancy. Sections 106-107, Succession Act, are in these terms:-
"106. If a legacy is given to two persons jointly, and one of them dies before the testator, the other legatee takes the whole.
1. Section 106 and 107, Indian Succession Act, 1925, infra.
"The legacy is simply to A and B. A dies before the testator. B takes the legacy.
(This section applies also to Hindus etc.)"
Section 106 deals with a bequest to persons as joint-tenants; section 107 deals with a bequest to persons as tenants-in-common.
Section 107 reads-
"107. If a legacy is given to legatees in words which show that the testator intended to give them distinct shares of it, then if any legatee dies before the testator, so much of the legacy as was intended for him shall fall into the residue of the testator's property.
A sum of money is bequeathed to A, B and C, to be equally divided among them. A dies before the testator. B and C will only take so much as they would have and if A had survived the testator."
This section also applies to Hindus etc. The principle is that as equity leans against joint tenancy and favours a tenancy-in-common, any words which in the slightest degree indicate the testator's intention to give distinct shares will create a tenancy-in-common.
41.14. Extension of section 106, Succession Act.-
It has been held by the Andhra High Court that even where section 106 is, in terms, inapplicable, e.g., where one of the joint donees dies after the testator, the rule underlying it could be made use of in construing wills in proper cases.1 But unless there is an intention expressed to the contrary, the sons, taking the self-acquired property of their Hindu father under a will or gift by him, take it as tenants-in-common, and not as joint tenants,2 according to the Patna High Court.
1. Surareddy v. Venkata Subbareddi, AIR 1960 AP 368.
2. Srimati Tewary v. Ramsurat Devi, AIR 1959 Pat 116.
41.15. View that sections lean in favour of joint tenancy criticised.-
We are not sure if the view sometimes taken that these sections lean in favour of joint tenancy,1 is entirely accurate. It should be noted that section 106 uses the word, "jointly", which makes all the difference. We are concerned with a deed of gift where the quantum of interest of each donee is not specified. It stands to reason that in such cases there should be a presumption that the intention was to benefit both the donees equally.
Since we are concerned with transfers without consideration, the test adopted in the first paragraph of section 45, namely, the source of the purchase money, would be of no use, and in the general run of cases, there would not be available any other test indicating the positive intention. Therefore, if some rule, constituting a provision in the nature of a presumption to start with, could be inserted, its practical utility can hardly be contested.
1. Arakal Joseph v. Domingo Imas, 1910 ILR 34 Mad 80 (Case on old Act).
41.16. Equality is equity.-
In equity, a maxim of general use is, that equality is equity; or, as it is sometimes expressed, "equity delighteth in equality". This maxim is variously applied; as, for example, to cases of abatement of legacies, where there is a deficiency of assets; to cases of apportionment of moneys due on incumbrances among different purchasers and claimants of different parcels of the land; and especially to cases of the marshalling and the distribution of equitable assets, which were applied in payment of debts proportionally, without reference to their dignity, or priority of right at law, except as regards Crown deb ts.1
1. Story Equity Jurisprudence, (1919).
41.17. Husband and wife.-
In this connection it may not be inappropriate to refer to a few English decisions relating to husband and wife where the doctrine of equity that "equity delighteth in equality" was, in substance, applied. Some of these cases were cases of purchases and not of gifts, but what is relevant to our purpose is the judicial attitude favouring the application of the doctrine of equality where the facts as a whole, permit of its application.
Thus, in Rimmer v. Rimmer,(1952) 2 All ER 683 (Court of Appeal), where it was not possible fairly to assess the separate beneficial interest of the husband and wife by a reference to the contributions which they had made towards the purchase of the house, and where in all the circumstances the proper and equitable course was to divide the proceeds of sale between them in equal snares, Evershed M.R. and Denning and Romer, JJ. applied this doctrine.
Even though the husband and wife contributed to the cost of the house in varying amounts, Romer LJ. observed that cases between husband wife ought not to be governed by the same strict considerations as are commonly applied to the ascertainment of the respective rights of strangers, when each of them contributes to the purchase price of the property.
41.18. Need for tentative provision.-
Of course, we are not concerned with the precise situation in issue in Rimmer v. Rimmer, but the point to be made is that where there is absolutely no evidence of a contrary intention, the law should have a tentative provision at least in the case of gifts, whether such gifts be in favour of a married couple or otherwise. The case of married couple and disputes between the parties to the marriage may in the future social conditions even in this country be more frequent. Not only can such disputes arise when the marriage comes to end, but also they may arise where one of the parties dies and the question arises of the respective rights of the survivor and the heir of the deceased.
41.19. Property right.- husband and wife.-
Questions often arise between husband and wife as to the ownership of property. Property rights, of course, have to be ascertained as at the time of purchase of transfer; the rights so ascertained will not be altered by subsequent events, unless there is an agreement to alter it.1 In the first place, the beneficial ownership of the property in question must depend on the agreement of the parties determined at the time of acquisition.2
If the property in question is land, ordinarily there must be some lease or conveyance which shows how it was acquired-"conveyance" is used here in a wide sense as to include all transfers of ownership of immovable property. If the document declares not merely in whom the legal title is to vest, but also in whom the beneficial title is to vest, it necessarily includes the question as to title as between the spouses for all time, subject to variation by a subsequent agreement where permissible.3 But if the document is silent as to the beneficial title or as to the arithmetical shares of each spouse and if there is no available evidence on that point, then what are called, the presumptions come into play.
1. Pettit v. Pettit, (1969) 2 All ER 385 (397) (HL).
2. Pettit v. Pettit, (1969) 2 All ER 385 (405) (HL).
3. Article in 1966, (Vol. 30), Conveyancer 354, 428.
What, then, are the presumptions? In England, it used to be considered previously that there was a presumption of advancement in the case of husband and wife, but it appears that the strength of this presumption has much diminished in the changing conditions of society.1 In India, the presumption of advancement was long ago discarded by the Privy Council, at least so far as the majority of the in habitants are concerned.2
1. Pettit Equity and the Law of Trusts, (1974), p. 107.
2. Gossain v. Gossain, (1863) 6 MIA 53 (PC).