Report No. 70
41.21. Section 82, Trusts Act.-
The Indian Trust Act1 deals with the case of transfer of one person for consideration paid by another in these terms:
"82. Where property is transferred to one person for a consideration paid or provided by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration.
Nothing in this section shall be deemed to affect the Code of Civil Procedure, section 317, or Act No. XI of 1859 (to improve the law relating to sales of land for arrears of revenue in the Lower Provinces under the Bengal PreOdency), section 36."
We are, however, concerned at the moment,2 with a different situation, namely, where there is a transfer to two or more persons, without consideration. In such cases, the most equitable and convenient provision to be inserted, in the absence of evidence to the contrary, would be to provide for equal shares for each transferee.
1. Section 82, Indian Trusts Act, 1882.
2. See para. 41.11, supra.
41.22. Joint account of husband and wife.-
It would, appear that in England even in cases where there was a certain consideration given by the husband, the Courts applied the doctrine of equality. In Jones v. Maynard, (1951) 1 Ch 572 (Vaisey, J.), the facts were interesting. In 1941, a husband, about to go over seas, authorised his wife to draw on his bank account, which was there after operated as a joint account. Both the husband and the wife drew upon the account and both paid their earnings into it. The husband with drew money to pay for investments made in his name from time to time. In 1948, they were divorced.
The former wife now brought an action against the former husband, claiming the balance of the account and half the investments. The claim was upheld. Vaisey, J., in his judgment held that where there is a joint account between husband and wife, and a common pool into which they put all their resources, it is not equitable that it should be subsequently picked apart to establish the proportionate shares of each, the husband being credited with his earnings and the wife with hers. This would be quite inconsistent with the original fundamental purpose of a joint purse or common pool-
"That being my view," he continued, "it follows that investments paid for out of the joint account although made in the name of the husband, "were in fact made by him in his own name as a trustee as to a moiety for his wife. If the investments out of the joint account had been made in the name of the wife alone, there is no doubt that the ordinary presumption of law would have applied and she would have been entitled to the investments; but as they were made in the name of the husband, it seems to me that the assumption of half and half is the one which I ought to apply."
41.23. Judicial attitude.-
We need not go into the troublesome and thorny area of joint accounts in bank payable to "either or survivor". The above case is cited here for an entirely different purpose-judicial attitude favouring equality. In conformity with that attitude, the ease of gifts should be covered and the principle of equality introduced.
In the light of the above discussion, our recommendations to section 45 are as follows:-
(a) the section should be split up to indicate distinctly the various situations with which it concerns itself;
(b) the case of gifts should be added to the section besides the doctrine of equality. A provision per (d) below be also inserted;
(c) if the transfer is for consideration, it should be made clear that in the absence of evidence to the contrary, the nature of their interests1 in the property will be identical with the nature of their interests in the consideration;
(d) if the transfer is not for consideration, the transferees should, in the absence of evidence to the contrary, be taken to be common owners of their interests in the property. The expression 'common owner' is one which we choose to rule out 'joint tenancy' in the absence of evidence to the contrary.
1. This is different from quantum, already dealt with in the section.
41.25. Revised section 45.- Revised section 45 should be somewhat on the following lines:-
"45. (1) Where immovable property is transferred for consideration to two or more persons, the following provisions shall apply in the absence of a contract to the contrary-
(a) the nature of their interests in the property shall be identical, as nearly as may be, with the nature of their interests in the consideration, subject to clauses (b) and (c) of this sub-section;
(b) where such consideration paid out of a fund belonging to them in common, they are, as regards the quantum of their interests respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they are respectively entitled in the fund;
(c) where such consideration is paid out of separate funds belonging to them respectively, they are, as regards the quantum of their interests respectively entitled to interests in such property in pro portion to the shares of the consideration which they respectively advanced;
(d) in the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property.
(2) Where immovable property is transferred otherwise than for consideration to two or more persons, the following provisions shall apply in the absence of evidence to the contrary-
(a) the transferees shall be common owners1 of the property which is the subject-matter of the transfer;
(b) they shall be presumed to be equally interested in the property."