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1 - 8 of 8 (0.27 seconds)Section 120 in The Indian Succession Act, 1925 [Entire Act]
Ma Yait vs The Official Assignee on 28 October, 1929
5. Now, before we proceed to examine the nature and quality of the interest of the assessee in the corpus, it is necessary first to clear the ground by pointing out that in any event it cannot be regarded as a spes successionis. Even if the construction placed by the Tribunal on the relevant provisions of the trust deed is right and the gift to the assessee is held to be contingent on his surviving up to 31st March, 1987, the interest of the assessee in the corpus would be a contingent interest and not a spes successionis. A spes successionis is a bare or naked possibility such as the chance of a relation obtaining a legacy on the death of a kinsman or any other possibility of a like nature which must be distinguished from a possibility coupled with interest. Where interest in corpus is given to a donee under a settlement and such interest is contingent on the happening of an uncertain event, the donee acquires a contingent interest in the corpus which becomes vested on the happening of the uncertain event and such contingent interest, though dependent on a possibility for its vesting, is very much different from a spes successionis. It is a form of property which is assignable or transferable and on which money can be raised unlike spes successionis which is non-transferable by reason of section 6(a) of the Transfer of Property Act. This distinction between the two legal concepts is clear and well defined and does not need any authority to support it. But if any authority were needed, it is to be found in the decision of the Privy Council in Ma Yait v. Official Assignee. In that case too the gift to the children was contingent on the youngest attaining the age of 20 and the argument was that the interest of the children being in the nature of spes successionis was not transferable and the assignment of such interest was therefore invalid. The Privy Council repelled this argument holding that the interest which the children took in the corpus was contingent interest which "was something quite different from a mere possibility of a like nature of an heir apparent succeeding to the estate, or the chance of a relation obtaining a legacy...." The Privy Council observed that a contingent interest is ".... a well ascertained form of property - it certainly has been transferred in this country for generations - in respect of which it is quite possible to raise money and to dispose of it in any way that the beneficiary chooses". It is, therefore, clear that even if the gift to the assessee be held to be contingent on his surviving up to 31st March, 1987, the interest of the assessee in the corpus cannot be held to be spes successionis and hence, not transferable under section 6(a) of the Transfer of Property Act.
Section 21 in The Indian Succession Act, 1925 [Entire Act]
The Indian Succession Act, 1925
The Transfer Of Property Act, 1882
Rajes Kanta Roy vs Santi Debi on 19 November, 1956
But we find that there is a decision of the Supreme Court in Rajes Kanta Roy v. Smt. Shanti Debi where it is laid down in clear and unambiguous terms that it is undoubtedly the rule that where the enjoyment of the property is postponed but the present income whereof is to be applied for the benefit of the donee, the gift is vested and not contingent but this rule operates normally in those cases only where the entire income is applied for the benefit of the donee. Having regard to this decision of the Supreme Court, we are not bound by the view taken by the Division Bench of the Bombay High Court and we must hold that, in order to attract the applicability of the Exception to section 21, the direction must require application of the whole of the intermediate income for the benefit of the donee and, though the trustees may be given a discretion to apply less than the whole intermediate income, no part of the unapplied portion of the intermediate income should be directed to be applied for a purpose other than the benefit of the donee.
Ratanbai Rustamji Dadachanji vs Cawasji Edalji Dadachanji on 2 August, 1922
This would appear to be the position on principle but the learned Advocate-General relied on a decision of a Division Bench of the Bombay High Court in Ratanbai v. Cawasji in support of his contention that the law in India was different and it was sufficient to bring the case within the Exception to section 21 if a part of the intermediate income was directed to be applied for the benefit of the donee regardless of the application of the rest of the intermediate income. This decision undoubtedly supports the contention of the learned Advocate-General, for both the learned judges who decided this case held that the rule laid down in the English decisions does not apply because the Exception to section 21 in terms refers not only to the whole income but to a part of the income as well and it is therefore sufficient if there is a direction in the will to spend a part of the income for the benefit of the legatee; such a direction would bring the case within the Exception to section 21. This decision was taken in appeal to the Privy Council and was reversed but the decision of the Privy Council did not touch this point and, therefore, the decision of the Bombay High Court on this point would stand and we would be bound to follow it whatever might be our own view in regard to the question.
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