Page |1Subject – Property Law TOPIC – Vested interest (with reference of Rajesh Kanta Roy vs Shrimati Sunita Debi AIR1957, S.C.255) Supervised By: Miss Rupa Pradhan NAME: Ahmed Hasan Mosaib ROLL NO.: (Admit card No.) - 102/LLBG/15023 (Class Roll. No.) – 16 COURSE: B.A.LL.B- Sem-8TH Page |2 ACKNOWLEDGEMENT ANNEXURE - II With profound gratitude and sense of indebtedness I place on record my sincerest thanks to, Miss Rupa Pradhan, Indian Institute of Legal Studies, for his/her invaluable guidance, sound advice and affectionate attitude during the course of my studies. I have no hesitation in saying that he/she molded raw clay into whatever I am through his/her incessant efforts and keen interest shown throughout my academic pursuit. It is due to his/her patient guidance that I have been able to complete the task. I would also thank the Indian institute of Legal Studies Library for the wealth of information therein. I also express my regards to the Library staff for cooperating and making available the books for this project research paper. Finally, I thank my beloved parents for supporting me morally and guiding me throughout the project work. Date: _____________________ AHMED HASAN MOSAIB Page |3 ANNEXURE - III TABLE OF CONTENTS __________________________________________________________ Acknowledgement…………………………………………………………...………………2 Research Methodology……………………………….………………………………..………………4 A. Aims and Objectives……………………… ……………..…………………………4 B. Statement of Problem…………………………… ….………………………………4 C. Research Questions……………………………………………………… D. Hypothesis……………………………………………………………………………4 E. Method of Research…………………………….………………….…………………5 F. Mode of Citation……………………………………………….……………………5 Table of Cases……………………………… ………………………….….………………6 Chapter – I: Introduction…………………………………..…………….…………………7 Chapter II: Vested interest……………………………………………………………….8 A. Principal Chapter III: VESTED IN DIFFERENT FORMS……………………………………….11 A. Sub Categorization B. Sub Categorization C. Sub Categorization Chapter IV: Case Study…………………………………………………………………14 A. Provisions of Law B. Facts of the case C. Issues Involved D. Judgments referred by the parties E. Judgments referred by the Court F. Maxims Used G. Judgment H. Own Observation I. Conclusion Chapter V: Conclusion………………………………………............................................17 Bibliography………………………………………………………………………………18 Page |4 ANNEXURE - IV RESEARCH METHODOLOGY ___________________________________________________________ A. AIMS AND OBJECTIVES The aims and objectives of this project are to understand the concepts of vested Interest, the purpose of having provisions which gives inclusive concept of law of Property is a byproduct of intensive form of government comment. One of the aims of the project is to have a comparative study on the topic; vested Interest with respect of law of Property is a byproduct of intensive form of government comment in India. B. STATEMENT OF PROBLEM Despite the laws and Acts, the current systems do not give an equal chance to access and flourish. Though we have various Laws and Statutes yet essential things are missed out and very few literates know the proper meaning and nature of property law is a byproduct of intensive form of government comment. As such many of us are still in dark as to what includes the term Assets on which interpretation of statues is a byproduct of intensive form of government comment is to be computed and how to compute the same. C. RESEARCH HYPOTHESIS This research work is an attempt to distill lessons from the concept of law of Property of statue is a byproduct of intensive form of government comment. It is an attempt to know the concept of various terminologies within the concept of law of Property of statues is a byproduct of intensive form of government comment and how they are very much needed in our present society. D. RESEARCH QUESTIONS Based on the statement of problem and research hypothesis aforementioned, the following research questions have been formulated: Page |5 E. METHODOLOGY OF RESEARCH “Methodology” implies more than simply the methods the researcher used to collect data. It is often necessary to include a consideration of the concepts and theories which underlie the methods. The methodology opted for the study on the topic is doctrinal in nature. Empirical research in law field indicates arranging, ordering and analysis of the legal structure, legal frame work and case laws by extensive surveying of legal literature but with field work. F. SCOPE AND LIMITATIONS The research work discusses the key points that the Learned Court observed as well as what is deduced after going through the research work. Property law topic being very vast like ocean, the work is limited to the project topic. G. REVIEW OF LITERATURE The researcher while writing this project has taken recourse to various primary and secondary sources. Primary sources would include various laws, books and articles. Secondary sources would include reports and websites. H. MODE OF CITATION A uniform mode of citation has been adopted throughout the project. Page |6 TABLE OF CASES Sashi kantha v. Promod Chandara Gosling vs Gosling Sunder Bibi v. Rajendra Narain Rajesh Kanta Roy vs Shrimati Sunita Debi AIR1957, S.C.255 Page |7 CHAPTER – I: INTRODUCTION Vested interest is defined under section-19 of transfer of property act and this section should be distinguished from contingent interest as defined in sec.21. When an interest is vested the transferee’s title is already prefect1. When the interest is contingent his title is yet imperfect, but is capable of becoming prefect on the fulfillment of some condition implied. If it is an uncertain event, it is take effect. Thus, ‘A’ gift to ‘C’ on death of B creates a vested interest in A even during B's life time for the condition is bound to happen. But a gift to A on the marriage of B creates only a contingent interest because B may never marry, but that contingent interest becomes vested if and when B gets marries. It must be noted that an interest may be vested even though it does not give a right to immediate possession .Thus , on a transfer to A for title with remainder to B.B's interest is vested because there is nothing but A's prior interest to stand between him and the actual enjoyment of the property transferred. An estate may be vested although the fact may be such it never become vested in possession and so never give a right to the actual enjoyment of the land. Thus, on a transfer of A for life with remainder to B life with interest never vest possession for there is still nothing but A's estate between B and the enjoyment of land. Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested, unless a contrary intention appears from the terms of the transfer. Vesting means granting a person an immediate right to present or future enjoyment of property2. In plain English, one has a right to a vested asset that cannot be taken away by any third party, even though one may not yet possess the asset. When the right, to the present or future possession of a legal estate can be transferred to any other party, it is termed a vested interest. A vested interest is not defeated by the death of the transferee before he obtains possession. The Transfer of Property Act deals with two kinds of interest vested interest and contingent interest. Vested interest is to be distinguished from contingent interest. When an interest is vested, the transfer is complete but when the interest is contingent, the transfer depends upon a condition precedent. When the condition is fulfilled the transfer takes effect and that the interest becomes vested. 1 Dr. S. N. Shukla, The Transfer of Property Act, 28th Ed. , 2014, p. 54 2 Justice P.S.Narayana, The Transfer of Property Act, 2012, p.43. Page |8 Chapter-II Definition of 'Vested Interest':(section-19) “Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on happening of an event which must happen, such interest is called vested interest3. Explanation.—An intention that an interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other person, or whereby income arising from the property is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another person. This interest becoming vested interest in transfer of property Analogous law:- Section 119 of Indian Succession Act, 1925,corresponds with section 19 of Indian transfer of property act and it run's as follows: "119,where by the term of a bequest the legatee is not entitled to immediate possession of the thing bequeathed , a right receive it at the proper time shall, unless a contrary intention appear by the will, become vested in the legatee on the testator's death ,and in such case the legacy is from testator's said to be vested interest. Explanation:- An intention that a legacy to any person shall pass not become vested interest in him not to be inferred merely from the provision whereby the payment or possession of the bequeathed is postponed ,or whereby a prior interest therein is bequeathed to some other person, or to some other person, or whereby the income arising from the fund bequeathed is directed to accumulated until the time of payment arrives, or from a provision that ,if a particular event shall happen, the legacy shall go over to other. Illustration:- A bequeathed to B 100rupees, t be paid to him at the death of C. On A's death the legacy become vested in interest in b, and if he dies before C, his representative are entitled to the legacy. Scope of the section:- This section is corresponding to s.119of The Succession Act, 1925,give expression to the English notion of the vested interest and make it the law of the land except in the case of mahammadans law. A vested interest is a immediate right, as distinguished from the a right which may come into existence in future. The immediate right may be right of present 3 The Transfer of Property Act, Bare Act, Professional book publishers, p. 7. Page |9 enjoyment of right of future enjoyment. In Sashi kantha v. Promod Chandara1 their lordship of the Calcutta High court pointed out the distinction between a vested interest and contingent interest as following: An estate or interest is vested, as distinguished from contingent, either when enjoyment of it is presently conferred or when its enjoyment is postponed the time of the enjoyment of the will certainly come to pass, in other words, an estate is vested when the immediate right of present enjoyment or future enjoyment .An interest is said to be contingent interest if enjoyment depend upon some event this the difference between vested interest and contingent interest4. A person get vested interest when it is created in his favour (1) Without specifying the time when it take effect, or (2) In terms specifying that it is to take effect forthwith, or (3) In terms specifying that it is to effect on the happening of an event which is must happen. Characteristics of vested interest 1) Vested interest does not depend upon the fulfillment of a condition. It creates present and immediate right though the enjoyment may be postponed to future date. 2) A vested interest is not defeated by the death of transferee before obtaining possession; it will pass on To His heirs. 3) Vested interest is Transferable and heritable. Such interest becomes a vested interest under these two circumstances: In case where on a transfer of property, an interest is created in favour of a person to take effect only on the happening of a specified uncertain event, then on the happening of the event. In case where on a transfer of property an interest is created in favour of a person to take effect only on the not happening of a specified uncertain event, then when the happening of the event becomes impossible. The not happening of the event should become absolutely certain, beyond doubt. Such an interest becomes a vested interest in the transferee5. For example: Suppose O is the owner of Black acre. Consider what happens when O transfers the property "to A for life, then to B." Person A acquires possession of Black acre. Person B does not receive any right to possess Black acre immediately; however, once person A dies, 4 Dr. Avtar Singh, Textbook on the Transfer of Property Act, Universal Law Publishing, 2009, p. 89. 5 Dr. R.K. Sinha, The transfer of Property, 15 th Ed. 2014, p. 56. P a g e | 10 possession will fall to person B (or his estate, if he died before person A). Person B has a future interest in the property. In this example, the event triggering the transfer is person A's death. Because they convey ownership rights, future interests can usually be sold, gifted, willed, or otherwise disposed of by the beneficiary (but see vesting below). Because the rights vest in the future, any such disposition will occur before the beneficiary actually takes possession of the property. This type of interest is known as vested interest. Points of distinction between vested and contingent interest need to be noted:- A contingent interest is inalienable. On the other hand, vested interest is heritable and transferable. A contingent interest depends solely upon the fulfilment of a condition, so that in case of non-fulfilment of the condition, the interest may fall thorough. On the other hand, a vested interest does not depend upon the fulfilment of any conditions and takes effect from the date of the transfer of property. In case of a contingent interest there is no present right. However, there is a promise for giving one and is altogether dependent upon the fulfilment of the condition. As against this, in case of a vested interest, there is a present and immediate right. Only its use is postponed. In case of a contingent interest, the transferee takes an interest of a contingent nature, which may be defeated by reason of non-fulfilment of the precedent conditions. This is not the case in case of a vested interest. It is to be noted that where, under a transfer of property, a person becomes entitled to an interest in the property upon attaining a particular age and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income to be applied for his benefit, then such interest is vested interest. In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defensible estate; that is, an estate with a condition or event triggering transfer of possessory ownership. A common example is the landlord-tenant relationship. The landlord may own a house, but has no general right to enter it while it is being rented. The conditions triggering the transfer of possession, first to the tenant then back to the landlord, are usually detailed in a lease. Vested interest should be without any condition. P a g e | 11 Chapter-III Vested in different forms6:- (i)Vested in possession- When it is a right to present possession for ex- our residential house. Vested in possession is a term used to indicate an interest which gives a right to immediate enjoyment of an interest in property as opposed to an interest vested in remainder. For example, an estate is vested in possession when there exists a right of present enjoyment; and an estate is vested in interest, when there is a present fixed right of future, enjoyment. “The phrase "vested in possession" is well understood as meaning a right of present enjoyment. Contrasted with these terms is the phrase "vested in interest," which means a present fixed right of future enjoyment. Thus any given interest may first be vested in interest, then vested in possession, and finally reduced to possession. (ii) Vested in interest: when it is not a right to present possession but a right to future possession. Example- a land & building is given to Ramesh for his life with a remainder to B , in that case ’s right invested in possession ,B’s right is vested in interest .i.e. after ’s death property will come to B without any condition. A vested interest is transferrable and heritable. A vested interest is a “right that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person's consent. The event or time frame that triggers vesting are typically defined by contract, such as employee pension benefits vesting after a certain number of years. (iii) Vested gift:- A vested gift refers to an absolute gift. Generally, a vested gift is free from contingencies. Although a vested gift is unconditional, its use or enjoyment might not occur until sometime in the future. Hence, a vested gift can be made for the purpose of present or future usage. (iv)Vested estate:- Vested estate is an absolute, unconditional, and indefeasible interest. It is an estate which is not contingent or expectant. Vested estate carry a fixed right of present or future enjoyment. It gives a certain and fixed right of present or future enjoyment; that is, an interest clothed with a present legal and existing right of alienation. An estate is vested in possession when there exists a right of present enjoyment, and vested in interest when there is a present right of future enjoyment. (v)Vested future estate:- Vested future estate is an estate which exists when there is a person in being who would have an immediate right to the possession of the lands upon the ceasing of the intermediate or precedent estate. 6 Dr. R.K. Sinha, The transfer of Property, 15th Ed. 2014, p. 59. P a g e | 12 (vi)Vested liabilities: -"vested liabilities" means “the present value of the immediate or deferred benefits available at normal retirement age for participants and their beneficiaries which are no forfeitable. (vii)Vested right:-A vested right is commonly defined as a “right that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person's consent. (viii) Vested interest by will:-property given to window in lieu of her maintenance during her life time and after her death surviving right ,if any ,was to vest in daughter , enactment of Hindu succession act, 1956 deprived daughter of their legal right as widows interest enlarged into an absolute estate ,no right vested in daughters will.4 "Or in terms specifying that it is to take effect forthwith": Where a transfer is made to A “when" or "if" he shall attain a particular age the word "when "or" if" will, unaided by context show that A was given only contingent interest but the word may be controlled by other expressions as to show that the grantor's intention is merely postpone the enjoyment and not vesting itself 5.In such cases the interest will be vested not contingent. thus, where X, by will directed the trustee to divide the estate 21 years after the testators’ death into certain share and give one such share to his wife, and stated that such share should vest in her at the date of his death, it was held by their Lordship of the privy council that she took a vested estate though postponed for 21 yrs . On the happening of an event: The interest is a vested interest where the operation of the transfer is made to depend upon some specified certain event .the event must be clearly specified , explained and it must be certain to happen. For example death of a person. Postponement of enjoyment:- It has been that an interest may be vested though the enjoyment thereof is postponed. And the explanation make it that from the mere provision for postponement of the enjoyment, it should not be inferred that the interest is not vested. In other words, the mere fact that the transfer is not entitled to the immediate enjoyment does not necessarily make the interest contingent one. Thus, where a gift was made 'A' with a direction postponing the enjoyment of it, it was held that the direction did not postpone the vesting. Where a Hindu widow made a gift of property to the deity with the consent of the reversion under an agreement under which the revision enjoyed the benefit of rent and income of the property during the lifetime of the widow, the property so donated became vested in deity. But though the provision for the postponement does not by itself prevent the vesting of property, such a provision cannot be said to be valid under all circumstances. Such a provision will be valid where 1. The right of enjoyment is given in the meanwhile to some other person, or P a g e | 13 2. The transferee is under the majority and enjoyment is postponed until he attains majority. The leading case on the point is Gosling vs Gosling where vice chancellor, Sir W.Page Wood made the following observation: The principle of this court has always been recognized the rights of all person who attain the age of 21 to enter upon the absolute use and enjoyment of the property given to them by a will, not withstanding any direction by the testator to the effect that they are not to enjoy until a later age unless, during the interval the property is given for benefit of the another. If the property is once theirs, its useless for the testator to attempt to impose any fetter upon their enjoyment of its full as the attain 21. And upon the principal unless there is in the will or in some codicil to it, a clear indication of an intention on the part of the testator, not only that has devisee are not too have the enjoyment of the property he devised to them until the attain 25,but some person is to have that ,or unless the property is so clearly taken away from devisee up to time of attaining 25,as to induce the court to the previous rents and profit ,there has been an intestacy the court does not hesitate to strike out of the will any direction that the devisee shall not enjoy it in full until they attain the age of 25 years. Conditional limitation: The interest shall not be vested is not to be inferred from a provision that if a particular event shall happen the interest shall pass to another person. Such type of a provision is called a conditional limitation. a conditional limitation divests an estate which has become vested and vests it in another person. Section 28 of transfer of property deals with conditional limitation. Sunder Bibi v. Rajendra Narain7- The terms of a compromise provided that L should have an estate for life and that after his death to R was to be the full owner of the estate, if he survived L. If R did not survive L ,the estate would pass to R’s lineal male descendent according to the rule of primogeniture . before the death of L. the question arose whether R had only a contingent interest or a vested interest which could be attached .if the provision had been merely this that the estate would pass to R, if he survived L and estate contingent on his surviving L. The further provision of a gift over to another person was conditional limitation which had the effect of vesting the estate R. The court gave the reasoning that the condition affected the retention of the interest and not in its acquisition .Therefore; R took a vested interest liable to be divested if he did not survive L. This above case is deal in conditional limitation. 7 AIR 1925 All 389. P a g e | 14 Chapter-IV Case Study RAJES KANTA ROY…………….. PETITIONER: Vs. SANTI DEBI…………………………….. RESPONDENT: Citations: 1957 AIR 255 DATE OF JUDGMENT: 19/11/1956 BENCH: JAGANNADHADAS, B. SINHA, BHUVNESHWAR P. IMAM, SYED JAFFER ACT: Trust deed-Construction-Vested interest or contingent interest -Transfer of Property Act, 1882 (IV of 1882), SS.19, 21-Attachable interest-Execution of decree-Compromise Decree providing for a personal remedy and a charge-Whether Personal remedy could be pursued in the first instance. Facts:- One Ramani Kanta Roy was possessed of considerable properties. He had three sons, Rajes Kanta Roy, Rabindra Kanta Roy and Ramendra Kanta Roy. Rabindra died childless in the year 1938 leaving a widow, Santi Debi. ln 1934 Ramani created an endowment in respect of some of his properties in favour of his family deity and appointed his three sons as shebaits. After the death of Rabindra his widow Santi Debi, instituted a suit against the other members of the family in 1941 for a declaration that she, as the heir of her deceased husband, was entitled to function as a shebait in the place of her husband. The suit terminated in a compromise recognizing the right of Salnti Debi as a coshebait. Shortly thereafter, however, i.e., in the year 1944, Ramani and his two sons, Rajes and Ramendra, filed a suit against Santi Debi. for a declaration that the above mentioned compromise decree was null and void. One of the grounds on which the suit was based was that the marriage of Santi Debi with Rabindra was a nullity inasmuch as the said marriage was one between persons within prohibited degrees. During the pendency of that suit Ramani, the father, executed a registered trust deed in respect of his entire properties on July 26, 1945. The terms of that trust-deed will be referred to presently. The eldest of the sons, Rajes, was appointed thereunder as the sole trustee to hold the properties under trust subject to certain powers and obligations. After the execution of this trust deed the father died, The exact date of his death does not appear on the record. Some time thereafter the suit was compromised on December 3, 1946. The material P a g e | 15 terms of this compromise will be set out presently. By the said compromise Santi Debi gave up her rights under the previous compromise decree of 1941 and agreed to receive for her natural life a monthly allowance of Rs. 475 payable from the month of November, 1946. It was one of the terms of the compromise that on default of payment Santi Debi will be entitled to realise the same by means of execution of the decree. It appears that the monthly allowance as aforesaid was regularly paid up to the end of February, 1948, and that thereafter payment was defaulted. Consequently Santi Debi filed an application for execution on July 8, 1949, to realise the arrears of her monthly allowance from March, 1948, to July, 1949, amounting to Rs. 8,075 against both the brothers, Rajes and Ramendra. Execution was asked for by way of attachment and sale of immovable properties,viz., premises No. 44/2, Lansdowne Road, Ballygunge P.S., 24- Parganas. Rajes filecl an objection to the execution under s. 47 of the Code of Civil Procedure on various grounds. Ramendra has not filed, or joined in, any such application and has apparently not contested the execution. The present contest in both the courts below and here is only between Rajes and Santi Debi. An order was passed by the Subordinate Judge over-ruling the objections raised by Rajes. An appeal was taken therefrom to the High Court at Calcutta which was dismissed by its judgment under appeal. Hence the present appeal in which Rajes is the appellant, while Santi Debi is the first respondent and Ramendra is the second respondent. Clause 12 of the deed was the main provision under which Rajesh kanta and his brother Ramendra Kanta Roy got any interest in the properties .This clause showed that Lots I to IV of the properties ultimately went to Rajesh and Lot V alone went to Ramendra .But the interest with either of them was to get the properties allotted to each was expressed to be one which each would get after termination of the trust. It was only after happening of two events i. The discharge of all the debts specified in the schedules. ii. The death of the settler himself that the trust was to come to an end and it was on the trust coming to an end that the sons were to get the properties allotted to them. Issue: In this particular case those issues are framed, are as follows- 1. Whether the interest created by the trust was vested or contingent? P a g e | 16 Ratio: It was observed that the entire scheme of the trust deed was: 1) Specified lots were earmarked for each of the two sons 2) The present income out of those lots were to be applied for the discharge of the debts after payment of specified sums there form by the way of monthly payment of the two sons and presumably such application was notionally pro rata 3) Any surpluses which remain from out of the income of each of the lots were to go to the very person whom the corpus of the lot itself was belong on the termination of the trust 4) In the event of any of the two sons dying before the termination of the trust, his interest in the monthly payment out of the income was to devolve on his heirs. This arrangement clearly show that what is postponed was not were vesting of the property in the lot themselves but that the enjoyment of the income of the income thereof was burden with certain monthly payments of which taken together constituted application of the income for the benefit of the two sons . Therefore the interest taken by the Rajesh and Ramendra under the trust deed was vested not contingent. It nothing but short of spes succession ,and the interest of the life estate holder in the property during his life time was vested interest. Judgment referred by the court: Ranganatha Mudaliar v. A. Mohana Krishna Mudaliar Judgment : The court are clearly of the opinion that the objection raised to the execution (1) on the ground that the properties charged are to be proceeded against, in the first instance, and (2) on the ground that the interest which Rajes gets under the trust deed either as regards the general properties covered by the deed or as regards premises No. 44/2, Lansdowne Road, is contingent, are untenable. If, as a fact, either the debts remain undis- charged or the P a g e | 17 alternative accommodation has not so far been provided, how the rights of persons affected thereby are to be safeguarded is not a matter that arises for consideration before us and we express no opinion thereupon. This appeal is accordingly dismissed with costs. Appeal dismissed. Conclusion: When a property is transferred it involves transfer of interest, if the interest transferred are is transferred immediately it is vested interest. From the point of view of time of accruing(when transferee get the interest the interest may be either vested or contingent).In a vested interest as soon as transfer is complete the interest accurse to transferee with immediate effect and the transferee title is complete. Vested interest should be without any condition. A transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested, unless a contrary intention appears from the terms of the transfer. P a g e | 18 BIBLIOGRAPHY PRIMARY SOURCES I. STATUTES: Transfer of property Act,1882 SECONDARY SOURCES I. BOOKS: Transfer of property act -Dr. R.K. Sinha Central law agency,18th Edition II. WEBSITES https://indiankanoon.org/doc/334293/ http://www.srdlawnotes.com/2016/05/vested-interest.html https://indialegalaid.wordpress.com/2013/09/30/vested-interest-under-section- 19-of-the-transfer-of-property-act-1882/