RAMASWAMI NAIDU Vs. GOPALAKRISHNA NAIDU

JUDGEMENT

(1.) THE question that arises for consideration in this second appeal by the plaintiff's is whether the deed dated 5-7-1962 executed by one Nachar Ammal is a will or a settlement. If it is construed as a will, the plaintiffs' suit is liable to be dismissed, and if it is construed as a settlement, the plaintiffs will succeed. Though the trial court held that it is a settlement deed, the lower appellate court held that it is a will and dismissed the suit.

(2.) THE document is styled as a settlement deed. It was also registered as such. In the preamble of the document, it is stated that out of natural love and affection for the first plaintiff and his wife the second plaintiff who are the son and daughter-in-law of the executant's paternal uncle and with a view to make them absolute owners after her lifetime, she is executing the document. In the disposition clause, it was stated that after the lifetime of the executant, the property will have to be taken and enjoyed absolutely with all rights of alienation by the plaintiffs and that the patta also will have to be transferred in favour of the plaintiff after her lifetime. The document further provided that during her lifetime, the executant was entitled to enjoy the income from the properties and without any power to encumber the property or in any way alienate the same. It was also stated that the executant had no right to either change or revoke, the settlement deed for any reason.

(3.) THE broad tests or characteristics as to what constitutes a will and what constitutes a settlement have been noticed in a number of decisions. But the main test to find out whether the document constitutes a will or a gift is to see whether the disposition of the interest in the property is in praesenti in favour of the settlees or whether the disposition is to take effect on the death of the executant. If the disposition is to take effect on the death of the executant, it would be a will. But if the executant divests his interest in the property and vests his interest in praesenti in the settlee, the document will be a settlement. The general principle also is that the document should be read as a whole and it is the substance of the document that matters and not the form or the nomenclature the parties have adopted. The various clauses in the document are only a guide to find out whether there was an immediate divestiture of the palakrishna Naidu and Ors. (24. 02. 1977 - MADHC) Page 3 of 4 interest of the executant or whether the disposition was to take effect on the death of the executant. If the clause relating to the disposition is clear and unambiguous, most of the other clauses will be ineffective and explainable and could not change the character of the disposition itself. For instance, the clause prohibiting a revocation of the deed on any ground would not change the nature of the document itself, if under the document there was no disposition in praesenti. In such a case the clause prohibiting revocation will be contrary to law and will be ineffective. If, on the other hand, the document is a settlement, merely because 3 right of revocation is given, it would not change the character of the document as a settlement 'because such a clause will be against law and will be invalid. The nomenclature of the document nor the fact that it had been registered also will not be of any assistance in most of the cases unless the disposition is very ambiguous and extraneous mid is required to construe that clause.