THIAGARAJAN, MINOR Vs. KVENKATRAMA AYYAR

JUDGEMENT

(1.) This Civil Revision Petition raises a question of some importance. One Rama Ayyar was a member of the Non-gazetted Government Officers Association, Madras, Mutual Benefit Fund, Limited. He became a member of it on March 19, 1925, and died on July 9, 1931. Under the rules of the Fund, certain sums of money became payable to his nominee or legal heirs in the event of his death. During his lifetime Rama Ayyar became indebted to the plaintiff who after his death filed Small Cause Suit No. 564 of 1931 against the son and the widow of Rama Ayyar and obtained a decree for a sum of Rs. 268-3-3 payable from the assets of the late Rama Ayyar in their hands. He attached a sum of Rs. 80 as due and payable by the Fund as the assets of the said Rama Ayyar. Both the defendants, his son and widow, as well as the Fund resisted the claim on the ground that the said sum did not form part of the estate of Rama Ayyar and it was payable to his legal heirs. The learned District Munsif of Negapatam rejected the claim holding that the said sum did form part of the estate of the late Rama Ayyar and the moneys were, therefore, liable to be attached for the decree debt of the plaintiff. Against this order the present civil revision petition is filed.

(2.) It is contended on behalf of the defendants that Rama Ayyar had no disposing power over the said sum and, therefore, it is not property capable of being attached under Section 60 of the Civil Procedure Code, that there was a trust created by Rama Ayyar in favour of his nominee or legal heirs or at any rate, there was a contract entered into by the Fund in and by which the said sum became payable only to the legal heirs and, therefore, the defendants are entitled to the said sum in preference to the plaintiff. It is contended on behalf of the plaintiff that the Fund did form part of the property of the deceased, that any nomination, made by him during his lifetime is more in the nature of a testamentary disposition and further the said nominee also died and there was no nomination by him and the legal heirs can only get the money as his property subject to the liability to pay his debts, that no question of trust arises nor any question of contract. Even assuming that there is such a contract entered into by the Fund with the said Rama Ayyar, the defendants being strangers to their contract are not entitled to enforce their claim.

(3.) Before examining the several contentions, it will be necessary to refer to the various rules and regulations of the Fund and define precisely the rights and privileges conferred upon a member or his nominee or his heirs. The Non-Gazetted Government Officers Association, Madras, Mutual Benefit Fund, Limited, is a company registered under the Indian Companies Act. The object of the Fund is to secure a suitable pecuniary benefit on co-operative basis to every member thereof on his retirement from service or his nominee or nominees. The liability of the members is limited and the capital is Rs. 20,000 divided into 20,000 shares of Re. 1 each. Any application for admission should be in the prescribed form and accompanied by a sum of Rs. 4 made up of the share capital of Re. 1, the annual contribution of Rs. 2 for working expenses and the advance call of Re. 1 and each member shall pay in advance in January of each year the annual contribution of Rs. 2 for meeting the working expenses of the Fund. The way in which moneys received by the Fund are to be disposed of according to the rules of the Association as given in Rule 8: Classification of Finance:-The finances of the Fund shall be distributed and accounted for as follows: (1) The amount collected as share capital shall be kept as a separate account and the interest accruing therefrom shall be transferred to the Reserve Fund. The share capital of a member who ceases to be such consequent on his death, or withdrawal or removal from the rolls of the Fund shall lapse to the Association. (2) The sums paid as calls, ordinary and emergency, shall bo utilised for making benefit payments to withdrawing members or to the nominees or legal heirs of deceased members in accordance with these Acticles, the balance being transferred to the Reserve Fund in each case according to these Articles. (3) The amount collected as annual contribution for meeting the working expenses of the fund shall be kept as a separate account and utilised for meeting all expenditure in connection with the working of the Fund (4) The Reserve Fund which shall be made up of the transfer made after paying the death or retirement benefits, and such of the sums as may be specifically transferred by the General Body, shall be utilised for paying the bonus referred to in Art. 12 and for safeguarding the claims of members in the case of an abnormal fall in the membership or an abnormal increase in the number of calls in any one year.