Saturday, October 25, 2014

Will, Gift and Settlement - distinguishing the attributes

Mathai Samuel & Ors vs Eapen Eapen (dead) by Lrs. & Ors CA No 8197 of 2012

11. ...basic  and  fundamental  difference  between  a   testamentary disposition and a settlement.  Will is an  instrument  whereunder  a  person makes a disposition of his properties to take effect  after  his  death  and which is in its own nature ambulatory and  revocable  during  his  lifetime.
It has three essentials:

     1) It must be a legal declaration of the testator’s intention;

     2) That declaration must be with respect to his property; and

     3) The desire of the testator that  the  said  declaration  should  be
        effectuated after his death.

12.   The essential quality of a testamentary disposition is  ambulatoriness of revocability  during  the executants’  lifetime.   Such  a  document  is dependent upon executants’ death for its vigour and effect.

13.   Section 2(h) of the Indian Succession Act says “Will” means the  legal declaration of the intention of a testator  with  respect  to  his  property which he desires to be carried  into  effect  after  his  death”.

16. ....A document which operates to dispose of properly in  praesenti  in  respect of few items of the properties is a settlement and in future in  respect  of few other items after the deeds of the executants,  it  is  a  testamentary disposition.  That one part of the document has effect during the life  time of the executant i.e. the gift and the other  part  disposing  the  property after the death of the executant is a Will.

17.   In a composite document, which has the characteristics of  a  Will  as well as a gift, it  may  be  necessary  to  have  that  document  registered otherwise that part of the document which has the effect of  a  gift  cannot be given effect to.  ...The  document which may serve as evidence of the gift, falls within the sweep  of  Section 17 of  the  Registration  Act.   Where  an  instrument  evidences  creation, declaration, assignment, limitation or extinction of any present  or  future right, title or interest in  immovable  property  or  where  any  instrument acknowledges  the  receipt  of  payment  of  consideration  on  account   of creation, declaration, assignment, limitation or extinction of  such  right, title or interest, in those cases alone the instrument or receipt  would  be compulsorily registrable under Section 17(1) (b) or (c) of the  Registration Act.  A ‘Will’  need  not  necessarily  be  registered.   But  the  fact  of registration of  a  ‘Will’  will  not  render  the  document  a  settlement.

Intention – Guiding Factor:

18.   The primary rule of construction of a document  is  the  intention  of the executants, which must be found in the words used in the document.   The question is not what may be supposed to have been  intended,  but  what  has been  said.   We  need  to  carry  on  the  exercise  of   construction   or
interpretation of the document only if the document  is  ambiguous,  or  its meaning is uncertain.  If the language used in the document  is  unambiguous and the  meaning  is  clear,  evidently,  that  is  what  is  meant  by  the executants  of  the  document.   Contemporary   events   and   circumstances
surrounding  the  execution  of  the  document  are  not  relevant  in  such situations.

30. ....we have .....no  hesitation in holding that so far as that item is concerned, the document  in  question cannot be construed as a settlement or a gift because there is no  provision in  the  document  transferring  any  interest  in  immovable  property   in praesenti in favour of settlees


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