‘Absolute’ Or ‘Life Interest’

Source: The Hitavada      Date: 29 Jan 2018 12:23:39


 

 

 

 

 

 

 

 

 

 

 

It is a settled principle of law that the “life interest” means an interest, which determines on the termination of life. It is incapable of being transferred by such person to others being personal in nature. Such person, therefore, could enjoy the “life interest” only during his/her lifetime, which is extinguished on his/her death.


IN THE judgement of the case - Mr. Ranvir Dewan v. Mrs. Rashmi Khanna & Another, delivered on December 12, 2017, Justice R.K. Agrawal and Justice Abhay Manohar Sapre, at the Supreme Court, have held that the Courts below were justified in holding that the case of appellant falls under section 14(2) of the Hindu Succession Act, 1956 and thereby she continued to enjoy only the “life interest” by virtue of section 14(2) of the said Act.


The appeal in this case was filed by the Plaintiff No. 1 against the final judgement and order of July 13, 2016 passed by a Delhi High Court division bench, whereby the HC dismissed the appeal filed by the plaintiff No. 2 (since dead) and the appellant herein and confirmed the order and judgement of October 11, 2013 delivered by a Single Judge Bench of the Court.


The question arising in this appeal for consideration was, “What is the true nature of the right received by Mrs. Pritam in the suit house through Will dated 24.8.1986 from her husband, namely, “absolute” by virtue of section 14(1) of the Act or “life interest “ by virtue of section 14(2) of the Act.


In order to decide the question, it was necessary to examine first as to what is the true nature of the estate held by the testator. Second, what the testator had intended and actually bequeathed to his wife by his Will and lastly, the right in the property received by Mrs. Pritam, namely, absolute interest by virtue of section 14(1) or life interest by virtue of section 14(2) of the Act.


Facts-wise, it was not in dispute that the suit house was a self-acquired property of the late Mr. Dewan. It was also not in dispute as one can take from reading the contents of the Will that Mr. Dewan had intended to give only “life interest” to his wife in the suit house, which he gave to her for the first time by way of disposition of his estate independent of her any right. It was also not in dispute that it was confined to a right of residence to live in the suit house during her lifetime and to use the income earned from the suit house to maintain herself and the suit house.
It was also not in dispute that the testator gave to his son the ground floor of the suit house and first floor to his daughter with absolute right of ownership.

The testator also permitted both of them to get their names mutated in municipal records as absolute owners and also get them assessed as owners in Wealth Tax assessment cases. So far as other properties were concerned, Mr. Dewan gave those properties to his wife absolutely.


After applying the principles laid down in the two cases -- V. Tulasamma & Others v. Sesha Reddy (Dead) by LRs - (1977) 3 SCC 99 and Sadhu Singh v. Gurudwara Sahib Narike & Others - (2006) 8 SCC 75 -- to the facts on hand, the Supreme Court had the considered opinion that the case of the second plaintiff, Mrs. Pritam does not fall under section 14(1) of the Act , but it squarely falls under section 14(2) of the Act. In other words, in “our” view the law laid down in Sadhu Singh’s case would apply.


Wife - Mrs. Pritam received only ‘life interest” in the suit house by the Will of June 24, 1986 from her late husband and such “life interest” was neither enlarged or ripened into an absolute interest in the suit house and remained “life interest” that is “restricted interest” till her death under section 14(2) of the Act. The Court’s observation came in the light of certain factual reasons arising in the case.
First, the testator - Mr. Dewan being the exclusive owner of the suit house was free to dispose of his property the way he liked because it was his self earned property.


Second, the testator gave the suit house in absolute ownership to his son and daughter and conferred on them absolute ownership. At the same time, he gave only “life interest” to his wife, that is, a right to live in the suit house which belonged to the son and daughter. Such disposition, the testator could make by virtue of section 14(2) read with section 30 of the Act.


Third, such “life interest” was in the nature of “restricted estate” under section 14(2) of the Act, which remained a “restricted estate” till her death and did not ripen into an “absolute interest” under section 14(1) of the Act. In other words, once the case falls under section 14(2) of the Act, it comes out of section 14(1). It is permissible in law because section 14(2) is held as proviso to section 14(1) of the Act.


Fourth, the effect of the Will once it became operational after the death of testator, the son and the daughter acquired absolute ownership of the suit house to the exclusion of everyone whereas the wife became entitled to live in the suit house as of right. In other words, the wife became entitled in law to enforce her right to live in the suit house qua her son/daughter so long as she was alive. If for any reason, she was deprived of this right, she was entitled to enforce such right qua son/daughter but not beyond it. However, such was not the case here.


Fifth, the testator had also given her other properties absolutely to his wife which enabled her to maintain herself. Moreover, a right to claim maintenance, if any, had to be enforced by the wife. She, however, never did it and rightly so because both were living happily. There was, therefore, no occasion for her to demand any kind of maintenance from her husband.


Sixth, it is a settled principle of law that the “life interest” means an interest, which determines on the termination of life. It is incapable of being transferred by such person to others being personal in nature. Such person, therefore, could enjoy the “life interest” only during his/her lifetime, which is extinguished on his/her death. Such is the case here. Her “life interest” in the suit house was extinguished on her death on September 12, 2016.


Seventh, as already mentioned, the facts of the case in hand and the one involved in the case of Sadhu Singh are found to be somewhat similar, and this case is fully covered by the judgement in the Sadhu Singh’s case In view of this legal position the Supreme Court held that there was no error in the impugned judgement, which has rightly held that the case of Mrs. Pritam falls under section 14(2) of the Act insofar as it relates to the suit house and the Apex-Court dismissed the appeal.