RFA No. 474 of 2004 (F)

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE P.SOMARAJAN FRIDAY, THE 1ST DAY OF JUNE 2018 / 11TH JYAISHTA, 1940 RFA.No. 474 of 2004 (F) AGAINST THE JUDGMENT IN OS 7/2002 of SUB COURT, THIRUVALLA, DATED 14-06-2004 APPELLANTS/DEFENDANTS 1 TO 3: - ---------------------------------------------------- 1 ANNAMMA PHILIP, W/o VARGHESE PHILIP (LATE), AGED 65 YEARS, VALLIYIL HOUSE, THATTACADU MURI, KUMBANADU, KOIPURAM VILLAGE, THIRUVALLA TALUK (DIED) - 2 SUJA ELIZABETH VARGHESE, W/O.VARGHESE, AGED 39 YEARS, KADAVATHARA MALAYIL, MEZHUVELI MURI, MEZHUVELI VILLAGE, KOZHENCHERRY TALUK. - 3 SUNU MATHEW NINAN, W/O.MATHEW NINAN, AGED 35 YEARS, ENNICKATTU, KUMBANADU, KOIPURAM VILLAGE, THIRUVALLA TALUK. (IT IS RECORDED THAT APPELLANTS 2 AND 3 ARE THE LEGAL REPRESENTATIVES OF THE DECEASED 1[st] APPELLANT AS PER ORDER DATED 23.06.2009 IN I.A.No.1920/2009.) BY ADV. SRI. KRISHNANUNNI (Sr.) BY ADV. SRI. SANTHOSH MATHEW RESPONDENTS/PLAINTIFF & DEFENDANTS 4 & 5 : - ----------------------------------------------------------------------- 1. KAVITHA SUNIL VARGHESE, W/O. (LATE) SUNIL VARGHESE, AGED 29 YEARS,, VALLIYIL HOUSE, THATTACADU MURI, KUMBANADU, KOIPURAM VILLAGE, NOW RESIDING AT MANNIL HOUSE, KUMBANADU, KOIPURAM VILLAGE, THIRUVALLA TALUK. 2. LIFE INSURANCE CORPORATION OF INDIA, THIRUVALLA BRANCH, REPRESENTED BY ITS BRANCH MANAGER, THIRUVALLA. 3. BANK OF INDIA, NRI BRANCH, COLLIS ESTATE, - 2ND FLOOR, M.G. ROAD, ERNAKULAM, REPRESENTED BY ITS BRANCH MANAGER. R1 BY ADV. SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) R2 BY ADV. SRI.LAL GEORGE THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 23.03.2018. THE COURT ON 01.06.2018 DELIVERED THE FOLLOWING: DMR/- ## **A.M.SHAFFIQUE & P. SOMARAJAN, JJ.** -----------------------------------------------R.F.A. No.474 of 2004 -----------------------------------------------Dated this the 01[st] day of June, 2018 ## J U D G M E N T ## **Somarajan, J.** Appellants herein are defendants 1 to 3 in O.S.No.7/2002 of Subordinate Judge's Court, Thiruvalla. The suit is one for partition and it was decreed in part allowing partition of item Nos.1 to 7 properties. The defendants 1 to 3 raised a counter claim, which was also decreed in part, by its judgment dated 14.06.2004 and this appeal is preferred in so far as it is against defendants 1 to 3. 2. The plaintiff is the wife of deceased Sunil P. Varghese. The first defendant in the suit is his mother and defendants 2 and 3 are the siblings. Seven items of properties were scheduled in the plaint. Item Nos.1 to 4 are immovable properties. Item No.5 is the amount payable under Life Insurance Policy, due from the fourth defendant, the Life Insurance Corporation of India, to the legal heirs of deceased Sunil P. Varghese. Item No.6 is the amount in fixed deposit with the fifth defendant Bank and item No.7 is the value of stock in trade of Margin Free Shop run by the deceased Sunil R.F.A. No.474 of 2004 2 P. Varghese. The plaintiff claimed 1/4[th] share over item Nos.1 and 3, half share over item Nos.4, 5, 6 and 7 and 1/9[th] share over item No.2 property. Defendants 1 to 3 contended that the plaintiff is entitled to only 2/9[th] share over item No.1, 1/9[th] share over item No.2, 1/4[th] share over item Nos.3 and 4 and admitted the plaint claim over item No.5. The claim for partition of item No.6 is disputed stating that the same is belonged to defendants 1 and 3. The deceased Sunil P.Varghese had no right over it. It was also contended that item No.6 deposit was transferred from UCO Bank, Singapore Branch, and it was in the joint name of defendant Nos.1 and 3. It was transferred to the fifth defendant Bank. The name of deceased Sunil was included only for operational convenience. Regarding item No.7, it was contended that the value of stock in trade of Margin Free Shop at the time of death of Sunil was only Rs.1,00,000/- and not Rs.6,00,000/- as claimed by the plaintiff and the plaintiff is entitled to only ½ share over the said amount. R.F.A. No.474 of 2004 3 3. The first defendant raised a counter claim of Rs.15,90,705.50 under the heads 'A' to 'F'. The lower court decreed the suit in part by passing a preliminary decree for partition of 2/9[th] share in item No.1, 1/9[th] share in item No.2, 1/4[th] share in item Nos.3 and 4, half share over item No.5, 1/4[th] share in item No.6 and an amount of Rs.55,569/- being the half of Rs.1,11,139/-, the value of item No.7. 4. The counter claim was also allowed in part. Aggrieved by the said preliminary decree and judgment as against item No.6 property and rejection of claim over counter claim 'B' and 'C' amounts, this appeal is preferred. 5. The main issue raised in the appellate stage is pertaining to whether item No.6 property is available for partition. The claim of defendants is that it really belonged to first and third defendants. It was actually a deposit stands in the name of first and third defendants with UCO Bank, Singapore Branch. Later on it was transferred to the fifth defendant Bank under a joint account in the name of first defendant and the deceased Sunil P. Varghese as Either or R.F.A. No.474 of 2004 4 Survivor Account. It is contended by defendants 1 to 3 that the name of Sunil P. Varghese was included in the said account only for convenience and hence the claim for partition is disputed. 6. Peculiar circumstances involved in the case can be summarized as follows: (i) The name of Sunil P. Varghese was not added on an existing account stands in the joint name of defendant Nos.1 and 3. (ii) It was really a joint account opened in the name of first defendant and late Sunil P. Varghese as Either or Survivor Account. (iii) It has come out in evidence that certain amounts were transferred to the said account from the joint account stands in the name of first and third defendants with UCO Bank, Singapore Branch. (iv) It was really operated by the first defendant and deceased Sunil P. Varghese. (v) The account was remained as a joint account in the name of first defendant and deceased Sunil P. Varghese till his death. (vi) Till that time no claim was raised by the third defendant or through the first defendant claiming any title or ownership over the said amount. (vii) The account R.F.A. No.474 of 2004 5 was Either or Survivor Account enabling any of the joint Account Holders to operate the same and in the case of death, the survivor can operate it. 7. The questions mooted are: (i) whether the opening of a joint account in the name of two persons with respect to the amount contributed by them to the said account would constitute a trust _inter se_ in so far as their respective contribution are concerned; (ii) whether there is any change in the legal position when the entire amount was deposited by one of the Joint Account Holders; (iii) what would be the legal position when the account is one characterized as Either or Survivor Account; (iv) what would be the legal position, if the amount was transferred from the account of one person to the account of another and; (v) whether it would constitute an implied trust or any gift in the absence of evidence to show creation of a trust or creation or discharge of a liability (by way of loan or otherwise)? 8. The documents produced would sufficiently show that the amount covered by the above said Either or Survivor R.F.A. No.474 of 2004 6 Account was from the joint account maintained by the first and third defendants in a foreign country (Singapore) with UCO Bank by transfer. It is the settled legal position that when some amount was entrusted with one person by another, either by transfer or by other means, if it is not a loan transaction and not for any specific purpose or in trust, the normal presumption is that it is a gift given by the transferor to the transferee. In other words, unless there is evidence to show that the entrustment was for a specific purpose or in trust or given as a loan, it would normally satisfy the ingredients which constitute a valid gift of money. The entrustment of the amount may be for a specific purpose inclusive of keeping the same conveniently and safely or for utilizing the said amount in the manner as directed by the entrustor. 9. It has come up before a Division Bench of this Court whether the deposit of amount in the name of wife by the husband would constitute a gift in her favour in **P.Narayana Menon v. Bhageerathi Amma (** AIR 1985 Kerala. 14). The R.F.A. No.474 of 2004 7 money was deposited in the joint names of husband and wife on the condition that it is payable to Either or Survivor or deposit in the name of his wife alone does not constitute a gift by him to his wife. It was also further held that in such a case without any declaration of trust there is creation of trust in favour of the beneficiary, in the absence of contrary intention or unless it can be proved that an actual gift of the amount was intended. 10. In the present case, as far as the third defendant is concerned, she had transferred the amount to the joint account of first defendant and her brother, deceased Sunil P. Varghese. She is nowhere in the joint account maintained by the first defendant, the mother, and her brother, deceased Sunil P. Varghese. So in so far as the third defendant is concerned, transfer of amount by her to the account maintained by a third person - the joint account of first defendant and deceased Sunil P. Varghese, would constitute a gift unless the transfer is shown to be for a specific purpose or in trust or by way of loan and the burden is heavily on the R.F.A. No.474 of 2004 8 transferor, the third defendant. Certainly the legal position would be different if the transfer was to a joint account maintained by the transferor along with a third person wherein the probability of creation of a gift rather than a trust is so remote. The failure on the part of the third defendant to prove and establish any specific purpose for the transfer of the said amount to the joint account of first defendant and late Sunil P. Varghese except bare allegation that the said account was opened for convenience, is so fatal to the case advanced by her. The fact that she is not a party to the joint account maintained by them is so crucial. In the said circumstance, the transfer of her share of money to the joint account of first defendant and deceased Sunil P. Varghese can only be treated as a gift unless there is evidence to show creation of trust, entrustment of amount for a specific purpose or by way of loan. 11. Even according to the defendants, the money transferred is from the joint account of first and third defendants and that the same is equally belonged to them. If R.F.A. No.474 of 2004 9 that be so, one half share of the third defendant out of the amount transferred would go equally to the first defendant and deceased Sunil P. Varghese. 12. Then comes to the question what would be the effect of a joint account characterized as Either or Survivor Account and whether the amount would go to the survivor on the death of one of the joint Account Holders. Needless to say that this cannot be treated as a will or a testament or a gift as it is one of the mode of account designated by the bank and on the death of one of the Account Holders the survivor would be entitled to operate the same. But, that does not mean that the said amount is belonged to him. He is holding the property in trust of the legal heirs of the deceased. So, he is only a nominee entitled to operate the account or to receive the amount for and on behalf of the legal heirs of the deceased account holder. 13. The decision drawn in **Anumati v. Punjab National Bank [2004 KHC 1594]** by the Apex Court is pertaining to a joint fixed deposit account characterized as Either or Survivor R.F.A. No.474 of 2004 10 Account. The issue involved is in respect of the authority or power of one of the parties/joint account holders to alter its terms or to make charge over it. By referring various decisions - **Simla Banking and Industrial Company Limited, Ambala City v. Mt. Bhagwan Kuar** (AIR 1928 Lah. 316), **Nath Bank Ltd. v. Sisir Kumar Sarkar** (AIR 1954 Cal.303; 58 CWN 385), **Hirschorn v. Evans (Barclays Bank Ltd., Garnishees)** , (1938 (2) KN 801 : 1938 (3) All ER 491 (CA) - the Apex Court had settled the legal position that parties to a joint account are not automatically authorized to pledge each others credit and no charge or liability can be imposed on a joint account of Either or Survivor for the dues of one against the other. An Either or Survivor account is really a tripartite agreement between joint account holders _inter se_ and the Bank. The Bank may on maturity, make payment only to either of them and it is not amenable for any modification by one of the joint account holders. What is dealt with by the Apex Court is the liability between the account holders and the Bank while the account holders were alive. R.F.A. No.474 of 2004 11 The question involved in the present case is with respect to the entitlement of amount covered by a joint account on the death of one of the account holders by the other. The legal position settled in Narayana Menon's case ( _supra_ ) is squarely applicable and an express declaration is not at all necessary for the creation of a trust and hence the amount held by the first defendant with the deceased Sunil P. Varghese on his death would be in trust for his legal heirs as far as his one half share over the same is concerned. 14. Being the legal position as stated above, the first defendant, who is the survivor, can only be a person in trust over the amount left out by the deceased Sunil P. Varghese under the above said joint account over which he was having 1/4[th] share being one half of the one half share gifted by the third defendant. 15. Yet another contention was also raised stating that the first defendant, who is the mother of deceased Sunil P. Varghese, was not an earning member and what is deposited in the joint account maintained by her along with her R.F.A. No.474 of 2004 12 daughter, third defendant, is the fund of her husband. But, no satisfactory evidence was adduced in that behalf. 16. In so far as counter claim 'B' and 'C' amounts are concerned, there is no satisfactory evidence to show the above said liability and the lower court has rightly rejected the claim under 'B' and 'C' and as such no interference is called for. In the result, the appeal is dismissed. No order as to cost of appeal. Sd/- ## **A.M.SHAFFIQUE (JUDGE)** Sd/- ## **P. SOMARAJAN (JUDGE)** DMR/-