1929 (10) TMI 10 - Other - Indian Laws

Summary

Issues:
- Validity of assignment under Section 6 of the Transfer of Property Act
- Interpretation of settlement and rights of assignor

Analysis:
1. The case involved an appeal from the High Court regarding the validity of an assignment made by the assignee of a settlement. The defendants, who were trustees of the settlement, claimed the assignment was invalid under Section 6 of the Transfer of Property Act, specifically citing clauses (a) and (e) which prohibit the transfer of certain types of interests.

2. The central issue was whether the rights assigned to the plaintiff's assignor were akin to a mere possibility or a right to sue, as outlined in the Act. The settlement in question established trusts for the settlor's property, granting vested interests in income and contingent interests in the corpus to the children. The nature of these interests was crucial in determining the validity of the assignment.

3. The settlement created vested interests in income for the children and contingent interests in the corpus until certain conditions were met. The rights conferred by the settlement were distinct from mere possibilities or rights to sue, as they were well-defined and transferable forms of property that had been recognized for generations. The rights granted under the settlement were clear and did not fall under the prohibited categories in Section 6 of the Act.

4. The Privy Council concluded that the defense's argument failed, affirming the lower courts' decision to grant the decree sought by the assignee in bankruptcy who succeeded to the original assignor's rights. The courts were deemed correct in their interpretation of the settlement and the rights conferred by it, leading to the dismissal of the appeal with costs.

5. While the Privy Council did not fully agree with the lower courts' reasoning regarding the nature of the interest in the corpus at the time of assignment, they upheld the decision based on the clear and transferable nature of the interests provided by the settlement. The Council found the defense's arguments to be untenable, and the case was deemed unarguable based on the established rights under the settlement.

6. Ultimately, the Privy Council advised dismissing the appeal, affirming the lower courts' decision in favor of the assignee, and ordering costs to be borne by the appellants. The judgment highlighted the clarity of the rights granted by the settlement, which distinguished them from mere possibilities or rights to sue, thus upholding the validity of the assignment in question.