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" And further it is said: "The resulting trust is rebutted when it is shown that the settlor intended that in the event of the failure of the trust the property should be held in trust for other purposes." Ratio |
In Cock vs Hutchinson Lord Longdale, M. R. Observed: "Upon this deed a question is made, whether there is or is not a resulting trust to the grantor as to the surplus, with respect to which there is no declaration of trust; and for the purpose of determining that question, it is necessary to look carefully to the langu... |
In general, where an estate or fund is given in trust for a particular purpose, the remainder, after that purpose is satisfied, will result to the grantor; but that resulting trust may be rebutted even by parole evidence, and certainly cannot take effect where a contrary intention to be collected from the whole instrum... |
The distinctions applicable to cases of this kind are pointed out in the case of King vs Dinison (1 V. & D. 260) by Lord Eldon, who adopts the principles laid down by Lord Hardwicks in Hill vs The Bishop of London ; The conclusion to which Lord Hardwicks comes is, that the question whether there 709 is or is not a resu... |
Now, it appears clearly from clause 2 of the will dated October 22, 1916 executed by the First Baronet that a substantially large sum of Rs.47,50,000/ was gifted by the First Baronet in equal shares to each of his sons excepting the eldest son, Mohamedbhoy. Ratio |
The gift was made inter vivos in respect of the major sons and under the will in respect of the minor son, Ismail. Ratio |
Clause 18 of the will, which constitutes the general residuary clause, discloses that the residue of the property was bequeathed by the First Baronet to all his sons, except Mohamedbhoy. Ratio |
Mohamedbhoy was apparently not included in those dispositions because he would succeed as Baronet to the benefit of the trusts constituted under the Baronetcy Act. Ratio |
He was the eldest son, and there is no reason to suppose that the First Baronet intended to exclude Mohamedbhoy from the benefit of his bounty. Ratio |
The First Baronet planned to provide for all his sons. Ratio |
Had he intended to exclude Mohamedbhoy for any reason, he would not have provided by clause 15 of the will that each one of his sons, including Mohamedbhoy, would enjoy an equal share in the mercantile business in Bombay and Calcutta in India, Hongkong and Shanghai in China and at Kobe in Japan. Ratio |
The benefit of the trusts created under the Baronetcy Act, according to the terms of that enactment, were to devolve on the male heir of the body of the First Baronet who took the name "Currimbhoy Ebrahim", and when executing the Will the First Baronet had that benefit in mind for Mohamedbhoy as is apparent from clause... |
" The First Baronet had the line of Mohamedbhoy in mind for supplying the line of future Baronets. Ratio |
He gave a special position to him, his eldest son. Ratio |
By clause 7 of the Will, he bequeathed to Mohamedbhoy all the addresses, testimonials and caskets presented to him, symbols of the high status and dignity of the family, to be retained and passed down as heirlooms. Ratio |
It is true that under section 4 of the Baronetcy Act the possibility could be envisaged that in the event of an existing descendant of Mohamedbhoy not using the name "Currimbhoy Ebrahim" the Baronetcy would pass to a descendant of 710 the next son of the First Baronet. Ratio |
But that envisions a very remote possibility. Ratio |
It is difficult to presume in reason that any male heir in the line of Mohamedbhoy would refuse to use the name "Currimbhoy Ebrahim" and deprive himself of the very real and substantial benefits of the Baronetcy. Ratio |
Therefore, the only conclusion can be that the trust properties created under the Baronetcy Act were intended by the First Baronet to vest in Mohamedbhoy and his heirs. Ratio |
In that light, section 27 of the Baronetcy Act assumes material importance in relation to the controversies before us. Ratio |
Section 27 reads: "Upon failure and in default of heirs male of the body of the said Sir Currimbhoy Ebrahim to whom the same title of Baronet may descend the said Corporation shall stand possessed of the said hereditaments and premises particularly described in the first Schedule hereunder written and of any other here... |
" Although section 27 can come into play only "upon failure and in default of heirs male of the body of the said Sir Currimbhoy Ebrahim" and that condition is absent in the present case the provision provides evidence, in the light of what has been said above, of the intention of the First Baronet that the trust proper... |
They would go to the heirs of the last Baronet, and not be distributed among his own heirs. Ratio |
We are of opinion that upon the provisions of the Baronetcy Act and of the Will, a direction by the first Baronet must be necessarily presumed that if the trust created by the Baronetcy Act fails or is revoked, the trust properties and funds must go to the last Baronet. Ratio |
The Division Bench of the High Court has found that the Fourth Baronet is entitled to the trust properties and funds, and a resulting trust does not come into existence. Ratio |
For the reasons which have prevailed with us, we hold that such a conclusion should ordinarily follow. Ratio |
However, the ultimate determination must turn on the validity of the claim made by 711 the Custodian of Evacuee Property that by virtue of sub section(4) of section 7 of the Repealing Act the trust properties and funds to which the Fourth Baronet would be entitled must vest in the Custodian. Ratio |
In understanding the import of sub section(4) section 7 of the Repealing Act it is imperative to note that it is a part of the scheme embodied in section 7 providing for the distribution of trust properties by the Official Trustee to "the persons rightfully entitled thereto". Ratio |
It comes into play as a step in the proceedings taken for that purpose. Ratio |
It is considered for application when the Official Trustee under sub section(1) or the High Court under sub section(2) is determining who are the persons entitled to the trust properties on distribution. STA |
Sub section(1) declares that if the claims received by the Official Trustee are justified and uncontested he must distribute the trust properties in accordance with such claims. STA |
Sub section(2) provides that if the Official Trustee is of the opinion that the claims are not justified, or if they are contested, he may apply to the High Court for orders and directions as regards the distribution of the trust properties amongst the several claimants. STA |
Sub section(3) provides that on obtaining such orders and directions, he must distribute the trust properties amongst the persons rightfully entitled thereto in accordance with the final decree or order passed in that behalf. STA |
Sub section (4) declares: "If any person entitled to the trust properties, or any part thereof, has been or is declared an evacuee within the meaning of the , and if any right, title and interest of such person in the trust properties has been or is declared to be evacuee property under that Act, then the Official Trus... |
An analysis of the provisions of this sub section is necessary. Ratio |
It applies where: (a) a person is entitled to the trust properties or any part thereof; (b) such person has been or is declared as an evacuee with in the meaning of the and 712 (c) his right, title and interest in the trust properties has been or is declared to be evacuee property under the . Ratio |
If the three conditions are satisfied, the Official Trustee is required to transfer and vest in the Custodian the trust properties, or so much thereof as is found to be evacuee property. Ratio |
And the law relating to evacuee property, the sub section says, shall apply to such right, title and interest in the trust properties as they apply to any other evacuee property under that law. Ratio |
When the sub section speaks of "any person entitled to the trust properties" it refers to the person found entitled to the trust properties by the Official Trustee under sub section(1) of section 7 or by the High Court under sub section(2) of that section. Ratio |
In the present case, the Fourth Baronet has been found by us to be entitled to Repealing Act has been defined by cl.(d) of section 2 of that Act to mean all the trust properties and funds settled and created under the Baronetcy Act. Ratio |
The second condition is also satisfied because the Fourth Baronet was declared an evacuee on June 10, 1952 under the . Ratio |
The third condition is similarly fulfilled. Ratio |
The right, title and interest of the Fourth Baronet in the trust properties, that is to say, his beneficial interest therein, was declared to be evacuee property on June 16, 1952 under the . Ratio |
All three conditions being satisfied, sub section(4) takes effect and the direction contained in it must be carried out. Ratio |
The Official Trustee is required to transfer and vest in the Custodian the trust properties found to be evacuee property. Ratio |
Now, the expression "evacuee property" has not been defined in the Repealing Act and, therefore, it must take its meaning from the definition in the Clause (f) of section 2 defines "evacuee property" to mean "any property of an evacuee". Ratio |
The definition does not require that for property to be evacuee property, there must be a direction under the that it is evacuee property. Ratio |
A perusal of the relevant provisions of the indicates that the Act contemplates the necessity of a declaration that property is an evacuee property in order that it should vest in the Custodian of Evacuee Property. Ratio |
Unless that declaration is made the evacuee property, even though it belongs to an evacuee, cannot vest in the Custodian. Ratio |
But there may be another law under which evacuee property may vest in the Custodian sub section(4) constitutes that law. Ratio |
It provides for another kind of case where evacuee property may also vest in the Custodian sub section(4) of section 7 of the Repealing Act, in essence, is a law in addition 713 to the for vesting evacuee property in the Custodian. Ratio |
The provision in sub section(1) that the Official Trustee shall transfer and vest in the Custodian the trust properties found to be evacuee property has the same statutory consequence is a declaration made under section 7 of the ,. Ratio |
In opposition to the claim of the Custodian, it was pointed out that a declaration that evacuee property is vested in the Custodian is barred after May 7, 1954 by section 7A of the . Ratio |
The provision in sub section(4) of section 7, on which the Custodian relies, is not a declaration under that Act. Ratio |
As we have held the Fourth Baronet to be entitled to the trust properties, it must be taken that those properties in virtue of the definition of "evacuee property mentioned above have been found to be evacuee property. Ratio |
The words "found to be evacuee property" mean found to be evacuee property in proceedings under section 7 of the Repealing Act. Ratio |
Therefore it is beyond dispute that the Official Trustee must, by virtue of sub section (4), transfer and vest in the Custodian the trust properties. Ratio |
Sub section(4) of section 7 further declares that the law relating to evacuee property shall apply to such right title and interest in the trust properties as they apply to any other evacuee property under the law. Ratio |
The words "such right, title and interest in the trust properties" mean the right, title and interest in the trust properties which we have found the evacuee entitled to in this proceeding under section 7, and which now vest in the custodian. Ratio |
That is distinct from the right, title and interest of the Fourth Baronet in the trust properties which were declared to be evacuee property under the . Ratio |
It is urged on behalf of Sir Fazalbhoy Currimbhoy that if sub section(4) of section 7 of the Repealing Act is construed as declaring the trust properties to be evacuee property to which the provisions of the law relating to evacuee property would apply, the sub section must be regarded as ultra vires on the ground that... |
The submission is misconceived. Ratio |
Sub section(4) of section 7 of the Repealing Act can be attributed to the legislative power of the State Legislature in respect of Entry 41 of List III of the Seventh Schedule to the Constitution of India, which speaks of: "41.Custody, management and disposal of property (including agricultural land) declared by law to... |
Reference may also be made to Entry 27 of List III of the Seventh Schedule, which speaks of: 714 "27.Relief and rehabilitation of persons displaced from their original place of residence by reason of the setting up of the Dominions of India and Pakistan. STA |
" The Repealing Act received the assent of the President. Ratio |
In case of any repugnancy between the Repealing Act and the , the former will prevail by reason of Article 254(2) of the Constitution. Ratio |
On the view taken by us, how ever, the sub section is not repugnant to any provision of the for, as we have pointed out already, it is in the nature of additional legislation on the subject. Ratio |
It is also submitted on behalf of Sir Fazalbhoy Currimbhoy that as the definition of the expression "the law relating to evacuee property ' in the Repealing Act has been defined by cl.(b) of section 2 of that Act to include the , the Legislature must be taken to have intended that a part of the trust properties would b... |
It seems to us that by defining the words "the law relating to evacuee property" in cl.(b) of section 2 of the Repealing Act to mean the , the , the and any other law for the time being in force in relation to evacuees or evacuee property, the Legislature intended to give the same powers to the Custodian in dealing wit... |
The object in enacting sub section(4) of section 7 of the Repealing Act is apparent. Ratio |
The Fourth Baronet had been declared an evacuee. Ratio |
His interest in the trust properties under the Baronetcy Act had been declared evacuee property under the . Ratio |
With the repeal of the Baronetcy Act and the revocation and extinction of the trust, that interest came to an end and the declaration ceased to have effect. Ratio |
The Legislature presumed that when the Official Trustee took proceedings for the distribution of the trust properties under section 7 of the Repealing Act, the Fourth Baronet would be found entitled to the trust properties or part thereof. Ratio |
He had already been declared an evacuee, and consistently with the earlier declaration vesting his interest in the trust properties as evacuee property in the Custodian now lapsed in consequence of the Repealing Act the Legislature intended that the trust properties falling in full ownership to the Fourth Baronet on re... |
That could not be accomplished by a declaration under the , in view of section 7A 715 thereof which prohibited such a declaration after May 7, 1954. Ratio |
The result could be accomplished under some other law, and sub.section (4) of section 7 was included in the Repealing Act to make provision accordingly. Ratio |
The trust properties were evacuee property because they belonged to an evacuee, and by the operative clause in sub section(4) of section 7, they were vested in the Custodian. Ratio |
The law relating to evacuee property was applied to the right, title and interest of the evacuee in the trust properties, even as they applied to any other evacuee property under that law. Ratio |
The terms in which the law relating to evacuee property has been applied to the trust properties fully confirms the conclusion that the trust properties falling to the Fourth Baronet were to be treated at par with evacuee property generally. Ratio |
It has been urged on behalf of the appellants in Civil Appeal No. 1221 of 1967 that the trust failed on March 14 1952, on the death of the Third Baronet, even before the Repealing Act was passed, and that the trust properties devolve, therefore on the heirs of the Third Baronet, that is to say his widow, son and two da... |
We are also of the view that there is no substance in this contention. Ratio |
On the death of the Third Baronet, the benefit of the trusts created by the Baronetcy Act passed to the Fourth Baronet. Ratio |
Towards the conclusion of the hearing, it was contended by learned counsel for Sir Fazalbhoy Currimbhoy that by virtue of the Notifications bearing No. 12/2/65 E PTY and No.12/3/65 E PTY dated September 10, 1965 and September 11, 1965 respectively the trust properties which could be rightfully claimed by the Fourth Bar... |
For that reason, it is said, the Fourth Baronet cannot be held entitled to the trust properties, and therefore they would not vest in the Custodian of Evacuee Property. Ratio |
The record before us does not show that the Custodian of Enemy Property filed any claim before the Official Trustee under sub section(1) of section 7 of the Repealing Act and, consequently, we consider it inappropriate to enter into this matter. Ratio |
The Division Bench of the High Court has held that the Custodian of Evacuee Property is entitled to be paid a sum of Rs. 1,334.06 representing the unpaid amount of the net income of the trust properties upto March 14, 1960. Ratio |
This finding has not been challenged, and we affirm it. Ratio |
716 The Official Trustee has pointed out that various liabilities on account of Income tax, Wealth tax, House tax and other taxes are outstanding in respect of the trust properties. Ratio |
He prays for directions that those tax liabilities be allowed to be cleared before the trust properties are transferred by him. Ratio |
He also points out that there are fees, charges, costs and other expenses to be paid off. Ratio |
We propose to remand the case to the High Court for making necessary orders in that regard after satisfying itself as to the existence and amount of these liabilities. Ratio |
In the result, Civil Appeal No. 722 of 1967 and Civil Appeal No. 1221 of 1967 are dismissed, and Civil Appeal No. 1016 of 1967 is allowed. Ratio |
There is no order as to costs of these appeals in this Court except an order for costs in favour of the Official Trustee, who shall be entitled to recover his costs of these appeals from the trust funds in his hands. Ratio |
The judgment and order dated August 9, 1966 of the Division Bench of the Bombay High Court are set aside, except in so far as they contain the direction for payment of Rs. 1,334.06 to the Custodian of Evacuee Property and in so far as they direct, and make provision for, the payment of the costs of the Official Trustee... |
The Official Trustee shall transfer to and vest, in the Custodian of Evacuee Property the accumulated trust properties and funds settled and created under the Sir Currimbhoy Ebrahim Baronetcy Act, 1913, subject, however to the aforesaid directions and orders and to the directions and orders by the Bombay High Court for... |
The case is remanded to the Bombay High Court for that purpose. Ratio |
P.B.R. C. A. Nos. 722 & 1221 of 1967 dismissed. RPC |
C. A. No. 1016 of 1967 allowed. RPC |
N: Criminal Appeal Nos. FAC |
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