Remuneration of trustees, as provided in the deed of trust, is a potential benefit and, therefore, a benefit within the meaning of the second limb of section 10 of the Estate Duty Act, 1953.

( 1 ) THIS reference relates to a trust called "prince Shahmat Ali Khan Trust". The trust was created by the former Nizam of Hyderabad who died on 24/02/1967. He was the last of Asifia Dynasty of Kings who ruled Hyderabad State. He had the reputation, at one time, of being the richest individual in the world. He was so referred in a book called "verdict on India". In that, it is said if he opened his money bags, the world of business were to have received a great tremor. The author of the book was a conservative journalist from England who came to India in 1942. His name is Beverly Nichols. He was a master of invective. He met the Prince of Berar, the son of the Nizam, and heard him utter once "shukriya" (thanks) in conversation. Nichols referred to that and recorded that in his long stay in the country, for the first time he heard such a word, otherwise there is no equivalent word in the numerous vernacular languages in India and people in India do not know or use such a word.

( 2 ) THE Nizam of Hyderabad, after police action, became concerned for his dependants. He, therefore, created numerous trusts in protection of their safety and welfare. Prince Shahmat Ali Khan Trust is one such trust created with a corpus of Rs. 12,88,169 for the benefit of his grandson. The Nizam himself is one of the trustees of the trust. As to remuneration of trustees, clause 18 of the deed directs that the trustees are to be rewarded with a sum not exceeding Rs. 3,000 per annum, if only the trustees resolve to pay for the services rendered by them. Having regard to this direction, the Additional Assistant Controller of Estate Duty, A-Ward, the Appellate Controller of Estate Duty-the two-interpreted clauses 2 and 18 and held section 10 of the Estate Duty Act, 1953 (34 of 1953) ("the Act"), is attracted and included Rs. 12,88,169 in the principal value of the estate of the Nizam for purposes of duty to be paid under the Act. The Appellate Tribunal, however, reversed that decision. Thereupon, at the instance of the Revenue, the following question is referred for the opinion of this court :"whether, on the facts and in the circumstances of the case, the Trust Fund Prince Shahmat Ali Khan is liable to be included in the estate of late Mir Osman Ali Khan Bahadur under section 10 of the Estate Duty Act ?"

( 3 ) THE law as to remuneration payable to trustees is contained in section 50 of the Indian Trusts Act, 2 of 1882, which recites, unless directed otherwise, a trustee has no right to any remuneration for the trouble, skill and loss of time in executing a trust. Whether or not there is a direction is not is controversy in the instant case. What is urged on behalf of the accountable person is, no resolution was passed by the trustees and no enforceable or legal right was created in favour of the trustee, therefore, section 10 is inapplicable. In view of what is found in clause 18 of the deed of must, it cannot be said that no right is created in favour of the trustees. The trustees in England and in India are generally not rewarded for services rendered unless there is direction to the contrary. This is authoritatively laid in Thorley v. Massam [1891] 2 Ch 613 (at p. 621) :"trustee as well as an executor, the law requires him, in the absence of express provision to the contrary, to perform the duties which he undertakes, without any remuneration for the trouble which he incurs in performing those duties. "

( 4 ) THE Tribunal, in the instant case, found on facts a direction in the deed of trust to pay trustees remuneration after "out goings" (including remuneration to trustees) were discharged. The balance of the amount only is to be paid to the beneficiary. Therefore, section 10 is not applicable. This reasoning of the Tribunal cannot be sustained. The issue is whether such a benefit as is found incorporated in the deed, attracts the application of section 10 of the Act. This aspect directly depends on the interpretation of section 10 of the