Where all the beneficiaries of a trust, both present and residuary, are unanimous in their demand for dissolution of the trust, and they are competent to contract, the trustees are bound to transfer the trust property to them as per Section 56 of the Indian Trusts Act.

RAMANUJULU NAIDU, J.

( 1 ) THIS Revision petition is filed against the order dt. 31-12-1981 passed by the learned Chief Judge, City Civil Court, Hyderabad dismissing o. P. No. 121/1981 filed by the petitioners herein under Section 34 of the Indian Trusts Act requesting the said Court for its opinion and advice on the question whether H. E. H. the Nizam s Dependants and Khanazads trust can be dissolved in the manner suggested by the beneficiaries thereunder, under Section 56 of the Indian Trusts Act.

( 2 ) THE material facts giving rise to the above Revision Petition, not in controversy, lie in a narrow compass and may be briefly stated : late H. E. H. the Nizam created a Trust known as H. E. H. the Nizam s dependants and Khanazads Trust by an indenture of Trust dated 12th august, 1957. Under the said Trust, late Nizam constituted himself and nawab Zain Yar Jung Bahadur and Shavaz Ardeshirlal, as the first trustees of the said Trust. While Nizam and Nawab Zain Yar Jung Bahadur since died and Shavaz Arideshirlal since retired from Trust, the petitioners and one Nawab Prince Muffakham Jah Bahadur, appointed from time to time as trustees, are the present Trustees of the said Trust. A sum of rs. 85,01,650/- invested in shares and securities was the corpus of the Trust. On or about 12-6-1961 another sum of Rs. 23. 5 lakhs also invested in shares and securities, was earmarked by the late Nizam for the benefit of the khanazads not covered by the earlier deed of Trust dated 12-8-1957. The said Parole Trust formed part and parcel of the original Trust as held by a Division Bench of this Court in C. I. T. vs. Nizam s Dependants and khanazads Trust. The relevant clauses of the deed of Trust dated 12-8-1957 may be usefully extracted. XX XX XX (Extract of the clauses of the deed of Trust Omittededitor)

( 3 ) IT may be noted that the trustees are charged with duties of (a) managing the Trust. Fund (b) payment of specified amounts to the beneficiaries every month during their respective lives, (c) instead of payment, applying the said amounts towards their maintenance and (d) payment of the amounts on the death of any of the beneficiaries to the husband or the wife of such beneficiary and on the death or re-marriage of the wife or husband of such beneficiary payment to the child or children of such beneficiary who shall be in existence on the date of the deed of Trust and who shall be surviving such beneficiary.

( 4 ) PART 1 of the Second Schedule lists out 43 dependants while Part ii of the said Schedule lists out 127 Khanazads. A further list of 182 khanazads was added later in exercise of the power died subsequent to 1957 and their children numbering 138 are recognised as beneficiaries under the Trust. Prince Mukarram Jah the first respondent herein is the ultimate beneficiary of the Trust as plainly enacted in Clause 3 (f) of the deed of Trust.

( 5 ) THE beneficiaries of the Trust formed themselves into an association called H. E. H. the Nizam s Dependants and Khanazads Beneficiaries association. The Association is impleaded as the second respondent to the Original Petition while the office-bearers of the Association are impleaded as respondents 3 to 8 to the said petition. All the beneficiaries, 490 in number, are also impleaded as other respondents in the Original petition.

( 6 ) ALMOST all the beneficiaries are uneducated and unemployed. They mostly depend upon the allowances granted to them under the deed of trust to eke out their livelihood. The monthly allowances set out in the deed of Trust constituted in the year 1957, proved to be wholly inadequate and meagre. As years passed by, the income earned from the corpus is being subjected to payment of huge wealth-tax. The first respondent, the ultimate beneficiary under the Trust, is being levied wealth-tax every year on a sum of Rs. 1. 2 crores upto 1979 and later on a sum of rs. 1,77,00,000/estimated to be the actual value of his interest in the trust property, though nothing is being

Click Here to Read the rest of this document