1956 Supreme(Cal) 83
HIGH COURT OF CALCUTTA
Mallick
ISAAC NISSIM SILAS - Appellant
Versus
OFFICIAL TRUSTEE OF BENGAL - Respondent
O. S. Suit 107 Of 1955
Decided On : MAY 09, 1956
GOURI MITRA
A trust can be revoked by the settlor with the consent of all the beneficiaries.
Headnote:
TRUST - REVOCATION - CONSENT OF BENEFICIARIES - TRUST CREATED FOR BENEFIT OF SETTLOR, WIFE, SONS AND THEIR CHILDREN - GIFT IN FAVOUR OF GRANDCHILDREN SUBJECT TO DOUBLE CONTINGENCIES - VOID UNDER SECTION 13 OF TRANSFER OF PROPERTY ACT - TRUST IN FAVOUR OF GRANDCHILDREN BAD IN LAW - SETTLOR ENTITLED TO REVOKE TRUST WITH CONSENT OF BENEFICIARIES UNDER SECTION 78 OF INDIAN TRUSTS ACT.
Fact of the Case:
The settlor created a trust for the benefit of himself, his wife, his three sons, and their children to be born. The trust deed provided that after the death of the settlor and his wife, the sons would have an absolute interest in the subject-matter of the trust, subject to a trust in favor of their children. The settlor sought to revoke the trust with the consent of his wife and two sons, who were the only beneficiaries.
Finding of the Court:
The court held that the gift in favor of the grandchildren was bad in law because it was subject to double contingencies and did not give the grandchildren the whole interest of the settlor in the corpus. The court also held that the settlor was entitled to revoke the trust with the consent of the beneficiaries under Section 78 of the Indian Trusts Act.
Issues: 1. Whether the trust created by the settlor can be revoked by the settlor with the consent of his wife and two sons? 2. Whether the gift in favor of the grandchildren is valid?
Ratio Decidendi: 1. The court held that the trust could be revoked by the settlor with the consent of the beneficiaries because they were the only beneficiaries and they had all consented to the revocation. 2. The court held that the gift in favor of the grandchildren was bad in law because it was subject to double contingencies and did not give the grandchildren the whole interest of the settlor in the corpus.
Final Decision: The court declared that the trust had been revoked and directed the Official Trustee to make over the property to the settlor.
( 1 ) THIS summons was taken out by the plaintiffs for the determination of this question, namely, whether the trust created by the first plaintiff Isaac Nissim Silas can be revoked by the settlor with the consent of his wife and two sons who along with the settlor are stated to be the only beneficiaries.
( 2 ) THIS trust was created by Issac Nissim Silas the settlor by an Indenture of Trust dated 1-4-1931. The Official Trustee of Bengal has been made a trustee and the property was conveyed to the trustee to be held by him upon trust set out in the said indenture.
( 3 ) THE trust was a family trust created for the benefit of the settlor and his wife, his sons and their children to be born. At the date of the trust the settlor's family consisted of his wife, and his three sons, Elias, Jacob and Nissim. The trust deed provides that the trustee after making provision for meeting the necessary expenses, namely, the payment of the rates and taxes of the Corporation and the costs of repair will pay the balance of the income to the settlor during his life time, thereafter to his wife thereafter to his three sons in equal shares. Disposition was made of the remainder in favour of the sons children that may be born and remain alive at a certain period subject to certain contingencies. After making provision for himself and his wife the settlor sets out the trust in favour of the sons and their children on the following terms :"upon Trust subject to the provisions hereinafter contained in respect of the shares of the said Elias Jacob and Nissim for the child or all the children of the said Isaac Nissim Silas and his wife Lily Silas who being sons shall attain majority or being daughters shall attain that age or marry and if more than one in equal shares absolutely but if there shall be only one such child then the whole in trust for such child subject nevertheless to the trusts hereinafter declared with respect to the shares therein of the said three children Elias Jacob and Nissim Silas that is to say Provided Always and it is hereby declared that the Trustee shall hold and stand possessed of the share of the said Elias Silas Upon Trust to pay the net income to arise therefrom to the said Elias Silas for and during the term of his natural life and subject thereto shall hold the said share Upon Trust for the child or children of the said Elias Silas who being sons shall attain their majority and being daughters shall attain majority or marry and if more than one in equal then the whole in trust for that one child And if there shall be no child of the said Elias Silas who shall attain a vested interest in the said share then my Trustee shall hold the said share. . . "on similar terms a trust has been created in favour of the children of the other two sons viz. Jacob and Nissim as well.
( 4 ) IN plain language therefore the three sons of the settlor named in the deed, namely, Elias, Jacob and Nissim were to have, after the death of the settlor and his wife, interest in equal shares in the subject-matter of the trust absolutely. At the same time it was provided that the share of each one of the sons would be subject to the trust in favour of the children created in subsequent clauses. It is provided that during the life time of each one of the sons of the settlor, namely, Elias. Jacob and Nissim the trustee will pay them 1/3rd of the income, after meeting the necessary expenses in the manner set out above and thereafter the trustee would make over the property to the children of each one of the sons, namely, Elias Jacob and Nissim and if no son be born to son or the daughter as the case may be do not attain the age of majority or marriage the portion of the property allotted to each one of the sons would revert back to the settlor's estate so as to be divisible amongst the other beneficiaries.
( 5 ) IT is to be noted that at the date of the trust none of the sons of the settlor was married and they had no sons. At present