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High Court Of Calcutta
SABYASACHI MUKHERJI, SUHAS CHANDRA SEN
MANINDRA NATH MUKHERJEE - Appellant
Versus
CONTROLLER OF ESTATE DUTY - Respondent
Matter 1308 Of 1979
Decided On : 01/14/1982
ESTATE DUTY - Settlement - Revocable or not - Whether the settlor had reserved any interest in the property - Whether the subsequent deeds were within the power of the settlor - Whether the properties covered by the first trust deed come within the mischief of Section 12 (1) of the E. D. Act.
Fact of the Case:
The deceased, Makhanlal Mukherjee, died intestate on 30th December, 1966, at the age of 77 years. During the estate duty assessment proceedings, the Asst. Controller found that various properties of the deceased were involved, including those covered by the original trust deed executed by the deceased on 24th October, 1944. The main question in this reference was whether the estate of the deceased had rightly been assessed to estate duty under Section 12 read with Section 27 of the Estate Duty Act, 1953.
Finding of the Court:
The court held that the properties covered by the first trust deed did not come within the mischief of Section 12 (1) of the E. D. Act, and therefore, the other properties were not includible for the purpose of the levy of estate duty.
Issues: 1. Whether the trust created by the deceased was revocable or not. 2. Whether the subsequent deeds executed by the deceased were within the power of the settlor in view of the provisions made in the first deed. 3. Whether the properties covered by the first trust deed come within the mischief of Section 12 (1) of the E. D. Act.
Ratio Decidendi: 1. The court held that the first trust deed did not contain any express reservation of power of revocation by the settlor, and the power to make subsequent deeds to make the first deed effective and strong was given to the trustees and not to the settlor. 2. The court held that the subsequent deeds purported to have been executed by the settlor were of no effect as they were beyond the power of the settlor in view of the limited reservations made in the first deed. 3. The court held that the properties covered by the first trust deed did not come within the mischief of Section 12 (1) of the E. D. Act, as the settlor had not reserved any interest in the property for life or any other period determinable by reference to death.
Final Decision: The question referred to the court was answered in the negative and in favor of the accountable person. Parties were directed to pay and bear their own costs.
( 1 ) IN this reference under Section 64 (1) of the E. D. Act, 1953, the following question has been referred to this court for an answer:" Whether, in the facts and circumstances of this case, and upon a proper construction of the trust deed dated 24th October, 1944, and the documents dated 25th June, 1954, 30th July, 1954, 10th September, 1956, and 22nd April, 1960, the Tribunal was right in holding that the estate of the deceased has rightly been assessed to estate duty under Section 12 read with Section 27 of the Estate Duty Act, 1953 ? "
( 2 ) DURING the estate duty assessment proceedings the Asst. Controller found that the deceased, Makhanlal Mukherjee, died intestate on 30th December, 1966, at the age of 77 years. The deceased was survived by six sons and one married daughter and one of them had been authorised to represent the other heirs in the estate duty proceedings. In the estate duty assessment various properties of the deceased were involved. We are concerned here with the properties covered by the original trust deed. The deceased executed a deed of trust on 24th October, 1944, and settled some properties to the trust. As this is the main deed and the main question involved in this reference boils down to this, it would be necessary, in our opinion, to refer to the provisions of the said deed. The said deed indicated the object of the trust. The object of the trust, inter alia, is as follows:" I have created this trust in order to preserve the properties mentioned in the schedule below in a state free from encumbrances and defects and to make development and enhancement of the same, get my Adya Sradh Ceremony performed out of the income of the said properties after my death, to get performed my Annual Sradh Ceremony, to offer pindas at Gaya and to get performed Tarpan according to Shastras for the solace of the departed souls of my ancestors, to get performed Annual Sradh and to perform the ten sacred rites, making arrangement for education and the maintenance of my heirs. God forbid if ever I leave no progeny, then this trust property, shall be included within Durgamani Trust Estate. "
( 3 ) THEN the deed went on to state the trust property and the appointment of the trustees. The settlor or the deceased appointed himself as a trustee for life and it was provided that he shall continue to realise interest and dividend in respect of the trust properties. Thereafter, the deed provided, inter alia, as follows:" The trustees shall function according to the provisions of the deed and shall be vested with power accordingly. This trust estate is not and shall not be liable for any of the personal debt of myself or other trustees. If any suit or cause has to be filed on behalf of the trust estate against anybody or if the same is done against the trust estate then any one of the trustees shall be competent to sign as a trustee on behalf of the trust estate on the plaint, written statement, petition or vakalatnama and all other papers relating to courts. If in future any deed or rectification deed is required to be executed in order to make the written object of this deed effective and strong, or any advice is received, then the same can be done by the appointed trustees or their representatives. "
( 4 ) THEN the deed also contains the following clause :" None shall be entitled to make any gift, sale, transfer, etc. , of the trust property at any time nor the same can ever be sold for any debt of any of my legal heirs, nor the same can be utilised for any other reason save and except the written provisions mentioned in this deed. But the trustee or trustees, for the benefit of the trust estate, shall be entitled to transfer any portion of money of the trust estate or shall be entitled to purchase any immovable property for residential purpose or for letting out of the said money but they cannot cause any loss or damage. "
( 5 ) THE other provisions are really not very material for our present pu
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