JUDGMENT
D.K. Seth, J.
1. This appeal arises out of a judgment and decree passed by the learned Subordinate Judge, Fifth Court at Alipore on June 12, 1978 in Title Suit No. 54 of 1974.
1.2. This suit was one for partition by the plaintiffs against defendants on the ground that the property belonged to one Pulin Behari Mukherjee, who happened to be the brother and uncle and granduncle respectively of the other plaintiffs. Pulin Behari got the property by inheritance as well as through self-acquisition. It was alleged that the properties were joint and that the defendant Nos. 1 and 2, who are the sons of the sister of Pulin Behari, threatened their right, title and interest in the property and that the other co-sharers refused to effect partition. The suit was contested by the defendant Nos. 1 and 2 whereas the other defendants supported the case of the plaintiffs but did not contest the suit though filed their written statements. The parties went to trial and adduced evidences.
Question/issues to be decided :
2. It appears that the facts are more or less admitted. The only question that falls for our consideration is as to the interpretation of the character of the deed of family settlement, as described by the settlor Pulin Behari, in favour of the defendant Nos. 1 and 2; viz. whether the said document has the effect of divestiture of interest and title of the settlor and vesting thereof in the beneficiaries; or in other words, whether by reason of the conditions contained in the document there was any restriction on the right of the beneficiaries or of the settlor which could, otherwise, negative the intent and purpose of the deed of settlement.
2.1. Both Mr. S. P. Roy Chowdhury, learned Senior Counsel, appearing for the appellant and Mr. Ashok Kumar Banerjee, learned Senior Counsel, appearing for the respondents had pointed out that the question of law with regard to the interpretation of the document is the only question which the Court is supposed to answer. On facts, there seems to be no dispute.
2.2. In Order to appreciate the situation, we are to examine in the context of the present case (1) whether there was immediate divestiture with the execution of the deed; (2) whether the retention of control by the settlor were such as to lead the Court to hold that there was no divestiture in fact; (3) whether conditional divestiture can be made; (4) whether there could be a valid divestiture and vesting and simultaneous retention of possession with certain reservation of rights through creation of trust in a combined document; (5) the nature and scope of settlement and its effect.
Submission of the respective counsel:
3. Mr. Roy Chowdhury and Mr. Banerjee had drawn our attention to the deed itself and the conditions contained therein and had pointed out in support of their respective contentions that either the document itself is, in fact, a deed of gift or family settlement, as the case may be, protected under Sections 122, 123, 126 and 197 of the Transfer of Property Act being a deed of settlement as defined in Section 2(24)(b) of the Indian Stamp Act or, according to Mr. Banerjee, it is neither a deed of gift nor a deed of settlement nor any other kind of deed which had the effect of divestiture of title or interest of the settlor immediately in favour of the defendant Nos. 1 and 2. According to Mr. Banerjee, there was no divestiture of or any vesting of the interest in the respective parties.
Whether there was any divestiture of interest of the settlor :
4. This question can be answered only on the basis of the deed itself having regard to the conduct of the parties. In fact, the deed had pointed out that the settlor was interested in protecting the welfare of the defendant Nos. 1 and 2, who were brought up. as his sons on account of certain circumstances with regard to the conditions of the parents of the said defendants and ultimate death of the said parents within a short while. Out of natural love and affection, the two sons of his sister were brought up by Pulin Behari as his own sons. For the welfare of these two nephews, the deed was executed. The deed was supposed to take effect immediately with the execution. However, the deed contained certain restrictions. It provided that the possession would be retained by the settlor as trustee after the divestiture of the interest of the settlor and vesting thereof unto the beneficiaries who would be in possession of the property after such divestiture through the settlor as trustee. During the lifetime of the settlor, the settlor would be entitled to the benefits of the usufruct of the property as well as the residence therein. At the same time, the two beneficiaries, who were residing with him, would continue to reside and would look after him and would do some acts as stipulated in the deed. The only right that was reserved as trustee by the settlor was right to transfer only in case of necessity of the trust or in case of non-compliance of the conditions contained in the deed.
4.1. The fact remains that no transfer of any of the properties or part thereof was ever effected by the settlor. This implies that the beneficiaries committed no fault in respect of the terms, which they were supposed to or obliged to perform. This leads us to presume that the deed was acted upon. Non-exercise of any right of ownership by the beneficiaries would, therefore, not stand in the way of holding that the deed was not acted upon or the possession was not given to the beneficiaries or that the deed was not effective simply because the settlor had retained possession. The deed itself clearly lays down that the settlor would possess the property as trustee on behalf of the beneficiaries in whom the rights stood vested. Therefore, the realization of rent or other acts by the settlor would be that of a trustee and not of an owner. Therefore, the condition laid down does not seem to affect the divestiture of the settlor’s right and vesting of the right unto the beneficiaries subject however to the conditions of the deed. The limited and contingent right to transfer reserved by the settlor, which was never exercised, would not negative the intent of the deed. The intention was clear. The terms were unambiguous.
4.2. The Transfer of Property Act does not postulate nor it defines settlement as a kind of transfer. The Transfer of Property Act, 1882 (TP Act) prescribes transfer’ by way of sale, lease, gift, licence, etc. But it does not speak anything about the settlement. Section 5 of the TP Act defines transfer of property as an act by a living person conveying in presenti or in futuro to one or more other living persons or to himself and one or more other living persons and to transfer property is to perform such an act. While dealing with transfer of property as already indicated, the TP Act deals with sale, mortgage, charge, lease, exchange, gifts, actionable claims etc. The partition implies a kind of exchange and is particularly governed by the Partition Act. In the present case, the document has certain characteristic, which is somewhat akin to the mode of transfer-recognized as gift in the TP Act. In the Indian context, there are certain kinds of transfer which though predominantly or primarily a gift or an exchange or an admixture of which is incapable of being defined assuming different kinds of transfer such as family arrangement/settlement or settlement. Apart from transfer made through the TP Act, transfer is also recognized by way of creation of trust governed by the Indian Trusts Act and endowment which is also a kind of trust for religious and charitable performances coming within the purview of the law governing Religious and Charitable Endowment Act.
4.3. In the present case, we are more concerned with gift. Therefore, we may look into the ingredients of a deed of gift in the context of the present case. Normally, transfer envisages absolute right of alienation. Section 10 of the TP Act defines the pre-dominant characteristics of a transfer, which without the right of alienation by the transferee is void. Conversely the right to transfer if retained by the transferor after the transfer, the transfer would be void. It is on this question on which Mr. Banerjee had highlighted. Drawing our attention to the various materials on records, he sought to point out that the right of the defendant Nos. 1 and 2 in relation to alienation was restricted during the lifetime of the settlor and the settlor retained the right to transfer during his lifetime, which are ingredients contrary to Section 10 of the TP Act attracting the mischief thereof.
4.4. The gift is dealt with the Chapter VII of the TP Act, which saves some kind of transfers without consideration. The gift is a transfer made voluntarily and without consideration by the donor to the donee accepted by or on behalf of the donee during the lifetime of the donor and while the donor is still capable of giving.
4.5. In this case from the records, it appears that the settlor had given the property to the beneficiaries. The beneficiaries had accepted the same by their conduct. The document was a unilateral one and was not termed as a gift. A gift once accepted is irrevocable. The gift can be made only by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses as provided in Section 123 of the TP Act. In the present case, the instrument is a registered one. It is signed by the settlor. It is attested by two witnesses. Law does not require that the acceptance of the gift by the donee is to be endorsed in the deed of gift in Order to make the instrument valid. Therefore, we are required to look at the conduct of the parties with regard to the acceptance of the gift. In this case, the beneficiaries by their conduct seem to have accepted the gift, In their evidence, it was sought to be pointed out by the defendant Nos. 1 and 2 that one of them used to collect rent. Be that as it may, we may consider this aspect at a later stage.
4.6. In this case, it seems that the particular document was termed as ‘family settlement’. The property was intended to be settled in favour of the defendant Nos. 1 and 2. The document took effect immediately on the execution. The defendant Nos. 1 and 2 were put to possession. This is apparent from the contents of the documents. The settlor possessed the property as trustee. The defendant Nos. 1 and 2 remained in possession through the Trustee (settlor) after the settlement was executed. Admittedly, both the settlor and the beneficiaries resided in the property and had the right to reside therein.
4.7. The settlor himself had restricted his right of alienation. He could do so only in certain conditions. One condition was that he could do so in the necessity of the trust. The other he could do so was in default of the beneficiaries to comply with the terms of the grant. There was nothing to show that the beneficiaries did not accept the property without the conditions. On the other hand, we have already observed that not only the beneficiaries had accepted the same with the conditions but had also acted upon the same. Under Section 127 of the TP Act, a gift can be onerous i.e., burdened by an obligation upon the donee.
4.8. Admittedly, in the present case, the document was neither titled as a deed of gift nor it was in the form of a deed of gift. Nor any stamp-duty payable on a deed of gift was paid. Admittedly, it was registered on payment of the stamp-duty payable for a deed of settlement.
4.9. In the Indian context, a family settlement is always respected by law and the Courts. The other kind of transfer or incidence of some rights in the immoveable property or moveable property may be governed by some other Acts including the Partition Act or the Trusts Act, as the case may be. But, in any case, when we look into a deed of settlement or a family settlement, we look at as a whole and we consider the same on the strength of the intent and purpose as is apparent from the deed itself and from the conduct of the parties.
Settlement: Nature and effect: If confers title :
5. As already observed, the conduct of the parties and the contents of the deed, which are admitted on facts requiring interpretation on the established principles of law, clearly shows that it is an admixture of gift or partition or trust, as the case may be. Family arrangement/settlement is accepted as a transfer of interest in the property in favour of a person between whom the family arrangement or settlement is made. The family settlement conceives of a pre-condition of interest or title in the property amongst the members participating in the settlement or the arrangement. But it does not preclude persons who may not have any interest in the property nor can his interest be ignored if the person derives title to the property through family settlement or family arrangement.
5.1. We had occasion to deal with the effect of family settlement in Premlall Seal v. Basanti Seat, 2004(15) AIC 636 (Cal) (DB) : 2003{4) ICC 510 (DB) ; 2003(3) Cal LT 527 (HC) (DB): 2003(10) ILD 384 (Cal) (DB): 2003(4) CRN 308 (DB), however, in a different context. While examining the nature of settlement, we had referred to Halsbury’s Laws of England in paragraph 9 of the said judgment which we prefer to quote :
“In Halsbury’s Laws of England Vol. 17, Third Edition at pp. 215-216, the essentials of the family settlement and the principles governing the existence of the same are described as :
‘A family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property for the peace and security of the family by avoiding litigation or by saving its honour.’
The arrangement may be implied from a long course of dealing, but it is more usual to embody or to effectuate the agreement in a deed to which the term ‘family arrangement’ is applied.
Family arrangements are governed by principles which are not applicable to dealings between strangers. The Court, when deciding the rights of parties under family arrangements or claims to upset such arrangements, considers what in the broadest view of the matter is most for the interest of families, and has regard to considerations which, in dealing with transactions between persons not members of the same family, would not be taken into account. Matters which would be fatal to the validity of similar transactions between strangers are not objections to the binding effect of family arrangements”.
5.2. Now we may examine the question in the Indian context where such settlement comes before the Court very often. A settlor may settle his property to fulfil his desire of disposition of the property for the benefit of the members of his family during his lifetime. At the same time he may put conditions to it for protecting his own interest so as to hold the family together and saving the family being disintegrated and the property being squandered or dissipated.
5.3. Settlement as defined in the Indian Stamp Act in Section 2(24)(b) is a settlement which is a non-testamentary disposition, in writing, of moveable or immoveable property made for the purpose of distributing property of the settlor among his family or those for whom he desires to provide or for the purpose of providing some persons dependant on him and includes an agreement in writing to make such a disposition and where any such disposition had not been made in writing any instrument recording, whether by way of declaration of trust or otherwise, the terms of any such disposition.
5.4. The expression ‘settlement’ having not been defined in the Transfer of Property Act, we can borrow the expression used in the definition of settlement in Section 2(24)(b) of the Indian Stamp Act. It also includes an instrument declaring a trust or otherwise intending to make a disposition for the purpose of the family of the settlor or those for whom he desires to provide. Admittedly, in this case the settlor wanted to provide for the two nephews, who were admittedly the members of his family, as it appears from the judgment itself and the materials on record. We do not have any second opinion with regard to the finding of the learned Judge that these two nephews were the members of the family of the settlor who enjoyed the property exclusively and absolutely on the basis of the partition made between his brothers sometimes in 1965 and there was no joinness among the members of the family of the brothers of the settlor.
5.5. Therefore, there is no bar in making settlement in favour of persons other than the settlor’s successors according to the Hindu Succession Act, 1956. Inasmuch as, among the parties the surviving brothers or the sons and daughters of the predeceased brothers and sisters were all Class-II heirs of the settlor under the Hindu Succession Act. Admittedly, the defendant Nos. 1 and 2 are also Class-II heirs. The plaintiff No. 1 and defendant No. 3, the brothers of the settlor, come in the IInd entry of Class-II heirs. The plaintiff No. 3, the defendant Nos. 5, 6, 7 sons and the defendant Nos. 10, 11, 12, 13 daughters of late Lalit Mohan, predeceased brother of the settlor, come in the IVth entry of Class-II heirs. The defendant Nos. 1 and 2, sons of the predeceased sister of the settlor, come in the same IVth entry. Whereas the plaintiff No. 2, the defendant Nos. 4, 8 and 9 do not come under any of the entries of Class-I or II heirs of the settlor. The heirs in one entry exclude those in the entry following. The heirs in one entry in Class-II would get simultaneously. Thus, these two defendants, though would have been excluded by the plaintiff No. 1 and defendant No. 3 if succession was opened, being members of the family of the settlor were entitled to be provided for in the settlement. On facts, the settlement was definitely accepted and acted upon. Therefore, the settlement in question made in favour of the members of the family for whom the settlor desired to provide can be recognized in law as a valid one.
Retention of possession and reserves of right to property: Effect of the conditions provided in the settlement:
6. As we have already seen the term ‘settlement’ has not been defined in the TP Act, even then it is recognized in law as a mode of disposition of the property. By reason of such disposition, right and interest is created in the person for whom it is made. The settlement, in fact, combines various kinds of transfer in one transaction. A disposition through settlement combines the mixed up characteristics or in other words it bears the character of an admixture of different kinds of transfer envisaged under the different provisions of law in one. It includes the effect of transfers envisaged in different kinds of law without coming into conflict with each other and in conformity with the different provisions thereof. The obvious purpose as discussed hereinbefore is to make suitable provision for disposition of the property of the settlor pursuant to his intention in anticipation of certain events with certain conditions for providing for whom he desires to provide being the members of his family or dependent on him. The members of family may be legal heirs; may be remote legal heirs; may not be legal heirs entitle to succeed. The interest of those members of the family may supersede those of the heirs. The extent of settlement is too wide even to include dependents who may not be the members of his family or successor to him.
6.1. As we find, it was a kind of gift conveying the property in favour of the donee together with delivery of possession and acceptance thereof which took effect immediately with the execution of the deed. Simultaneously, with the delivery of possession and vesting of the interest in the donee when the acceptance was not in dispute or denied, a trust was created when the settlor possessed the property as trustee for the beneficiaries upon whom the property had vested. In between the creation of trust, the divestiture of the right of the settlor and vesting of the property in the beneficiaries was complete. The creation of the trust would not negate the same. As soon the trust was created, the rights reserved for the trustees were those of the trustees and would not affect the respective divestiture and vesting of the interest of the settlor and vesting unto the beneficiaries. The right exercised by the trustee was not in conflict with the right of the beneficiaries.
The principle applied:
7. Mr. Banerjee, however, contended that there was no acceptance and that it was not known to the defendant Nos. 1 and 2 because this document was produced only at the stage of the appeal. In reply Mr. Roy Chowdhury submitted that the decision cited by Mr. Banerjee would not apply in this case. A deed of settlement when acted upon was as effective for the purpose of divestiture of interest of the settlor and vesting thereof with the beneficiaries.
7.1. Mr. Banerjee relied on Kesava Kurup Raghava Kurup v. Thomas Idicula and Anr., , with regard to the question of acceptance. A gift in Order to be valid is to be accepted by the donee during the lifetime of the donor and while he is still capable of giving. Under Section 122 of TP Act the acceptance may be expressed or implied. The acceptance, therefore, as an essential factor for the validity of a gift, has to be proved or established by the person relying on it. According to Mr. Banerjee, this ingredient had not been established. We have already observed that so far as the acceptance is concerned, there is no doubt about the same and that it was so accepted which could safely be presumed and has rightly been so found by the learned Judge. Then again when it becomes a deed of settlement and not a deed of gift as discussed hereinbefore, the question of acceptance would not be so material. In this settlement, the disposition was made by an unilateral document creating a disposition which had a combined effect of transfer and trust and the deed was neither a gift nor a trust and was made to provide for the members of the family or the dependents as the case may be. Therefore, this decision does not help Mr. Banerjee in the manner he sought to contend.
7.2. Mr. Banerjee then relied upon the decision in State of U, P. and Anr. v. Sayed Abdul Jalil, , in Order to contend that a document must be read as a whole. In a document meant for a transfer of ownership, the purpose is generally stated clearly to be that the property given would be owned and possessed henceforth by the donees in such a way that they could use it or deal with it as they liked. A mere allotment of accommodation or transfer of one’s residence in another owned by the former would not constitute transfer of ownership. Transfer of ownership in the ordinary course if expected to be evidenced by much more clear and unequivocal language, the transaction would amount to nothing more than the grant of licence revocable at the option of the settlor and the right to reside in the house would continue so long as the grantor would allow the licensee to do so. In the absence of any declaration of gift by the donor, it could not amount to gift of the property. If it was a licence, it would come to an end on the death of the grantee. Relying on this decision, Mr. Banerjee contends that in the present case, there was no express gift and having regard to the nature of the document read as a whole, there was no clear indication of transfer since during the lifetime of the settlor, the beneficiaries’ right was restricted and as such there was no transfer effected by virtue of the said deed except creating a licence.
7.3. The above decision does not help us in the context of the present case. There was no registered instrument in the case dealt with in the said decision, which is a distinguishable feature on the basis whereof the ratio laid down therein cannot be attracted in the present case. As discussed above, it is no more necessary for us to dilate on this question any further since on the materials apparent on the face of the record makes this present case clearly distinguishable. The reliance on the said decision having regard to the facts and circumstances of the case, therefore, seems to be misplaced.
7.4. However, Mr. Roy Chowdhury did not rely upon any decision to support his contention. He had argued on the strength of abstract proposition of law as noted hereinbefore.
7.5. As we have already discussed, there is nothing to hold that there was no acceptance by the defendant Nos. 1 and 2. It also appears that the deed was acted upon. It further appears that there was no default on the part of the defendant Nos. 1 and 2 in adhering to the conditions contained in the deed. The settlor did not exercise any right of alienation. However, the right of alienation by the settlor reserved in the deed was in conflict with Section 10 of the TP Act. Inasmuch as no absolute right of alienation was reserved by the settlor. Therefore, the settlor did not retain or ever intended to retain the right of ownership in terms of Section 10 of the TP Act and as such the contention of Mr. Banerjee cannot be acceded to.
7.6. A trust is an obligation as defined in Section 3 of the Indian Trusts Act, 1882 annexed to the ownership of the property arising out of a confidence reposed in and accepted by the owner, or declared or accepted by him for the benefit of another or of another and the owner. The person who accepts the confidence is the trustee and who declares the trust is the author of the trust and the person for whose benefit the confidence is accepted is the beneficiary. Thus, the right of confidence accepted by the settlor would be governed by the principles of the Trusts Act. It is, in fact, a personal convenant or contract binding two parties with regard to inter-relations in between themselves. There is no conflict in between the divestiture of the settlor’s interest and vesting thereof unto the beneficiary and then to hold the property in trust for and on behalf of the beneficiaries by the settlor. This combination of different kinds of disposition governed by different provisions of law has since been recognized by the Indian context, which is apparent from the definition of settlement given in the Stamp Act and recognition thereof as a valid disposition. Once a document comes within the purview of the definition of settlement, it definitely conveys title or interest within the scope and ambit of such definition and constitutes a valid disposition.
7.7. When a person proposes to give the property to a person in consideration of love and affection which is otherwise without consideration as defined in Section 122 of the TP Act and creates a trust in respect of the immoveable property attempted to be gifted, though the disposition might be followed by creation of a trust and take effect immediately, yet it would not be a gift within the meaning of Section 122 of the TP Act. In Order to contend otherwise, Mr. Banerjee relied on a decision in Suleman Isubji Dadabhai v. Naranbhai Dahyabhai Petel and Ors., . But this decision supports the view we have taken. In the said decision it was held :
“Ordinarily, ‘transfer’ of an immoveable property to oneself will be an exercise in futility inasmuch as he would not transfer anything nor he would transfer any rights of his – legal or beneficial – to a third party. It is impossible to conceive that a person can be a vendor and a vendee, a mortgagor and a mortgagee, a lessor and a lessee or a donor and a donee. Therefore, it is only in case of a trust that the concept of ‘transfer’ to oneself comes into play, particularly when the settlor appoints himself as the sole trustee. When a settlor creates a ‘trust’ by settling some of his properties and appoints himself as the sole trustee, he bifurcates his dual ownership, retains in himself the legal ownership of the property and transfers beneficial or equitable ownership to those for whose benefit he has created the trust. Transfer contemplated by Section G not only includes a sale, mortgage, lease, exchange and gift but also includes a vesting declaration. Therefore, what a person does by creating a trust in respect of his immoveable properties and appointing himself as the sole trustee of the trust is to make a gift of the property. It is this vesting declaration which invests him with the legal ownership of the property, divests him of the beneficial ownership and transfers the latter to the beneficiaries of the trust. To make a different view and hold that such a transfer creates both a gift and a trust will create a conflict between Section 122 of the Transfer of Property Act and Section 6 of the Trusts Act, because whereas Section 122 of the Transfer of Property Act in terms contemplates the transfer of that property to the donee and acceptance thereof by and on behalf of the donee, Section 6 of the Trusts Act does not contemplate the transfer of property to oneself.”
This decision relied upon the decision in Himansu Kumar Roy v. Moulvi Hasem Ali Khan, AIR 1938 Gal 818 wherein it was held :
“Under Section 6 of the Act subject to the provisions of Section 5 a trust is created when the author of the trust indicates with reasonable certainty by any words or acts : (a) an intention on his part to create thereby a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust property, and (unless the trust is declared by Will or the author of the trust is himself to be the trustee) transfers the trust property to the trustee. Section 6 therefore contemplates that the author of the. trust should transfer the trust property. The word ‘transfer’ is to be found also in the Transfer of Property Act which was passed in the same year. The word ‘transfer’ has been used in a wider sense. It includes not only sales, mortgages, leases, gifts, but it also includes vesting declarations. In the case of moveable property, the ownership of the property is to be transferred. In the case of immoveable property only a declaration is necessary”.
“Therefore, in the view of the Calcutta High Court, transfer contemplated by Section 6 of the Trusts Act not only includes a sale, mortgage, lease, exchange and gift but also includes a vesting declaration. Therefore, what a person does by creating a trust in respect of his immoveable properties and appointing himself as the sole trustee of the trust is to make a vesting declaration and not to make a gift of the property. It is this vesting declaration which invests him with the legal ownership of the property, divests him of the beneficial ownership and transfers the latter to the beneficiaries of the trust”.
7.8. The decision of the Gujarat High Court in Suleman Isubji Dadabhai (supra) also relied on a decision of the Supreme Court in Tulsidas Kilachand v. Comm. of I. T., wherein it was held :
“That under Sections 5 and 6 of the Indian Trusts Act, if the declarer of the trust is himself the trustee also, there is no need that he must transfer the property to himself as trustee; but the law implies that such a transfer has been made by him, and no overt act except a declaration of trust is necessary. The capacity of the declarer of trust and his capacity as trustee are different, and after the declaration of trust, he holds the assets as the trustee. Under the Transfer of Property Act, there’ can be a transfer by a person to himself or to himself and another person or persons. In the context of Section 16(3)(b) of the Income-tax Act, 1922, the Supreme Court has observed in that decision that change of capacity makes the declarer answer the description ‘any person’. In that case, Tulsidas Kilachand created a trust and settled his shares upon himself as the trustee. In that context, the Supreme Court observed that the deed of settlement executed by Tulsidas Kilachand must be regarded as involving a transfer even though the same individual in his capacity as the transferor and in his capacity as the trustee was the same”.
The Gujarat decision also relied upon Chhatra Kumari Devi v. Mohan Bikram Shah , wherein it was held :
“That the Indian law does not recognize legal and equitable estates and that therefore there can be but one ‘owner’ and where the property is vested in a trustee, the ‘owner’ must be the trustee. It has been further observed that the trustee is the owner of the trust property, the right of the beneficiary being in a proper case to call upon the trustee to convey to him. These observations made by the Privy Council cannot be applied to the facts of the instant case because we are concerned with amended Section 5 of the Transfer of Property Act which provides for the concept of ‘transfer to himself projecting its long arms to Section 6 of the Trusts Act”.
Conclusion :
8. Since the custody of the document was not in question on account of the pleadings and the evidences adduced on the question of fraud, undue influence in bringing about the document was not established. Therefore, it was immaterial as to when the original document was produced. No cross-objection or cross-appeal have been preferred with regard to the findings of the learned Judge so far as it relates to the finding that there was no collusion or invalidity of the deed on account of its execution or otherwise. Neither there was any dispute with regard to the defendant Nos. 1 and 2 being members of the family of the settlor. In these admitted facts the only question that we were asked to answer is the interpretation of the document which, according to us, is a family settlement. Having regard to the terms, as we have already discussed, the same had taken effect immediately with the execution and simultaneously the settlor having been appointed as trustee on behalf of the beneficiaries, who possessed the property through the trustee and, thus, the delivery of property was complete. In the absence of any proof of default on the part of the defendant Nos. 1 and 2 with regard to the conditions contained in the deed, as we have already found, the deed was acted upon and accepted by the beneficiaries.
8.1. Having regard to the facts as discussed above, we may answer the question No. (1), in the affirmative that there was immediate divestiture with the execution of the deed; question No. (2), the retention of control in the present case cannot lead the Court to hold that there was no divestiture in fact; question No. (3), there could be divestiture followed by conditions creating certain obligations attached to the divestiture within the scope of Section 127 of the TP Act; question No. (4), that immediately with the execution of the deed and simultaneously with the divestiture, there was vesting of the interest in the beneficiaries, which was complete with the conditions following, creating a trust; question No. (5), simultaneous creation of trust could be made and the rights retained and the conditions contained in the trust was not in conflict with the divestiture or the vesting and the instrument clubbed a transfer by gift and creation of trust being a disposition within the definition of settlement recognized in law as a valid disposition creating interest and title in favour of the beneficiaries upon fulfilment of the conditions contained in the deed which in the present case definitely stood fulfilled.
Order:
9. In the circumstances, the appeal is allowed. The judgement and decree appealed against is hereby set aside. The suit for partition is hereby dismissed.
10. There will, however, be no Order as to costs.
11. After this judgment is delivered, the learned Counsel for the respondents prays for stay of operation of the judgment and decree for eight weeks. The prayer is allowed. The operation of the judgment and decree shall remain stayed for a period of eight weeks from date.
R.N. Sinha, J.
12. I agree.