P L D 1962 (W (PLP)

QADEERUDDIN AHMED, J.‑This is an application under Order XXI, rule 58 and section 151, C. P. C.

2. The facts are that Messrs Standard Vacuum Oil Company obtained a decree for Rs. 59,464‑3‑0 against Mir Laik Ali and five others as trustees of the Hyderabad Relief and Rehabilitation Trust of 1950. In execution of the decree, the Ceramic Industries Factory was attached. Mir Laik Ali has taken objection to the attachment in a representative capacity in the sense that he has come to this Court as the Chairman of the Trustees of the Hyderabad Rehabilitation Trust, 1955 on the ground that the factory belongs to them as the trustees of the latter Trust.

3. The first point for determination is whether the Ceramic Industries Factory, which has been attached, vests in the trustees of the Hyderabad Rehabilitation Trust 1955. The objectors have produced the following documents :‑ (i) Exh. A/1 : The Declaration regarding the constitution of the Hyderabad Relief and Rehabilitation Trust 1950. (ii) Exh. A/2: The Declaration regarding the constitution of the Hyderabad Rehabilitation Trust 1955. (iii) Exh. A/3 : The joint balance‑sheet of both the Trusts for the year ended the 31st of December 1956. (iv) Exh. A/4 : The agreement of managing agency by which the Hyderabad Rehabilitation Trust 1955, has entrusted the Ceramic Industries Factory to Messrs H. M. Saya & Co. for twenty years with effect from the 25th of June 1959. (v) Exh. A/5 : The resolution of the Hyderabad Relief and Rehabilitation Trust of 1950 passed in a meeting held on the 18th of January 1955, by which the trust decided to make a gift of the Ceramic Industries Factory (together with the outstanding liability of Rs. 25 lacs and all other subsisting obligations `contractual or otherwise, to the employees and others' but expressly, excluding certain stores and stocks or raw materials) `under Muslim Law orally to the Hyderabad Rehabilitation Trust 1955 and authorised the Chairman, Mir Laik Ali to pronounce the gift and hand over possession' to the donee. (vi) Exh. A/6: A copy of the letter from the Joint Secretary, Government of Pakistan, dated the 24th of January 1955 intimating the Hyderabad Relief and Rehabilitation Trust of 1950 that the Government did not desire to exercise its right to take over the assets conferred on it by the 23rd clause of the Hyderabad Relief and Rehabilitation Trust deed. The agreement (Exh. A/4) should be noted in particular. In addition to the above documents, the objectors have also examined one witness, namely, Mr. Muhammad Ikramullah, an ex‑Minister of the Hyderabad State and a trustee of the Hyderabad Rehabilitation Trust of 1955 in whose evidence the above‑mentioned documents have been proved and who has stated that the Factory was gifted orally by the judgment‑debtors for the benefit of the Hyderabad Rehabilitation Trust, 1955, on behalf of which objection has been taken by Mir Laik Ali, and that possession of the Factory was physically delivered in 1955 and accepted on behalf of the donee by some of them, including himself.

4. The oral and documentary evidence establishes that the Factory originally belonged to the judgment‑debtors and that the objectors who have entrusted it to Saya & Co. are in constructive possession of it. Mr. Nur Muhammad, counsel for the decree‑holder, however, attacked the right of the objectors to entrust the Factory to Saya & Co. He argued, firstly, that the gift was invalid and that, therefore, the possession of the objectors is in the nature of a trust for the benefit of the judgment‑debtors. He could not, and did not, argue that the gift was made with the intention of depriving the decree‑holder of the fruits of the decree because the decree was given on the 19th of January 1960, while the gift was made in 1955. Secondly, he argued that the donors and the donees are two trusts in name only but in reality they are one. Counsel, therefore, concluded that the gift does not entitle the objectors to save the Factory from attachment.

5. The grounds on which Mr. Nur Muhammad argued that the gift was invalid are: (a) that the trustees who have made the gift were legally not competent to do so under the Trusts Act, 1882 ; and (b) that an immovable property of the magnitude that there was a liability of more than Rs. 25 lacs (refer to Exh. A/5) on it could not be gifted away orally. The first ground is not sound, because under clause 23 of the Constitution of the Hyderabad Relief and Rehabilitation Trust of 1950 (Exh. A/1), the trustees had the power to transfer the income or corpus of the Trust if the gift was made "to any Trust or Charity or Institution in Pakistan for the benefit of Hyderabad in such manner as such Trust, Charity or Institution may deem fit". This condition was satisfied in this case. The condition precedent for transferring the income or corpus, of the Trust, according to clause 23 of the trust deed (Exh. A/1) was that "the Government of Pakistan shall have the first refusal to take over all the assets of the Trust fund or any part thereof at the book value or for any other consideration as may be mutually agreed upon between the trustees and the Government of Pakistan". This condition has also been satisfied by the letter of the Government (Exh. A/6).

6. The second ground has force in it, because a good part of the Factory is immovable property of considerable value and, therefore, under section 123 of the Transfer of Property Act, it could be transferred only " by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses", unless it can be said that the exception provided for by section 129 of the Transfer of Property Act saved the transaction from the provisions of section

123. Under section, 129 of the Transfer of Property Act, section 123 of that Act has no effect on "any rule of Muhammadan Law". Under Muhammadan Law as applicable to this country, Muslims can make gifts orally. The fact that the gift has been expressly made under the Muhammadan Law proves that the trustees purported to act under Muhammadan Law in . order to obviate the necessity of a registered gift deed. The point for decision, therefore, takes this form: whether the trustees could invoke the rule of Muhammadan Law to take advantage of section 129 of the Transfer of Property Act.

7. It is true that all the trustees of the Hyderabad Relief and Rehabilitation Trust of 1950 who made the gift were Muslims, but this was a mere chance resulting from a combi nation of certain circumstances, because there is nothing in the Constitution of the Trust (Exh. A/1) to make it necessary that the trustees should be Muslims. Moreover, the beneficiaries of the Trust are also not necessarily Muslims because the Trust has been created for Hyderabadis in Pakistan and other places, in order to provide relief for them in their difficulties and distress. Additionally, the trust deeds of both the Trusts (Exhs. A/1 and A/2) have kept a secret of the source of the Trust funds: they merely declare that the trustees‑ " are desirous of dedicating a sum of Rs . . . . . . . now held by them to the purpose . . . . . mentioned and of making in respect of the said sum the declaration of Trust . . . . .". It, is not possible, therefore, to say that the creator or creators of the Trusts were Muslims.

8. As the Trusts are not Waqfs, the Trust property vests in the trustees ; therefore, the trustees have purported as Muslims to take advantage of this legal situation. They have made the gift by pressing into use section 129 of the Transfer of Property Act and excluding the application of section 123 of the Act. They have thus also obviated the necessity of obtaining income‑tax clearance certificate. Applicability to the gift of the above‑mentioned rule of Muhammadan Law is the only aspect of which the objectors could try and have tried to take advantage.

9. The fact, however, that all the trustees of the Hyderabad Relief and Rehabilitation Trust of 1950 were Muslims at the time of making the gift, was, as pointed out above, a mere chance or accident. There is no Muslim characteristic in the nature of the Trust. It may appear plausible to argue that: the mere fact that the trustees who made the gift were Muslims is sufficient to enable them to invoke the rule of Muhammadan Law and thus obviate the necessity of a registered gift deed, because the criticism that they happened to be Muslims by chance is no more valid in respect of them, as speaking objectively, it would be valid to say that any Muslim who makes a gift, happens to be a Muslim by chance. This analogy, however, is not true, because a Muslim who makes a gift of his own property, cannot be said to act in a dual capacity, but a trustee in whom a trust property vests acts in a dual capacity because quite apart from his personal capacity, he acts as a trustee. He has two capacities or personalities. This reason ing is not academic because these proceedings are themselves an illustration of its practical importance in as much as some of the trustees who are judgment‑debtors (as the trustees of one Trust) are also objectors as the trustees of another Trust. Moreover, hypothetically, it is easy to conceive a situation in which the trustees of a trust created by a non‑Muslim (for purposes which are foreign to the concepts of Islam) maul happen to be Muslims. If they make an oral gift of immovable/ property, as trustees, it would be unreasonable to argue that for the mere fact that they happened to be Muslims, they could rely on the rules of Muhammadan Law to justify their actions. As the creator or creators of the Trust are unknown, the objects of the Trust have no Islamic characteristic in them, the, beneficiaries are not necessarily Muslims ; it would be erroneous' to extend the benefit of the rule of Muhammadan Law to the gift made by the trustees in disregard of all the unfavourable surrounding circumstances and the dual capacity in which they) have acted, merely because they happened to be Muslims in their private capacity. I should, therefore, conclude that the oral gift made of the Ceramic Industries Factory was not legally valid for want of registration. This disposes of both grounds of the first contention of Mr. Nur Muhammad.

10. Turning now to his second contention I have to examine whether the two Trusts are one or not. The objectors' witness has stated that in all there were three trusts, namely :‑ (i) The Hyderabad Relief and Rehabilitation Trust of 1950 ; (ii) The Hyderabad Rehabilitation Trust of 1955 ; and (iii) The Imdadi Trust. He has disclosed that Rs: 14 lacs of the Imdadi Trust were invested in the Ceramic Industries Factory and Rs. 10 to 15 lacs were invested by the Hyderabad Relief and Rehabilitation Trust of 1950. The latter trust made a free gift of this Factory to the Hyderabad Rehabilitation Trust of 1955, but it was a gift subject to heavy liabilities which are mentioned in the resolu tion (Exh. A/5) by which the trustees decided to make the gift. The total liabilities, subject to which the gift was made, were at least Rs. 25 lacs, out of which, according to counsel for the objectors, the liability of Rs. 22 lacs towards the Imdadi Trust has not been discharged as yet. The facts that the original investment of the Imdadi Trust was Rs. 14 lacs, that its claim for Rs. 22 lacs has remained unsatisfied from 1955 to this date, and that the Hyderabad Relief and Rehabili tation Trust of 1950 has made a gift of the Factory without any consideration to the Hyderabad Rehabilitation Trust of 1955, may be consistent with the provisions of the trust deeds ; yet the manner in which huge amounts of money belonging to one trust have passed to another trust does create an impression that the division of the trust funds into three parts was merely a matter of some convenience. The balance‑sheet (Exh. A/3) for the year which ended on the 31st of December, 1956 is significantly common to the Hyderabad Relief and Rehabilitation Trust of 1950 and the Hyderabad Rehabilitation Trust of 1955. The constitutions of these two trusts (Exhs. A/1 and A/2) also show that the majority of the trustees of the two Trusts is common and that the Chairman of both the Trusts is the same gentleman, namely Mir Laik Ali. The decree, in execution of which the Factory has been attached, was granted by consent against the judgment‑debtors with Mir Laik Ali as their Chairman. Now Mir Laik Ali has objected to the attachment as the Chairman of the objectors, under Order XXI, rule 58, C. P. C. Technically speaking, the capacities of Mir Laik Ali with reference to the two Trusts are different, but the background of the source of the funds, the interchange ability of the funds, the joint-ness of the management through the preparation of common balance‑sheets and the free gift by one Trust to the other, leave no doubt that, in reality, the two Trusts are one and the same. This reality is, however, to be seen through the net of technicalities; because advantage of technicalities can be taken by the objectors. Technically speaking, there are two trusts and two sets of trustees ; though the decree‑holder can on his part take advantage of the intermingling of the funds to the extent that it may destroy the technical concept of two entities. In this respect, the decree‑holder may try to take advantage of two facts, namely : (i) that all the three trusts have invested huge amounts of money in the factory, and (ii) that one or more joint balance -sheets exist. But these facts do not fully destroy the technically separate existence of the trusts. This means that the decree- holder can successfully take advantage of the invalidity of the gift only.

11. Mr. Hafiz Sultan, counsel for the objectors, contended that under Order XXI, rules 58 to 60 C. P. C. the scope of the enquiry in these proceedings is limited to the considerations as to whether an objector has some interest in the property which has been attached, and whether he was possessed of the attached property at the time of attachment or not. In support of this contention he has relied on Bachu Lal v. Ram Din (A I R 1939 All. 117). Under Order XXI, rule 60, C. P. C. however, the Court has further to see whether the possession of an objector at the time of the attachment was in trust for the judgment‑debtor or not. The` mere fact of possession is obviously not sufficient, because eve in the property found in the possession of a judgment‑debtor, but not on his own account or as his own property, cannot be sold in the execution of a decree if the decree is against the judgment debtor personally. As pointed out by Mulla in his Commentary under Order XXI, rule 59, C. P. C "it is impossible to separate altogether the question of possession and of title. Thus, if the judgment‑debtor was in possession, he may have been in possession as agent or trustee of another, and this has to be enquired into." As far back as in 1888, their Lordships of the Privy Council have pointed out in Sardhari Lal v. Ambika Pershad ((1888) 15 I A 123) that‑ "The Code does not prescribe the extent to which the investigation should go; and though in some cases it may be very proper that there should be as full an investigation as if a suit were instituted for the very purpose of trying the question, in other cases it may also be that the most prudent and proper course to deliver an opinion on such facts as are before the . . . . Court at the time, leaving the aggrieved party to bring the suit which the law allows to him." Sir Shadi Lal, J has pointed out in Amirchand v. Ram Soran a Das (A I R 1914 Lah. 508), that a claim could not be rejected merely because it was `doubtful' or `complicated'. The situation is still not free from difficulty because, as pointed out by Mulla in the above‑mentioned Commentary on the Code of Civil Procedure enacted in 1908 :‑ "If instead of determining the question of possession, the Court determines the question of title, and disposes of the application on the question of title, the order is open to revision under section 115 of the Code. Similarly, where a Court ought to inquire into the question whether the possession of the judgment‑debtor was on his own account or on account of some other person, but it refuses to do so, the order is open to revision . . . . When the Court omitted to notice that the sale‑deed under which the claimant professed to be in possession was invalid for want of registration the order allowing the claim was reversed in revision." The last observation of the learned commentator is of particular value in these proceedings In this case, the difficulty is not that the scope of enquiry cannot be demarcated, but that the scope of a managing agency agreement, which is well known with reference to limited liability companies established under the Company Law, is far from being clear with reference to trusts. The trustees cannot give up their own obligations by with drawing from the trust and entrusting the responsibilities of the trust to strangers. Moreover, in this case, Mr. Nur Muhammad has argued that the constructive possession of the objectors is not their own possession because, in law, it inures for the benefit of the judgment‑debtors on the short ground that the gift made by the judgment‑debtors to the objectors is invalid.

12. Mr. Hafiz Sultan argued that the difficulty is not removed from the way of the decree‑holders by this argument because the objectors have enjoyed the benefit of the gift from 1955 and have "leased" the Factory for twenty years by executing a "lease deed" (Exh. A/4) in favour of Messrs H. M. Saya & Co. The document, which is called a "lease deed" by counsel, purports to be a managing agency agreement and not a lease deed. It is neither a registered document nor is it properly stamped, but has been admitted in evidence without objection. It may at lest be taken to establish that Saya & Co. has taken possession of the Factory from the objectors. The last question, therefore, which arises for consideration is: whether the possession of the Factory by Saya & Co., is by itself sufficient to allow the claim of the objectors ?

13. Mr. Hafiz Sultan argued that, by an inference drawn from Order XXI, rule 60, C. P. C., the answer to the above question should be in the affirmative. The rule is as follows :‑ "Where upon the said investigation the Court is satisfied that for the reason stated in the claim or objection such property was not, when attached, in the possession of the judgment- debtor or of some person in trust for him, or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the judgment‑debtor at such time, it was so in his possession, not on his own account or as, his own property, but on account of or in trust for same other person, or partly on his own account and partly on account of some other person, the Court shall make an order releasing the property wholly or to such extent as it thinks fit, from attachment." The words on which counsel relied are : "such property was not, when attached, . . . in the occupancy of a tenant . . . . . . . paying rent to" the judgment‑debtors. He further, meant to say that the ultimate liability of the objectors to account for the benefits derived by them to the judgment‑debtors is not a part of the enquiry in these proceedings, which is limited to the sole question of possession and the nature of possession, in terms of Order XXI, rules 60 and 59 read together. The latter rule is as follows:‑ "The claimant or objector must adduce evidence to show that at the date of the attachment he had some interest in or was possessed of the property attached." Counsel argued that the objectors have proved firstly, that they are in constructive possession of the attached property and secondly, though indirectly, that Saya & Co., who is in physical occupation of the property is not paying anything to the judgment‑debtors. This, according to counsel, is all that the objectors had to prove under Order XXI, rule 59, C. P. C., and all that the Court has to find under Order XXI, rule 60, C. P. C. for releasing the attached property. The question of ultimate accountability of the objectors to the judgment‑debtors, counsel contended, raises remote questions of legal right and title, which are not relevant in these proceedings.

14. The consideration of right and title is however not irrelevant because it explains the nature of possession and what is described by counsel as remoteness is merely the logical end F of the argument. Moreover, the two facts proved by the objectors, namely, gift and possession of Saya & Co., are inadequate in terms of Order XXI, rules 59, 60 and 61, C. P. C. for releasing the property because the effect of this proof is displaced by the finding that the gift was invalid, and because the effect does not travel far enough to establish that in the last analysis the possession of Saya & Co., is not on behalf of the judgment-debtors. On the contrary the status of the objectors themselves is in law for the benefit of the judgment‑debtors.

15. I accordingly reject the application of Mir Laik Ali. The parties are left to bear their own costs.

16. Exh. A/4 is hereby impounded. It should be sent to the Collector for suitable action. K. B. A. Application rejected.