P L (PLP)

M. B. AHMAD, J.‑‑This is a reference by the Chief Revenue Controlling Authority, in Karachi, dated 18th September, 1958, under section 57 of the Stamp Act, 1899 requesting this Court to give an opinion whether, the instrument, dated 7th June, 1956, which was executed by one, Dr. Peshoton Dubash, was a "declara tion of Trust" or was a "Deed of Settlement" within the meaning of section 2 (24) of the Stamp Act, which was required to be stamped in accordance with Article 58‑A (ii) of Schedule I of the Stamp Act. The subject‑matter of the Trust are movable properties of the following description :‑ Rs. (i) 3y. Government of India Conversion Loan 1946, worth ... ... 1,42,700 (ii) 4% Government of India Loan, 1960‑70 worth ... 93,700 (iii) 768 Habib Bank Ordinary shares of face value of Rs. 20 each worth ... 15,360 Total 2,51,760 Dr. Dubash had described himself as " absolute owner " in possession of movable properties". "fie has also stated that he was "desirous of divesting himself of the ownership of the said Trust properties and transferring the same to God" and dedicating them as Trust in the way of God for the maintenance of his three daughters. In paragraph 5, he reserved to himself the right of removing the rrustees, appointing otl;er Trustees, reducing or increasing the numb .r o(' Trustees and changing the provisions regarding the appointment of Trustees. In paragraph 18, the Trust was to be constituted for a period of seven years commenc ing from Ist May, 1956, and then the Trustees had a right to dissolve the Trust after the expiry of this period, or to extend the same on the conditions laid down by him for another five years. After the dissolution of the Trust, the property was to go to his daughters and their heirs (para. 19). If, however, all lines of his daughters or their paternal reversionars became extinct, the Trust would then be utilised for the maintenance of any Zoroastrian Mazdayasna Society in the discretion of the Trustees. The Collector was of the opinion that this instrument was a Deed of Settlement and imposed a fee of Rs. 7,543 plus a penalty of the same amount for registering it, while, Dr. Dubash insisted that it was a Trust and wanted to register it on payment of Rs. 15 only under Article 64‑A of the Stamp Act. In appeal, the Chief Controlling Revenue Authority agreed with the Collector that, this instrument was a Deed of Settlement within the meaning of section 2 (24) and chargeable to Stamp Duty under Article 58‑A (if) of Schedule I of the Stamp Act: In the reference, submitted by him to this Court, the Chief Controlling Authority has pointed out that the instrument records a disposition of the property among the daughters and dependents of the Executant, and ultimately, . if no one is left, in favour of a Society, and therefore, the definition given in section 2 (24) applies. According to the Chief Controlling Revenue Authority, the deed purports to have created a Trust for the maintenance of the daughters primarily and there was distribution or disposition of the entire property among the beneficiaries on the dissolution of the Trust. The utilisation of the income of the Trust for the maintenance of a God‑worshipping Society is only in default of the persons for whom the settler has provided. According to the Chief Controlling Revenue Authority, the respondent's intention, as was apparent from the instrument itself, was to consolidate and preserve his property in the hands of the Trustees for ultimate distribution among his daughters or their heirs. The learned counsel for Dr. Dubash contended orally before us that the executant was not the owner of all the properties, in question. The daughters, who are the beneficiaries, were the owners themselves of more than half of the properties and the executant's distribution had no legal effect. This contention was repelled both, by the Collector and the Chief Revenue Controlling Authority. In our view, this argument has no force, The executant has described himself as the absolute owner of the properties and in possession. His disavowal of ownership at this stage cannot change the language of the Deed under reference. In his capacity as absolute owner, the executant has made a perpetual disposition of the entire property for the benefit of his family. The dis tinguishing features of this Deed are, that (i) it provides for a general distribution of properties among the daughters of the Executant and if no heir is left, the property is to go to a Society (ii) it purports to operate in the life time of the owner, and (iii) is intended to have immediate operative effect inasmuch as the Executant has handed over possession of the properties to the Trustees. The learned counsel for the Executant did not show us any definition of Trust under which the above instrument could be treated as a Deed of Trust alone and not as a Deed of Settlement. His main stress lay on the argument that the document as executed did not convey a valid disposition because he had no authority to dispose of the property mentioned in the Deed. We have, therefore, ourselves examined whether the terms mentioned in this instrument would render it a Deed of Trust for purposes of the Stamp Act. A Trust for purposes of Article 64 of the Stamp Act has not been defined by the Stamp Act in the manner in which the Act has dealt with a Settlement in section 2 (24). We are, therefore, left to find out its definition in other Acts. The definition most favourable to the Executant would be found in section 3 of the Trust Act It of 1882 "

3. A "trust" is an obligation annexed to the ownership:of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner ; the person who reposes or declares the confidence is called the "author of the trust" ; the person who accepts the confidence is called the "trustee" ; the person for whose benefit the confidence is accepted is called the "beneficiary" the subject matter of the trust is called "trust‑property" or "trust‑money" ; the "beneficial interest" or "interest" of the beneficiary is his right against the trustee as owner of the trust‑property ; and the instrument, if any, by which the trust is declared is called the "instrument of trust", a breach of any duty imposed on a trustee, as such, by any law for the time being in force, is called a "breach of trust" ; Section 5 reads "

5. No trust in relation to immovable property is valid unless declared by a non‑testamentary instrument in writing signed by the author of the trust or the trustee and‑ registered, or by the will of the author of the trust or of the trustee. No trust in relation to movable property is valid unless declared as aforesaid, or unless the ownership of the property is transferred to the trustee. These rules do not apply where they would operate so as to effectuate a fraud." Section 6 reads "

6. Subject to the provision 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." Article 1 of Underhill's Law of Trust and Trustee, Tenth Edition, page 3, reads `Art. 1.‑Definition of Trust, Trustce, Trust Property, Beneficiary, and Breach of Trust A trust is an equitable obligation, binding a person (who is called a trustee) to deal with property over which he has, control which is called the trust property), for the benefit of persons (who are called the beneficiaries or cestufs que trust), of whom he may himself be one, and any one of whom may enforce the obligation. Any act or neglect on the part of a Trustee which is not authorised or excused by the terms of the trust instrument, or by law, is called a breach of trust. The above definition was expressly approved by Cohen, J., in Re Marshall's Will Trusts. Other definitions of a trust are to be found in the recognised text‑books ; but none of these learned and excellent works contains a definition which is altogether satisfactory." Settlement has been defined in section 2 (24) of the Stamp Act as a non‑testamentary disposition in writing of movable or immovable property made "(a) in consideration ofimarriage. (b) for the purpose of distributing property of the settler among his family or those for whom he desires to provide, or ‑ for the purpose of providing for some person dependant on him, or (c) For any religious or charitable purpose , and includes an agreement in writing to make such a disposition and, where any such disposition has not been rnade in writing, any instru ment recording, whether by way of declaration of trust or otherwise the terms of any such disposition". In the words of Mulla and Pratt (The Indian Stamp Act 5th Edition page 42) " A settlement is a disposition of property movable or immovable generally couched in the form of a trust, either in consideration of marriage or for one or more of the objects specified, i.e., religion, charity, or provision for family, dependents or others. It is these objects which attract the benefit of a duty half that of a gift or of a conveyance." It would thus appear that any agreement, even if it is in the form of a trust, containing disposition of property in terms of (a), (b) and (c) of section 2 (24) of the Stamp Act renders an instru ment a deed of settlement. We cannot accede to the argument that if a non‑testamentary instrument, which disposes of property for any of the purposes' mentioned in clauses (a), (b) and (c) of subsection (24) of section 2 of the Stamp Act, is couched in the form of a trust, therefore, it is a declaration of trust and cannot be a settlement. In fact a large number of Trust would come under Settlement and would be chargeable under Article 58‑A (2) of Schedule I of the Stamp Act. In a reference, reported 'in I. L. R. Bombay, Volume 20 page 210, the Full Bench considered a case where an instrument called a trust deed by the party executing it was intended to have immediate operation. It vested the property in the trustees at once, and the provisions as to the management and the ultimate beneficial interest in the property showed that it was contemplated that its operation might extend beyond the lifetime of the owner. The Full Bench held that the instrument fell under the definition of a settlement in the Stamp Act (I of 1879) and should be stamped accordingly. The circumstances in this case appear to be more or less the same. Our attention was drawn to another Full Bench Ruling of the Allahabad High Court in Narendra Singh Ju Deo reported in (1), in which a deed transferring property to trustees was held to be a trust and not a settlement. But in this case, their Lordships definitely said " We do not think that the deed taken as a whole can be regarded as one executed for rthe purpose of the distribution of the owner's property." This is exactly, a circumstance which would distinguish a settle ment from a trust as would be apparent from a reading of C clauses (a), (b) and (c) of section 2 (24) of the Stamp Act. In this case, under reference, the Executant has distributed his property for good. This Ruling, therefore, does not support the Executant. We are, therefore, of the opinion that the instrument executed by Dr. Dubash comes within the description given in section 2 (24) of the Stamp Act of 1899 and is liable to be charged with the A higher duty that can be levied under Article 58‑A (ii) of Schedule I of the Stamp Act. Under section 6 of the Stamp Act, although an instrument may amount to a declaration of trust, it does not cease to be also a settlement and section 6 further provides that an instrument SOl framed as to come within two or more of the descriptions in Schedule I shall be chargeable with the highest of the different duties. The reference is answered accordingly. A.B. Reference answered.