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Mrs. Kalidha Adib Begum and anr. Vs. S.A. Bashirunnissa Begum Hussaini and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai High Court
Decided On
Reported in(1970)2MLJ98
AppellantMrs. Kalidha Adib Begum and anr.
RespondentS.A. Bashirunnissa Begum Hussaini and ors.
Cases ReferredIn Mirza Hashim Mishkee v. A.A.H. Bindaneem
Excerpt:
- .....of breach of trust in that she had not paid anything to the petitioners out of the income of the gifted property. as regards the validity of the trust, the respondents put their contention on two grounds. firstly, it is said that the gift is void inasmuch as it has been created not only in favour of the petitioners but also in favour of the future children to be born to the first petitioner. secondly, it is contended that under the terms of the trust deed, there was no effective transfer of possession or transfer of beneficial interest in the property in favour of the donees, and as such, the gift is void. exhibit p-1 inter alia provides that the donees are not only the present petitioners but also children to be born to the first petitioner. thus the gift is in favour of living.....
Judgment:

K.S. Palaniswamy, J.

1. This petition, filed under Section 74 of the Indian Trusts Act,. (II of 1882), raises an interesting but complicated question of Mahomedan Law. The relevant facts are these. The first petitioner is the mother of the second petitioner and is the daughter of the first respondent and late M. Abdul Basith Sahib. Respondents 2 and 3 are the sister's children of the first respondent. The site upon which the petition-scheduled building stands originally belonged to the first respondent. The susperstructure belonged to Abdul Basith. On 15th February, 1951, Abdul Basith executed a settlement over the petitioner-scheduled property in favour of the first petitioner without reference to the first respondent, his wife. On 25th October, 1956, Abdul Basith revoked that settlement with the consent of the first petitioner. On 27th July, 1959, Abdul Basith and the first respondent jointly executed a document, which is marked as Exhibit P-1 in this case, styled as settlement deed, constituting themselves as trustees for the. purpose of carrying out the terms of the trust and providing for the management of the property after their lifetime. The point in controversy is about the validity of this transaction and its scope and effect.

2. The contention of the petitioners is that under the trust deed the donors did not retain for themselves any interest in the property and were bound to utilise the income from the property to discharge the debt due to Kodambakkam Co-operative Building Society, to repair the buildings, to pay the tax and also to maintain the first petitioner and to educate the second petitioner and that after the death of Abdul Basith the first respondent acted in violation of the trust deed. They allege that the first respondent did not pay the interest due to the Society and did not pay anything to the first petitioner for her maintenance or for the education of the second petitioner, that the first respondent deprived the petitioners of a considerable portion of the property in their occupation and had allowed respondents 2 and 3 to occupy a considerable portion and that, therefore, the first respondent is liable to be removed.

3. The respondents contend that the alleged trust itself is void under the Muslim law. They also contend that under the terms of the trust deed, the first respondent is entitled to enjoy the entire income during her lifetime without any liability to pay anything to the petitioners and that even if the trust is valid, the petitioners would be entitled to the beneficial interest only after her lifetime.

4. The first question that arises for consideration is whether the gift, made through the medium of the trust deed Exhibit P-1, is valid. The second question is whether the first respondent is guilty of breach of trust in that she had not paid anything to the petitioners out of the income of the gifted property. As regards the validity of the trust, the respondents put their contention on two grounds. Firstly, it is said that the gift is void inasmuch as it has been created not only in favour of the petitioners but also in favour of the future children to be born to the first petitioner. Secondly, it is contended that under the terms of the trust deed, there was no effective transfer of possession or transfer of beneficial interest in the property in favour of the donees, and as such, the gift is void. Exhibit P-1 inter alia provides that the donees are not only the present petitioners but also children to be born to the first petitioner. Thus the gift is in favour of living persons and unborn persons. A gift to a person, who is not yet in existence, is void. Vide Section 141 of the Principles of Mahomedan Law by Mullah, 16th edition. There is no controversy about this position. The only question is whether the gift is void in toto even to the extent of the interest of the donees in existence or whether it is void only to the extent of the interest created in favour of unborn persons. In Musamat Surtaj Fatima v. Syed Muhamad Jawad I.L.R.(1931)Luck. 423, there is a casual observation to the effect that there is nothing contrary to the terms of the Muhammadan law in a gift by one person to another of a guzara for the lifetime of the latter with a continuance in favour of the male heirs of the donee and that such a gift could be made without offending any principle of Mahomedan law. How far this view was correct arose for consideration before Balakrishna Aiyar, J., in Imam Sahib v. Ameer Sahib : AIR1955Mad621 . In that case a Mahomedan executed a settlement by which he gave all his properties to his son and directed that the son and his heirs should pay five mudis of rice to each of his two daughters and after their lifetime to their male children. It was held that in so far as the dispositions could be regarded as an attempt to limit the succession to male heirs and thus to create a line of succession unknown to Mahomedan law the deed was bad and that in so far as the direction that five mudis of rice should be paid to the male descendants of the daughters could be regarded as a gift, it would be bad because it would be a gift to persons not in existence on the date when the document was executed. The learned Judge held that the observations in Musamat Surataj Fatima v. Syed Muhammad Jawad I.L.R.(1931) Luck. 423, was a mere obiter, as there was no discussion of the question or examination of the authorities. The learned Judge held that the document in that case was bad in respect of the persons who were not in existence on the date of the document. I am in respectful agreement with this view. On behalf of the respondents no authority was cited to show that in a case like this, where a gift is made in favour of living persons and also in favour of unborn persons, the whole transaction should be struck down as void. The gift has to be held to be void only to the extent to which interest is created in favour of unborn persons. In that view, I hold that Exhibit P-1 is not totally void and that it is void only to the extent it creates an interest in favour of unborn persons.

5. The second objection raised on behalf of the respondents with regard to the validity of the trust appears to me to be well-founded. The preamble portion of the document contains a declaration of the intention of the donors. The relevant portion reads thus:

Whereas the donors have fully and completely divested themselves of the ownership of the property retaining only a right to manage the property and to utilise the net income of the property after defraying the expenses for taxes paid and charges and repairs to the property for their own use during their lifetime.

6. The donors constituted themselves as trustees for the purpose of carrying out the settlement. It is further stated that the gift had been accepted by the donees and that the donors had accepted the trust as trustees for the donees. It is also said that the donors have taken possession of the properties in their capacity as trustees for the donees. After making these provisions, the trust deed proceeds to make provisions for the constitution of trustees after the lifetime of the donors. The deed states that the succeeding trustees are the present respondents 2 and 3. After nominating respondents 2 and 3 as the succeeding trustees to come into effect after the lifetime of the donors, the trust deed states:

The trustees shall take charge of the property and out of the income after meeting taxes, public charges, repairs and payment to the Madras Government Co-operative Building Society, Kodambakkam, Madras, the monthly instalments towards the discharge of the mortgage debt on the property, pay the net balance for the maintenance of the first donee herein so long as she lived and for the education of the second donee herein.

7. The document further provides that after the lifetime of the first donee (the first petitioner), the trustees should deliver and hand over the property to the second donee (second petitioner) and to all the children of the first petitioner and that such children shall enjoy the property with absolute powers of alienation.

8. How far the above provisions are in conformity with the Muslim Law and could be given effect to should be examined. For a gift to be valid, three essentials should be satisfied; (1) a declaration of gift by the donor, (2) acceptance of the gift, express or implied, by or on behalf of the donee, and (3) delivery of possession of the subject of the gift by the donor to the donee. It is essential to the validity of a gift that the donor should divest himself completely of all ownership and dominion over the subject of the gift--Vide Sections 149 and 148 of Principles of Mahomedan Law, by Mullah, 16th Edn. A gift may be made through the medium of a trust. The same conditions are necessary for the validity of such a gift as those for a gift to the donee direct with this difference that the gift should be accepted by the trustees and possession also should be delivered to the trustees--Vide Section 151. No physical departure or formal entry is necessary in the case of a gift of immoveable property in which the donor and the donee are both residing at the time of the gift. In such a case the gift may be completed by overt act by the donor indicating a clear intention on his part to transfer possession and to divest himself of all control over the subject of the gift--Vide Section 152 (3).

9. Cases have arisen for decision on the question whether the gift would be valid where the donor retains the right to enjoy the income of the subject of the gift during his or her lifetime. On this question, the decisions are uniform. The Judicial Committee held in Md. Aslam Khan v. Khalilul Rehman A.I.R. 1947 P.C. 97, that where the donor reserves to himself the possession of the property during his lifetime, the gift is not complete and is not valid. Their Lordships came to that conclusion even though the donor had given the authority for mutation of name in the relevant register in favour of the alleged donee. The full facts of the case do not appear from the record. It is, however, seen that the alleged donee was in possession at the time when the dispute arose. Notwithstanding that circumstance, their Lordships held that inasmuch as there was a reservation of possession of the property by the donor during his lifetime the gift was incomplete.

10. Following the above Privy Council decision, the Kerala High Court has taken the consistent view that where the donor reserves to himself the right to be in possession during his lifetime, the gift is invalid--Hajee Kunju Mamathu v. Asikutti (1959) K.L.T. 624, and Pichakannu v. Aliyarkunju Lebba (1963) K.L.T. 226. Both these cases were decided by the same learned Judge, Velu Pillai, J, It is pointed out that it is essential to the validity of a gift that there should be a delivery of such possession as the subject of the gift is susceptible of, and that a gift with a reservation of possession by the donor during his lifetime is void. In the latter case the reservation of possession and enjoyment was by the donor not only for his benefit but also for the benefit of the donees with the further stipulation that the possession and enjoyment by the donees were however subject to those of the donor. The learned Judge has pointed out that having regard to these provisions the donor did not divest himself completely of all dominion over the property, though in a sense, he purported to associate the donees with himself and that such association however did not amount to complete divestiture of the right of the donor over subject of the gift. It is also pointed out that where the donee resides with the donor at the time of the gift although no physical departure by the donor or formal entry by the donee is necessary, the gift can be construed to be complete only if the donor indicates a clear intention on his part to transfer possession and also divest himself completely of all control over the subject-matter of the gift.

11. In Mussamat Bibi Bilkis v. Sheik Wahid Ali I.L.R.(1928) Pat. 118, the donor administered and remained in joint possession of the property gifted with the donee until his death. It was held that the gift was not perfected by a proper transfer of possession and was hence invalid. In Jayanabibi v. Jayarabi (1950) 1 M.L.J. 209, the property, which was the subject matter of the gift, was in the hands of the tenants. The donor reserved to himself the right to receive rent during his lifetime and also undertook to pay municipal taxes. Raghava Rao, J., held that inspite of the fact that there was a declaration in the document ' I have delivered possession of the property to you even now,' there was no sufficient delivery of possession as required by Mahomedan law, as such a declaration shall be valid only by an attornment of the tenants to the donee or by receipt of rents and profits by the donee, inasmuch as a right was reserved by the donor himself.

12. In Md. Bibi v. Sulaiman : AIR1926Mad1110 , the question arose as to what kind of delivery of possession was necessary in the case of a gift by way of trust where the donor constitutes himself as trustee for the donee. The relevant passage in the judgment runs thus:

But it is clear that under the Mahomedan law in order to complete a gift by way of trust it is sufficient to give possession to the trustee. No doubt, if the maker of the trust had appointed third parties as trustees and failed and neglected to deliver possession of the properties to them, there might be considerable force in the argument of the plaintiff. But in this case the maker of the trust appointed himself in the first instance as the trustee and he was in possession. In the case of Mahomed Salfulla Sahib v. Vajinuddin Sahib (1915) 2 L.W. 1018 : 31 I.C. 281 : (1915) M.W.N. 876, Sadasiva Aiyar and Napier, JJ., held and distinctly laid down that a Mohamedan trustee could, by making himself a trustee or agent of the donee or as his guardian, if the donee was a minor, or expressing an intention to treat his own possession as the donee's unequivocally, transfers, legally effectual possession to the donee while himself remaining inactual possession. I take it that the general principle of the law relating to delivery of possession in Mahomedan Law is that, so far as the donor is concerned, he must be shown to have completed all that he was bound to do for the purpose of giving effect to the arrangement made by him. That is to say, if his intention was that the donees should get the property, he must deliver over possession to them. If his intention was that third parties should hold the property for the benefit of the donees, then delivery must be effected to such third parties. But in cases where it is clear that what was intended was that he should himself hold possession on behalf of the donees, it seems to me that it should be sufficient, if he declared the trust thereby treating his own possession as will be presumed in law into possession by himself in his capacity as trustee.

13. In the above case the donor did not reserve to himself any beneficial interest in the subject of the gift. He continued in possession only on behalf of the donee in his capacity as the trustee. In Mirza Hashim Mishkee v. A.A.H. Bindaneem (1928) 113 I.C. 255, a Bench of the Rangoon High Court had to consider the validity of a gift made through trust by a Muslim. The trust deed inter alia provided that the trustee should pay the income of the property to the settlor during her lifetime, that on her death the trustee should pay the income to her husband and that on his death the trustee should pay the income to certain persons. The trust deed further provided that the payment of income to the settlor during her lifetime was subject to a reduction of 15 per cent to be kept by the trustee as his commission. In construing the validity of these provisions, the learned Judges held:

We do not...think that the fact that the property in this case was made over to a trustee can be held in any way to alter the fact that the settlor did reserve to herself a life interest in the property. It is true that the trustee is to get 15 per cent. of the income but that is only as commission for acting as the trustee and amounts to little more than payment to him as manager. The gift in this case must, in our opinion, be held to be a gift reserving in the settlor a life interest in the subject-matter of the deed. A gift by a donor to herself is clearly no real gift at all and reservation in this deed of settlement of a life interest in the settlor results in their being no gift at all in presenti but in the gift taking effect only on the settlor's death.

14. The learned Judges have referred to Section 349 of Tyabji's Mahomedan Law, where the relevant passage is this:

Where a declaration of gift purports to transfer the subject of the gift to a donee at a future time, or contingently on the happening of a future event, the gift is void.

15. The learned author has made the remarks:

There is however one exception to this rule. For, where the condition on which the operation of the gift is suspended, is the death of the donor the disposition constitutes a particular species of gift, namely, a bequest, and it may operate as such in Mohamedan Law.

16. After referring to the above passage, this is what the learned Judges observed:

But in the present case it is not the contention that the gift operates as a bequest which would be revocable at any time during the testator's lifetime. This exception to the general rule would not make the settlement valid as a gift inter vivos, and that is what is claimed for the settlement here.

17. Keeping the above principles in view the facts of this case should be examined. I, have already referred to the preamble portion of the trust deed, Exhibit P-1, in which the donors unequivocally declared the reservation of their right to manage the property and to utilise the net income for their own use during their lifetime. Nowhere in the rest of the document is there any indication that during the lifetime of the donors, the donees have any interest in the income of the property. The direction to pay maintenance to the first petitioner and to pay for the education of the second petitioner is intended to come into effect only after the lifetime of the donors and that direction is applicable only to the trustees who would come into office after the death of the two donors. Mr. Krishna Rao, appearing for the petitioners, contended that the preamble portion is merely a declaration of the intention of the donors and cannot be given effect to and that what is relevant is the provision in the operative portion of the document and that applying that principle, it should be held that even the donors during their lifetime are bound to pay to the first petitioner for her maintenance and to pay to the second petitioner for the education. I am afraid that this argument has no substance. The unequivocal declaration made by the donors by which they reserved their right to enjoy net income for their own use during their lifetime cannot be ignored. There is no ambiguity in the document, and the donors have clearly intended that only after their lifetime the donees would get interest in the income. Mr. Krishna Rao, next contended that the donors continued in possession after the date of the gift not as donors but only as trustees, that their possession as trustees was only on behalf of the donees and that, therefore, there is no infirmity in the gift. No doubt, the document has been cleverly worded with a view to make it appear that there was delivery of possession by the donors to the donees, acceptance of the gift by the donees and taking possession of the property by the donors themselves as trustees. But mere use of the words does not carry the matter any far. The real intention of the makers of the document should be gathered from the recitals and the effect that follows from the recitals should be ascertained. The pith and substance of the transaction is that though the donors divested themselves of the ownership they expressly reserved their right to the exclusive use of the income for their own use during their lifetime. Such enjoyment of the net income by the donors was not in their capacity as trustees, but only in their capacity as donors. The illusory nature of the transaction so far as the first petitioner is concerned can be easily demonstrated. Under the terms of the trust deed the donors alone are entitled to enjoy the net income during their lifetime. The first petitioner is given only enjoyment for her lifetime, but during the lifetime of the donors she gets no interest either in the corpus or in the income. If she happens to pre-decease both the donors she gets nothing during her lifetime. In that view, it follows that there is no transfer in praesenti of any beneficial interest in favour of the first petitioner and what she gets is contingent upon her surviving the donors. The second petitioner also gets no interest in the income during the lifetime of the two donors. On an examination of the terms ?of the document, I have no doubt in holding that there is no transfer in praesenti of any beneficial interest in favour of the petitioners in the subject-matter of the gift inasmuch as the donors have reserved to themselves the right to enjoy entire income during their lifetime. Therefore, notwithstanding the declaration of transfer of possession in favour of the donees and the taking possession by the donors as ?trustees, the gift is incomplete and is, hence, not valid.

18. In view of my foregoing finding, the question as to whether the first respondent is guilty of breach of any of the terms of the trust deed does not arise. If it should arise, I would hold against the petitioners for the following reasons. The charge is that the first respondent has not paid anything to the petitioners and has inducted respondents 2 and 3 into possession of a portion of the property and has denied them the right to enjoy the property. The terms of the trust deed, already adverted to, entitle the first respondent to enjoy the entire income for her lifetime without any liability to pay any portion thereof to the petitioners. Therefore, there is no justification in the charge that the first respondent has not paid any amount to the petitioners out of the income from the property. The further charge is that the first respondent is not regular in paying the interest due on the mortgage in favour of the Kodambakkam Co--operative Building Society. It is not clear how much amount is outstanding under the mortgage and how many defaults have been committed in the payment of the interest due under the mortgage. In the absence of these particulars it is not possible to hold that the first respondent has failed in her duty as a trustee.

19. In conclusion Mr. Krishna Rao for the petitioners contended that inasmuch as the first respondent denies the validity of the trust, that by itself is sufficient to remove her from the trusteeship and appoint a new trustee. It is no doubt so. Inasmuch as the first respondent has denied the existence of the trust itself and if the view as to the validity of the gift is to be in favour of the petitioners, they would be entitled to the removal of the first respondent from trusteeship. But such-removal cannot in any way affect her rights to the enjoyment of the entire income from the property having regard to the terms of the trust deed.

20. In the view which I take about the validity of the gift deed, the petition fails and is dismissed. In the circumstances of the case, I direct the parties to bear their own costs.


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