1943 (2) TMI 11 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the trust created by the deed of settlement.
2. Operability and transfer of property under the deed.
3. Whether the settlor divested himself of property.
4. Whether the trust was acted upon and perfected.
5. Registration requirements of the deed.

Detailed Analysis:

1. Validity of the Trust Created by the Deed of Settlement:
The central issue was whether the deed of settlement dated 11th June 1928 created a valid trust. The deed assigned a sum of Rs. 33,000 from the settlor's Provident Fund and household furniture to trustees. The settlor intended the trust to benefit Miss Mackintosh and Miss Phyllis Anne Sansoni. The court found that the deed complied with Section 6 of the Trusts Act, which requires the intention to create a trust, the purpose, the beneficiary, and the trust property to be indicated with reasonable certainty. The property was indicated as the sum of Rs. 33,000 or thereabouts, which was deemed sufficiently certain despite the exact amount being variable. The court held that the trust property was indicated with reasonable certainty and the trust was valid.

2. Operability and Transfer of Property under the Deed:
The court examined whether the deed effectively transferred any property to the trustees. The settlor's credit in the Provident Fund was argued to be an actionable claim under Section 3 of the Transfer of Property Act, meaning it was a debt that could be transferred. The court held that the credit in the Provident Fund was an actionable claim and that the settlor had a beneficial interest in it. The deed of settlement, being an instrument in writing, effectively transferred this actionable claim to the trustees. Therefore, the deed was operative in transferring the trust property.

3. Whether the Settlor Divested Himself of Property:
The court considered whether the settlor divested himself of any property by the deed. It was argued that the settlor did not divest himself of the Provident Fund money as he received it himself upon retirement. However, the court noted that the settlor's retention of a copy of the trust deed and his statements to Miss Mackintosh indicated his intention to continue the trust. The settlor's actions of investing the Provident Fund money in his name and receiving the income were consistent with the trust deed, which allowed him to enjoy the income during his lifetime. The court concluded that the settlor did divest himself of the property by creating the trust.

4. Whether the Trust was Acted Upon and Perfected:
The court addressed whether the trust was acted upon and perfected. Despite the settlor receiving the Provident Fund money himself, the court found that the trust was acted upon as the settlor invested the money and retained a copy of the trust deed. The trust deed allowed the settlor to enjoy the income during his lifetime, and there was no evidence of any deed revoking the trust. The court held that the trust was acted upon and remained enforceable.

5. Registration Requirements of the Deed:
The court considered whether the deed required registration under Section 5 of the Trusts Act, which mandates that non-testamentary instruments declaring a trust of moveable property must be registered unless the ownership of the property is transferred to the trustee. The court found that the deed of settlement was an instrument transferring an actionable claim, which did not require registration. Therefore, the deed was valid without registration.

Judgment:
The court decreed that the defendant must deliver the securities listed in annexure (b) to the plaintiff within two weeks and any monies belonging to the estate. The costs of both parties were to be paid out of the trust fund, with the defendant's costs including expenses incurred in obtaining letters of administration and furnishing security. The fees and charges of the government were to be a first charge upon the subject matter of the suit.