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TMI Blog1972 (8) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... naswami Naidu and his adopted son, Rajasekaran, as also minor, Devarajan, the adopted son of his pre-deceased son. Under that partition the building in question was directed to be maintained by Narayanaswami Naidu with the income from certain lands over which he had been given a life-interest. The partition deed further provided that after the death of Narayanaswami Naidu, the building has to be maintained by his daughter-in-law, one Janaki Ammal, with the income from the same lands, and that after her death, Rajasekaran and Devarajan were to maintain the building with the income from the same lands. Subsequent to the partition deed, a family settlement deed was executed on February 5, 1958, under which Janaki Ammal was deprived of her right to manage the building and also her right with regard to the lands with the income of which the building has to be maintained, and instead it was provided that after the death of Narayanaswami Naidu the lands should be equally divided between Rajasekaran and Devarajan and enjoyed with absolute rights, subject to their liability to maintain the said "Nataraja Nilayam". Narayanaswami Naidu died on December 31, 1958. At the time of his death he wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble persons except on the question of valuation of the building. He reduced the value of the building from Rs. 62,000 to Rs. 40,000. The accountable persons preferred a further appeal to the Appellate Tribunal. The Tribunal felt that the question whether the building " Nataraja Nilayam " was a trust property or not had not been properly considered by the authorities and, therefore, remitted the matter to the Appellate Controller to record further evidence and to submit a finding on that question. In pursuance of the remit order the Appellate Controller recorded further evidence which consisted of photostat copies of the stone slab fixed to the building and the notice board at the entrance of the building. On the basis of the said evidence the Appellate Controller submitted a finding to the effect that the building in question constituted an endowment for religious and charitable purposes. But, the Tribunal did not accept the finding of the Appellate Controller but held that the building in question did not constitute a trust property but was the private property of the deceased which passed on his death to the accountable persons and in that view, included the value of the buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty are : (1) the building had been constructed by the deceased with the funds of the joint Hindu family and not with his separate funds and therefore the building belonged to the joint family in the first instance; (2) the building has been included in the joint family properties that were divided under the partition deed dated March 1, 1950, and had been allotted to the share of the deceased; (3) there is no trust deed with reference to the building; (4) the partition deed dated March 1, 1960, did not contain any specific recital to the effect that the building has been set apart as a trust for religious and charitable purposes or that the deceased had divested himself of his absolute rights in the said property; (5) a mere provision for the maintenance of the building by the deceased and thereafter by others cannot amount to creation of a trust with reference to the building; (6) under the settlement deed dated October 10, 1958, Rajasekaran and Devarajan had been given the right to divide and enjoy the building equally ; (7) the exclusive use of the building from 1942 to 1958, for religious and charitable purposes did not amount to a permanent dedication of the buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Hindu law be validly made without any instrument in writing even if it be appropriation of some landed property. It is also well established that the existence of a trust can be established even by the conduct of parties. Though normally a Hindu while dedicating property to a deity or any other religious or charitable object ordinarily goes through the ceremonies of sankalpa and samarpan, it cannot be said that those ceremonies are essential to the creation of an endowment. The performance of these ceremonies is only relevant to show the intention of the grantor, and if there is clear and unequivocal manifestation of intention to create a trust and there is formal divestiture of the ownership in the property on the part of the donor with the intention to devote it to religious and charitable purpose the dedication must be deemed to be complete. The dedication of property is not a sacrament but a secular act ; but the mere renunciation of ownership by the donor with a particular object is sufficient to create an endowment. We are of the view that the Tribunal has not kept in mind these general and accepted principles while considering the question as to whether " Nataraja Nilaya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. Here again, we are not in a position to agree with the view of the Tribunal. The question is not whether the accountable persons had the benefit of the deceased's 3/16th share in the goodwill but the question is whether that share legally passed to or vested in the accountable persons on the death of the deceased. In Khushal Khemgar Shah v. Khorshed Banu, their Lordships of the Supreme Court considered goodwill of a business of a firm as property of the firm in view of section 14 of the Partnership Act which expressly states that the goodwill of the business is also the property of the firm. In that case the court was ascertaining the rights of the parties in relation to goodwill with reference to the partnership deed which contained the following clause: " This partnership shall not be dissolved or determined by the death of any of the parties hereto but the same shall be continued as between the surviving partners on the same terms and conditions but with such shares as shall then be determined." Based on the said clause the surviving partners had contended that the goodwill being merely a right to the name, place of business and the reputation of the firm, the share of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deceased's share in the goodwill cannot be disputed in view of the decision of the Supreme Court in Khushal Khemgar Shah v. Khorshed Banu. The observation of the Tribunal that " it is exceedingly doubtful whether the accountable persons would have succeeded if they had taken any legal steps for recovery of the deceased's share in the goodwill of the business " which formed the basis for its finding that the deceased's share in the goodwill did not pass on his death to the accountable persons is no longer tenable. Section 53 of the Act setting out the duties and liabilities of the accountable persons provides that every legal representative on whom the beneficial interest in the property passing on death of the deceased vests or any other person in whom any interest in the property so passing is vested in possession by alienation or other derivative title shall be accountable for the whole of the estate duty on the property passing on the death, but his liability for duty shall not exceed the assets of the deceased which he actually received or which, but for his own neglect or default he might have received. On the facts of this case, section 53 stands attracted for the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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