TMI Blog1979 (11) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... on the death of the deceased. The appeal is, therefore, partly allowed. We hold that only one-half of the properties which were the subject-matter of the trust deed dated June 27, 1939 (Jagadhatri Sampad Trust) passed on the death the deceased under s. 5 of the Act and the remaining one-half did not. - - - - - Dated:- 20-11-1979 - Judge(s) : V. D. TULZAPURKAR., E. S. VENKATARAMAIAH JUDGMENT The judgment of the court was delivered by VENKATARAMIAH J.--In this appeal by certificate, the question which arises for consideration is whether all or any part of the properties which were the subject-matter of a trust can be treated as passing on the death of Panchu Gopal Banerjee (hereinafter referred to as " the deceased ") for purposes of levy of estate duty under the E. D. Act, 1953 (hereinafter referred to as " the Act "). The deceased was the son of Woomesh Chandra Banerjee. Woomesh Chandra Banerjee executed a deed of trust on June 27, 1939, constituting a trust known as " Sri Sri Iswar Jagadhatri Sampad " and transferred all his properties which were described in the schedule attached to the deed to the said trust and appointed himself as the first managing trustee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee under the deed of trust. The deceased died on April 17, 1955, and on his death, the question whether the properties which were the subject-matter of the trust should be included in the estate passing on his death arose for consideration in the estate duty proceedings. The accountable persons contended before the Dy. CED who was the assessing authority that no estate duty was payable in respect of the properties comprised in the trust (valued by the Deputy Controller at Rs, 2,89,000) as the said properties did not pass on the death of the deceased. The Deputy Controller held that the provisions of the trust were such as to keep the properties tied up in perpetuity without any power of alienation and that since the purpose for which the trust was created was not a public or charitable one, the trust as a whole was void. He accordingly, held that the said properties passed on the death of the deceased under s. 5 of the Act. This part of the order of the Deputy Controller was affirmed in appeal by the CBR in Estate Duty Appeal No. Cal./134 by its order dated April 3, 1961. The Board held that even though the purpose of the trust was said to be for certain religious purposes, the fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is obvious that such an intention must be gathered on a fair and reasonable construction of the document considered as a whole. If the income of the property is substantially intended to be used for the purpose of a charity and only an insignificant and minor portion of it is allowed to be used for the maintenance of the worshipper or the manager, it may be possible to take the view that dedication is complete. If, on the other hand, for the maintenance of charity a minor portion of the income is expected or required to be used and a substantial surplus is left in the hands of the manager or worshipper for his own private purposes, it would be difficult to accept the theory of complete dedication. " In that case, the document under which it was claimed that a complete dedication of certain property had been made for religious purposes contained a recital which read as follows : " If, after conducting the said charities properly there be any surplus,the same shall be utilised by the said Shanmugam Pillai and his heirs for family expenses. They should also look after the same carefully and properly. " On the basis of the evidence available in the case and the reci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired only Rs. 25 per month as their remuneration. The dominant intention in creating the trust was to benefit the members of the family of the author of the trust and to see that the properties were not alienated by them for ever. From a fair reading of the deed, we are of opinion that there was only a partial dedication under the deed for religious purposes. It follows that the properties retained their private and secular character and were only subject to a charge for religious purposes. In the circumstances, the provision for the benefit of the trustees and other heirs and relatives of the author of the trust fails as it is hit by the rule against perpetuities. This, however, does riot affect the validity of the religious endowment. What should happen to the properties which are gifted or settled on persons in contravention of the rule against perpetuities in cases of this nature where properties are given away partly by way of religious endowments and partly for the benefit of certain individuals for their use, may be stated thus : " if the terms of the document under which the properties or their income are gifted or bequeathed or settled amount to their complete dedication f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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