TMI Blog1953 (10) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... re for the purposes of the business within the meaning of Section 10(2)(xv)of the Indian Income-tax Act. Appeal dismissed. - - - - - Dated:- 8-10-1953 - Judge(s) : GHULAM HASAN., N. H. BHAGWATI., PATANJALI SASTRI., S. R. DAS., VIVIAN BOSE JUDGMENT The judgment of the Court was delivered by BHAGWATI, J.--This is an appeal from the judgment and order of the High Court of Judicature at Calcutta on reference made by the Income-tax Appellate Tribunal under Section 66(1) of the Indian Income-tax Act (XI of 1922). The appellant is a banking company carrying on business at, among other places, Calcutta and Allahabad. On the 15th March, 1946, the appellant executed a deed by which it purported to create a trust for the payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h several contentions were sought to be raised by the appellant as well as the Income-tax authorities before the High Court as arising from the question, the only contention which was canvassed before the High Court and was held to be determinative of the enquiry before it was whether the deed of trust dated the 15th March, 1946, was valid. On the construction of the several provisions of the deed of trust the High Court held :-- " I am of opinion that in view of these provisions of the trust deed coupled with the uncertainty as regards the beneficiaries and the absence of any obligation to grant any pension, no legal and effective trust was created, and the so-called trust must be held to be void. " It further held that even if the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. (c) the beneficiary..................... The validity or otherwise of the trust in question has got to be determined with reference to the above sections of the Indian Trusts Act. The deed of trust provided in clause 5 that the income of the fund if sufficient and if the income of the fund shall not be sufficient then the capital of the fund shall be applied in paying or if insufficient in contributing towards the Payment of such pensions and in such manner as the bank or such officers thereof as shall be duly authorised by the bank in that behalf shall direct to be paid out of the fund. Clause 7 stated that the fund was established for the benefit of retiring employees on the European and Indian staff of the bank to whom pensions sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for the time being relating to the fund and for the purposes of that clause all the provisions contained in the deed were deemed to be the regulations in relation to the fund. On a consideration of the provisions of the deed of trust above set out it is clear that the bank or its officers duly authorised in that behalf were constituted the sole authorities to determine what pensions and in what manner the same should be paid out of the income of the fund. The fund was declared to have been established for the benefit of the retiring employees to whom pensions shall have been granted by the bank. Officers of the staff who were qualified under clause 8 were declared entitled to apply to the bank for a pension. But there was nothing in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the moneys had been transferred to the trustees. Shri N. C. Chatterjee however urged that the power conferred upon the bank or its officers duly authorised in that behalf was a power in the nature of a trust, that there was a general intention in favour of a class and a particular intention in favour of individuals of a class to be selected by them and even though the particular intention failed from the selection not being made the court could carry into effect the general intention in favour of the class and that therefore the trust was valid. He relied in support of this contention on Brown v. Higgs and Burrough v. Philcox. The position in law as it emerges from these authorities is thus summarised by Lewin on Trusts, Fifteenth Edi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, the court implies a trust for or gift to those objects equally if the power be not exercised. But for the principle to operate there must be a clear indication that the settlor intended the power to be regarded in the nature of a trust. " This position however does not avail the appellant. As already a stated there is no clear indication in the deed of trust that the bank intended the power to be regarded in the nature of a trust, inasmuch as there was no obligation imposed on the bank or its officers duly authorised in that behalf to grant any pension to any applicant. There was no duty to grant any pension at all and the pension, if granted, could be withdrawn, modified or determined by the bank or its officers duly authorised in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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