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TMI Blog1983 (1) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... such time as the daughter and son got married. It is relevant to note that at the time of making the settlement, the daughter was a minor, aged about six years. By clause 19 of the trust deed, it was provided that the trust is 'irrevocable'. Clause 22 of the trust deed provided that if the said intended marriage is not solemnised for any unforeseen reason within a period of twenty years from the date of the trust deed, the deed of trust would become void and the trust fund shall become re-invested in the settlor as a beneficial owner thereof, subject as aforesaid, the settlor shall have no manner of right, title or interest in the said money or its accumulations or accretions thereof. 4. Subsequently, by a supplementary deed executed on 26-10-1979, the said clause 22 has been amended to read : " If the said intended marriage were not to be solemnised for any unforeseen reason or reasons within a period of 25 (twenty five) years from the date of this deed, this deed of trust shall become invested with 'UNIVERSITY OF MADRAS' which is an Educational Institution. The SETTLOR or his legal heirs shall have no right, title or interest whatsoever in the said trust property or its accum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from the trusts, viz., M.C. Shymala Marriage Benefit Trust and M.S. Sowmiyaram Marriage Benefit Trust, and modify the assessments. 7. The assessee filed appeals against the orders of the Commissioner and contended that the view taken by the Commissioner is erroneous. The irrevocability of the trust had not been affected or eroded in any manner by the provisions made in clause 22 of the trust deed. The provisions of clause 22 should have been totally ignored or held invalid and inoperative. The purpose of clause 22 is never to re-invest the settlor with the corpus or income of the property but to provide for a contingency which should not in any manner be misunderstood as an indirect power reserved in the settled property by making a provision in the settlement deed to gain access to the property. That it is so is made clear by the supplementary deed though drawn up sometime in 1979 but making the intention paramount that it was never the intention of the settlor to create a revocable trust and that was the manifest intention right from the inception of the settlement. 8. The departmental representative very vehemently contended that when a clause had been inserted in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision in the trust deed as to the manner in which the trust property is to be disposed of, then the general law as embodied in the Trusts Act will step in to provide for this situation, as to what will happen in case the trust is extinguished by reason of the marriage not taking place, i.e., the object for which the trust has been created not being fulfilled, under section 83 of the Trusts Act the author of the trust may in certain cases get the property back to him. This is not to say that the trust is a revocable trust. What clause 22 has in effect provided for is a situation on the extinguishment of the trust. There are certain obligations in the nature of trust which also come into being which require to be dealt with in the manner provided for in the Trusts Act. Section 80 and onwards or the Trusts Act provide for those obligations which are in the nature of trusts. There are a number of relationships which more or less closely resemble trusts, but not actually trusts created by any author. These obligations in the nature of trusts are also called constructive and or resulting trusts. The obligation in the nature of trusts created in several circumstances are enumerated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 22 should be ignored, we would read clause 22 in such a way as it embodied the provisions of section 83 of the Indian Trusts Act providing for a situation of resulting trust and that situation is certainly not a situation which would impinge upon the irrevocability of the trust which was so declared by clause 19 of the settlement deed. By settlement deed of 1979, the author of the trust gave a direction to the contrary. Pursuant to those directions, the trust property in case the trust failed, instead of coming back to the author of the trust, would go to the University of Madras direct. That does not mean that by amending the trust deed by providing for diversion of the property to the University of Madras, an otherwise revocable trust had been made into an irrevocable trust. The trust in both the circumstances remained irrevocable. The trust deed before it was supplemented provided for the resulting trust spoken of in section 83 of the Indian Trusts Act, while after the supplement it, again is a resulting trust subject to a direction as to how the property should be dealt with. We are, therefore, of the opinion that the assessee has not created a revocable trust reserving to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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