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TMI Blog1966 (10) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... rs already stand seized , possessed of the said hereditaments and premises hereunder described Then follow the procisions of the alleged trust which was to be called g. P. Nair Family Trust Clause 2 gave authority to the trustees to recover the rens and profits of the property. Out of it ₹ 6,000 were to be paid annually to the two settlors Govind Nair and his wife Kartiaka Nair and a sum of ₹ 3,000 each per year to the two daughters. The trustees were also directed to pay ₹ 100 per month to each of the two sons and/or daughters of Mrs. Prakashini Govindan Kutti Menon and Jayashee Parmeshwar Nair In the event of the amount being insufficient the amount payable to each of the said sons and daughters of the two daughters was to be proportionately reduced. In clause 2 (b), 5 per cent of the income from the trust was set apart for religious charitable and education and medical relief for the poor and distressed relations of the said Govind Parmeshwar Nair and Kartika Parmeshwar Nair. In clause 2 (c) it was provided that after the dath of Govind Nair and his wife, the amount coming to their share shall be distributed queally among their two daughters and thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of marriage, (ii) for the purpose of distributing property of the settlor among his family or those for whom he deisres to provide, or for the purpose of providing for some persons dependent on him, or (iii) for any religious or charitable purpose, and includes an agreement in writing to make such a disposition and where any such disposition has not been made in writing any instrument recording whether by way of declaration of trust or otherwise, the terms of any such disposition. The first requirement of the definition is that there shall be a nonteatamentary disposition On behalf of the settlors trustees it has been urged that having regard to the provisions made in the document. it primarily distributes only the income of the property and in the ultimate provisions distributes the sale proceeds of the property, but it does not ditribute the property as such under any of its provisions. Since by the definition settlement means any non-testamentary disposition of movable or immovable property . etc. , it is urged that one cannot enlarge the scope of the definition by incorporaing therein any other idea than the strict language of the section implies. When the sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r means ir is achieved. For the proper construction of sub-clause (ii) what one has to look to is the nature of the purpose and not the nature of the property. In the present case though the property may be converted from immovable property into cash, the purpose would still remain the same viz. of distributing property of the settlor. ( 7. ) Thus in the present case even though a provision is that immovable property shall be sold and the proceeds thereof distributed, it can still be said that it is a disposition of immovable property for the purpose of distributing property of the settlor. The other clauses of sub-clause (ii) for whom he deisres to provide or for the purpose of providing for some person dependent on him also do not militate against the above construction. ( 8. ) So far as the decision in (1960) 3 SCR 167: (Air 1960 SC 751), is concerned, Mr. Rege relied upon the observations of the Supreme Court at pages 174-175 (of SCR): (at p. 755 of AIR) where Their Lordships in construing the expression distribution of capital assets occurring in the third proviso to Section 12b (1) of the Income-tax Act held that it would be wrong to read into that expression any ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. So far as movable property is concerned no trust is valid unless declared as aforesaid or unless the ownership of the property is transferred to the trustee. Section 6 provides subject to the provision of Section 5, a trust is created when the author of the trust indicates with reasonable certainty by any words or acts (a) an intention on his part to create thereby a trust, (b) the purpose of the trust (c) the beneficiary and (d) the trust-propery and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the trustee. It is the words in the brackets unless the author of the trust is himself to be the trustee that Mr. Rege has relied upon. He urged that where the author of the trust is himself to be the trustee, a transfer of the trust property to the trustee, is not necessary and cannot strictly speaking be made. In the present case he urged that all that happened was that the trust property which was in the possession and ownership of the four owners was merely declared as trust property and held by themselves as trustees for their own benefit. Therefore, no disposition of the trust property was made nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the definition is disposition and not transfer and the word disposition is of much wider connotation than the word transfer . In the decision in the Civil Reference No. 24 ofc 1956 Chief Justice Chagla defined disposition as follows:- disposition means any plan or arrangement for the disposal of the property, and undoubtedly by this document the plan or arrangement which was given effect to was that the property should no longer belong absolutely to the settlors. but while the settlors continued to be the legal owners of the property the beneficial interest in the property should belong to the beneficiary. But even if we were prepared to accept Mr. Gupte's contention that we must read disposition as meaning transfer or conveyance even so in our opinion on a clear reading of this document there is a transfer or conveyance by the settlorsw as absolute owners of the property to themselves as trustees of the property . Mr. Gupte has emphasised the fact that there are no words of conveyance in the document. But when the settlors declare that henceforth they are going to hold this property as trustees for the sole benefit of their son Sorab, it clearly means that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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