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TMI Blog1996 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... Abdul Latiff Haji Essa Sait. This was particularly with reference to a document dated September 30, 1962, in favour of his daughter, Khadija Bai, in respect of nine items of house property. We will have to understand the document, it being a gift deed, in order to know the intentions of the donor. We will also have to bear in mind that the donor expired on November 25, 1967, and as such the document is found to have been executed on September 30, 1962, beyond the statutory period of five years as provided for by section 33(1)(o) of the Estate Duty Act, 1953. The document is at annexure " G ". We have carefully gone through the contents of the document and found some of the features to enable us to know the intention of the donor. The document is in favour of the daughter of the donor, named, Khadija Bai. The donor had no male children and had only one female childhis daughter named above. We further find a statement that under the Shariat law the said Khadija Bai would have the right to hold all the properties, both movable and immovable, and to collect all the amounts due to the donor and divide it and give to the other heirs. The donor had also executed a will registered at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operties that they were managed up to the end of Karkidakam 1136 and the income was utilised up to the end of the year 1137. In paragraph 7, it is found that income-tax, wealth-tax, etc., with regard to the said properties were paid in the name of settlor No. 1, the donor. After stating these with reference to the properties covered by the settlement deeds in the nature of trust, the important aspects are to be found in paragraph 8 of the document. It is averred that as settlor No. 1, the donor, is getting old and unwell and as the husband of settlor No. 2, daughter, Khadija, has agreed to manage the properties of settlor No. 2 as the power-of-attorney-holder and as it is felt that it is better to give the management to the husband for the development and improvement of the properties and as settlor No. 1 will get rest and in the above circumstances, it was decided that settlor No. 2---daughter, Khadija, shall give a specific amount to settlor No. 1, the donor, and all the rights of No. 1 in the aforesaid properties were released to settlor No. 2. It is then seen that for reasons specified in the paragraph under consideration, the donor divested himself of everything in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to account the income of the property to the donor, making it clear that the donor would have a right of residence of the family in the two-storeyed building. What is important is with regard to the payment of the monthly amount of Rs. 1,250 and this position is clarified in clause 14 in the following manner : " Except for receiving Rs. 1,250 per month for his expenses and the right for residence and for receiving the rent as stated in clauses 9 and 13, vendor No. 1 has no other right in the said properties and after the death of No. 1 all the rights of No. 2 aforesaid shall go exclusively to No. 2 and no other heirs of No. 1 can question the same. " It would thus be seen that except for receiving Rs. 1,250 nothing is left as far as the donor is concerned, specifying it with reinforcement that all the rights of settlor No. 2 with regard to the properties in question would be exclusive for settlor No. 2---daughter, Khadija. Reading the above text and features emerging therefrom, it would be at once clear that practically all rights with regard to the properties under the said document are transferred along with the execution of the document itself. It is made clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke the position amply clear. Section 100 of the Transfer of Property Act is as follows : " Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have charge on the property, and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge. Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust, and save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge. " It would be at once seen that the charge is either by an act of parties or by operation of law and is in the nature of security for payment of money to another. It is in the nature of the provisions in regard to a simple mortgage. It is elementary that a simple mortgage as is understood by the provisions of section 58(b) of the Transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any benefit to him by contract or otherwise. This is not the situation when the document is read and understood. The property, as we have observed above, passed on to the donee on the execution of the document itself. We have already considered the position with regard to the condition relating to monthly payment and, therefore, it would be seen that the situation would not be governed by the first proviso also. The Tribunal has referred to the decision of this court in Dr. K. P. Mohamed Babu v. CED [1973] 90 ITR 282 laying down the same proposition to the effect that the gift would be a conveyance of all the rights in the properties covered by it and in regard thereto the provision for maintenance would have to be understood on the basis of the contract spelt out in the deed and referable to it. This court has also considered the importance of the phrase " to the extent " occurring in section 10 under consideration to mean " as not causing any different situation in regard to the passing of the property ". Apart therefrom there is yet another aspect which would put out totally the rigour of the application of the provisions of the Estate Duty Act, 1953, to the situation. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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