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TMI Blog1973 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of the settlement deed dated August 21, 1947, in C. S. No. 38 of 1956 before the High Court. In the said suit, Fathima Bi was appointed by court as receiver in respect of the property. Later, there was a compromise between Jameela Begum, the settlee, under the settlement deed dated May 15, 1950, and the legal heirs of Amirunnissa Begum, the result of which was that Jameela Begum's title to the property was recognised. Even during the pendency of the said litigation, Fathima Bi died on January 24, 1957. Jameela Begum, the accountable person, filed a statement of accounts in respect of the properties that passed on the death of Fathima Bi. In this statement she included a sum of Rs. 4,07,778, representing the value of the said property. On the basis of the said statement, the original assessment was completed on March 29, 1962, on a principal value of Rs. 4,31,548. The accountable person, however, preferred an appeal to the Appellate Controller against the said assessment for the first time contending that the value of the property " Albany " has been wrongly included in the estate of the deceased. As this objection was not raised before the Assistant Controller, the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accountable person the right to the usufruct from the property having been reserved by the settlor for himself during his lifetime, and, after his death, to his wife, during her lifetime, such reservation in favour of the settlor's wife after the death of the settlor was invalid under the Mohammedan law. In this view the Tribunal excluded the value of the property " Albany " from the principal value of the estate of the deceased. At the instance of the revenue the following question has been referred to this court under section 64(1) of the Estate Duty Act, 1953 : " Whether, on the facts and in the circumstances of the case and on a proper consideration of the settlement deed dated May 15, 1950, the value of the property by name 'Albany' is includible in the estate of the deceased ? " The accountable person having given up her contention that she acquired title to the property only under the compromise decree in C. S. No. 38 of 1956, and not under the settlement deed dated May 15, 1950, even before the authorities below, it has to be taken that she is claiming title to the property only under the settlement deed dated May 15, 1950. The two reasons given by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be taken to confer absolute rights to the accountable person, Jameela Begum, only in relation to the corpus, that, therefore, the reservation made as regards income in favour of the settlor during his lifetime and thereafter in favour of his wife during her lifetime is valid, that such a reservation cannot be taken to be in derogation of the absolute grant made of the corpus in favour of the accountable person and that, in any event, the operative portion of the document having clearly provided that the gift of the property to the accountable person can only be subject to the right of reservation in relation to the usufructs from the property for the duration of the settlor's life and also the lifetime of his wife, the gift in favour of the accountable person should be taken to be conditional on her payment of the usufructs to the settlor and his wife. It is said that such a condition has been held not to be derogatory of an absolute grant in Syed Mohamed v. Kairum Bivi. In that case a Sunni Muslim by a deed of settlement in favour of two beneficiaries declared that : " The settlees shall have absolute estate over the property...... in equal shares each taking half, and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the validity of a clause in a gift deed reserving the right of enjoyment of the usufruct by the donor and expressed the view that a limited interest out of the usufruct can validly be created under both the schools of Shias and Sunnis. The learned judges expressed the view that the Muslim law recognises a distinction between the corpus of the property and its usufructs, that it recognises only absolute dominion, heritable and unrestricted in point of time as regards the corpus of the property, that in any gift of a corpus with a condition inconsistent with such absolute dominion, the condition is rejected as invalid but that such dominion over the corpus takes effect subject to any limited interest in the usufruct of the property and that, therefore, a gift of the corpus with a reservation to collect the accruing income during the lifetime of the donor is valid and enforceable. In paragraph 165 at page 158 of Mulla's Mohamedan Law, 17th edition, there is a discussion on the above subject thus : " Where property is transferred by way of gift, and the donor does not reserve dominion over the corpus of the property nor any share of dominion over the corpus, but stipulates simply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn in the above cases it is clear that the reservation of a right to the usufruct or creating an obligation on the part of the donee to collect and pay over the usufructs to the donor in a gift deed is valid even under the Mohammedan law. In this case, the donor has not only reserved his right to the income from the gifted property to himself during his lifetime but also conferred such a right to receive the income on his wife after his death. The question is whether the gift of the usufruct in favour of his wife after his death is invalid. We are of the view that the principle of the above decisions is that the donor is entitled to make a reservation of the right to enjoy the income or create an obligation to pay over the income from the gifted property for a limited duration either to himself or to others. The fact that the reservation has been made as regards the usufructs in favour of both the donor and his wife cannot make the reservation an invalid one. The learned counsel for the assessee seeks to support the view of the Tribunal on the basis of section 11 of the Transfer of Property Act which is as follows : " Where, on a transfer of property, an interest therein is crea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in future and, therefore, such a gift is invalid under the Mohammedan law. The Tribunal is also of the opinion that even if the settlement deed is construed to be a will so far as it related to the reservation of the usufruct in favour of his wife, such a request will be invalid under the Mohammedan law, for Fathima Bi being the wife of the settlor and as such a legal heir, the prior consent of the other heirs to such a bequest is necessary and that there is no evidence of such a consent in this case. The Tribunal has also taken the view that the settlement deed cannot be taken as a trust as under the Mohammedan law there could be a valid trust only when the immediate or ultimate object of the trust is for religious or charitable purpose and that there is no such purpose in this case. The further reasoning of the Tribunal is that the condition regarding the payment of income from the property to Fathima Bi was not acted upon inasmuch as immediately after the death of Shamsudeen Sahib, the property became the subject-matter of litigation which continued throughout the lifetime of Fathima Bi, that her right to receive the income from the said property was never recognised though sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... divest in praesenti the right to the usufruct and to confer it upon the donee. It is well established that principles governing the gifts of usufructs are distinct from those governing the gifts of corpus. While in the gift of corpus the property gifted must be in existence at the time of the gift and the gift should be completed by delivery of possession of the property gifted to the donee, but in the case of gift of the usufruct such a condition in the nature of things cannot be insisted upon. (Vide Nawab Umjad Ally Khan v. Mussumat Mohumdee Begum. In Ameer Ali's Treatise on Muhammadan Law, volume I, at page 139, the learned author says : " If a donor were to make a condition that the donee should give a part of the income or pay an annuity to his heirs in perpetuity, and give effect to the donation by transferring the subject thereof to the dominion of the donee, as the condition in nowise interferes with the completeness of the gift, both the gift and the condition would become operative in law. In this view the decision of their Lordships of the Privy Council seems to be in absolute accordance with the Hanafi law. Thus even where the gift of the usufruct is to be in perp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft of the usufructs in her favour. Her right to get the usufructs will arise under the document only after the lifetime of Fathima Bi. Therefore, the question of obligation not binding on the minor will arise only if there is a gift of the usufruct in her favour with an obligation to pay over. As will be seen from the foregoing, we have construed the gift as an absolute gift of the corpus in favour of the donee and a gift of the usufructs only after the lifetime of Fathima Bi and that, during the lifetime of the donor and Fathima Bi, the donee is constituted as a trustee for collecting the usufructs and paying over the same to the donor during his lifetime, and thereafter to his wife, Fathima Bi. We are, therefore, not inclined to accept the contention of the accountable person that she is not bound by the obligation to pay over the income. We are not also inclined to agree with the view of the Tribunal that as the condition to pay over the income to Fathima Bi during her lifetime was not given effect to and as in fact Fathima Bi did not enjoy that right, it could not be said that there was a cesser of that right on her death. It is very difficult to understand this reasoning of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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