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TMI Blog1953 (10) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... a deed by which it purported to create a trust for the payment of pensions to the members of its staff. The deed declared that a pension fund had been constituted and established. It then recited that a sum of Rs. 2,00,000 had already been made over to three persons who were referred to as the " present trustees " and proceeded to state that the fund would consist in the first instance of the said sum of Rs. 2,00,000, and that there would be added to it such further contributions that the bank might make from time to time, though it would not be bound to make such contributions. In the course of the accounting year 1946-47, the bank made a further payment of Rs. 2,00,000 to this is fund. In its assessment for the assessment year 1947-48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held to be void. " It further held that even if the ownership of the money had passed over to the trustees, still the further provision regarding the application of the money to the payment of pensions being entirely ineffective and void, the money cannot be said to have been expended for the purpose of the business, and that therefore was not an expenditure or an expenditure for the purposes of the business within the meaning of Section 10(2)(xv) of the Act. This was also the only contention urged before us by Shri N. C. Chatterjee appearing on behalf of the appellant. Section 3 of the Indian Trusts Act (II of 1882) defines a trust as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uropean and Indian staff of the bank to whom pensions shall have been granted by the bank. Clause 8 provided that any officer on the European staff of the bank who had been in the service of the bank for at least twenty five years and any officer or other employee on the Indian staff of the bank who had been in the service of the bank for at least thirty years might apply to the bank for a pension, and that in special circumstances the bank might grant pensions to employees who had not completed the respective periods of service abovementioned. Clause 9 provided for the withdrawal, modification or determination by the bank of any pensions payable thereunder when in its opinion the conduct of the recipient or the circumstances of the case ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to the bank for a pension. But there was nothing in the terms of the deed which imposed any obligation on the bank or its officers duly authorised in that behalf to grant any pension to any such applicant. The pension if granted could also be withdrawn, modified or determined under the directions of the bank or any officer of the bank duly authorised in that behalf and such directions were binding on the trustees. The regulations in relation to the fund could also be altered and new regulations could be made to the exclusion of or in addition to all or any of the regulations contained in the deed of trust. It was open under the above provisions for the bank or its officers duly authorised in that behalf to grant no pension at all to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is thus summarised by Lewin on Trusts, Fifteenth Edition, page 324 :-- " Powers, in the sense in which the term is commonly used, may be distributed into mere powers, and powers in the nature of a trust. The former are powers in the proper sense of the word--that is not imperative, but purely discretionary ; powers which the trustee cannot be compelled to execute, and which, on failure of the trustee, cannot be executed vicariously by the court. The latter, on the other hand, are not discretionary, but imperative, have all the nature and substance of a trust, and ought rather, as Lord Hardwicke observed, to be designated by the name of trusts. 'It is perfectly clear,' said Lord Eldon, 'that where there is a mere power, and that power i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined by the bank or its officers duly authorised in that behalf as therein mentioned. Under the circumstances it could not be said that there was a power in the nature of a trust which could be exercised by the court if the donee of the power for some reason or other did not exercise the same. It will be appropriate at this stage to consider whether any beneficiary claiming to be entitled to a pension under the terms of the deed could approach the court for the enforcement of any provision purporting to have been made for his benefit. Even though he may be qualified under clause 8 to apply for the grant of a pension he could not certainly enforce that provision because there was no obligation imposed at all on the bank or its officers dul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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