Appeal No 147 of 1958
Appeal from the judgment and decree dated January 4 1955 of the Allahabad High Court in Special Appeal No 36 of 1955
A V Viswanatha Sastri C P Lal and G C Mathur for the appellants
K B Bagchi section N Mukherjee for P K Bose for the respondent No 1 1961
April 18
The Judgment of the Court was delivered by SUBBA RAO J
This appeal by certificate raises the question of construction of a will executed by one Pyare Mohan Bannerji
29 The facts giving rise to this appeal lie in a small compass and they are as follows Pyare Mohan Bannerji died in October 1874 leaving behind him considerable property
He executed a will dated February 12 1874 making various bequests including the payment of certain amounts to the first respondent Uttar para Hitakari Sabha
After his death his widow held the property for life till her death on March 25 1945
Thereafter the property went into the possession of the appellants who are the heirs at law of the testator
On March 17 1950 the first respondent Uttarpara Hitakari Sabha hereinafter referred to as the Sabha filed an application in the High Court of Judicature at Allahabad under section 10 of the Official Trustees Act Act II of 1913 claiming that the late Pyare Mohan Bannerji had created a trust by his will and praying that an official trustee be appointed to be the trustee of the properties of the trust
This was registered as Testamentary Case No 9 of 1950
The appellants contested the claim of the Sabha and contended inter alia that no trust had been created by the testator and that the appellants being the legal heirs of the testator were entitled to succeed to the entire pro perty left by him
Mootham J as he then was who heard the said case at the first instance held that by his last will Pyare Mohan Bannerji created a trust in favour of the Sabha and appointed the Official Trustee a trustee of all the properties left by Pyare Mohan Bannerji specified in Schedule B to the petition
On appeal a division bench of the said High Court consisting of Malik C J and Agarwala J agreed with Mootham C J that the will created a trust in favour of the Sabha but the learned Judges held that the Sabha was entitled only to a half share in the cash and properties pertaining to the estate of the said testator and appointed the Official Trustee as trustee only in regard to the said share on that basis suitable directions were given
The first respondent accepted that position but the appellants ie the persons claiming to be the heirs at law preferred the present appeal against the judgment of the High Court in so far as it went against them
30 Learned counsel for the appellants contends that under the will not a trust but only a charge was created in favour of the first respondent and therefore the first respondent could not invoke in aid the provisions of section 10 of the Act
Section 10 of the Act reads 1 If any property is subject to a trust other than a trust which the Official Trustee is prohibited from accepting under the provisions of this Act and there is no trustee within the local limits of the ordinary or extraordinary original civil jurisdiction of the High Court willing or capable to act in the trust the High Court may on application make an order for the appointment of the Official Trustee by that name with his consent to be the trustee of such property
 It is common case that if the will created a trust it would not fall under any one of the exceptions mentioned in the section
Therefore the only question is whether the will created a trust or a charge in favour of the first respondent
The concepts of trust and charge are well defined
A trust is an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner
 Where property of one person is made security for the payment of money to another the latter person is said to have a charge on the property
 The boundaries between the two concepts are well demarcated but more often than not courts found considerable difficulty in construing a particular document to place it in one or other of the categories
The same difficulty was encountered even in England
The test laid down for marking out the one from the other by some of the authoritative text books on the subject may be useful in construing the will in question
In Halsbury s Laws of England 2nd Edn
33 Lord Hailsham the distinction between the two concepts has been stated thus at p 98 Where property is given to a person upon condition that he does a certain act or confers a 31 certain benefit on another person the condition may constitutes a trust if it is directed to be or must necessarily be performed and satisfied out of the property and consequently imposes a fiduciary obliga tion in respect of the property but it will not be construed as a trust if this is not the case and the condition merely imposes a collateral duty
Similarly a devise of land upon condition of paying a sum of money or an annuity does not create a trust though it may create a charge
A charge does not in itself create a trust but it may do so if it is coupled with other trusts or the context otherwise so requires
Conversely a trust may amount merely to a charge Lord St Leonards points out Sugden on Powers 7th Edn p 122 that What by the old law was deemed a devise upon condition would now perhaps in almost every case be construed as a devise in fee upon trust and by this construction instead of the heir taking advantage of the condition broken the cestui que trust can compel an observance of the trust by suit in equity
 In The Commissioners of Charitable Donations and Bequests vs Wybrants 1 a testator had devised lands to trustees and their heirs upon trust to grant and convey the same to the use of John Wybrants for life subject nevertheless to and charged and chargeable with  four annuities three of which were to be paid to charitable institutions and the fourth to the poor of a parish
In construing that provision the Lord Chancellor said at p 285 It certainly is not necessary to use the word trust  in order to create an express trust
I do not intend to lay it down that every charge creates a trust although it imposes a burden but a charge may create a trust depending on the nature of the charge
In Bailey vs Ekins 2 Lord Elton said he was confident Lord Thurlow s opinion was that a charge of debts is a devise of the estate in substance and effect pro tanto upon trust to pay the 1 1845 69 RR 278
2  323
32 debtsand this is supported by the current of authorities
The principle is no less powerful in the case of charities particularly where the charity is to a fluctuating uncertain body like the poor of a parish
The testator gives the estate to one subject to this charge
Who is to pay the annuities but the person who is liable to the burden and this in the case of a charity impresses him with the character of a trustee for the charity
By the ancient rule of equity no one could acquire an estate with notice of a charitable use without being liable to it
 The fact that a beneficial interest is also created in favour of the trustees in respect of the property subject to a trust does not make the transaction any the less a trust
The law permits a person to bequeath his property to another subject to a trust in respect of a portion of the income in favour of a third party or a charity
On this subject in Lewin on Trusts it is stated at P 133 Upon this subject a distinction must be observed between a devise to a person for a particular purpose with no intention of conferring the beneficial interest and a devise with the view of conferring the beneficial interest but subject to a particular injunction
 So too Tudor in his book on Charities 5th Edn says much to the same effect at p 52 A charitable trust may be made to attach to a part of the property only or it may be limited to particular payments directed to be made out of the income as in the numerous cases where property has been given to a college or municipal corporation or city guild upon trust or to the intent that certain specified charitable payments shall be made or subject to or charged with certain charitable payments
In these cases as will be seen the donees as a rule take beneficially subject only to the specified charitable payments
 The said tests may afford a guide to ascertain whether a document creates a charge or a trust but they are subject to the fundamental rule of construction that a trust may be created in language sufficient 33 to show the intention and no technical words are necessary the said intention must be gathered from a fair reading of the provisions of the document
In the light of the foregoing discussion let us look at the provisions of the will to ascertain the express intention of the testator
At the time the testator executed the will he had a wife and a nephew by name Sital Prasad Chatterji but no children
He had many other close relatives and dependents
He was also charitably disposed
He executed the will making suitable provision for his wife nephew relatives and for charities
He could carry out his intention in two ways he could bequeath his entire property to his widow and nephew subject to a fiduciary obligation imposed on them to pay certain amounts to the relatives and the charities or he could give the entire property to his widow and nephew subject to the payment of certain amounts charged on the said property
The question is what did he intend to do by this document He did not use either the word trust or charge and therefore we must gather the intention only from the circumstances obtaining at the time the document was executed and the recitals found therein
Under the will the testator made the following bequests depending upon different contingencies Firstly the property was given to his wife and nephew in equal shares for their lifetime subject to the payment of all his debts annuities and charges it is also provided therein for the sale of a standing jungle in Doomree and Sukhiae in the Gorakhpore District for the purpose of discharging the debts
The second contingency related to the event of the testator and his nephew begetting son or sons in that event after the lifetime of his wife and nephew the son or sons of his nephew would get one fourth share subject to their paying one fourth of the annuities and charges and whole of the remainder was given to his son or sons subject to their paying the remaining three fourths of the annuities and charges
The third contingency related to the testator getting no children but his nephew having sons in that event after the 34 death of his wife and nephew the whole of his property would go to the said son or sons subject to the said annuities and charges
In the event of the testator having children and the nephew having no son or sons after the death of his wife and nephew the property would go to his children subject to the payment of annuities and charges mentioned in the first portion of the will
The last contingency contemplated was that neither the testator nor his nephew had any issue in that event the whole of the property was given to his legal heirs subject to the payment of annuities and charges
The quantum of bequests made in favour of the Sabha expanded from contingency to contingency
During the lifetime of the nephew and the widow the said Sabha got rupees fifteen per month
In the event of either the testator or his nephew not having any children the direction was that the said Sabha should get rupees fifty per month
In that contingency not only the said Sabha but any other institution which took its place  would get the said amount
It was also mentioned that the amount should be given only to be spent in paying the school fees of indigent boys of Coterie reading in the Ooterpara School and whose parents or guardians might not have the means to pay their school fees
On the happening of the last contingency that is both the testator and his nephew dying without children his legal heirs took the property subject to the payment of half of the net income to the said Sabha or any institution which might take its place
The said amount was directed to be paid thus Rupees fifty per month in payment of schooling fees of indigent boys of Ooterpara reading in the Ooterpara school and the balance if any as scholarships to persons resident of Ooterpara or failing such of Bengal who after passing the entrance examination of the Calcutta University may wish to learn practical agriculture or Chemistry or Mechanics
 At present it is common case that all the relatives for whom provision was made in the will passed away that there are no daughters of testator s nephew and that the Sabha is the only institution entitled to receive the 35 amounts provided for under the will
We are therefore only concerned with the question whether a trust was created in favour of the first respondent or not on the happening of the last contingency namely the testator leaving no children and his nephew no sons
On the happening of that event the property passed to his legal heirs
When that stage was reached the testator was more interested in charities than to make provision for persons for whom he had love and affection
The amount was payable to the Sabha or any other institution which might take its place
Further there was a direction that the said amount should be spent towards specified charitable purposes
The direction was couched in an elastic form to prevent the charitable object being defeated
The charity was conceived to be a permanent one and it was necessary that the regular payment of the amount was secured
It is therefore clear that under the will on the happening of the said contingency the testator clearly intended that his legal heirs should regularly pay half the net income to the first respondent so that the specified charities may be carried out perpetually
That object would not be achieved if the first respondent was placed in the position of a creditor with a charge on the property with an off chance of the charge being defeated by a bonafide purchaser for value of the property bequeathed to the legal heirs
Learned counsel emphasized the fact that under the will the first respondent had to spend the moneys for specified objects and not the legal heirs and contended that the first respondent might be in the position of a trustee in respect of the amounts received from the legal heirs but the legal heirs were not trustees in respect of the charity
The question is not whether the legal heirs or the first respondent are the trustees in respect of the fund after it reached the hands of the first respondent but the question is whether the legal heirs as owners of the property were under a fiduciary obligation to pay the said amount for charitable purposes
Having regard to the circumstances visualized at the time the last contingency happened 36 the fluctuating amount the donees had to pay the permanent nature of the charity and the declared intention of the testator to pay as much as half the net income towards the carrying out of the said charitable object we hold that the legal heirs took the property of the testator subject to a trust rather than a charge
No other question arises in this appeal
For the foregoing reasons we hold that the conclusion arrived at by the High Court is correct
In the result the appeal fails and is dismissed with costs
Appeal dismissed


Summary:
One P died in 1874 leaving considerable property
He also left a will which provided for several contingencies the first respondent was given an interest under each contingency which was enlarged from contingency to contingency
Under the last contingency which happened the entire property was given to the heirs with a direction that half of the income of the property be given to the first respondent
The heirs contended that the direction merely created a charge and not a trust of half of the property
Held that the direction created a trust rather than a charge
The charity was conceived to be a permanent one and it was necessary to secure regular payments to it
The testator clearly intended that the heirs should regularly pay half the income to the first respondent so that the specified charities may be carried on perpetually
This object could not be achieved if the direction merely created a charge and not a trust
The Commissioners of Charitable Donations and Bequests vs Wybrants  1845 69 R R 278 and Bailey vs Ekins 7 Ves 319 referred to