Case: State Bank of India Vs. Special Secretary Land and Land Revenue and Reforms and Land and Land Utilisation Deptt. of W.B. and Others

or otherwise attracts any of the exemptions envisaged under Section 19 of the Act. It is true, as held by this Court, in W.O. Holdsworth case , that whatever be the position of a trustee or a Trust under English law, under Section 3 of the Indian Trusts Act (Trusts Act for short) a trust is an obligation annexed to the ownership of property and arising out of confidence reposed in and accepted by the owner or declared and accepted by him, for the benefit of another or of another or the owner, and puts the trustee thereof under an obligation of executing (sic) the person who reposes or declares the confidence is called the "trustee" (sic); the person for whose benefit the confidence is accepted is called the "beneficiary", the subject-matter of the trust called "trust property" or "trust money" and the "beneficial interest" or "interest" of the beneficiary is his right against the trustee as owner of the trust property, and the instrument, if any, by which the trust is declared, is called the "instrument of trust". The provisions in Section 3 of the Trusts Act, as seen, emphasise the fact that the beneficiary has a right to obtain his beneficial interest or interest against the trustee as owner of the trust property. The trustee, therefore, would, no doubt, become trust propertys owner for the purpose of effectively executing or administering the trust for the benefit of the beneficiaries and for due administration thereof but not for any other purpose. The question which, therefore, arises for our consideration is, whether the owning by State Bank of India of vacant land - the trust property as a trustee for the purpose of discharging the obligations annexed to that property as envisaged under Trusts Act, in the course of executing the trust of administering trust properties, for the benefit of beneficiaries - is to hold such vacant land, i.e., to own such land or to possess such land as owner, as envisaged under Section 19 of the Act, so as to attract the exemption given thereunder 7. Vacant land held under Section 19 of the Act by the State Bank of India must be vacant land owned or possessed as owner thereof because of the definition clause (l) of Section 2 of Act. However, it is difficult for us to think that such owning or possessing as owner of the vacant land by the State Bank of India, could be regarded as referable to any land other than that vacant land to be owned or acquired by it under sub-section (6) of Section 34 of State Bank of India Act for the purpose of providing buildings or other accommodation in which to carry on the business of the State or for providing residences for its officers and other employees. It is equally difficult for us to think that the vacant land held, that is, owned or possessed as owner by any other bank specified in Section 19 of the Act is not its owner with all the rights of ownership including the right of disposal vested in it. Therefore, when the Bank holds the trust properties in due course of executing and administering the trust for the benefit of beneficiaries, it does not hold such property "as the owner" or "possess as owner" envisaged under the Act. In our considered view, no bank holds trust properties as owner envisaged under Section 19 of the Act or possess vacant land as envisaged under Section 19 of the Act. Thus, a bank even though regarded under Trusts Act as the owner of trust property-vacant land for the purpose of executing or administering a trust, it cannot hold a trust property-vacant land as its owner or possessed as owner as could make that land eligible for the benefit of exemption envisaged under Section 19 of the Act. However, it was urged by Dr Shankar Ghosh that if a property held by a public charitable or religious trust is exempted under Section 19 of the Act so long it is required or used for such purpose, private trust also becomes entitled to such exemptions, if the property held by it is used for a charitable purpose. This argument has to be considered in the light of the object sought to be achieved by the Act and not independently of it. The object of the Act is to take over the urban land found in excess of the ceiling area and to utilise the same for public good. The vacant lands found in excess of ceiling areas which become entitled to the benefit of exemption under Section 19 or Section 20, as seen therefrom are those vacant lands which are meant to serve public purposes and not private purpose. Therefore, anyone who is entrusted under a private trust to discharge certain duties as trustee thereof, cannot claim exemption respecting the property of that trust under Section 19(1)(iv). When a bank, which in the course of carrying on its commercial activities under Section 6 of the Banking Regulation Act is required to discharge its duties as the executor or trustee under a will in administering an estate, it does not hold the trust property-vacant land as an executor or trustee of a public charitable or religious trust as would entitle it to claim exemption under Section 19 of the Act, inasmuch as, such trust property-vacant land cannot be that which is required or used for public or charitable purpose. If the provisions of the State Bank of India Act, the Banking Regulation Act and the Trusts Act, to which we have adverted, are understood as pointed out, in their right perspective, the property-vacant land held by a bank as a trustee or executor under a will in the course of carrying on its business cannot get the benefit of exemption envisaged under Section 19(1)(iv) of the Act. The question considered by us is answered, accordingly, though for reasons different from those given by the High Court

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is true, as held by this Court, in W.O. Holdsworth case , that whatever be the position of a trustee or a Trust under English law, under Section 3 of the Indian Trusts Act (Trusts Act for short) a trust is an obligation annexed to the ownership of property and arising out of confidence reposed in and accepted by the owner or declared and accepted by him, for the benefit of another or of another or the owner, and puts the trustee thereof under an obligation of executing (sic) the person who reposes or declares the confidence is called the "trustee" (sic); the person for whose benefit the confidence is accepted is called the "beneficiary", theof the trust called "trust property" or "trust money" and the "beneficial interest" or "interest" of the beneficiary is his right against the trustee as owner of the trust property, and the instrument, if any, by which the trust is declared, is called the "instrument of trust". The provisions in Section 3 of the Trusts Act, as seen, emphasise the fact that the beneficiary has a right to obtain his beneficial interest or interest against the trustee as owner of the trust property. The trustee, therefore, would, no doubt, become trust propertys owner for the purpose of effectively executing or administering the trust for the benefit of the beneficiaries and for due administration thereof but not for any other purpose. The question which, therefore, arises for our consideration is, whether the owning by State Bank of India of vacant landthe trust property as a trustee for the purpose of discharging the obligations annexed to that property as envisaged under Trusts Act, in the course of executing the trust of administering trust properties, for the benefit of beneficiariesis to hold such vacant land, i.e., to own such land or to possess such land as owner, as envisaged under Section 19 of the Act, so as to attract the exemption given thereunderour considered view, no bank holds trust properties as owner envisaged under Section 19 of the Act or possess vacant land as envisaged under Section 19 of the Act. Thus, a bank even though regarded under Trusts Act as the owner of trustland for the purpose of executing or administering a trust, it cannot hold a trustland as its owner or possessed as owner as could make that land eligible for the benefit of exemption envisaged under Section 19 of the Act. However, it was urged by Dr Shankar Ghosh that if a property held by a public charitable or religious trust is exempted under Section 19 of the Act so long it is required or used for such purpose, private trust also becomes entitled to such exemptions, if the property held by it is used for a charitable purpose. This argument has to be considered in the light of the object sought to be achieved by the Act and not independently of it. The object of the Act is to take over the urban land found in excess of the ceiling area and to utilise the same for public good. The vacant lands found in excess of ceiling areas which become entitled to the benefit of exemption under Section 19 or Section 20, as seen therefrom are those vacant lands which are meant to serve public purposes and not private purpose. Therefore, anyone who is entrusted under a private trust to discharge certain duties as trustee thereof, cannot claim exemption respecting the property of that trust under Section 19(1)(iv). When a bank, which in the course of carrying on its commercial activities under Section 6 of the Banking Regulation Act is required to discharge its duties as the executor or trustee under a will in administering an estate, it does not hold the trustland as an executor or trustee of a public charitable or religious trust as would entitle it to claim exemption under Section 19 of the Act, inasmuch as, such trustland cannot be that which is required or used for public or charitable purpose. If the provisions of the State Bank of India Act, the Banking Regulation Act and the Trusts Act, to which we have adverted, are understood as pointed out, in their right perspective, theland held by a bank as a trustee or executor under a will in the course of carrying on its business cannot get the benefit of exemption envisaged under Section 19(1)(iv) of the Act. The question considered by us is answered, accordingly, though for reasons different from those given by the High Court