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

2. Facts in Civil Appeal No. 3573 of 1988 areThat certain David Platt Sunderdale (to be called David) held and possessed property No. 350, Netaji Subhash Chandra Bose Road, Tollygunge, Calcutta Comprised a total extent of 4208.04 square metres. The competent authorities under the Act found that extent to be in excess of ceiling area by 1933.02 square metres. State Bank was an executor/trustee under a will of David for that property, was issued a notice by the competent authorities oncalling for the filing of a draft statement under Section 8(1) of the Act. But, the State Bank filed an application before the competent authority claiming exemption of the property under Section 19(1)(iv) and Section 20 of the Act. However, when that application was rejected and the order of rejection was upheld by Higher Forums under the Act, the same were impugned in a writ petition filed by the State Bank in the High Court of Calcutta. That writ petition was allowed by a learned Single Judge of that High Court by his order datedbecause of his view that the State Bank was entitled to exemption under Section 19 of the Act. The appeal, preferred against that order of learned Single Judge was allowed by the Division Bench of the same Court and dismissed the writ petition. The judgment of the Division Bench made in appeal has given rise to Civil Appeal No. 3573 of 1988 filed by the State Bank by obtaining a certificate therefor from High Court3. Facts in Civil Appeal No. 3574 of 1988 areCertain Ajit Kumar Banerjee (to be called Banerjee) owned a property bearing No.Diamond Harbour Road of a total area of 4208.0 square metres. The competent authority under the Act when found that the vacant land of the property exceeded the permitted ceiling area, it issued a notice under Section 8(1) of the Act, calling upon the State Bank which was an executor/trustee in respect of that property under a will of Banerjee, to file draft statement. But the State Bank made an application claiming exemption under Section 19(1)(iv) and Section 20 of the Act. However, when that application was rejected by the competent authority, the order of rejection was challenged by the State Bank in a writ petition filed in the High Court. The said writ petition was allowed by a learned Single Judge of the High Court finding that the State Bank since held the lands as a trustee, exemption in Section 19(1)(iv) of the Act was attracted. But appeal No. 375 of 1986 filed against the orders of the learned Single Judge, were allowed by the Division Bench of the High Court by its judgment datedThe Division Bench found that the lands held by the Bank for the benefit of either a residuary legatee or forprivate individuals, did not attract the exemption. Therefore, the State Bank, the trustee under private trust, was not entitled to claim exemption in respect of vacant lands of the Trust under Section 19(1)(iv), inasmuch as acceptance of such claim, could lead to ridiculous and anomalous situation. That judgment of the Division Bench of the High Court rendered in appeal of the State has given rise to Civil Appeal No. 3574 of 1988 filed by State Bank by obtaining a certificate therefor from the High Court

Reasoning: 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