Case: Abinash Chandra Bannerji And Others Vs. Uttarpara Hitakari Sabha And Others

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, Uttarpara 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 s. 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 property 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, i.e., 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.

Court's reasoning:
It is common case that if the will created a trust, it would not fall under any one of the exceptions mentioned in thedid 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 foundAt 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 testators nephew and that the Sabha is the only institution entitled to receive the 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 bona fide purchaser for value of the property bequeathed to the legalquestion 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 whetherthe 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, 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 aother question arises in this appeal.