Wakf as settlement under estate duty law: successive beneficial enjoyment and reserved interests can bring property within tax.

A wakf deed can constitute a "settlement" under the Estate Duty Act where it creates successive beneficial enjoyment among descendants and then for charitable purposes. The legal focus is on the succession of benefits, not merely on technical vesting of title, so the wakf property is treated as settled property. A power to amend the deed, alter beneficiaries, and vary shares may also amount to a reserved interest if it allows the settlor to include himself as a beneficiary and retain a life interest. A separate right of residence in specified properties was likewise treated as an interest retained by the settlor, making the exclusion proviso inapplicable and bringing the property within section 12.

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Issues: Whether the wakf properties created by the deceased constituted settled property passing under a settlement so as to attract section 12 of the Estate Duty Act, and whether the deceased had reserved an interest in the property within the meaning of that section.

Analysis: The expression "settlement" in the Estate Duty Act was held to include a dedication or endowment, and the wakf was treated as a settlement because the beneficial enjoyment under the deed moved successively among the settlor's descendants and thereafter to charitable objects. The Court held that "settled property" is concerned with successive beneficial enjoyment, not merely with the technical vesting of title, and that the wakf deed created such a succession of benefits. The reserved power to amend the deed, alter beneficiaries, and vary shares was held wide enough to enable the settlor to include himself among the beneficiaries and thus to reserve a life interest. The separate right of residence in specified properties was also treated as an interest retained by the settlor, and the exclusion proviso to section 12 was found inapplicable.

Conclusion: The wakf property fell within section 12 of the Estate Duty Act, and the amount was rightly included in the principal value of the estate and charged to estate duty.

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