Estate duty on wakf property turns on reserved interest and joint maintenance of settlor with relatives, not supervisory control.

Section 12(1) of the Estate Duty Act, 1953 applies only where the settlor reserves an interest in the settled property for life or for a period determined by his death, and the Explanation is triggered only when maintenance is reserved for the settlor jointly with his relatives. A wakf creating a permanent dedication, with only a supervisory power to ensure administration according to the wakfnama, does not amount to a retained interest or a power to alter beneficiaries. Mere provision for the maintenance of the settlor's family or relatives is insufficient to bring the wakf properties into the dutiable estate.

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Issues: Whether the properties comprised in the wakf could be included in the dutiable estate under section 12(1) of the Estate Duty Act, 1953, and whether the Explanation to that provision was attracted on the footing that the settlement provided for the maintenance of the settlor's family and relatives.

Analysis: The wakfnama created a permanent dedication of the properties and distributed the income according to specified objects and beneficiaries. Clause 19 conferred only a supervisory power to ensure administration in accordance with the wakfnama; it did not reserve to the settlor any interest in the settled properties, any power to alter the beneficiaries or objects, or any right enabling him to derive a life interest from the trust income. The provision was materially different from settlements where the settlor retained a wide power to alter beneficiaries or secure personal benefit. The Court also held that the mere circumstance that the wakf made provision for the maintenance of the settlor's family did not attract section 12(1), because the Explanation is not meant to convert every settlement benefiting relatives into a reservation of interest for the settlor. The words in the Explanation require a reservation for the maintenance of the settlor jointly with his relatives, and the conjunction could not be read disjunctively so as to make maintenance of relatives alone sufficient. The whole scheme of section 12(1), including the second proviso, showed that the provision applies only where an interest in the settled property is reserved to the settlor for life or for a period determinable by reference to his death, or where the Explanation in its own terms is satisfied.

Conclusion: The wakf properties were not includible in the dutiable estate under section 12(1), and the answer to the referred question was in favour of the accountable person and against the revenue.

Final Conclusion: The reference was answered by holding that no part of the wakf properties could be brought into the principal value of the estate under section 12(1) of the Estate Duty Act, 1953.

Ratio Decidendi: Section 12(1) applies only when the settlor reserves an interest in the settled property for life or for a period determinable by reference to his death, and the Explanation is attracted only where the settlement reserves maintenance of the settlor jointly with his relatives, not where the settlement merely benefits relatives or gives the settlor a supervisory power over administration.

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