TaxTMI 
TaxTMI 
2009 (3) TMI 1023
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....r of the Nizam through Dullan Pasha Begum Saheba and his step brother have been mentioned in part I, the remaining thirteen sons of the Nizam and the children of his deceased son, Kazim Jah were mentioned in Part II and seventeen daughters have been mentioned in part III of the third schedule. The dispute is with regard to the terms Remaining sons and Remaining Daughters Fund' expressed in the Will. The children of some of the deceased remaining sons and remaining daughters seek for a direction to the trustees to execute the Trust Deed by giving the correct interpretation to clauses 9 to 11 of the Trust Deed. The dispute lies in the interpretation of some of the important clauses of the Trust deed and particularly clauses 9 and 10 thereof. Trust Deed The preamble of the Trust Deed dated 29.03.1951 states: "and WHEREAS the settler out of natural love and affection which he bears towards his relatives specified in the Third Schedule hereunder written and for diverse other good causes and considerations him there unto moving, is desirous of making a settlement of the said articles specified in the First Schedule hereunder written and of the said securities specified....
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....he daughter of the settler by Dulhan pasha Begum Prince Muazzam Jah, the second son of the settlor in the manner as mentioned in clause 7. 7 One such equal part to and hold the same upon the trust for Shahbada Nawab Basalat Jha Bahadur the step brother of the settler in the manner as mentioned in clause 8. 7 Three such equal parts to and hold the same upon trust for the sons, grandsons and granddaughters of the settler as mentioned in Part II of the third schedule and as mentioned in clause 9 7 The remaining three equal parts to and hold the same upon trust for the daughters of the settler specified in Part III of the third schedule to the deed and as mentioned in clause 10. Clause 9 of the Trust Deed reads as under: "9. The Trustees shall hold the said three equal parts of the Principal Fund allocated to the sons, grandsons and grand daughters of the Settlor mentioned in part II of the Third Schedule hereunder written (hereinafter called "the Remaining Sons' Fund" UPON TRUST to divide the same or to treat the same as notionally divided into 126 (One hundred twenty six) equal units and to allocate such 126 units to the respective beneficia....
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....t II of the Third Schedule hereunder written) shall die without leaving any child or remoter issue him surviving then the Trustees shall on his death hold the units of the Remaining Sons' Fund allocated to such beneficiary as aforesaid UPON TRUST to divide the same into two equal parts and to allocate one such equal part to the remaining beneficiaries specified in Part II of the Third Schedule hereunder written (including 7(seven) grandchildren of the Settlor specified in item 14 of Part II of the Third Schedule hereunder written). In the shares and the proportions mentioned against their respective names in second column thereof and to allocate the other such equal part to the daughters of the Settlor specified in the part III of the Third Schedule hereunder written in equal shares and proportions and to hold and stand possessed of the respective shares which on such division and allocation shall go through respective beneficiaries specified in Parts II and III of the Third Schedule hereunder written Upon Trust to add the same to and amalgamate the ame with the respective units of the Remaining Sons' Fund or the Remaining Daughters' Fund hereinafter referred to (as the....
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....iciaries specified in Part II of the Third Schedule hereunder written as specified against their respective names in the second column thereof and to hold and stand possessed of the respective shares which on such division and allocation shall go to the respective beneficiaries specified in parts II and III of the Third Schedule hereunder written UPON TRUST to add the same to and amalgamate the same with the respective units of the Remaining Sons' Fund or the Remaining Daughters' Fund (as the case may be) originally allocated to them respectively under the provisions of the preceding clause (9) hereof and this Clause and to hold the same respectively upon the same respective units as those upon which the respective original units to which they are added and with which they are amalgamated as aforesaid are directed to be held under the provisions of the preceding clause 9 hereof and this clause." Clause 11 is a residuary clause providing for the manner in which the trust is to be applied in respect of the ultimate beneficiaries. Enactment The State enacted the Nizam's Trust Deeds (Validation) Act, 1950 (for short "the 1950 Act"). It received the Presidential Ass....
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.... the beneficiaries dying issueless or not, and thereafter allocate their shares to their legal heirs in accordance with law, (2) Issue a perpetual injunction against the trustees restraining them mis-interpreting or wrongly applying the provisions of clauses 8 to 10 of the Trust Deed, or (3) Restraining the trustees from making allocations or amalgamations of Trust Funds concerned and making any payments, without giving two weeks advance notice to plaintiffs." Forty similarly placed children of the deceased sons and daughters filed another suit which was marked as O.S. No. 540 of 1998 for declaration that they have vested rights in the corpus and accretion of the remaining sons fund' to the extent of Rs. 2,22,99,200/-. In the aforementioned suit, heirs and legal representatives of the grand children of the settler were impleaded as parties. In the said suit, the following three issues were framed: "1. Whether the plaintiffs are entitled for declaration in respect of the corpus fund as prayed for? 2. Whether the plaintiffs are entitled for mandatory injunction against the defendants and their successor trustees and secreta....
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....all be divided into (2) parts and to allocate one such part to the remaining beneficiaries specified in Part - II of the 3rd Schedule including grandchildren in the shares and proportions mentioned against their respective names in the second column thereof and to allocate the other such part to the daughters of the settlor specified in part - III of the Third Schedule hereunder written, in the equal shares and proportions. Similarly, the direction is repeated for clause 10(e). This direction can be implemented only if the contention of the children of deceased remaining sons and daughter is accepted. Then only the units allocated to the deceased remaining sons or remaining daughters can be distributed in shares and proportions as mentioned against their respective names in the second column thereof. If the interpretation of Trustees and surviving remaining sons and daughters is accepted, this direction of the Settlor cannot be implemented, for the reasons that consequent upon death, some of the remaining sons and daughters, there cannot be 126 units in Part II or 17 units in part - III". (v) "...The Settlor did not use the word "remaining daughters" in clause 9(e) o....
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....n of the impugned judgment held: "(i) The impugned order is the common order passed in two O.Ps i.e., O.P. No. 173 of 1998 and O.P. No. 253 of 1998 and the two suits as preliminary issues. Although the order insofar as it relates to the two O.Ps. is bad for want of necessary jurisdiction, the order in so far as it relates to the preliminary issues in the two suits is concerned is unquestionable on the point of jurisdiction..." (ii) "...The petitioners who preferred these two revision petitions have surprisingly not filed appropriate proceedings as against the order pertaining to the two suits. In that view of the matter, the common order becomes unassailable except holding that the original petitions are not maintainable." Despite the aforementioned findings, the High Court proceeded to consider the merit of the matter holding: "(i) "...The various legal pleas thus raised by the learned counsel for the petitioners attacking the Trust deed and the Nizam's trust Deeds Validation Act and the Validation Amendment Act are therefore not tenable and cannot be countenanced". (ii) "...In both these cases, suits ought to have been filed ....
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....s preferred thereagainst by the trustees. A Civil Miscellaneous Petition, which was marked as CMP No. 11230 of 2000, has also been filed. Concededly, the said appeal and the civil miscellaneous petition are pending. By an order dated 6.07.2000, the High Court directed that the aforementioned decree dated 3.04.2000 of the City Civil Court shall not be given effect to pending notice. This Court by an order dated 10.04.2000 issued notices in the special leave petitions filed by the respondents. By an order dated 21.01.2000, special leave to appeal has been granted, observing: "pending the disposal of the appeal, the High court may proceed to hear and dispose of CCA No. 114 of 2000 but it shall do so independently and uninfluenced by the judgment and order under challenge insofar as it deals with the merits." Submissions Mr. P.P. Rao, learned senior counsel appearing on behalf of the appellant, would raise the following contentions: (i) Whether in view of the fact that the civil revision applications were filed against the order dated 21.07.1999 passed in original applications which having been found to be not maintainable, the High Court shoul....
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....mitted a serious error in passing the impugned judgment insofar as it failed to construe the principles of construction of a trust deed by placing itself in the armchair of the settlor. (x) The settlor having intended to provide some property not only to the sons and daughters and the grand-children who are alive could not have intended to deprive heirs and legal representatives of those who had died issueless. (xi) The trustees in implementing the deed of trust could not have ignored a well thought of scheme of the settlor in terms whereof he intended to make no discrimination between the heirs and legal representatives and by reason whereof, he intended to make provisions not only for the children and grand-children who were then alive but also for the grand-children and great-grand children who were yet to be born. (xii) From a perusal of the deed of trust, it would be evident that wherever the settlor intended to grant special benefit either to a heir or to a trust, he having specifically provided therefor. Having regard to the fact that the heirs and legal representatives of the deceased's son or daughter having not been exclude....
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....xercised, the High Court should not have interfered therewith. (viii) The findings on the suit being subject to passing of a decree, a civil revision application against the order dated 21.07.1999 was maintainable. (ix) The trust deed should be construed in a manner so as to achieve a certainty, as provided for under Section 6 of the Indian Trusts Act read with illustrations (c) and (d) appended thereto. (x) Respondents being the children of the predecessor-in-interest and daughters having got the benefits cannot claim any benefit once over again on the ground that they were also entitled as heirs and legal representatives of the pre-deceased sons and daughters who had died issueless. (xi) Special leave having been granted, in the peculiar facts and circumstances of this case, this Court should exercise its discretionary jurisdiction under Article 139A of the Constitution of India and render a final decision in the matter keeping in view the passage of time. (xii) Article 136 of the Constitution of India should be widely construed so as to take into consideration a situation of this nature where a litigation....
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....d. A civil miscellaneous application has also been filed. A decree was not passed pursuant to or in furtherance of the order dated 21.07.1999. It may be true that in terms of Section 105 of the Code of Civil Procedure when an appeal against the final decree is passed, legality of the said order could be challenged in the appeal. Only because a civil revision application has not been filed, the same, in our opinion, would not attract the principle of res judicata as an appeal from the final decree could still be maintained. In C.V. Rajendran (supra), while holding that the principle of res judicata applies in different stages of the same proceedings, it was held: "...Here what is sought to be reagitated is not really the order of remand but the order deciding a germane issue which was allowed to become final at an earlier stage of the same suit. The principle of res judicata applies as between two stages in the same litigation so that if an issue has been decided at an earlier stage against a party, it cannot be allowed to be reagitated by him at a subsequent stage in the same suit or proceedings. This position is laid down in Hope Plantations Ltd. v. Taluk Land Board....
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....tion of continuing stay of the reference proceedings pending decision of the appeal, could hardly justify interference on revision under Section 115 of the Code when there was no illegality or material irregularity committed by the learned Additional District Judge in his manner of dealing with this question. It seems to us that in this matter the High Court treated the revision virtually as if it was an appeal." Reliance has also been placed by Mr. Rao on Ouseph Mathai (supra) wherein it was held: "...In fact power under this article casts a duty upon the High Court to keep the inferior courts and tribunals within the limits of their authority and that they do not cross the limits, ensuring the performance of duties by such courts and tribunals in accordance with law conferring powers within the ambit of the enactments creating such courts and tribunals. Only wrong decisions may not be a ground for the exercise of jurisdiction under this article unless the wrong is referable to grave dereliction of duty and flagrant abuse of power by the subordinate courts and tribunals resulting in grave injustice to any party." A civil revision application although must necessaril....
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....circumstances exist that substantial and grave injustice has been done. It was held: "20. In view of the above decisions, even though we are now dealing with the appeal after grant of special leave, we are not bound to go into merits and even if we do so and declare the law or point out the error - still we may not interfere if the justice of the case on facts does not require interference or if we feel that the relief could be moulded in a different fashion..." There is no quarrel with the aforementioned proposition, but, as has been noticed in that case itself the discretionary jurisdiction is to be exercised keeping in view the fact and circumstance of each case and no hard and fast rule can be laid down therefor. There is another aspect of the matter which cannot also be lost sight of. Applications were filed before the District Court also under Sections 56 and 61 of the Indian Trusts Act praying for issuance of directions to the trustees. Such directions if issued ordinarily would be binding on them. The trustees, therefore, would be entitled to take recourse to a remedy available before a superior court, if they are aggrieved by such direction. If the High Cour....