Bombay High Court
Zoolfiqar Ali Currimbhoy Ebrahim vs The Official Trustee Of Maharashtra on 27 July, 1966
Equivalent citations: (1967)69BOMLR326
JUDGMENT Tarkunde, J.
1. [His Lordship after stating the facts, proceeded.] A preliminary objection to the maintainability of this petition was taken be-for me by Mr. Chagla on behalf of respondents Nos. 6 to 8. Respondent No. 8 is the Fourth Baronet; respondent No. 6 is his minor son; and respondent No. 7 is his mother, being the second wife of the Third Baronet. Mr. Chagla urged that this petition is not maintainable because the Repealing Act, under which the petition is filed, is itself ultra vires the Bombay State Legislature. The Act is ultra vires, according to Mr. Chagla, because it violates Articles 14 and 31 of the Constitution and also because it was beyond the legislative competence of the Bombay State Legislature to pass such an Act. Mr. Chagla expressly told me that respondents Nos. 6 to 8 do not challenge the Act on the ground that it violates Article 19(1)(f) of the Constitution, the reason being that respondents Nos. 6 to 8 are not citizens of India. I may add that, if respondents Nos. 6 to 8 were able to challenge the Repealing Act on the ground that it imposes unreasonable restrictions on the right guaranteed under Article 19(1)(f) of the Constitution, they might have been able to make out an arguable case. As I will show while dealing with the various claims on the merits, what the Repealing Act has achieved is to divest the Custodian of a valuable interest which was vested in him and to debar respondent No. 6 from acquiring a beneficial life interest in the trust properties which he might have acquired, and on the other hand, to allow the trust properties to go to persons who, apart from the Repealing Act, did not have the least moral or legal right thereto. It appears to me that, as a result of the Repealing Act, large shares in the trust properties (which I am told are at present of the value of between Rs. 39-lakhs and Rs. 40-lakhs) will go to some of the claimants as a mere windfall.
2. A notice of the preliminary objection to the validity of the Repealing Act was given to the Advocate General. The learned Advocate General appeared and at his request the State of Bombay was made a party-respondent.
3. A preliminary objection to Mr. Chagla's preliminary objection was taken by Mr. Bhabha on behalf of respondent No. 9, one of the surviving sons of the First Baronet. Mr. Bhabha urged that respondents Nos. 6 to 8 have no "immediate and direct" interest in the trust properties and they are, therefore, not entitled to challenge the validity of the Repealing Act. Mr. Bhabha pointed out that respondent No. 8's beneficial interest in the trust properties had vested in the Custodian prior to the Repealing Act, that the only right of respondent No. 6 was in the nature of spes successionis, and that respondent No. 7 (mother of respondent No. 8) also does not have any immediate interest in the trust properties. In support of his contention, Mr. Bhabha relied on certain observations in the minority judgment of Das J. in DwurTcadas Shri-nivas of Bombay v. The Sholapur Spinning & Weaving Co. Ltd. [1954] S.C.R. 674. The portion of the judgment of Das J. to which my attention was drawn was the one in which the learned Judge dealt with the effect of Chiranjitlal Chowdhuri v. The Union of India [1950] S.C.R. 869 and pointed out that a person who challenged the constitutionality of an Act on the ground that the Act was Violative of Articles 19(1)(f) and 31 of the Constitution must rely upon the plea of infringement of his own fundamental rights and not the alleged infringement of the fundamental rights of somebody else. I am of the view that Mr. Bhabha's objection was not weir taken. In the first place, the preliminary objection taken by Mr. Chagla to the validity of the Repealing Act was not confined to the plea that the Act was violative of fundamental rights relating to property. Secondly, the preliminary objection was not advanced by Mr. Chagla on the ground that the fundamental rights of some persons other than respondents Nos. 6 to 8 were violated by the provisions of the Repealing Act. If respondents Nos. 6 to 8 did not have any rights in the trust properties when the Repealing Act was passed, that aspect of the matter can, if necessary, be considered while examining on merits their plea that the Repealing Act is violative of Article 31 of the Constitution.
4. Mr. Chagla's plea that the provisions of the Repealing Act amount to a denial of equality before the law or the equal protection of the laws, guaranteed by the Article 14 of the Constitution, was based on a comparison of one of the provisions of the Repealing Act with the corresponding provision of two other Bombay Acts by which other Baronetcy Trusts were extinguished. Those Acts werethe Sir Chimibhai Madhavlal Ranchhodlal Baronetcy (Repealing) Act, 1956 (Bombay Act No. T of 1957), and the Sir Sassoon Jacob David Baronetcy (Repealing) Act, 1957 (Act No. 36 of 1957). By both these Acts the trusts created by the corresponding Baronetcy Acts were revoked and extinguished. It was, however, provided by Section 2(7;) of the Sir Chinubhai Madhavlal Ranchhodlal Baronetcy (Repealing) Act, 1956, that from the commencement of that. Act all the trust properties shall be deemed to be transferred to, and shall vest in, the present Baronet, Provision to the same effect was made by Section 2(6) of the Sir Sassoon Jacob David Baronetcy (Repealing) Act, 1957, The present Repealing Act, however, instead of transferring the trust properties to the present Baronet (respondent No. 8), as was done in the earlier Acts, provided by Section 4(7) that the Official Trustee shall hold the trust properties upon trust "to distribute the same amongst the persons rightfully entitled thereto according to law". There is undoubtedly a substantial difference in the provisions with regard to the disposal of the trust properties in the present Repealing Act and the two Acts mentioned above. The difference, however, does not. amount to a discrimination so as to constitute a violation of the fundamental rights guaranteed by Article 14. The present Repealing Act and the two Acts mentioned above are private Acts, and it is not possible to assume that they were, passed in identical circumstances. One obvious difference was that in the case of the impugned Repealing Act the present Baronet was and is an evacuee, whereas the then Baronets in the two other cases were not. The difference between the impugned Repealing Act and the other two Acts relates to the rights in the trust properties which were granted to the Baronets who held the title when the Acts were passed, and it is obvious that there is a just and reasonable relation between this difference and the fact that the Baronet in the present case was an evacuee whereas the Baronets in the other cases were not evacuees. There might also have been other differences in the circumstances in which these Acts were passed and these differences might have a just and reasonable relation to the different provisions made by the Legislature. I am accordingly of the view that the Repealing Act has not been shown to be violative of the fundamental right guaranteed by Article 14.
5. There is also no substance in the plea that the Repealing Act violates Article 31 of the Constitution. Clause (1) of Article 31 says that no person shall be deprived of his property save by authority of law. It was of course no part of Mr. Chagla's contention that the effect of the Repealing Act was to deprive any person of his property without any authority of law. Mr, Chagla urged that the Repealing Act violated Clause (2) of Article 31. Clause (2) provides that no property shall be compulsorily acquired or requisitioned save for a public-purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned. It is obvious that the Repealing Act does not compulsorily acquire or requisition any property. Clause (2 A) of Article 31 says:
Where a law does not provide for the transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property.
Mr. Chagla argued that the Official Trustee is a Corporation sole, that the Repealing Act provides for the transfer of the right to possession of the trust properties to the Official Trustee, and that therefore the Repealing Act must be deemed to provide for compulsory acquisition or requisitioning of property. The argument is palpably untenable. The Official Trustee may be a corporation sole, but a corporation consisting of the Official Trustee is not "owned or controlled by the State", Under the provisions of the Repealing Act, the Official Trustee acts as a statutory authority and not as an agent of the State. Moreover, the Official Trustee is vested under the Repealing Act with the trust properties for the specific purpose of distributing them amongst the persons rightfully entitled thereto, and it is a novel proposition that such an Act results in a compulsory acquisition or requisition of the trust properties by the State and is invalid in the absence of a provision for compensation. Since it is obvious that Article 31 has no application to the Repealing Act, it is unnecessary to consider whether any of respondents Nos. 6 to 8 had such an interest in the trust properties as to entitle them to challenge the Repealing Act on the ground that the Act violated their fundamental property rights.
6. However, the validity of the Repealing Act was challenged by Mr. Chagla mainly on the ground that the Bombay State Legislature did not have the necessary legislative competence to pass such an Act. At one stage in this part of his argument, Mr. Chagla urged that the topic covered by the Repealing Act was included in Item 44 of List I (Union List) of the Seventh Schedule of the Constitution, and that therefore the State Legislature could not legislate on the topic. Item 44 of List I is "Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities." It will be noticed that the Baronetcy Act of 1913 set up a corporation with perpetual succession and a common seal under the name The Trustees of the Sir Currimbhoy Ebrahim Baronetcy" and that this corporation was dissolved by Section 3(&) of the Repealing Act. If the Repealing Act could be regarded in substance as a piece of legislation dealing with the winding up of a corporation, the legislation would in my view be within the ambit of Item 32 in List II (State List) and not of Item 44 in List I (Union List). The relevant part of Item 32 of List II is "Incorporation, regulation and winding up of corporations, other than those specified in List I". If the objects of the Corporation which was set up by the Baronetcy Act of 1913 were "not confined to one State", the winding up of that Corporation would be a Union topic under Item 44 of List I, but it would be a State topic under Item 32 of List II if the objects of the Corporation were confined to one State. Now, all the trust properties mentioned in the Schedules to the Baronetcy Act, 1913, were properties situate within the State of Bombay. All the persons who constituted the Corporation, apart from the heir of the First Baronet who held the Baronetcy, were officials of the Bombay Government. It would therefore follow, on the assumption that the Repealing Act was in substance an Act dealing with the winding up of a corporation, that the Act was within the legislative competence of the Bombay State Legislature. It seems clear, however, that in substance the Repealing Act was an Act dealing with a trust, and the winding up of the Corporation which was set up by the Baronetcy Act of 191.3 was merely incidental to the main purpose of the Legislature, which was to revoke the trust created by the Baronetcy Act, 1913. Hence the topic covered by the Repealing Act falls in the tenth item of List III (Concurrent List) of the Seventh Schedule of the Constitution. Item 10 of List III is "Trust and Trustees". The main argument of Mr. Chagla as to the validity of the Act was on the basis that the Repealing Act deals with a topic in the concurrent field of legislation.
7. Mr. Chagla's argument in this behalf related to the terms of Clause (2) of Article 254 of the Constitution. In order to appreciate the argument, the whole of Article 254 may be quoted:
254. (1) If any provision of a; law made by the Legislature of a State is repugnant to any provisions of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of Clause (2), the law made by Parliament; whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnanoy, be void.
(2) Where a law made by the Legislature of a State specified in Part A or Part B of the First Schedule with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall if it has been reserved for the consideration of the President and has received his assent, prevail in that State :
Provided that nothing in this clause shall prevent Parliament from enacting at anytime any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
It will be noticed that Clause (2) of the article deals with a law made by a State Legislature which is repugnant to the provisions of an earlier law made by Parliament or of an existing1 law. The term existing law has been denned by Article 366(70) of the Constitution as any law, Ordinance, order, bye-law, rule or regulation passed or made before the commencement of this Constitution by any Legislature, authority or person having power to make such a law, Ordinance, Order, bye-law, rule or regulation.
The Baronetcy Act of 1913 was a law made by the Governor General in Council, which was then the Central Legislature, and was as such an existing law. The Bombay State Legislature which passed the Repealing Act in 1960 had the power to make a law repugnant to the Baronetcy Act of 1913, provided the Repealing Act was reserved for the consideration of the President and had received his assent. If was not disputed that the Repealing Act was in fact reserved for the consideration of the President and had received has assent. Mr. Chagla, however, argued that while the State Legislature could have made a law with the assent of the President which was inconsistent with the Baronetcy Act of 1913, it had no power to make a law repealing the Baronetcy Act as it has purported to do. According to Mr. Chagla, in the absence of an express authority granted by the Constitution, one Legislature cannot directly repeal an Act passed by another Legislature even if it has the power of passing an Act inconsistent therewith. It was further urged by Mr. Chagla that the concept of repugnancy involves the continued existence of both the laws the earlier law as well as the subsequent law which is repugnant thereto.
8. It is implied in these arguments that, where a State Legislature wishes to repeal an existing law on a concurrent topic with the assent of the President, it can do so indirectly but not directly. Secondly, the argument necessarily covers amendments as well as repeals, for an amendment repeals a part of an earlier Act and often, but not always, substitutes another provision in its place. Thirdly, the argument necessarily applies to all existing laws in the concurrent field of legislation, and not merely to laws passed by the Central Legislature in that field. It implies for instance that the State Legislature cannot directly repeal or amend any Act passed by the Governor in Council prior to 1935 or by the Provincial Legislature between 1935 and 1950 and the rules made under these Acts, if the topic covered by them is included in the Concurrent List.
9. Prima facie this argument appears to be untenable, for there is no warrant for supposing that a State Legislature cannot do directly what it can do indirectly. The argument that the concept of repugnancy involves the continued existence of both the Acts is fallacious because, whenever a question arises whether one Act is repugnant to another, both the Acts, are assumed to co-exist for the purpose of ascertaining whether they are repugnant and whether one of them prevails over the other. Mr. Chagla, however, claims support for his contention from an observation found in the judgment of Venkatarama Ayyar J, in the Supreme Court decision in Zavsrbhai Amaidas v. The State of Bombay. . In that case the Supreme Court examined the question whether a certain amendment made by Central Act No. 52 of 1950 in the provisions of the Essential Supplies (Temporary Powers) Act, 1946 (also a Central Act), was repugnant to certain provisions of a Bombay Act of 1947. The Central Act No. 52 of 1950 did not purport to repeal or amend the Bombay Act of 1947, so that no question of direct as against indirect repeal was involved in the case. In the course of his judgment, the learned Judge quoted Article 254(2) 'of the Constitution and traced the history of that article from Section 107(2) of the Government of India Act, 1935. The terms of Section 107(2) of the Government of India Act, 1935, were similar to the terms of art 254(2) of the Constitution* One difference, however, was that instead of the proviso which is found in Article 254(2), there was the following clause in Section 107(2): "....but nevertheless the Dominion Legislature may at any time enact further legislation with respect to the same matter." What was done by the proviso to Article 254(2) was to say that the further legislation which Parliament could pass would include "a law adding to, amending, varying or repealing" a law on a concurrent subject which was made by the State Legislature after the assent of the President as required in the earlier portion of art 254(2). In this connection, the following observation was made in the judgment of the Supreme Court (p. 806):
This (Article 254(2) of the Constitution) is, in substance, a reproduction of Section 107(2) of the Government of India Act, the concluding portion thereof being incorporated in a proviso with further additions. Discussing the nature of the power of the Dominion Legislature, Canada, in relation to that of the Provincial Legislature, in a situation similar to that under Section 107(2) of the Government of India Act, it was observed by Lord Watson in Attorney -General for Ontario v. Attorney-General for the Dominion [1896] A.C. 348, that though a law enacted by the Parliament of Canada and within its competence would over-ride Provincial legislation covering the same field, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute. That would appear to have been the position under Section 107(2) of the Government of India Act with reference to the subjects mentioned in the Concurrent List. Now, by the proviso to Article 254(2) the Constitution has enlarged the powers of Parliament, and under that proviso, Parliament can do what the Central Legislature could not under Section 107(2) of the Government of India Act, and enact a law adding to, amending, varying or repealing a law of the State, when it relates to e matter mentioned in the Concurrent List. The position then is that under the Constitution Parliament can, acting under the proviso to Article 254(2), repeal a State law. But where it does not expressly do so, even then, the State law will be void under that provision if it conflicts with a later 'law with respect to the same matter' that may be enacted by Parliament.
10. It was urged by Mr. Chagla that this passage from the judgment of the Supreme Court shows that the Indian Parliament would not have been competent to repeal or amend a State law in the concurrent field, if power to do so were not given expressly to the Parliament by the proviso to Article 254(2) of the Constitution. It must follow, according to Mr. Chagla, that the State Legislature is not competent to repeal an existing law (which must necessarily be a law passed by another legislative authority), as no authority to repeal or amend an existing law has been given expressly by the Constitution to the State Legislature.
11. It does appear that Mr. Chagla's argument finds some support in the above observations of the Supreme Court. The observations, however, do not amount either to ratio decidendi or to obiter dicta of the Supreme Court, and are in the nature of casual observations. The case before the Supreme Court was not one where a Legislature had repealed or amended an Act passed by another Legislature on a subject, in the Concurrent List, Immediately after the observations quoted above, the judgment of the Supreme Court went on to say (p. 806):
In the present case, there was no express repeal of the Bombay Act by Act No. LII of 1950 in terms of the proviso to Article 254(2).
Even casual observations of the Supreme Court would always be treated by this Court with the utmost respect; but those observations, if they do not amount either to ratio decidendi or to obiter dicta, are not a binding authority. A distinction between obiter dicta and casual observations of the Supreme Court was made by a Division Bench of this Court consisting of Chagla, C.J., and Shah J. in Mohandas v. Sattanathan. . In that ease the Division Bench considered the jurisdiction of Customs authorities to impose a fine exceeding Rs. 1,000 under item 8 of Section 167 of the Sea Customs Act, 1878. The Division Bench had to decide' upon the "extent of the binding authority of an observation of Bhagwati J. in the Supreme Court decision in Maqbool Hussain v. State of Bombay (1953) 56 Bom. L.R. 13, s.c. to the effect that the highest penalty which can be inflicted by the Customs Officers under the Sea Customs Act was Rs. 1,000. After observing that it was necessary in the interests of judicial uniformity and judicial discipline that all the High Courts must accept as binding the obiter dicta of the Supreme Court in the same spirit in which they accepted the obiter dicta of the Privy Council, Chagla C.J. in his judgment observed (p. 1160):
... Now, an obiter dictum is an expression of opinion on a, point which is not necessary for the decision of a case. This very definition draws a clear distinction between a point which is necessary for the determination of a case and point which is not necessary for the determination of the case. But in both eases points must arise for the determination of the tribunal. Two questions may arise before a Court for its determination. The Court may determine both although only one of them may be necessary for the ultimate decision of the case. The question which was necessary for the determination of the case would be the ratio decidendi; the opinion of the tribunal on the question which was not necessary to decide the case would be only an obiter dictum.
The learned Chief Justice further observed (p. 1163):
Therefore, it would be incorrect to say that every opinion of the Supreme Court would be binding upon the High Courts in India. The only opinion which would be binding would be an opinion expressed on a question that arose for the determination of the Supreme Court, and even though ultimately it might be found that the particular question was not necessary for the decision of the case, even so, if an opinion was expressed by the Supreme Court on that question, then the opinion would be binding upon us.
The Division Bench held that the aforesaid observation in the Supreme Court decision in Maqbool Hussain's case was not an obiter dictum but a casual observation made in considering the whole scheme of the Sea Customs Act and that it was, therefore, not binding upon the High Court on the- interpretation of Section 168, item 8, of the Act. This view of the Division Bench was approved by a Full Bench of this Court in Kaikhusroo Phirozshah v. State of Bombay. (1954) 57 Bom. L.R. 24, F.B. It appears that the Supreme Court itself does not regard its casual observations as binding authorities. In M/s. Ranchhoddas v. Union of India (1951) A.I.R. S.C. 935 a Bench of six Judges of the Supreme Court considered the extent of the power of Customs authorities to impose a penalty under item 8 of Section 167 of the Sea 'Customs Act, 1878. In the judgment of the Court delivered by Sarkar, J., the learned Judge referred to the aforesaid observation in Maqbool Hussain's case and to similar observations in two subsequent cases, and said (p. 937):
Some of the High Courts have thought that this Court had decided in these cases that the maximum penalty permissible under the provision is Rs. 1,000. The fact is that the question was never required to be decided in any of these cases and could not, therefore, have been, or be treated as, decided by this Court.... None of these cases is authority for the proposition that the maximum penalty which can be imposed under item 8 in Section 167 is Rs. 1,000.
12. The observations of Venkatarama Ayyar J. in Zavsrbhai's case which, have been quoted above, and on which Mr. Chagla relies, are thus not binding on this Court. Even so, I should if possible have accepted those observations and the inference which arises therefrom, all the more readily as the observations are based on a decision of the Privy Council. However, there are several reasons why I cannot accept the view which appears to be implicit in these observations. For the sake of clarity, and in order to do justice to the elaborate arguments advanced before me, I will first give1 the reasons why I cannot accept, the inference which can be logically deduced from these observations, and then deal with the reasons one by one. The reasons are:
(1) That the proposition which can be inferred from the aforesaid observation (namely, that a State Legislature while legislating in the concurrent field cannot directly repeal or amend an existing law) is contrary to well-established tenets as to the scope of legislative powers of Indian Legislatures laid down by the Privy Council, followed by the Federal Court, and accepted and approved by the Supreme Court.
(2) That the above proposition is contrary to legislative history between 1935 and 1950 (between the Government of India Act, 1935, and the promulgation of the Constitution), which history must be assumed to have been known to the Constituent Assembly when it passed Article 254(2) of the Constitution in essentially the same terms as were found in Section 107(2) of the Government of India Act, 1935.
(3) That the said proposition, if accepted, would render a large number of Provincial and State Acts, passed before and after promulgation of the Constitution, ultra vires and invalid.
(4) That even otherwise, the proposition would lead to absurd results.
(5) That the powers of the Indian Parliament to repeal or amend a State law on a concurrent topic can be shown to stand independently of the proviso to Clause (2) of Article 254 of the Constitution.
(6) That the decision of the Privy Council in Attorney-General for Ontario v. Attorney-General for the Dominion,, did not relate to a concurrent field of legislation, as appears to have been assumed in the aforesaid observations in Zaverbhai's case.
(7) That the law laid down in Attorney-General for Ontario v. Attorney--General for the Dominion was considered in some Indian cases, and the proposition that one Legislature cannot directly repeal or amend a law passed by another Legislature, when both legislate on a topic within their competence, was ultimately disapproved by a Full Bench of the Calcutta High Court on the authority of a later decision of the Privy Council.
13. I will shortly deal with these reasons one by one:
14. (1) It is well settled that the Indian Parliament and the State Legislatures, when legislating on a topic within their competence, have full plenary powers, the only limitations being those that are expressly laid down in the Constitution. Article 254(2) of the Constitution empowers a State Legislature to make, with the assent of the President, a law repugnant to an existing law. When one Act purports to repeal another, it is obviously repugnant thereto. In fact, a repealing Act is wholly repugnant to the Act which it purports to repeal. The word "repugnant" means "contrary or contradictory to; inconsistent or incompatible with" (Shorter Oxford English Dictionary). There is no express limitation in the Constitution to the 'effect that the power which has been given to the State Legislature to make, with the assent of the President, a law repugnant to an existing law, cannot, extend to repealing or amending the latter. In the absence of an express limitation, it must be assumed that the State Legislature has the power of amending or repealing an existing law, provided the requirement of securing Presidental assent is fulfilled. In The Queen v. Burah (1878) L.R. 5 I.A. 178 the Privy Council considered the question whether conditional legislation could be passed by the Governor General in Council, the then central legislative authority in India. Their Lordships observed (p. 193);
...The Indian Legislature has powers expressly limited by the Act of the Imperial Parliament which created it, and it can, of course, do nothing beyond the limits which circumscribe these powers. But, when acting within those limits, it is not in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation, as large, and of the same nature, as those of Parliament itself. The established Courts of Justice, when a question arises whether the prescribed limits have been exceeded, must of necessity determine that question; and the only way in which they can properly do so is by looking to the terms of the instrument by which, affirmatively, the legislative powers were created, and by which, negatively, they are restricted. If what has been done is legislation, within the general scope of the affirmative words which give the power, and if it violates no express condition or restriction by which that power is limited (in which category would, of course, be included any Act of the Imperial Parliament at variance with it), it is not for any Court of Justice to incuire further, or to enlarge constructively those conditions and restrictions.
It follows that, where an Indian Legislature acts within the general scope of its legislative powers, the only limitations to the scope of those powers are the limitations, if any, which are expressly laid down in the instrument which granted the powers. In The United Provinces v. Atiqa Begum [1940] F.C.R. 110, at p. 130 the Federal Court considered the validity of an Act passed by the United Provinces Legislature to regularise retrospectively certain rent remissions which had been directed by the Provincial Government under orders held invalid by the High 'Court. In upholding the validity of the Act, the Federal Court observed (p. 133) :
... It must always be remembered that within their own sphere the powers of the Indian Legislatures are as large and ample as those of Parliament itself: The Queen v. Surah [1878] 3 A.C. 889"; and the burden of proving that they ore subject to & strange and unusual prohibition against retrospective legislation must certainly lie upon those who assert it.
Again in Bhola Prasad v. The King-Emperor [1942] F.C.R. 17, at p. 27 the Federal Court examined the question whether a Provincial Legislature having the power to legislate "with respect to intoxicating liquors" could pass an Act to prohibit intoxicating liquors throughout the Province or in any part thereof. In its judgment the Federal Court observed:
We must again refer to the fundamental proposition enunciated in The Queen v. Burah, that Indian Legislatures 'within their own sphere have plenary powers of legislation as large and of the same nature as those of Parliament itself. If that was true in 1878, it cannot be less true in 1942. Every intendment ought therefore to be made in favour of a Legislature which is exercising the powers conferred on it. Its enactments ought not to be subjected to the minute scrutiny which may be appropriate to an examination of the by-laws of a body exercising only delegated powers, nor is the generality of its power to legislate on a particular subject to be cut down by the arbitrary introduction of far-fetched and impertinent limitations.
The principle laid down in The Queen v. Burah was accepted by the Supreme Court on several occasions, one of which was in The Union of India v. Madan Gopal Kabra. [1954] S.C.R. 541. In that case, the Supreme Court considered whether the Indian Parliament could levy retrospectively a tax on income which accrued prior to the promulgation of the Constitution and in circumstances under which it was not subject to any income-tax. In holding that the Union Parliament had such power, the Supreme Court observed in its judgment (p. 554) :
...The legislative powers conferred upon Parliament under Article 245 and Article 246 read with List I of the Seventh Schedule could obviously be exercised only after the Constitution came into force and no retrospective operation of the Constitution is involved in the conferment of those powers. But it is a different thing to say that Parliament in exercising the powers thus acquired is precluded' from making a retroactive law. The question must depend upon the scope of the powers conferred, and that must be determined with reference to the 'terms of the instrument by which, affirmatively, the legislative powers were created and by which, negatively, they were restricted.': [Queen v. Burah].
The Supreme Court went on to point out that no limitation or restriction is imposed in the Constitution in regard to retroactive legislation and that it was, therefore, competent for Parliament to make a law imposing a tax on the income of any year prior to the commencement of the Constitution.
15. (2) Under the Government of India Act, 1935, as under the Constitution, a number of very important topics were included in the Concurrent List, such as criminal law, criminal procedure, civil procedure, evidence, marriage and divorce, transfer of property, contracts, factories, labour welfare, etc. Between the years 1935 and 1950 the Bombay Provincial Legislature alone had passed a number of Acts amending, and in one case repealing, Central Acts relating to concurrent topics. At my request a list of about 25 such Acts was handed over to me by the learned Advocate General. These Acts amended, amongst others, the Indian Limitation Act, the Indian Lunacy Act, the Indian Registration Act, the Transfer of Property Act, the Presidency Towns Insolvency Act, the Provincial Insolvency Act, the Indian Electricity Act, the Code of Criminal Procedure, the Land Acquisition Act, the Legal Practitioners Act and the Code of Civil Procedure. In particular, numerous amendments were made during these years by the Bombay Provincial Legislature in the Code of Criminal Procedure. The instance where a Central Act was repealed was that of Bombay Act No. '9 of 1943, by which the Waste Lands (Claims) Act of 1863, being Act No. 23 of 1863 passed by the Governor General of India in Council, was repealed as far as the Bombay Province was concerned. Several such amending Acts must have been passed by the Legislatures of other Provinces after the Government of India Act, 1935, and before the promulgation of the Constitution. These Acts were passed under the provisions of Section 107(2) of the Government of India Act, 1935. It was obviously assumed by the Provincial Legislatures that their power to pass repugnant laws under Section 107(2) included the power to amend Central Acts or to repeal them as far as their respective Provinces were concerned, provided the assent of the Governor General or of His Majesty was obtained as required by Section 107(2) of the Act. This legislative history must be assumed to have been known to the Constituent Assembly, and it must follow from the fact that the same words were employed, in Article 254(2) of the Constitution as were found in Section 107(2) of the Government of India Act, 1935, that the State Legislatures under the Constitution had the same rights of amending and (within their territorial limits) repealing existing Acts which Provincial Legislatures enjoyed under the Government of India Act, 1935. A similar approach was adopted by the Privy Council in The Queen v. Burah, where their Lordships held that the Indian Legislature had the same power to pass conditional legislation which it had before the Councils Act of 1861. After pointing out that certain provisions of the Code of Civil Procedure and the Code of Criminal Procedure which were passed prior to 1861 were in the nature of conditional legislation, their Lordships observed (p. 196):
... If their Lordships were to adopt the view of the majority of the High Court, they would (unless distinctions were made on grounds beyond the competency of the judicial office) be casting doubt upon the validity of a long course of legislation, appropriate, as far as they can judge, to the peculiar circumstances of India ; great part of which belongs to the period antecedent to the year 1861, and must therefore (as Sir Richard, Garth well observed) be presumed to have been known to, and in the view of, the Imperial Parliament, when the Councils' Act of that year was passed.
16. (3) Apart from the Provincial Acts mentioned above, a number of Acts were passed by the Bombay State Legislature after the promulgation of the Constitution amending, and in one instance repealing, Central Acts on topics included in the Concurrent List. A long list of such Acts was handed over to me by the learned Advocate General. It is of some interest to note that the separation between judicial and executive functions was brought about in the Bombay State by carrying out a series of amendments in the Code of Criminal Procedure by Bombay Act No. 8 of 1954. By the Bombay Public Trusts Act, 1950, the Religious Endowments Act, 1863 (a Central Act) was repealed in areas where the Bombay Act applied. If the inference which Mr. Chagla wishes to draw from the aforesaid observations of the Supreme Court in Zaverbhai Amaidas v. The State of Bombay was correct, all these Acts of the Bombay Provincial Legislature and the Bombay State Legislature, along with similar Acts passed in other Provinces and States in India, would have to be held invalid.
17. (4) Even otherwise, the inference which was drawn by Mr. Chagla from the aforesaid observations of the Supreme Court would lead to absurd results. The expression "existing laws" includes not only Acts passed by the Central Legislature, but Acts passed by the Governor General in Council and the Provincial Legislature on concurrent topics, as well as the rules made under any of these Acts. If Mr. Chagla were right, none of these Acts and none of the rules made thereunder can be directly repealed or amended by the State Legislature even with the assent of the President. For instance, the Bombay Industrial Relations Act (Act No. XI of 1947) was passed by the Provincial Legislature and it related to a concurrent topic. If the Bombay State Legislature wishes to amend any of the provisions of this Act or of the rules thereunder, what it must do, if Mr. Chagla were right, is to pass a repugnant Act or a series of repugnant rules, without directly touching any of the provisions of the Act or the rules. There is no reason why the powers of the State Legislature, should be subjected to such an artificial restriction. In fact, the Bombay Industrial Relations Act ha* been amended several times by the State Legislature after the Constitution.
18. (5) The proviso to Clause (2) of Article 254 of the Constitution, from which the power of the Indian Parliament to repeal or amend a previous law passed by a State Legislature on a concurrent topic is supposed to arise, relates only to a law which might be passed by Parliament after a State Legislature has made a law repugnant to an existing law. The proviso does not cover a situation where a State Legislature passes a non-repugnant law on a concurrent topic. It cannot, however, be doubted that such a State law on a concurrent topic can also be repealed or amended by Parliament. It must, therefore, follow that the power of Parliament to amend or repeal a State law on a concurrent topic arises independently of the proviso to Article 254(2). For instance, the Bombay Prevention of Hindu Bigamous Marriages Act, 1946, and the Bombay Hindu Divorce Act, 1947, were non-repugnant Acts on a eon-current topic, that is to say, they were Acts which were not repugnant to any existing law or any earlier law made by Parliament. Yet these Acts were repealed by the (Central) Hindu Marriage Act, 1955.
19. It appears that the purpose of the proviso to Article 254(2) was not to grant to Parliament the power of amending or repealing State Laws which Parliament would not have possessed otherwise, but to make it clear that the assent given by the President to a repugnant State law would not prevent Parliament from subsequently enacting a law "adding to, amending, varying or repealing" the repugnant law so made by the State Legislature. Under the Government of India Act, 1935, the powers of the Central Legislature in this respect were more limited. A proviso to Section 107(2) of that Act laid down that if a repugnant Provincial law was passed with the assent of the Governor General or of His Majesty, no bill repugnant thereto could be introduced or moved in either Chamber of the Federal Legislature "without the previous sanction of the Governor General in his discretion.'' It appears that the proviso to Article 254(2) was introduced to make it clear that the legislative power of Parliament would be unaffected by the assent given by the President to a repugnant State law.
20. (6) In the passage from the judgment of Venkatarama Ayyar J. in Zaver-bhai Amaidas v. The State of Bombay it has been observed that in Attorney- General for Ontario v. Attorney General for the Dominion the Privy Council" was discussing the nature of the power of the Dominion Legislature, Canada, in relation to that of the Provincial Legislature "in a situation similar to that under Section 107(2) of the Government of India Act." (The ease of Attorney-General for Ontario v. Attorney-General for the Dominion has been referred to by Canadian constitutional lawyers as the local Prohibition Case and will be referred to hereafter as the Ontario Prohibition Case). The facts of the Ontario Prohibition Case make it clear that the Privy Council were not there dealing with a concurrent field of legislation at all. According to the British North America Act, 1867, which defines the Constitution of Canada, the only topics on which the Dominion Legislature and the Provincial Legislatures had concurrent powers were agriculture and immigration (Section 95). The situation with which the Privy Council dealt in the Ontario Prohibition Case was in fact similar to the situation which might have arisen under Sub-sections (I) and (3) of Section 100 of the Government of India Act, 1935, or which may arise under Clauses (1) and (3) of Article 246 of the Constitution. That is to say, the Central Legislature, while legislating in its own exclusive field (on a topic included in List I of the Seventh Schedule), might make a law which happens to be repugnant to a law made by the Provincial or State Legislature legislating in its own exclusive field (on a topic included in List II of the Seventh Schedule). It is well settled that in such a case the Central Act prevails over the Provincial or the State Act to the extent of the repugnancy. It is also clear that in such a situation, while the Central Legislature might pass a repugnant Act when legislating in its own exclusive field, it cannot enter the legislative field of the Provincial or State Legislature and directly repeal or amend an Act passed by the Provincial or State Legislature on a topic covered by List II of the Seventh Schedule. This in essence was the decision of the Privy Council in the Ontario Prohibition Case.
21. In the Ontario Prohibition Case the main facts were that the Dominion Legislature of Canada passed the Canada Temperance Act, 1886, and some of its provisions purported to repeal some of the clauses of an old Provincial Act called the Upper Canada Act of 1864. The question before the Privy Council was whether the Dominion Legislature had the power to directly amend the clauses of the Upper Canada Act of 1864. In the British North America Act, 1867, the legislative authority of the Parliament of Canada is defined by Section 91, while Section 92 gives a list of subjects of exclusive Provincial legislation. The Upper Canada Act of 1864 dealt with the subject of Prohibition on a local scale, and it was held by the Privy Council that under Section 92 the Provincial Legislature had exclusive jurisdiction to deal with Prohibition on a local scale. Under Section 91, however, the Dominion Parliament had the power to make laws for the peace, order and good government of Canada, in relation to all matters not coming within the classes of subjects by this Act assigned exclusively to the legislatures of the provinces". The Privy Council observed that a subject, like that of prohibition, though local and provincial in its origin, may attain such dimensions as to affect the body politic of the Dominion. The Privy Council, therefore, held that the Canada Temperance Act, 1886, was duly passed by the Dominion Parliament in exercise of its power to make a law for "the peace, order and good government of Canada". It may further be noted that the Upper Canada Act of 1864, was passed prior to the British North America Act, 1867, and Section 129 of the British North America Act provided that all existing laws in the Provinces of Canada shall continue to be operative subject to the power of the appropriate Legislature to repeal, abolish or alter them. This clearly meant that an old law which related to a subject of exclusive Provincial legislation under Section 92 could be repealed or amended by the Provincial Legislature concerned, and that an old law which related to a topic which came within the legislative authority of the Canadian Parliament under Section 91 could be amended or repealed by the Parliament of Canada. It was in this situation that the Privy Council came to the conclusion that the Canadian Parliament, while it could pass a law repugnant to the provisions of the Upper Canada Act, 1864, could not directly repeal any provision of the Upper Canada Act of 1864. Their Lordships stated (p. 366):
It has been frequently recognised by this Board, and it may now be regarded as settled law, that according to the scheme of the British North America Act the enactments of the Parliament of Canada, in so far as these are within its competency, must override provincial legislation. But the Dominion Parliament has no authority conferred upon it by the Act to repeal directly any provincial statute, whether it does or does not come within the limits of jurisdiction proscribed by Section 82. The repeal of a provincial Act by the Parliament of Canada can only be effected by repugnancy between its provisions and the enactments of the Dominion ; and if the existence of such repugnancy should become matter of dispute, the controversy cannot be settled by the action either of the Dominion op of the provincial legislature, but must be submitted to the judicial tribunals of the country...
After referring to Section 129 of the British North America Act, their Lordships went on to say (p. 366):
...It appears to their Lordships that neither the Parliament of Canada nor the provincial legislatures have authority to repeal statutes which they could not directly enact... The old Temperance Act of 1864 was passed for Upper Canada, or, in other words, for the province of Ontario; and its provisions, being confined to that province only, could not have been directly enacted by the Parliament of Canada. In the present case the Parliament of Canada would have no power to pass a prohibitory law for the province of Ontario; and could therefore have no authority to repeal in express terms an Act which is limited in its operation to that province...
It will be observed that the whole of this passage, except for one clause, is entirely consistent with the view that the Privy Council was dealing here with the power of the Dominion Legislature, legislating in its own exclusive field, to affect laws made by a Provincial Legislature legislating in its own exclusive field. The only part of this passage which might indicate that the Privy Council were laying down a principle of wider application consists of the clause "whether it does or does not come within the limits of jurisdiction prescribed by Section 92". It is perhaps possible, by relying on that clause, to hold that according to the view of the Privy Council the Parliament of Canada cannot directly repeal a Provincial law even in the concurrent field prescribed by Section 95 of the British North America Act. Supposing that that was the view of the Privy Council with regard to the scope of legislative powers of the Parliament of Canada, it does not follow that the same view should prevail with regard to the scope of the powers of Indian Legislatures under the Indian Constitution. The concurrent field of legislation is much wider under the Indian Constitution, and India had a legislative history, at least from 1935, of one Legislature amending the Acts of another in the concurrent field after following the procedure prescribed in that behalf.
22. (7) The decision of the Privy Council in the Ontario Prohibition Case was considered by a special Bench consisting of three Judges of the Calcutta High Court in Shib Nath v. Porter. The Special Bench was concerned with the validity of an Ordinance passed by the Governor-General in the exercise of his emergency powers under Section 72 of the 9th Schedule of the Government of India Act, 1935. A clause of the Ordinance purported to amend a section of the Defence of India Act, 1939, which was passed by the Central Legislature. It was urged before the Special Bench, on the authority of the Ontario Prohibition Case, that the repealing provision in the Ordinance was bad because when two equally competent legislative bodies deriving the authority to legislate from the same paramount Legislature, namely the Parliament, can operate on the same field, one of such bodies cannot directly repeal or amend the laws passed by the other unless the authority which created those two legislative bodies had expressly conferred on one the power of repealing or amending the enactments made by the other.
Of the three Judges, Mitter J. accepted this view and Sen J. agreed with him. The third Judge, Khundkar, J., delivered a dissenting judgment in the course of which, after quoting the above passage from the Ontario Prohibition Case he observed (p. 401):
In the light of this passage, the general import of the words of Lord Watson quoted by my learned brother is really no more than this, that an authority which cannot make a law of a particular kind, can have no power, unless such power is expressly given, to repeal or amend a law of that particular kind.
It may be mentioned in passing that, in the course of his judgment Mitter J. emphasised the similarity between the power to amend and the power to repeal. He observed (and with respect I agree with the observation) (p. 387) :
...The power to amend stands on the game principle, for whereas repeal means the destruction, of the whole, amendment means the destruction of a part, followed, may be but not necessarily, by the creation of a substitute...
This case went in appeal before the Federal Court (King Emperor v. Sibnath Banerjee [1944] F.C.R. 1.), but the Federal Court were able to decide the appeal without resolving the difference on the interpretation of the Privy Council decision in the Ontario Prohibition Case which had occurred between Mitter J. and Sen J. on the one hand and Khundkar J. on the other. Later, however, the Privy Council dealt with an essentially similar situation in King-Emperor v. Benoari Lal Sarma (1944) L.R. 72 I.A. 57. In that case also the validity of certain provisions of an Ordinance passed by the Governor-General in the exercise of his emergency powers under Section 72 of the 9th Schedule of the Government of India Act, 1935, had arisen for consideration. The Ordinance provided for three special classes of Courts of criminal jurisdiction and declared that certain provisions of the Criminal Procedure Code were inapplicable to proceedings under the Ordinance. In particular, Section 26 of the Ordinance excluded the revisional and appellate powers of the High Courts in cases decided by the special Courts. In delivering the judgment of the Privy Council, Viscount Simon observed (P. 68):
...Assuming that the condition as to emergency is fulfilled, the Governor-General acting under Section 72 may repeal or alter the ordinary law as to the revisional jurisdiction of the High Court, just as the Indian legislature itself might do.
The Ontario Prohibition Case was not cited before the Privy Council, but the statement of Viscount Simon made it clear that the Governor General, acting as a legislative authority, had the power to repeal or alter a law made by the Central Legislature, assuming that the condition as to emergency was fulfilled.
23. The effect of this Privy Council decision was considered by a Full Bench of the Calcutta High Court in Jnan Prosanna v. Province of West Bengal [1919] A.I.R. Cal. 1, f.b. In that case the validity of an Ordinance promulgated by the Governor of Bengal in the exercise of his emergency powers under Section 88(1) of the Government of India Act, 1935, was in question. The Ordinance purported to amend the West Bengal Security Act, 1948, passed by the Provincial Legislature. In his judgment Harries C.J. rejected the argument that an Ordinance could not directly repeal or amend an existing Provincial law by repugnancy, but that it might do so indirectly by making repugnant provisions. The learned Chief Justice observed:
...It was contended that there was nothing in Benoari Lal a case, which threw any doubt on the view of this Court as to how far an Ordinance could repeal or amend existing legislation. Viscount Simon, L.C. it was urged, must have been referring to repeal or amendment by repugnancy in the passage in his judgment to which I have just made reference. In my view, however, it is clear that Viscount Simon was referring to direct repeal and amendment in his judgment and therefore it is not now possible to contend that an ordinance cannot directly repeal or amend existing legislation.
All the Judges of the Full Bench concurred in this view, and it may be noted that Mitter and Sen JJ., who constituted the majority in the earlier decision in Shit Nath v. Porter, were parties to the Full Bench and expressed agreement with the view of the learned Chief Justice.
24. I must, therefore hold that the Bombay State Legislature was competent to repeal with the assent of the President the Baronecy Act of 1913 in so far as it operated in the State of Bombay. It was not claimed for the State that the Repealing Act of 1960 has any wider operation, nor was it shown by Mr. Chagla that the Repealing Act could not be effective if its operation is confined to the State of Bombay. Hence the preliminary objection taken by Mr. Chagla to the validity of the Repealing Act and the maintainability of the present petition is rejected.
25. [His Lordship after considering some points not material to this report, proceeded.]
26. The Preamble of the Baronetcy Act, 1913, shows that the Act was passed at the desire of the First Baronet and that he had consented to all the important provisions thereof. It is common ground that before the Baronetcy Act was passed, the properties comprised in the Schedules thereof were the self-acquired properties of the First Baronet. Section 3 of the Repealing Act of 1960 specifically provides, not only that the Baronetcy Act shall stand repealed, but also that the trusts, powers, provisions, declarations and purposes declared and expressed in that Act shall stand revoked and extinguished. In view of the express revocation and extinguishment of the trust created by the Baronetcy Act, the trust properties cannot be distributed according to the provisions of that Act. Under Sections 3 and 4 of the Repealing Act, the trust properties are vested in the Official Trustee for the limited purpose of distributing them amongst the persons rightfully entitled thereto according to law. It seems clear that the Legislature does not intend to exercise any further dominion on the trust properties. In the case of failure of an ordinary trust created by deed or will, a resulting trust arises in favour of the settlor or his estate, on the ground that no beneficial interest was granted to the trustee when the properties were conveyed to him. An analogous situation has arisen here. The trust properties came initially from the estate of the First Baronet; they have now been released from the trust created by the Legislature; and the Legislature has vested the properties in the Official Trustee with no further directions except that they should be distributed according to law. The properties must, therefore, spring back or'' result" to the estate of the First Baronet.
27. Mr. Peerbhoy, who appeared with Mr. Chagla for respondents Nos. 6 to 8, argued that the First Baronet was to all intents and purposes the real author of the trust embodied in the Baronetcy Act, and that even after the repeal of that Act by the State Legislature, the trust properties should be distributed according to the intention of the First Baronet. Mr. Peerbhoy referred to the Will of the First Baronet, which shows that he gave an amount of approximately Rs. 10-lakhs to each of his six other sons, but gave nothing to Mohamedbhoy who was expected to be the Second Baronet. The residuary properties of the First Baronet were also bequeathed to the six surviving sons excluding the would-be Second Baronet. The reason according to Mr. Peerbhoy why the eldest surviving son (Mohamedbhoy) was excluded from the gift of Rs. 10-lakhs each made to the other sons as well as from the residuary clause of the Will was that properties worth about Rs. 20-lakhs were included in the Schedules of the Baronetcy Act, and Mohamedbhoy and his male heirs were expected to get beneficial life interests in succession in those properties after the death of the First Baronet. Mr. Peerbhoy also referred to Sections 4 and 27 of the Baronetcy Act and argued therefrom that it was not the intention of the First Baronet that the trust properties should revert to his estate. Section 4 of the Baronetcy Act provided, in substance, that if at any time the then Baronet refused or neglected to use the name of Currimbhoy Ebrahim, and if there was no person to succeed him to the title, the properties would devolve as on a total failure of the male issue of the First Baronet. It does not appear to me that this provision has much bearing on the argument advanced by Mr. Peerbhoy. Section 27 of the Baronetcy Act provided that, in the event of extinction of the Baronetcy for want of male heirs of the body of the First Baronet, the trust properties would go to the heirs of the last Baronet. It is, however, clear that the last Baronet in that contingency would not necessarily have been a person belonging to the branch of Mohamedbhoy, the Second Baronet. In the absence of male issue of Mohamedbhoy, the Second Baronet, the title as well as the beneficial interests in the trust properties might have passed to other male issue of the First Baronet. Therefore, the terms of Section 27 also do not advance Mr. Peerbhoy 'a contention. From the terms of the Will, however, an inference can certainly be drawn that, Mohamedbhoy, the eldest surviving son of the First Baronet, was excluded from the gift of Rs. 10-lakhs each made to the other sons and from the residuary legacy in view of the expectation that he and his male heirs would succeed to the title of Baronet and would get beneficial interests in the trust properties.
28. Mr. Peerbhoy further argued (and this argument was also based on the hypothesis that the First Baronet was the real author of the trust created by the Baronetcy Act) that no resulting trust would arise in favour of the estate of the First Baronet because he had manifested an intention to the contrary. Mr. Peerbhoy relied in support on the following passage in Scott on Trusts, Vol. III, p. 2175, Article 411 (1999 edn.):
...If, however, the settlor properly manifested an intention that no resulting trust should arise in the event of the failure of the trust, it will not arise, but the property will be disposed of in accordance with his intention, whether that intention is expressed in specific language or not. No resulting trust arises if it appears by evidence properly admissible that in the event of the failure of the trust the property should be transferred by the trustee to a third person, or held upon a different trust, or that it should be retained by the trustee free of trust.
29. It appears to me that none of the descendants of the First Baronet, other than the heirs of the Third Baronet, had any claim, legal or moral, to the trust properties prior to the passing of the Repealing Act. I have, therefore, considered the arguments advanced by Mr. Peerbhoy for respondents Nos. 6 to 8 with a good deal of sympathy. I do not however, see how in law the claim of respondents Nos. 6 to 8, that respondent No. 8 (the Fourth Baronet) should get the corpus of the trust properties, can be sustained. In the first place, the legal author of the trust was the Legislature and not the First Baronet. The Legislature has expressed in Section 3 of the Repealing Act its intention that the Trust created by the Baronetcy Act shall stand revoked and extinguished. Secondly, even supposing- that the First Baronet can be looked upon as the settlor of the properties in trust, he has not expressed in any legally effective form his intention with regard to the disposal of the trust properties on the extinction of the trust. It is not open to me to deduce the intention of the First Baronet by speculating on what he might have wished if he were faced with the eventuality of the Baronetcy Act being repealed. Mr. Peerbhoy suggested that I should act on the basis that the First Baronet had made an oral gift of his property; but no such oral gift was in fact made, and in any case an oral gift to unborn persons, was invalid under Mohamedan law and the Fourth Baronet was not born during the lifetime of the First Baronet. It is also not possible to assume that the First Baronet had made some oral gift through the medium of a trust as suggested by Mr. Peerbhoy because such a trust could be made only by a registered instrument (Section 5 of the Indian Trusts Act) and would also have been invalid if made in favour of unborn persons. The passage from Scott on Trusts quoted above does not help Mr. Peerbhoy's clients because, in the first place, the First Baronet was not the author of the trust, and secondly, he has not expressed any intention with regard to how the properties should be disposed of in case the trust created by the Baronetcy Act was extinguished by a repealing Act. It must, therefore, follow that, whatever might have been the unexpressed wishes of the First Baronet, the trust properties must revert to his estate on the extinguishment of the statutory trust created by the Baronetcy Act.
30. Mr. Peerbhoy then suggestedrather vaguelythat the rights of the Fourth Baronet in the trust properties were saved by Section 10 of the Repealing Act. Section 10 says that "save as provided in this Act," nothing herein shall affect any right which any person may be entitled by due process of law to enforce against the trust properties or against any heirs male of the body of the First Baronet to whom the title of Baronet may have descended or their heirs and legal representatives. It was not shown that the Fourth Baronet has any right to the beneficial interest in the trust properties which has remained unextinguished by the provisions of the Repealing Act. If any person has any enforceable right against the Fourth Baronet that is not affected by th& provisions of the Act; but this fact does not entitle the Fourth Baronet to claim, any beneficial interest in the trust properties.
31. A claim was made on behalf of the other heirs of the Third Baronet (his daughters, respondents Nos. 26 and 27) that the trust created by the Baronetcy Act failed when the- Third Baronet was declared an evacuee, and that the trust properties should go on the failure of the trust to the heirs of the Third Baronet. This contention was mentioned rather than argued before me. The contention is palpably untenable, for there was no provision in the Baronetcy Act to the effect that on a Baronet being deprived of his beneficial interest in the trust properties by operation of some law, the properties would pass to his heirs.
32. I, therefore, hold on the first issue that, on the repeal of the Baronetcy Act, the trust properties reverted to the estate of the First Baronet.
33. [His Lordship after considering Issue No. 2, proceeded.]
34. This brings me to the most hotly contested issue in the case, namely, whether the properties are carried by the residuary clause in the Will of the First Baronet. If they are so carried, the properties pass to the six sons of the First Baronet and their heirs, excluding the heirs of the Second Baronet as well as all the daughters of the First Baronet and those who claim through them. Arguments in support of the contention that the trust properties were swept by the residuary clause were addressed to me principally by Mr. Palkhivala for respondent No. 30, Mr. Bhabha for respondent No. 9 and by Mr. Nariman for respondent No. 4.
35. The arguments of those who relied on the residuary clause were based on the implicit assumption that, even after the coming into effect of the Baronetcy Act, the First Baronet had still a contingent beneficial interest in the trust properties which was covered by the "Will and which was carried by the residuary clause. It is obvious that a "Will operates only on the property belonging to the testator. No property which does not belong to the testator can be covered either by the Will as a whole or by the residuary clause thereof. A 'Will' has been defined in Section 2(h) of the Indian Succession Act as "the legal declaration of the intention of a testator with respect to his property which he desires to be carried into effect after his death." It follows that a Will has no operation on any property in which the testator has no interest at the time of his death. For reasons which will be given presently, I have come to the conclusion that, after the coming into effect of the Baronetcy Act, even a contingent beneficial interest in the trust properties was not left with the First Baronet. For the sake of completeness, however, I will first examine the arguments of Mr. Palkhivala and others on the assumption made by them, namely, that the First Baronet had a contingent beneficial interest in the trust properties at the time of his death.
36. It was argued by Mr. Palkhivala and other supporters of the residuary clause that Clause 18 of the Will of the First Baronet was a general residuary clause or a true residuary clause as it is sometimes called; that is to say, it covered all the properties which belonged to the First Baronet at the time of his death, whether they were known to him or not, except the properties which were specially disposed' of by the Will. It was not a restricted residuary clause, following upon a list of enumerated properties, some of which were made the subject of specific legacies and the rest of which fell into the residue; nor was it a residuary clause the general terms of which could be circumscribed on the principle of ejusdem generis. The following statement from Halsbury on the scope of a general or true residuary clause was relied upon (Halsbury, 3rd edn., Vol. 16, p. 377, para. 734):
A general residuary gift passes everything not disposed of, whether the testator has not attempted to dispose of it or whether the disposition fails by lapse or any other event. In order to exclude from such a gift a particular property belonging to the testator and not otherwise disposed of by Will, it is necessary to find a plain and unequivocal intention on the part of the testator not to include that property in the residuary gift; the mere fact that the testator is under the erroneous impression that the particular property is not his to dispose of does not exclude the property from the residue.
To the same effect is the provision of Section 103 of the Indian Succession Act, which says:
Under a residuary bequest, the legatee is entitled to all property belonging to the testator at the time of his death, of which he has not made any other testamentary disposition which is capable of taking effect.
Reliance was placed in this connection on In re Bagot Paton v. Ormerod. [1893] 3 Ch. D. 348. In that case, a testatrix had made two "Wills. By her first Will she had settled a certain amount on her daughter and her daughter's family. In the second Will, she recited inter alia that she had settled the aforesaid amount on her daughter and her family. At the end of the second Will she bequeathed "all the residue of my estate and effects, of what nature or kind so ever and where so ever, which shall remain after payment of my funeral and testamentary expenses and debts, to the said Charles Edward Ormerod for his own use and benefit." In an earlier action brought in the Probate Division it was held that the First Will had been revoked by the second. The scope of the residuary clause in the second Will came up for consideration in the case In re Bagot. It was held by Kekewich J.and his decision was confirmed by a strong- Court of appeal consisting of Lindley, L.J., Lopes, L.J., and A.L. Smith, L.J. that the property which was mentioned in the Second Will as having been already settled on the daughter and her family, and which in fact was found not to have been so settled, was swept by the residuary clause. In his judgment, Lindley, L.J. observed (p. 357):
...She (the testatrix) intended whatever was hers, and was not otherwise disposed of, to go to her residuary legatee. It is true that she did not intend this particular fund to go at once to him, because she thought she had settled it already, and that, therefore, it was not hers. She made a mistake; it was hers, and the residuary bequest in terms carries it.
The learned Judge further observedand particular reliance was placed before me on this observation (p. 358) :
Suppose that the fund which the testatrix thought she had settled had been settled, but that by failure of the trusts of the settlement that fund had again become hers: it would then clearly have passed under the residuary bequest. This result, moreover, would have been in accordance with her intention as expressed in the residuary bequest. But this shews that if this fund was hers she did not intend to exclude it from the operation of the bequest of her residuary estate.
Referring to the earlier decision in Circuitt v. Perry (1856) 23 Beav. 275 the learned Judge said (P. 358):
...In Circuitt v. Perry Lord Romilly seems to have intimated that a residuary bequest would not include property which a testator thought was not his. But this is a proposition which cannot be supported.
The result of the cases cited before the Court of Appeal was summarised by A.L. Smith, L.J., in these terms (p. 361):
...To prevent personal property which would otherwise fall into the general residue, assuming a true general residuary bequest to exist, there must be found in the will an expression of the testator's intention not only to except such property either from the operation of the residuary clause in the will in favour of a particular recipient, but an intention to except it from the operation of the will, or the residuary clause, as the ease may be, whether the proposed recipient in the events which happen can take the property or not.
To the same effect is the decision in Blight v. Hartnoll. (1883) 23 Ch. D. 218. In that case the bequest of a wharf failed for remoteness and it was held that the wharf fell into the residue and was covered by the residuary clause. There were no express words in the Will to the effect that, if the bequest of the wharf failed, the wharf should not go into the residue. It was held that, in the absence of such express words, the residuary clause covered the wharf.
37. On the other side, reliance was on Kunthalammal v. Suryaprakashroya Mudliar (1915) I.L.R. 38 Mad. 1096 and Subodhchandra Niyogi v. Bhubulika Dasee (1933) I.L.R. 60 Cal. 1406. In both these cases, however, the residuary clause in the Will was in respect of properties which were either enumerated or specified and out of which some specific legacies were carved out. It was not a general residuary clause. In the earlier of these two eases it was observed that the residuary clause in the form in which it appears in English Wills is practically unknown to the ordinary testator in Madras and that the rules of construction which have been laid down by English Courts are not applicable. In the latter case, some stress was laid on the fact that the property which was there claimed to be covered by the residuary clause was unknown to the testator. In the case before me, the residuary clause is framed in clear and comprehensive terms. It is in a form not different from the form in which a residuary clause generally appears in English Wills. The question whether the testator had knowledge that certain property belonged to him might become relevant where the residuary clause is couched in such terms that the Court is required to consider the surrounding circumstances in order to ascertain the sense in which the terms were used by the testator. In the present case, the terms of the residuary clause are unambiguous.
38. It was further argued by the opponents of the residuary legatees that it was clearly not the intention of the First Baronet to include the trust properties in the residuary clause. The fact that the First Baronet excluded his eldest son Mohamedbhoy (the would-be Second Baronet) from the list of residuary legatees was itself claimed to be an indication of the intention of the First Baronet that the residuary clause should not carry the trust properties in the event of the trust failing or being extinguished. A reference was also made to Sections 4 and 27 of the Baronetcy Act which showed that, in the contingencies mentioned in those sections, the properties were to go to persons other than the residuary legatee. It appears to me, however, that the First Baronet never contemplated the failure or extinguishment of the statutory trust and did not give any expression to his intention with regard to the disposal of the trust properties in case the statutory trust failed or was extinguished. Secondly, the intention of the testator must be ascertained from the contents of the Will itself. For it is the terms of that Will that are determinative of the disposal of the properties which belonged to the testator at the time of his. death. Provisions like Section 4 and Section 27 of the Baronetcy Act, which lay down the manner in which the trust properties were to be disposed of in certain contingencies, merely have this effect, that in the event of those contingencies the trust properties would not have reverted to the estate of the First Baronet. The Court must gather the intention of the testator from the language used in the Will itself and the Court can travel outside the Will only when surrounding circumstances are required to be considered for ascertaining the meaning of the words used by the testator. The duties of a Court in construing a Will were thus explained by the Privy Council in Narasimhammha v. Parthasarathy (1914) I.L.R. 37 Mad. 199, p.c. (p. 221):
...In all cases the primary duty of a Court is to ascertain from the language of the testator what were his intentions, i.e. to construe the will. It is this that in so doing they are entitled and bound to bear in mind other matters than merely the words used... But all this is solely as an aid to arriving at a right construction of the will, and to ascertain the meaning of its language when used by that particular testator in that document. So soon as the construction is settled, the duty of the Court is to carry out the intentions as expressed, and none other. The Court is in no case justified in adding to testamentary disposition. In all cases it (the Court) must loyally carry out the will as properly construed, and this duty is universal, and is true alike of Wills of every nationality and every religion or rank of life.
On the construction of the Will, I must hold that if the First Baronet had any legal interest, however contingent, in the trust properties at the time of his death, it was covered and carried by the residuary clause of his Will.
39. I have, however, come to the conclusion that the First Baronet was completely divested of the trust properties by the Baronetcy Act and that he had no contingent interest in those properties at the time of his death. In the case of an ordinary trust, where a settlor conveys his properties to a trustee by a document inter vivos or by a testamentary disposition, it can be assumed that he intends that the properties should revert to him or his estate on the failure of the trust. An express trust, in other words, can give rise simultaneously to an implied trust in favour of the settlor or his estate. In Snell's Principles of Equity, 24th edn., p. 88, trusts have been classified into express, implied and constructive trusts, and resulting trusts are treated as a species of implied trusts. The following statement is made1 about implied trusts:
Implied trust: a trust arising from the presumed intention of the owner of the property, as where he convoys it to another to be hold on certain trusts which fail, either wholly or partly, or uses it for the purchase of other property which, by his direction, is transferred to a stranger. This is called an implied or presumptive trust, or where, as in the examples given, the beneficial interest comes back to the person who conveyed the property or provided the money for its purchase in the name of another, a resulting trust.
This passage shows that, wherever a settlor creates by deed or will an express trust, an implied trust may arise in favour of himself or his estate, by virtue of his presumed intention. In such cases, transfer of properties to a trustee leaves with the settlor or his estate a contingent beneficial interest which falls into possession on the failure of the express trust. This contingent beneficial interest is capable of being bequeathed and would then be carried, in the absence of any other specification, by a general residuary clause.
40. In the present case, however, the trust was not created by the First Baronet either by deed or by will, and no beneficial interest, vested or contingent, remained with the First Baronet after the passing of the Baronetcy Act. The Baronetcy Act was passed with the consent of the First Baronet, but he was not in law the author of the trust. The legal sanction for the trust was the Act of the Legislature having plenary powers, and not the consent given by the First Baronet before the Act was passed. The Act created a Board of Trustees, constituted the Board into a Corporation with perpetual succession and a common seal, and vested the Corporation with the properties described in the Schedules to the Act. That the properties were vested in the Corporation by virtue of the Act has been specifically stated in the Act itself. Section 5 of the Act says that the properties, described in the Schedules shall, be' vested in the said Corporation "immediately upon the passing of this Act by force and virtue thereof". The marginal note of Section 30 of the Act is "Saving of existing rights", and that section saves the rights of all persons, and bodies "other than and except the said Sir Currimbboy Ebrahim, his devisees and heirs and assigns". The fact that the First Baronet was not in law the author of the trust is further emphasized by the fact that the trust has been extinguished and revoked by the Legislature by passing the Repealing Act of 1960 without any reference to the wishes of the First Baronet in that behalf. If the First Baronet were in law the author of the trust, the Legislature could not have extinguished and revoked the trust in the manner it has done. Since the First Baronet was not in law the author of the trust, and since the Baronetcy Act had vested the properties absolutely in a Corporation having a perpetual succession, it is not possible to hold that any implied trust was created in favour of the First Baronet when the Baronetcy Act was passed, by virtue of any presumed intention on his part. Moreover, when the Legislature repealed the Baronetcy Act and extinguished the trust created thereby, there was nothing to prevent the Legislature from making some positive provision with regard to the disposal of the trust properties which would have prevented the properties from reverting to the estate of the First Baronet. As already stated, such positive provisions were made in two other Repealing Actsthe Sir Chinubhai Madhavlal Ranchhodlal Baronetcy (Repealing) Act, 1956, (Act I of 1957), and the Sir Sassoon Jacob David Baronetcy (Repealing) Act, 1957 (Act XXXVI of 1957). The fact that the Legislature could have made such a provision in the present easea provision by which the properties would have been prevented from reverting to the estate of the First Baronetis in my opinion proof positive that no contingent beneficial interest was left in the First Baronet on the passing of the Baronetcy Act of 1913. The trust properties have now reverted to the estate of the First Baronet, not because a trust created by him has failed, but because a statutory trust has been extinguished by the Legislature without making any provision for the further disposal of the trust properties. Since there was no interest, vested or contingent, left in the First Baronet after the passing of the Baronetcy Act, no interest in the trust properties could be covered by the Will of the First Baronet or be swept by the residuary clause thereof. It follows that the trust properties must be deemed to pass to the heirs of the First Baronet as on an intestacy.
41. This reasoning applies not only to the Will of the First Baronet, but also to the Wills made by some of the descendants of the First Baronet on which some of the claimants have relied. The shares of these testators in the trust properties will not be covered by the Wills made by them because they had no interest in the trust properties at the time of their respective deaths. For instance, the Fourth Baronet has relied on an alleged Will made by his father, the Third Baronet, contained in a letter which has been produced at exh. B to the Fourth Baronet's Statement of Claim. The advocate who appeared for respondents Nos. 26 and 27 (the step-sisters of the Fourth Baronet) told me that his clients did not admit this alleged Will. On behalf of the Fourth Baronet, therefore, Mr. Peerbhoy suggested that I should direct the Official Trustee to keep undistributed the share of the trust properties that would go to the branch of the Third Baronet till the existence and validity of the alleged Will was determined in appropriate proceedings. I would have done so if I had found that the share of the Third Baronet's branch in the trust properties could be devised by him by a testamentary disposition. Since I have found otherwise, the alleged Will has no effect on the devolution of the trust properties. Similarly, respondent No. 30 relied on a Will made by her husband Alimohamed, the son's son of the First Baronet. For reasons given above, the devolution of the trust properties would not be affected by this Will as well. Again, respondent No. 38 had relied on a Will alleged to have been executed by Ahmedbhoy, one of the sons of the First Baronet. However, the claimants from the branch of Ahmedbhoy, namely, respondents Nos. 38, 28, 29, 34 and 35 have come to an agreement with regard to the manner in which the share which might go to the branch of Ahmedbhoy should be distributed amongst them in case it is held distributable on the basis of an intestacy. This agreement has been filed and their shares will be determined accordingly.
42. Primia facie there is some inconsistency in my finding that the trust properties revert to the estate of the First Baronet, but that they are not covered either by the Will of the First Baronet or by the Wills made by the descendants of the First Baronet. I venture to think the inconsistency is more apparent than real. In my view, on the extinguishment of the trust created by the Baronetcy Act by the provisions of the Repealing Act, the trust properties go by way of a resulting trust to the estate of the First Baronet, on the principle that the trustee has no beneficial interest in those properties. This resulting trust, however, is not in the present case an incident of any implied trust in favour of the First Baronet, because no such implied trust was created in his favour when the Baronetcy Act of 1913 was passed. The above view is the raison d'etre of my findings of the first three issues.
43. [The rest of the judgment is not material to this report.]
44. The Fourth Baronet (respondent No. 8) and respondents, Nos. 6 and 7 appealed. This appeal [No. 31 of 1963] was heard with the appeal [No. 34 of 1963] filed by the Custodian of Evacuee Property.
45. A.A. Peerbhoy, with S.C. Chagla and Ashok Desai, instructed by Nagindas Hoosseinally & Co., for appellants Nos. 1, 2 & 3. L.M. Zaveri, with Miss Usha Parikh, for respondent No. 2. E. II. Pandia, for respondents Nos. 3 & 22 in Appeal No. 31/63 and for respondents Nos. 3 & 25 in Appeal No. 34/63. M.M. Jlwiveri, for respondent No. 4 in both the appeals. K.H. Bhabha, with F.S. Nariman, for respondent No. 5 in both the appeals. E.G. Vahanvati, with B.A. Dada, for respondent No. 7 in Appeal No. 31/63 and respondent No. 10 in Appeal No. 34/63. F.G. B. Khairaz with JV.B. Soman, for respondents Nos. 8, 9 to 9D, 10 to 10B, 10D to 10-1, 11 to 11B in Appeal No. 31/63 and for respondents Nos. 11, 12 to 12D, 12 to 13B, 13D to 13-1 and 14 to 14B in Appeal No. 34/63. Kaka, for respondents Nos. 12, 12A and 12-G in Appeal No. 31/63 and for respondents Nos. 15, 15A to 15D in Appeal No. 34/63. M.P. Kenia, with Z.E. Ladhabhoy, for respondents Nos. 13, 13A and 13-B.G. 0. Sanghvi, for respondents Nos. 14 to 17 in Appeal No. 31/63 and respondents Nos. 17 to 20 in Appeal No. 34/63. V.C. Shah, for respondent No. 18A in Appeal No. 31/63 and respondent No. 21A in Appeal No. 34/63. S.G. Vakil, with G.S. Shahapurkar, for respondent No. 23 in Appeal No. 31/ 63 and respondent No. 26 in Appeal No. 34/63. M.L. Palan, with R.P. Bhatt, for respondents Nos. 24 and 25 in Appeal No. 31/63 and respondents Nos. 27 and 28 in Appeal No. 34/63. I.M. Chagla, with N, A, Palkhivala and 8. J. Sorabjee, for respondent No. 28 in Appeal No. 31/63 and respondent No. 31 in Appeal No. 34/63. Suresh Parekh, with Lalit Manharlal, for respondents Nos. 31, 31A, 31B, 32, 33 & 36 in Appeal No. 31/63 (respondents Nos. 34, 34A, 34B, 35, 36 & 38 in Appeal No. 34/63). K. 8. Cooper, with M.P. Laud, for respondent No. 34 in Appeal No. 31/63 and for the appellant in Appeal No. 34/63. M.G. Karmali, with L.H. Merchant, for respondents Nos. 37 & 37A instructed by Jamshedji Rustomji Devidas & Jani & Merchant and respondents Nos. 20, 21, 26, 27, 29, 30 & 30-A instructed by Ambubhai and Diwanji.
Kotval, C.J.
46. These two appeals have been heard together by consent because they involve common questions of law and fact. This judgment will cover the disposal of both the appeals.
47. We are concerned in these appeals; with a petition by the Official Trustee of Maharashtra seeking directions from this Court in regard to the properties of an extinct trust viz. the Sir Currimbhoy Ebrahim Baronetcy Trust which was revoked and extinguished by Sir Currimbhoy Ebrahim Baronetcy (Repeal and Distribution of Trust Properties) Act, 1959 (Bombay Act IX of 1960). The circumstances under which the Official Trustee is seeking directions are as follows:
48. On July 20, 1911, by Letters Patent issued by His Majesty" King George V. Sir Currimbhoy Ebrahim was created a Baronet. The said Letters Patent are not before us and it was stated on behalf of the present Baronet, the original claimant No. 8 that they are not traceable. After the creation of the Baronetcy, in order to provide for the upkeep, and maintain the dignity of the Baronetcy an Act came to be passed by the Governor-General of India in Council, being Act No. IV of 1913 intituled the Sir Currimbhoy Ebrahim Baronetcy Act, 1913. By this Act considerable immoveable property and a large sum of money were set apart for the maintenance of "the dignity, state and degree" of the said Baronet and a trust was created of these properties. The first Baronet passed away on May 29, 1934. He left behind a will dated October 22,1916, to which reference will be made in connection with the several claims of his heirs. After the death of the first Baronet his eldest son Mahomedbhoy assumed the title and became the second Baronet. He held the title till his death on March 31, 1928. He was succeeded by his son Husseinali who became the third Baronet. The third Baronet migrated to Pakistan some time prior to 194'9. The exact date is not known. Consequent upon his migration his properties were dealt with under the provisions of the then operative Bombay Evacuees (Administration of Property) Act, 1949 and on September 29, 1949, the third Baronet was declared an Evacuee and his properties vested in the Custodian of Evacuee Property. The orders in this respect are at exh. A both dated September 29, 1949.
49. On March 4, 1952, Husseinali, the third Baronet, passed away in Pakistan and was succeeded by his son Mohamedbhai as the fourth Baronet. He is the title holder at present and is the original claimant No. 8. On the date on which he succeeded as the fourth Baronet, Mahomedbhai was a resident of India but shortly thereafter he left for Pakistan and, therefore, his interest in the trust properties was also affected by the law governing evacuee property. On June 16, 1952, the fourth Baronet's interest in the properties of the trust declared under the Baronetcy Act was notified as evacuee property. The order passed in this behalf as well as the notification under Section 7(3) of the Administration of Evacuee Property Act, 1950, are collectively at exh. C. Against these orders vesting his beneficial interest in the trust properties in the Deputy Custodian the Fourth Baronet preferred an appeal to the Custodian-General at Delhi, but that appeal was dismissed on August 26, 1960, on the ground that it was barred by time.
50. Before the appeal came to be dismissed other events, of considerable importance took place. Consequent upon the fourth Baronet having migrated to Pakistan along with his son Zoolficar Ali (Claimant No. 8) who will normally be entitled to succeed to the Baronetcy, the Legislature of the then State of Bombay passed an Act repealing the Sir Currimbhoy Ebrahim Baronetcy Act of 1913. The disputes, which are before us, and in regard to which the Official Trustee is seeking our directions, principally arise out of the provisions- of that Act. It is intituled the Sir Currimbhoy Ebrahim Baronetcy (Repeal and Distribution of Trust Properties) Act, 1959 (Bombay Act IX of 1960). It was assented to by the President on January 23, 1960, and came into force on March 15, 1960.
51. In order to understand the provisions of the Repealing Act, it is necessary to go back to the provisions of the Act which it repealed viz. the Sir Currimbhoy Ebrahim Baronetcy Act, 1913 and to see what exactly was the change sought to be brought about by the Repealing Act. The Sir Currimbhoy Ebrahim Baronetcy Act passed on February 27, 1913, remained in full operation until the Repealing Act. The Baronetcy Act recites in its preamble that it was passed for the purpose of settlement of certain properties belonging to Sir Currimbhoy Ebrahim, Baronet "so as to accompany and support the title and dignity of a Baronet lately conferred on him by His Majesty King George V" to hold to him and the heirs male of his body lawfully begotten and to be begotten and "for other purposes". The preamable also recites that Sir Currimbhoy Ebrahim was desirous of settling in perpetuity certain property on himself and the heirs male of his body who may succeed to the title of Baronet and therefore he had set apart properties of the aggregate market value of about Rs. 20 lakhs upon trust and for the purposes declared in the Act. It is also recited that the Act was being passed at the desire of the Baronet and because he had asked that it should be passed.
52. So far as the provisions of the Act itself are concerned, Section 2 names the trustees. They were all State Officials except the Baronet for the time being holding the title. The trustees were created into a corporation with perpetual succession and a common seal under the style and title of "The Trustees of the Sir Currimbhoy Ebrahim Baronetcy". They were to execute the trusts, powers and purposes of the Act. Section 3 enjoined that the heirs male of the body of Sir Currimbhoy Ebrahim who shall succeed to the title shall take upon themselves respectively the name of "Currimbhoy Ebrahim" in lieu and place of any other name or names whatever and they shall always subscribe themselves accordingly. Section 4 of the Act provided that in the event of any person to whom the title descends refuses or neglects to use the name "Currimbhoy Ebrahim" as provided, or discontinue to use the name, he shall not be entitled to the benefits of the trusts created by the Act and they shall during the remainder of his natural life be suspended. Section 4 makes a further important provision as to what the corporation should do with the trust properties in the event of such suspension. It says that the properties and the income therefrom shall be accumulated for the benefit of the male issue of the said Baronet that may subsequently be born and succeed to the said title and" in default of any such male issue the whole of the said property shall devolve upon such person as would be entitled to the same if there had been a total failure of issue male of the said Sir Currimbhoy Ebrahim."
53. This is one of the sections of the Act upon which the fourth Baronet now relies to claim the properties after the Repealing Act has come into force. We will show a little later how that claim arises. Sections 5, 6 and 7 are sections which provide for the management of the property by the Corporation and declare the right of the Baronet for the time being to use and occupy free of rent as his residence certain properties described in the second part of the First Schedule of the Act. The substance of these provisions is that the income, from the trust property shall be collected by the Corporation and after defraying certain expenses and setting apart an amount for a sinking fund and a repairing fund, the residue shall, be held for the benefit of the Baronet for the time being.
54. Other important sections which need mention are Sections 16, 21 and 27. Section 16 controls the power of the trustees of the Corporation to transfer the trust property. The power is conferred upon them but it is subject to the approval of the Governor in Council. By Section 21 the Baronet for the time being has been given power to appoint jointures in lien of maintenance and other claims of certain women of the family. One of the claimants before us who claims under this section of the Act is Lady Amira Currimbhoy (Claimant No. 7) the second wife of the third Baronet, who is the mother of Mahomedbhai, the fourth Baronet (Claimant No. 8). Section 27 of the Act made provisions as to devolution upon the failure and in default of the heirs male of the body of the first Sir Currimbhoy Ebrahim. The provision made was that the Corporation shall continue to hold the trust property and funds which may then be vested in them by virtue and operation of this Act upon trust for the heirs of to last Baronet absolutely and shall also stand possessed of the said hereditaments and premises particularly described in the second schedule...upon trust for the heirs of the last Baronet for all the then residues of the terms granted by the leases by which the same are demised.
This is another of the sections of the Act upon which the fourth Baronet has relied to claim the trust properties for himself consequent upon the revocation and extinction of the trusts by the Repealing Act. We will indicate presently how this claim arises.
55. Then we turn to the Repealing Act. It is prefaced by a long preamble, most of the paragraphs of which were the subject of some comment by on or the other of the several parties before us. The preamble recites the facts, as we have stated them above and this recital comprises of 9 paragraphs which for convenience' of reference we have numbered and in our references hereinafter we shall refer to the said numbers of the paragraphs. The first two paragraphs refer to the passing of the Baronetcy Act and the creation of the Corporation under the style and title of "The Trustees of the Sir Currimbhoy Ebrahim Baronetcy". The third paragraph refers to certain amendments of the Baronetcy Act. In the fourth, fifth and sixth paragraphs! the facts regarding the migration of the third Baronet to Pakistan and of the declaration of his property as an evacuee property and his subsequent death leaving behind his widow Amina, now the Dowager Lady Currimbhoy Ebrahim, and his son Mahmud Currimbhoy, the fourth Baronet, are referred to. Paragraphs 7 and 8 refer to the fourth Baronet and recite that he too has; continued to remain in Pakistan and, therefore, he was declared an evacuee and the beneficial interest of the said Sir Currimbhoy Ebrahim the fourth and present Baronet in the Sir Currimbhoy Ebrahim Baronetcy Trust vested in the Deputy Custodian of Evacuee Property. Paragraph 9 is rather important for the purposes of the present appeals. It recites AND WHEREAS, in consequence of the aforementioned recitals, difficulties have arisen in the administration of the trusts declared by the Baronetcy Act; and whereas for that and for other diverse good reasons it is expedient to repeal the Sir Currimbhoy Ebrahim Baronetcy Act, 1913, to revoke the trusts, powers, provisions and declarations therein declared and expressed for the purpose of supporting the title and dignity of Baronet, to dissolve the Corporation constituted Trustees for executing the powers and purposes of the Baronetcy Act, to vest all the properties which are subject to the settlement created by that Act,.. which now vest in the Corporation, in the Official Trustee to hold the same for the purpose of the distribution thereof to persons rightfully entitled thereto in accordance with law ; and to provide for matters connected with the purposes aforesaid,...
56. The Act consists of 13 sections not all of which are relevant for the points raised in these appeals. It is principally with Sections 3 and 4 that we are concerned. By Section 3(a) and (5) all the trusts, powers, provisions, declarations and purposes by and in that (the Baronetcy) Act declared and expressed shall be, and are hereby revoked and extinguished ; " "the Corporation shall be and is hereby dissolved and shall cease to function, and the Trustees shall cease to hold office as such Trustees.
Clause (c) of Section 3 provides the trust properties, in so far as they consist of immovable property shall by force and virtue of this Act vest in, and in so far as they consist of any moneys, investments, securities or other movable property shall stand transferred to, the Official Trustee, and be handed over to him (anything in Official Trustees Act, 1913 notwithstanding), and the Official Trustee shall hold and stand possessed of the same for the purposes, and with and subject to the powers and provisions, hereinafter expressed.
57. Section 4, Sub-section (1) states how the properties shall be dealt with after they vest in the Official Trustee. Actually there is hardly any provision made which can be said to be an effective provision or one which can provide any guidance to this Court. All that Sub-section (1) of Section 4 says is that As soon as may be after the commencement of this Act, the Official Trustee shall take possession or charge of the trust properties and make an inventory thereof, and hold the trust properties upon trust to distribute the same amongst the persons rightfully entitled thereto according to law, and until such distribution to manage the said trust properties, in accordance with the provisions of this Act (The italics are ours).
Under this sub-section, therefore, the property has to be held by the Official Trustee for distribution amongst the persons "rightfully entitled thereto according to law". It is this phrase in Sub-section (1) of Section 4 which has given rise to all the disputes that have arisen between the respective claimants and regarding which the Official Trustee has asked for directions. Section 5 prescribes that a notice should be issued asking all claimants to submit their respective claims in regard to the trust properties. Section 6 deals with the submission of claims and the particulars to be stated therein. Section 7 then deals with the disposal of the claims by the Official Trustee. If he finds that any claims are justified and are uncontested he is directed to distribute the trust property in accordance with such claims but if after enquiries he finds that any claim is not justified or is contested, in whole or in part, he has to apply to the High Court for orders and directions. It is under this section that the Official Trustee has moved this Court. Sub-section (4) of Section 7 deals with a claim under special circumstances viz. where any person entitled to trust properties has been or is declared an evacuee. This sub-section and its applicability have also given rise to questions of considerable difficulty in this appeal firstly as to interpretation and secondly as to its effect upon the rights of the fourth Baronet. We will deal with this sub-section separately when we come, to deal with the points argued on behalf of the Custodian who has filed appeal No. 34 of 1963.
58. Now it will be seen that the Baronetcy Act vested the properties of Sir Currimbhoy Ebrahim Baronetcy Trust in several Trustees who were constituted into a Corporation, but all this was done, as the preamble of the Act itself shows at the express desire of the first Baronet. We would mention at this stage a point which is undisputed so far as these appeals are concerned viz. that all the parties before us agreed that though the trust was created by virtue of legislation it was nonetheless a trust created at the instance of a private party and should be treated as such by the Court whatever be its decision. In other words, it is common ground between all the parties to the appeal that the Baronetcy Act must be taken as having created nothing more or less than a private trust and that though it came into being1 as a result of legislation that fact cannot have any influence upon the points arising in the appeals. We say this here because in deciding certain important points arising before him the learned Single Judge answered those points by saying that the trust was a creature of the Legislature and that, therefore, the author of the trust must be deemed to be the Legislature and not the first Baronet. The entire arguments before us were on that footing and we must, therefore, take it for the purpose of this argument that what the Baronetcy Act created was no more and no less than a lawful private trust. No doubt in the course of his arguments which were confined only to the Constitutional questions that arise in these appeals, the learned Advocate General did point out that the aid of the Legislature had to be sought by the first Baronet in making the provisions to succession which so to say created an estate in tail male which in the absence of legislative sanction would have been illegal because it would militate against the rule against perpetuity. It was, therefore, necessary to take aid of the Legislature and get over the bar imposed by the rule against perpetuity. Nevertheless, oven the learned Advocate General did not dispute the position that the trust was created at the instance of the first Baronet and represented only his intention to place in trust his own property. It is such a trust which was revoked and extinguished by the provisions of the Repealing Act.
59. Before the learned single Judge the Repealing Act was in the first place attacked upon Constitutional grounds and the attack was four-fold. It was urged that the Act was bad because it worked discrimination against claimants Nos. 8, 7 and 6 viz, the fourth Baronet; his mother, Amina, Lady Currimbhoy Ebrahim and his son Zoolficar Ali and that, therefore, it infringed Article 14 of the Constitution. The Act was also challenged under Articles 19 and 31 as affecting the fundamental right to property and alternatively as depriving the fourth Baronet of his rights in the property. The Act was also challenged on the ground that the Legislature of the then State of Bombay which passed the Act was not competent to do so and all these challenges have been negatived by the learned single Judge. The same Constitutional questions have been raised before us in appeal.
60. Apart from these Constitutional questions, five questions arose before the learned single Judge as under:
1. Whether on repeal of the Baronetcy Act and the coming into force of the Repealing Act the Official Trustee holds the properties in trust for the benefit of the fourth Baronet as contended by the claimants Nos. 6, 7 and 8 or alternatively in trust for the legal representative of Husaeinaji, the third Baronet or whether the properties have by virtue of a resulting trust reverted to the estate of the first Baronet;
2. Whether the distribution of the properties should be made as if the inheritance opened on the date of the Repealing Act i.e. March 15, 196O, or whether it must be deemed to have opened on the date of the death of the first Baronet i.e. May 29, 1924.
3. Whether the properties are governed by the provisions of the will dated October 22, 1916 of the first Baronet or should the properties go by intestate succession
4. If in the event of the properties going by intestate succession whether the parties were governed by the Hindu Law which applied to succession among the Khojas in 1924 or should the succession be governed by the Muslim Personal Law an provided by the Shariat Act of 1937 ; and
5. Whether the Custodian of Evacuee Property is entitled to such share in the trust properties as the fourth Baronet may be held entitled to or to any part thereof.
The learned single Judge held that upon the passing of the Repealing Act the properties reverted to the estate of the first Baronet by virtue of a resulting trust and that they would pass by succession according to the Muslim Personal Law to the heirs of the first Baronet on his death on May 29, 1924. He negatived all the remaining contentions. We shall deal with the reasons why the learned Judge so held when we come to deal with the individual contentions. advanced on behalf of the several claimants.
61. The principal arguments before us in these appeals have been advanced on behalf of the fourth Baronet and his mother and son, claimants Nos. 8, 7 and 6 respectively by Mr. Peerbhoy. The arguments naturally fall into two main parts viz. the attack against the Constitutionality of the Repealing- Act and the arguments going to show who are the persons rightfully entitled according to law to take the properties upon the revocation and extinguishment of the Trusts created by the Baronetcy Act. We shall deal with the Constitutional points first,
62. Mr. Peerbhoy has first of all referred to the Baronetcy Act and pointed out that by that Act the fourth Baronet and his predecessors who held the title were only entitled to the beneficial interest in the usufruct or income arising' from the trust properties. So far as the corpus of the trust properties is concerned the only provision made by the Baronetcy Act was in Section 27 "Upon failure and in default of heirs male of the body of Sir Currimbhoy Ebrahim" and even then Mr. Peerbhoy points out that the property was to be held in trust for the heirs of the last Baronet "for all the then residues of the terms granted by the leases by which same are demised", i.e. they were ultimately to vest in the heirs of the last Baronet. Therefore on the date on which the Repealing Act was passed the son of the fourth Baronet, claimant No. 6 Zoolficar Ali had a right to succeed to the properties in the event of the failure of the Baronetcy or if the Baronetcy continued he had the chance of succeeding as the Baronet himself. The Repealing Act, however, put an end to the trusts as well as the Corporation consisting of the Trustees, revoked and extinguished the trusts and dissolved the Corporation. He referred to the recitals in the preamble as to the reason why and the purpose for which all this was being done. One of the reasons disclosed was in the ninth paragraph of the preamble of the Repealing Act. It says that the Act was being passed because "in consequence of the aforementioned recitals, difficulties have arisen in the administration of the trusts declared by the Baronetcy Act and whereas for that and for other diverse good reasons it is expedient to repeal...." Mr. Peerbhoy, therefore, urged that in terms the Act says that it was necessary to repeal the provisions of the Baronetcy Act because difficulties had arisen in the administration of the trusts, but the operative provisions of the Act had nothing whatsoever to do with solving the difficulties or any particular difficulty but is only concerned with extinguishing and revoking the trusts and dissolving the Corporation and vesting the entire trust property in the Official Trustee. He says that this was a peculiar and totally unjustified manner in which to solve the so-called difficulties which had arisen in the administration of the trusts. He urged that the operative provisions of the Act do not in the first place conform to the very purpose of the Act but go far beyond it and in the second place in so far as they have gone far beyond it, they have worked a discrimination against the fourth Baronet and his heirs as compared to other similar enactments whereby similar other Baronetcies were put an end to and their respective Acts repealed. In particular, he referred to two Acts viz. the Sir Chinubhai Madhavlal Ranchhodlal Baronetcy (Repealing) Act, 1956, also passed by the Legislature of the then Bombay State as Bombay Act No. 1 of 1957 and the Sir Bassoon Jacob David Baronetcy (Repealing) Act, 1957, passed by the same Legislature as Bombay Act No. XXXVI of 1957.
63. Both these Acts revoked and extinguished the trusts created by the original Acts which constituted the Baronetcies namely the Sir Chinubhai Madhavlal Ranchhodlal Baronetcy Act, 1924 and the Sir Sassoon Jacob David Baronetcy Act, 1915. He also pointed out that those Acts were for all intents and purposes repealed and that the second section of both the Repealing Acts were virtually the only operative provisions of those Acts. All that the two sections provide is that the Trusts created by the respective Acts are "hereby revoked and extinguished" and all the properties, movable and immoveable, are directed to be handed over to the respective Baronets subject to the provisions of the respective Acts. The other provisions of the Acts are hardly restrictive of the absolute rights in which the respective trust properties were vested in the two Baronets. Moreover other provisions are made to ensure the validity of rights, liabilities and obligations incurred prior to the repeal, to validate all. contracts, suits and legal proceedings. Beyond that Mr. Peerbhoy pointed out that those two Acts did nothing else, whereas the Repealing Act in the case of Sir Currimbhoy Ebrahim goes far beyond those provisions. After the trusts are revoked and extinguished and the Corporation was dissolved the property is not made to pass to the Baronet for the time being as in the other two cases but, on the other hand, Section 4(i) declares in somewhat vague terms that the trust property shall be held upon trust to distribute the same amongst the persons rightfully entitled thereto according to law. Sections 5 and 6 say that the Official Trustee shall invite claims and the question of submission of claims and what particulars are to b& stated in those claims, are all provisions which create a discrimination against the present Baronet, for he urged that this is nothing more or less than inciting members of his family and other people to come and put in claims against him who should be the only rightful owner if once the trusts are revoked and extinguished. In the two other Acts the trusts were simply revoked and extinguished and the property handed over to the Baronet for the time being. "Why then this discriminatory treatment in the case of this Baronetcy alone? He has further pointed out that even assuming that the fourth Baronet was an evacuee under the Administration of Evacuee Property Act and validly adjudicated as such, still what vested in the Custodian as a result of that declaration was only the beneficial interest of the fourth Baronet in the trust properties i.e. his right to receive the income from the properties in the hands of the trustees, but no part of the corpus of the property had vested in the Custodian and nonetheless the Repealing Act makes provision for the distribution also of the corpus. To that extent again Sir Currimbhoy Ebrahim is being treated on a footing entirely-different and highly discriminatory than the other two Baronets were treated under the other two respective Acts. There is a denial of equality before the law or the equal protection of the laws guaranteed by Article 14 of the Constitution.
64. The provisions of Article 14 of the Constitution have been expounded and interpreted in several cases by the Supreme Court of India and so far as the meaning of the key phrases in the article "equality before the law" or the "equal protection of the laws" are concerned, there is no doubt or difficulty. The pronouncement in Chiranjitlal Chowdhuri v. The Union of India [1960] S.C.R. 869 laid down the ambit of those expressions. As to the meaning and effect of the guarantee contained in that article the Supreme Court accepted the statement by Willis in his Book on Constitutional Law and they quoted with approval the following passage (p. 877):
The guarantee of the equal protection of the laws means the protection of equal Jaws, It forbids Glass legislation, but does not forbid classification which rests upon reasonable grounds of distinction. It does not prohibit legislation, which is limited either in the objects to which it is directed or by the territory within which it is to operate. 'It merely requires that all persona subjected to such legislation shall be treated alike under like circumstances and conditions both in the privileges conferred and in the liabilities imposed.' The inhibition of the amendment...was designed to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation. 'It does not take from the states the power to classify either in the adoption of police laws, or tax laws, or eminent domain laws, but permits to them the exercise of a wide scope of discretion, and nullifies what1 they do only when it is without any reasonable basis. Mathematical nicety and perfect equality are not required. Similarity, not identity of treatment, is enough.
After referring to this passage and pointing out that Article 14 of the Constitution corresponds to the "equal protection" clause in the 14th Amendment in the American Constitution, the Supreme Court held It must be admitted, that the guarantee against the denial of equal protection of the laws does not mean that identically the same rules of law should be made applicable to all persons within the territory of India in spite of differences of circumstances and conditions " (See per Mukherjea J., at page 911).
65. The two cases upon which Mr. Peerbhoy relied namely, (1) Budhan Choudhry v. The State of Bihar and (2) Bam Krishan Dalmia v. Tendolkar J. (1958) 61 Bom. L.R. 192, S.C. do not lay down any different construction of the article but on the other hand, both these cases rely upon the decision in Chiranjitlal's case. In Budhan Choudhry's case the Supreme Court held that it is well settled that while Article 14 of the Constitution forbids class legislation, it does not forbid reasonable classification for the purposes of legislation and that in order to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be- founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and (ii) that such differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases; namely geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. Further Article 14 condemns discrimination not only by a substantive law but also by a law relating to procedure. The same tests were reiterated in Bam Krishna Dalmia's case.
66. In the light of these principles we turn to consider whether the Repealing Act in such differences which it has made so far as Sir Currimbhoy Ebrahim is concerned as compared to the other two Baronetcy Repealing Acts has worked a discrimination against the former. Now, in the first place, the Baronetcy Act and the Repealing Acts which related thereto were all pieces of legislation which dealt with the rights to which one private citizen was entitled for the time being. They were so to say private Acts which necessarily, therefore, concerned themselves with the facts, conditions and circumstances peculiar to those particular individuals, They were not like other public Acts, applicable to or operative against a class or a number of individuals. Even so, it is not permissible to work a discrimination even against an individual unless there are circumstances or conditions specially applicable to one individual and those circumstances have a reasonable connection with the object and purpose of the legislation passed upon them. We do not think that the legislation would be bad on the charge of discrimination.
67. On the question whether one individual can possibly form a class by himself it seems to us that the decision in Chiranjitlal Chowdhuri's case cited above is decisive. In that ease the legislation impugned was directed only against a particular company, the Sholapur Spinning and Weaving Company Ltd., and it was urged that there was no classification, for it was only one legal person that was dealt with as a class. At p. 911 Mr. Justice Mukherjea answered the point thus:
....I am unable to accept the argument of Mr. Chari that a legislation relating to one individual or one family or one body corporate would per se violate the guarantee of the equal protection rule. There can certainly be a law applying to one person or to one group of poisons and it cannot be held to be unconstitutional if it is not discriminatory in its character... The legislature undoubtedly has a wide field of choice in determining and classifying the subject of its laws, and if the law deals alike with all of a certain class, it is normally not obnoxious to the charge of denial of equal protection, but the classification should never be arbitrary. It must always rest upon some real and substantial distinction bearing a reasonable and just relation to the things in respect to which the classification is made; and classification made without any substantial basis should be regarded as invalid.
68. Therefore, in the first place, even though a legislation may be directed only against an individual it is not necessarily discriminatory. So long as the classification is not arbitrary, but is made upon a "substantial basis", the legislation could be upheld.
69. If one compares the earlier Baronetcy Repealing Acts namely the Sir Chinubhai Madhavlal Ranchhodlal Baronetcy Act and the Sir Sassoon Jacob David Baronetcy Act with the Currimbhoy Ebrahim Baronetcy (Repeal and Distribution of Trust Properties) Act, the important differences appear. None of the special circumstances which are recited in the nine paragraphs of the preamble in Sir Currimbhoy Ebrahim Baronetcy Repealing Act are to be found in the former Acts. One important and distinguishing circumstance was that both the third and the fourth Baronets had left India for Pakistan leaving the trust properties, which were intended to support the dignity of the title, behind in India, Obviously the very purposes for which the Baronetcy Act had intended the trust properties to be used were thereby frustrated. The Act recites these circumstances in the eighth and ninth paragraphs of the preamble and it is with specific reference to this fact that the provisions of Section 1(4) were enacted. We will presently refer to that section in detail and attempt to- construe it; suffice it to say here that Mr. Peerbhoy on behalf of the claimants Nos. 6, 7 and 8 gave it a certain interpretation whereby the property continued as the property of the 4th Baronet, whereas Mr. Cooper on behalf of the Custodian of Evacuee Property gave it an interpretation whereby the entire trust properties would be vested in the Custodian. The very fact that this provision was incorporated into the Act shows the basis upon which the Legislature proceeded, the basis being that the Baronet for the time being and his predecessor were both evacuees and were not available in India and, therefore, the very purpose and object, of the original Baronetcy Act was not being fulfilled and was likely to be frustrated. That in itself could well have formed a reasonable basis for the classification. The Act moreover recites various other circumstances and from its provisions the basis of the classification is further made clear. The entire properties comprised in the Sir Currimbhoy Ebrahim Baronetcy Trust as indicated in the Baronetcy Act were in Bombay. The Trustees who were formed into a Corporation were officials resident in Bombay and the entire management of the the trust properties was in the hands of the Baronet for the time being associated with the other Trustees. In terms he was made the managing trustee. If then the managing trustee himself left the State and indeed the country and there was no prospect of his being able to manage the trust properties as prescribed by the Baronetcy Act, the State Legislature may well have considered that it was futile to continue the provisions of the Baronetcy Act. At any rate, the classification had a reasonable relation to the purpose which induced the Act. We do not say that it must fully justify all the provisions of the Act. That is not necessary so long as it can be said that there is some real substantial distinction bearing a reasonable and just relation to the things in respect of which a classification is made. The Act was not a uniform public law governing all Baronetcies but was with reference to the particular circumstances of an individual Baronetcy and the Repealing Act can, therefore, have regard to the special circumstances affecting that Baronetcy. That the Repealing Act has, in our opinion, done in the instant case.
70. Having revoked and extinguished the trusts and dissolved the Corporation under Section 3, Clauses (a) and (b), the Legislature could not have left matters at that. Some provision had to be made for the management of the trust properties which were subject to the trust and as to who was to be entitled to them. These provisions were made in Clause (c) of Section 3 and in Section 4(1). By Section 3(c) the trust properties were to be vested in or transferred to the Official Trustee and Section 4(7) provided for their devolution.
71. Considerable comment was made upon the provisions of Section 4(1) in so far as it provides that the trust properties shall be held by the Official Trustee "upon trust to distribute the same amongst the persons rightfully entitled thereto according to law....". It was said that this is hardly any provision at all for it leaves the matter at large and indicates nothing as to who is to be entitled and how the property is to be distributed. No doubt the Legislature' in this respect could have spoken with more clarity and particularity, but we have to take the provisions such as they are and to consider whether there was any discrimination against the persons whose rights are being affected. As we have said, if the trusts created by the Baronetcy Act failed in that purpose, in so far as the principal beneficiary thereof and the possible beneficiary, Ms son, had left India and the managing trustee had also left India, the Legislature could well decide that it was no longer necessary to keep the Baronetcy Act in force and to repeal it. Having repealed it, it was not for the Legislature to indicate to whom the properties should go. Perhaps if the Legislature had indicated its mind in the slightest degree, the same claimants could well have urged that they had been discriminated against and it was for that reason that the Legislature merely said that the trust property shall be liable to be distributed amongst the persons rightfully entitled thereto according to law. Apart from that the learned Advocate General pointed out that a number of questions of extreme difficulty and complexity would have arisenand indeed upon the judgment of the learned single Judge have arisen. They are questions raised by the claimants as to whether the property should revert to the estate of the first Baronet and, if so, whether it should be governed by the "Will of the first Baronet or go by intestacy. There were questions raised by the claimants as to whether, if the property is to go by intestacy, the succession should open as on the death of the first Baronet or the third Baronet or on the date of the Repealing Act. There were also questions raised by some of the claimants as to whether the parties being Khojas were governed prior to a certain date by the Hindu law or whether they should be throughout held to be governed by the Muslim personal law. Having regard to these questions which the Legislature must have foreseen would arise, it seems to us that they could reasonably take the view that they should not undertake by the legislation a decision on these questions or lay down the principles upon which those questions could be decided. Hence the general provision deliberately made that the properties may be distributed amongst the persons rightfully entitled thereto according to law. There is no discrimination involved in making that provision, in our opinion, and there appears a reasonable nexus between that provision and the object and purpose of the Act.
72. At the fag end of the arguments in these connected appeals in pressing the appeal on behalf of the Custodian (being appeal No. 34 of 1963) Mr. Cooper on his behalf relied strongly upon the provisions of Sub-section (4) of Section 7 and he put a certain construction upon that section the result of which was he urged, that the Custodian would become entitled to take the entire trust properties to the exclusion of all the claimants in both the appeals. In other words, the beneficial interest of the fourth Baronet had already and admittedly vested in the Custodian but upon a particular interpretation which is placed upon Sub-sections (4) of Section 7, he urged that even the corpus of the trust properties would pass to the Custodian. Mr. Peerbhoy, on the other hand, on behalf of the claimants Nos. 6, 7 and 8 put forward a different construction resulting in the corpus of the trust properties reverting to the fourth Baronet himself. We need not at this stage go into this question. We shall deal with it separately when we consider the Custodian's appeal, but we may say for the present that upon a proper construction of Sub-section (4) of Section 7, we can gee no discrimination arising* under Article 14.
73. It is now well settled that where a certain result is achieved by a legislation which in itself is not discriminatory, even if other methods are open and possible to achieve that result, the legislation will not be struck down for the reason that- those other methods were not followed, for the Legislature is the sole judge of the method to be adopted (See Shri Bam Krishna Dalmia v. Justice S.B. Tendolkar). In considering this question of "equality before the law or the equal protection of the laws", we are not only confined to the provisions of the Act, but we may legitimately turn to look at all the surrounding circumstances and particularly the documents which preceded the passing of the impugned legislation. Having regard to the purposes set forth in the Baronetcy Act and the facts which have transpired since then, namely that the third and the fourth Baronets having left this country and have been adjudicated evacuees, we think that the provisions of the Repealing Act are not discriminatory in nature against claimants Nos. 6, 7 and 8, and they do not infringe the provisions of Article 14.
74. Then we turn to the attack against the Act under Article 19 of the Constitution. Mr. Peerbhoy urged that the Repealing Act affects the right to acquire, hold and dispose of property of the fourth Baronet, at least to the extent of the beneficial interest which accrued to him under the Baronetcy Act. It is argued that even though the property has vested in the Custodian of Evacuee Property the possession of the Custodian was only temporary and upon the property ceasing to be subject to evacuee property law his heirs and successors could claim to be entitled to the same. These rights are affected by the passing of the Repealing Act.
75. To this contention the learned Advocate General took a preliminary objection urging that the point was virtually given up in the Court below. It is no doubt true that it was conceded that the fourth Baronet not being a citizen was not entitled to the protection of or to urge any plea under Article 19 directly. Mr. Peerbhoy, however, replied to this objection by saying that though he may have given up the plea that Article 19 was directly applicable, nonetheless nothing precluded claimants Nos. 6, 7 and 8 from showing that the law under which this property was being affected is a void law. He relied upon a decision of this Court in State v. Yusuf Abdul Aziz where a similar point was raised.
76. Chief Justice Chagla answered the point at p. 738 as follows:
... A person who is not a citizen cannot come to this Court for assistance, invoking his right under Article 15(1). But we do not think it right to say that Mr. Peerbhoy'g client has come to this Court for enforcement of the fundamental right under Article 15(1), Mr. Peerbhoy's contention is that inasmuch an the law discriminates against citizen and citizen on grounds only of sex, the law is void under Article 18, and as he is being prosecuted under a void low, his prosecution is bad and ho cannot be convicted of an offence under a void law. To that extent even a non-citizen may rely on any of the fundamental rights, not indeed for the purpose of enforcing those rights, but merely in order to point out to the Court that a particular law being in violation of any of those fundamental rights is bad, inoperative and no penal consequence can follow, from the breach of such a law. If Mr. Peerbhoy could satisfy us that this particular piece of legislation does discriminate contrary to what is provided under Article 15(1), then undoubtedly it would be bur duty to say that Section 497 is bad, and as Mr. Peerbhoy's client is being prosecuted under a void law, the prosecution must be quashed.
That is precisely the line of argument which Mr. Peerbhoy has adopted in the present case. He says that though his clients may not be entitled directly to take advantage of Article 19 nonetheless they are entitled to show that the particular law under which their property is being dealt with is a void law.
77. No doubt Yusuf Abdul Aziz's case was a case where Article 15(7) was invoked and here it is art 19(1)(f) that is being invoked, but we do not think that for the purpose of the point before us the invoking of a different fundamental right will make any material difference. In that case Yusuf was being prosecuted for having committed adultery with the complainant's wife while the complainant was in jail on a conviction for breach of trust. "What was argued on behalf of Yusuf was that Section 497, Indian Penal Code was void, under Article 14, because it discriminated against men and in favour of women. The man was punishable for adultery but not the woman. Therefore the law operated unequally. In answer to this contention a preliminary objection was raised that Yusuf was not a citizen and therefore he could invoke Article 15 in his favour for it applied only to citizens as Article 19 does in the present case. The principle upon which the Division Bench relied was that the moment a law is found to be conflicting or in derogation of any fundamental right, to that extent the law becomes a void law, and even a non-citizen can show that a particular law being in violation of fundamental rights is void "and no penal consequences can follow from the breach of such a law". That principle, it seems, was only assumed as correct in that case and the point was not directly dealt with. There is hardly any reasoning to support it. It was not argued there as it is argued here that if there was a conflict between a penal law and any of the fundamental rights, the penal law is not necessarily void but may under certain circumstances be a valid law. To the extent that the attention of the Division Bench was not directly invited to that point and to certain words which qualify the principles laid down in Articles 18(7) and 13(2), it seems to us that that decision cannot be followed for holding that every law which contravenes a fundamental right is necessarily void.
78. Our attention was invited afresh to Article 13(7) and (2). Article 13(7) deals with "all laws in force in the territory of India immediately before the commencement of this Constitution" and it says that in so far as such laws are inconsistent with the fundamental rights in Part III of the Constitution the laws shall, "to the extent of such inconsistency, be void", (the italics are ours). Sub-article (2) of Article 13 deals with laws made after the coming into force of the Constitution and it says that the State shall not make any law which takes away or abridges the rights conferred by Part III and any law made in contravention of this clause shall, to the extent of the contravention, be void. Therefore, the laws under Sub-section (1) which are already in existence at the commencement of the Constitution, as well as the laws which are made after the coming into force of the Constitution are void only to the extent of the inconsistency or to the extent of the contravention. This in the first place would be sufficient to show that the assumption made in Yusuf Abdul Aziz's case that a law which contravenes a fundamental right is necessarily void is not justified.
79. But we need not merely found our conclusion that it is doubtful if the decision in Yusuf Abdul Aziz's case is any good law upon a mere consideration of Article 13 itself, for the decision of a Division Bench of this Court is binding upon us unless set aside by a larger Bench or directly or indirectly by the superior Court. There is, however-, clear authority of the Supreme Court for a contrary view. In Behram Khurshed Pesikaka v. The State of Bombay [1956] I S.C.R. 613, s.c. 57 Bom. L.R. 575 discussing the scope of Article 13 the Supreme Court observed as follows (p. 651):
The meaning to be given to the expression 'void.' in Article 13(1) is no longer res Integra. It stands concluded by the majority decision in Keshavan Madhava Menon, v. The State of Bombay. [1951] S.C.R. 228, s.c. 53 Bom. L.R. 458. The minority view there was that the word ' void' had the same meaning as ' repeal' and therefore a statute which came into clash with fundamental rights stood obliterated from the statute book altogether, and that such a statute was void ab initio. The majority however held that the word 'void' in Article 13(1). so far as existing laws were concerned, could not be held to obliterate them from the statute book, and could not make such laws void altogether, because in its opinion, Article 13 had not been given any retrospective effect. The majority however held that after the coming into force of the Constitution the effect of Article 13(1) on such repugnant laws was that it nullified them and made them insffectual and nugatory and devoid of any legal force or binding effect. It was further pointed out in one of the judgments representing the majority view, that the American rule that if a statute is repugnant to the Constitution the statute is void from its birth, has no application to cases concerning obligations incurred or rights accrued in accordance with an existing law that was constitutional it, its inception, but that if any law was made after the 26th January, 1950, which was repugnant to the Constitution, then the same rule shall have to be followed in India as followed in America. The result therefore of this pronouncement is that the part of the section of an existing law which is unconstitutional is not law, and is null and void. For determining the rights and obligations of citizens the part declared void should be notionally taken to be obliterated from the section for all intents and purposes though it may remain written on the statute book and be a good law when a question arises For determination of rights and obligations incurred prior to 26th January, 1950, and also for the determination of rights of persons who have not been given fundamental rights by the Constitution.
To the same effect are the observations of the Supreme Court in Bhikaji Narain Dhakras v. The State of Madhya Pradesh. There the fundamental right alleged to have been infringed was the right to practise any profession, or to carry on any occupation, trade or business under Article 19(1)(g) and the Supreme Court pointed out at p. 598 that ...Article 13(1) by reason of its language cannot be road as having obliterated the entire operation of the inconsistent law or having wiped it out altogether from the statute book. Such law existed for all past transactions and for enforcement of rights and liabilities accrued before the date of the Constitution, a3 was held in Keshavan Madhava Menon's case. The law continued in force, even after the commencement of the Constitution, with respect to persons who were not citizens and could not claim the fundamental right.
and a little later they pointed out that The true position is that the impugned law became, as it were, eclipsed, for the time being, by the fundamental right.
The Division Bench in Yusuf Abdul Aziz's case was dealing with an offence arising under the Indian Penal Code which is a pre-Constitution law and will be governed by Article 13(1) of the Constitution. Therefore, so far as the decision in Yusuf Abdul Aziz's case is concerned, there is direct conflict with the view taken in the two cases to which we have referred above and to that extent we do not think we can follow it.
80. The learned Advocate General also relied upon another decision of the Supreme Court in M.P. V. Sundararamier & Co. v. The State of Andhra Pradesh. [1958] S.C.R. 1422 There again the Supreme Court cited with approval at p. 1470 the statement of Cooley on Constitutional Law at p. 201 that "a finding of unconstitutionally does not destroy the statute but merely involves a refusal to enforce it". After referring to Wilkerson v. Rahrer (1891) 140 U.S. 545, 35 Law ed. 572 and to Behram Khurshed Pesikaka's case and The State of Bombay v. F.N. Balsara' [1951] S.C.R. 682, s.c. 53 Bom. L.R. 982 and other authorities, the Supreme Court summarised the result of the authorities at p. 1474 as follows:
...Where an enactment is unconstitutional in part but valid as to the rest, assuming of course that the two portions are severable, it cannot be held to have been wiped out of the statute book as it admittedly must remain there for the purpose of enforcement of the valid portion thereof, and being on the statute book, even that portion which is unenforceable on the ground that it is unconstitutional will operate proprio vigore when the Constitutional bar is removed, and there is no need for a fresh legislation to give effect thereto.
In this case the Supreme Court was not considering the bar resulting from a conflict with any fundamental right, but only with Article 286(7)(a) of the Constitution. It was a case of sales-tax and of a post-Constitution law. At pages 1475 and 1476 the Supreme Court themselves emphasised this distinction and pointed out that the case before them was not a case which turned on the construction of Article 13 of the Constitution, but that they were concerned with an infringement of Article 286(2). Nevertheless they reiterated the same principle. Having regard to the positive words of Article 13(7) "to the extent of such inconsistency" the principle can be deduced directly from its express language.
81. Mr. Peerbhoy relied upon a decision in Deep Chand v. State of U.P. where the difference between the provisions of Sub-article (1) and Sub-article (2) of Article 13 was pointed out and the Supreme Court stated the principle as follows (pp. 655-56) :
...The combined effect of the said provisions may be stated thus : Parliament and the Legislatures of States have power to make laws in respect of any of the matters enumerated in the relevant lists in the Seventh Schedule and that power to make laws is subject to the provisions of the Constitution including Article 13 i.e. the power is made subject to the limitations imposed by Part III of the Constitution. The general power to that extent is limited. A Legislature, therefore, has no power to make any law in derogation of the injunction contained in Article 13. Article 13(1) deals with laws in force w the territory of India before the commencement of the Constitution and such laws in so far as they are inconsistent with the provisions of Part III shall, to the extent of such inconsistency, be void. The clause therefore, recognises the validity of the pro-Constitution laws and only declares that the said laws would be void thereafter to the extent of their inconsistency with Part III; whereas Clause (2) of that article imposes a prohibition on the State making laws taking away or abridging the rights conferred by Part III and declares that laws made in contravention of this clause shall, to the extent of the contravention, be void. There a clear distinction between the two clauses. Under Clause (1), a pre-Constitution law subsists except to the extent of its inconsistency with the provisions of Part III; whereas, no post-Constitution law can be made contravening the provisions of Part III, and therefore the law, to that extent, though made, is a nullity from its inception. If this clear distinction is borne in mind much of the cloud raised is dispelled.
82. The same distinction was drawn in a recent decision in Mahendra Lal v. State of U.P. where Bhikaji Narain's case was referred to with approval. In para. 22 of the A. I. R. Report Mr. Justice Wanchoo pointed to the opening words of Article 13(2) "The State shall not make any law" and observed that that is what makes for the difference between Sub-article (2) and Sub-article (1) of Article 13. He observed (p. 1030) ;
...Now contravention in the context takes place only once when the law is made, for the contravention is of the prohibition to make any law which takes away or abridges the fundamental rights. There is no question of the contravention of Article 13(2) being a continuing matter. Therefore, where there is a question of a post-Constitution law, there is a prohibition against the State from taking away or abridging fundamental rights and there is a further provision that if the prohibition is contravened the law shall be void to the extent of the contravention. In view of this clear provision, it must be held that unlike a law covered by Article 13(1) which was valid when made, the law made in contravention of the prohibition contained in Article 13(2) is a still-born law either wholly or partially depending upon the extent of the contravention. Such a law is dead from the beginning and there can he no question of its revival under the, doctrine of eclipse.
83. In view of these clear pronouncements of the Supreme Court we cannot see our way to follow the decision in Yusuf Abdul Aziz's case, because that was clearly a case of pre-Constitution law and, therefore, would not be void from the inception even though it contravened the article. It would merely be eclipsed, to the extent of that conflict, by the fundamental right.
84. Having discussed the effect of Article 13 and shown why we are unable to follow Abdul Aziz's case however does not provide any solution to the question that has been raised. What is being argued here is that claimants Nos. 6, 7 and 8 are admittedly foreigners or, at any rate, non-citizens and they cannot take advantage of the provisions of Article 19 at all, for Article 19 commences with the recital "All citizens shall have the right...". Obviously, therefore, the preliminary condition of Article 19(1) is not fulfilled in this case. Nonetheless, it is urged that these claimants can show that the law is void, although they may not be able to claim the fundamental rights themselves. The whole of this theory is founded upon the remarks of the Division Bench in Yusuf Abdul Aziz's case and we have shown that the ratio of that case can no longer be binding on us in view of the several subsequent pronouncements of the Supreme Court.
85. Viewing this doctrine on its own, it seems to us that the argument which" Mr. Peerbhoy has advanced comes to this that though his clients are not citizens, though for that reason they cannot take advantage of Article 19 at all, or challenge the Repealing Act as contravening that article, nonetheless they can produce the same result by pointing out that the law before the Court is void. It virtually amounts to saying that these claimants can do indirectly what they cannot do directly having regard to the Constitutional provisions in Article 19. We do not think that we can permit by so obvious a device the contention to be raised. In so far as we have come to that conclusion we must emphasise that the provisions of Article 13(1) and (2) are not called into play at all. We cannot see what connection there is between the distinction drawn,that a pre-Constitution law infringing a fundamental right is only temporarily eclipsed and that a law made after the Constitution infringing a fundamental right is void in its inceptionand the question whether Article 19(1)(f) upon its own terms applies or not. Quite apart from the question whether the law is void or voidable, whether it is temporarily eclipsed or still-born, the fact remains that an essential condition to the applicability of Article 19(1) has not been fulfilled in so far as the person who is claiming to enforce that right is not a citizen. It seems to us a mere play of words to say that although he is not a citizen he is still entitled to show that the law is void, when in effect he cannot take advantage of that law. In our opinion, therefore, these claimants are not entitled to take advantage of Article 19 for the simple reason that they are not citizens, nor are they entitled to show that the law is void and, therefore, should not be enforced.
86. But assuming that we are not right in this view of the matter, the next question that falls to be considered is whether in fact any case is made out to show that Article 19(1)(f) has been infringed. We have already shown while discussing the challenge to the Act under Article 14 of the Constitution that in our opinion there is an intelligible nexus between the law made and the purpose to be achieved and that the basis for the classification made in that law is a reasonable basis. Having regard to the recitals in the preamble of the Repealing Act we have already said that the Legislature could very reasonably have come to the conclusion that there was no useful purpose served in continuing the Baronetcy Act and therefore repealing the same. For the same reasons they could reasonably have come to the conclusion that the trust declared under the Baronetcy Act should be revoked and extinguished and the Corporation consisting of the Trustees should be dissolved. As to the rest of the provisions of the Act all that Section 4, Sub-section (1) says is that the property shall go to those persons who are "rightfully entitled thereto according to law". Now in so far as that is what the statute says, we cannot see how it can infringe any right to acquire, hold or dispose of property. The statute simply says that the property shall go to the person rightfully entitled thereto according to law, i.e. no one's claim if it is just and rightful under law would be ignored and therefore would not infringe any right under Article 19(1)(f), No doubt if a course of succession or devolution different from the personal law of the parties had been indicated there was something to be said for the contention, but the Legislature went up to a point and then left the matter entirely to be decided by this Court according- to law. In the result no doubt there is a very vague and controversial provision of law which has given rise to much difficulty but we can hardly say that that provision infringes the guarantee under Article 19(1)(f). Apart from this we may also point out that there is nothing which prevents the Legislature' from making any law imposing reasonable restrictions on the exercise of any of the rights conferred by Clause (f) of Article 19(1), In our opinion, even though there may be a provision affecting a right to enjoy, hold and dispose of property, the law lays down only reasonable restrictions.
87. We have said this so far upon a consideration of the provisions of the Act excepting Section 1(4) which was invoked in his aid by the Custodian. We have already referred to Mr. Cooper's arguments in that respect and we shall deal with the question whether that section infringes Article 19 or not separately. For the present we may say that in our opinion it does not.
88. [His Lordship after considering a point not material to this report, proceeded.]
89. So far as the challenge to the Repealing Act under Article 31 of the Constitution is concerned, the matter can be briefly disposed of. Article 31(7) says that no person shall be deprived of his property save by authority of law. The Constitutional guarantee is, therefore, that a person cannot be deprived of his property unless there is authority for the deprivation in law. Now granting that the Repealing Act deprives anyone of property there is clear authority of law for the alleged deprivation. Bo far as Sub-article (2) of Article 31 is concerned, which was principally relied on by Mr. Peerbhoy, it refers to property being compulsorily acquired or requisitioned and lays down the conditions under which that can be done. Clearly there is no case here of acquisition or requisition of any property. If at all there is any provision affecting property the provision says that the trust properties shall be distributed between the claimants rightfully entitled thereto according to law. That can be hardly said to fall within the ambit of acquisition. The case so far as requisition is concerned is even worse. Moreover, the new Sub-article (2A) says that where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property. Obviously here there is no provision whatever for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State. It was feebly suggested that the transfer to and vesting of the trust properties in the Official Trustee was to a Corporation owned or controlled by the State. The argument has only to be stated to be rejected. There is no question of the Official Trustee being a Corporation owned or controlled by the State, though he has been constituted into a Corporation sole under the Official Trustees Act. There is nothing to show that there is any control over the Official Trustee by the State.
90. Then we turn to examine the last of the Constitutional objections to the Repealing Act namely its legislative competence. The argument under this head has been two-fold. The first argument is directed to showing that the Repealing Act falls within the ambit of entry 44 of List IUnion Listand that, therefore, it was beyond the legislative competence of the Legislature of the then State of Bombay which passed it. In answer the Advocate General sustained the legislative competence of the enactment on the basis of the Entry 10 of List III (Concurrent List). Entry 44 of List I relates to "Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities" whereas entry 10 of List III is concerned with "Trust and Trustees". We have already set forth the provisions of the Repealing Act and we have shown that the preamble recites that "difficulties have arisen in the administration of the trusts declared by the Baronetcy Act and whereas for that and for other diverse good reasons... " With that end in view Section 3 revoked and extinguished the trusts created by the Baronetcy Act and all powers, provisions, declarations and purposes by and in that Act declared and expressed. By Section 3(b) it dissolved the Corporation comprised of the Trustees under that Act. By Section 3(c) it provided that the trust properties shall vest in and be transferred to the Official Trustee and be handed over to him and that he shall hold and stand possessed of the same, for certain purposes. The purpose is expressed in Section 4(1) to be to distribute the same amongst the persons "rightfully entitled thereto according to law and until such distribution to manage the said trust properties according to the provisions of this Act". The provisions of Sections 5 and 6 are merely supplemental to the purpose mentioned in Section 4 namely that it provides a machinery by which the distribution contemplated in Sub-section (1) of Section 4 should take place. Section 7 deals with the actual distribution of the trust property and save and except one case contemplated in Sub-section (4) where any person entitled to the trust properties has been or is declared an evacuee the other provisions of that section in substance leave it to the High Court to decide disputes. The Official Trustee has no power to do so and can only himself distribute if the claims are' justified and are undisputed. Section 8 refers to the powers of the Official Trustee till the trust properties are thus distributed. Section 9 deals with powers of the Official Trustee to invest moneys vested in him. Obviously both Sections 8 and 9 provide for powers until the actual distribution takes place and do not go beyond that. Section 10 clearly provides that the provisions of the Act arc not to affect other rights and interests particularly the right of jointure if any. Section 11 grants an indemnity to the Corporation and the erstwhile trustees upon the repeal of the trusts created by the Baronetcy Act. Section 12 protects action taken in good faith. Section 13 excludes the operation of the Official Trustees Act, 1913. It is clear, therefore, that the principal object of the enactment was to get rid of the trusts created by the Baronetcy Act and for that purpose alone the Corporation comprising of the erstwhile trustees in directed to be dissolved. Save this provision in Section 3(b), there is hardly any other provision referring to the- Corporation in the Act. No doubt Section 3(b) winds up the Corporation but in the totality of the provisions of the Act, that provision probably is most innocuous and incidental to the other provisions. It is clear to us that the pith and substance of this enactment was to deal with the trust, the trust properties and the trustees under the Baronetcy Act and that it is only in an incidental manner that the legislation has provided for a Corporation. Since by the Baronetcy Act the Trustees were constituted into a Corporation sole, the Repealing Act had to say that the Corporation is dissolved. We cannot for that reason, however, hold that the legislation is in regard to the winding up of the Corporation. It directly and in substance makes provisions only for the trusts declared under the Baronetcy Act, the trust property and the Trustees constituted by the Act.
91. The Act beyond dispute is a Repealing Act and it repeals the provisions of the Baronetcy Act. There can be no doubt that the principal intention behind the Baronetcy Act was the settlement of property to uphold the dignity, state and degree of the Baronetcy and for that purpose to create a trust. As we have already pointed out, the trust with the provisions it contained namely that it "was to be for the benefit of successive holders of the title of Baronet, would have offended against the law against perpetuity. Therefore, the Legislature lent its aid and resorted to the device of incorporation of the trust. The incorporation, therefore, was only an aid to the main purpose of establishing a trust for the benefit of successive Baronets. Incorporation was not the main purpose or object of the Baronetcy Act. Much less, therefore, can an enactment which provides for the revocation and extinction of the trusts and dissolution of the Corporation have for its main purpose the dissolution of the Corporation. It is a significant fact that even the Corporation was entitled in the Baronetcy Act as "The Trustees of the Sir Currimbhoy Ebrahim Baronetcy". In other words, the Corporation itself was constituted of Trustees. In pith and substance, therefore, the enactment clearly falls within entry No. 10 in List III and not entry 44 in List I of the Constitution Schedule.
92. The point of some substance is the second part of the contention raised on the score of want of legislative competence. The argument is as follows: Though the State Legislature had the power to legislate it was a legislation falling within the Concurrent field and even acting within that field the State Legislature could not repeal what was an existing law made by another Legislature namely the then Governor General in Council which passed the Baronetcy Act, It was urged that having regard to the provisions of Article 254 the State Legislature with the assent of the President may enact a provision repugnant to a Central law but it has no power to repeal the law made by another Legislature much less a law made by a competent Central Legislature such as the then Governor General in Council. It was urged that in order to enable the State Legislature to repeal the Baronetcy Act there must be found an express power conferred upon the State Legislature to repeal it because it was not a legislation enacted by it but by an erstwhile Central Legislature.
93. Reliance was placed in this respect upon the remarks in two decisions of the Supreme Court. One was the decision in Zaverbhai Amaidas v. The State of Bombay. Discussing the provisions of Article 254(2) of the Constitution the Supreme Court compared them with those of Section 107 of the Government of India Act and pointed out that the article was in substance a reproduction of that section. Then Venkatarama Ayyar J. on behalf of the Court referred to the decision of the Privy Council in Attorney-General for Ontario v. Attorney-General for the Dominion [1896] A.C. 348 in order to construe Article 254. The remarks which the Supreme Court made in that connection at p. 806 and which Mr. Peerbhoy relied on were:
...Discussing the nature of the power of the Dominion Legislature, Canada, in relation to that of the Provincial Legislature, in a situtation similar to that under Section 107 of the Government of India Act, it was observed by Lord Watson in Attorney-General for Ontario v. Attorney-General for the Dominion, that though a law enacted by the Parliament of Canada and within its competence would override Provincial legislation covering the same field, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute. That would appear to have been the position under Section 107 of the Government of India Act with reference to the subjects mentioned in the Concurrent List. Now, by the proviso to Article 254(2) the Constitution has enlarged the powers of Parliament, and under that proviso, Parliament con do what the Central Legislature could not under Section 107 of the Government of India Act, and enact a law adding to, amending, varying or repealing a law of the State, when it relates to a matter mentioned in the Concurrent List. The position then is that under the Constitution Parliament can, acting under the proviso to Article 254(2), repeal a State law. But where it does not expressly do so, even the, the State law will be void under that provision if it conflicts with a later' law with respect to the same matter' that may be enacted by Parliament.
These remarks were quoted with approval in Tika Ramji v. State of U.P. The proviso to Article 254(2) gives power to Parliament to enact at any time any law in respect of any matter referred to in Sub-articles (1) and (2) including a law adding to, amending, varying or repealing the law so made by the Legislature of the State. Now the argument is that even in order to enable Parliament to repeal the law made by another Legislature, an express power had to be conferred upon Parliament. The Supreme Court has pointed out that it was only because of the conferment of that power of repeal that Parliament had the power to repeal a State legislation. A fortiori, therefore, does it require a clear express power of repeal to be conferred upon a State Legislature in order to enable it to repeal what was a Central law. Without an express provision giving power to repeal the enactment of another Legislature the State Legislature could not be assumed to have the power to repeal a Central law. Therefore, they could not have passed the Act to repeal the Baronetcy Act which was a Central law.
94. We have already held that the Repealing Act was within the legislative, competence of the Legislature of the then State of Bombay, and that it fell within the ambit of entry 10 of List III. The power to make that law is referrable to Article 246(2) of the Constitution which confers the power upon thf1 Legislature of any State to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule. Once, therefore, the legislation clearly falls within the ambit of the power conferred by the Constitution upon the Legislature it would require a clear provision to show that it is taken out of that power. It was ruled long ago in the leading case of The Queen v. Burah (1878) L.R 5 I.A. 178 at p. 193 that The Indian Legislature has powers expressly limited by the Act of the Imperial Parliament which created it, and it can, of courses do nothing beyond the limits which circumscribe these powers.
But the Privy Council hastened to add But, when acting within those limits, it is not in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation, us large, and of the same nature, as those of Parliament itself. The established Courts of Justice, when question arises whether the prescribed limits have been exceeded, must of necessity determine that question ; and the only way in which they can properly do 80, is by looking to the terms of the instrument by which, affirmatively, the legislative powers were created, and by which, negatively, they are restricted. If what has been done is legislation, within the general scope of the affirmative words which give the power, and if it violates no express condition or restriction by which that power is limited (in which category would, of course, be included any Act of the Imperial Parliament at variance with it), it is not for any Court of Justice to inquire further, or to enlarge constructively these conditions and restrictions.
Therefore, in so far as we have found that the enactment was within the legislative competence of the State Legislature, it is not for us to enlarge constructively any of the conditions or restrictions upon that power. Next we are of opinion that if the State Legislature had the power to enact a law relating to trust it must have the power to repeal a law relating to that trust. Unless the power to legislate which is expressly conferred by Article 246 read with the relevant entry in the Legislative List is controlled or restricted by any express provision, the power of repeal would be implicit. It seems to us almost axiomatic that if a Legislature within its own sovereign sphere is conferred powers of legislation on a particular subject implicit in those powers would be the power to repeal the same legislation.
95. But the further question that has been raised here is that the legislation which is repealed is not the legislation of that Legislature which has repealed it. It was the legislation of the then Governor General in Council which was the Central Legislative Authority and so we turn to examine whether there is to be found in any of the provisions of the Constitution such a power of repeal bearing in mind the principle to which we have just adverted that even in a Federal Constitution the Legislature of a State acting within the sphere of its own power is sovereign and secondly that any limitations of legislative powers must be express (See The United Provinces v. Atiqua Begum' [1940] F.C.R. 110, at p. 130 and Bhola Prasad v. The King-Emperor [1942] F.C.R, 17, at p. 27 and even after the Constitution the same view taken in Maharaj Umeg Singh v. The State of Bombay. [1955] 2 S.C.R. 164, at p. 179, s.c. 57 Bom. L.R. 709.
96. The provision analogous to Article 254 in the Government of India Act was, as pointed out by the Supreme Court, Section 107 of the Government of India Act. Sub-section (2) of Section 107 of the Government of India Act provided that, Where a Provincial law with respect to one of the matters enumerated in the Concurrent Legislative List contains any provision repugnant to the provisions of an earlier Dominion law or an existing law with respect to that matter, then, if the Provincial law, having been reserved for the consideration of the Governor-General has received the assent of the Governor-General, the Provincial law shall in that Province prevail, but nevertheless the Dominion Legislature may at any time enact further legislation with respect to the same matter.
The concluding words "nevertheless the Dominion Legislature may at any time enact further legislation with respect to the same matter" would, in our opinion, clearly include a provision repealing the previous legislation. This conclusion is further strengthened by a consideration of Section 292 of the Government of India Act, 1935, which is an analogous provision to Article 372 of the Constitution. It says that notwithstanding the repeal of the Government of India Act all the laws in force in British India immediately before the commencement of the Government of India Act "shall continue in force in British India until altered or repealed or amended by a competent Legislature or other competent authority". That again shows that the Legislature under the Government of India Act had the same power. A consideration of the analogous provisions under the Constitution of arts, 254(2), 372(2) and (3)(b) and 392 leads to the same conclusion. No doubt the proviso- to Article 254(2) expressly refers to the power of Parliament of enacting at any time any law with respect to any matter referred to in Sub-articles (7) and (2) including a law adding to, amending, varying or repealing the law so made by the Legislature of the State, but the language of the proviso is significant. It does not say that Parliament shall have the power to repeal, amend, add to, or vary a law so made but what it says is that "nothing in this clause shall prevent Parliament from enacting such legislation". In other words the proviso assumes that Parliament has the power and by way of abundant caution declares that nothing in Clause (2) shall prevent Parliament from enacting such a law. Therefore, first of all the proviso does not confer any power on Parliament at all to add to, amend, vary or repeal a law. It is in marked contrast to the language of Article 245(7) which says that "Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India". Here the conferment of the power by the Constitution is clear whereas the proviso to Article 254(2) couched in negative language, presupposes that the power is inherent in Parliament and so says that "nothing in this clause shall prevent Parliament from enacting at any time any law... ". Therefore, Mr. Peerbhoy is not right when he suggests that because of this express power conferred upon Parliament it must be assumed that a similar power is necessary for a State Legislature to enact a law repealing an enactment not passed by it.
97. Further a consideration of Article 372(7) and (2) which deal with the subject of "continuance in force of laws existing on the date of the Constitution", which as we have already pointed out is analogous to Section 292 of the Government of India Act, puts the matter beyond any controversy. Article 372(7) says:
Notwithstanding the repeal by this Constitution of the enactments referred to in Article 395 but subject to the other provisions of this Constitution, all the law in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority.
Here again the power of repeal is assumed and all that is provided for is the necessary qualification namely the competence of the Legislature to enact a law. We cannot, therefore, accede to the contention that the power to enact and the power to repeal must be separately conferred on a Legislature. Nowhere have the two powers been separated from each other so far as the Constitution is concerned. Sub-article (2) of Article 372 deals with the power of the President to make laws in order to bring the provisions of any law in force in the territory of India into accord with the provisions of the Constitution and the power of the President is stated in these words, "the President may by order make such adaptations and modifications of such law, whether by way of repeal or amendment, as may be necessary or expedient". Here again, the power of repeal is shown to be included in the power to make the adaptations and modifications. Sub-article (3)(b) of Article 372 provides that Nothing in Clause (2) shall be deemed...
(b) to prevent any competent Legislature or other competent authority from repealing or amending any law adapted or modified by the President under the said clause.
This is a power analogous to the power conferred in the proviso to Article 254(2) and the language is once again in the negative i.e. it says that "nothing shall be deemed to prevent any competent Legislature" (which incidentally would include a State Legislature) from repealing or lamenting any law. The power to repeal in the State Legislature, therefore, is again assumed as inherent.
98. In answer to these contentions founded upon the provisions of Article 372, Mr. Peerbhoy pointed out that in Sub-article (1) the power is "subject to the other provisions of this Constitution" and he, therefore, urged that Article 372 would be governed or controlled by Article 254 and by the proviso to Sub-article (2) of Article 254, in which case it would not advance the argument any further. Dealing with this very clause of Article 372 of the Constitution tile Supreme Court held in S.I. Corpn, (P) Ltd. v. Secy., Board of Revenue that ...The words' subject to the other provisions of the Consitution' should, therefore be given a reasonable interpretation, an interpretation which would carry out the intention of the makers of the Constitution and also which is in accord with the constitutional practice in such matters. The article posits the continuation of pre-existing laws made by a competent authority notwithstanding the repeal of Article 295 ; and the expression 'other' in the article can only apply to provisions other than those dealing with legislative competence... a pre-Constitution law-made by a competent authority, though it has lost its legislative competency under the Constitution, shall continue in force, provided the law does not contravene the other provisions of the Constitution.
In view of this clear pronouncement of the Supreme Court, Article 254 which deals with the subject of legislative competency cannot be held to control Article 372, in spite of the use of the expression in that article of the words "subject to the other provisions of the Constitution".
99. We have pointed to these provisions, of the Constitution to show that it is not essential that an express power of repeal should be conferred upon a Legislature even if it be the repeal of a legislation passed by another Legislature, but obviously so long as the remarks of the Supreme Court in Zaverbhai's case stand, they would be binding upon us, even if they be obiter dicta. The learned single Judge, however, has held that these remarks were mere casual observations and not binding upon him and it is in connection with that finding that we have ventured to refer to the several provisions of the Constitution.
100. The finding of the learned single Judge that the remarks in Zaverbhai's case were mere casual observations was, however, strongly attacked by Mr. Peerbhoy. Zaverbhai's case was not a case where the proviso to Article 254(2) was applicable and there was no question of repeal involved in that case. The case arose out of two different enactments. A Central Act had prescribed a punishment of three years' imprisonment for an offence under Section 7 of the Essential Supplies (Temporary Powers) Act. The then State of Bombay considered that the maximum punishment of three years provided by that section was not adequate for offences under the Act and with a view to enhancing the punishment prescribed enacted the Bombay Act XXXVI of 1947. The question before the Court was, which was the Act which was to prevail. It was argued that the particular section of the Bombay Act was plainly repugnant to Section 7(1) of the Essential Supplies (Temporary Powers) Act. It will be seen, therefore, that it was a case falling within Article 254(2) of the Constitution and no question of the applicability of the proviso to that Sub-article ever arose. In considering the provisions of Article 254 the Supreme Court referred to Section 107(2) of the Government of India Act which it observed was analogous. They called it a reproduction. Mr. Justice Venkatarama Ayyar then referred to the case of Attorney-General for Ontario v. Attorney-General for the Dominion and indicated that that case was an authority for the proposition that though a law enacted by the Parliament of Canada and within its competence would over-ride- Provincial legislation covering the same field, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute. The learned Judge also referred to the proviso to Article 254(2) and observed that acting under the proviso to Article 254(2) Parliament can repeal a State law, but where it does not expressly do so, even then, the State law will be void under that provision if it conflicts with a later "law with respect to the same matter" that may be enacted by Parliament. It is clear that the Supreme Court was not concerned in that case with legislation in the concurrent field. The question was of repugnancy between a Central law and a State law. The remarks, therefore, were not necessary for the decision of the question before the Supreme Court.
101. As to what constitutes a mere casual observation or an obiter dictum in a decision, has been indicated in a Full Bench decision of this Court in Kaikhusroo Phirozshah v. State of Bombay. (1954) 57 Bom. L.R. 24, f.b. Chief Justice Chagla put the distinction thus (p. 28):
...We have had occasion recently to point out (Mohandas v. Sattanathan ) that we must show the same respect for an obiter dictum of the Supreme Court as we used to show to the obiter dictum of the Privy Council. Judicial discipline undoubtedly requires it. But we also pointed out what are the obiter dicta which require to be followed by the High Courts in India. Any considered opinion by the Supreme Court, even on a point which does not strictly arise for decision, must be accepted by the High Courts as laying down a statement of law which must be followed. But with great respect to the Supreme Court, we do not read this particular observation as laying down that the views of the Supreme Court, expressed with great emphasis and after due deliberation, have been set aside by a passing casual observation that Article 19(1)(f) applied to the facts of that case.
In the earlier case to which reference was made, the same learned Judge defined what was an obiter dictum as follows (p. 1160):
But the question still remains as to what is an obiter dictum given expression to by the Supreme Court which is binding upon the Courts in India. Now, an obiter dictum is an expression of opinion on a point which is not necessary for the decision of a case. This very definition draws a clear distinction between a point which is necessary for the determination of a case and a point which is not necessary for the determination of the case. But in both eases points must arise for the determination of the tribunal.
102. Mr. Peerbhoy relied upon a decision of a learned single Judge of the Allahabad High Court in Union of India v. Firm Bam Gopal to urge that there can be no such distinction between a casual observation and an obiter dictum of the Supreme Court and that every statement in a decision of the Supreme Court would be of equal authority. We need not go into the reasons which impelled the decision of the learned Single Judge. Suffice it to say that we are ordinarily bound to follow the two decisions of this Court. Moreover the decision of the Allahabad High Court is not binding upon us.
103. The learned Advocate General did also advance a considerable argument to suggest that the observations in Zaverbhai's case, which we have quoted above, were per incuriam and for that reason we should not follow them. He pointed out that the reference to the ease of Attorney General for Ontario v. Attorney General for the Dominion, was incorrect. That case he urged was not a case of legislation falling within the concurrent field at all. It arose under Sections 91 and 92 of the British North America Act, 1897, which dealt with the general power of legislation conferred upon the Dominion Parliament and the power of the Provincial Legislature under Section 92. So far as the concurrent field of legislation is concerned, there was no provision in the British North America Act except in Section 95 and that section dealt with only two subjects which were not relevant to the decision in that case. Therefore, the Ontario case was not at all concerned with the concurrent field of legislation and reference to it in a case where the concurrent field of legislation was involved was inappropriate.
104. Thus the Supreme Court regarded the case as seen from the following remarks:"concerning a law enacted by the Parliament of Canada within its competence would over-ride Provincial legislation covering the same field". The remarks suggest that it was a decision in a concurrent field of legislation, which was not the case. On this ground the learned Advocate General suggested that the remarks in Zaverbhai's case should be held to be per incuriam. We do not think, however, that we need go into that question. It is sufficient for our purpose to show that the remarks which we have reproduced were mere casual observations not binding on us. In that view we have already referred to the relevant provisions of the Constitution from which we infer that a power of repeal is implicit in a power to legislate on one and the same subject and so long as the particular Legislature remains within the ambit of its legislative power and has legislative competence, it is immaterial that its legislation has the effect of repealing the legislation of another Legislature.
105. We may also refer to a recent decision of the Supreme Court in M/s. Ram Krishna v. Janpad Sakha where a tax legislation was repealed after the commencement of the Government of India Act, 1935, and while Section 143 declared that "the tax may continue to be levied," there was no express power of repeal. The Supreme Court referred once again to the Ontario case and used it to construe the relevant provision namely Section 143(2) of the Government of India Act. Dealing with the argument that the power to levy a tax does not give a power to repeal the legislation, the Supreme Court held at page 1079, para. 14 as under:
It must however be observed that merely because the legislature is empowered undo the entry to constitute local authorities and vest thorn with power and jurisdiction it would not follow that these local bodies could be vested with authority to levy any and every tax for the purpose of raising revenue for the purposes of local administration. They could be validly authorised to raise only those taxes which the province could raise under and by virtue of the relevant entries in the Provincial Legislative List. This is on the principle that the Province could not authorise local bodies created by it to impose taxes which it itself could not directly levy for the purposes of the Provincial Government. Now comes the question whether the Provincial Legislature was competent, by legislation, to discontinue the levy of the tax by effecting a repeal of the taxing provision contained in the Local Self-Government Act of 1920. There is no doubt that the general principle is that the power of a legislative body to repeal a law is co-extensive with its power to enact such a law, as would be seen from the following passage in the judgment by Lord Watson in Attorney-General for Ontario v. Attorney-General for the Dominion, at page 366 :
Neither the Parliament of Canada nor the provincial legislatures have authority to repeal statutes which they could not directly enact.
But obviously its application in particular instances would be controlled by express constitutional provision modifying the same. We have such a provision in the case on hand in Section 143(2) of the Government of India Act, 1935. In the context the relevant words of the sub-section could only mean ' may continue to be levied if so desired by the Provincial Legislature' which is indicated by or is implicit in the use of the expression 'may' in the clause ' may be continued until provision to the contrary is made by the Federal Legislature'.
106. In accordance with this view the Supreme Court construed the words "may continue to be levied" occurring in Section 143(2) of the Government of India Act to justify the repeal of that legislation.
107. It seems to us further that it can hardly be doubted that a power to legislate would imply a power to amend that legislation and to that extent every amendment made to a legislation does in some measure repeal the previous legislation yet it can hardly be said that the Legislature which is given power to legislate cannot amend its own legislation. That again would show that the power to repeal a legislation is implicit in the power to enact itself.
108. The Supreme Court considered this position in State of Orissa v. M. A. Tulloch & Co. and pointed out that the entire theory underlying implied repeals is that there is no need for the later enactment to- state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions indicating a supersession of an earlier law then there is in law a repeal notwithstanding the absence of the word "repeal" in the later statute. If the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded a legislation without stating in express terms that it is repealing another enactment can achieve that object. If the Legislature by passing positive legislation can impliedly repeal another legislation it is. not necessary for them to have an express power to repeal. If a Legislature, acting within the scope of its legislative competence, can impliedly repeal another piece of legislation would it make any difference that the legislation repealed was not made by itself? In principle it seems to us that it would not. If we were to confine the power of a Legislature acting within its competence to repealing impliedly only legislation which has been passed by itself we would in effect be cutting down its legislative competence itself which we cannot do. In our opinion, therefore, the proviso to Article 254(2) does not show that the State Legislature in order to repeal the legislation passed by another Legislature even though it be a central legislation, must have an express, power of repeal conferred upon it. So long as it acts within the sphere of its legislative competence it may repeal or affect another statute not made by itself. The legislation before us namely the Repealing Act was therefore not lacking in legislative competence in any way. We accept in this respect the finding of the learned single Judge. We hold that the Sir Currimbhoy Ebrahim Baronetcy (Repeal and Distribution of Trust Properties) Act, 1959, is not ultra vires of either Article 14 or Article 19 or Article 31 of the Constitution and that it was a piece of legislation enacted by a Legislature competent to do so and within the ambit of its powers.
109. Then we turn to points raised in these appeals other than Constitutional. We have already referred to the provisions of Sections 3 and 4 of the Repealing Act. These sections completely did away with the trusts created by the Baronetcy Act and the Corporation established thereunder. Under Section 3(a) the trusts, powers, provisions, declarations and purposes by and in that Act declared and expressed were revoked and extinguished. The Corporation was dissolved and it was declared "shall cease to function". The Trustees, it was declared "shall cease to. hold office as such Trustees". By these provisions, the provisions of the Baronetcy Act were in substance put an end to. Then the Repealing Act made provisions for the future. Clause (c) of Section 3 provided that the immoveable properties shall vest in the Official Trustee and that the moneys, investments, securities or other movable property shall stand transferred and be handed over to him. It also provided that the Official Trustee shall hold and stand possessed of the same for the purposes and with and subject to the powers and provisions hereinafter expressed. Now upto this stage, nothing more was done by the Repealing Act than to destroy the rights and liabilities created under the Baronetcy Act, but the trust properties remained and they were directed to be held by the Official Trustee for certain purposes. Curiously enough those purposes are nowhere stated in the subsequent provisions of the Act. The only provision as to what is to happen in future to the trust property is Sub-section (1) of Section 4 and all that it says is that the Official Trustee shall take possession or charge of the trust properties, (which is a repetition of the concluding words of Section 3(c)), make an inventory thereof and hold the trust properties upon trust to distribute the same "amongst the persons rightfully entitled thereto according to law". No words that we have come across in recent legislation have caused more difficulty than those words in this legislation, for instead of specifying any positive intent the Legislature has virtually said nothing except that the Courts should find out who are the persons rightfully entitled according to law, and give the property to them.
110. It is on the basis of these words in Section 4(7) that the trust properties are now being claimed exclusively for himself by Mohamedbhoy, the Fourth Baronet as well as by each one of the thirty other claimants before- the Official Trustee. In view of the fact that the beneficial interest of the Fourth Baronet has vested in the Custodian of Evacuee Property, the Custodian on his part claims the entire property including the corpus of the trust properties, for it is his contention that by virtue of certain notifications under the Administration of Evacuee Property Act the entire property now vests in him, That is the subject-matter of. Appeal No. 34 of 1963.
111. The claims of the several claimants who have been held by the learned single Judge to have been heirs of the first Baronet under the Muslim Personal Law is based upon the equitable doctrine of resulting trust. It was contended on their behalf before the learned single Judge and accepted by him that upon the extinguishment of the trusts by the Repealing Act and the dissolution of the Corporation, the properties must be held to revert to the original settlor viz. the First Baronet. Before us all the parties including claimants Nos. 6, 7 and 8 as well as the Custodian have throughout argued the matter as if the trust created by the Baronetcy Act was a private- trust created directly by the First Baronet himself and they have also assumed throughout that the repeal by the Legislature was as if it were a repeal by the settlor himself. The question then is whether upon the failure of the trusts created by the Baronetcy Act the trust properties which the Official Trustee is holding upon trust to distribute amongst the persons rightfully entitled thereto according to law, should go by way of a resulting trust to the estate of the First Baronet or whether there is to be found expressed or implied any intention in the settlor to give away the properties to the branch in which the Baronetcy has devolved. A considerable part of the time taken in these appeals was taken in a discussion of the principles governing this doctrine of resulting trust and the effect upon that doctrine of the expression of a contrary intention by the settlor.
112. The learned single Judge referred in his judgment to a passage from Scott on Trusts, Vol. 3, Article 411, but since it was contended by Mr. Palkhivala on behalf of claimant No. 30 that the entire passage in that Article of which the passage formed a part, was not referred, we would reproduce the entire passage in Article 411 to show what the principle consists in:
If an owner of property transfers it inter vivos upon a trust which fails either at the outset or subsequently, and ho has not indicated what disposition should be made of the property in the event of the failure of the trust, the trustee cannot retain it but will be compelled in equity to restore it to the settlor. In such a case the trustee holds the property upon a, resulting trust for the settlor. Since the trustee was not intended to have the beneficial interest, and since the beneficial interest was not otherwise disposed of, it reverts or results to the settlor. On the failure of the trust the court will put the parties in state quo by restoring the property to the settlor. If, however, the settlor property manifested an intention that no resulting trust should arise in the event of the failure of the trust, it will not arise, but the property will be disposed of in accordance with his intention, whether that intention is expressed in specific language or not. No resulting trust arises if it appears by evidence properly admissible that in the event of the failure of the trust the property should be transferred by the trustee to a third person, or held upon a different trust, or that it should be retained by the trustee free of trust.
In Article 412 the learned author has further explained the basis of a resulting trust as follows (p. 2184):
Where an express trust fails, a resulting trust in favour of the settlor arises not because the settlor actually intended that it should arise but because he did not intend that the trustee should have the beneficial interest and did not make any other disposition of the property in the event that the intended trust should fail... The resulting trust is rebutted when it is shown that the settlor intended that in the event of the failure of the trust the property should be held in trust for other purposes.
113. In Underhill's Law of Trusts and Trustees, 11th edn., the same principle is explained in Article 27 at page 172, but there is a passage quoted at page 173 from the decision of the Court of Appeal in Merchant Taylors' Co. v. Attorney-General (1871) L.R. 6 Ch. 512, at p. 518 which throws a great deal of light upon how this principle is administered in English Courts of Chancery. Lord Justice James stated the rule as follows:
As a general rule of law, it is clear that where there is a gift to trustees merely as trustees, they cannot take any benefit arising from the fact that the expressed trusts do not, whether originally or from any subsequent event, exhaust the whole estate. In ordinary trusts the results are, that there is an implied trust for the donor's heirs or representatives. In most cases of gifts for charitable purposes there is an implied trust for charity.
But there is a class of casesnot confined or peculiar, as it seems to me, to gifts to colleges, municipal corporations, or city guildsin which it is a fairly moot question whether, in a gift of property to trustees, they take as trustees solely for the purposes of the trusts, or take subject only to the due execution of the specified trusts. And, in considering that question where it fairly arises, every surrounding circumstance, the character and position of the donor and donee, the more or less probability of one intention or another, the current of authorities in similar, or nearly similar, cases, are all matters which the Court of construction not only may, but must, look to for aid and guidance.
The same principles are to be found stated in Lewin on Trusts, 15th edn., at pages 130 and 131 and in Halsbury 's Laws of England, Simonds edn., Vol. 38, at pages 861 and 862 in paras, 1451 and 1453. As an illustration of how a resulting trust arises Underhill at page 11 gives the following illustration:
A., by his will, gives property to B., in trust for C., who dies before the testator. Here the trust in favour of C. fails ; but, as it is obvious that the testator never intended that B. should have the beneficial interest in the property, equity constructs or implies a trust in favour of A.s heir, or residuary devisee, or residuary legatee, as the case may require. That is an example of that species of ' constructive trust' which is known as a ' resulting trust,' from the Latin verb resultare, to spring back. Similarly, there is a resulting trust for the settlor where an express trust fails for uncertainty as, for example, because it is impossible to ascertain the beneficiaries.
Of course, as we have shown above, the whole of this illustration is subject to the rule that a contrary intention, contrary to the resulting trust is not expressed or implied.
114. In Cook v. Hutchinson (1836) 48 E.R. 222 at page 225 Lord Langdale, the Master of the Rolls, adopted the principles laid down by Lord Hardwicke in Hill v. The Bishop of London (1737) 1 Atk. 618 with the following observations:
Upon this deed a question is made whether there is or is not a resulting trust to the grantor as to the surplus, with respect to which there is no declaration of trust; and for the purpose of determining that question, it is necessary to look carefully to the language of the deed, and to the circumstances of the particular case. In general, where an estate or fund is given in trust for a particular purpose, the remainder, after that purpose is satisfied, will result to the grantor ; but that resulting trust may be rebutted even by parol evidence, and certainly cannot take effect where a contrary intention, to be collected from the whole instrument, is indicated by the grantor, The distinctions applicable to cases of this kind are pointed out in the case of King v. Denison 1 V. & B. 260 by Lord Eldon, who adopts the principles laid down by Lord Hardwicke in Hill v. The Bishop of London. The conclusion to which Lord Hardwicke comes is, that the question whether there is or is not a resulting trust must depend upon the intention of the grantor. ' No general rule,' ho observes, ' is to be laid down, unless where a real estate is devised to be sold for payment of debts, and no more is said ; there it is clearly a resulting trust, but if any particular reason occurs why the testator should intend a beneflcial interest to the devisee, there are no precedants to warrant the Court to say it shall not be a beneficial interest.
In this particular case, the father over 80 years of age had executed a deed making a provision for himself during his life and for his wife and children after his death. lie then proceeded to make a release and assignment of the property comprised in the deed, to his son "upon the trusts hereinafter declared concerning the same"; but when ho actually declared the trusts he did not exhaust the whole of the property and the Court held that though he did not exhaust the whole of the property that was an immaterial circumstance, for having carefully looked through the whole of the deed and considering the relation between the parties and the object and purport of the instrument, the Court came to the conclusion that the father intended to part with all beneficial interest in the property, and that he meant his son to have the benefit of that part of the property of which the trusts were not expressly declared.
115. It may at once be admitted that the case of Cook v. Hutchinson may not be an authority under similar circumstances in India for in England the principle of advancement operates where a near relation to the settlor is concerned. It is equally clear that in India the principle of advancement does not operate and that was settled many years ago by decision of the Privy Council. Nevertheless it seems to us that the circumstance that a person is a near relation of the settlor cannot wholly be ignored and that it would be one of the circumstances and an important circumstance to be taken into account in the Court discharging its duty to find the true intent of the settlor or the testator.
116. The principles, therefore, to be culled from these authorities regarding resulting trusts and an intention contrary to resulting trust are as follows:
(a) When a gift or a trust fails equity presumes that the donee or devisee is not to take the property of which he is only the legal owner, but the property must be held for the benefit of the settlor's "heirs or representatives".
(b) The above rule is subject to a contrary intention expressed by the settlor or implied from the terms of the settlement. If the intention is express on the face of a document, no evidence to the contrary is admissible, but, on the other hand, if the intention is to be implied or gathered from the surrounding circumstances, then parol evidence is admissible.
(c) The test is to see whether in a gift of property to trustees, they take as trustees solely for the purposes of the trusts or take subject only to the due execution of the specified trust.
(d) In determining the settlor's or testator's intentions "every surrounding circumstance, the character and position of the donor and donee, the more or less probability of one intention or another, the concurrent authorities in similar or nearly similar cases, are all matters which the Court of construction not only may, but must, look to for aid and guidance".
(e) If there is a near relation such as a son or a wife who is the donee or devisee the presumption is that he or she takes absolutely so far as the law in England is concerned. In India there is no such presumption of advancement but the relationship of the donee or devisee to the settlor is an important circumstance among others to be taken into account.
117. [His Lordship then examined the circumstances existing in the ease in the light of the above principles and after considering the provisions of the Repealing Act and the Will dated October 22, 1916, left behind by the 1st Baronet, proceeded].
118. Upon the facts what is the obvious intention of the settlor in the event of the trusts created by the Baronetcy Act failing" In our opinion, upon these circumstances, there can be only one answer and that is that in the event of the failure of the trusts, after his life-time the trust properties should be held for the benefit of the Baronet for the time being and that because that property was by the Act to go to each one of the heirs male of his body only lit did not give to the first one among them Mohamedbhoy, the Second Baronet, anything during his life-time. The intention contrary to a resulting trust is thus clearly manifested.
119. [His Lordship after referring to some points not germane to this report, proceeded].
120. Then we turn to examine whether there is any impediment in law to our giving effect to this doctrine of a contrary intention. First we turn to the provisions of the Repealing Act to see if the Repealing Act has debarred us from giving effect to the doctrine or put any impediment in the way of enforcing that doctrine. The only relevant provisions are Sections 3 and 4. We have already referred to these provisions. By Clause (a) of Section 3 the trusts, powers, provisions, declarations and purposes by and in the Baronetcy Act were revoked and extinguished and by Clause (b) the Corporation was dissolved and it ceased to function. Therefore, so far as the trusts and the trustees under the Baronetcy Act were concerned, they ceased to exist. Clause (c) then vested the trust properties in the Official Trustee who was enjoined to hold and stand possessed of the same "for the purposes and with and subject to the powers and provisions, hereinafter expressed". Section 4(7) no doubt gave effect to a new trust. It says As soon as may be after the commencement of this Act the Official Trustee shall take possession or charge of the trust properties and make an inventory thereof and hold the trust properties upon trust to distribute the same amongst the person rightfully entitled thereto according to law...
We are not concerned here with the ancillary provision as to management until the distribution takes place.
121. Now the trust properties referred to in this sub-section are denned as meaning1 all properties whether immoveable or movable of whatever description which are subject to the settlement created by the Baronetcy Act and which immediately before the commencement of the Repealing Act were vested in the Corporation. The sub-section says that these trust properties shall be held "upon trust" and the purpose is stated to be "to distribute the same amongst the persons rightfully entitled thereto according to law". What then was it that the Legislature had in mind when it made this provision in Sub-section (1) of Section 4? Obviously the Legislature did intend to create another trust. It seems to us that there is no escape from the words "hold the trust properties upon trust to distribute the same" A trust was intended to be created pro tern though much argument was advanced to the contrary. Mr. Palkhivala urged that it was only for the purposes of distribution. We were not told how nonetheless it ceased to be a trust. The purpose may be ephemeral or temporary, that is to say until the properties are distributed or it may be permanent, but that seems to us hardly material upon the question whether there is a trust or not. We have no doubt that by Section 4(1) the Legislature created a new trust. In terms the sub-section says so.
122. Then the question is does this provision of the legislation preclude the application of the doctrine of resulting trust or of an intention contrary to a resulting trust? Normally, if the Legislature had made provision or indicated its intention as to how the property was to be distributed or was to devolve, we may have considered that that was an indication that the doctrine should not apply. But the Legislature has made absolutely no provision and not indicated its mind in the slightest degree as to how the property should be distributed. All that it says is "distribute the property amongst the persons rightfully entitled thereto according" to law". Therefore, it seems to us that although a new trust came into being and was created by the Legislature the purpose of the trust is so stated as not to preclude the application of the doctrine of resulting trust or the doctrine of an intention contrary to a resulting trust. We do not think that there is any impediment to the application of the doctrine so far as the Repealing1 Act is concerned.
123. Then we turn to consider whether there is anything in any other law preventing- the- application of the doctrine. In the several arguments that were advanced in opposition, two provisions of law were referred to viz. Sections 83 and 94 of the Indian Trusts Act. The principal argument in this respect was advanced by Mr. Bhabha supported by Mr. Pandya and Mr. M.M. Zaveri. The argument is that either Section 83 or Section 94 applies to this ease and that, therefore, the Legislature having crystallised the doctrine of resulting trust or an intention contrary to a resulting trust in the statute, itself, the Courts are precluded from giving effect to the general doctrine as we have stated it above. Section 83 runs as follows:
Where a trust is incapable of being executed, or where the trust is completely executed without exhausting the trust-property, the trustee, in the absence of a direction to the contrary, must hold the trust-property, or so much thereof as is unexhausted for the benefit of the author of the trust or his legal representative.
Two conditions are stated in the opening clause of the section which are conditions without which the section would become inapplicable. They are (a) where the trust is incapable of being executed or (b) where the; trust is completely executed without exhausting the trust property. Now what arc the circumstances here? The trusts created by the Baronetcy Act were completely revoked and extinguished, and the Corporation which held the trust properties was dissolved. In lieu of that trust which was extinguished and dissolved a new trust came into being with the avowed object of distributing the trust properties amongst "the persons rightfully entitled thereto according to law". Can it be said then that this was a clase where "a trust is incapable of being executed"? Either the first trust was completely extinguished or dissolved and a new trust was created in its place or the old trust continued in the guise of the new. In either case it seems to us hardly a case of incapability of the trust being executed or a trust being completely executed. It must also be noticed here that Section 3(c) says that the immoveable property shall vest in the Official Trustee upon the revocation of the trusts by Section 3(a) and the movable property "shall stand transferred to" the Official Trustee who shall hold and stand possessed of it for the purposes of the new trust mentioned in Section 4(1). The language used is "shall vest" and "shall stand transferred to" thus showing that there is no gap or time lag between the revocation and extinguishment of the old trust and the creation of the new trust with the object of distribution. It can hardly be said that under these circumstances the Baronetcy trust became "incapable of execution" or was completely executed without exhausting the trust property. The present is a unique case where a trust is; being revoked and extinguished by a statute which at the same time statutorily creates a new trust with a different mode of distribution. The draftsman of Section 83 would, we are sure, have been surprised if he were told that he had provided for a case like this.
124. The several ways in which a trust is extinguished are indicated in Section 77 and the cases are (a) where its purpose is completely fulfilled, (b) where its purpose becomes unlawful, (c) where the fulfilment of its purpose becomes impossible and (d) where the trust being revocable is expressly revoked. The first three clauses cannot apply to the present case, but it was urged that this was a case where the trust being revocable is expressly revoked. "We have already shown that the provisions of Sections 3 and 4 of the Repealing Act are peculiar; possibly if such provisions have been made by a deed of private settlement it would have been inoperative and of no effect, for the purposes of the trust newly created under Section 4(1) seem to be utterly vague land uncertain, but apart from that, the trust properties under the Baronetcy Act were unprovided for after the revocation and extinguishment of the trust and the dissolution of the Corporation and Section 4(1) immediately vested them in the Official Trustee upon trust. The second trust undoubtedly has not become incapable of being executed nor, it seems to us, in spite of the revocation of the first trust can that trust be said to be incapable of being executed. The illustrations to Section 83 indicate what is the import of the conditions laid down in the opening clause of Section 83 and the illustrations are eloquent. They are as follows: A conveys certain land to B (1) upon trust and no trust is declared; (2) upon trust to be thereafter declared and no such declaration is ever made; (3) upon trusts that are too vague to be executed; (4) upon trusts; that become incapable of taking effect; (5) in trust for "C" and "C" renounces his interest under the trust. It was urged by Mr. Bhabha that the fourth illustration covers the present case. The fourth illustration does not, however, make clear what is the meaning of the words "incapable of being executed" except to show that it is incapable of taking effect. In our opinion the meaning is that the trust is there but is incapable of taking effect, i.e. the trust subsists but its purpose has failed, but surely such a case cannot be approximated with a ease such as we have here where Section 3(a) provides that the trusts, powers, provisions, declarations and purposes by and in that Act declared and expressed shall be and are hereby revoked and extinguished. The first clause of Section 77 cannot be fulfilled in a case like the present. It contemplates a ease where the trust is completely executed. That obviously has not happened in the present case. On the contrary, the trust was presumably extinguished and revoked without its purpose being completely fulfilled and so to say merged in a new trust.
125. Moreover it seems to us that even assuming that Section 83 is applicable, the section only refers to a particular case under particular circumstances and it cannot displace the application of the doctrine governing the intention contrary to a resulting trust. The Chapter in which it occurs, viz. Chapter IX, itself says that it deals with the subject "Of certain Obligations in the Nature of Trusts" and does not deal exhaustively with each variety of obligation in the nature of trusts which can arise under different circumstances. The case does not directly fall under Section 83 and therefore we do not think that the doctrine of an intention contrary to resulting trust cannot apply
126. Reliance was placed in this connection on a decision of this Court in Dwarkadas Damodar v. Dwarkadas Shamji (1913) I.L.R, 40 Bom. 341, s.c. 17. Bom, L.R. 938 and particularly upon the remark of Scott C.J. at page 347 that The law as to what are known in ordinary legal language as 'resulting trusts' is stated in Section 83 of the Indian Trusts Act" and it was urged that that is the authority for the view that the English doctrines of a resulting trust and a contrary intention cannot apply in India and that we are governed only by the provisions of Section 83. Dwarkadas's case, in our opinion, is distinguishable. In that case the daughter of the settlor was the sole heir of the settlor and it was held that she was also the sole beneficiary capable of taking under the settlement. Therefore her life interest under the settlement merged in her reversion on the principle that (p. 350) ... whenever a greater estate and a less coincide and meet in one and the same person without any intermediate estate, the less is immediately annihilated ; or, in the law phrase, is said to be merged, that is, sunk or drowned, in the greater.
Section 83, therefore, was not applied and it was not a case falling under that section.
127. Then we turn to Section 94. It runs as follows:
In any case not coming within the scope of any of the preceding sections, where there i3 no trust, but the person having possession of property has not the whole beneficial interest therein he must hold the property for the benefit of the persons having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands.
The phrase in this section '' where there is no trust invited considerable comment from either side. On one side it was urged that it includes a case where there was a trust, but it Was revoked under the power of revocation as in the present case. On the other hand, it was urged that Section 94 contemplates a class of cases where there is no trust ab initio and in support of this contention were pressed the illustrations appended to this section. Illustration (a) it was said shows a Case where the trust from its very inception was illegal and, therefore, there was no trust. Illustration (b) is a case of the creation of a trust by mistake and obviously where there is a mistake it is as if a trust is nonest. Illustration (c) in terms refers to a void gift. It is urged that it is in cases similar to those that 'are shown in the illustrations which alone come under the phrase "where there is no trust". On the other side it is argued that even if a valid trust has come into being and is revoked, the case would also fall under Section 94.
128. While there is much plausibility in the argument that it refers to the case where the trust from the very inception was illegal in view of the illustration pointed out, we do not think that we need examine these rival contentions for even assuming that the opening clause of Section 94 applies to the present case, Section 94 does not assist anyone in solving the problem before us which is whether the doctrine of a resulting trust and contrary intention apply. As we have said, Section 4(1) of the Repealing Act merely says "to distribute the property amongst the persons rightfully entitled thereto according to law". Section 94 does not assist us in finding out who are the persons "rightfully entitled according to law. All that it says is that if the conditions in the opening clause are fulfiled, the person holding the property "must hold the property for the benefit of the persons having such interest, or the residue thereof to the extent necessary to satisfy their just demands". The question, therefore, who are the persons having such interest or the residue thereof to the extent necessary to satisfy their just demands, still remains to be determined and to that extent, we think that Section 94 does not carry the case any further than Section 4(1) of the Repealing Act. In that view it is not necessary to consider Section 94 in greater detail. "We do not think that there is any impediment to the application of the doctrine of resulting trust and of an intention contrary to a resulting trust so far as the provisions of law are concerned.
129. Then we turn to consider certain arguments (advanced by Mr. Palkhivala. On the application of the doctrines he urged that the doctrine postulates certain fundamental conditions and in the absence of those conditions the doctrine cannot be invoked. He did not rely upon Section 83 or any other provision of the Trust Act. The argument runs as follows:
130. That the doctrine of a resulting trust or the doctrine of an intention contrary to a resulting trust is by itself never the foundation of a right or title. A resulting trust is unheard of where a trust is completely abolished or as in the present case is revoked and extinguished, for both the legal and equitable interests are terminated thereby. Section 3 of the Repealing Act repeals the Baronetcy Act altogether and says that in consequence the trusts are revoked and extinguished. Even the trustees are made to cease to function. Therefore the doctrine cannot create any title in anyone, though it may be used by a party to defend a title already inherent in him or to prevent a title passing which inheres in him. Mr. Palkhivala urged that all the cases show that whenever the doctrine was applied the settlement or trust was subsisting and the idea was that the erstwhile right or presumed right was augmented. So far as the fourth Baronet is concerned, he is by virtue of the revocation and extinction of the- trusts in his favour a complete stranger and has no right or title inherent in him and that, therefore, he is not a person who could claim the property by virtue of the doctrine of an intention contrary to a resulting trust. He referred to the same passages to which we have referred in Lewin on Trusts, Scott on Trusts and Halsbury's Laws of England, Simonds edition and suggested for our acceptance four propositions as follows:
1. The claim on the basis of a contrary intention can only be founded upon an effective and independent title or right based on a subsisting Will, settlement or other conveyance.
2. The rule of contrary intention can in no event give the claimant any higher title than what he would have if there had been an express provision (in the present case in the Baronetcy Act).
3. The beneficiary under a wholly revoked settlement can in no case claim on the ground of a contrary intention because that would be tantamount to rendering the revocation at least partly nugatory. In the present case it would be tantamount to superseding legislation.
4. If the passing of the Repealing Act in the life time of the first Baronet would have given rise to a resulting trust the position can be no different because the Repealing Act was passed after his death.
131. We are unable to accept these contentions. We have already indicated what in our opinion is a true scope of the doctrine. In the passage from Scott on Trusts in Article 411 it is clearly stated that the doctrines are not two separate doctrines but two aspects of one and the same doctrine namely that where a trust fails one must find what was the intention of the settlor or the presumed intention, if no intention be manifest upon the document. The passage which we have quoted from the judgment of Lord Justice James in Merchant Taylors' Co. v. Attorney General, at page 518, shows that this intention can be gathered from all the circumstances. What the learned Judge stated will bear reproduction And, in considering that question where it fairly arises, every surrounding circumstance, the character and position of the donor and donee, the more or less probability of one intention or another, the current of authorities in similar, or nearly similar cases, are all matters which the Court of construction not only may, but must, look to for aid and guidance.
There is no scope for postulating that a title or right must co-exist in the person claiming under this rule before he can claim under the doctrine. It may be that in several of the cases which arose in England where this doctrine was applied, the claimant had a right or title in himself upon the circumstances of those cases, but the doctrine as stated in the authorities, does not, in our opinion, require any such pre-existing right or title in the claimant. Secondly, the argument that the Fourth Baronet is a third person i.e. a person who has no right or title whatsoever is clearly negatived by the passage from Scott on Trusts, which we have already reproduced. The last sentence of that passage expressly and in terms refers to a third person as follows:
No resulting trust arises if it appears by evidence properly admissible that in the event of the failure of the trust the property Should be transferred by the trustee to a third person or held upon a different trust, or that it should be retained by the trustee free of trust.
Obviously, this "third person" is a person unconnected with any right or title. No authority was cited for the proposition that some pre-existing right or title must be inherent in the claimant as a necessary pre-condition to his claiming the application of the doctrine, but all that was urged was that that was the position upon the facts of the cases decided in England.
132. The case in hand is probably unique in the annals of trusts. We asked Mr. Palkhivala and he was not in a position to show us that even in England a trust such as this was ever revoked by an enactment by Parliament and much less that the extraordinary and difficult provisions of Sections 3 and 4 were ever made. We do not think, therefore, that the doctrine which we have set forth above will not apply to this case simply because the trusts have been revoked and extinguished by statute.
133. The fourth proposition which Mr. Palkhivala has posed can be clearly answered. The answer would be that there would not be a resulting trust in favour of the First Baronet even if the Repealing Act had been passed in his life time since he had expressed an intention contrary to a resulting trust. We have already referred to the case Cook v. Hutchinson, at page 225. Other cases relied upon were Foord In re: Foord v. Conder [1922] 2 Ch. 519 and Biddulph v. Williams. (1875) L.R. 1 Ch. D. 203 In the latter case by a deed two persons in the exercise of a joint power of appointment, appointed part of the settled property to trustees upon trust for sale; and it was declared that the trustees should stand possessed of the proceeds upon the trusts intended to be declared by a deed of even date, but no deed declaring the trusts was ever executed, and there was evidence to show that the deed of appointment was executed with a view to avoid the difficulties of an application to the trustees to exercise the power of sale. Lord Jessel, Master of the Rolls, after setting forth the terms of these transactions asked himself "Now, what m the legal effect of that?" and he answered it as follows (p. 211):
... It is emphatically a question of intention. You are to ascertain from the deed whether the appointor, or in this lease the appointors intended to deal with the beneficial interest, and then I suppose those authorities would have some application which say that when you conceive that a single appointor intended to destroy the ownership or the ownerships of the persons entitled under the settlement in default of appointment, there must be an intention to make the money his own, because it could be nobody else' We cannot find a word in this decision to suggest that a prior right or title inherent in the person claiming on the basis of an intention contrary to a resulting trust is essential. On the other hand, it seems that the cardinal rule reiterated is that one must look to the intention of the settlor and nothing else irrespective of whether the person who gets the property by application of the rule has or has not in him a title.
134. The manner in which the contrary intention of a testator is to be recorded and found is shown by the case of Foord v. Conder. In that case a testator by bis will made the following bequest, "All my effects including rubber and all other shares I leave absolutely to my sister M.J. on trust to pay my wife per annum (three hundred pounds)...". The bequest was more than sufficient to satisfy the annuity and it was therefore held that the testator's sister was entitled to the beneficial interest of the balance and was not a trustee thereof for the next of kin. Here we see the application of the doctrine of an intention contrary to a resulting trust.
135. The sister who was held entitled to the beneficial interest in the balance of the money in her hands though she held it as a trustee, was held entitled to it because there were several indications which tended to show that there was a contrary intention expressed defeating the presumed intention that the property must result back to the settlor's heirs. The penultimate paragraph of the judgment discusses these several circumstances.
136. The passages to which we have already referred above indicate that upon failure of a trust the presumed intention of the settlor must be that the trustee or legal owner must not keep the trust property for himself unless a contrary intention is indicated. We have discussed the circumstances here and they overwhelmingly indicate that the First Baronet, the settlor in this case, intended that these trust properties should go only to the Baronet for the time being and in the event of failure to the Baronet at that and his heirs. Thus a clear contrary intention is established upon the circumstances here and we think, therefore, that upon application of this doctrine the Fourth Baronet would be entitled to the trust properties absolutely in his own right.
137. The learned single Judge considered that the property would result back to the estate of the First Baronet as upon a resulting trust. But the basis of his decision was a basis which has not been supported by any of the parties appearing before us. One of the reasons which he stated was that "the legal author of the trust was the Legislature and not the First Baronet". Now so far as this position is concerned, we have already shown how the Baronetcy Act came to be passed. The whole foundation of that Act was the intention of the First Baronet to settle the properties for the benefit of the heirs male of his body. That he had to take recourse to legislation and the aid of the Legislature in doing so was due to the fact that by himself he could not create a perpetuity and a perpetual succession to that property as has been created under the Act. Indeed it is so suggested in the preamble and it is for that purpose that the trustees also had to be constituted into a Corporation by a legislation. Thus the intention is still the intention of the settlor though an Act of the Legislature supervened. This aspect of the settlement was not brought to the notice of the learned single Judge. On the other hand, it seems to us that a perusal of the provisions of the Baronetcy Act and particularly of the preamble thereof clearly indicates that the entire Act was passed at the desire of the First Baronet. Nowhere does it appear that the Act was passed contrary to his intention.
138. The second reason which prevailed with the learned single Judge was stated by him:
Even supposing that the First Baronet can be looked upon as the settlor of the properties in trust, he has not expressed in any legally effective form his intention with regard to the disposal of the trust properties on the extinction of the trust. It is not open to me to deduce the intention of the First Baronet by speculating on what he might have wished if he were faced with the eventuality of the Baronetcy Act being repealed.
It seems to us that the learned Judge felt that since the intention was not expressed on the face of a document in any legally effective form, the intention could not be given effect to. We have already referred to the passage from Underhill's Law of Trusts and Trustees and the judgment of Lord Justice James in Merchant Taylors' Co. v. Attorney General, which show on the contrary that it is precisely the duty of the Court to ascertain the intention from every surrounding circumstance, the character and position of the donor and donee, the more or less probability of one intention or another, the current of authorities in similar, or nearly similar cases....
Therefore, in our opinion, the learned single Judge was not correct in observing that it was not open to him to deduce the intention of the First Baronet by speculating on what he might have wished if he were faced with the eventuality of the Baronetcy Act being repealed. Because of this view, which in our opinion, was incorrect, the learned Judge did not go into the several circumstances to which we have already adverted which clearly point to the settlor (the First Baronet) having an intention contrary to a resulting trust. We need not repeat those circumstances, but in our opinion they are so overwhelming as to leave no possible doubt as to the conclusion. Upon this view we think also that in holding as under, the learned Judge was clearly wrong.
It must, therefore, follow that, whatever might have been the unexpressed wishes of the First Baronet, the trust properties must revert to his estate on the extinguishment of the statutory trust created by the Baronetcy Act.
139. [His Lordship then turned to Appeal No. 34 of 1963 filed by the Custodian of Evacuee Property. After rejecting a preliminary objection that the appeal was barred by time, His Lordship considered the question whether having regard to the provisions of Section 1(4) of the Repealing Act, as it was now held that the entire property belonged to the Fourth Baronet, it should not be handed over to him, but should be declared to have vested in the Custodian. His Lordship concluded as follows.]
140. Now it is clear upon the facts that though upon a reading of the definitions in the Administration of Evacuee Property Act, the corpus of the trust properties may be evacuee property, it is equally clear that they were never dealt with according to the procedure in Section 7 of the Administration of Evacuee Property Act. Therefore, there was never any declaration in regard to the corpus and in so far as such a declaration was lacking an essential condition to the operation of Sub-section (4) of Section 7 of the Repealing Act was not fulfilled. We may also point out that the two clauses which lay down the two conditions upon which alone Sub-section (4) can come into force are joined by the conjunction "and" thus indicating that both the conditions must be simultaneously fulfilled, before the consequences indicated in the sub-section flow. Since one of the conditions and an essential condition was not fulfilled we do not think that the section and the consequences flowing from that section would be attracted to the corpus of the trust properties which we have now held the Fourth Baronet is entitled to....
141. In the result, therefore, we confirm the findings of the learned single Judge on all the Constitutional issues arising between the parties and hold that the Sir Currimbhoy Ebrahim Baronetcy (Repeal and Distribution of Trust Properties) Act, 1959, is a valid piece of legislation and intra vires of the Constitution. We partially allow Appeal No. 31 of 1963 and set aside the findings of the learned Single Judge holding that the trust properties reverted to the first Baronet and instead we hold that the fourth Baronet, claimant No. 8 before the Official Trustee, is entitled to the trust properties remaining after payment therefrom of the costs ordered to be paid by the learned Single Judge and by us as we shall presently order. We dismiss appeal No. 34 of 1963.
142. [The rest of the judgment is not material to this report.]