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Showing contexts for: settlor trust in Narasingh Charan Mohapatra vs Radhakanta Mohapatra on 11 May, 1949Matching Fragments
6. The main controversy between the parties, however, centers round the competency of the Utkal University to be brought on the record in pursuance of the terms of the trust deed and the liability of the appellant, Narasingh Charan, to be described as a trustee in view of his express revocation of the trust deed. The points urged be Mr. De may be briefly summarised as follows: (1) There is no valid trust created as the defendant has not accepted the position of a trustee. (2) The University is incompetent to accept a religious trust, as the teaching of Karma Kanda contemplated by the settlor is a religious purpose and the endowment amounts to a religious endowment. (3) The contemplated trust has not been accepted by the Senate and the promised donation has not been fully paid. (4) There is no devolution of interest 'in prasenti' and so the settlor could revoke the trust which in fact he has done. (5) Since the University is not a party to the deed there is no valid creation of the trust. (6) The property which is the subject-matter of the trust is not ascertainable and an undivided interest cannot be the subject-matter of a gift. The trust is, therefore, invalid for uncertainty. It is well settled that where the settlor constitutes himself the trustee the question of acceptance of the position of a trustee does not arise. A trust may be constituted without communication to a trustee and a trust is not affected by the fact that the trustee is unable or unwilling to act. A trust does not fail for want of a trustee, and if a trustee refuses to accept before the trust takes effect, the person in possession becomes a constructive trustee. Even a disclaimer by a trustee does not avoid a trust. If the settlor has done everything that is required to be done under the law the trust takes effect at once, the test of completeness being whether anything, fact, remains to be done on the part of the donor. A trust in the accepted sense of the word is the creation of an obligation by the owner to the intent that he may hold the property for the benefit of some other person or object. As soon as the trust is declared according to the requirements of the law, the legal ownership passes to the trustee and he is bound to apply the income arising out of the property to the use and benefit of 'cestui que trust'. As a general rule, it may be laid down that in order to make a voluntary declaration of trust binding upon the author of the trust he must have completely parted with all his interest in the property to the trustee or declared himself to be a trustee of the property for the benefit of the 'cestui que trust'-See 'Agnew's Trusts, p. 53'. It follows from the above that if the defendant was legally constituted a trustee by his being designated as such by the instrument of the trust, and if he did, in fact, act in the execution of the trust, there was no further need for anything more to be done by him. The evidence shows that the defendant paid Rs. 10,000/- in execution of the trust he created and that in his subsequent letters (Ex. 3-H and -J) he only suggests an alteration in the scheme for carrying out the trust and does not allege that there was no trust already. Mr. De's contention that the appellant did not accept the position of a trustee is, therefore, legally untenable and is unsound in fact.
7. The next contention is that the teaching of Karma Kanda being one of the objects of the trust, the whole endowment fails as the University is incapable of accepting or administering a religious endowment. This argument involves two assumptions neither of which is correct. The teaching of Karma Kanda is a charitable purpose and it is intended to impart education and advance knowledge. It is not for the performance of any particular ritual that the gift is made. Knowledge of Karma Kanda is altogether different from the performance of certain ceremonies or rituals, and I have no doubt in my mind that the study of Karma Kanda is as much a charitable purpose as the study of physical sciences. A gift to a general public use which extends to the poor as well as to the rich is a charitable gift. Even a gift for a religious purpose has been held to be a good charitable gift, if it involves religious 'instruction or edification of the public. In 'Dunne v. Byrne'-(1912) Ac. 407: (81 LJPC). Lord Machaughten delivering the judgment of the Judicial Committee stated that charity in its legal sense Comprises, among other trusts, trusts for the advancement of religion. But the trusts must be such as tend either directly or indirectly towards benefiting the public. It was next urged that the trust was not completed as the proposal of the donor did not receive the sanction of the Senate and the payment of the sum of Rs. 15,000/- (the balance out of the Rs. 25000/- promised by the appellant) contemplated in the deed of trust was not carried out. The settlor did not stipulate that the trust should fail in case of non-acceptance by the Senate when he made his proposal. In his first letter to the University he solicited the approval of the Syndicate and expressly stated in his letter (Ex. 2) that in case the Syndicate approves he may be informed immediately and the work map be undertaken without delay. In his letter Ex. 4 suggesting the creation of a trust he reiterated his earlier proposal and said "As soon as the University accepts the above proposal in its meeting of the Syndicate I wills execute and register a deed of trust and make it over to you".
9. It was next pointed out that there was no devolution of interest 'in praesenti' and that, therefore, its was open to the settlor to revoke, Reliance was placed in para 10 and 14 of the trust-deed in support of this contention. Para 10 says that after payment of the sum of Rs. 5000/- annually out of the income of the immovable properties which constitute the subject-matter of the trust, the balance of the income shall be retained by the settlor or shall be paid to him during his life time for his maintenance. Mr. De argues from this that as a substantial portion of the income is retained by the donor and as the donor is referred to as the "Settlor" instead of as "Trustee" there is no vesting of interest in the University by the execution of the trust deed. A person may both be a trustee and a 'cestui que trust' or one of the trustees and one of the 'cestui que trusts'. Under the terms of the deed both the University and the appellant are constituted trustees, the defendant being the trustee in charge of the management of the immovable properties and the University being the trustee for carrying out the object of the trust. The defendant is also the 'cestui que trust' in respect of the balance of the income arising out of the properties after payment of Rs. 5000/- annually during his lifetime. The use of the expression 'settlor' is not only appropriate but any other expression would be inconsistent with the creation of the trust. Mr. De argues that if the defendant became a trustee under the deed, the use of the word 'settlor' would negative any such intention. But if the word 'trustee' were used in place of the word 'settlor' the balance of the income would go to the trustee, whoever he might be, and would not be available to the donor for his his lifetime, as it was the donor's express intention that he should enjoy only for his lifetime the balance of the income. Para 14 says that the settlor and the University agree to carry out the terms and conditions set forth above. That the University did agree to accept the proposal and establish a College, as desired by the donor, is proved by the proceedings of the Syndicate and para 14 merely recites what had already been done towards the carrying out of the trust. I am, therefore, unable to appreciate the contention of Mr. De that the University should have been one of the executants of the trust deed.
10. The trust is created by the defendant in favour of the University and para 14 of the deed of trust merely recites that the University had already accepted the proposal to discharge the functions of a trustee. A trust may be constituted without communication thereof to the trustee or to the 'cestui que trust' and a trust is not affected by the fact that no trustee is named or by the fact that the trustee who is named either refuses or is unable, through death or otherwise, to act. A trust of the property does not depend on the immediate existence of a legal estate in a trustee to support it. See Halsbury's Laws of England Vol. 33. p. 103. A trust is generally irrevocable unless a power of revocation is expressly reserved. If a man executes a voluntary conveyance and does not reserve a liberty to himself by a power of revocatsion the, Court will not loose the fetters he has put upon himself-See Villers v. Beaumont, (1682) 1 Vern 100. The presumption is that a charity is charitable and not fraudulent. Section 120, Transfer of Property Act lays down that a gift cannot be revoked except under circumstances in which, if it were a contract, it might be rescined-such as fraud, undue influence, coercion, etc. It cannot be stated, in fact it is not even suggested, that the defendant was the victim of any fraud or undue influence or coercion such as would vitiate a contract. Nor would a mere mistake of law be sufficient to revoke a deed of gift, for Courts of Equity strongly incline against remedying mere mistakes of law. In 'Abhayachari v. Ramachandrayya', 1 Mad HCR 393 the settlor brought a suit to cancel an instrument of gift executed by him in favour of the defendant, on the ground that the deed of gift was invalid under the Hindu the donee could perform his obsequies. The Law and that he had erred in supposing that Court held that even where the deed is voidable on the ground of fraud or mistake it is always a question for the discretion of the Court whether cancellation and delivery up of a deed are to be ordered. The case is simply one of the plaintiff's choosing to alter his mind, and the Court refuses to remedy a mere mistake of law. A similar case where all the authorities are discussed is reported in Raja-Ram v. Khandu Balu, (15 I C 529.) In Pullayya v. Vedachala, 1911-2 MWN 376: (11 I C 24) one L executed a registered trust deed intending title to pass thereby and it was held that the subsequent destruction and non-delivery of the deed to the trustees did not prevent the passing of the title to them. In another case reportd ein the same volume at p. 382 'Mahadeva v. Sankara, 1911-2 MWN 382 (12 IC 546) certain immoveable properties were settled on charitable trusts by a registered deed and the settlor appointed himself as Hukdar for life and provided that, after his death, his grandson should succeed him as Hukdar. It was held that the acquired under the deed a vested right to the trusteeship which took effect in possession at the death of the settlor and the settlor had no. power to revoke the appointment of the grandson before his death. In 'Krishnaswamy v. Kothandarama Naiken, 27 M L J P. 582 (AIR. 12) 1915 Mad 380, the donor executed a deed of trust by which she settled certain properties on a temple. She constituted herself trustee during her lifetime and provided in the said deed for the carrying our, of the trust by certain individuals after her death. On the day previous to her death she executed a will by which she purported to revoke the trust and to make a new disposition of her properties. The dispositions themselves were in favour of the temple to which she had given the properties comprised in the trust deed. The trustees appointed under the earlier trust deed filed a suit for a declaration that the subsequent will was inoperative and had not the effect of revoking the trust. The document was. all along with the settlor as, under the terms of the trust, she was herself to be the trustee during her lifetime and the Court held that. the fact that the deed of trust was not handed,, over was no indication of the terms of the trust not having been given effect to. It was also held that, as there was a complete dedication of the property to the temple on the execution of the deed of trust, it was not open to the settlor to revoke the dedication by the will. which she executed immediately prior to her death.