Indian Kanoon - Search engine for Indian Law

(b) From and after the expiration of the said period but not otherwise, the trustees shall hold the trust funds in trust for the said Anarkali absolutely.

(c) If the said Anarkali shall die before the expiration of the said period leaving a child or children her surviving, the trustees shall hold the trust funds in trust for such child or children of the said Anarkali, if more than one in equal shares absolutely, provided however that if the said Anarkali shall die before the expiration of the said period without leaving child or children her surviving the trustees shall hold the trust funds for her mother, Bharatidevi Sarabhai, absolutely and if the said Bharatidevi Sarabhai shall not be then living, then in trust for such of the other children of child of the said Bharatidevi Sarabhai as may be living at the death of the said Anarkali, and if more than one in equal shares absolutely.

9. Bearing in mind this primary rule of construction, we may now turn to the provisions of the two trust deeds. The material provision of both the trust deeds are identical and we would, therefore, for the sake of convenience, refer only to the material clause of the first trust deed. The provision of the deed which effects gift of the corpus to the assessee is sub-clause (b) of clause 2. This provision says that from and after the expiration of (the period of eighteen years in the case of the other trust deed) but not otherwise, the trustees shall hold the trust funds in trust for the assessee absolutely. Now, on the plain terms of this provision, it is clear that the interest in the corpus of the trust funds is to vest in the assessee only at the date of expiration of the period of distribution and not before such date. The trustees are required to hold the corpus of the trust funds in trust absolutely for the assessee only form the expiration of the period in trust absolutely for the assessee only from the expiration of the period of distribution and it is only then the interest in the corpus of the trust funds would vest in the assessee. But if the assessee dies before the expiration of the period of distribution, what is to happen to the corpus of the trust funds ? To whom is it to go ? The answer is provided by clause 2, sub-clause (c). That sub-clause says that if the assessee shall die before the expiration of the period of distribution leaving a child or children her surviving, the trustees shall hold the trust funds in trust for such child or children of the assessee, if more than one in equal shares absolutely, but if she shall die before the expiration of the period of distribution without leaving a child or children her surviving, the trustees shall hold the trust funds for her mother, Bharatidevi Sarabhai, absolutely and if Bharatidevi Sarabhai is not then alive, then in trust for such of the other child or children of Bharatidevi Sarabhai as may be living at the death of the assessee, and if more than one, in equal shares absolutely. This provision also emphasizes that the interest in the corpus of the trust funds is not intended to vest in the assessee until the expiration of the period of distribution. If the assessee is alive at the date of expiration of the period of distribution, the interest in the corpus of the trust funds would vest in such child or children at the death of the assessee : if she has died without leaving any child or children her surviving, the interest in the alive : but if she too is dead, the interest in the corpus of the trust funds would vest in the child or children of Bharatidevi Sarabhai who may be living at the death of the assessee. Throughout, the contingency of the beneficiary of the corpus being alive at the relevant date is emphasised in sub-clause (c) of clause 2 and that reinforced the view that under clause 2, sub-clause (b), the interest granted to the assessee is not a vested interest arising immediately to the assessee but is a contingent interest which becomes vested only if the assessee is alive at the date of expiration of the period of distribution.