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Commissioner Of Wealth Tax, Gujarat, ... vs Ashok Kumar Ramanlal on 4 November, 1965 cites

Ma Yait vs The Official Assignee on 28 October, 1929

(4) Now, before we proceed to examine the nature and quality of the interest of the assessee in the corpus, It is necessary first to clear the ground by pointing out that in any event it cannot be regarded as a spes successions . Even if the construction placed by the Tribunal on the relevant provisions of the trust deed is right and the gift to the assessee is held to be contingent on his surviving upto 31st March 1987, the interest of the assessee in the corpus would be a contingent interest and not a spes successions . A spes successions is a bare o naked possibility such as the chance of an heir apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman or any other possibility of a like nature which must be distinguished from a possibility copied with interest. Where interest in corpus is given to a donee under a settlement and such interest is contingent on the happening of an uncertain event, the donee acquires a contingent interest in the corpus which becomes vested on the happening of the uncertain event and such happening of the uncertain event and such contingent interest though dependent on a possibility for its vesting is very much different from a spes successions . It is a form of property which is assignable or transferable and on which money can be raised unlike spes successions which is assignable or transferable and on which money can be raised unlike spes successions which is non-transferable by reason of S. 6(A) of the transfer of Property Act. This distinction between the two legal concepts is clear and well defined and does not need any authority to support it. But if any authority were needed,, it is to be found in the decision of the Privy Council in Ma Yait v. The Official Assignee, 57 Ind Appellant 10: (AIR 1930 PC 17). In that case too, the gift to the children was contingent on the youngest attaining the age of 20 and the argument was that the interest of the children being in the nature of spes successions was not transferable and the assignment of such interest was therefore invalid. The Privy Council repelled this argument holding that the interest which the children took in the corpus was contingent interest which "was something quite different from a mere possibility of a like nature of an heir apparent succeeding to the estate or the chance of relation obtaining a legacy". The Privy Council observed that a contingent interest is " a well ascertained form of property - it certainly has been transferred in this country for generations -in respect of which it is quite possible to raise money and to dispose of it in any way that the beneficiary chooses". It is therefore clear that even if the gift to the assessee bee held to be contingent on his surviving upto 31st March 1987, the interest of the assessee in the corpus cannot be held to be spes successions and hence not transferable under S. 6(a) of the transfer of Property Act.
Bombay High Court Cites 1 - Cited by 12 - Full Document

Rajes Kanta Roy vs Santi Debi on 19 November, 1956

As observed by the Supreme Court in Rajesh, Kanta v Smt. Shanti Debi. AIR 1957 SC. 255 ".......a court has to approach the task of construction in such cases with a bias in favour of a vested interest unless the intention to the contrary is definite and clear". Another rule of equal cogency which must be borne in mind is that in all those cases the question is really "one of intention to be gathered from a comprehensive view of all the terms of the document". With these preliminary observations we will now proceed to examine the relevant clauses of the trust deed (5-A) if we look at the trust deed, it is clear that the provision which effects the gift of the corpus to the assessee is sub-clause (c) of C1.3. this provision says that if the assessee shall be alive on 31st March 1987, the trustees shall transfer and hand over the corpus of the trust fund including accumulation of income. "If any, to the assessee absolutely and as an absolute owner of the same . Now if this provision stood alone, there can be no doubt that it would have to be construed as creating a contingent interest in the corpus in the assessee . Such a consequence would follow clearly from the application of the rule enact in section 21 of the transfer of Property Act, But as pointed out by the Supreme Court, the intention of the settler is to be collected from the settlement as a whole and no one clause should be construed in isolation for the intention of author of the settlement is to be found not in one part of the settlement or in the other but in the entire settlement and that intention can best be gathered by viewing a particular part of the settlement not detached from its context in the settlement but in connection with its whole context. We must, therefore, see whether there is anything in the other parts of the trust deed which shows that the gift of the corpus though apparently contingent was really intended to create a vested interest (6) Now several provision contained in the trust deed were relied upon by the learned Advocate General on behalf of the revenue as indicative of the settler intention to create a vested interest. Of these the main provision on which he relied was that contained in clause 3, Sub- clause (b) which imposes an obligation on the trustees in their absolute discretion deem fit for "maintenance, education and advancement and otherwise for the benefit". Of the assessee and his wife (provided of course she is born before the date of the trust deed) and in case of any surplus income directs them to accumulate the same for a period of not more than 18 years. The argument of the learned Advocate General was that this provision brought case within Exception to Section 21 of the transfer of Property Act which provides as follows:
Supreme Court of India Cites 10 - Cited by 23 - B Jagannadhadas - Full Document
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