S.N. MATHUR v. BOARD OF REVENUE & ORS

Citation: [2009] 2 S.C.R. 681

Court: Supreme Court of India

Bench: R.V. RAVEENDRAN, J.M. PANCHAL

Case summary

S.N. MATHUR v. BOARD OF REVENUE & ORS.pdf

Judgment text

[2009] 2 S. C. R. 681 · take the instrument o"'t of the category of a 'settlement' as \: ,; defined under section 2(24). It was heldthat the instrument would .. be a settlement, even if the disposition was not for the purpose ~ of distribution of th£? owner's property if the disposition was for the purpose of providing for some persons depending on the ' settler. It was also observed that the reservation of the right of ' .. revocation had no bearing on the question whether a deed of ~' trust amounted to a settlement or not. The Bench concluded that deed of trust as also a deed of settlement, can be for a 1. limited period. 9. 2) In T. Ranganathan Pillai (supra), a Full Bench of the ~ Madras High Court was dealing with a reference in respect of a r deed purporting to be a Trust'C:leed under which a Trust was · that it was not a deed of settlement but only a declaration of Trust.

The High Court on an examination of the terms of the •• instrument, also held that it was not made for any of the three • purposes mentioned in clauses (a), (b) and (c) of Section 2(24), -~ and therefore, it was not a settlement. The said decision is therefore of no assistance. 9. 3) In Sardar Deohao Jadhav (supra), the MP High Court was considering the question whether the instrument before it c:--1 was a trust deed or a settlement deed. In that case the properties had already been dedicated to the family deities by the forefathers of the executant of the trust deed and the executant was only having custody of the properties which was in the ownership of the deities. By the deed of trust, the executant merely purported to make proper provision in respect of the discharge of duties of his office of Shebait of the famjly deities and declared a trust in respect of the properties mentioned .. iJ therein.

There was no disposition, but merely a declaration or assertion that the properties belonged to the deities. In those circumstances, the High Court found, reading the deed as a whole, that the executant was executing a trust deed in respect of the properties of family deities of which he was the Shebait and the essence of the document was to provide for the custody of the properties, and not to make any 'disposition'. By executing ,,, the deed of trust, the executant neither transferred nor parted J.. with any property. He 'lost' nothing by executing the deed. The High Court therefore held that the instrument was liable to be stamped underArticle 64, as a Trust deed. The decision, on the facts, is inapplicable. 9. 4) Neither of the three decisions relied on by Appellant is therefore of any assistance.

In Banarsi Dass Ahluwalia (supra), relied on by the respondents, a Special Bench of the {> Delhi High Court was considering an instrument whereby the 'l' ' founder created a public charitable trust and appointed himself as the first trustee and dedicated and endowed upon trust his various assets and properties and declared that the business and properties described thereunder, shall no longer be the personal business and properties of the founder but shall be held in Trust. The Delhi High Court held that the term 'settlement' had a larger ambit than 'trust' having regard to the definition of settlement in section 2(24). It also held that while a trust made -j for the purposes specified in section 2(24) would always be a settlement, the converse may not be true. The Court therefore held ~hat the deed of trust also answered the definition of ···~......... ,:,..

'settlement' and having regard to section 6, when an instrument is covered by both Articles 64 and 58 of the Act, it shall be chargeable to duty underArticle 58 as the duty thereunder was higher than the duty under Article 64. This decision reiterates the principle enunciated by the Allahabad High Court in Sridhar (supra). Be that as it may. 10. We therefore uphold the decision to subject the deed to stamp duty underArticle 58 of the Act. We are however of the view that the case does not warrant levy of penalty equal to the deficit stamp duty. On the facts and circumstances, we reduce the penalty to Rs. 5/-. The appeal is allowed in part accordingly. GN. Appeal party allowed. i' ~ +·· ,, ~ ) .... ~ y ' I