TRUSTEES OF SAHEBZADI OALIA KULSUM TRUST versus CONTROLLER OF ESTATE DUTY, A.P.

Citation: [1998] 3 S.C.R. 947 · Decided: 03-08-1998 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

TRUSTEES OF SAHEBZADl OALIA KULSUM TRUST 
A 
v. 
CONTROLLER OF ESTATE DUTY, A.P. 
AUGUST 3, 1998 
[SUJATA V. MANOHAR AND M. SRINIVASAN, JJ.] 
Muslim Law: 
Transfer of Property Act, 1882 : Sections 2, 1 3, and 14. 
Wakfs-Dedication of property-In perpetuity-Validity of-Muslim 
sett/or created trusts in respect of certain jewellery and other properties for 
the benefit of his children and their descendants for life and thereafter for 
the maintenance of a holy shrine-Held, According to the principles of 
Muslim law such a Wakf is valid and not affected by Ss. 13 and 14-
B 
c 
•. Mussalman Waif Validating Act, 1913-Mussalman Waif Validation Act, D 
/!ho. 
Wakfs-Wakf-alal-aulad-Wakf property-Estate duty-Liability a/-
Dedication, of property-In perpetuity- For the benefit of Sett/or's children 
and their descendants for life and thereafter for the maintenance of a holy 
shrine-Held, such Wakf property not part of sett/or's estate-Hence, not E 
liable for estate duty. 
The deceased executed a deed of trust under which he settled certain 
jewellery and other properties on trust for the benefit of his grand daughter 
for life and thereafter for her children and their children for life etc. and F 
ultimately for the maintenance of a holy shrine. The deceased also executed 
a similar deed of trust in favour of his daughter-in-law. 
On the death of the settlor the Additional Assistant Collector of Estate 
Duty included the corpus of the said two trust deeds in the principal value of 
the estate of the settlor for the purposes of estate duty. The Appellate Controller G 
of Estate Duty allowed the appeal filed by the appellant-Trust The Tribunal 
dismissed the appeal filed by the respondent-Revenue. However, the High 
Court allowed the respondent's appeal. Hence this appeal. 
On behalf of the respondent it was contended that the trusts created 
under the said deeds of trust werevoid ab initio since they violated Sections H 
947 
948 
SUPREME COURT REPORTS 
[1998] 3 S.C.R. 
A 13 and 14 of the Transfer of Property Act, 1882, particularly the Rule against 
Perpetuity incorporated therein. 
Allowing the Appeal this, Court 
HELD: 1. In the light of the principles of Mohammedan Law the two 
B trusts are valid Wakfs and are not affeded by Sections 13 and 14 of the 
Transfer of Property Act, 1882. As a result the settlor had divested himself 
of these properties during his lifetime for the benefit of his grand daughter 
and his daughter-in-law and thereafter for their descendants and then for holy 
shrine. On the date of his death the settlor did not have any interest in the 
C properties nor had he reserved any interest to himself under these trusts. 
Hence, for the purposes of Estate Duty, the deceased cannot be considered as 
having any interest in the trust property, which passed on his death. The 
properties, which constituted the subject matter of the two trusts, therefore 
cannot be included in the estate of the deceased for purposes of estate duty. 
D 
[955-F-H) 
Sala v. Hussain, AIR (1955) Hyd 229, approved. 
Abu/ Fat'! Mohammad Ishak v. Rasamaya Dhur Chowdhary, (1894) 22 
IA 76, overruled. 
E 
Rasamaya Dhur Chowdhary v. Abu/ Fata Mohammad Ishak, (1891) ILR 
18 Cal 399, referred to. 
Syed Ameer Ali: Mahommedan Law (Fourth Edn.) Vol. I p. 284, A.A. 
Fyzee Outlines of Muhammadan Law (Fourth Edn.) p. 303, referred to. 
F 
Baillie's Dig 2nd Edn. p. 593, cited. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2961-
62 of 1984 Etc. 
From the Judgment and Order dated 9 .12.84 of the Andhra Pradesh 
G High Court in C. R. No. 87-88 of 1978. 
K. N. Shukla, (P. Murli Krishanan, Mrs. A. K. Verma) for JBD & Co., 
(Rajeev Sharma) for B. K. Prasad and (A. D. N. Rao) for A. Subba Rao, B. 
Parthasarthy for the appearing parties. 
H 
The Judgment of the Court was delivered by 
I 
.; 
• 
TRUSTEES OF S.O.K. TRUST v. C.E.D. [SUJATA V. MANOHAR, J.] 949 
MRS. SUJATA V. MANOHAR. J. On 21st of March, 1953, the Nizam A 
of Hyderabad, Sir Mir Osman Ali Khan, executed a deed of trust under which 
he settled certain jewellery and other properties on trust for the benefit of 
Sahebzadi Oalia Kulsum, his grand daughter for life and thereafter for her 
children and their children for life etc. and ultimately for the maintenance 
of a holy shrine. On the same date, he also executed a deed of trust in favour 
of his daughter-in-law, Sahebzadi Anwar Begum, the wife of second Prince B 
Muazzam Jah. The terms of the two trust deeds are similar. For the sake of 
con
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