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PETITIONER: FAZALBHOY CURRIMBHOY ETC.

       Vs.

RESPONDENT: OFFICIAL TRUSTEE OF MAHARASHTRA & ORS., ETC.

DATE OF JUDGMENT12/12/1978

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. FAZALALI, SYED MURTAZA SINGH, JASWANT

CITATION:  1979 AIR  687            1979 SCR  (2) 699  1979 SCC  (3) 189  CITATOR INFO :  R          1980 SC1206  (19)  D          1983 SC 259  (21)

ACT:      Sir Currimbhoy  Ebrahim Baronetcy Act, 1913-Act created a trust  of  the  properties  of  the  First  Baronet-Fourth Baronet migrated  to Pakistan  and was  declared an evacuee- State  Legislature   passed  the   Sir  Currimbhoy   Ebrahim Baronetcy (Repealing  and Distribution  of Trust Properties) Act, 1959-S.7(4)  of the  Repealing Act-Scope  of-Effect  of repeal-Official Trustee-If  required to transfer and vest in the Custodian  the trust  properties  found  to  be  evacuee property.

HEADNOTE:      In 1911  King George  V conferred  the "dignity, status and degree"  of a  Baronet  on  Sir  Currimbhoy  Ebrahim  of Bombay. To  provide  for  the  upkeep  and  dignity  of  the Baronetcy the Sir Currimbhoy Ebrahim Baronetcy Act, 1913 was passed by  virtue of which considerable properties belonging to Sir Currimbhoy Ebrahim were settled upon the trust.      Section 8  of  the  Baronetcy  Act  provided  that  the residue of  income from  the properties  settled  under  the trust was  to be paid to the first Baronet and the heir male of his  body, who  would, for  the time being succeed to the title of Baronet. Section 27 provided for the vesting of all properties and  funds in  the Trust  "upon  failure  and  in default of  heirs male of the body of the last Baronet." The First Baronet left behind a Will in respect of certain other properties. On the death of the First Baronet his eldest son assumed the  title of Second Baronet and on the death of the Second Baronet  his eldest  son Hussainbhoy became the Third Baronet.      The Third  Baronet migrated  to  Pakistan  between  the years 1947 and 1949. He was, therefore, declared an evacuee. Certain properties  belonging to him were declared vested in the Custodian  of  Evacuee  Property.  Two  other  immovable properties as  well as  the right, title and interest of the Third Baronet  in the Sir Currimbhoy Ebrahim Baronetcy Trust were declared  as  evacuee  properties  and  vested  in  the Custodian of  Evacuee Property.  On the  death of  the Third

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Baronet in  Pakistan in  1952  his  eldest  son  Mohamedbhoy succeeded as  the Fourth  Baronet. At  that time  the Fourth Baronet was  residing in  India, but  shortly thereafter  he migrated  to  Pakistan.  The  Deputy  Custodian  of  Evacuee Property made  an order  declaring  the  Fourth  Baronet  an evacuee and notified his beneficial interest in the Trust as evacuee  property   vesting  in  the  Custodian  of  Evacuee Property.      The Fourth  Baronet having  migrated to  Pakistan along with  his   son,  the  Bombay  Legislature  passed  the  Sir Currimbhoy Ebrahim  Baronetcy (Repealing  & Distribution  of Trust Properties)  Act, 1959.  The Repealing  Act inter alia revoked and  extinguished the  trusts,  powers,  provisions, declaration and  purposes declared  and expressed in the Sir Currimbhoy Ebrahim  Baronetcy Act  and vested the properties and funds in the Official Trustee for the purpose of 700 distributing them  amongst the  persons rightfully  entitled thereto, according to law.      The Official  Trustee thereupon called upon the persons claiming interest  in the  trust properties  to submit their claims.      On the  Official Trustee’s application under s. 7(2) of the Repealing  Act seeking orders and directions of the High Court  as  regards  distribution  of  the  trust  properties amongst the  several claimants,  a single  Judge of the High Court took  the view  that the Custodian was not entitled to the share  of the  Fourth Baronet  in the  Trust  properties because the  beneficial interest of the Fourth Baronet which had vested in the Custodian came to an end on the extinction of the Trust that the Repealing Act had the effect of giving rise to  a resulting  trust in  favour of  the settlor,  the first Baronet;  that the  trust properties  reverted to  his estate on  his death,  that they  must be  deemed to pass by inheritance, according  to the Muslim personal law, and that the residuary  clause in  the will  executed  by  the  First Baronet did not cover the trust properties.      A Division  Bench of the High Court on appeal held that on the  terms of  the Will  a contrary  intention  had  been manifested by  the First  Baronet that  in the  event of the failure of  the Trust  the trust properties shall, after his life time,  be held  for the  benefit of the Baronet for the time being  and therefore the Fourth Baronet was entitled to the trust  properties absolutely in his own right. The claim of the  Custodian of  Evacuee Property  to the corpus of the trust properties was rejected. ^      HELD: 1.  Upon the  provisions of the Baronetcy Act and of  the   Will  a   direction  by  the  First  Baronet  must necessarily be  presumed that  if the  trust created  by the Baronetcy Act failed or was revoked the trust properties and funds must go to the last Baronet. [710 G].      (a) Although  the trust  was created by statute, it was created at  the instance  of the First Baronet so as to keep the trust  in perpetuity  for the  upkeep of the dignity and title of  the Baronetcy at all times. A trust of this nature has been regarded as a private trust. [707 B].      (b) Section  83 of  the Indian Trusts Act provides that where a  trust is  incapable of  being executed or where the trust is  completely executed  without exhausting  the trust property, the  trustee, in the absence of a direction to the contrary, must  hold the  trust property  for the benefit of the author of the trust or his legal representatives. On the terms of  this section,  which incorporates in codified form the concept  of what  is  known  as  a  resulting  trust,  a

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resulting trust can arise only in the absence of a direction to the contrary. [707 E-F].      (c) In the instant case the various clauses of the will show that  substantially large  sums of money were gifted by the First Baronet in equal shares to each of the sons except the  eldest  son.  In  all  these  clauses  the  eldest  son Mohamedbhoy was  not included  because he  would succeed  as Baronet to  the benefit  of the  trust constituted under the Act. There  is no  reason to  suppose that the First Baronet intended to  exclude Mohamedbhoy  from the  benefit  of  his bounty. According  to the  terms of the Act, the benefits of the trust created under the Baronetcy Act were to devolve on the male heirs of 701 the  body  of  the  First  Baronet  who  took  the  name  of Currimbhoy Ebrahim,  and when  executing the will, the First Baronet had  that benefit in mind for Mohamedbhoy. The First Baronet had  the line  of Mohamedbhoy  in mind for supplying future Baronets.  Therefore the  only conclusion that can be drawn is  that the  trust properties  created under  the Act were intended  by the  First Baronet  to vest in Mohamedbhoy and his  heirs. Although s. 27 comes into play only upon the failure and in default of heirs male of the body of the said Currimbhoy Embrahim,  the intention of the First Baronet was that the  trust properties and funds should be confined even ultimately to  the line  of Mohamedbhoy his eldest son. They would go  to the  heirs of  the  last  Baronet  and  not  be distributed among his own heirs. [709 B-710F]      2. While  ordinarily the  trust  properties  and  funds would have  devolved on  the Fourth  Baronet,  the  ultimate determination of  the case  must turn on the validity of the claim made  by the  Custodian of  Evacuee Property  under s. 7(4) of the Repealing Act. [710H]      (a)  The   Repealing  Act   was  passed  by  the  State Legislature under  Entry 41  of  List  III  of  the  Seventh Schedule to  the Constitution and received the assent of the President. In  case of  any repugnancy between the Repealing Act and the Administration of Evacuee Property Act, 1950 the former  will  prevail  by  reason  of  Art.  254(2)  of  the Constitution. Section 7(4) is not repugnant to any provision of  the  1950  Act.  It  is  in  the  nature  of  additional legislation on the subject. [714 B].      (b) Section  7(4)  of  the  Repealing  Act  was  passed because the  Fourth Baronet had been declared an evacuee and his interest in the trust properties under the Baronetcy Act had been  declared evacuee property under the 1950 Act. With the repeal  of the  Baronetcy Act  and  the  revocation  and extinction of  the trust,  that interest  came to an end and the declaration  ceased  to  have  effect.  The  Legislature presumed that when the Official Trustee took proceedings for the distribution  of the  trust properties under s. 7 of the Repealing Act, the Fourth Baronet would be found entitled to the trust  properties or  part thereof.  He had already been declared  an  evacuee  and  consistently  with  the  earlier declaration vesting  his interest in the trust properties as evacuee property  in the Custodian, the Legislature intended that the  trust properties  falling in full ownership to the Fourth Baronet  on repeal  should likewise  be vested in the Custodian. That  could not  be accomplished by a declaration under the  Administration of  Evacuee Property Act, 1950, in view of  s. 7A  thereof which  prohibited such a declaration after May  7, 1954.  The result  could be accomplished under some other  law and  s. 7(4) of the Repealing Act was passed to make  provision accordingly.  The trust  properties  were evacuee property  because they  belonged to an evacuee [vide

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s. 2(f)  Administration of Evacuee Property Act, [1950], and by the operative clause in s. 7(4) of the Repealing Act they were vested  in the  Custodian. The  law relating to evacuee property was applied to the right, title and interest of the evacuee in  the trust properties even as they applied to any other evacuee  property under  that law.  The terms in which the law  relating to  evacuee properties has been applied to the trust  properties fully confirms the conclusion that the trust properties  falling to  the Fourth  Baronet were to be treated at par with evacuee property generally. [714 F-H].      (c) Section  7(4) of  the Repealing  Act requires three conditions to  be satisfied.  They are: (i) that a person is entitled to the trust properties or 702 any part  thereof; (ii)  that such  person has  been  or  is declared  as   an  evacuee   within  the   meaning  of   the Administration of Evacuee Property Act, 1950, and (iii) that his right,  title and  interest in  the trust properties has been or  is  declared  to  be  evacuee  property  under  the Administration of  Evacuee  Property  Act,  1950.  If  these conditions are satisfied the official trustee is required to transfer and  vest in  the Custodian the trust properties or so much  thereof as  is found to be evacuee property and the law relating  to evacuee property shall apply to such right, title and  interest in the trust properties as they apply to any other evacuee property under that law. [711 G-H].      In the  present case  the first  condition is satisfied because the  Fourth Baronet had been found to be entitled to all the trust properties and funds settled and created under the Baronetcy Act. The second condition is satisfied because the Fourth  Baronet was  declared an evacuee. Similarly, the third condition  is satisfied  because the  right, title and interest of  the Fourth  Baronet in the trust properties was declared to be evacuee property. All three conditions having been satisfied,  s. 7(4)  takes  effect  and  the  direction contained in it must be carried out. The Official Trustee is required to  transfer and  vest in  the Custodian  the trust properties count to be evacuee property. [712 B-D].      3. There  is no substance in the contention that on the death of  the Third  Baronet before  the Repealing  Act  was passed, the  trust properties  devolved on  the heirs of the Third Baronet  i.e. his widow, son and two daughters. On the death of  the Third Baronet the benefit of the trust created by the Baronetcy  Act passed to the Fourth Baronet. [715 D].

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos.  722, 1016 and 1221 of 1967.      Appeal from  the Judgment  and Decree dated 9-8-1966 of the Bombay High Court in Appeal Nos. 31 and 34 of 1963.      K. D.  Mehta and  D. N.  Mishra for the Appellant In CA 722/67.      S. T.  Desai, R.  B. Datar  and Girish Chandra for RR 3 and 65 in CA 722/67.      I. N. Shroff and H. S. Parihar for R 48 in CA 722/67.      S.  T.  Desai,  R.  B.  Datar  for  the  Appellant  and Respondent-40 in 1016/67.      I. N.  Shroff and  H. S.  Parihar for  RR 27-28  in  CA 1016/67 and also for the appellant in CA 1221/67.      S. T. Desai and Girish Chandra for Respondent No. 63 in CA 1221/67.      The Judgment of the Court was delivered by      PATHAK, J. These appeals, on certificate granted by the

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High Court of Judicature at Bombay, are directed against the judgment and order 703 dated August  9, 1966  passed  by  the  High  Court  in  its appellate jurisdiction  against orders and directions issued by a  learned Single  Judge of  the High Court on a petition filed by  the Official  Trustee of  Maharashtra in regard to the  properties   of  the   former  Sir  Currimbhoy  Ebrahim Baronetcy Trust.      On July  21, 1911,  His Majesty  King George  V  issued Letters Patent conferring the "dignity, state and degree" of a Baronet of the United Kingdom of Great Britain and Ireland on Sir  Currimbhoy Ebrahim  of Bombay  and the heirs male of his body  lawfully begotten  and to be begotten. In order to provide for  the upkeep  and dignity  of the  Baronetey, the then Governor  General of  India in  Council enacted the Sir Currimbhoy Ebrahim Baronetcy Act, 1913 (hereinafter referred to simply  as  "the  Baronetcy  Act")  by  virtue  of  which considerable properties  belonging to Sir Currimbhoy Ebrahim were  settled  upon  the  trustee,  and  for  the  purposes, declared in the Act. The Trust was created by statute at the instance  of   Sir  Currimbhoy  Ebrahim.  The  Trustees  who included the  Baronet for the time being and three officials of the Government of Bombay designated by their office, were constituted as a Corporation with perpetual succession and a common seal  for the purpose of executing the trusts, powers and purposes  of the  Act. By  virtue of  section 8  of  the Baronetcy Act, the residue of the income from the properties settled under  trust, after  payment  to  the  credit  of  a Sinking Fund and a Repairs Fund, and payment of rates, taxes and  cost  of  ordinary  repairs  in  respect  of  buildings comprising the  trust properties was to be paid to the First Baronet and the heir male of his body who would for the time being have succeeded to the title of Baronet. The successive Baronets were  also entitled  in the circumstances mentioned in s.  10 to the use and benefit of additional hereditaments vesting in  the Corporation.  Section 27  provided  for  the vesting of  the trust properties and funds "upon failure and in default of heirs male of the body of the last Baronet".      The First  Baronet, Sir Currimbhoy Ebrahim, died on May 29, 1924  leaving behind  a Will  dated October  22, 1916 in respect  of   certain  other  properties.  His  oldest  son, Mohamedbhoy,  assumed   the  title  and  became  the  Second Baronet. Mohamedhoy died on March 31, 1928. He was succeeded by his son, Hussainbhoy, who became the Third Baronet.      The  third  Beronet  migrated  to  Pakistan  some  time between 1947  and September,  1949. On September 29, 1949 he was  declared   an  evacuee   under  the   Bombay   Evacuees (Administration  of   Property)  Act,   1949,  and   certain properties belonging  to him  were declared  vested  in  the Custodian of Evacuee Property by an order of that date. 704 On November  15,  1949,  a  notification  was  issued  under sub.s.(1) of s.7 of the Administration of Evacuee Properties Ordinance, 1949  notifying two  further immovable properties as well  as the  right, title  and  interest  of  the  Third Baronet in  the Sir  Currimbhoy Ebrahim  Baronetcy Trust  as evacuee  property   vesting  in  the  Custodian  of  Evacuee Property. An  appeal by the Third Baronet against the orders dated September 29, 1949 and November 15, 1949 was dismissed by the Custodian of Evacuee Property on February 13, 1950.      Two years  later, on  March 4,  1952, the Third Baronet died in  Pakistan. He was succeeded by his son, Mohamedbhoy, as the  Fourth Baronet. It seems that Mohamedbhoy was at the time residing  in India,  but shortly thereafter he left for

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Pakistan. On  June 10, 1952, the Deputy Custodian of Evacuee Property made  an order  declaring  the  Fourth  Baronet  an evacuee under  the Administration  of Evacuee  Property Act, 1950 and  directing that  his beneficial interest in the Sir Currimbhoy Ebrahim  Baronetcy trust  be notified  as evacuee property. Therefore,  on June  16, 1952,  a notification was issued under  sub-s.(3) of  s.7  of  the  Administration  of Evacuee Property  Act, 1950  declaring that  the  beneficial interest of the Fourth Baronet in the Sir Currimbhoy Ebrahim Baronetcy  Trust   was  evacuee   property  vesting  in  the Custodian of  Evacuee Property  The Fourth Baronet preferred an appeal  to the  Custodian General  of  Evacuee  Property, Delhi, but  the appeal  was dismissed  on August 26, 1960 on the ground that it was barred by time.      Meanwhile,  the   Fourth  Baronet  having  migrated  to Pakistan  alongwith   his  son  Zoolfikar  Ali,  the  Bombay Legislature passed  an Act titled the Sir Currimbhoy Ebrahim Baronetcy (Repealing  & Distribution  of  Trust  Properties) Act, 1959,  which we  shall refer to as "the Repealing Act)" The Act,  as its name shows, repealed the Baronetcy Act and, inter alia,  revoked and  extinguished "the  trusts, powers, provisions, declaration and purposes" declared and expressed in that  Act. It  provided for the vesting of the properties and funds in the Official Trustee, Bombay for the purpose of distributing them  "amongst the  persons rightfully entitled thereto according  to law".  Acting under the Repealing Act, the Official  Trustee called  upon persons claiming interest in the  "trust properties", an expression which includes the properties and funds settled and created under the Baronetcy Act, to  submit their  claims. As  he found  that the claims were contested  and was  unable to  say which  of them  were justified, he  applied to the Bombay High Court under sub-s. (2) of  s. 7  of the Repealing Act for orders and directions as regards the distribution of 705 the trust  properties amongst  the  several  claimants.  The properties were  valued at  Rs. 30 lakhs for the purposes of court fees.      The petition  was entertained  in the  High Court under its general  and inherent jurisdiction and was registered as Trust Petition  No.  3  of  1962.  It  was  disposed  of  by Tarkunde, J.  On December  20, 1962.  A contention raised by some of the claimants that the Repealing Act was ultra vires was rejected.  As regards  the claim  of  the  Custodian  of Evacuee Property,  the learned  Judge took the view that the beneficial interest  of the Fourth Baronet, which had vested in the  Custodian, came  to an  end on the extinction of the trust and the Custodian was not entitled to the share of the Fourth Baronet in the trust properties. He ordered, however, that so  much of  the net  income of  the  trust  properties accruing upto  March 15,  1960, as  had remained  unpaid  be transferred to  the Custodian.  He  rejected  the  claim  to maintenance made  by the  Third Baronet’s widow, the Dowagar Lady Amine  Currimbhoy Ebrahim.  On the  material before him the learned Single Judge held that the Repealing Act had the effect of  giving rise to a resulting trust in favour of the Settlor,  the  First  Baronet,  that  the  trust  properties reverted to  his estate  as on his death on May 29, 1924 and that they must be deemed to pass by inheritance according to the Muslim  personal law as on an intestacy occurring on the death of  the First  Baronet. He observed that the residuary clause in  the will  dated October  22, 1916 executed by the First Baronet  did not  cover the  rust properties. On those findings, he directed the Official Trustee to distribute the net trust properties amongst the several claimants according

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to the shares mentioned in an agreed statement subscribed to by the claimants.      Against the  order of  Tarkunde, J.,  two appeals  were filed in  he High  Court. Appeal  No.31 of 1963 was filed by the  Dowagar  Lady  Amine  Currimbhoy  Ebrahim,  the  Fourth Baronet, Sir  Currimbhoy Ebrahim, and his son, Zoolfikar Ali Currimbhoy Ebrahim,  and Appeal  No. 34 of 1963 was filed by the Custodian of Evacuee Property. The appeals were heard by a Division  Bench of  two learned  Judges, Kotval,  C.J. and Mody, J.  The Division  Bench rejected  the challenge to the constitutional validity  of the  Repealing Act,  but on  the point whether  a resulting trust had come into existence the learned  Judges   held  that  in  view  of  the  surrounding circumstances, particularly  the terms  of the will executed by the  First Baronet  on October 22, 1916, it must be taken that contrary  intention had  been manifested  by the  First Baronet that  in the  event of the failure of the trust, the trust properties  should after his life time be held for the benefit of  the Baronet for the time being. Accordingly, the learned 706 Judges laid down that the Fourth Baronet was entitled to the trust properties  absolutely in  his own right. On the claim of the  Dowager Lady  Amine Currimbhoy Ebrahim, they pointed out that  her son,  the Fourth Baronet, had made a statement through counsel  in court  that the  would pay the amount to her out  of the corpus received by him. Appeal No.31 of 1963 was allowed  in part.  In regard  to the appeal filed by the Custodian of  Evacuee Property,  the learned Judges rejected his claim to the corpus of the trust properties, holding him entitled to  a sum  of Rs.  1,334.06 only,  representing the unpaid amount of the net income of the trust properties upto March 14, 1960. Appeal No.34 of 1963 was dismissed.      Three appeals  have been  filed in  this  Court.  Civil Appeal No.722  of 1967  has  been  filed  by  Sir  Fazalbhoy Currimbhoy, Civil  Appeal No. 1016 of 1967 has been filed by the Custodian  of Evacuee  Property and Civil Appeal No.1221 of 1967  has been  filed by  Munira Fazal  Chinoy and Mumtaz Mohamed Rahimtoola, daughters of the Third Baronet.      The case  of Sir Fazalbhoy Currimbhoy, the appellant in Civil Appeal  No.722 of  1967 is  that  the  effect  of  the Repealing Act  on the trusts created by the Baronetcy Act is to revoke  and extinguish those trusts and to give rise to a resulting trust in favour of the estate of the First Baronet as on  the date  of his  death, and  that the  estate  would devolve as  on an  intestacy under  the Muslim personal law. The  case   of  Munria   Fazal  Chinoy  and  Mumtaz  Mohamed Rahimtoola, the  appellants in  Civil Appeal No.1221 of 1967 is that  no resulting  trust comes into existence consequent on the  repeal because a contrary intention must be presumed in the  First Baronet that the trust properties should go to the Fourth Baronet. It is also contended by these appellants that  alternatively   the  trust  must  be  deemed  to  have extinguished on  the death of the Third Baronet and that the trust properties  devolved on them, their mother the Dowager Lady Amine Currimbhoy and the Fourth Baronet as the heirs of the Third  Baronet. The  case of  the Custodian  of  Evacuee Property, the  appellant in Civil Appeal No. 1016 of 1967 is that the  trust properties  would ordinarily  have passed to the Fourth  Baronet but  because of  sub-s.(4) of s.7 of the Repealing Act  the Official  Trustee is required to transfer and vest the trust properties in the Custodian.      It is  contended on  behalf of  Sir Fazlbhoy Currimbhoy that the  trust having  been created  by the Baronetcy Trust Act, a  legislative  statute,  it  must  be  regarded  as  a

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statutory trust  and, thereafter, when the Baronetcy Act was repealed and the trust was revoked and 707 extinguished  by  the  Repealing  Act,  another  legislative enactment, the  necessary and only result was that the trust properties reverted  to the estate of the settler, the First Baronet. Now, no doubt the trust was created by statute. But it was  created at the instance of the First Baronet. It had to be  a trust in perpetuity in order that the upkeep of the dignity and title of the Baronetcy should always be ensured. A trust  such as  this has been regarded as a private trust. Indeed, throughout the trial before the learned Single Judge and during  the hearing  of the  appeals before the Division Bench of  the High  Court the  case proceeded on the footing that the  trust created by the Baronetcy Act was governed by the law  relating to  a private trust. The parties proceeded as if  the trust was a private trust created directly by the First Baronet  himself, and  it was  assumed throughout that the repeal  by the legislature was a repeal effected by him. We must,  therefore, proceed  in this  case  as  if  we  are dealing with a private trust.      The contention  on behalf  of Sir  Fazalbhoy Currimbhoy that a resulting trust follows the revocation and extinction of the  trust created  by the  Baronetcy Act  rests  on  the provisions of  section 83  of the Indian Trusts Act. Section 83 provides:-           "83. Where a trust is incapable of being executed,      or where  the  trust  is  completely  executed  without      exhausting the  trust-property,  the  trustee,  in  the      absence of  a direction  to the contrary, must hold the      trust-property, or  so much  thereof as is unexhausted,      for the benefit of the author of the trust or his legal      representative."      The section  incorporates in  codified form the concept of what  is known  as a  resulting trust.  On the  terms  of section 83, a resulting trust can arise only "in the absence of a  direction to the contrary". It is not disputed that if there is  no direction  to the contrary the trust properties must be  held for  the benefit  of the  estate of  the First Baronet. Can an intention to the contrary be inferred? Scott on Trusts declares:-           "If an  owner of property transfers it inter vivos      upon a  trust which  fails  either  at  the  outset  or      subsequently, and he has not indicated what disposition      should be  made of  the property  in the  event of  the      failure of  the trust, the trustee cannot retain it but      will be compelled in equity to 708      restore it  to the  settlor. In such a case the trustee      holds the  property upon  a  resulting  trust  for  the      settlor. Since the trustee was not intended to have the      beneficial interest,  and since the beneficial interest      was not otherwise disposed of, it reverts or results to      the settlor. On the failure of the trust the court will      put the parties in status quo by restoring the property      to the  settlor. But if the settlor properly manifested      an intention  that no  resulting trust  should arise in      the event  of the  failure of  the trust,  it will  not      arise,  but   the  property  will  be  disposed  of  in      accordance with  his intention,  whether that intention      is expressed  in specific language or not. No resulting      trust  arises   if  it  appears  by  evidence  properly      admissible that  in the  event of  the failure  of  the      trust the property should be transferred by the trustee      to a  third person,  or held upon a different trust, or

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    that it  should be  retained by  the  trustee  free  of      trust."      And further it is said:           "The resulting  trust is rebutted when it is shown      that the  settlor intended  that in  the event  of  the      failure of  the trust  the property  should be  held in      trust for other purposes." In Cock v. Hutchinson Lord Longdale, M. R. Observed:-           "Upon this  deed a question is made, whether there      is or is not a resulting trust to the grantor as to the      surplus, with  respect to which there is no declaration      of trust;  and for  the  purpose  of  determining  that      question, it  is necessary  to look  carefully  to  the      language of  the deed,  and to the circumstances of the      particular case. In general, where an estate or fund is      given in trust for a particular purpose, the remainder,      after that  purpose is  satisfied, will  result to  the      grantor; but  that resulting trust may be rebutted even      by parole  evidence, and  certainly cannot  take effect      where a  contrary intention  to be  collected from  the      whole instrument,  is indicated  by  the  grantor.  The      distinctions applicable  to  cases  of  this  kind  are      pointed out  in the  case of King v. Dinison (1 V. & D.      260) by Lord Eldon, who adopts the principles laid down      by Lord  Hardwicks in  Hill v.  The Bishop of London (1      Atk. 618). The conclusion to which Lord Hardwicks comes      is, that the question whether there 709      is or  is not  a resulting  trust must  depend upon  me      intention of the grantor........ "      Now, it appears clearly from clause 2 of the will dated October 22,  1916 executed  by  the  First  Baronet  that  a substantially large  sum of Rs.47,50,000/- was gifted by the First Baronet  in equal shares to each of his sons excepting the eldest  son, Mohamedbhoy.  The gift was made inter vivos in respect  of the  major sons and under the will in respect of the  minor son,  Ismail. Clause  18 of  the  will,  which constitutes the general residuary clause, discloses that the residue of  the property was bequeathed by the First Baronet to  all   his  sons,  except  Mohamedbhoy.  Mohamedbhoy  was apparently not  included in  those dispositions  because  he would succeed  as Baronet  to  the  benefit  of  the  trusts constituted under  the Baronetcy Act. He was the eldest son, and there  is no  reason to  suppose that  the First Baronet intended to  exclude Mohamedbhoy  from the  benefit  of  his bounty. The  First Baronet  planned to  provide for  all his sons. Had he intended to exclude Mohamedbhoy for any reason, he would  not have  provided by  clause 15  of the will that each one  of his sons, including Mohamedbhoy, would enjoy an equal  share  in  the  mercantile  business  in  Bombay  and Calcutta in  India, Hongkong  and Shanghai  in China  and at Kobe in  Japan. The  benefit of the trusts created under the Baronetcy Act,  according to  the terms  of that  enactment, were to  devolve on  the male  heir of the body of the First Baronet who  took the  name "Currimbhoy  Ebrahim", and  when executing the  Will the  First Baronet  had that  benefit in mind for  Mohamedbhoy as  is apparent  from clause 21 of the will, wherein he declared:-           "Lastly it  is  my  special  desire  that  my  son      Mohamedbhoy on  succeeding to  the title of Baronet and      every  succeeding   Baronet  shall  forthwith  on  such      succession adopt  the names  of Currimbhoy  Ebrahim and      continue to do so as long as he holds the title."      The First  Baronet had  the line of Mohamedbhoy in mind for supplying the line of future Baronets. He gave a special

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position to him, his eldest son. By clause 7 of the Will, he bequeathed to  Mohamedbhoy all  the addresses,  testimonials and caskets presented to him, symbols of the high status and dignity of  the family,  to be  retained and  passed down as heirlooms. It  is true that under section 4 of the Baronetcy Act the  possibility could be envisaged that in the event of an existing  descendant of  Mohamedbhoy not  using the  name "Currimbhoy  Ebrahim"   the  Baronetcy   would  pass   to  a descendant of 710 the next son of the First Baronet. But that envisions a very remote possibility.  It is  difficult to  presume in  reason that any  male heir  in the line of Mohamedbhoy would refuse to use  the name "Currimbhoy Ebrahim" and deprive himself of the very  real and  substantial benefits  of the  Baronetcy. Therefore,  the  only  conclusion  can  be  that  the  trust properties created  under the Baronetcy Act were intended by the First  Baronet to  vest in Mohamedbhoy and his heirs. In that light, section 27 of the Baronetcy Act assumes material importance in  relation  to  the  controversies  before  us. Section 27 reads:-           "Upon failure  and in default of heirs male of the      body of  the said  Sir Currimbhoy  Ebrahim to  whom the      same title  of Baronet may descend the said Corporation      shall stand  possessed of  the said  hereditaments  and      premises particularly  described in  the first Schedule      hereunder written  and of  any other hereditaments of a      freehold tenure  and of  the funds  which may  then  be      vested in them by virtue and operation of this Act upon      trust for  the heirs of the last Baronet absolutely and      shall also  stand possessed  of the  said hereditaments      and  premises  particularly  described  in  the  Second      Schedule hereunder  written or  such of  them as may be      still vested  in the  said Corporation  and  any  other      hereditaments of  a leasehold  tenure which may then be      vested in  the said  Corporation by  virtue of this Act      upon trust  for the  heirs of  the last Baronet for all      the then  residues of  the terms granted by the lessees      by which the same are demised."      Although s.  27 can  come into  play only "upon failure and in  default of  heirs male  of the  body of the said Sir Currimbhoy Ebrahim"-  and that  condition is  absent in  the present case-the  provision provides  evidence, in the light of what  has been  said above, of the intention of the First Baronet that  the  trust  properties  and  funds  should  be confined even  ultimately to  the line  of Mohamedbhoy. They would go  to the  heirs of  the last  Baronet,  and  not  be distributed among his own heirs.      We are  of opinion  that upon  the  provisions  of  the Baronetcy Act  and of  the Will,  a direction  by the  first Baronet must  be necessarily  presumed  that  if  the  trust created by  the Baronetcy Act fails or is revoked, the trust properties and  funds must  go  to  the  last  Baronet.  The Division Bench  of the  High Court has found that the Fourth Baronet is entitled to the trust properties and funds, and a resulting trust  does  not  come  into  existence.  For  the reasons which  have prevailed  with us,  we hold that such a conclusion should  ordinarily follow.  However, the ultimate determination must turn on the validity of the claim made by 711 the Custodian  of Evacuee  Property that by virtue of sub-s. (4) of  s. 7  of the  Repealing Act the trust properties and funds to  which the  Fourth Baronet  would be  entitled must vest in the Custodian.      In understanding  the import  of sub-s. (4) s. 7 of the

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Repealing Act  it is imperative to note that it is a part of the scheme  embodied in  s. 7 providing for the distribution of trust  properties by the Official Trustee to "the persons rightfully entitled  thereto". It  comes into play as a step in the  proceedings taken for that purpose. It is considered for application  when the  Official Trustee under sub-s. (1) or the  High Court  under sub-s.  (2) is determining who are the  persons   entitled   to   the   trust   properties   on distribution.  Sub-s.   (1)  declares  that  if  the  claims received  by   the  Official   Trustee  are   justified  and uncontested he  must  distribute  the  trust  properties  in accordance with such claims. Sub-s. (2) provides that if the Official Trustee  is of  the opinion that the claims are not justified, or  if they  are contested,  he may  apply to the High  Court   for  orders  and  directions  as  regards  the distribution of  the trust  properties amongst  the  several claimants. Sub-s. (3) provides that on obtaining such orders and directions,  he must  distribute  the  trust  properties amongst  the   persons  rightfully   entitled   thereto   in accordance with  the final  decree or  order passed  in that behalf. Sub-s. (4) declares:           "If any  person entitled  to-the trust properties,      or any part thereof, has been or is declared an evacuee      within the  meaning of  the Administration  of  Evacuee      Property  Act,  1950,  and  if  any  right,  title  and      interest of  such person  in the  trust properties  has      been or  is declared  to be evacuee property under that      Act, then  the Official  Trustee shall,  subject to any      order or  direction which  the High  Court may  make or      give, transfer  and vest  in the  Custodian  the  trust      properties, or  so much  thereof  as  is  found  to  be      evacuee  property,   and  the  provisions  of  the  law      relating to  evacuee property shall as far as may apply      to  such   right,  title  and  interest  in  the  trust      properties as  they apply to any other evacuee property      under that law".      An analysis  of the  provisions of  this sub-section is necessary. It applies where:      (a)  a person  is entitled  to the  trust properties or           any part thereof;      (b)  such person  has been or is declared as an evacuee           with in  the  meaning  of  the  Administration  of           Evacuee Property Act, 1950 and 712      (c)  his  right,   title  and  interest  in  the  trust           properties has  been or  is declared to be evacuee           property  under   the  Administration  of  Evacuee           Property Act, 1950.      If the  three conditions  are satisfied,  the  Official Trustee is  required to  transfer and  vest in the Custodian the trust  properties, or  so much thereof as is found to be evacuee property.  And the law relating to evacuee property, the sub-section  says, shall  apply to such right, title and interest in  the trust properties as they apply to any other evacuee property under that law. When the sub-section speaks of "any  person entitled  to the trust properties" it refers to the  person found entitled to the trust properties by the Official Trustee  under sub-s.  (1) of  s. 7  or by the High Court under sub-s. (2) of that section. In the present case, the Fourth  Baronet has  been found  by us to be entitled to Repealing Act  has been  defined by  cl. (d) of s. 2 of that Act to  mean all  the trust properties and funds settled and created under  the Baronetcy  Act. The  second condition  is also satisfied  because the  Fourth Baronet  was declared an evacuee on June 10, 1952 under the Administration of Evacuee

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Property  Act,   1950.  The  third  condition  is  similarly fulfilled. The  right, title  and  interest  of  the  Fourth Baronet in  the  trust  properties,  that  is  to  say,  his beneficial interest  therein, was  declared  to  be  evacuee property on  June  16,  1952  under  the  Administration  of Evacuee  Property  Act  1950.  All  three  conditions  being satisfied,  sub-s.   (4)  takes  effect  and  the  direction contained in it must be carried out. The Official Trustee is required to  transfer and  vest in  the Custodian  the trust properties found to be evacuee property.      Now, the  expression "evacuee  property" has  not  been defined in  the Repealing  Act and,  therefore, it must take its meaning  from the  definition in  the Administration  of Evacuee Property  Act, 1950.  Clause (f)  of  s.  2  defines "evacuee property" to mean "any property of an evacuee". The definition does  not require that for property to be evacuee property, there must be a direction under the Administration of Evacuee  Property Act  that it  is  evacuee  property.  A perusal of  the relevant provisions of the Administration of Evacuee  Property   Act,  1950   indicates  that   the   Act contemplates the necessity of a declaration that property is an evacuee  property in  order that  it should  vest in  the Custodian of  Evacuee Property.  Unless that  declaration is made the  evacuee property,  even though  it belongs  to  an evacuee, cannot  vest in  the Custodian.  But there  may  be another law  under which  evacuee property  may vest  in the Custodian. sub-s.  (4) constitutes that law. It provides for another kind of case where evacuee property may also vest in the Custodian.  sub-s. (4)  of s. 7 of the Repealing Act, in essence, is a law in addition 713 to the  Administration of  Evacuee Property  Act,  1950  for vesting evacuee  property in the Custodian. The provision in sub-s. (1) that the Official Trustee shall transfer and vest in the  Custodian the  trust properties  found to be evacuee property has the same statutory consequence is a declaration made under  s. 7  of the  Administration of Evacuee Property Act, 1950,.  In opposition to the claim of the Custodian, it was pointed  out that a declaration that evacuee property is vested in the Custodian is barred after May 7, 1954 by s. 7A of the  Administration of  Evacuee Property  Act, 1950.  The provision in  sub-s. (4)  of s.  7, on  which the  Custodian relies, is not a declaration under that Act. As we have held the Fourth  Baronet to  be entitled to the trust properties, it must  be taken  that those  properties in  virtue of  the definition of  "evacuee property  mentioned above  have been found to be evacuee property. The words "found to be evacuee property" mean  found to  be evacuee property in proceedings under s.  7 of  the Repealing  Act. Therefore  it is  beyond dispute that  the Official Trustee must, by virtue of sub s. (4),  transfer   and  vest   in  the   Custodian  the  trust properties. Sub-s. (4) of s. 7 further declares that the law relating to evacuee property shall apply to such right title and interest  in the  trust properties  as they apply to any other evacuee property under the law. The words "such right, title and  interest in the trust properties" mean the right, title and  interest in  the trust  properties which  we have found the evacuee entitled to in this proceeding under s. 7, and which  now vest  in the custodian. That is distinct from the right,  title and  interest of the Fourth Baronet in the trust properties  which were declared to be evacuee property under the Administration of Evacuee Property Act, 1950.      It is  urged on behalf of Sir Fazalbhoy Currimbhoy that if sub-s.  (4) of  s. 7 of the Repealing Act is construed as declaring the  trust properties  to be  evacuee property  to

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which the provisions of the law relating to evacuee property would apply, the sub-section must be regarded as ultra vires on the ground that the State Legislature is not possessed of legislative competence  to declare  any property  as evacuee property. The submission is misconceived. Sub-s. (4) of s. 7 of the  Repealing Act  can be  attributed to the legislative power of  the State  Legislature in  respect of  Entry 41 of List III  of the  Seventh Schedule  to the  Constitution  of India, which speaks of:-           "41. Custody,  management and disposal of property      (including agricultural  land) declared  by law  to  be      evacuee property". Reference may  also be  made to  Entry 27 of List III of the Seventh Schedule, which speaks of:- 714           "27.  Relief   and   rehabilitation   of   persons      displaced from  their original  place of  residence  by      reason of  the setting up of the Dominions of India and      Pakistan." The Repealing  Act received  the assent of the President. In case of  any repugnancy  between the  Repealing Act  and the Administration of  Evacuee Property  Act, 1950,  the  former will  prevail   by  reason   of  Article   254(2)   of   the Constitution. On  the view  taken by  us, how ever, the sub- section  is   not  repugnant   to  any   provision  of   the Administration of  Evacuee Property  Act  for,  as  we  have pointed out  already, it  is in  the  nature  of  additional legislation on the subject.      It  is  also  submitted  on  behalf  of  Sir  Fazalbhoy Currimbhoy that as the definition of the expression "the law relating to  evacuee property’ in the Repealing Act has been defined by  cl. (b)  of s.  2 of  that Act  to  include  the Evacuee Interest  (Separation) Act,  1951,  the  Legislature must be  taken to  have intended  that a  part of  the trust properties would be distributed among the heirs of the First Baronet. It  seems to us that by defining the words "the law relating to  evacuee property"  in cl.  (b) of  s. 2  of the Repealing Act to mean the Administration of Evacuee Property Act, 1950,  the Evacuee Interest (Separation) Act, 1951, the Displaced Persons  (Compensation  and  Rehabilitation)  Act, 1954 and  any other  law for  the time  being  in  force  in relation to  evacuees or  evacuee property,  the Legislature intended to give the same powers to the Custodian in dealing with the  trust properties  as he enjoys in respect of other evacuee property.      The object  in enacting  sub-s. (4)  of  s.  7  of  the Repealing Act  is apparent.  The  Fourth  Baronet  had  been declared an  evacuee. His  interest in  the trust properties under the  Baronetcy Act  had been declared evacuee property under the Administration of Evacuee Property Act, 1950. With the repeal  of the  Baronetcy Act  and  the  revocation  and extinction of  the trust,  that interest  came to an end and the declaration  ceased  to  have  effect.  The  Legislature presumed that when the Official Trustee took proceedings for the distribution  of the  trust properties under s. 7 of the Repealing Act, the Fourth Baronet would be found entitled to the trust  properties or  part thereof.  He had already been declared an  evacuee,  and  consistently  with  the  earlier declaration vesting  his interest in the trust properties as evacuee property  in the Custodian-now lapsed in consequence of the Repealing Act-the Legislature intended that the trust properties falling  in full  ownership to the Fourth Baronet on repeal,  should likewise be vested in the Custodian. That could  not  be  accomplished  by  a  declaration  under  the Administration of  Evacuee Property Act, 1950, in view of s.

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7A 715 thereof which  prohibited such  a declaration  after May  7, 1954. The result could be accomplished under some other law, and sub. s. (4) of s. 7 was included in the Repealing Act to make  provision   accordingly.  The  trust  properties  were evacuee property because they belonged to an evacuee, and by the operative clause in sub-s. (4) of s. 7, they were vested in the  Custodian. The  law relating to evacuee property was applied to  the right,  title and interest of the evacuee in the trust  properties, even  as they  applied to  any  other evacuee property  under that law. The terms in which the law relating to  evacuee property  has been applied to the trust properties fully  confirms the  conclusion  that  the  trust properties falling  to the Fourth Baronet were to be treated at par with evacuee property generally.      It has  been urged on behalf of the appellants in Civil Appeal No.  1221 of  1967 that  the trust failed on March 14 1952, on  the death  of the  Third Baronet,  even before the Repealing Act  was passed,  and that  the  trust  properties devolve, therefore  on the  heirs of the Third Baronet, that is to  say his  widow, son and two daughters, The submission was made  before a  Division Bench  of the Bombay High Court and was  rejected. We  are also of the view that there is no substance in  this contention.  On the  death of  the  Third Baronet, the  benefit of the trusts created by the Baronetcy Act passed to the Fourth Baronet.      Towards the conclusion of the hearing, it was contended by learned  counsel for  Sir Fazalbhoy  Currimbhoy  that  by virtue of  the Notifications  bearing No.  12/2/65-E-PTY and No.12/3/65-E-PTY dated  September 10, 1965 and September 11, 1965  respectively  the  trust  properties  which  could  be rightfully claimed  by the Fourth Baronet would stand vested in the  Custodian of  Enemy property  under the  Defence  of India Rules,  1962. For  that reason, it is said, the Fourth Baronet cannot be held entitled to the trust properties, and therefore they  would not  vest in  the Custodian of Evacuee Property. The  record before  us  does  not  show  that  the Custodian of  Enemy Property  filed  any  claim  before  the Official Trustee  under sub-s.  (1) of s. 7 of the Repealing Act and, consequently, we consider it inappropriate to enter into this matter.      The Division  Bench of the High Court has held that the Custodian of  Evacuee Property  is entitled to be paid a sum of Rs.  1,334.06 representing  the unpaid  amount of the net income of  the trust  properties upto  March 14,  1960. This finding has not been challenged, and we affirm it. 716      The Official  Trustee  has  pointed  out  that  various liabilities on  account of Income-tax, Wealth tax, House tax and other  taxes are  outstanding in  respect of  the  trust properties.  He   prays  for   directions  that   those  tax liabilities be  allowed  to  be  cleared  before  the  trust properties are  transferred by  him. He also points out that there are fees, charges, costs and other expenses to be paid off. We  propose to  remand the  case to  the High Court for making necessary  orders in  that  regard  after  satisfying itself as to the existence and amount of these liabilities.      In the  result, Civil  Appeal No. 722 of 1967 and Civil Appeal No.  1221 of 1967 are dismissed, and Civil Appeal No. 1016 of  1967 is  allowed. There  is no order as to costs of these appeals  in this  Court except  an order  for costs in favour of  the Official  Trustee, who  shall be  entitled to recover his  costs of  these appeals from the trust funds in his hands.  The judgment  and order  dated August 9, 1966 of

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the Division  Bench of  the Bombay High Court are set aside, except in  so far  as they contain the direction for payment of Rs.  1,334.06 to the Custodian of Evacuee Property and in so far  as they  direct, and make provision for, the payment of the  costs of  the Official Trustee and other parties and affirm the order for costs made by the learned Single Judge. The Official  Trustee shall  transfer to  and vest,  in  the Custodian  of   Evacuee  Property   the  accumulated   trust properties and  funds settled  and  created  under  the  Sir Currimbhoy Ebrahim  Baronetcy Act, 1913, subject, however to the aforesaid  directions and  orders and  to the directions and orders by the Bombay High Court for prior payment of the liabilities, if  any, on  account of Income Tax, Wealth Tax, House tax  and other taxes and other charges, expenses, fees and costs  incurred by  the official  Trustee. The  case  is remanded to the Bombay High Court for that purpose. P.B.R.              C. A. Nos. 722 & 1221 of 1967 dismissed.                              C. A. No. 1016 of 1967 allowed. 717