In Re: Abdulla Haji Pawood Bowla Orphanage - Court Judgment

Basil Scott, Kt., C.J.

1. The instrument upon which we have to adjudicate was prepared for the purpose of declaring the trusts of certain funds placed in the hands of trustees for the establishment, maintenance and management, of a home or homes for poor and destitute female children and waifs of the Mahomedan community in Bombay. The funds amounting to about three lakhs of rupees came into the hands of the trustees from two sources. About one lakh was the result of appeals by Mr. Edwardes, the Commissioner of Police, for funds for a female Mahomedan Orphanage. The rest was provided by the executors and trustees of Abdulla Haji Dawood Bowla to whom a sum of two lakhs was bequeathed by their testator for the establishment and maintenance of such a charitable institution as the trustees should in their absolute discretion think fit.

2. The question of Stamp duty has been argued as relating to two distinct matters which for the purposes of duty may be dealt with separately under Section 5 of Act II of 1899.

3. Dealing first with the funds resulting from Mr. Edwardes' appeal we are unable to hold that any previous disposition has been made in writing of any portion of those funds. It is no doubt true that some of the contributions were accompanied by letters from the donors expressing their wishes, with regard to the funds contributed, but such letters were not in themselves dispositions. The disposition would be by delivery of a cheque or money passing the sum contributed to Mr. Edwardes. We hold, therefore, that the instrument before us is an instrument recording by way of declaration of trust the terms of the disposition of the fund collected by Mr. Edwardes. It is thus a settlement according to the definition in Section 2 (24) and is chargeable with duty on Rs. 1,03,200 at the rate of eight annas per cent.

4. Turning now to the funds brought in by the Bowla trustees, we hold that the provisions of the will amount to a disposition for a charitable purpose of the two lakhs of rupees from which the funds in question have accrued. The instrument before us relates not to 'free property' (to adopt the expression of the Court in Massereene and Ferrard v. The Commissioners of Inland Revenue (1900) 2 I.R. 138, but to property already held upon a general charitable trust. See Pocock v. Attorney General (1876) 3 Ch. D. 342. The trustees in appropriating the money to the trusts declared by the instrument in question are exercising the power of appointment conferred upon them by the will. The disposition was by the testator by the will and not by the trustees by this instrument. See Bai Motivahu v. Bai Mamubai ILR (1897) 21 Bom. 709. The instrument qua the Bowla funds is an appointment chargeable with a duty of Rs. 15 under Schedule I, Article 7.