COMMISSIONER OF WEALTH TAX Vs. BHOGILAL MAGANLAL SHAH

JUDGEMENT

(1.) THIS reference arises out of an assessment to wealth tax made on the assessee for the asst. yrs.1957 58 to 1962 63, the relevant valuation dates being 31st March of each of the years 1957 to 1962. The reference involves the question of construction of a trust deed dt. 8th Oct., 1945, made by the assessee's wife, Chanchalbai, hereinafter referred to as the settlor. By the trust deed, the settlor settled shares of the value of Rs. 1,75,000 and a fixed deposit of Rs. 25,000 on the trust set out in cl. 1, 2 and 3 of the trust deed. These clauses ran, inter alia, as under :

(2.) IF the said Sheth Bhogilal Maganlal Shah predecease the settlor and her son Ramniklal Bhogilal Shah survives the said Bai Chanchalbai, the entire trust property shall on the death of the settlor vest in the said Ramniklal Bhogilal Shah and the trustees shall pay out and hand over to him the entire trust property, i.e., the corpus with all the accretions thereto to be used enjoyed and disposed of by him, the said Sheth Ramniklal Bhogilal Shah, as he likes at his own sweet will.

(3.) 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 successionis. Even if the construction placed by the Tribunal on the relevant provision of the trust deed is right and the gift of the corpus to the assessee is held to be contingent on his surviving the settlor the interest of the assessee in the corpus would be a contingent interest and not a spes successionis. A spes successionis is a bare or naked possibility such as 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 coupled with interest. Where interest in corpus is given to a donee under a settlement and such interest in contingent on the happening of an uncertain event the donee acquires a contingent interest in the corpus which become vested on the happening of the uncertain event and such contingent interest, though dependent on a possibility for its vesting, is very much different from a spes successionis. It is a form of property which is assignable or transferable and on which money can be raised unlike spes successionis which is non transferable by reasons 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 decisions of the Privy Council in Ma Yait vs. Official Assignee (1930) LR 57 IA 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 of nature of spes successionis 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,