TRUSTEES OF H E H THE NIZAMS SUPPLEMENTAL JEWELLERY TRUST HYDERABAD Vs. COMMISSIONER OF WEALTH TAX ANDHRA PRADESH

JUDGEMENT

(1.) On 28th February 1952, the late Nawab Sir Mir Osmin All Khan Bahadur, the Nizam of Hyderabad created a trust called "The Nizam's Supplemental Jewellery Trust". The corpus of the trust consisted of jewellery specified in the first six schedules of the deed of trust and 2,000 cumulative preference shares of Rs.100 each in Greaves Cotton & Company Limited specified in the 7th schedule of that deed. By Clause 3 of the deed of the trust the trustees were required to meet the expenses relating to the management and administration of the trust from the income derived from the shares specified in the 7th schedule. Clauses 4, 5, 6, 7, 8 and 9 of the deed of trust dealt respectively with the jewellery specified in Schedules 1 to 6 of the deed

(2.) The first schedule specified certain jewellery and clause 4 gave an absolute discretion to the trustees to give from time to time such of the jewels as they thought fit to such member or members of the family of the settlor or his relatives. The trustees were also given the discretion to sell the whole or part of the jewellery with the consent of the settlor, to invest the sale proceeds and to pay from time to time such sum or sums as they thought fit to such member or members of the family of the settlor or his relatives. After the expiration of a period of twenty years from the date of the creation of the trust the trustees were required to pay out of the corpus and the accumulated income such sum or sums as the trustees thought fit in their discretion to such member or members of the family or relatives of the settlor as might be in distress and in poor circumstances. The beneficiaries under clause 4 were not specified except vaguely as ' members of the family or relatives of the settlor.'

(3.) Under clause 5 of the deed of trust the jewellery in the second schedule was dealt with. The trustees were required to allow Prince Mauzzam Jah Bahadur.' second son of the Nizam to wear and use the jewellery on festive or ceremonial occasions. After every such festive or ceremonial occasion the trustees were required to take charge of the jewellery and re-deposit them for safe custody with a bank or some safe deposit company. The right to wear and use the jewellery on festive or ceremonial occasions was the only right which was given to Prince Mauzzam Jah Bahadur in relation to the jewellery specified in the second schedule. The trustees were given the right to sell the jewellery or part of it at their discretion but with the consent of the settlor during his life time or with the consent of Prince Mauzzam Jah after the Settlor's lifetime. The income from the sale proceeds, if the jewels were sold was required to be paid to the Prince during his lifetime. We are not, however, concerned with this part of the trust since the jewels were not sold and they were in tact at all relevant times. It was further provided that after the lifetime of Prince Mauzzam Jah Bahadur the jewellery was to go, absolutely, to the male descendants of the Prince.