Voluntary Organizations and Civil Society

Trustees of Sahebzadi Oalia Kulsum Trust v Controller of Estate Duty [1998] 233 ITR 434

The International Journal
of Not-for-Profit Law

Volume 1, Issue 2, December 1998

The Supreme Court of India has held in the case of Trustees of Sahebzadi Oalia Kulsum Trust v Controller of Estate Duty [1998] 233 ITR 434 that a wakf (Islamic trust) created in the State of Hyderabad for the immediate benefit of the settlor’s dependants and thereafter for a holy shrine in Iran was valid. The case was litigated to determine whether the trust property should be included in the value of the settlor’s estate for the purposes of estate duty (a form of inheritance tax).

The court considered the Mussalman Wakf Validating Act of 1913, which was enacted to override the decision of the Privy Council in Abdul Fata Mahomed Ishak v Russomoy Dhur Chowdhary [1894] 22 IA 76 that a bequest to charity after the extinction of the wakif’s (benefactor’s) family was too remote and therefore invalid for breach of the rule against perpetual trusts of property. The Act purported to restore Islamic law for Muslims in India but it did not apply to the State of Hyderabad, which was not part of British India. The court held that the validity of a wakf in Hyderabad continued to be governed by accepted principles of Islamic law rather than the Privy Council decision.

In this context the Supreme Court cited with approval the following passage from Mohammedan Law by Syed Ameer Ali: “When a wakf is created constituting the family or descendants of the wakf [sic, for wakif], the recipients of the charity so long as they exist, the poor are expressly or impliedly brought in not for the purpose of making the wakf charitable (for the support of the family and descendants is a part and parcel of the charitable purpose for which the dedication is made), but simply to impart permanency to the endowment. When the wakif’s descendants fail, it must come to the poor.” Accordingly, applying these principles of Islamic law, the wakf was validly created.