Official Trustee v. Sachindra Nath Chatterjee

Table of Contents

Quick Summary

The Supreme Court held that a settlor can change a trust only in the way the original deed allows. Here, the deed said “by will” only. So a later deed could not cut out a son. The Court also clarified that “jurisdiction” means the power to decide the exact dispute, not just a loose connection with the subject. The Calcutta High Court’s earlier order allowing change by deed was without jurisdiction and void.

Issues

1. Can a settlor modify a trust by deed during life when the deed allows variation only by will?
2. Is a general link with the subject matter enough for a court’s jurisdiction, or must it have power to decide the specific controversy?

Rules

• Trust variation: A settlor can vary a trust only if the deed permits it; if the deed prescribes a method, that method must be followed.
• Section 34, Indian Trusts Act, 1882: The court’s power is limited and advisory; it cannot authorize changes beyond the deed.
• Jurisdiction test: The court must have authority over the subject matter and to decide the precise questions between the parties.

Arguments

Judgment

• The settlor lacked authority to vary the trust by deed; the deed demanded variation by will.
• The 1937 order exceeded the court’s limited jurisdiction under the Trusts Act and was void.
• “Jurisdiction” means power to decide the precise controversy; a general subject link is not enough.
• The second trust deed was invalid; the original trust stood restored.
• Trustee could reimburse legal costs from the trust; no personal liability for the invalid deed.
• Appeal dismissed.

Ratio

When a trust deed prescribes a specific mode of variation, that mode is exclusive. Courts under Section 34 cannot expand settlor powers through advisory orders. Jurisdiction requires authority to adjudicate the exact dispute between the parties.

Why It Matters

• Protects beneficiary interests from unilateral reshaping by the settlor.
• Sets a clear boundary for courts’ advisory jurisdiction in trust matters.
• Teaches precise use of “jurisdiction” in civil procedure and trust litigation.

Key Takeaways

• Deed said “by will only” → deed variation invalid.
• Section 34 = limited, advisory; cannot rewrite trust powers.
• Jurisdiction = authority over dispute’s exact questions.

Mnemonic + 3-Step Hook

Mnemonic: “Will Wins, Deed Denied; Jurisdiction Justified.”

1. Will Wins: If deed says “will,” follow the will.
2. Deed Denied: No deed-based cut-outs.
3. Jurisdiction Justified: Court must have power over the exact dispute.

IRAC Outline

Issue: (1) Can the settlor vary by deed? (2) What level of jurisdiction is required?

Rule: Variation only as deed permits; Section 34 is limited; jurisdiction must cover the specific controversy.

Application: Deed allowed only will-based changes; court’s 1937 order exceeded Section 34; second deed invalid.

Conclusion: Variation by deed void; original trust restored; costs from trust allowed; appeal dismissed.

Glossary

Settlor

Person who creates the trust.

Corpus

The trust property or principal.

Jurisdiction

Court’s legal power to decide a specific dispute.

Section 34 (Trusts Act)

Advisory power; not a license to alter deed terms.

FAQs

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