SUKETU JAYANTILAL SHAH Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) ONE Jayantilal Shah, who happened to be the father of the accountable person herein, expired in 1944. He died in jointness with his wife, Subhadra, two sons and an unmarried daughter. The said joint family owned certain shares, loans, jewellery and immovable properties including agricultural lands. Under S. 3(2) of the Hindu Women's Rights to Property Act, 1937, on the demise of the said Jayantilal Shah, his widow, Subhadra, acquired the same interest in the joint family properties which her husband had at the time of his demise. After the death of Jayantilal Shah, his widow, Subhadra, and their two sons and one unmarried daughter continued in jointness. The widow, Subhadra, died on 14th Nov., 1959, leaving behind her, her two sons and one unmarried daughter who along with her constituted a joint Hindu family as stated above. It is common ground that Subhadra has not claimed partition of the joint family properties before her death nor there was any partition effected amongst the said members. On her demise, the Asstt. CED, Ahmedabad, called upon the applicant herein who was the elder son and also the Karta of the joint Hindu family to file return under the ED Act in respect of the property of the deceased, Subhadra. The return was made on 3rd Sept., 1960. One of the contentions on behalf of the accountable person before the Asstt. CED was that the individual property of the deceased, Subhadra, was liable to estate duty and her share in the joint Hindu family properties did not pass on her death since it merged with the interests of the other members of the said family. The Asstt. CED rejected this contention urged on behalf of the accountable person as in his opinion the undivided interest of Jayantilal Shah in the joint family properties which devolved on Bai Subhadra, under S. 3(2) of the Hindu Women's Rights to Property Act, 1937, became her absolute estate and of full ownership under s. 14 of the Hindu Succession Act, which, therefore, passed on her demise to her heirs under S. 15 of the said Act. The Asstt. CED, therefore, held that 1/3rd share which the deceased, Subhadra, had in the joint family properties was dutiable under S. 5 of the ED Act. The accountable person, therefore, carried the matter in appeal before the Appellate CED. A preliminary contention was raised on behalf of the applicant herein before the Appellate CED that he was not an accountable person. The said contention was rejected by the Appellate CED who upheld the view of the Asstt. CED that the interest which the deceased, Subhadra, had in the joint family properties became absolute under the provisions of the Hindu succession Act, which the deceased could have disposed of by a will and, therefore, her share was liable to be included in her property liable to duty under s. 6 of the ED Act. The Appellate CED in the alternative held that the provision of S. 7 was also attracted. In that view of the matter, the Appellate CED confirmed the decision of the Asstt. CED. The accountable person being aggrieved by the decision of the Appellate CED carried the matter in appeal before the Tribunal. It was, inter alia, contended on behalf of the accountable person that the interest which the deceased, Subhadra, had in the joint family properties would not pass under ss. 5, 6 or 7 of the ED Act, as her interest in the joint family properties was inchoate or indefinite since she had not demanded any partition of the joint family properties and possession of her share by metes and bounds. It was, therefore, contended that she could not be said to be possessed of the "property" within the meaning of S. 14 of the Hindu Succession Act which was one of the conditions precedent for converting the limited estate into absolute estate under the said section. Since no partition was claimed nor effected between the members of the said joint family, the position available before the Hindu Succession Act, 1956, came into force, prevailed, and on her death her interest in the joint family properties would merge with the interests of the other members of the family and, therefore, there would be no property passing on the death under S. 5 or for that matter under S. 6 or 7 of the ED Act. None of these contentions found favour with the Tribunal, which held that the interest of the deceased, Subhadra, in the joint family property became her absolute property under S. 14 of the Hindu Succession Act, 1956, which devolved in terms of S. 15 of the said Act. It, therefore, concluded that the property in question passed on under S. 5 of the ED Act. The Tribunal did not uphold the opinion of the Appellate CED that the provision of S. 7 would also be attracted in the facts of the present case. In that view of the matter, the Tribunal held that the interest of the deceased, Subhadra, in the joint family properties was liable to be included in the property which should be subjected to duty under S. 5 or S. 6 of the ED Act. The Tribunal, therefore, dismissed the appeal of the accountable person. At his instance, therefore, the following questions have been referred to us for our opinion :

(2.) AT the time of hearing of this reference, the learned advocate, appearing on behalf of the assessee, did not press question No. 5. The pertinent point which is required to be determined in this reference is whether the deceased, Subhadra, was the absolute owner of the interest of her deceased husband which devolved on her in the joint family properties in 1944, and, consequently, whether she was competent to dispose of the said interest which passed on her death in 1959. The following three contentions have been raised on behalf of the accountable person :

(3.) IN Mangal Singh vs. Smt. Rattno AIR 1967 SC 1786, the Supreme Court again pointed out that s. 14 covers all cases of property owned by a female Hindu although she may not be in actual, constructive or physical possession of that property, provided of course that she has not parted with her rights and is capable of obtaining possession of the property. In Munnalal vs. Rajkumar AIR 1962 SC 1493 it has been held that where, at the time of her death, the widow was in possession of the share of her property to which she became entitled under the Hindu Women's Rights to Property Act, 1937, that share or that property would devolve upon her heirs and the latter would be entitled to prosecute a suit for partition filed by the widow. In Bhadri Pershad vs. Smt. Kanso Devi AIR 1970 SC 1963 it has been held that the same principle would be applicable where a widow has acquired an interest in any property by virtue of the operation of the Act of 1937 and this irrespective of any actual partition having been effected or not. In Sukh Ram vs. Gourishankar AIR 1968 SC 365 the Supreme Court was concerned with a case of a joint Hindu family comprising of two brothers, H and S, and a son, C, of the second brother, S, which was governed by the Mitakshara law of the Benaras School. H died in 1952 leaving him surviving his widow, K. In December, 1956, after the Hindu Succession Act came into force, K sold a half share in a house and a shop belonging to the joint family. In a suit by S and C challenging the sale, it was held that K having become full owner of her husband's interest was competent to effect the sale. It is, therefore, clear to us that the entire reasoning adopted on behalf of the accountable person for purposes of advancing this contention is to say the least fallacious. If the interest of the widow which she has acquired on the demise of her husband in the HUF is not an imperfect or inchoate right and she is a limited owner of that interest during her lifetime, the effect of S. 14 is to enlarge that limited ownership into absolute ownership irrespective of the fact whether partition is effected or not. The first contention urged on behalf of the accountable person, therefore, deserves to be rejected.