T R CHIDAMBARAM Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) 1.RATNAM J.In this reference under section 64(1) of the Estate Duty Act, 1953 (hereinafter referred to as "the Act"), at the instance of the accountable person, the following question of law has been referred to this court for its opinion."Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the deceased had full power of disposition over the property left by him and the value of such property was includible in his estate under section 6 of the Estate Duty Act ?" * Briefly stated, the facts giving rise to this reference are as under : One Thirunavukkarasu Chettiar, at the time of his death on October 19, 1967, was the sole coparcener of the Hindu undivided family consisting of himself and his wife, Umayal Achi. On the death of Thirunavukkarasu Chettiar on October 19, 1967, his widow, Umayal Achi, was his sole heir. A few months after the death of Thirunavukkarasu Chettiar, his widow, Umayal Achi, adopted Chidambaram on May 1, 1968, and the adoption was evidenced by a deed. In the course of the proceedings relating to the chargeability to duty of the estate of the deceased Thirunavukkarasu Chettiar under the provisions of the Act, the accountable person put forward the plea that the adoption of Chidambaram by Umayal Achi related back to the date of death of the deceased Thirunavukkarasu Chettiar and that the property left behind by the deceased Thirunavukkarasu Chettiar should, therefore, be treated as belonging to the Hindu undivided family of the deceased, his widow and the adopted son. In other words, it was claimed by the accountable person, as could be gathered from the assessment proceedings, that in view of the adoption made by the widow, only half the value of the half share of the deceased in all the properties of the erstwhile Hindu undivided family and half the value of the other properties owned by him separately on the date of his death could be subjected to estate duty.

(2.) THE AssistantController of Estate Dutynegatived this claim of the accountable person on the view that on the death of Thirunavukkarasu Chettiar, as the sole coparcener in the then Hindu undivided family, the estate of the deceased vested in his widow under the provisions of the Hindu Succession Act, 1956 1967 AIR(SC) 1761, 1967 (3) SCR 687, and Punithavalli Ammal v. Ramalingam, 1970 AIR(SC) 1730, 1970 (1) SCC 570, 1970 (3) SCR 894, 1970 (2) MLJ 70, would govern this case and that the other decision of the Supreme Court reported in Sitabai v. Ramchandra, 1969 (2) SCC 544, 1970 (2) SCR 1, 1970 AIR(SC) 343, 1969 MahLJ 926, 1969 MPLJ 868, 1969 MhLJ 926 and strongly relied on by the accountable person was clearly distinguishable. Ultimately, the Tribunal held that the deceased had full power of disposition over the property left behind by him and that the value of that was includible in his estate under section 6 of the Act.

(3.) THE nearest reversioner of Ramji Dass instituted a suit impleading the mortgagee, the donor, as well as the donee praying for a declaration that the alienations were not binding on him. That suit was decreed and the widow of Ramji Dass preferred an appeal and during the pendency of the appeal, she made an adoption. THE appeal was dismissed and Bhagwani, the widow of Ramji Dass, also died and thereafter the reversioner brought a suit for recovery of possession of the properties which had been earlier mortgaged and gifted. THE adoption made by Bhagwani was also disputed and it was stated that even if that adoption was valid, the adopted son could not succeed to the properties of Ramji Dass.