NAKULESHWAR MONDAL Vs. UNION OF INDIA

JUDGEMENT

(1.) The facts in this case are shortly as follows; The Estate Duty Act, which is a Central Act, being Act No. 34 of 1953 (hereinafter referred to as the 'Act') came into operation on the 6th October, 1953. It is an Act to provide for the levy and collection of an estate duty. Section 9 (1) of the Act provides that property taken under a disposition made by the deceased purporting to operate as an immediate gift inter vivos, whether by way of transfer, delivery, declaration of trust, settlement upon persons in succession or otherwise, which shall not have been bone fide made, two years or more before the death of the deceased, shall be deemed to pass on the death. In the case of gifts made for public charitable purposes the period is six months instead of two years, but we are not concerned with that in this case. The petitioners are sons of Manindra Nath Mondal, since deceased. They are residents of Chandranagore, which was previously a French territory, but was ceded to India and has now merged into the State of West Bengal. The said Manindra Nath Mondal, died on the 18th October, 1955 at Chandranagore. Prior to his death, on the 13th August, 1954, and on the 25th Sept., 1954, the said Manindra Nath Mondal executed two Deeds of Gifts in favour of his sons the petitioners in this case. The Chandernagore (Merger) Act, 1954 is a Central Act, which came into operation on or about 29th September. 1954. Under section 2 (a) of the said Act, "appointed day" means the 2nd day of October, 1954. Section 3 provides that as and from the appointed day, Chandernagore, which has been defined under Section 2 (c) as--"the whole of the territory which immediately before the 9th day of June, 1952, was comprised in the Free Town of Chandernagore",--shall form part of the State of West Bengal and the boundaries of that State shall be so altered an to comprise within them the territory of Chandernagore. Section 4 contains an amendment of the First Schedule to the Constitution incorporating into the State of West Bengal the territory of Chandernagore. Section 17 of the said Act is important and is set out below:-

(2.) The position, therefore, is as follows: It the Estate' Duty Act applied to Chandernagore at the time of the death of the said Manindra Nath Mondal, that is to say, on the 18th October, 1955, then, in order to escape estate duty, the Deeds of Gifts would have not only to be bona fide but executed two years before the date of death. In this case, the two Deeds were not executed two years before the death, and as such the properties which are the subject-matter of the gifts would also be the subject-matter of estate duty. So far as the applicability of the Estate Duty Act is concerned. I see no difficulty at all. The Act was an All-India Act and was in force an the State of West Bengal on the appointed day. Therefore, under Section 17 of the Merger Act, this law extended to Chandernagore. Mr. Dutt appearing on behalf of the petitioners has tried to take refuge behind the provisions of the Constitution. His argument is as follows; He says that under Article 1 of the Constitution, prior to the 7th Amendment thereof In November, 1950 India, is to be a Union, of States and the States and the territories thereof shall be the States and their territories specified in Parts A B and C to the First Schedule. In Part A of the First Schedule of the Constitution Item No. 10 is 'West Bengal', which corresponded to the Province of West Bengal. The Constitution (7th Amendment) Act, 1956 came into operation on the 1st day of November, 1956. By this, the sub-division of the States into classes A, B and C was abandoned. The States and the territories thereof were to be as specified in the 1st Schedule, as amended. The State of West Bengal was described as follows:-

(3.) Article 3 of the Constitution lays down that 'Parliament may by law, either increase the area of any State, or diminish the area of any State or alter the boundaries of any State. Under Article 4 (1) any law referred to in Article 3 shall contain such provisions for the amendment of the First Schedule and the Fourth Schedule as may be necessary to give effect to the provisions of the law and may also contain such supplemental, incidental and consequential provisions as Parliament, may deem necessary. Under Clause (2) of Article 4 no such law as aforesaid shall be deemed to be an amendment of the Constitution for the purposes of Article 368. Article 368 of the Constitution lays down that an amendment of the Constitution may be initiated by the introduction of a Bill for the purpose in either House of Parliament and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting, it shall be presented to the President for his assent and upon such assent being given to the Bill the Constitution shall stand amended accordingly. Upto now, there have been nine amendments to the Constitution. What is argued is that Parliament alone can alter the boundaries of a State, and the State of West Bengal can only be as was to be found in the Schedule to the Constitution. This Schedule had not been amended prior to November, 1956. It is therefore, argued that prior to that date, Chandernagore could never be a part of the State of West Bengal, and the Deeds of Gifts were much earlier than November 1956, In my opinion, this argument seems to take us nowhere. It is true that Parliament alone can enact a law increasing the area of any State or altering the boundaries of any State under Article 3. For that purpose, certainly the First Schedule or the Fourth Schedule as the case may be, will have to be altered. But how this alteration is to be effected is contained in Article 4 itself. All that is necessary is that the law itself, as promulgated by parliament should contain provisions for the amendment of the First Schedule or the Fourth Schedule as the case may be. It may be commented that the amendment of a Schedule to the Constitution cannot be contained in a statute passed by Parliament, without It being incorporated in the Constitution. Such however is the law. A law promulgated by Parliament under Article 3, of the nature of the Chandernagore Merger Act is not to be deemed to be an amendment of the" Constitution for the purposes of Article 368, and it is sufficient if the statute itself contains the proposed amendment to the First Schedule. I have already pointed out that under Section 4 of the Chandernagore (Merger) Act, there was provision for the amendment of the First Schedule. It may then be asked as to why the Schedule was amended in 1956 by incorporating the altered boundaries. That is quite clear from the objects and reasons for introduction of the 7th amendment to the Constitution, and the reason is that the Constitution was brought up-to-date with regard to the amendments to the Schedule. As I said an amendment to the First Schedule can be done by a Parliamentary Act passed under Article 3. Since these amendments were contained in a number of statutes, it was convenient in 1956 to bring them together in one place and amend the Schedule in the Constitution itself. It does not follow, however, that prior to 1956 the Chandernagore (Merger) Act together with the amendment in the 1st Schedule to the Constitution was ineffective. Mr. Dutt then refers me to a Supreme Court decision in Re: Berubari Union etc.. This was a reference under Article 143 (1) of the Constitution of India, and related to the proposed cession of a portion of the Berubari Union to Pakistan. It is not quite clear to me with what objects Mr. Dutt cited this case, because it completely goes against the contention put forward by him. It was held there that the acquisition of foreign territory by India could be done in the exercise of its inherent rights as a sovereign State. For this Purpose it was not necessary for Parliament to pass a law. But after the said territory formed a part of the territory of India, the process of assimilation was to be done, either under Article 2 or Article 3 (a) or (b) of the Constitution. In the Berubari case: (supra). Gajendragadkar, J., gave an illustration of this procedure and referred to the Chandranagore (Merger) Act itself. The learned Judge said as follows:-