H H IQBAL MOHMAD KHAN Vs. CONTROLLER OF ESTATE DUTY GUJARAT AHMEDABAD

JUDGEMENT

(1.) The facts leading to this Reference are as follows. The late Nawab of Palanpur the father of the present petitioner died on May 17 1957 The deceased Nawab was she owner of a palace known as Zorawar Palace. In the year 1954: the deceased Nawab sold this place to the Government of Bombay for a sum of Rs. 15 0 0 In January 1959 possession of this palace was handed over to the Government against payment of Rs. 5 0 0 towards the purchase price. The balance of Rs. 10 0 0 remained unpaid and that balance was payable by three annual installments. There is no dispute that out of these Rs. 10 0 0 Rs. 9 0 0 were gifted to the petitioner by the deceased Nawab. The only dispute is about the date when the gift was made the gift itself not being challenged.

(2.) The Deputy Controller held that the amount of Rs. 9.00 0 was deemed to have passed to the petitioner on the death of the deceased Nawab and that under section 9 of the Estate Duty Act 1953 as the gift was made within two years of the death of the late Nawab it was chargeable to estate duty. On appeal before the Central Board of Revenue it was contended that the gift was governed by Mahomedan Law that section 130 of the Transfer of Property Act was not applicable and that the gift was made two years or more before the death of the late Nawab and therefore was not chargeable. Before the Central Board of Revenue. reliance was placed on a letter written to the petitioner by his late father dated May 3 1955 two draft letters dated May 13 1955 and an affidavit made on December 23 1959 by Mr. Thacker a partner of Messrs. Mulla and Mulla who in May 1955 were acting as solicitors for the late Nawab. The draft letter under which instructions were given to the government of Bombay to pay the sum of Rs. 9 0 0 out of the said unpaid balance of Rs. 10 0 0 directly to the petitioner was not signed on May 13 1955 but was signed by the late Nawab on September 19 1955 and sent to the Chief Minister. In view of the instructions contained in that letter the amount of Rs. 9 0 0 in fact paid to the petitioner directly by the Government of Bombay. On these facts the Central Board of Revenue by its order dated January 27 1960 held that by reason of section 129 of the Transfer of Property Act providing that the provisions of Chapter VII shall not affect any rule of Mahomedan Law and transfers of actionable claims not falling under Chapter VII but under Chapter VIII of the Transfer of Property Act sec. 130 of the Transfer of Property Act would be applicable to the case that the debt being capable of partition there was no valid transfer of the sum in question even under Mahomedan Law prior to September 19 1955 when that debt was actually partitioned and lastly that the letter dated May 3 1955 did not complete the gift and that the gift was completed only on September 19 1955 when the deceased signed the letter addressed to the government of Bombay informing that Government of the aforesaid gift to the petitioner.

(3.) The present Reference is made at the instance of the petitioner and the question that is referred to us is:-