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Issues Involved:
1. Applicability of Mahomedan law versus Section 130 of the Transfer of Property Act. 2. Determination of the effective date of the gift. 3. Validity of gifting part of an actionable claim. Issue-wise Detailed Analysis: 1. Applicability of Mahomedan Law versus Section 130 of the Transfer of Property Act The primary issue was whether the gift should be governed purely by Mahomedan law or also by Section 130 of the Transfer of Property Act. The court concluded that Section 130, which deals with the transfer of actionable claims, overrides Mahomedan law in this context. Section 130 requires that a transfer of an actionable claim be effected by an instrument in writing signed by the transferor, making the transfer complete and effectual upon execution. This specific provision prevails over the general rules of Mahomedan law, which require a declaration of gift, acceptance by the donee, and delivery of possession. The court cited Tyabji's Commentary on Muhammadan Law and relevant case law, including Mt. Bibi Alimunnissa v. Shaikh Abdul Aziz and Yacoob Sahib v. Pacha Bibi, to support this conclusion. 2. Determination of the Effective Date of the Gift The court analyzed whether the letter dated May 3, 1955, effected the gift. The petitioner argued that the gift was complete when this letter was written, while the revenue contended it was merely a proposal. The court examined the letter's content, noting that it expressed a clear intention to gift Rs. 9,00,000 to the petitioner, thereby fulfilling the requirements of Section 130. The court also considered subsequent conduct, such as the draft letter dated May 13, 1955, and an affidavit by Mr. Thacker, which corroborated that the gift was made before May 3, 1955. The court concluded that the gift was indeed effected by the letter dated May 3, 1955. 3. Validity of Gifting Part of an Actionable Claim The final issue was whether part of an actionable claim could be the subject-matter of a gift. The Central Board of Revenue had held that gifting part of an actionable claim was invalid. However, the court found this conclusion unwarranted, noting that neither Section 130 nor any other provision of the Transfer of Property Act prohibits such a transfer. The court cited ample authority to show that a transfer of part of an actionable claim is permissible. The learned Advocate-General conceded this point, and the court ruled that the finding by the Central Board of Revenue was incorrect and could not be sustained. Conclusion The court answered the referred question in the negative, indicating that the gift of Rs. 9,00,000 should not be regarded as having been made within two years of the death of the deceased and thus was not liable to estate duty. The respondent was ordered to pay the costs of the reference to the petitioner.
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