1977 (5) TMI 16 - SC - Indian Laws

Whether, on the facts and in the circumstances of the case, one-fourth share of the deceased in the joint family properties, to which she was entitled under section 3 of the Hindu Women s Rights to Property Act, 1937, was correctly included in her estate as property deemed to pass on her death under section 7 of the Estate Duty Act, 1953 ? Held that - By virtue of the provisions of the Act of 1937 a Hindu widow undoubtedly possesses a coparcenary interest as contemplated by section 7(1) of the Act and she is also a member of a Hindu coparcenary as envisaged by section 7(2) of the Act. On the death of Smt. Alladi, therefore, there was clearly a cesser of her interest and her interest merged in the coparcenary property and by reason of the inclusive part of sub-section (1) of section 7, it must be taken to have passed on her death and was hence exigible to estate duty. Since Smt. Alladi was a member of the coparcenary, this interest of her s which passed on her death was liable to be valued in accordance with the method provided by section 39 of the Act. The interpretation of section 40 of the Act is not free from difficulty, but as the present case squarely falls within the ambit of section 7(1), latter part, and sub-section (2) of section 7 of the Act which attracts section 39, it is not at all necessary for us to enter into the complex domain of the scope and ambit of section 40 of the Act in this case. The result is that the appeal is allowed, the judgment of the High Court is set aside and the question referred to the High Court is answered in the affirmative

Issues Involved:
1. Inclusion of 1/4th share of the deceased in joint family properties under section 7 of the Estate Duty Act, 1953.
2. Applicability of the Estate Duty Act, 1953, to agricultural lands.
3. Inclusion of accrued interest on fixed deposits and Government securities in the estate under section 34(2) of the Estate Duty Act, 1953.

Detailed Analysis:

1. Inclusion of 1/4th Share of the Deceased in Joint Family Properties:
The primary issue before the court was whether the 1/4th share of the deceased, Smt. Alladi, in the joint family properties should be included in her estate for estate duty purposes under section 7 of the Estate Duty Act, 1953. The court examined the nature of the interest conferred on a Hindu widow by the Hindu Women's Rights to Property Act, 1937, and its implications under the Estate Duty Act.

The court noted that prior to the 1937 Act, a Hindu widow had no right or interest in a Hindu coparcenary. The 1937 Act introduced significant changes, conferring on the widow the same interest as her husband, albeit limited to a Hindu woman's estate. The court emphasized that the widow's interest was not a coparcenary interest in the strict legal sense but possessed all other characteristics of a coparcenary interest, including the right to demand partition and a fluctuating interest subject to increase or decrease with changes in the family.

The court concluded that Smt. Alladi's interest in the joint family properties was a coparcenary interest that lapsed on her death and merged into the coparcenary. This interest was capable of valuation under section 39 of the Estate Duty Act. The court rejected the reliance on the Privy Council decision in Arunachalam Chettiar's case, distinguishing it on the grounds that it did not involve a statute similar to the 1937 Act.

2. Applicability of the Estate Duty Act, 1953, to Agricultural Lands:
Although this issue was referred to the High Court, the respondent did not press it during the hearing. Therefore, the court did not address this issue in its judgment.

3. Inclusion of Accrued Interest on Fixed Deposits and Government Securities:
Similarly, the respondent did not press this issue before the High Court, and it was not addressed in the judgment.

Conclusion:
The court held that the 1/4th share of Smt. Alladi in the joint family properties was correctly included in her estate under section 7 of the Estate Duty Act, 1953. The court emphasized that a Hindu widow possesses a coparcenary interest as contemplated by section 7(1) of the Act and is a member of a Hindu coparcenary under section 7(2). The interest of Smt. Alladi, which passed on her death, was liable to be valued in accordance with section 39 of the Act. The appeal was allowed, the judgment of the High Court was set aside, and the question referred to the High Court was answered in the affirmative.

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