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TMI Blog1985 (12) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... ah Manyam Kanakayya at Rs. 7,42,487. Rajah Manyam Kanakayya died on 28-7-1949. Before his death, while he was in sound disposing state of mind he executed the registered will dated 23-7-1949. Meenakshamma is the wife of Rajah Manyam Kanakayya. Kamakshamma is the sister of Smt. Meenakshamma who was married to one Shri Yelamarthi Venkata Satyanarayanamurthy. The second son of Shri E. Venkata Satyanarayanamurthy through Kamakshamma is the one Krishna Rao. Incidentally it may be mentioned that Shri K. Venkata Satyanarayanamurthy managed the estate of Rajah Manyam Kanakayya. The discussion about the terms of the registered will dated 23-7-1949 may be reserved for the present and we may take it up a little later. To complete the narration, suffice for the present to know that Smt. Meenakshamma was given the right to adopt a son to her husband in his registered will. It is stated in the recitals of the will referred to above that preferably her sister's son Krishna Rao may be considered for adoption and if she does not adopt the said minor boy, the testator bequeathed and directed Rs. 35,000 to be given to the said boy. The deceased Smt. Meenakshamma adopted the said Krishna Rao while he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the estate only is liable to be paid. 5. These contentions were repelled or were not accepted by the Assistant Controller. He held that at the time of execution of the will Rajah Manyam Kanakayya stood in the position of a sole surviving coparcener with all legal rights and complete control of disposal over the same. The sole surviving coparcener under Hindu law can dispose of the joint family properties in his hands as he likes by means of even gift or will or other testamentary document. Taking the circumstances or the position in which Rajah Manyam Kanakayya was placed at the time of execution of the will dated 23-7-1949 naturally his prime concern would have been very much as to how to protect the interests of his wife or provide her adequately after his death. In fact his wife Smt. Meenakshamma lived 20 years subsequent to his death. Therefore, the Assistant Controller held that Rajah Manyam Kanakayya left no room for any doubt in the language employed by him in the will. He made it clear in the said will that the future adopted son will have to wait until the death of his widow to receive the properties. So also it is made clear that as long as his widow is alive she w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Andhra Pradesh High Court it was argued on behalf of the accountable person that on the date of death of Rajah Manyam Kanakayya in 1949, the adopted son must be deemed to have succeeded to the properties of late Rajah Manyam Kanakayya by survivorship in which case the will dated 23-7-1949 executed by late Rajah Manyam Kanakayya cannot have any effect inasmuch as even before the death of the deceased all the properties of late Rajah Manyam Kanakayya became the absolute properties of the adopted son. Much force was found in this argument advanced on behalf of the accountable person as the said argument was found derived sufficient support from the authoritative decision of the Andhra Pradesh High Court in Estate of Late Smt. K. Narasamma's case. Therefore, the learned Appellate Controller held that the entire property after the death of Smt. Meenakshamma had to be excluded for the purpose of estate duty and, hence, he allowed the appeal filed before him. 7. As against the impugned orders dated 6-5-1982 passed by the Appellate Controller the present second appeal by the revenue is filed and, thus, the matter stands for our consideration. The contentions of the revenue as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side we are inclined to agree with the submissions of the learned standing counsel for the revenue. In the decided case before the Andhra Pradesh High Court Shri Kailasa Venkanna got divided from his brother, Shri Kailasa Krishna sometime in 1895. Shri Kailasa Venkanna executed a registered will on 5-8-1907 by which deed he bequeathed to his wife Smt. Kailasa Narasamma all his immovable and movable properties. He died issueless in 1930. The anti-adoption agreement in that case was dated 15-2-1943. Therefore, it can be seen that either on the date of the execution of the will or on the date of the death of Shri Kailasa Venkanna in 1930 the then prevailing law of right of survivorship was not eroded in any way. It is only for the first time an attempt to erode the rights of survivorship was made by the Legislature by enacting the Hindu Women's Rights to Property Act. The provisions of sub-sections (2) and (3) of section 3 of the said Act are as follows : "(2) When a Hindu governed by any school of Hindu law other than the Dayabhaga School or by customary law dies having at the time of his death an interest in a Hindu joint family property, his widow shall, subject to the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... father. Lower down in his order it is held that after the death of the adoptive father in 1949 the adopted son became the sole survivor of the late Rajah Manyam Kanakayya for which he must be deemed to have succeeded to all the properties of the late Rajah Manyam Kanakayya existing as on the date of the death of late Rajah Manyam Kanakayya. The learned Appellate Controller also held that the will executed by the late Rajah Manyam Kanakayya, viz., the will dated 23-7-1949 will not have any effect inasmuch as even before the death of the late Rajah Manyam Kanakayya all his properties became the absolute properties of the adopted son. We fail to understand the correctness of the deductions by the learned Appellate Controller. We are at a loss to understand how even during the lifetime of late Rajah Manyam Kanakayya the accountable person can become the sole surviving coparcener. Is it correct to postulate that late Rajah Manyam Kanakayya had no rights in the properties held by him even during his lifetime ? Further, what is the effect of the will dated 23-7-1949 executed by the late Rajah Manyam Kanakayya admittedly at a time when he was the sole surviving coparcener and when the adop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nanda Gajapathi was not the sole surviving coparcener when he executed the will in 1897. It is sufficient to quote the following observations of Viscount Dunedin in---'Krishnamurthi Ayyar v. Krishnamurthi Ayyar' AIR 1927 PC 139 to reject this contention of Mr. Rajagopala Ayyangar. 'When a disposition is made inter vivos by one who has full power over property under which a portion of that property is carried away, it is clear that no rights of a son who is subsequently adopted can affect that portion which is disposed of. The same is true when the disposition is by will and the adoption is subsequently made by a widow who has been given power to adopt. For the will speaks as at the death of the testator, and the property is carried away before the adoption takes place.' As their Lordships of the Privy Council put it tersely in the First Pithapur case, 22 Mad. 383 (PC). 'If the Rajah had power to alienate he might do it by will and the title by the will would have priority to the title by succession' " Further we have to hold that such a view is quite opposed to the ratio of the Hon'ble Supreme Court expressed in the case of Surjit Lal Chhabda v. CIT [1975] 101 ITR 776. Chie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true construction of section 3, sub-sections (2) and (3) of the Hindu Women's Rights to Property Act, the widow acquires no rights as on the actual date of death of Venkatasiva Rao, viz., 7-6-1956. Sub-section (2) of section 3 is quite clear that when a Hindu governed by Mitakshara school of Hindu law dies having at the time of his death an interest in a Hindu joint family property, his widow shall have in the property the same interest as he himself had. Sub-section (3) provides that in respect of the interest which devolves on her under sub-section (2) she shall have the limited interest known as the Hindu woman's estate and it further enacts that she shall have the same right of claiming partition as a male owner. It does not expressly or impliedly enact that the Hindu governed by the Mitakshara school of Hindu law is deemed to live till his widow claims a right of partition. It is significant to note that under the terms of sub-sections (2) and (3) of section 3, the interest of the husband devolves upon the widow immediately on the date of his death. No legal fiction is imported in the section and the Legislature does not provide that the husband is deemed to live till she clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absolute owner of that estate by operation of section 14 of the said Act and thus she would have all the rights of a full owner to possess, manage, and enjoy exclusively and of disposal either by any act inter vivos or by will the said estate. On her death intestate, her interest in the joint family properties would pass and devolve by succession on her heirs and to that extent it would be required to be included in the estate liable to pay duty under the Estate Duty Act. In any case, the widow having become the absolute owner of the share which she inherited from her husband, would be competent to dispose it of, it being an incident of full ownership, and, therefore, her interest would be deemed to be property passing on her death under section 6 of the Estate Duty Act." 9. The learned departmental counsel contended that Rajah Manyam Kanakayya being the sole surviving coparcener till his death in 1949 is absolutely entitled to deal with the property he held. He is empowered to gift away or sell away or alienate any part of the joint family property held by him and in support of that proposition, the learned counsel brought to our notice the decision of the Gujarat High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fundamental principle under law is the dictum that once a property or a right is vested it cannot be divested and he contends that when once Smt. Meenakshamma derives the whole property under the terms of the will dated 23-7-1949 after the death of her husband on 28-7-1949 her right in the property cannot be divested simply because she adopted a boy to her husband on 20-8-1951 and in support of his contention he drew our attention to the judgment of the Andhra Pradesh High Court in CWT v. Smt. T. Yasodamma [1984] 146 ITR 445. There the law was stated as follows as per the head-note of the decision: "Held, that once partition took place between C and the assessee, she became the absolute owner of the property which fell to her share, by virtue of section 14 of the Hindu Succession Act, 1956. The assessee was competent to adopt a boy but such an adoption did not result in divesting her of the property which had already vested in her. Therefore, the assessee was the absolute owner of the properties and should be assessed only as an individual." Thus, he contended that the whole property derived by her under the terms of the will should be deemed to have passed on her death on 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by Hindu women under section 3(2) and 3(3), the learned advocate for the accountable person brought to our notice that the said right cannot be said to be either a right of survivorship or a right of inheritance but it is a special type of interest which is a creation of the statute and in this connection he invited our attention to the commentary of Mulla's Principles of Hindu Law, Fifteenth edn., which is as follows: "Where property devolves on a widow and the property was the separate property of her husband, she takes in it the same share as a son. This is by inheritance under section 3(1). The interest that she acquires in a case where the husband was a member of a joint family does not devolve on her by survivorship. All the High Courts are agreed on this but there was difference of opinion on the question whether she can be said to have acquired the interest in such property by inheritance till the conflict was set at rest by the Supreme Court in Lakshmi Perumallu v. Krishnavenamma ('65) A.S.C. 825 when it was held that such interest is neither by survivorship nor by inheritance but a special type of interest which is the creation of statute." He argued that under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and other estates, resident of French Yanam, now resident of Rajahmundry, E.G. District. I have no issues, male or females. You are the 2nd son of my sister Yelamarthy Kamakashamma, wife of Venkata Sathyanarayanamurthy. For perpetuation of lineage and for spiritual attainment in next world, I and my late husband Kanakayya Zamindar, intending to bring you up and adopt you asked your natural father and my sister's husband Yelamarthy Venkata Sathyanarayanamurthy. In pursuance of his acceptance, we have brought you to our house. You were aged about 10 years by then. Since last 8 years, we are giving education and bringing you up and treating you as our son. I and my husband were contemplating to adopt you and to perform you the thread ceremony as you are attaining age. Due to will of God, having fell ill, and thinking that he may not survive on 23-7-1949, your adopted father and my husband Shri Raja late Kanakayya Zamindar had executed a will and got it registered in the Sub-Registrar Office, Rajahmundry in Book No. 3, Vol. 53, pages 64, 65, document No. 66 of 1949. He died on 28-7-1949. Therefore, in pursuance of the above will and wishes of my husband and my wish and also on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanakayya died on 28-7-1949. By that date the adoption of the minor boy Krishna Rao did not take place. Smt. Meenakshamma adopted the boy only on 20-8-1951. Again neither the factum of adoption nor the validity of adoption were in question before us. Under the circumstances we hold that the right of the adopted boy in the joint family property commenced only from the date of adoption, i.e., 20-8-1951. We also hold that all the alienations prior to the date of adoption including the will dated 23-7-1949 are fully binding against the adopted son they being alienations made by the sole surviving coparcener. He had the requisite authority to do so. We respectfully follow the declaration of law by the Hon'ble Supreme Court in Surjit Lal Chhabda's case, where it is held that a son either born or adopted after alienation shall take the family hotchpot as he finds it. A son born, begotten or adopted after the alienation has no right to challenge the alienation. After Smt. Meenakshamma adopted Krishna Rao and renamed him as Rajah Manyam Kanakayya on 20-8-1951 a joint family had come into existence between the accountable person and the deceased. A joint family need not necessarily possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mma's case even though it may help to support the case set up by the assessee. 12. Our task is not over by simply considering what is the correct legal position to be applicable to the facts of the case. Now we have to decide by applying the above legal principles to the facts of the present case. We have already held that the will dated 23-7-1949 is fully valid and fully operative. But what are the actual terms of the will and what type of estate was conferred by Smt. Meenakshamma in different situations ? In our considered opinion, the learned departmental standing counsel stressed only on a disposition found in the said will which comes into operation had not Smt. Meenakshamma adopted anybody during her lifetime to her husband but he did not take us through the types of bequests contemplated under the will if Smt. Meenakshamma adopted a boy to her late husband, Raja Manyam Kanakayya the testator provided for both the situations in different ways he had provided for situation where his wife Smt. Meenakshamma does not want to go for adoption and in such a case the testator bequeathed all his properties both movable and immovable absolutely to her except for implementing the dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the terms of the will dated 23-7-1949 as well as the ante-adoption agreement dated 20-8-1951 that Smt. Meenakshamma is entitled only to the life interest, whereas the accountable person is entitled to the vested remainder rights after her death. If that is the correct intendment of the bequeathals made in the will dated 23-7-1949 the life estate enjoyed by Smt. Meenakshamma and the vested remainder rights in each of the properties covered by the will dated 23-7-1949 passed to the accountable person under the terms of the will. Therefore, in our considered opinion, the accountable person became entitled to the properties not because he inherited the said properties from his adoptive mother Smt. Meenakshamma but because he obtained them as a legatee under the will dated 23-7-1949 under the dispositions made under it. Therefore, in our considered opinion, section 5 does not come into operation. In our opinion, section 7(1) does attract. The said provision is as follows: "Interests ceasing on death.---(1) Subject to the provisions of this section, property in which the deceased, or any other person had an interest ceasing on the death of the deceased, shall be deemed to pass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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