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TMI Blog1969 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ney performed as a member of the flying crew in the Corporation's service. (1) Death resulting from air journey on duty Senior Captain (Basic Pay exceeding Rs. 1,250) 45,000 Captain and Senior Flight Navigator (Basic Pay exceeding Rs. 1,050) 40,000 Junior Captain Flight Navigator and Senior Radio Officer in selection grade (Basic Pay not exceeding Rs. 1,050) 35,000 First Officer, Senior Radio Officer and Flight Engineer (Basic Pay not exceeding Rs. 850) 30,000 First Officer, Senior Radio Officer and Flight Engineer (Basic Pay not exceeding Rs. 650) 25,000 Probationary Flight Navigator 25,000 Second Officer, Probationary Flight Engineer and Radio Officer 20,000 Air Hostess and Steward 15,000 Probationary Radio Officer, Probationary Air Hostess and Probationary Steward 10,000. The compensation payable under the said rule was in addition to the compensation which the Corporation had agreed to pay under an agreement described as Pilot Agreement entered into with the Corporation on 1st April, 1960, according to rule (iv) whereby it was provided that the Corporation shall pay compensation for the death of a pilot, a maximum of 36 times his monthly basic pay if such death occurred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty converted from one species into another by any method. Explanation 1.-The creation by a person or with his consent of a debt or other right enforceable against him personally or against property which he was or might become competent to dispose of, or to charge or burden for his own benefit, shall be deemed to have been a disposition made by that person, and in relation to such a disposition the expression 'property' shall include the debt or right created. Explanation 2.-The extinguishment at the expense of the deceased of a debt or other right shall be deemed to have been a disposition made by the deceased in favour of the person for whose benefit the debt or right was extinguished, and in relation to such a disposition the expression 'property' shall include the benefit conferred by the extinguishment of the debt or right." Section 5 is the charging section. It imposes estate duty in the case of every person dying after the commencement of the Act upon the principal value of the property passing on his death. It also determines what properties passing on a death are liable to charge and at what rates. Section 2(16) which defines the expression "property passing on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he true import of passing of property referred to in section 5 of our Act. As in this case we are mainly concerned with section 6 we may as well turn to section 2 of the U. K. Finance Act, 1894, which is in terms almost identical with those of sections 6 to 17 of the Act. Sections 1 and 2(1)(a), in so far as they correspond to sections 5 and 6, read as under : Section 1: " In the case of every person dying after the commencement of this part of this Act, there shall, save as hereinafter expressly provided, be levied and paid, upon the principal value ascertained as hereinafter provided of all property, real or personal, settled or not settled, which passes on the death of such person a duty, called 'estate duty', at the graduated rates hereinafter mentioned, and the existing duties mentioned in the First Schedule to this Act shall not be levied in respect of property chargeable with such estate duty." Section 2(1): "Property passing on the death of the deceased shall be deemed to include the property following, that is to say:- (a) Property of which the deceased was at the time of his death competent to dispose : . . . . " It may be mentioned that even the English Act did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude certain kinds of property, or, perhaps more accurately certain property in certain situations and is not to be deemed to include certain property in other situations. Section 5 and sections 6 to 17 like sections 1 and 2 of the U.K. Finance Act are, however, not mutually exclusive. That they were mutually exclusive, was indeed the view that was held at one time and it had the high authority of Lord Macnaghten who said in Earl Cowle v. Inland Revenue Commissioners, that "if the case falls within section 1 it cannot also come within section 2. The two sections are mutually exclusive." Lord Halsbury, who too was in that case, also appeared to take the same view as Lord Macnaghten. But in Public Trustee v. Inland Revenue Commissioners, all the law Lords including Viscount Simonds and Lord Radcliffe who took part in that decision, were uniformly critical of the abovementioned dictum of Lord Macnaghten, in Cowley's case. For the decision of the present case neither the facts in Cowley's, case nor the controversy about the correctness of Lord Macnaghten's dictum are of much relevance except that the view regarding mutual exclusiveness of sections 1 and 2 which had held the field for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the property of the deceased in the sense in which it is defined in section 2(15). I have already said that the Act does not define the word "property" except by way of an inclusive definition. The restraint appears to be deliberate because the term cannot be precisely defined and any attempt to do so will take up to the realms of metaphysics. However, according to Lord Halsbury in New York Breweries Co. v. Attorney-General, a case referred to by Grover J. (as his Lordship then was) in Murat Singh v. Controller of Estate Duty : " 'Property' is not something necessarily connected with physical possession and capable therefore of being treated by manual delivery ; but if one comes to analyse its meaning, it is manifest that a great many things, choses in action, are in the ordinary sense of the word 'property' and capable of being treated not indeed by physical handling, but by the documents of title and investments recognised by the law as transferring the title, the incorporeal right to sue (that is what is strictly comprehended in such phrases), documents which are capable of being enforced and treated as subjects of property." It is, therefore, in this general and comprehen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled under the terms of his employment; only its payment was conditional upon his death being caused by an accident during or as a result of air journey performed as a member of the flying crew in the service of the Corporation or while travelling on duty in surface transport provided by the Corporation or its nominated agents and was, by its very nature, receivable by his legal heirs. Although no specific rule was pointed out to us it was also stated that the deceased had power of disposition over it in the sense that he could nominate the person or persons by whom the amount was recoverable after his death, and that the deceased had actually nominated his wife for that purpose. Learned counsel, therefore, contended that the right to get compensation as a condition of one's service is as much an interest in property as any other interest which a person may have in incorporeal property, such as choses-in-action, etc. The circumstance that the occasion for the exercise of that right arises after the death of that person and is also conditional upon death, does not in any way detract from the existence of that right and the deceased's interest therein during his lifetime. The payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce which the Board might have granted to him if he had at the date of his death become permanently incapable of serving efficiently as a teacher in contributory service, whichever, is greater." The lady made the required contributions and also fulfilled the other conditions on which the payment of the gratuity to her personal representatives depended. Rowlatt J. held that although the quantum of the gratuity was not ascertainable until death, the gratuity was property passing at the death of the deceased, of which she was competent to dispose, within the meaning of the Finance Act, 1894, and so subject to duty. Miss Quixley's administrate appealed. One of the questions posed before the Court of Appeal was : Is there a right which the lady had in the gratuity within the term "property" ? Lord Hanworth M. R. answered the question thus : " But first of all, if the interest that she had falls within the term 'property' we can leave outside for the moment, the other matters brought into consideration in the argument. Now it appears to me that from and after the 1925, Act came into operation, whereby it was laid down that the Board shall make a grant to the legal personal represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Act, 1894, imposes estate duty upon all property which passes on the death. In order that the estate duty may be payable under that section the property must have a continuous existence before and after the death, and the possession or enjoyment of the property must pass from one person to another on the death. Section 2 deals with property which does not in fact pass on the death, and enacts that, for the purposes of liability to estate duty, that property shall be deemed to pass. In order that estate duty may be payable in respect of property under that section, it is not necessary that there should have been a continuous existence of that property, nor is it necessary that it should pass from one person to another on the death. It would include property which comes into existence for the first time on the death of a person. Amongst the property which is so deemed to pass under section 2 is 'property of which the deceased was at the time of his death competent to dispose'--see sub-section (1)(a) of section 2. The words 'competent to dispose' are further defined by section 22, sub-section (2)(a) which enacts, so far as material for this case, that a person shall be deemed comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in it and had also the right to appoint the person to whom it should be paid on his death. Although no specific rule providing for such appointment has been pointed out the fact that he did nominate his wife as the person to whom the compensation should be paid and the Corporation accepted the nomination, goes to show that his authority to do so was recognized. Learned counsel for the accountable person countered the argument advanced on behalf of the revenue by submitting that the compensation in question is in no way different from death compensation under the workmen's compensation schemes, etc., which are generally not dutiable, the deceased having never paid for them nor having held them as his property at any time. So also are damages paid for death on account of accidents. He said there was a difference between compensation payable on account of damages suffered by the estate of the deceased as a result of injuries caused to him and the benefit that accrued to his legal representatives after his death and was occasioned by it. It was urged that in one case the deceased had an interest in the compensation amount which he could dispose of during his lifetime while in the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghudu v. Nallagadda Erraiya. I do not think seetion 6(a) of the Transfer of Property Act has any bearing on the question arising for decision in this case as we are not concerned in any way with the rights of the dependants to transfer or dispose of their right of expectancy in this case. For the purpose of decision of this case what is material is the right of the deceased to dispose of by will or otherwise the compensation which his dependants or legal representatives are entitled to receive. I also do not think much of the distinction which the learned counsel endeavoured to draw between the pecuniary damages for the loss caused to the estate and the pecuniary loss sustained by the members of his family through his death. The distinction may have some relevance and I dare say it does have some relevance when one has to consider the question of damages as was the case in Feay v. Barnwell decided by Singleton J., but it does not seem to have any relevance for the purpose of deciding whether the compensation payable in the present case is property which should "be deemed to pass on the death of the deceased." Learned counsel lastly contended that a mere power of nomination for wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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