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TMI Blog1971 (11) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... vermal filed a return under the Estate Duty Act in which they claimed that the deceased constituted a Hindu undivided family along with his wife, Smt. Dhani Bai, and in view of the adoption which she made 11 days after the death of her husband, the deceased was competent to dispose of only one-third of the family properties, the reason being that by a legal fiction the adopted son is like a posthumous son, who is deemed to have come into existence before the death of the adoptive father. This contention was overruled by the Deputy Controller who held that as the deceased was the sole surviving coparcener the entire properties held by him passed on his death under section 5 of the Act, he being competent to dispose of the entire properties at the time of his death. He accordingly levied estate duty on the whole of the estate. The accountable person then filed an appeal to the Central Board of Direct Taxes, New Delhi, which was dismissed. On their application under section 64(1) the above question of law was thereafter referred to this court. Having heard the learned counsel for the parties we are of the opinion that the view taken by the authorities below is erroneous. It is not di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving coparcener was the subject of exhaustive evidence by expert witnesses and their Lordships were referred to and studied numerous authorities in which in reference to his interest language was used not incompatible with his being regarded as the 'owner' of the family property. But though it may be correct to speak of him as the 'owner', yet it is still correct to describe that which he owns as the joint family property. For his ownership is such that upon the adoption of a son it assumes a different quality ; it is such, too, that female members of the family (whose members may increase) have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it. And these are incidents which arise, notwithstanding his so-called ownership, just because the property has been and has not ceased to be joint family property. Once again their Lordships quote from the judgment of Gratiaen J. : ' To my mind it would make a mockery of the undivided family system if this temporary reduction of the coparcenary unit to a single individual were to convert what was previously joint property belonging to an undivided family into the separate property of the surviving c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Coming now to the question as to the interest of the deceased person in the joint family properties at the time of his death it is sufficient to refer to the decision of their Lordships of the Supreme Court in Krishnamurthi v. Dhruwaraj. The following pedigree will help in understanding the facts of that case : N (died 1892) Son B (died 1885) =wife T daughter K (died 1933) Son D by adoption in 1945 Son V (respondent-plaintiff) (died 1934) 2 Sons (defendants-appellants) N was possessed of joint family property, which was inherited by his daughter, K, on his death in 1892. On the death of K the property was inherited by her son, V. On the death of V the family property was inherited by his two sons, the appellants-defendants. About 11 years after the death of V, B's widow, T, adopted a son, D, to her husband, B. This son, D, instituted the suit for the recovery of the property from the two appellants. The appellants denied the respondent's right to the property contending that K was the owner of the property and thug became a fresh stock of descent and that the appellants had inherited the property from their father, V, to whom it had been alienated by K in 1930. The H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed son relates not to the estate of his adoptive father but to that of a collateral. With reference to the claim with respect to the estate of a collateral, the governing principle is that inheritance can never be in abeyance, and that once it devolves on a person who is the nearest heir under the law it is thereafter not liable to be divested. When succession to the properties of a person other than an adoptive father is involved, the principle applicable is not the rule of relation back but the rule that inheritance once vested could not be divested. " As explained in Anant Bhikappa Patil v. Shankar Ramchandra Patil the adopted son is the continuator of his adoptive father's line exactly as an aurasa son, and an adoption, so far as the continuity of the line is concerned has a retrospective effect : whenever the adoption may be made there is no hiatus in the continuity of the line. In order that there may be no break in the continuity of the line the adopted son must be deemed to have come into existence before the death of his adoptive father. If he does not come into existence before the death of his adoptive father there will be a break in the line. Therefore, the legal ficti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on would have been one-third. In view of the fiction enacted in section 39 of the Estate Duty Act the share of the deceased person in the family properties at the time of his death was one-third and this alone will be deemed to have passed on his death. We may here refer to the dictum of Lord Asquith of Bishopstone in East End Dwellings Co. Ltd. v. Finsbury Borough council : " If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs ; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. " The learned counsel for the revenue relied on the obiter observations of the Judicial Committee in Krishnamurthi v. Krishnamurthi contained in the following passage : " It will be apparent from this examination that it is not possible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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