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TMI Blog1973 (12) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the wife of the deceased, Kamlaslianker Bhachech, in this bungalow and the land appertenant thereto. It is found that on 24th December, 1950, the deceased, Kamlaslianker, and his wife, Mahendraba, made a joint will in respect of the above referred bungalow. The bungalow is situated on plot No. 825 and appertenant to its main structure, there are two blocks bearing Nos. 48/2 to 48/6. Over and above these two blocks, there is a garage, a bath room and two latrines as well as some open compound land appertenant to this structure. By the joint will executed by the deceased, Kamlashanker, and his wife, Mahendraba all these properties were disposed of. The relevant portion of the will which contains the terms of this disposal is as under: "During our lifetime we shall continue to be the joint owners of the land, bungalow and blocks with their common bath room and two privies including the garage bearing No. 48/1 and shall be jointly entitled to the rents and income of the said land and blocks and the user and rent of the bungalow. After the death of one of us, the survivor shall become the owner of the said land, bungalow and blocks including the garage No. 48/1 with the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Part III which contemplates it "exceptions from the charge of duty". Section 29 says that if estate duty has already been paid in respect of any settled property since the date of settlement on the death of one of the parties to a marriage, the estate duty shall not be payable in respect thereof on the death of the other party to the marriage, unless the latter was, at the time of his death, competent to dispose of such property. Therefore, the case of the accountable person is that since the property in question was settled by the joint will dated 24th December, 1950, in favour of the grandsons and since the duty has been once paid on the death of Mahendraba, one of the joint executors of the will, the second duty on the death of the deceased is not payable by virtue of the provisions of section 29. In this connection, the accountable person has further contended that on a true construction of the will, the deceased was neither at the time of his death nor at any time during the continuance of the settlement, the full owner of the share of Mahendraba, because he had only a life interest therein to receive rents and profits from that share and, therefore, the exemption contempl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right of ownership in regard to the property which was held by the other testator. His rights were confined to the right to receive rents and income and user of the premises but the right of disposition was not there." On these observations, the Tribunal decided in favour of the accountable person and held that the share of Mahendraba was exempt from estate duty as the case squarely falls within the ambit of section 29 of the Act. Being aggrieved by this decision of the Tribunal, the revenue has preferred this reference in which the following question is referred to us for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the respondent is entitled to the full benefit conferred by section 29 and that as such no estate duty in respect of the half share in the joint property which originally belonged to late Mahendraba, the wife of the deceased, is payable by the respondent?" We have already stated above the respective contentions of the parties with regard to this question. The first contention is purely of law and concerns the correct interpretation of section 29 of the Act. The question is whether the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued as "payable" and if that is so, it cannot be said that estate duty became payable "since the date of settlement" if once it is believed that the settlement came into existence oil the death of Mahendraba. Presuming for the sake of argument that the word "paid" is used in the first part of the section in the sense of "payable", we don't find ourselves in agreement with Shri Kaji that the expression "since the date of settlement" excludes the possibility of the "settlement" and "liability to pay" estate duty coming into existence simultaneously. The dictionary meaning of the word "since" is "throughout" and this meaning does not exclude the possibility of a simultaneous happening. At any rate, looking to the language and the spirit of the section, it is clear to us that the expression "if the estate duty has already been paid ...... since the date of the settlement" means "if the estate duty has become payable or has been paid either simultaneously with the creation of settlement or at any time thereafter". The reason why we propose to read the section in this manner is not merely the wide dictionary meaning of the word "since" but the fact that the section comes into operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsy between the parties. However, before touching the merits of the respective contentions raised by the parties on this point, it would not be out of place to refer to some relevant provisions of the Estate Duty Act. Section 5 of the Act is the charging section and provides that in the case of every person dying after the commencement of the Act, there shall be levied and paid up, on the principal value of all the property settled or unsettled which passes on the death of such person, a duty called "estate duty". Section 7 says that the property in which the deceased or any other person had interest ceasing on the death of the deceased shall be deemed to pass on the deceased's death to the extent to which a benefit accrues or arises by the cesser of such interest. It is not in dispute that even if it is believed that the deceased had only a life interest in the disputed property that interest ceased and passed on his death to the other legatees named in the will. Therefore, application of section 7 to the facts of the present case cannot, and is not, in fact, disputed. Coming then to section 29, which contemplates exemption from estate duty, it provides as under : "29. Settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procal agreements between the parties making the will and, therefore, the deceased has no power to revoke any of the dispositions made in the will or to do anything inter vivos which would go against these dispositions. The argument was that there was an implicit agreement between the deceased and his wife that, on the consideration of each agreeing to bequeath his or her share in the property in favour of the survivors, each undertook not to do anything which would render the subsequent bequests in favour of grandsons ineffective, and if such was the agreement, the argument continued, it must follow that what the deceased received as a legatee was not the full ownership rights of disposal but only the limited life interest in the share of his wife, and this would be so, even if the status of the deceased as a survivor is described in the will as "owner". The contention was that, if this construction of the will is accepted, there comes into existence a resulting settlement in favour of the grandsons on the death of the wife and, hence, the property becomes a "settled property" within the meaning of section 2(19) of the Act. It was pointed out that, if once it is believed that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the will in the light of the peculiar circumstances of each case. Therefore, before considering what is a joint and/or a mutual will, let us consider what was the real intention of the deceased and his wife in making the disputed will, and what is the exact nature of the dispositions contemplated by them. It should be remembered that the contents of the will are clear enough to show that when it was executed the only direct heirs of the deceased and his wife were their grand-children to whom the property was ultimately directed. Their grand-children were the only persons who were entitled to their love and affection and there was no question of any diversion of this love and affection during the lifetime of either of these two spouses. Thus, neither the deceased nor his wife had any reason to believe that if the survivor of them was made the absolute owner of the property, there was any danger of the property ultimately going to any person other than the grandsons. The deceased and his wife were far advanced in life when they executed this will, and unlike the western social conditions relating to which some of the English cases cited at the Bar were decided, the so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are clear and explicit, and where the intention of the testator to grant the absolute estate is expressed in plain and unequivocal terms, then that intention should prevail, and the meaning of the terms used would not be cut down or abridged unless other terms used in the document lead to a construction which would abridge the said meaning. Therefore, the question is whether there is anything else either in the excerpts quoted above or in any other part of the document which would cut down or abridge the full implications of the meaning of the word "owner" which is used with reference to the rights of the survivor. We are of the opinion that there is none. The Tribunal has put emphasis on the fact that just after referring to the ownership rights of the survivor, the will in the very next sentence refers to the right of the survivor to receive rents and income from the properties in question. The Tribunal has, therefore, concluded that the so-called ownership right of the survivor was confined only to the receipt of rent and income from the properties in question. In other words, according to the Tribunal, it was not the full ownership rights which was intended to be conferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no connection with the existence of the bequest at all. We are unable to accept this line of reasoning, because, every testamentary bequest comes into existence only on the date on which it becomes effective. Therefore, when the executants have specifically provided in the will that the bequest in favour of the grandsons would become effective only after the death of the survivor of them, what they have unequivocally indicated is that during the lifetime of the survivor, there would be no settlement of any bequest in favour of the grandsons. In this connection, the learned Advocate-General further drew our attention to clause (3) of the will which creates certain pre-emptive rights with regard to the bequeathed property as amongst their grandsons and their heirs. The contention was that this clause indicates that the intention of the executants of this will was to see that so far as possible the property should not go out of the hands of their direct heirs. It was, therefore, contended that the directions contained in clause (3) of the will further illustrate the intention of the executants not to enable the survivor of them to do anything which would defeat the ultimate beque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xecutants of this will was working at the relevant time. This clause is in the following terms : "(5) Certain moneys are lying in some banks both in current account and savings account in our joint names. We bequeath all such amounts lying to our credits at the time of the death of the survivor of us to our grandson Dilharshanker Chintvanshanker Bhachech and in the event of his death before the death of the survivor of us to his heir according to law." This clause of the will speaks about the bank deposits of the executants of the will. What is bequeathed from these bank deposits is only the amount lying to the credit of the survivor at the time of his death.This indicates that what the executants were contemplating was to make the bequest only of that property which was available at the time of the death of the survivor. It would not be improper to take this clause of the will as giving proper indication of the mind of the executants. We find that the executants have treated their immovable property in the same manner in which they have treated the cash deposits lying to their credit in the banks, and it is for this reason that they have advisedly stated that the survivor of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it should not be so construed as to enable the survivor to revoke any of its provisions or to do anything which would render its provisions fruitless. It was, therefore, greatly emphasised that we should first construe this will as a mutual will. We have already noted above that the contention of the revenue is that there is no element of mutuality in this will and, therefore, it is nothing more than a joint will. In view of these contentions, we shall presently consider the concepts of mutual will and a joint will and the will which is both joint and mutual. Halsbury defines the concepts of joint as well as mutual will as under at pages 846 and 847 of volume 39 of the third edition : "Joint wills.--A joint will is a will made by two, or more, testators contained in a single document, duly executed by each testator and disposing either of their separate properties or of their joint property. It is not, however, recognised in English law as a single will. It is in effect two or more wills ; it operates on the death of each testator as his will disposing of his own separate property ; on the death of the first to die it is admitted to probate as his own will and on the death of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, so far as it disposes of his property, and the fact that one party has died without revoking the disposition of his property does not prevent the survivor from revoking the disposition which he has made notwithstanding that he has received benefits out of the estate of the deceased party." From these observations it is clear that before holding that a particular will is a mutual will, the court is always required to find out whether the mutuality in question is the result of any agreement between the testators. The learned Advocate-General contended on this point that if from the provisions of the will it is found that the surviving testator gets the benefit of the property which he did not possess, as a result of the testamentary disposition made by the dying testator, and if the surviving testator is found to have taken the benefit of that disposition, then the agreement which is contemplated in the mutual will should be presumed to exist. It was pointed out that the English decision of Dufour v. Pereira rested on the facts of this type and the only evidence about mutuality which was available in that case, was available from the will itself. The decision given in Dufour's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and executed mutual wills in pursuance of that arrangement, the one who pre-deceases the other, dies with the implied promise of the survivor that the arrangement shall hold good ; and if the survivor, after taking a benefit under the arrangement, alters his will, his personal representative takes the property upon trust to perform the contract, for the will of the one who has died first has, by the death, become irrevocable. The question which now arises to be considered is how far these principles are applicable to the facts of the present case, and how far the ratio of the decision in Dufour's case, that instrument of the will itself is evidence of the agreement, has been accepted by the subsequent English decisions. We find that in three subsequent decisions, the above-said ratio of Dufour's case has been considered by the English courts. The first is Lord Walpole v. Lord Oxford, the second is In re Oldham and the third is a Privy Council decision in Gray v. Perpetual Trustee Co. Ltd. We shall presently refer shortly to the facts of these cases and show how the Dufour's case was considered by these decisions. Dufour's case was decided by Lord Camden in 1769. Lord Loughbo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made a fresh will ignoring the alternative provisions of her own mutual will. The plaintiff in that case supported the provisions of the joint will and contended that, from the agreement to make mutual wills in the form in which they were made, the survivor who accepted the benefit under the mutual agreement became thereby subject to alternative trusts mentioned in the mutual wills. Reliance was placed by her on Dufour's case. Astbury J., while delivering the judgment, made the following observations on the point under consideration: "The first point to determine is whether from the evidence in this case, which substantially consists only of the facts of the making of these mutual wills in the terms I have stated, I am bound or able to come to Lord Camden's conclusion in Dufour v. Pereira that there was in fact an agreement or arrangement between the husband and wife that the survivor, here the wife, who was to take the other's property not for life but absolutely should if she accepted the benefit be bound not to alter the disposition in the second part of her 1907 will. The plaintiff contends that no such arrangement need be proved outside the fact of the form of the mutual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement not to revoke the wills ; in the absence of a definite agreement to that effect there was no implied trust precluding the wife from making a fresh will inconsistent with her former will, even though her husband had died and she had taken the benefits conferred by his will. It is further held in this case that although by the mutual wills the wife expressly had refrained from exercising a power of appointment, which her husband had, only in default of her exercising it, the wife can both take the benefit of her husband's will and exercise her power of appointment, unless the language of his will either put her to her election, or placed her in the position of seeking at the same time to approbate and reprobate its provisions. This case has considered the implications of Dufour's case and other cases on the point. Speaking of Dufour's case, Viscount Haldane has observed as under : "In Dufour v. Pereira, the conclusion reached was that if there was in point of fact an agreement come to that the wills should not be revoked after the death of one of the parties without mutual consent, they were binding. That they were mutual wills to the same effect was at least treated as a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cases, it will be clear that under the English law in order to render mutual wills irrevocable, both the conditions must be concurrently satisfied : (a) the surviving testator must have received benefits from the deceased under the mutual will, and (b) the mutual wills should have been executed in pursuance of an agreement that the testators shall not revoke the mutual wills. Such an agreement not to revoke the wills may either appear from the wills themselves or may be proved outside the wills." In fact the said High Court was at pains to point out to the facts from which the agreement as regards irrevocability could be spelt out in that case. Reference to paras. 33 and 34 of the reported judgment makes this quite clear. The details of the will, which the High Court considered in that case, are given in para. 5 of the judgment. These details show that two brothers belonging to a Hindu family, having attained the advanced age, and having no issue male or female of their own, pooled their self-acquired and joint properties together each relinquishing his own separate rights therein, with an idea that they should enjoy them together during their lifetime. They made bequests of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If two separate documents evidencing the element of mutuality are, by themselves, not sufficient to spell out an agreement not to revoke, it is difficult to comprehend what difference would a single document make in that position. If the singularity of the document is itself sufficient evidence of an agreement prohibiting a power to revoke, then we are afraid every will executed jointly by more than one person would necessarily be a mutual will. Moreover, even the expressions such as "our wills", "our property", "our present wishes" would also make no difference because when two or more persons join in making a will, such expressions are inevitable. In our opinion, a joint will becomes " joint and mutual" only when two types of agreements are evidenced, namely, (1) the agreement to join together to make the dispositions in question, and (2) the agreement that the dispositions made jointly shall not be revoked by any of the executants without the consent of the rest. Evidence of the first type of agreement is, in the very fact, that the will is jointly made, but the evidence of the second type of agreement is required to be obtained from internal or external sources and it woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... define or explain all the implications of a mutual will. In fact, the Supreme Court wanted to point out one distinguishing feature between a joint will and a mutual will and while doing so, it seems to have picked up only one distinguishing feature which was sufficient for its purpose. There is no doubt that the receipt of reciprocal benefits by the joint executants of a will is one of the considerations which would distinguish a mutual will from a joint will. But that is not all, because the foregoing discussion shows that another important distinguishing feature is that, in a mutual will, there should be some internal or external evidence of an agreement not to revoke the provisions of the will. This aspect is not considered by the Supreme Court as, in fact, it was not necessary to be considered for the disposal of that case. Under the circumstances, we find that the observations made by the Supreme Court in that case cannot be construed as laying down a proposition that if the surviving testators receive benefit of the property of the deceased under a mutual will, that fact, by itself, would be sufficient to make the will irrevocable by the surviving testator. We find that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made. We have no doubt that the word 'reciprocal' used by their Lordships of the Supreme Court in the case cited above has been used in the sense that the word 'reciprocal' is used in the Contract Act and in the Law of Contracts as implying the moving of consideration from both sides." It is, therefore, clear that the Allahabad High Court shares the view that in order to prohibit the testators of a joint will from revoking the provisions of that will, there should be an agreement to that effect between the parties. Now, coming to the facts of the present case, can we say that such an agreement is proved ? If once we hold that the mere fact that each of the executants was to take the property of the other as a legatee, is not by itself sufficient to prove an agreement not to revoke, we must insist on some other evidence, either internal or external, to prove the agreement of this type. So far as the external evidence is concerned, there is none in this case, So far as the internal evidence is concerned, it is apparent that each of the executants of the will under consideration might have thought it quite safe to trust the other, and to believe that having regard to their ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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