DULAT J. - This is a reference under section 64 of the Estate Duty Act, 1953.
Shri M. S. Shahani, whose estate is in question died on the 12th July, 1956. He was a displaced person from Pakistan, where he had left certain immovable properties concerning which he had filed a claim. That claim had been verified and, under the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, he was entitled to receive a net compensation of Rs. 72,717. When the return of the estate duty was submitted by the son of the deceased, who is the petitioner before us, this particular claim was included in it. The Assistant Controller of Estate Duty valued the claim at Rs. 72,717 and assessed duty accordingly. The petitioner appealed to the Central Board of Revenue and he contended there that the compensation claim should have been valued at half its face value, as such claims were being sold in the market at fifty per cent. discount. The Central Board of Revenue found that there was no definite evidence produced to support the contention and, in the absence of evidence to the contrary, the Board held that the compensation claim had been correctly valued since, under the Displaced Persons (Compensation and Rehabilitation) Rules, the claimant was entitled to receive Rs. 72,717. The petitioner then asked for a question of law arising in the case to be referred to this court, and the Central Board of Revenue decided thereupon to refer the following question :
'Whether on the facts and circumstances of the case, the amount of compensation included in the principal value of the estate has been correctly taken at the figure of Rs. 72,717 ?'
On behalf of the petitioner the contention is that, under section 36 of the Estate Duty Act, the value of every property has to be the estimated price which it would fetch if sold in the open market at the time of the deceaseds death, and the Central Board of Revenue was, therefore bound to inquire into the market price of the compensation claim and not merely take its face value as correct. This contention seems to rest on a slight misunderstanding of the nature of the compensation claim, as provided in the Displaced Persons (Compensation and Rehabilitation) Act, 1954. The argument assumes that a displaced person is merely entitled to receive a compensation claim which has then to be disposed of by him and consequently, it is worth only what it may fetch in the open market. Actually, however, that is not so. A compensation claim is merely a decision made by a competent authority in respect of a claim made by a displaced person concerning his property left behind in Pakistan. The decision, when made, entitles the claimant to receive compensation the value of which is fixed according to precise rules. In the present case, the value of compensation receivable by the deceased has been determined under the Rules as Rs. 72,717. The amount that can be paid to the claimant in cash or in the form of other property has to be worth Rs. 72,717. The Displaced Persons (Compensation and Rehabilitation) Act and the Rules made under it themselves determine the amount of compensation expressed in terms of money which is receivable by the claimant, and there is no question of the claimant being under any necessity of disposing of the claim in order to realise its value. It is said on behalf of the petitioner as was said before the Central Board of Revenue also, that such compensation claims are sold in the market and they roughly fetch only half of their face value. The Central Board of Revenue found, and the statement of the case submitted to us mentioned this pointedly, that there was no evidence to support the allegation made by the petitioner and in the absence of evidence the Central Board of Revenue were fully entitled to accept the face value of the net compensation payable to the deceased as its proper value within the meaning of section 36 of the Estate Duty Act.
In the course of arguments, reliance was sought to be placed on certain English decisions concerning the valuation of unquoted share of shares which are not ordinarily transferable, but those decisions can be of no assistance in the present case, for a claim to receive a particular amount as compensation under the Displaced Persons (Compensation and Rehabilitation) Act has no great resemblance to the shares of a company, whether transferable or not. The holder of a verified claim under the Displaced Persons (Compensation and Rehabilitation) Act is, by force of law, entitled to receive some property of the exact value of his net compensation and hence, therefore, the net compensation is determined as has been done in the present case and its value in the absence of evidence to the contrary, would be the face value. It follows that the decision made by the Central Board of Revenue in this case is correct, and the question referred for our decision must be answered in the affirmative and against the petitioner, and I would so order. The petitioner must pay the respondents costs before us. Counsels fee Rs. 75.
FALSHAW C.J. - I agree.
Question answered in the affirmative.