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S.V. Sundaresann Vs. Assistant Controller of Estate Duty - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Judge
Reported in[1983]144ITR916(Mad)
ActsEstate Duty Act - Sections 61
AppellantS.V. Sundaresann
RespondentAssistant Controller of Estate Duty
Appellant AdvocateK. Srinivasan, Adv.
Respondent AdvocateJ. Jayaraman, Adv.
Cases ReferredPeramanayakam Pillai v. Sivaraman
Excerpt:
.....to disposition - coparcener cannot execute gift in respect of his undivided interest in joint family property and gift if made would be void abinitio - respondent committed error in treating settlement as valid and excluding value of lands covered by settlement deed in computing value of estate - respondent has no other option but to ignore gift altogether in computation of value of estate - held, respondent was justified in exercising his powers under section 61 and revising order of assessment and recomputing value of estate by including one half of value of agricultures lands covered by settlement deed. - - 8. hindu law on the question of gifts of ancestral property is well settled. a gift or device by a coparcener in a mitakshara family of his undivided interest is wholly..........been definitely settled by judicial decision that it is incompetent to an undivided members of a hindu family, to alienate by way of gifts his undivided share or no portion thereof and that such alienation is void in toto, and this principle cannot be evaded by the undivided members professing to make an alienation for value, when such value is manifestly inadequate and inequitable. in such a case, the transaction can be upheld against there family in respect of the alienor interest in the joint family property, only to the extent of the value received.' 11. the above dictum has been followed by raghava rao j., in venkatgappayya (k.) v. raghavayya (k.) : air1951mad318 . in that case, the very coparcener who had made a gift of his undivided interest had filed th suit for recovery of.....
Judgment:

Panmanabhan, J.

1. The writ petitioner herein is one Sundaresan. The petitioners father, S. K. Venkataramanan and S. K. Kamakshisundaram were brothers and were mambers of an HUF of which Venkataramanan was the karta. Venkataramanan;'s wife is Saraswathi Ammal Kamakshisundaram remained a bachelor. While, so, on October 28, 1959, Venkatramaman and Kamakshisundram executed a settlement deed by which they covered an extend of 27.29 across of agricultural lands in Varadampalayam and Kotturverampalayam village belonging to the HUF in favour of Venkataramanan's wife, Saraswathi Ammal. Saraswathi Ammal obtained possession of the lands pursuant to the said settlement deed and was in enjoyment. On March 25, 1965, Saraswathi Ammal in here turn executed a settlement deed in respect of a portion of the said properties in favour of her husband Venkataramanan.

2. On November 15, 1970, Kamakshisundaram died unmarried leaving his brother Venkataramanan as the sole surviving in coparcener, As the accountable persons, Venkataramana filed an estate duty account in respect of the estate of the deceased Kamakshisundram under the provisions of the E. D. Act, 1953. In the account filed on August 9, 1970, the value of the estate of Kamakshisundaram was shown as Rs. 3,69,616 including the value of the entire agricultural lands. subsequently, a revised account was filed stating that the lands in Varadampalayam and Kottuverampalayam village had been settled in favour of Saraswarthi Ammal, and that consequently the said lands had to be excluded from the estate of Kamakshisundaram for the proposes of computation of estate duty. This was accepted by the ASst. Controller of Estate Duty and an order of assessment was passed.

3. On October 28, 1972, November 27, 1974 and July 21, 1975, the respondent revised the assessment order on some ground with which we are not concerned in this writ petition.

4. On December 7, 1976, the respondents issued a notice to the petitioner under s. 61 of the e. D. Act, 1953 (called 'the ACt') stating that the settlement deed dated October 28, 1959, executed by Venkataramanan and kamakshisundaram, in favour of SAraswathi Ammal was void and, therefore, the half share of kamakshisundaram should be include in his estate and that the assessment already made under the Act had to be revised. The petitioner in his reply to the notice took the stand that the respondent was fully aware of all the fact at the time the original order of assessment was passed, that there was no error apparent from the record and that consequently the respondent had no jurisdiction to initiate rectification proceedings under s. 61 of the act, On February 25, 1977, the respondent negatived they contention of the petitioner and passed a revised order of assessment including the value of one held share of the agricultural lands covered d by the settlement deed executed by the brother in favour of Saraswathi Ammal and recomputed the value of the estate of late Kamakshisundaram at Rs. 4,65,455. The respondent took the view that the settlement dated October 28, 1959, executed by Venkataramana and Kamakshisundaram in favour of Saraswathi Ammal was an initio void.

5. In the above circumstances, the petitioner, has filed this writ petitioner for the issue of a writ of certiorari to quash the received order of assessment passed by the respondent on February 25, 1977.

6. Mr. K Srinivasan the learned counsel for the petitioner raised the following contentions : (1) The view taken by the respondents that the settlement deed executed by the late Kamakshisundaram and late Venkataramana, the petitioner father, was valid. Under Hindu law a coparcener can gift his undivided share in the family properties with the consent of the other coparceners. At the time of the settlement deed, Venkataramana and kamakshisundaram were e only members of th joint family. In as much as both of them had jointly executed the gift deed, each one of them must be deemed to have consented to the execution of the gift deed by the other in favour off SAraswathi Ammal. Viewed in this light, the settlement deed has to be held to be valid. Further, after the introduction of the Hindu Succession Act a comparison had got the power to make a gift of his undivided share in the family proprieties under s,.30 of the Hindu Succession Act. (2) In any event, on the facts and circumstances of this case, the respondents had no jurisdiction to revise the assessment in exercise of his powers under s. 61 of the Act. The power under s,. 61 of the Act can be invoked only where the earlier reorder of assessment suffers from an error apparent from the record, In the present case, there was no error apparent rom the record in the earlier order of assessment. The respondent had taken note of the settlement deed and excluded the settled lands from the computation of the value of the estate of late kamakshisundaram. In may view of the matter, the question whether a gift made by a coparcener of an HUF is void or not is a debatable point and therefore, e such a question cannot be determined by resorting to s, 61 of the Act.

7. having bestowed our anxious and careful consideration to the argument s advances by Mr. K. Srinivasan, we are of the view that they are devoid of merit.

8. Hindu law on the question of gifts of ancestral property is well settled. A gift or device by a coparcener in a Mitakshara family of his undivided interest is wholly invalid and void in toto, subject to an exception in the case of a manager in favour of small gifts to female relations on special occasions or for pious, charitable or religious proposes,. the law is thus stated in Mayane Treatise on Hindu Law and Usage, eleventh edition, at page 484 :

'It is now equality well settled in all the provinces that a gift or device by a coparcener in a Mitakshara family of his undivided interest is wholly invalid... A coparcener cannot make a gift of his undivided interest in the family property, movable or immovable either to a stranger or to a relative except for purpose warranted by special texts. In Radhakant Lal v. Nasma Begun [1918] 4 5 Cal, 733, gifts of a part of the joint family estate made by a Hindu in favour of two of his concubines and the daughter of one in respect of this own interest.'

In Mulla's Hindu law, fourteenth th edition at page 320 it is stated thus it coparcener can dispose of his undivided interest in coparcener property by gift. Such transaction being void altogether there is no estoppel or other kind of personal bar which precludes the down form asserting his right to remove the transferred property.'

9. In Ramaman v. Venmkata [1888] ILR 11 Mad 246 a Hindu had made a gift of certain land, which he had purchased with the income of the ancestral property. Thereafter, his son brought a suit to recover possession of the land on e ground that the gift was not valid. The learned judges observed as follows (p. 249) :

'During coparcenary, e ancestral property vests in the joint family, and if any coparcener dies before partitions, the property vests in the other coparceners as if he was never born. In the case of a sale, the alienation is upheld to the extent of the alienation share as a matter of equity, which the purchaser is considered to be entitled to insist upon, but in e case of gift there is no such equity. If has already been decided buy a Full bench of this court that the gift by a coparcener of his undivided interest in ancestral property cannot be supported at all even to the extent of the donors share.... The gift is not binding on the family either in part or in whole, and the property in the subject of gift originally vesting in its is not divested by is, and we rate, therefore, of opinion that the power of interdiction includes a right to see that the family estate is preserved for the family until a partition is made and that the done, who accepted the gift subject to his right of a coparcener is not entitled to complain of its enforcement to his prejudice.'

10. In Rottala Runvganatham Chetty v. Pulicat Ramasami Chetti [1904] ILR 27 Mad 162, a Full Bench of this court has observe as follows (at p. 166) :

'It has now been definitely settled by judicial decision that it is incompetent to an undivided members of a HIndu family, to alienate by way of gifts his undivided share or no portion thereof and that such alienation is void in toto, and this principle cannot be evaded by the undivided members professing to make an alienation for value, when such value is manifestly inadequate and inequitable. In such a case, the transaction can be upheld against there family in respect of the alienor interest in the joint family property, only to the extent of the value received.'

11. The above dictum has been followed by Raghava Rao J., in Venkatgappayya (K.) v. Raghavayya (K.) : AIR1951Mad318 . In that case, the very coparcener who had made a gift of his undivided interest had filed th suit for recovery of possession of the property. On behalf of the done-defendant if was contended that the well known common law maxim, that a man cannot derogate from his won grant, must preclude the plaintiff-donor form seeking to recover the property converted by him to the defendant. The learned judge rejected the contention in the following words :

'It cannot be said that the validity of a gift by a coparcener is not as matter for challenge at the instance of the very coparcener who executed the deed. The maxim that a man shall not derogate from his own grant is not applicable to a as in which the personal law of the parties renders altogether void a grant by him which must therefore, be treated in the eye of law as altogether non est. There being no rights create by a void transaction of that kind there is no estoppel or any other kind of personal bar-akin thereto which precludes the executant of such gift from asserting his right to recover the property and have a declaration that the gifts is void.'

12. A similar question came up once against for scrutiny before the Full Bench of this court Peramanayakam Pillai (K.) v. Sivaraman (S. T.) : AIR1952Mad419 . The head not at page 309 (of MLJ) reads as follows :

'It is the undoubted right of a coparcener under Hindu law to alienate for consideration his interest on the property, but it is not open to him to make a gift of is, as the very foundation of the alienee's equity is the payment of consideration.'

13. Raghava Rao J., while formulating the various propositions arrived at by him, has observed as follows (at pages 456 of AIR) :

'A gift or devise by a coparcener in a Mitakshara family of his undivided interest is, ordinarily speaking and subject to an exception in the case of a manager in favor of small gifts to female relations on special occasions or for pious, charitable or religious purpose, wholly invalid, void in toto. This principle cannot be evaded by the undivided members 'professing to make an alienation for value, when such value is manifestly inadequate and inequitable (vide rottala Ranganatham Chetty v. Pulicat Ramasami Chetti[1904] ILR 27 (FB).? 162

14. Veeraswami J. (as he then was) held in Sivagana Thevar v. U. Thevar : AIR1961Mad356 , that even a gift of reasonable portion of immovable property belonging to the joint family to a second wife as a marriage gifts or in anticipation of marriage is invalid.

15. Varadarajan J. (as he then was) in Kandammal v. Kandiah Thevar : (1977)1MLJ121 , had occasion to consider the validity of a gift of joint family property by a father to his wife at the time when a son has bene conceive by here and was in the mother womb. The learned judges following the Full Bench decision in Rottala Ranganatham Chetty v. Pulicat Ramasami Chetti [1904] ILR 27 Mad 162 and K. Permanayakam Pillai v. S. T. Sivaraman : AIR1952Mad419 , held that the gift made by the father in that case wa a initio void.

16. From the above decision if follows that a gift by a coparcener of his undivided interest is a initio void,. This is on the principle stated in Ramanna v. Venkata, ILR 11 Mad 246, that the family estate as to be preserved fro the benefits of the joint family which in the conception of Hindu law is composed not only of the coparcenary for the time being and the male children in the womb, but also of the male children to be born thereafter. As was observed by the Full Bench in Peramanayakam Pillai v. Sivaraman : AIR1952Mad419 , the right of a coparcener under Hindu law to alienate for consideration his interest in the property is based on principals of equity for that consideration paid by the alienee. However, no such consideration can arise in the case of gifts executed by a coparcener in respect of his undivided interest in e coparcenary property. The contention of Mr. Srinivasan that in view of the fact that both Venkataramanan and Kamakshisundaram were parties to is, the settlement deed could not be held to the void cannot be sustained. if the very basis of the rule that a gift by a coparcener of his undivided interest in the coparcenary property is void is based on the principle that the joint family property has to be preserved not only for the males members, adults and minors, who were then existing and in e womb but also to be born thereafter into the family, it will not be possible to hold that all the adult members by common consent can deprive the family of joint family property by a gift. We are therefor, not in a position to accept the contention of Mr. Srinvasan that by consent, the members of the joint family can execute a valid gift of the joint family property. to uphold that said proposition would be to go against the long catena of decision which has held against the validity of gifts executed by a coparcener in respect of his undivided interest.

17. Mr. Srinivasan, then contended that under s. 30 of the Hindu Succession Act it will be open to e coparcenary to execute a gift of his undivided interest in the coparcenary property. Section 30 of the Hindu Succession Act reads as follows :

'Any Hindu may dispose of by will or the testamentary disposition any property, which is capable of being so disposed of by him, in accordance with the provision of the Indian Succession Act, 1925 (39 of 1925), or any other law for the time being in force and applicable to Hindus.

Explanation - The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a members of a tarwad, tavazhi, illom, kutumba or kavaru in the property of the tarwad, tavazhi, illom, kutumba or kavaru shall, notwithstanding anything contained i this Act or any other law for the time being in fore, be deemed to be property capable of being disposed of by him or by her within the meaning of this section.'

18. According to the original Mitakshara law, no coparcener, not even a father, could dispose of by will his undivided coparcenary interest even if the other coparcenary consent to the disposition. This is because even if the other coparcenary died his undivided devolved by survivorship on the other coparceners. The title by survivorship was considered to take precedence to the exclusion of that by devise. This rule of Mitakshara law has now been abrogated by s. 30 and the Explanation thereto. Section 30 read with the Explanation only empowers a coparcener to dispose of his property by will in accordance with the provision of the Indian succession Act, 1925, or any other law fort the time being in force. The section is confined only to testamentary dispositions, and does not cover dispositions by ways of gift inter vivos. We therefore, reject the contention of Mr. Srinvasan that the settlement deed executed by the late kamakshisundaram and Venkataramanan in favour of Saraswathi Amma; in 1959 would be valid under s. 30 of the Hindu Succession Act.

19. The next question for consideration is whether the respondent, the Asst, CED, had jurisdiction to revise the original order of assessment,. As already stated the contention of Mr. Srinivasan is that the question whether a gift of his undivided interest in joint family property by a Hindu coparcener is void or not, is a debatable point and the not free from difficulty. In the circumstances, according to the leaner counsel a mistake apparent on the reorder must be obvious and patent mistake and not something which can be established only by a long-drawn process of reasoning of points on which there may be two opinion. A diction on a debatable point of law is not a mistake apparent from the record. The learned counsel realised upon the decision of the Supreme /court in T. s. Balaram, ITO v. Volkart Brothers : [1971]82ITR50(SC) . No exception can be taken to this contention of the learned counsel. In the above case, which dealt with the power of an ITO to rectify a mistake under s. 154 of the I. T. ACt, 1961, Hegde J., observed as follows (at p. 53 :)

'A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there any conceivably be two opinions. A decisions on a debatable; e point of law is not a mistake apparent from the record.'

20. A Bench of this court in CWT v. Kamala Ganapathi Surbramaniam : [1981]127ITR175(Mad) , to which one of us was a party (Balasubrahmanyan J.) has occasion to consider the power of the WTO under s. 35 of the W. T. ACt which conferred on the WTo the power for rectification of any order passed among others by the AAC on the ground that is suffered an error apparent from record. The learned judges held that when an apparent mistake is found in an order, the jurisdiction to rectify is acquired.

21. We have has occasion to consider th power of rectification vested in the ITo under s. 154 of the I. T. ACt, m 1961, in T. C. No. 1192 if 1977, decided on 10-12-1981 (Umma Salma v. CIt : [1983]144ITR890(Mad) . the argument of the learned counsel for the assessee in that case was that the error that was sought to be rectified by the Ito could only be resolved by a debate and lengthy argument. That was no accepted by us on the ground that the earlier order of assessment passed by the Officer was manifestly working and no extraneous circumstance was required to show the erroneous nature of the the order. The same principle applies in interpreting s. 61 if the E. D. ACt. AS we have already found it is one of the settled principles of Hindu law that a comparison cannot execute a gift in respect of his undivided interest in joint family property and that such a gift if made would be void into. In the circumstances, the gift deed executed in 1959 by Venkataramanan and Kamakshisundaram in favour of Saraswathi Ammal was a initio void and no est. The respondent committed a glaring and palpable error in treating the settlement as valid and excluding the value of the lands covered by the settlement deed in computing the value of the estate which passed on the death of Kamakshisundaram. In view of the catena of decision holding that a gift by a coparcener if hi undivided interest in the joint family property is a initio void the respondent has no other option but to ignore the gift altogether in the computation of he value of the estate which passed on the death of Kamakshisundaram. There cannot be any two opinions on the question whether a gift executed by a coparcener of his undivided interest in valid, void or voidable. Viewed in that the light, we see no reason to accept the contention of Mr. Srinivasan that the validity of a gift executed by Kamakshisundaram and Venkataramanan in 1959 in favour of Saraswathi Ammal was a debatable one and cannot be deemed to be a n error apparent from record to clothe the respondent with p[owner under s. 61 of the E. D. ACt to revise the order of assessment originally passed. As already pointed out, m the error, is so glaring and palpable that in needed to be rectified the moment the mistake wa realised by the respondent. We have therefore, no hesitation in holding that the respondent was justified in exercising his powers under s. 61 of the E. D. ACt and revising the earlier order of assessment and recomputing the value of the estate of Kamakshisundaram by including the one half of the value of the agricultures lands covered by the settlement deed of 1959.

22. In the result, the writ petition is dismissed, m but under the circumstances without costs.


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