Asutosh Mookerjee, J.
1. This is a reference under Section 5 of the Court Fees Act, 1870, made by the Taxing Officer on the original side of this Court. The circumstances under which the reference has been made are lucidly stated in the order of reference and need only be narrated here very concisely.
2. An application has been made by the Administrator-General for Letters of Administration in respect of the estate of G.A. Quiningborough as in a case of intestacy. As the application has been made by the Administrator-General, no affidavit of valuation, such as is required in the case of an ordinary application under Section 19H of the Court Fees Act, has been filed. But, in accordance with established practice, the Administrator-General has set out in his petition a list of the estate, and in another list the debts payable out of the estate. The value of the estate in the first list is given as Rs. 1,244-11-0, and the amount of the debts in the second list at Rs. 522, leaving a balance of Rs. 722-11. The question for determination is, whether the fee mentioned in Article 11 of the first Schedule to the Court Fees Act is payable in respect of the estate left by the deceased.
3. Article 11 of the first Schedule to the Court Fees Act provides for the payment of a fee on a Probate of a Will or Letters of Administration, with or without Will annexed, when the amount or value of the property in respect of which the grant of Probate or Letters is made exceeds Rs. 1,000. The question thus arises as to the true import of the expression 'amount or value of the property in respect of which the grant of Probate or Letters is made' does it mean the gross value of the property or does it signify the net value obtained by the deduction of the debts and expenses from the gross value. Sir Richard Couch, C.J., held in the case of In the goods of Ravi Chunder Dona 18 W.R. 153 : 9 B.L.R. 30 that in estimating the amount of the ad valorem fee chargeable under Article 11 of the first Schedule to the Court fees Act, the fee must be paid in respect of the property without deducting the amount of the debts to be paid out of it. It cannot be reasonably disputed, I think, that this is a possible interpretation of Article 11 taken by itself. But since this decision was given in 1872, the Court Fees Act has been twice amended, first, by Act XI at 1899, and, next, by Act VII of 1910. In my opinion, a substantial alteration in the law has been effected by these amendments and Article 11 must now be interpreted in the light of Section 19I, which was inserted in the Court Fees Act by Section 2 of Act XI of 1899. Sub-section 1 of Section 19I requires the applicant for Probate or Letters of Administration to file in the Court a valuation of the property in the form set forth in the third Schedule and to pay on such valuation the fee mentioned in Article 11. When we turn to the third Schedule, we find that the petitioner is required to state in the prescribed Form of Valution that he has truly set forth in Annexure B all the items which he is by law allowed to deduct. Annexure A is a statement of the valuation of the moveable and immoveable properties of the deceased. On the face of the Form of Valuation, it is thus patent that the petitioner is required to state the value of the property and is allowed to deduct the amount shown in Annexure B as not subject to duty. When we turn to Annexure B we find that it is headed 'Schedule of debts, etc.'; then follow five different items, as to each of which a statement of value has to be made. These are as follows: (1) amount of debts due and owing from the deceased, payable by law out of the estate ; (2) amount of funeral expenses: (3) amount of mortgage encumbrances ; (4) property held in trust not beneficially or with a general power to confer a beneficial interest; (5) other property not subnet to duty. Three positions are now perfectly plain; first, that each of the first four items constitutes property not subject to duty and that consequently the fee cannot be calculated on the gross value of the estate as also on the debts and the difference taken; secondly, that unsecured debts are, for this purpose, placed on the same basis as mortgage encumbrances; thirdly, that the record paragraph of the Form of Valuation, read with the last clause of Annexure A and the first and last clauses of Annexure B, makes manifest the Legislative intent that the fee is payable, only on the difference between the gross value of the estate and the amount of debts, as such difference alone constitutes property subject to duty. This has admittedly been always the law with regard to mortgage-debts: In the goods of Peter Innes 16 W.R. 253 : 8 B.L.R. App. 43, In the goods of Charles Edward Maclean 6 N.W.P.H.C.R. 214, In the goods of Ramchandra Lakshmanji 1 B. 118; and I feel no doubt that this is the law also in respect of unsecured debts under the Court Fees Act as amended in 1899, whatever view might have been maintained before that date. The essence of the matter is that when an estate is burdened with the payment of debts, the market value of the property is the value of the estate left after deduction of the amount of the debts: Cooper v. Cooper (1874) 7 H.L. 53 : 30 L.T. 409 : 22 W.R. 713: Blake v. Bayne (1908) A.C. 371 : 77 L.J.P.C. 97 : 99 L.T. 35. It is worthy of note that under the Law of England, in determining the value of an estate for the purpose of Estate Duty, allowance is made for debts and encumbrances (Finance Act 1894, Stat. 57 and 53 Vict. C. 80, Section 17). I am not unmindful that a contrary opinion was adopted in the case of Collector of Maldah v. Nirode Kamini Debya 15 Ind. Cas. 621 : 17 C.W.N. 21; but for reasons fully set out in my judgment in the case of In the goods of Harriett Teviot Kerr 21 Ind. Cas. 502 : 18 C.W.N. 121 at p. 127 : 18 C.L.J. 308 at p. 818, I am unable to accept that view as a correct exposition of the true intent of the Legislature. That decision holds that the fee is to be paid on the net value of the property, but the liability for assessment is to be determined with regard to the gross value of the estate; in other words, the fee is first determined on the gross value and is then reduced by the fee calculated on the amount of debts. This cannot be right, for the debts, as already explained, are exempt from duty. I hold accordingly that for purposes of Article 11 of the first Schedule to the Court Fees Act, the expression 'the amount or value of the property' signifies what is described as the net total in Annexure A in Schedule III, obtained by the deduction of the amount shown in Annexure B as not subject to duty from the gross valuation of the moveable and immovable property left by the deceased. In this view fee cannot be levied in the case before me.