PETITIONER: CONTROLLER OF ESTATE DUTY MADRAS Vs. RESPONDENT: ALLADI KUPPUSWAMY DATE OF JUDGMENT03/05/1977 BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA BHAGWATI, P.N. UNTWALIA, N.L. CITATION: 1977 AIR 2069 1977 SCR (3) 721 1977 SCC (3) 385 ACT: Estate Duty Act, 1953--Sections 7(1) and (2) and 39--Scope of. Hindu Joint Family--Death of coparcener--Nature of interest of widow--Widow not claiming partition during the life time--Death of widow--Whether interest in Joint family property passes--Liability to estate duty--Estate Duty Act, 1953, Ss. 5, 6, 7(1), 39, 40(a) and (b)---Hindu Women's Rights to property Act, 1937, Section 3(2). Construction of fiscal statutes--Duty of the court--Legislative intent reflected in the Acts must be given full effect to. HEADNOTE: Shri Alladi was a member of the Hindu coparcenary con- sisting of himself his wife (Smt. Alladi) and three sons. Shri Alladi who died before the Estate Duty Act 1953 came into force, during his life time had settled certain proper- ties absolutely on his wife and had also declared certain other properties to form part of the joint family proper- ties. Smt. Alladi died on January 5, 1956, a few months before the passing of the Hindu Succession Act, 1956. The Assistant Controller of Estate Duty valued her estate at a total amount of Rs. 7,25,527/- including a sum of Rs. 2,02,271/- being the value of her 1/4th share in the joint family properties, on the footing that as Smt. Alladi was a member of the Hindu coparcenary, her interest in the joint family properties. passed on her death to the other three sons and the value Of this interest being 1/4th, the heirs would be liable to pay estate duty on the value of the 1/4th, share. The respondent filed an appeal before the Central Board of Revenue and contended that as Smt. Alladi died as a Hindu widow she possessed no coparcenary interest which could pass on her death; her interest merged without any benefit accruing or arising to the coparceners and hence section 7 subsection (1) had no application. This plea did not find favour with the Board. which upheld the order of the Assistant Controller of Estate Duty as correct. The Board further held that the Hindu widow's. estate created by s. 3(2) of the Hindu Widows Rights to Property Act, 1937, was an interest in property which ceased on the death of the widow attracting estate duty. Thereupon, the respondent moved the Board to make reference to the High Court of Madras for decision of the questions of law involved in the case. The Board referred three questions to the High Court under section 64(1) of the Act, but at the time of the hearing of the reference, the respondent confined his arguments only to the following issue, namely "Whether on the facts and in the circumstances of the case 1/4th share of the deceased in the joint family properties to which she was entitled under s. 3 of the Hindu Womens Rights to Property Act, 1937, was correctly included in her estate as property deemed to pass on her death under s. 7 of the Estate Duty Act, 1953." The High Court relying on the decisions of the Privy Council in Attorney General of Ceylon v. Arunachalam Chettiar (1957) AC 513 and Gartside v. Inland Revenue Commissioners 1968 AC 553 held that the interest of Smt. Alladi was not a coparcenary interest which could have passed under s. 7(1) of the Act and as the said interest was incapable of valuation, it was not exigible to estate duty and thus held against the Revenue and in favour of the accountable person. Allowing the appeal by certificate, the Court, HELD: (1) By virtue of the provisions of the Act of 1937 a Hindu widow undoubtedly possess a coparcenary interest as contemplated by s. 7(1) of the Act and she is also a member of the Hindu coparcenary as envisaged by s. 7(2) of the Act. [734 B] 722 (2) Prior to the passing of the Act of 1937 a Hindu Woman had no right interest at all in a Hindu coparcenary. The Act of 1937 bettered the rights a Hindu widow and conferred on her by s. 3 the same interest as possessed her husband. [727 A] (3) The words "the same interest as he himself had" in sub-section (2) of s. 3 of the Act of 1937 clearly indicate that the statute gave effect to the well-settled doctrine of Hindu shastric law that the persons of the husband after his death continues through his wife who is a surviving half and the husband continues to live through the widow so long as the widow is alive. When the Legislature used the expres- sion' "the same interest as he himself had", it would in- clude all the rights possessed by the husband which could devolve on the wife. Thus, a Hindu widow was introduced for the first time into the Hindu coparcenary having the same rights as her husband and became as it were a member of the Hindu coparcenary with two qualifications, namely, (i) she had only a limited interest and (ii) that she could not be a coparcener because having regard to the nature of her entry into the family after marriage with her husband, there was no question of her getting interest in the Hindu copar- cenary by birth which is one of the most important incidents of a Hindu coparcenary. [727 D-E] (4) The essence of coparcenary property is the unity of ownership which is vested in the whole body of coparceners and the two principal incidents of coparcenary are that the interest of coparceners devolve by survivorship and not by inheritance and that the male issue of a coparcenary ac- quires an interest in the coparcenary property by birth and not as representing his father. [729 D-E] (5) A Hindu coparcenary has six essential characteris- tics, namely, (i) that the lineal male descendants upto the third generation acquire an independent right of ownership by birth and not as representing their ancestors; (ii) that the members of the coparcenary have the right to work out their rights by demanding partition; (iii) that until parti- tion, each member has got ownership extending over the entire property jointly with the rest and so long as no partition takes place it is difficult for any coparcener to predicate the share which he might receive; (iv) that as a result of such co-ownership the possession and enjoyment of the property is common; (v) that there can be no alienation of the property without the concurrence of the other copar- ceners unless it be for legal necessity and (vi) that the interest of a deceased member lapses on his death and merges in the coparcenary property. Applying these tests to the interest of a Hindu widow who has been introduced into a coparcenary by virtue of the Act of 1937, it will be seen, that short of the first condition she possesses all the necessary indicia of a coparcenary interest. The fact that before the Act of 1956 she had the characteristic of a widow estate in her interest in the property does not detract any the less from this position. Therefore, though a Hindu widow cannot be a coparcener she has conarcenary interest and is also a member of the coparcenary by virtue of the rights conferred on her under the Act of 1937. [731 F-H, 732 A-B-D] State Bank of India v. Ghamandi Ram (dead) through Shri Gurbax Rai [1969] 3 SCR 681. 686 applied. (6) If the widow has not chosen to exercise her right of partition, there no severenee of the Hindu coparcenary and on her death the interest of the widow merges in the copar- cenary property or lapses to the other coparceners. Parappagari Parappa alias Harmmanthappa and Anr. v. Parappagari Nagaman and Ors. ILR 1954 Madras 183; S.T. Sabujpari and Anr. v. Satrughan Isser and Ors. AIR 1958 Patna 405, 410 and Mst. Khatrant Kuer v. Smt. Tapeskwari Kuer AIR 1964 Pat 261, approved. (7) It was not the intent of the legislature which was folly aware of the statutory interest conferred on a Hindu widow by virtue of the Act of 1937 and the incidents thereof that though a Hindu widow has got the same interest as her husband in the Hindu coparcenary and has also the right to demand 723 partition and her interest is a fluctuating one would lapse to the other coparceners in case of her death without seek- ing partition in the same manner as that of other coparcen- ers, yet it should be exempt from estate duty. In the instant case, Smt. Alladi was a member of the Hindu coparce- nary, her interest was undoubtedly a coparcenary interest which lapsed on her death and merged into the coparcenary. It was clearly capable of valuation, it being covered by s. 39 of the Act. The High Court was in error in basing its decision on the Arunachalam Chettiar's case and also in Gartside's case ignoring the decisions of this Court and also the peculiar and special provisions of the Act. [732 F, 733 A-C] Attorney-General of Ceylon v. Arunchalam Chettiar (1957) AC 513 34 ITR (E.D.) 20 and Gattside v. Inland Revenue Commissioners (1968) AC 553=70 ITR 663 (H.L.) held inapplicable. (8) It is wrong to contend that the widow could not be treated either as a member of the Hindu coparcenary or as having been conferred coparcenary interest in the property. Even though the widow is not a coparcener in the strictly legal sense of the term, the interest which she has is the same interest as her husband and that is the coparcenary interest with the only limitation placed on her by s. 3(3) of the Act of 1937, namely, that her interest would be limited interest, of a Hindu widow. In the instant case, Smt. Alladi possessed a coparcenary interest which lapsed on her death and merged into the coparcenary and was clearly covered by the inclusive part of sub-s. (1) of s. 7 and under s. 39, the value of the benefit accruing or arising from the cesser of the coparcenary interest was to be deter- mined by taking the principal value of the share and the joint family property which would have been allotted to her had there been partition immediately before her death. The present case squarely falls within the ambit of s. 7(1) latter part and sub-s. (2) of s. 7 of the Act which at- tracts s. 39. By reason of the inclusive part of sub-a. (1) of s. 7 it must be taken to have passed on her death and was hence exigible to estate duty. [733 D-G] (9) When the phraseology of a particular section of the statute takes within its sweep the transaction which is taxable, it is not for the court to strain and stress the language of the section so as to enable the tax-payer to escape the tax. The legislative intent reflected in the Act of 1937 and Estate Duty Act, 1953, must be given full effect to. [733 H, 734 A] JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2003/71
(From the Judgment and Order dated 5-12-1969 of the
Madras High Court in Tax-Case No. 40 of 1965)
S.T. Desai, P.L. Juneja and R.N. Sachthey, for the
appellant.
G. Venkatarama Sastry, K.R. Ramamani and J. Ramamurthi
for the respondent.
The Judgment of the Court was delivered by
FAZAL ALI, J.–This appeal by certificate is directed
against a Full Bench judgment of the Madras High Court dated
December 5, 1969-Alladi Kuppuswami v. Controller of Estate
Duty, Madras(1)–by which the reference made to the High
Court by the Central Board of Revenue was answered in favour
of the accountable person and against the Revenue. The case
involves an interesting and important question of law in
respect of ambit and scope of ss. 7(1) & (2) as also 39 of
the
(1) 76 I.T.R. 500
7–707SCI/77
724
Estate Duty Act, 1953–hereinafter referred to as ‘the Act’.
In order to decide the question of law arising in the ap-
peal, it may be necessary to set out briefly the facts of
the case. Sri Alladi Krishnaswami Iyer died some
time.before the passing of the Estate Duty Act, 1953, but
during his life time he had settled certain properties
absolutely on his wife Smt. Alladi Venkatakshmamma–to be
referred in short as ‘Smt. Alladi’–and he had also declared
certain other properties to from part of the joint family
properties. Sri Alladi Krishnaswami Iyer hereafter to be
referred to as “Shri Alladi” was a member of the Hindu
coparcenary consisting of himself, his wife and three sons.
In the instant case we are only concerned with the joint
family properties left by Shri Alladi. Smt. Alladi died on
January 5, 1956 a few months before the passing of the Hindu
Succession Act, 1956 and the Assistant Controller of Estate
Duty valued her estate at a total amount ot Rs. 7,25,527
including a sum of Rs. 2,02,271 being the value of her the
share in the joint family properties. The dispute in the
present case centres round the inclusion of the aforesaid
sum of Rs- 2,02,271/-. The Revenue assessed the estate duty
on the footing that as Smt. Alladi was a member of the
Hindu coparcenary her interest in the joint family proper-
ties passed on her death to the other three sons and the
value of this interest being 1/4th the heirs would be liable
to pay estate duty on the value of the 1/4th share assessed
at Rs. 2,02,271/-. The accountable persons raised several
contentions before the Revenue including the question as to
whether or not the Act would apply to agricultural lands as
also whether interest on certain fixed deposits in Govern-
ment securities would be assessable under the Act. It
appears, however, that before the High Court the respondent
pressed only the question relating to the inclusion of the
value of 1/4th share of Smt. Alladi valued at Rs.
2,02,271/-. The respondent filed an appeal before the Board
and contended that as Smt. Alladi died as a Hindu widow she
possessed no coparcenary interest which could pass on her
death: her interest merged without any benefit accruing or
arising to the coparceners and hence s. 7 sub-s. (1) had
no application. The plea taken by the respondent did not
find favour with the Central Board of Revenue which upheld
the order of the Assistant Controller of Estate Duty.
Thereupon the respondent moved the Board of Revenue to
make a reference to the High Court of Madras for decision of
the questions of law involved in the case. The Board ac-
cordingly referred the following questions to the High
Court:
“1. Whether, on the facts and in the
circumstances of the case, one-fourth share of
the deceased in the joint family properties,
to which she was entitled under section 3 of
the Hindu Women’s Rights to Property Act,
1937, was correctly included in her estate as
property deemed to pass on her death under
section 7 of the Estate Duty Act, 1953 ?2. Whether the Estate Duty Act. 1953, in
so far as it seeks to levy duty on agricultur-
al lands, is ultra vires of the legislative
powers of the Union Legislature ?725
3. Whether, on the facts and in the
circumstances of the case, the accrued inter-
est on fixed deposits and Government securi-
ties up to the date of death of the deceased
was correctly included in her estate under
section 34(2) of the Estate Duty Act, 1953 ?Although three questions had been referred to the High Court
by the Board at the hearing of the appeal the respondent
gave up questions Nos. 2 and 3 and confined his arguments
only to question No. 1 which falls for determination in this
case. The High Court, relying mainly on the decisions of
the Privy Council in Attorney-General of Ceylon v. Arunacha-
lam Chettiar;(1) and Gartside v. Inland Revenue’ Commission-
ers(2) came to the conclusion that the interest of Smt.
Alladi was not a coparcenary interest which could have
passed under s. 7 (1) of the Act and as the said interest
was incapable of valuation was not exigible to estate duty.
Thereafter the appellant applied to the High Court for
granting a certificate of fitness for leave. to appeal to
this Court and the same having been granted the appeal has
now been placed before us for hearing.The respondent reiterated his contentions before us and
submitted that s. 7(1) of the Act had no application to the
facts of the present case, and therefore, the share of Smt.
Alladi was not exigible to estate duty. The appellant,
however, submitted that a Hindu widow had a coparcenary
interest in the joint family properties which could be
valued on the basis of the factors enumerated in s. 39 of
the Act, the High Court was in error in holding that the
interest of Smt. Alladi was not capable of any valuation.
The appellant, therefore, submitted that the High Court had
not correctly appreciated the legal nature and character of
the interest of the Hindu widow conferred on her by virtue
of the Hindu Women’s Rights to Property Act, 1937.
In our opinion the answer to the problem would naturally
lie in a correct interpretation of ss- 7(1) & (2) of the Act
as also on a true construction of s. 3(2) of the Hindu
Women’s Rights to Property Act, 1937 as amended by Act 11 of
1938. It is true that while this Court has had occasions to
interpret the provisions of the Hindu Women’s Rights to
Property Act, 1937–hereafter referred to as the Act of
1937′—on several occasions, yet the exact point which
arises in this case has not yet been determined by this
Court. In order to understand the implications Of the
arguments advanced by counsel for the parties. before us, it
may be necessary to extract the relevant provisions of the
Act as also of the Act of 1937. Section 7 sub-ss. (1) & (2)
of the Act run thus:“7. Interests ceasing on death,–
(1) Subject to the provisions of this
section, property in which the deceased or any
other person had an 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
(1957) A.C. 513–34 I.T.R. (E.D.) 20
(2) (1968) A.C5.53–70 I.T.R. 663 (II. L.)
726
or arises by the cesser of such interest,
including, in particular, a coparcenary inter-
est in the joint family property of a Hindu
family governed by the Mitakshara, Marumakkat-
tayam or Aliyasantana law.(2) If a member of a Hindu coparcenary
governed by the Mitakshara school of law dies,
then the provisions of sub-section (1) shall
apply with respect to the interest of the
deceased in the coparcenary property only :–(a) if the deceased had completed his
eighteenth year at the time of his death, or(b) where he had not completed his
eighteenth year at the time of his death,. if
his father or other male as cendant in the
male line was not a coparcener of the same
family at the time of his death.”It would be seen that s. 7(1) consist of two parts–the
first part refers to the interest of the deceased which
ceases on his death and according to this part two condi-
tions are necessary before there is a passing of the inter-
est–(1) that there must be a cesser of the interest by
virtue of the death of the deceased; and (2) that as a
result of such cesser a benefit accrues or arises. The
second part of sub-s. (1) contains an inclusive category
which brings within the fold of sub-s. (1) a coparcenary
interest in the joint family property of a Hindu family
governed by the Mitakshara, Marumakkattayarn or Aliyasantana
law. In the instant case, we are mainly concerned with the
Mitakshara law. We might dispose of a short argument ad-
vanced by Mr. S.T. Desai in support of the appeal on this
question. It was submitted that the words “governed by the
Matakshara, Marumakkattayam or Aliyasan ana law” clearly
show that the coparcenary interest has been used in a wide
sense and cannot be restricted to the strict coparcenary
interest known to the Mitakshara law alone- In the view
which we take in this case, however, it is not at all neces-
sary to go into this point. The main question for determi-
nation is as to whether the interest acquired by a Hindu
widow under the Act of 1937 can be said to be a coparcenary
interest in the legal sense of the term. Once a Hindu widow
is held to have a coparcenary interest, then there would be
no difficulty in treating her as a member of the Hindu
coparcenary, in which case her interest could be easily
valued according to the relevant provision of s. 39 of the
Act which runs thus:“39. (1) The value of the benefit
accruing or arising from the cesser of a
coparcenary interest in any joint family
property governed by the. Mitakshara school of
a Hindu law which ceases on the death of a
member thereof shall be the principal value of
the share in the joint family property which
would have been allotted to the deceased had
there been a partition immediately before his
death.”In order to understand the content and charac-
ter of the interest which a Hindu widow gets
by virtue of the statutory provisions con-
tained in
727
the Act of 1937 there can be no doubt that
prior to the passing of the Act of 1937 a
Hindu woman had no right or interest at all in
a Hindu coparcenary. She was neither a copar-
cener nor a member of the coparcenary nor did
she have any interest in it, except the right
to get maintenance. She also had no right to
demand partition of the coparcenary property
after the death of her husband. The Act of
1937 introduced broad and important changes by
bettering the rights of a Hindu widow and
conferring on her the same interest as pos-
sessed by her husband. Sub-sections (2) and
(3) of s. 3 of the Act of 1937 run thus:
“(2) When a Hindu governed by any school
of Hindu law other than the Dayabhaga school
or by customary law dies having at the time of
his death an interest in a Hindu joint family
property, his widow shall, subject to the
provisions of sub-section (3), have in the
property the same interest as he himself
had.”“(3)Any interest devolving on a Hindu
widow under the provisions of this section
shall be the limited interest known as a Hindu
Woman’s estate, provided however that she
shall have the same right of claiming parti-
tion as a male owner.The words “the same interest as he himself had” in sub s.
(2) of s. 3 of the Act of 1937 clearly indicate that the
statute gave effect to the well settled doctrine of Hindu
Shastric Law that the persons of the. husband after his
death continues through his wife who is the surviving half
of the husband and the husband continues to live through the
widow so long as the widow is alive. It was this concept of
the Hindu Law which was sought to be recognised and given
effect to by the Act of 1937. In these circumstances,
therefore, when’ the Legislature used the expression “the
same interest as he himself had” it would include all the
bundle of rights possessed by the husband which would de-
volve on the wife and if there were to be any limitations on
those rights they were spelt out by subs. (3) itself, name-
ly, that while the Hindu widow would have the same right and
interest as her husband, her interest would only be the
limited interest known as a Hindu Woman’s estate. Sub-
section (2) of s. 3 of the Act of 1937 further conferred on
the widow the right to demand partition and on partition she
was entitled to get the same share as her husband. Thus the
position appears to be that a Hindu widow was introduced for
the first time into the Hindu coparcenary having the same
rights as her husband and became as it were a member of the
Hindu coparcenary with two qualifications, viz., (1) that
she had only a limited interest; and (2)that she could not
be a coparcener because having regard to the nature of her
entry into the family after marriage with her husband there
was no question of her getting interest in the Hindu copar-
cenary by birth which is one of the most important incidents
of a Hindu coparcenary. All the other rights of a coparcener
were duly conferred on her by the Act of 1937.
Dwelling on the content and import of the nature of the
interest of a Hindu widow this Court pointed out in Jaisri
Sahu v. Rajdewan
728
Dubey & Others(1) that on the death of her husband the
properties vested in the widow and she fully represented the
estate. In this connection, this Court made the following
observations:“When a widow succeeds as heir to her hus-
band, the ownership in the properties, both
legal and beneficial, vests in her. She
fully represents the estate, the interest of
the reversioners therein being only spes
succession’s. The widow is entitled to the
full beneficial enjoyment of the estate and
is not accountable to any one. It is true that
she cannot alienate the properties unless it
be for necessity or for benefit to the
estate, but this restriction on her powers is
not one imposed for the benefit of reversion-
ers but is an incident of the estate as
known to Hindu law.”
Similarly in a later case in Potti Lakshmi
Perumallu v. Potti Krishnavenamma(2) this
Court reiterated that a Hindu widow was the
surviving half of her husband and so long as
she was alive the husband continued to live in
her. This ‘Court observed as follows:
“The decisions also recognise that
though the widow does not, by virtue of the
interest given to her by the new law become a
coparcener she being entitled to claim parti-
tion of the joint family property is in the
same position in which her deceased husband
would have been in the matter of exercise of
that right. That is to say, according to
these decisions her interest is a fluctuating
one and is liable to increase or decrease
according as there are accretions to or dimi-
nutions of the property. In our opinion these
decisions lay down the law correctly.”
It may be pertinent to note that in the aforesaid case the
Court was considering the nature of the interest which a
widow derived by virtue of the statutory substitution con-
tained in s.3(2) of the Act of 1937. It was also pointed out
that like other coparceners of a Hindu coparcenary the
interest of a widow until separated by a partition continued
a fluctuating one which was liable to increase case or
decrease with the deaths or additions in the family.
In Satrughan Isser v. Smt. Subujpari & Others(3)
this Court pointed out that the interest conferred on a
Hindu widow arose by statutory substitution and the Act of
1937 introduced changes which were go far alien to the
structure of a Hindu coparcenary. In this connection the
Court observed as follows:
“The Act in inventing the widow of a
member of a coparcenary with the interest
which the member had at the time of his death
has introduced changes which are alien to the
(1) [1962] 2 S.C.R. 558, 564-565.
(2) [1965] 1 S.C.R. 26, 33.
(3) [1967] 1 S,C.R. 7.
729
structure of a coparcenary. The interest of a
widow arises not by inheritance nor by survi-
vorship, but by statutory substitution:
A Hindu coparcenary under the Mitakshara
school consists of males alone: it includes
only those members who acquire by birth or
adoption interest in the coparcenary property.
The essence of coparcenary property is unity
of ownership which is vested in the whole body
of coparceners. While it remains joint, no
individual member can predicate of the undi-
vided property that he has a definite share
therein. The interest of each coparcener is
fluctuating, capable of being enlarged by
deaths, and liable to be diminished by the
birth of sons to coparceners: it is only on
partition that the coparcener can claim that
he has become entitled to a definite share.
The two principal incidents of coparcenary
property are: that the interest of coparceners
devolves by survivorship and not by inheri-
tance; and that the mate issue of a coparcener
acquires an interest in the coparcenary
property by birth, not as representing his
father but in his own independent right ac-
quired by birth.”
As pointed out above the essence of coparce-
nary property is the unity of ownership which
is vested in the whole body of coparceners and
the two principal incidents of coparcenary
property are that the interest of coparceners
devolves by survivorship and not by inheri-
tance and that the male issue of a coparcener
acquires an interest in the coparcenary
property by birth and not as representing his
father. Alter having described the incidents
of a Hindu coparcenary, the Court proceeded to
observe as follows:
“By the Act (Act of 1937) certain anti-
thetical concepts are sought to be reconciled.
A widow of a coparcener is invested by the Act
with the same interest which her husband had
at the time of his death in the property of
the coparcenary. She is thereby introduced
into the coparcenary, and between the surviv-
ing coparceners of her husband and the widow
so introduced, there arises community of
interest and unity of possession. But the
widow does not on that account become a copar-
cener: though invested with the same interest
which her husband had in the property she does
not acquire the right which her husband could
have exercised over the interest of the other
copareeners. Because of statutory substitu-
tion of her interest in the coparcenary
property in place of her husband, the right
which the other coparceners had under the
Hindu law of the Mitakshara school of taking
that interest by the rule of survivorship
remains suspended so long as that estate
enures. * * * She has
still power to make her interest definite by
making a demand for partition, as a male owner
may. If the widow
730
after being introduced into family to which
her husband belonged does not seek partition,
on the termination of her estate her interest
will merge into the coparcenary property.”
Again this Court did not approve of the as-
sumption made by some Courts that the fight
vested in the widow was liable to revert to-
the coparcenary, even where, on demand for
partition it became separated from the copar-
cenary property, and in this connection this
court observed as follows:
“The assumption that though the right
vested in the widow by the Act is a right of
property which may on demand for partition
become separated from the coparcenary property
it is still liable to revert to the coparce-
nary on the determination of the widow’s
estate, does not give full effect to the
statutory conferment upon the widow of the
same right of claiming partition as a mate
owner”.
Finally this Court approved of certain obser-
vations made by the Madras High Court in
Parappagari Parappa alias Hammanthappa and
Another v. Parappagari Nagamma and others(1)
where Subba Rao J.as he then was, made the
following observations:
“She could ask for partition and sepa-
rate possession of her husband’s share. In
case she asked for partition, her husband’s
interest ‘should be worked out having regard
to the circumstances obtaining in the family
on the date of partition. If she divided
herself from the other members of the family
during her lifetime, on her demise the
succession would be traced to her husband on
the basis that the property was his separate
property. If there was no severance, it
would devolve by survivorship to the other
members of the joint Hindu family :” It is,
therefore, manifest from the aforesaid deci-
sion that if the widow had not chosen to
exercise her right of partition, there is no
severance of the Hindu coparcenary and on her
death the interest of the widow merges in the
coparcenary property or lapses to the other
coparceners. As already indicated above, this
Court in Satrughan v. Smt. Sabujpari & others
(supra) had taken the same view and had con-
firmed the Division Bench decision of the
Patna High Court in Smt. Sabujpari and another
v. Satrughan Isser and others(2), where the
Patna High Court after considering the entire
law on the subject, observed thus:
“After having considered the various
authorities and the various aspects of the
case, my conclusions are that, under the
Provisions of the Act a widow of a deceased
coparcener is placed in same position as the
deceased coparcener was, for the reason of the
fiction that half the body of the deceased
husband survived in the widow; that, like her
husband, the widow also is entitled to effect
severance of the joint status
(2) A.I.R. 1958 Pat. 405, 410.
731
of the family by an unequivocal expression of
intention separate;* * * that in
case the widow does not exercise her right of
partition and dies without expressing any
intention to separate, the interest of the
husband, which she enjoyed, goes by survivor-
ship to the other members of the joint
family.”
We find ourselves in complete agreement with
the observations made by the Patna High Court
to which one, of us (Untwalia, J., as he then
was) was a party. The view taken by the Patna
High Court in the aforesaid case was later on
approved by a Full Bench of the Patna High
Court in Mst. Khatrani Kuer v. Smt. Tapeshwari
Kuer(1).
In State Bank of India v. Ghamandi Ram
(dead) through Shri Gurbux Rai(2), this Court,
while dealing with the incidents of Hindu
coparcenary, observed as follows:
“According to the Mitakshara School of
Hindu Law all the property of a Hindu joint
family is held in collective ownership by
all the coparceners in a quasi-corporate capa-
city. * * * The incidents of
coparcenership under the Mitakshara law are:
first, the lineal male descendants of a person
up to the third generation, acquire on birth
ownership in the ancestral properties is
common; secondly, that no alienation of the
property. any time work out their rights by
asking for partition; thirdly, that till
partition each member has got ownership ex-
tending over the entire property, conjointly
with the rest; fourthly, that as a result of
such co-ownership the possession and enjoyment
of the properties is common; fifthly, that no
alienation of the property is possible unless
it be for necessity, without the concurrence
of the Coparceners, and sixthly, that the
interest of a deceased member lapses on his
death to the survivors. A coparcenary under
the Mitakshara School is a creature of law and
cannot arise by act of parties except in
so far that on adoption the adopted son be-
comes a coparcener with his adoptive father as
regards the ancestral properties of the lat-
ter.”
Thus analysing the ratio of a aforesaid case regarding the
incidents of a Hindu coparcenary it would appear that a
Hindu coparcenary has six essential characteristics, namely,
(1) that the lineal male descendants up to the third genera-
tion acquire an independent right of ownership by birth and
not as representing their ancestors; (2) that the members of
the coparcenary have the right to work out their rights by
demanding partition; (3) that until partition, each member
has got. ownership extending over the entire property con-
jointly with the. rest and so long as no partition takes
place, it is difficult for any copercener to predicate the
share which he might receive; (4) that as a result of such
co-ownership the possession and enjoyment of the property iS
common; (5) that there can be no alienation of the property
without
(1) A.I.R. 1964 Pat 261. [19691 3 S.C.R, 681,686.
732
the concurrence of the other coparceners unless it be for
legal necessity; and (6) that the interest of a deceased
member lapses on his death and merges in the coparcenary
property. Applying these tests to the interest of a Hindu
widow who has been introduced into a coparcenary by virtue
of the Act of 1937, we find that, excepting condition No.
(1), all other conditions are fully satisfied in case of a
Hindu widow succeeding to the interest of her husband in a
Hindu coparcenary. In other words, after her husband’s
death the Hindu widow under the Act of 1937 has got the
right to demand partition, she cannot predicate the exact
share which she might receive until partition is made, her
dominion extends to the entire property conjointly with the
other members of the coparcenary, her possession and enjoy-
ment is common, the property cannot be alienated without
concurrence of all the members of the family, except for
legal necessity, and like other coparceners she has a
fluctuating interest ‘in the property which may be increased
or decreased by deaths or additions in the family. It is
manifest that she cannot fulfil the first condition, because
she enters the coparcenary long after she is born and after
she is married to her husband and acquires his interest on
his death. Thus, short of the first condition, she possess-
es all the necessary indicia of a coparcenary interest. The
fact that before the Act of 1956, she had the characteristic
of a widow-estate in her interest in the property does not
detract any the less from this position. It must follow as
a logical corollary that though a Hindu widow cannot be a
coparcener, she has coparcenary interest and she is also a
member of a coparcenary by virtue of the rights conferred on
her under the Act of 1937.
There is yet another important aspect of the matter
which has to be considered. At the time when the Estate
Duty Act was passed in 1953, the Legislature was fully aware
of the statutory interest conferred on a widow by virtue of
the Act of 1937 and the incidents thereof. In these circum-
stances it is not reasonable to infer that the Legislature
could have intended that though a Hindu widow has got the
Same interest as her husband in the Hindu coparcenary and
has also the right to demand partition and her interest
which is a fluctuating. one would lapse to the other copar-
ceners in case of her death without seeking partition in the
same manner as that of other coparceners, yet it should be
exempt from estate duty.
The sheet-anchor of the argument of the respondent was
the Privy Council decision in Arunachalam Chettiar’s case
(supra). In the first place, the facts of that case are
clearly distinguishable from the facts of the present case.
In that case, the Hindu undivided family consisted of
father, son and some female members. According to the
Privy Council, the females were merely entitled to
maintenance. The females there could not have any interest
in the coparcenary nor could any such argument be advanced
because there was no statute similar to the Act of 1937.
Moreover, in the Estate Duty Ordinance which was being
construed by the Privy Council there was neither any
provision like the inclusive part of sub-s. (1) and sub-s.
(2) of s. 7 nor any provision similar to s. 39 of the Act.
In these circumstances, we do not see how the Privy Council
decision in Arunachalam Chattiar’s case
733
(supra) can be called in aid to support the contention of
the respondent. In the instant case, once it is held, as it
must be, that Smt. Alladi was a member of the Hindu coparce-
nary, her interest was undoubtedly a coparcenary interest
which lapsed on her death and merged into the coparcenary.
It was also clearly capable of valuation, unlike the posi-
tion in Arunachalam Chettiar’s case where the Privy Council
was construing a provision similar to s. 40 of the Act,
which, in our opinion, has no application in the present
case, it being covered by s. 39 of the Act. A fortiori the
same observations apply to the case of Gertside v. Inland
Revenue Commissioners (supra). That case has no application
here where we are concerned with the concept of a Hindu
coparcenary which is totally alien to the estates contem-
plated under the English Acts. For these reasons, there-
fore, we are clearly of the opinion that the two cases
relied upon by the High Court do not appear to be of any
assistance in deciding the points at issue in the present
appeal, and the High Court was in error in basing its deci-
sion on the aforesaid cases ignoring the decisions of this
Court as also the peculiar and special provisions of the
Act.
Finally, it was vehemently contended by Mr. Sastri for
the respondent that the right of a Hindu widow under the Act
of 1937 was merely a statutory substitution of a new status
by her introduction into the copercenary and she could not
be treated either as a coparcener or a me, tuber of the
copercenary or to possess any kind of coparcenary interest.
While we agree that the widow after the introduction in the
coparcenary could not be held to have become a coparcener,
because one of the essential characteristics of a coparcen-
er, namely, acquisition of interest by birth, is wholly
wanting in her case, yet when the Legislature which was
fully aware of the status of a Hindu widow under the Shas-
tric Law chose to improve her status by conferring a new
right on her under the Act of 1937, and with this avowed
object clothed her with all the rights and concomitants of a
coparcener’s interest, it is futile to contend that the
widow could not be treated either as a member of the Hindu
coparcenary or as having been conferred coparcenary interest
in the property. Even though the widow is not a coparcener
in the strictly legal sense of the term, the interest which
she has is the same interest as her husband and that is the
coparcenary interest with the only limitation placed on her
by s. 3(3) of the Act of 1937, namely, that her interest
would be the limited interest of a Hindu widow. The conclu-
sion is therefore inescapable that Smt. Alladi did possess a
coparcenary interest which lapsed on her death and merged
into the coparcenary and the case was clearly covered by the
inclusive part of sub-s. (1) of s. 7 and under s. 39 the
value of the benefit accruing or arising from the cesser of
her coparcenary interest was to be determined by taking the
principal value of the share in the joint family property
which would have been allotted to her, had there been a
partition immediately before her death.
The last plank of the argument of the respondent was
that the Estate Duty Act being a fiscal statute should be
construed strictly so as to give every benefit of doubt to
the subject. There can be no quarrel with this proposition
but when the phraseology of a particular section of the
statute takes within its sweep the transaction which is
734
taxable, it is not for the Court to strain and stress the
language of the section so as to enable the tax-payer to
escape the tax. In the view that we take in this case, it
is manifest that the legislative intent reflected in the Act
of 1937 and the Estate Duy Act, 1953, must be given full
effect.
Summarising, therefore, the position that emerges is as
follows:
By virtue of the provisions of the Act of 1937 a Hindu
widow undoubtedly possesses a coparcenary interest as con-
templated by s. 7( 1 ) of the Act and she is also a member
of a Hindu copercenary as envisaged by s. 7(2) of the Act.
On the death of Smt. Alladi, therefore, there was clearly a
cesser of her interest and her interest merged in the coper-
cenary property and by reason of the inclusive part of sub-
s. (1 ) of s. 7, it must be taken to have passed on her
death and was hence exigible to estate duty. Since Smt
Alladi was a member of the copercenary, this interest of
her’s which passed on her death was liable to be valued in
accordance with the method provided by s. 39 of the Act.
The interpretation of s. 40 of the Act is not free from
difficulty, but as the present case squarely falls within
the ambit of s. 7 (1 ) latter part and sub-s. (2) of s. 7 of
the Act which attracts s. 39, it is not at all necessary
for us to enter into the complex domain of the scope and
ambit of s. 40 of the Act in this case.
The result is that the appeal is allowed, the judgment
of the High Court is set aside and the question referred to
the High Court is answered in the affirmative. There will
be no order as to costs.
S.R. Appeal
allowed.
735