JUDGMENT
Rama Rao, J.
1. The question referred under section 27(1) of the Wealth-tax Act is as follows :
“Whether, on the facts and in the circumstances of the case, the value of life interest, viz., Rs. 5,835, in respect of agricultural lands or the value of agricultural lands, viz., Rs. 1,75,035, is liable to levy of wealth-tax for the assessment year 1976-77 ?”
2. For the assessment year 1976-77, the assessee, the widow of late Sri Balijepalli Krishnamurthi, filed a return admitting a sum of Rs. 5,835 being the value of her life interest in the agricultural lands of extent of 36, 11 1/5 acres. The husband of the assessee executed a will on June 7, 1950, conferring life interest to the wife in the properties. There is no mention about the vested remainder. The wife is empowered to adopt a boy if she chooses to do so. The Wealth-tax Officer held that the assessee was the absolute owner of the entire property left by her husband and did not accept the valuation based upon the claim of life interest. On appeal, the Appellate Assistant Commissioner held that the value of the life interest alone is exigible to levy of wealth-tax. On appeal at the instance of the Revenue, the Appellate Tribunal held that the value of the life interest alone is liable to be assessed as limited estate only was given by the will as provided under section 14(2) of the Hindu Succession Act and the widow did not acquire absolute interest in terms of section 14(1) of the Hindu Succession Act.
3. The learned standing counsel for the Revenue contended that the limited estate is enlarged to that of an absolute estate in view of section, 14(1) of the Hindu Succession Act and even otherwise, on the death of the husband and on the date when the will came into force, the wife is entitled to the property absolutely and further, in the absence of any indication regarding the remainder, the intestacy in so far as the remainderman interest should be inferred and from this perspective also the wife gets absolute interest. Learned counsel for the assessee, Sri P. Venkatarama Reddy, seeking to sustain the order of the Appellate Tribunal contended that in view of the specific restriction of life interest in the will, the provisions of section 14(2) of the Hindu Succession Act are attracted and the limited interest is not enlarged and the question of her succeeding to the property does not arise in view of the specific recital in the will.
4. The Hindu Succession Act, apart from other drastic changes in Hindu law, conferred an absolute estate on a Hindu female by enlarging the hitherto limited estate. Under the Hindu Women’s Right to Property Act, 1937, the widow is entitled to inherit her husband’s property and enabled to claim partition, but her interest is restricted to limited interest which is known as woman’s estate. This limited interest is enlarged by removing the disability of a female to acquire and hold the property as an absolute owner and convert the estate already held on the date of commencement of the Act as a limited owner into an absolute estate. Section 14(1) of the Hindu Succession Act provides that the property possessed by a female Hindu shall be held by her as full owner. Sub-section (2) in the nature of an exception to sub-section (1) provides that the incident of absolute ownership does not apply to a situation where the restricted interest is prescribed in the property acquired by way of gift or a will or any other instrument or decree or order of a civil court. In the absence of any restriction visualised under sub-section (2), the provisions of sub-section (1) have full sway.
5. In Vaddeboyina Tulasamma v. V. Sesha Reddy, AIR 1977 SC 1944, while considering the operation of section 14(1) and section 14(2) of the Hindu Succession Act, Bhagwati J., held as follows (at pages 1948 and 1949) :
“Where, however, property is acquired by a Hindu female at a partition or in lieu of right of maintenance, it is in virtue of a pre-existing right and such an acquisition would not be within the scope and ambit of sub-section (2), even if the instrument, decree, order or award allotting the property prescribes a restricted estate in the property.”
Fazal Ali J. held as follows (at pages 1978) :
“Sub-section (2) of section 14 applies to instruments, decrees, awards, gifts, etc., which create independent and new titles in favour of the females for the first time and has no application where the instrument concerned merely seeks to confirm, endorse, declare or recognise pre-existing rights. In such cases, a restricted estate in favour of a female is legally permissible and section 14(1) will not operate in this sphere. Where, however, an instrument merely declares or recognises a pre-existing right, such as a claim to maintenance or partition or share to which the female is entitled, the sub-section has absolutely no application and the female’s limited interest would automatically be enlarged into an absolute one by force of section 14(1) and the restrictions placed, if any, under the document would have to be ignored. Thus where a property is allotted or transferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the admit of sub-section (2) and would be governed by section 14(1) despite any restrictions placed on the powers of the transferee.”
6. In Jinnappa Thavannappa Patel v. Smt. Kallavva, , Khemanna executed a will dated January 3, 1980 Whereby he bequeathed his property for life in favour of his wife and after her lifetime to his brother’s son absolutely. In the context of considering whether the widow acquired absolute right in view of section 14(1) of the Hindu Succession Act, the Karnataka High Court held that a Hindu widow has an inherent right of maintenance charged on the properties of her husband and she did not get the rights in the properties for the first time. She was given these properties in lieu of her right to maintenance and she got the property by virtue of a pre-existing right though the document purports to give a restricted right. In Bai Vajia v. Thakorbhai Chelabhai, , while considering the interaction of section 14(1) and section 14(2) of the Hindu Succession Act, the Supreme Court held as follows (headnote) :
“The widow’s right to maintenance, though not an indefeasible right to property, is undoubtedly a ‘pre-existing’ right. It is true that a widow’s claim for maintenance does not ripen into a full-fledged right to property, but nevertheless it is undoubtedly a right which in certain cases can amount to a right to property where it is charged. It cannot be said that where a property is given to a widow in lieu of maintenance, it is given to her for the first time and not in lieu of a pre-existing right. The claim to maintenance, as also the right to claim property in order to maintain herself, is an inherent right conferred by the Hindu law and, therefore, any property given to her in lieu of maintenance is merely in recognition of the claim or right which the widow possessed from before. It cannot be said that such a right has been conferred on her for the first time by virtue of the document concerned and before the existence of the document, the widow had no vestige of a claim or right at all.”
7. In Manavala Chetty v. Ramanujam Chetty [1971] 1 MLJ 127, the testator under the will apart from other properties bequeathed a right of residence in the house to the wife and no provision had been made with regard to the residuary estate and in the context of considering
whether the widow got absolute right in the house, Ramamurthi J. held as follows :
“The inference is clear that the testator had died intestate with regard to this property except to the limited extent of the right of residence carved out in favour of his wife. When the document is silent, containing no express provision as to what should happen to the property after the death of the wife, evidence of the testator’s intention and his conduct are undoubtedly admissible, as such evidence is obviously not to contradict or vary the provisions of the will. The testator’s intention, as observed earlier, is clearly to the effect that the executors of the trust estate were not to get the house.”
8. In Mohanlal v. Habibullah, , life interest was given to the widows and there was no mention regarding the devolution after the death of the widows and while considering this aspect, the Patna High Court held as follows (paragraph 16 at p. 436) :
“It is well settled that the property of the testator not included in the will would after his death go to his nearest heir. In this case, the testator did not say what would happen to the shares given to the two ladies after their death, and, therefore, the shares given to these ladies constituted the property left by the testator undisposed of, subject to the life interest of these ladies, and, as admittedly Mahadeo Sao was the nearest heir of Kallar Sao at the time of the will, he would be entitled to the shares given to these two ladies by the will for their maintenance.”
9. Section 14 of the Hindu Succession Act enlarging the limited interest of the Hindu female into that of absolute estate comprises two aspects. Sub-section (1) provides that the Hindu female acquires absolute right in the property possessed by her and the erstwhile limited interest is incarnated into that of absolute interest. Sub-section (2) seeking to shrink the operation of sub-section (1) provides that the life interest subsists in the event of an express declaration to that effect in the will or any other interest. But, however, the declaration in an instrument does not relax the coverage of sub-section (1) in the event of a pre-existing right. The right to maintenance from out of the properties of the husband inheres in the wife and any interest carved out of the properties should be considered in lieu of the pre-existing right of the wife. Notwithstanding the absence of any specific recital in the instrument regarding the purpose or provision of life interest to the wife, it can be presumed that such a provision is with reference to the pre-existing right of the wife in the property for maintenance. In the instant case, the husband bequeathed the properties for enjoyment during her lifetime and there is no provision regarding devolution after her death. The provision for life interest must be deemed to have been done in satisfaction of the pre-existing right for maintenance. Even otherwise, on the day when the will came into effect, the wife succeeds to the property and, therefore, the life interest under the will merges into her right to succeed to the property without any stings. On the death, when succession opened, the life interest is sidelined. The will is confined to the life interest of the widow and in the absence of any recital, there is intestacy in so far as the remainder interest and in view of this, the widow is the only heir and is entitled to succeed with all rights. Therefore, considered from this perspective also, the widow gets absolute interest.
10. Learned counsel for the assessee referred to Ramaswami Goundar v. Ramaswami Goundar [1972] 1 MLJ 417, wherein the Madras High Court while drawing a distinction between the bare life interest and the widow’s estate held as follows) : [paragraph 32 at page 426]
“Firstly, the bequest to the plaintiff, Muthuthandava, Natesa and the first defendant is a vested interest and is not a contingent remainder, contingent on their surviving the widow. If the intention of the testator was that they should get only if they survived the widow, words to that effect would have been used, but that is not the case. The conferment of a vested interest on the plaintiff and the other three persons is inconsistent with the notion that the Hindu widow’s estate was what was given to Sowbagiammal, because a Hindu widow is not a bare life estate holder but a full owner though her powers of alienation are limited and the persons who take after her would only have mere spes successionis or chance of succession; only those reversionary heirs living at the time of her death would be entitled to take under the Hindu law. Secondly, a Hindu widow would have powers of alienation binding the reversioners in certain limited circumstances, but a bare life estate holder would not have any such powers, and in this case no such powers of alienation have been conferred on the widow.”
“It is, therefore, clear that under the will, Sowbagiammal was given only a bare life estate with a vested remainder to the plaintiff, Muthuthandava, Natesa and the first defendant. In such a case, section 14(2) of the Hindu Succession Act will apply and Sowbagiammal’s estate will not be enlarged under section 14(1) of the Act”. (paragraph 33 at p. 428).
11. The Madras High Court adverted to the vital distinction between bare life interest and widow’s estate and on the interpretation of the bequest under the will arrived at the conclusion that life interest alone was given and as such section 14(2) of the Hindu Succession Act will apply. This decision obviously turned upon the interpretation of the recitals in the will and is not applicable to the situation in the instant case.
12. In the result, we hold that the value of agricultural lands, viz., Rs. 1,75,035, is liable to levy of wealth-tax for the assessment year 1976-77 and the reference in answered in favour of the Revenue.