RAMANUJAM J.


The following common question of law has been referred to this court for opinion at the instance of the Revenue under s. 64(1) of the E.D. Act Whether, on the facts and in the circumstances of the case, only half of the property in question passed on the death of the deceased ?


One H.A.S. Abdul Razack Sait, who was a member of the Cutchi Memon sect of Mohamedans, died on October 10, 1968, leaving behind him five sons, namely, Abdul Sattar Sait, born on June 11, 1938, Khader Sait, Arif Sait, Bashir Sait and Farook Sait all born after 1938. In the estate duty proceedings, the accountable person claimed that the deceased's estate was governed by the Mitakshara law of succession and, therefore, only the cesser of interest of the deceased should be brought to charge, that the cesser of interest would be 1/6th of the value of the entire estate the deceased having five sons at the time of his death. The Asst. Controller: however, rejected the claim of the accountable person and brought to estate duty the value of the entire estate as free estate as he was of the view that as per the provisions of the Cutchi Memons Act, 1938, the privilege of the members of the Cutchi Memon community to follow the Hindu law of succession had been withdrawn.


On appeal before the Appellate Controller it was contended by the accountable person that Abdul Sattar Sait had 50% interest in the joint family estate as soon as he was born and that, therefore, only the value of the remaining half of the properties should have been subjected to estate duty. The Appellate Controller, however, rejected the said contention observing that as per the Hindu law the rights of a coparcener would crystallise only at the time of the partition and proceeded to hold that the properties brought to estate duty by the Asst. Controller must suffer a reduction to the extent of 1/6th since Abdul Sattar Sait should be deemed to have been divided on the date of death of the coparcener on a notional partition in the family and that 1/6th share cannot be brought to charge as interest passing on the death of the deceasedAgainst the order of the Appellate Controller, both the Revenue and the accountable person filed appeals before the Income-tax Appellate Tribunal. On behalf of the Revenue it was contended that the accountable person was governed by the Mahomedan law under the provisions of the Cutchi Memons Act, 1938The accountable person, on the other hand, contended that the Cutchi Memons Act, 1938, preserved the right of Abdul Sattar Sait acquired by him before the commencement of the said Act, but on the coming into force of the said Act, there was, as it were, a division in status between the deceased and Abdul Sattar Sait and that, therefore, only half the estate passed on the death of the deceased. It was also pointed out by the accountable person that the provisions of the Shariat Act of 1937 did not touch any coparcenary right.


The Appellate Tribunal considered the rival contentions and took the view that only the provisions of the Cutchi Memons Act, 1938. Aggrieved by the decision of the Tribunal the Revenue has obtained reference on the above common question of law. The question referred to above involves the application of the provisions of the Cutchi Memons Act, 1938.


According to the accountable person, on the date of the death of the deceased, the property was owned by the deceased and his five sons and, therefore, the deceased's 1/6th share alone will pass on death. In any event, prior to the date of the commencement of the Act, Hindu law of inheritance and succession applied to the deceased as well as his son, Abdul Sattar Sait, who had then been born and as such they were each entitled to a half share in the joint family properties and that is saved by the provisions of s. 3 of the 1938 Act. Therefore, on the death of the deceased it, is only his half share that should be taken to have passed on deathAccording to the Revenue the eldest son, Abdul Sattar Sait, though as a coparcener had a right to seek partition before the commencement of the 1938 Act, his share did not get crystallized and, therefore, such an undefined and indefinite right is not saved by s. 3 of the Act and the right of Abdul Sattar Salt by, birth will get protection under s. 3 only when it gets crystallized by a partition and, therefore, the entire property which is inherited by all the five sons after the death of the deceased should be taken to have passed on death.


Section 2 of the 1938 Act provided that all Cutchi Memons, subject, however, to the provisions of s. 3, shall, in matters of succession and inheritance, be governed by the. Mahomedan law. Section 3, subject to which s. 2 applied, is a saving provision and it provides that nothing in the Act shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of any such right or liability; and any such legal proceeding or remedy may be continued or enforced as if this Act had not been passed. According to s. 2, after 1st November, 1938, all Cutchi Memons would be governed in matters of succession and inheritance only by Mahomedan law. But this is subject to s. 3. Section 3, however, saves any right or liability acquired or incurred before the Act. The question is what is the right that had been acquired by Abdul Razack and Abdul Sattar Sait, who were the only two coparceners on November 1, 1938, the date of the commencement of the Act, under the Hindu law. On the date when the Act came into force the son had a right by birth and he has become a coparcener with his father. Each of the coparceners had at right to claim half share in the joint family properties before November 1, 1938. Though the Act, does not expressly say that there will be a deeming partition between the two coparceners on the date of the Act, a conjoint reading of ss. 2 and 3 would indicate that for purposes of applying s. 2 and for determining the properties to which the Mahomedan of inheritance and succession would have to be applied, a notional has to be assumed on the date of the Act. Further, unless there is at partition and the shares of the coparceners get crystallized, s. 2 Cannot be applied. Thus, on the commencement of the Act, both the father and the son became entitled to a half share each in the properties and that right to half share is saved by s. 3 of the Act. This view gets support from the decision of the Supreme Court in CED v. Hajee Sattar Sait. In that case a Muslim who belonged to the Cutchi Memon sect, died in 1955 possessed of properties, most of which were acquired by his ancestors. He had two sons born long before 1948. The authorities under the E.D. Act sought to levy estate duty on the entire estate whereas the sons of the deceased claimed that the properties had come to them under the Hindu law rule of devolution by survivorship and therefore, only 1/3rd of the properties, that is the undivided share of the deceased, could properly be said to have passed to them on his death and be assessable under the E.D. Act of 1953. The Supreme Court held that as the parties being Cutchi Memons were governed in matters of property, succession and inheritance by the rules of Hindu law including the rules as to joint family property, its distribution according to the rule of survivorship and the right of the son in it by birth, that the accountable persons having been born before 1948 when the Cutchi Memons Act of 1938 was extended to Bangalore where the parties lived, had already acquired a right by birth in the property held by their father, that such right had expressly beenby s. 3 of that Act, and that their interest in the property could not, therefore, pass to them on the death of their father as envisaged by the E.D. Act and, therefore, only 1/3rd of the properties which was the share of the deceased could be properly said to have passed to the accountable persons on the death of their father. The principle laid down in the said case squarely applies to the facts of this case. As Abdul Sattar Sait, the eldest son of the deceased was before 1938, his right by birth to a half share in the joint family which existed on the (late of the commencement of the Act is saved by s. 3 of the Act and, therefore, that share cannot be taken to passed oil the death of the deceased.


The learned counsel for the Revenue, however, submits that the right of a coparcener to a share in the coparcenary property will get crystallized only if a partition place and that an indefinite and oscillating right could not be taken to have been saved by s. 3 and, therefore, the entire property should be deemed to have passed on the death of the deceased. It is also planted out by the Revenue that the Cutchi Memons Act of 1938 does not bring about a notional partition between the, coparceners on the date of the coming into force of the Act so that it could be said that the shares of the coparceners have crystallized oil the date of the Act and this aspect of the matter has not been considered by the Supreme Court in the above decision. It is no doubt true that this aspect of the matter does not appear to have been considered by the Supreme Court. However, the said decision of the Supreme Court on almost similar facts binds this court. In the case before the Supreme Court the two sons of the deceased were born before the date of the extension of the Cutchi Memons Act, 1938, to Bangalore Cantonment area in which they lived. There also there was no partition between the coparceners. However, each of the sons was held entitled to an undivided 1/3rd sha

re on the date of the application of the Cutchi Memons Act and that right was he Id to have been saved by s. 3 of that Act and it is in this view that the Supreme Court held the sons' interest in the property on the date of the commencement of the Act cannot be taken to have passed on the death of the deceasedTherefore, following the said decision of the Supreme Court, we have to hold in this case that on the date of the commencement of the Cutchi Memons Act, 1938, Abdul Sattar Sait has acquired a half share in the joint family properties by birth as per the Hindu law of inheritance and succession and that right stood expressly saved by s. 3 of that Act. The result is that only the other half share which belonged to the deceased at the time when the Act came into force that should be taken to have passed on death. We have to, therefore, uphold the view taken by the Tribunal in this case. The question referred to us is answered in the affirmative and against the Revenue. The accountable person will have his costs from the Revenue. Counsel's fee Rs. 500.