Civil appeal No 2086 of 1974 and 67 of 1975 From the Judgment and order dated 20th September 1973 of the Madras High Court in Tax Case No 
310 of 1967
C Rarnakrishna Mohan Parasaran and Mrs Janaki Rama chandran
for the Appellants in CA No 2086 of 1971 and for the Respondent in CA No 67 of 1975
SC Manchande Dr Gauri Shankar KP Bhatnagar and Miss A Subhashini for the Appellant in CA No 67 of 1975 and for the Respondent in CA No 2086 of 1974
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
These two appeals are from the judgment and order of the Madras High Court dated 2oth September 321 1973 by certificates of fitness granted by the High Court under section A 65 of the  hereinafter called the Act
Civil Appeal No 2086 of 1974 is by accountable persons and Civil Appeal No 67 of 1975 is by the revenue
The judgment under appeal is reported in 94 ITR at page 323
The accountable persons are the sons of one late M Chindermbara Chettiar hereinafter called the deceased
The deceased was the Karta of a Hindu undivided family
He gave his first son Muthiah in adoption to his divided paternal uncle Pethachi Chettiar and adoption ceremony was held on 7th June 1931
Subsequently his second son also called Pethachi was born in 1933 with whom the deceased was joint throughout his life
On 21 February 1954 prior to proceeding to Malaya by air the deceased took out a personal accident insurance policy with the United India Fire and General Insurance Company Ltd hereinafter cal led the Insurance Company
Under the terms of the said policy which was to be in force for one month the Insurance Company had agreed that if at any time during the currency of the said policy the deceased should sustain any accident resulting in any injury or injury leading to his death then the Insurance Company undertook to pay to the assured or to the legal representative of the assured in case of the assured s death such sum as might be appropriate in the Table of Benefits appended to the Policy
The Table of Benefits mentioned that in case of death or total disablement the benefit payable was RS 2 lakhs in case of partial disablement RS 1 lakh
 in case of temporary disablement a weekly payment of Rs1200 or Rs300 according to the nature of the disablement
The policy inter alia provided that the policy is unassignable and the company shall not be affected by notice of any trust or purported to be imposed upon assignment of or of any charge or lien imposed or purported or any dealing with the policy and the receipt of the insured or the executors or administrators of the insured for any moneys payable thereunder shall in all cases be any effectual discharge to the company
A sum of Rs250 was paid or credited as paid by the deceased as and towards the premium and other charges for the aforesaid personal accident insurance policy
It also appeared that in the proposal Form dated 20th February 1954 filed by the deceased with the Insurance Company the deceased had effected a nomination in favour of his son M Ct
Muthiah
On the 13th March 1954 the deceased died following the crash of the airliner in 322 which he had travelled
On his death the Insurance Company paid the nominee the appellant No 1 herein a sum of RS 2 lakh which was the benefit stipulated to be paid in such an event under the terms of the policy
At the time of his death the deceased had other properties and interests
One was his interest as an undivided coparcener in his joint family which consisted after the adoption away of his first son A Muthiah of the deceased and his second son Pethachi
In the assessment under the hereinafter called the Act  the Deputy Controller of Estate Duty was of the view that the personal accident insurance money of RS 2 lakhs paid by the Insurance Company should be charged to estate duty and further that it had to be aggregated with the rest of the properties passing on the deceased s death
He held further that the insurance money of RS 2 lakhs was property which the deceased was competent to dispose of by will
Before the Deputy Controller it was urged that the amount of RS 2 lakhs could not in any case be aggregated with the rest of the properties but must be brought to charge independently as a separate estate in itself the contention being that the deceased had no interest at all in the said insurance money
The Deputy Controller rejected this contention as untenable holding that the deceased did have an interest in the insurance money
As in respect of the deceased s interest in the coparcenary property which had to be included in the dutiable estate the Deputy Controller took the view that such interest extended to 12 share of the joint properties on the basis that the deceased and his second son Pethachi were alone entitled as coparceners to the said properties
He rejected the contention that M Ct
Muthiah who had been adopted away from this family in 1931 was nevertheless entitled as on the date of the deceased s death to an equal interest in the deceased s family properties so that the quantum of the deceased s coparcenary interest was no one half but only one third of the total value of the family properties
It was urged before the Deputy Controller that the adoption of M Ct
Muthiah in 1931 was on the basis that notwithstanding his adoption into another family M Ct
Muthiah must continue to retain his interest in the properties belonging to the family of his birth
A Muri in Tasil in curdgeon leaf purported to have been executed on 7th June 1931 was produced before the Deputy Controller in support of the above plea
The Deputy Controller did not accept the genuineness of the said document
But even otherwise the Deputy Controller proceeded to hold that the Muri had no legal effect on the continued rights of adopted son in the family of his birth subsequent to his adoption
He accord 323 ingly included in the dutiable estate one half of the joint family properties as being the measure of the deceased s coparcenary interest
The accountable persons appealed against the above assessment to the Appellate authority which at that time as the law then was the Central Board of Revenue
The Central Board held that the insurance money of RS 2 lakh was chargeable to estate duty under section 6 of the Act
The Board took the view that under the terms of the policy the deceased had the right to nominate a person to take the moneys on the deceased s death and also the capacity to dispose of the amount by testamentary disposition
On the question as to whether the amount of RS 2 lakhs must in any event be charged as a separate estate in itself segregated from the rest of the properties the Central Board rejected the accountable persons  contention that the deceased never had any interest in the said insurance money
On the terms of the accident policy the Board was of the view that the deceased did have the power of disposition over the insurance money both by the exercise of the power of nomination under the policy and also independently by the exercise of any testamentary power
On the point relating to the exact quantum of the deceased s interest in coparcenary property the Board accepted the genuineness of the Muri
Before the Board an Agreement in writing dated 19th August 1976 between A Muthiah and Pethachi
the two sons of the deceased was produced to further support the claim that Muthiah retained his coparcenary interest in the family of his birth despite his adoption into another family
The Board however held that the Hindu law adoption makes the adopted son lose his property interests in the family of his birth and that the dwamushayana form of adoption pleaded by the accountable persons had become obsolete in Madras
The Board rejected the claim that there was a custom prevailing in the Muttukttsi Chettiar community to which the deceased belonged under which the adopted son never loses his property rights in the family of his birth
On these findings the Board upheld the assessment of one half of the value of the whole of the joint family property as the measure of the deceased s tiahle interest
324 After the decision of the Board the following questions of law were referred to the High Court
Whether the deceased was competent to dispose of the moneys payable under the accident policy and whether the sum of Rs200000 is includible in the principal value of the estate 2
If the sum of RS 2 lakhs was liable to be assessed to duty whether the said amount could be aggregated with the other properties or should be assessed as an estate by itself 3
Whether the share of the deceased Chindambaram Chettiar in the property of the joint family at the time of his death was one half or one third of the property The High Court by the judgment under appeal answered the first question in favour of the revenue and against the accountable person and the second and third questions were answered against the revenue and in favour of the accountable person
Being aggrived by the answer against the first question the ac countable person has preferred the appeal being appeal No 2086 of 1974 and on the certificate granted by the High Court and on the subsequent two questions the revenue obtained the certificate of fitness to appeal to this Court which is appeal No 67 NT of 1975
The High Court in the judgment under appeal held that under section 5 of the Act all properties which passed on the death of the person were liable to estate duty
Under section 6 of the Act property which the deceased was at the time of his death competent to dispose of should be deemed to pass on his death and under section 31a a person was deemed competent to dispose of property if he has such an estate or interest therein or such general power as would if he were suijuris enable him to dispose it of
General power included every power of authority enabling the holder thereof to appoint or dispose of property as he thought fit whether exercisable by instrument inter vivos or by will or both
A personal accident policy was not a contract of indemnity
The amount payable on death of the insured was fixed in the policy itself
It was in the contemplation of the parties even at the time of the contract that in the case of death the amount would be 325 payable either to the nominee or the legal representative and not to A the assured
It was thus in the nature of a provision made by the deceased for such person
The deceased had no interest in the money as such because that came into existence the moment after his death and was payable to the nominee or legal representative
But he had a right in the payment on his death to his legal representatives
In other words he had interest over the payment of money and not in the money itself
He had a right to take away that right of the legal representatives to receive the money and to vest it in some other person by will
He could nominate a person to whom the amount should be paid
Nomination in such a case was in the nature of a disposition by will and as such till he breathed his last he could cancel such nomination and nominate another
The nominee unlike an assignee of life policies got title to the money on death for the property itself came into existence by reason of the death and was payable to the nominee by virtue of the power of disposition by will which deceased had over the sum
The High Court further held that the money paid on death was property and that was clear
This property according to the High Court came into existence at the time of death
The High Court further held that though the property was not in existence before his death since it came in at the time of his death the deceased was competent to dispose of the same by will
It was this power according to the High Court of disposal that attracted the provisions and made it property which was deemed to pass on his death under section 6 of the Act
The beneficial interest in the policy which accrued or arose on death was the sum paid out under the policy and this beneficial interest having been purchased by the deceased the provisions of section 15 of the Act were also attracted
Further the estate had been depleted to the extent of the premium paid and the beneficial interest purchased and the deceased not having received a full equivalent for what he has paid and having regard to the nature of the policy the intention from the beginning was to make a provision
The principal value of the estate that was deemed to pass under section 6 and which accrued or arose under section 15 was that sum which was paid out under the policy
As there was no devolution of interest from the deceased to another person and from the very inception the amount was payable only to the nominee or legal representative section 5 of the Act was not applicable
It was further held by the High Court that in the case of a personal accident policy the property was not the policy but the ultimate money that was paid and that should be deemed to pass on death of the deceased because of his competency to dispose of the same by 326 will and the holder of the policy had a light to have the amount paid to his legal representative or nominee
The right was with respect to the disposition of the money payable under the policy and not a right in the money itself
But in case of a life insurance policy both the policy and the money payable thereon was property which could be settled during the lifetime of the insured
As the deceased never had any interest during his lifetime in the money paid on death under the personal accident policy though he was competent to dispose of the same by will the sum paid under the policy was not aggregatable with the other estate of the deceased and was to be treated as an estate by itself under section 343 of the Act
The High Court held that though as the deceased was competent to dispose of the moneys payable under the policy the sum of RS 2 lakhs was includible in the principle value of the estate but the same was not liable to be aggregated with the other properties and had to be assessed as an estate by itself
Regarding adoption the High Court was of the view that the type of adoption set out by the accountable person was recognised by the custom of the Nattukottai Chettiar community the terms of the muri formed part of the adoption and the adoption could not be considered de hors the agreement and hence the deceased had only one third share in the joint family properties at the time of his death
In order to appreciate the question involved in Civil Appeal No 2086 of 1974 it is necessary to bear in mind the scheme of the Act
Section 5 deals with levy of estate duty
It states that there shall be levied and paid upon the principal value ascertained in the manner provided of all properties which passes on the death of such person
Therefore three factors are important 1 there must be passing 2 of such property and 3 such passing on must be on the death of a person
Section 215 of the Act defines property  as inclusive of any interest in property movable or immovable the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale and also includes any property converted from one species into another by any method
There are two Explanations which are not necessary to be set out in detail
Section 216 deals with property passing on the death  and includes any property passing either immediately on the death or after any interval either certainly or contingently and either originally or by way of substitutive limitation and on the death  includes at a period ascertainable only by reference to the death 
327 Section 31a b  c inter alia provides for certain situations in which a person is deemed competent to dispose of property
Section 5 as we have noted before deals with the levy of estate duty
Section 6 deals with property within disposing capacity and provides that property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death
Section 14 deals with policies kept up for a donee
It is not necessary to set out the actual terms of the said provisions
Section 15 deals with annuity or other interest purchased or provided by the deceased and provides that any annuity or other interest purchased or provided by the deceased either by himself alone or in concert or by arrangement with any other person shall be deemed to pass on his death to the extent of the beneficial interest accruing or arising by survivorship or otherwise on his death
Section 34 of the Act provides for aggregation and stipulates that for purposes of determining the rate of the estate duty to be paid or D any property passing on the death of the deceased what kinds of property should be aggregated
Except sub section 3 of section 34 nothing is material for our present purpose
Sub section 3 of section 34 reads as follows 3 Notwithstanding anything contained in sub section 1 or sub section 2 any property passing in which the deceased never had an interest not being a right or debt or benefit that is treated as property by virtue of the Explanation to clause 15 of section 2 shall not be aggregated with any property but shall be an estate by itself and the estate duty shall be levied at the rate or rates applicable in respect of the principal value thereof Sree C Ram Krishan learned counsel for the accountable persons in the first appeal before us and who was the advocate who had appeared before the High Court made various submissions
He submitted that it was a condition precedent for the attraction of the duty that a the estate holder must have had possessed or enjoyed a property or an interest in property b the interest in a property might be either vested or contingent c but that interest should be with regard to either an immovable property or a movable property or an interest in immovable or movable property which was capable of being ascertained during the lifetime or at the time of the death of the estate 328 holder d a contingent interest could fall within the purview of the Act only if the interest was of a tangible nature and was capable of being ascertained that is to say the estate holder must always be having a possibility to enjoy or possess that interest either actually or constructively during his lifetime itself
He cited the example of a life insurance policy
According to counsel if the above tests were satisfied then there had to be a passing of that property or interest as contemplated by section 216 of the Act
Even though a person might have a power to dispose of a property or interest in property he could not or his estate could not be brought within the purview of the Act solely because of the above factors
Because over and above this in order for an estate to be liable for estate duty the power of disposition must be with regard to a property capable of being ascertainable during his lifetime or at the time of his death
It was urged that a property or interest in property has necessarily to change hands in order to attract estate duty
There has also to be a change in the beneficial possession and enjoyment of the property or the interest in that property
In other words it was submitted the property of interest which was liable for estate duty under the Act has to pass through the estate of the deceased
According to the counsel applying the above principles it could not be said that an accident insurance policy had the characteristics of a property or interest in property and therefore was not liable for estate duty because an accident insurance policy could not be construed as a movable property unlike a life insurance policy or an annuity because as laid down in section 215 it was not only necessary for a person to have property or interest in property but that interest must be in regard to a movable property and his interest should also be capable of being ascertainable during his lifetime or at the time of his death in that movable property
An accident insurance policy according to him could not be construed as a property or an interest in property since a person who possessed it could not also be said to have a contingent interest because there was every possibility of the accident policy getting extinguished or rendered worthless during his lifetime on the other hand in the case of a life insurance policy there is always a tangible continuing interest only that the value of that interest might be subjected to a change at the time of passing of the property
Further it was submitted that it was not necessary that during the lifetime of the deceased the property in question should have attained  the full value eg Annuity 
An annuity could mature even after the death of the estate holder
But it must be noted that the 329 estate holder in the case of an annuity deposit knew precisely the value of the contingent interest that would mature at a future date
Consequently even a contingent interest which did not get crystalised during the lifetime of the deceased but which interest would with certainty accrue after the demise of the estate
holder will be caught by section 6 as a property passing from the deceased to the beneficiary
Thus though only a future interest that that crystalised after the death of the estate holder would be deemed as a property of the estate holder
Learned counsel submitted that an accident policy is not property because it lacks the well known characteristic of property namely that it should be capable of being mortgaged or pledged as a security
It lacked the characterists of a security
Consequently an accident policy was not a property according to counsel
Since the benefit in accident policy could only accrue after the death of the estate holder it became property for the first time after the demise of the estate holder
There was according to the counsel for the accountable person no element of property during the lifetime of the estate holder
Therefore there could not be any passing of property in a case like this
A possession of accident policy could not be construed as a property in the hands of the estate holder
It was further submitted that in the case of an accident insurance policy there cannot be passing because there was no change in the beneficial possession or enjoyment of the property or interest in the policy
The interest in accident insurance policy did not pass through the estate of the deceased as in the case of a life insurance policy or annuity
But here the interest directly went to the beneficiary in the case of the death by accident of the estate holder
It was in the premises submitted that it cannot be accepted that the deceased had any power of disposition over the accident policy during his lifetime because the interest in an accident policy could not also be elevated to that of a contingent interest since there is always the chance for the accident policy being rendered worthless during the lifetime of the deceased
There is also no chance for the deceased to bear the fruition of the policy during his lifetime because in the case of an accident policy the condition of the policy itself was to the effect that the policy would bear fruition only if the estate holder did not die due to natural causes but in an accident 
A large number of authorities both Indian and English and a large number of dictionaries relevant for this purpose were relied upon
330 So far as the first appeal is concerned namely Civil Appeal No 2086 of 1974 the question of assessability to estate duty of the amount received as a result of the death of the assured is involved
This question has been examined by various authorities to some of which our attention was drawn
Before we do so it may be worthwhile to refer to the dictionary meaning of certain words to which our attention was drawn
In Words and Phrases Legally Defined Vol
1 1969 second Edn at page 332 it has been said that Contingent Liability is a phrase with no settled meaning in English law because Danckwerts J thought it necessary to resort to dictionary used
The Court of Appeal regarded its meaning as an open question
A conditional obligation it has been said there or an obligation granted under a condition which is uncertain had no obligatory force till the condition was purified
All this was relied in aid of the submission that until the accident happened or death resulted the beneficiary of the insurance policy or the nominee of the assured does not get any benefit
In order words the birth of the property and the right to get it accrues on the death of the deceased
The property which the legatee or the nominee receives was property until the accident during the lifetime of the deceased
In Words and Phrases Legally Defined Vol 4 at page 200 Property has been defined as to what belongs to a person exclusively of others and can be the subject of bargain and sale
It includes goodwill trade marks licences to use a patent book debts options to purchase life policies and other rights under a contract
An annuity secured only by a personal undertaking was not however treated as property nor was a revocable Licence according to that dictionary
The decision in Attorney General vs Quixely 1929 All England Law Reports Reprint 696 has coloured many of the decisions of both English and our courts on this aspect
It is necessary therefore to appreciate that decision properly if possible
Briefly the facts in t hat case were that on 11th April 1927 a school teacher died and her legal representative became entitled to receive a death gratuity under the School Teachers Superannuation Act 1925 section 51
on 11th August 1927 the gratuity was paid and the estate duty was claimed in respect of it
It was held by the Court of Appeal in England that the gratuity was property of which the teacher was competent to dispose within the meaning of the Finance Act 1894 of England and 331 therefore estate duty was exigible in respect of it by virtue of section A 21a of that Act
The information filed on behalf of the Attorney General alleged that Margaret Louis Quixley died intestate on 11th April 1 1927
Letters of administration to her estate were 5th July 1927 granted to her sister the defendant out of the Principal Probate Registry
The deceased was at the time of her death in the service of the Girls  Public Day School Trust as a secondary school teacher at the Blackheath High School and had been in such service for a period of upwards of five years
Such service was recognised service within the meaning of the School Teachers Superannuation Acts 1918 to 1925 and contributory service within the meaning of the Schools Teachers Superannuation Act 1925 and the contributions prescribed by the School Teachers Superannuation Acts 1922 1924 and 1925 were duly paid by and in respect of the deceased down to the time of her death
In the above circumstances a death gratuity became payable by the Board of Education to the defendant as the legal personal representative of the deceased under the School Teachers Superannuation Act 1925
Rowlatt J Observed that the question involved was not free from difficulty
He narrated the facts as such
The lady was a teacher under circumstances which under the School Teachers Superannuation Act 1918 entitled her to the prospect of brought within the ambit of a power in the Board of Education to grant a gratuity of this kind on her death
Rowlatt J Observed that she had no right she made no contribution but there was a power conferring a gratuity
Then the effect of the School Teacher Superannuation Act 1922 was that she remained without any further advantage than being in the category of persons who might receive such a grant but she was compelled to make a contribution
Under the School Teachers Superannuation Act 1925 matters were carried a step further because she or her executors or administrators were given in return for the compulsory contribution a right to receive the gratuity
Considering sub section 1a of the relevant Act which is similar to our section 6 of the present Act reads as follows Property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death
 Rowlatt J gave judgment for the Crown
There was an appeal and the appeal was dismissed
Lord Hanworth MR after stating the H 332 facts and analysing the provisions noted that in 1925 there came an important Act under which the gratuity became payable to the deceased s representatives
Master of Rolls further went on to observe that from and after the operation of the Act of 1925 referred to in the judgment there was a definite right on the part of the school teacher who fulfilled certain conditions as the teacher before the Court of Appeal did by dying at the time when she was still in contributory service to be paid a sum which was to be estimated and calculated under the provisions of the statute
Master of Rolls further observed the statute therefore gave at once a right to the person who fulfilled the conditions of service and equally a right to the board to insist on the contributions being paid
Master of Rolls found as a fact that all the conditions required were fulfilled therefore the teacher had an absolute right to be paid
It is this significant factor that has to be borne in mind
Therefore it was held that there was a right which the deceased could dispose of by will therefore it was property passing on the death of the deceased
It was a comprehensive Act providing for superannuation benefit for teachers on retirement and gratuity to legal heirs in the case of death in service
Section 5 provided that death gratuity to be paid to legal heirs if teacher died while in service
Section 9 provided for contribution compulsory at a certain fixed percentage both by the teacher and by the employer
Section 12 provided for repayment of contributions on teacher creasing to be eligible
See in this connection Halsbury s Statutes of England 2nd Edn Vol 8 page 388
In that context in our opinion this question of liability arising on the death of accident policy has to be understood in a different perspective
In Quixley s case there was a vested right in the teacher during her lifetime and the teacher could dispose of that right in the manner she liked
But in case of death by accident in aircrash the deceased had only a right of nomination for his heirs to get the money but the money would arise or the property would be born only on the contingency of the death happening
We have examined the nature of the right in the light of the submissions made
The interest in accident policy does not pass through the estate of the deceased
It was always a chance so far as the deceased was concerned in the instant case
Sankey CJ found in Quixley s case that the deceased had a right only quantification was not there
But in the instant case before us the deceased had no right in his lifetime
Undoubtedly the right to nominate and right of the nominee or legal representative to get the money was there in case 333 of death of the deceased but the deceased had no right to the money A which was dependent on happening of an uncertain event
In Controller of Estate Duty vs A T Sahani New Delhi  the Delhi High Court had to consider slightly different question
There under Rule 159 of the Indian Airlines Corporation Flying Crew Service Rules a member of the flying crew was entitled to a compensation at specific rates in the event of his death or an injury caused by an accident during or as a result of air journey performed as such in the Corporation s service
The compensation payable under the said rule was in addition to the compensation which the Corporation had agreed to pay under an agreement described as Pilot Agreement entered into with the Corporation whereby it was provided that the Corporation shall pay compensation for the death of a pilot a maximum of 36 times his monthly basic pay if such death occurred in the circumstances mentioned in the above mentioned service rules or while travelling on duty in surface transport provided by the Corporation or its nominated agents
In accordance with the terms of the aforesaid agreement between the deceased and his employer a sum of RS 68300 was received by his widow as compensation
The High Court under reference in that case held that the right to get compensation as a condition of one s service was as much an interest in property as any other interest which a person might have in incorporeal property such as choses in action etc
The circumstances that the occasion for the exercise of the right arose after the death of the person and was also conditional upon death did not in any way detract from the existence of the right of the deceased s interest therein during his lifetime
The Court noted that though in that case the deceased was not required to make any contribution for the purpose of earning the compensation as in Quixley s case yet the compensation was payable as a reward for the services rendered
Therefore the deceased had interest in it and had also the right to appoint the person to whom it should be paid
The distinction between pecuniary damages for the loss caused to the estate and pecuniary loss sustained by the membes of his family through his death has no relevance for the purpose of deciding whether the compensation payable in a case like the present was property which should be deemed to pass on the death of deceased
The High Court felt that the case came within the ratio of the decision of the Court of Appeal in Quixley s case supra
But the facts of the instant appeal are different
334 Prior to the judgment under appeal the problem arose before Jammu  Kashmir High Court in the case of Controller of Estate Duty vs Kasturi Lal Jain Ali CJ as the learned judge then was of the Jammu  Kashmir High Court held that before a property could pass to the heirs of a deceased person under section 5 of the  it had to fulfil the following conditions i The property must be in the power possession and control actual constructive or beneficial of the deceased ii The deceased must have an interest whether in praesenti or contingent in the said property iii The property must be in existence during the life time of the deceased or at the time of his death and iv The deceased must have power of disposition over the property
 The Court was of the view that where compensation was paid under the Carriage by Air Act 1934 to the heirs of a person dying in an air crash by the Airlines Corporation the deceased had neither any interest in the property nor was he in possession of the property either actually or constructively
The property in such a case did not and could not have come into existence during the lifetime of the deceased but accrued for the first time after his death and that too because his death took place in a certain mode
It was further held that under the provisions of the Carriage by Air Act 1931 the compensation ensured for the benefit of the members of the passenger s family and had nothing to do with the estate of the deceased
As none of the above said conditions for the passing of property on death under section 5 of the Act was fulfilled the estate duty could not be levied on such compensation
The learned Chief Justice observed that the connotation of the words passes on the death of such person  was important
He referred to Webster s International Dictionary
He observed that passing  involved some actual change in the title or possession of the property which must result on death
The Division Bench therefore negatived the revenue s contention
The Punjab and Haryana High Court in the case of Controller of Estate Duty Patiala vs Smt
Motia Rani Malhotra  had to deal with this problem though in a different context
It is held by the High Court in that case that the amount of compensation received by 335 the heirs of a person who died in an air crash comes into being only A after the death of the person
It exists at no point of time either contingently or otherwise during the lifetime of the deceased
The High Court was of the opinion that the property which was not in existence at all during the lifetime of the deceased cannot be said to pass on his death
The provisions of the Indian Carriage by Air Act 1934 provided compensation to members of the family of a victim of an air crash
In the very nature of things the damages by way of compensation arose after the person was dead
The Act definitely provided for whom it was available
If it were part of his estate passing on his death it would pass on to his heirs other than those specified in the Act in case they were not in existence
But that did not happen
If the members of the family specified in the Act are not in existence the payment has not to be made
Hence the compensation was not property capable of passing on death
The High Court felt that there was a lot of difference between compensation received on account of permanent or temporary injury in an air crash and the compensation received by the heirs of a person dying in an air crash
In the former case the amount received by the person formed part of his estate but where compensation was received by his heirs on his death in air crash according to the High Court it cannot partake of his estate
When a person boarded a plane he could not at that time be said to have created an estate or interest capable of passing after his death
Section 15 of the Act provided for those types of cases where the owner of property tried to dissipate his property in such a way that it passed on to his heirs without suffering estate duty
It did not bring to charge compensation received by the heirs of a victim of an air crash
Therefore the sum of money received in such a case was not liable to estate duty according to Punjab and Haryana High Court
The problem there was however slightly different from the present but the basic position was that the property came into existence only on the death of the passenger in the plane
In Bharatkumar Manilal Dalal vs Controller of Estate Duty Gujarat  it is necessary to refer briefly to the facts
One M the deceased in that case had purchased on 8th August 1965 a limited non renewable policy covering certain travel accidents from A insuring himself against risk of air travel for his journey from USA to India and back for a maximum sum of f 75000
Similarly the deceased had purchased in July 1965 a personal accident policy from company insuring himself for a maximum of RS 100000 against risk 336 of loss of life or limb arising as a result of accident in the course of one year
The deceased had paid only one premium of RS 255 under the said policy to the company B The father of the deceased the accountable person was nominated as the beneficiary in both the insurances for receiving the claim amount payable under the policies in case of death of the insured
M died on 24th January 1966 in a plane accident on his way to the USA RS 100000 and RS 357808 were received from company and Company A respectively by the accountable person as a sequel to the accident
The Appellate Tribunal held that the said two sums were liable to be included in the dutiable estate of the deceased M under section 15 of the but not under any other section
On a reference at the instance of both the accountable person and the revenue the question was whether the amounts were liable to estate duty under sections 5 6 14 or 15 of the Act
The High Court held that section 14 of the Act was not attracted on a plain reading of the section
The High Court held further that section 14 imposed liability of duty on money received under a policy of insurance effected by any person on his life and would not therefore take in its sweep the cases of moneys paid under an accident policy the connotation of which was well known as contradistinguished from that of life policy
It was contended for the assessee that the purchase of an accident policy by the deceased could not be held to be an interest purchased or provided by him within the meaning of section 15 of the Act and that the words other interest in section 15 should be understood in the cognate sense of the word annuity on the principle of noscitur a sociis
The term other interest was of widest amplitude and there was no warrant in the section itself or in any other provision of the Act to infer that the legislature wanted to restrict the meaning and import of the term other interest
The contention that the import of the term other interest should be restricted and that it should take colour from the word annuity and should bear a cognate meaning must be rejected
If the legislative intent as outlined in the Statement of objects and Reasons given in the Bill legislature wanted to cover all kinds of interests which have been purchased or provided by the deceased in the nature of annuities or policies other than life insurance policy as passing on his death to the extent of a beneficial interest accruing or arising as a result of the death
The High Court referred to the decision in Westminster Bank Ltd vs Inland Revenue Commissioners
 36 ITR ED 3
It could not be successfully contended according to the High Court that the deceased had no interest in his lifetime in the 337 relevant policies
In the two personal accident policies in that case the A subject matter of the insurance was the person of the deceased in case of its being exposed to certain perils of travelling and the assured would clearly be prejudiced by the loss of life or limb as a result of the accident and therefore had an insurable interest for purposes of personal accident
To contend that death did not generate a new beneficial interest the High Court felt was beside the point for the time being
The deceased had an interest in the contractual right under the two relevant policies of insurance to exact a particular sum if and when there was loss of life or limb arising as a result of accident
The very fact that deceased had a contractual right to exact a particular sum in case of loss of life or limb was an interest in expectancy and it would have been in interest in presenti the moment the accident occur red resulting in loss of limb
The contract of insurance contained in the two relevant policies conferred on the deceased the benefit of the policies namely the right to exact a particular amount of damage depending on the loss of limb or life
as the case might be
The contention that the deceased had no interest in the policies according to the High Court was not well found be upheld
It was further held that on the death of the insured the beneficial interest of the accountable person was generated
Therefore section 15 of the Act was applicable
As regards the applicability of sections 5 and 6 of the Act the deceased had property in the nature of interest to receive the sums assured on the happening of the contingency of accident resulting in loss of limb or life under the contracts of insurance contained in the aforesaid two accident policies and he was competent to dispose of that property by an act inter vivos or by a will
The property in nature of interest was in existence in the lifetime of the deceased which passed on his death to the beneficiaries designated or to his legal representative in absence of such designation and was therefore dutiable under section 5 of the Act
In any case he had a right to property and under the said policies which he could have disposed of by will and therefore it must be deemed to pass on his death under section 6 of the Act
In the view we have taken of the policy involved in the instant case we are unable with respect to agree with the High Court that the deceased had right in expectancy the deceased had no right the nominee or the beneficiary would have the right the property does not pass through the deceased
Relying on section 343 of the Act it was contended by the 338 accountable person that the aforsaid sum should not be aggregated with other property of the deceased and should be assessed as an estate by itself
As we have noted before this question is a subject matter of Civil Appeal No 67 of 1975
On this aspect the judgment under appeal held in favour of the accountable person while the Gujarat High Court was of the view that sub section 3 would not be applicable because it could not be said that the deceased had no interest in the contract of insurance contained in the two accident policies
The High Court held that the deceased had property in the nature of interest to receive payment in case of loss of limb arising as a result of accident or the deceased purchased an interest for the benefit of his legal representatives in case of loss as a result of accident
It therefore could not be said that the deceased had never any interest in the contracts of insurance contained in the said two policies and money payable thereunder
To this extent the Gujarat High Court dissented from the Madras High Court s view
It was further held by the Gujarat High Court that it could not be contended that the principal value of the property should be determined with reference to the death of the insured and at the time of his death the property in question had only the value of the premiums which had been paid
It must be held that the valuation must be ascertained on the date immediately succeeding the date of the death which in the present case would be aforesaid two sums
Therefore the High Court allowed two sums received from the insurance company to be included in the estate duty under section 5 section 6 and section 15 of the Act
The Bombay High Court in Smt
Amy F Antia vs Assistant Controller of Estate Duty Bombay  was confronted with a situation where an engineer in the employment of MN Destur  Company died in an air crash on 28th May 1968
The question which arose in the course of estate duty proceedings on his death was whether an amount of Rs68400 which was payable on the death of the deceased in pursuance of a group insurance policy taken out by the employer Destur  Co was liable to be included as part of the property which passed on the death of the deceased
The Bombay High Court was of the view that personal accident insurance was one of the three main types of insurance
The object of personal accident insurance was to make a provision in case an accidental injury happens which may sometimes disable a person and affect his employment and his earning capacity or in some cases it may result in death and the injured person wants to make provision for his dependants in case untimely accidental death occurs
A personal accident policy was in the 339 nature of a provision for the legal representatives and in the case of the death of the insured the death benefit was payable to the legal representatives
The proviso in the insurance policy in that case stated that the insured alone would have the sole and exclusive right of receiving payment or enforcing any claim under the policy
 Co issued an office circular which made it clear that the compensation payable by the insurance company in each case would be equivalent to two years salary of the individual concerned at the time of accident resulting in a claim under the policy
Clause 5 of the circular stated that the benefits enjoyed by the staff under the scheme were ex gratia in character and might be withdrawn or modified at the sole discretion of the company
In pursurance of the insurance policy a sum of RS 68400 was paid by  Co to the estate of the deceased
A sum of RS 50000 was also paid to the estate of the deceased by the airlines in accordance with the provisions of the Indian Carriage by Air Act
The Assistant Controller and the Appellate Controller held that both the amounts were liable to estate duty
The Tribunal held that the amount of RS 68400 was liable to estate duty and out of the amount of RS 50000 RS 43846 was not liable to estate duty
The Bombay High Court held that with regard to the amount of RS 68400 the insurance policy and the circular issued by  Co had to be read together
The policy expressly provided that in the case of an insured person suffering an injury the insured would be paid the capital sum insured against the name of the insured person and in respect of the person suffering was twice the annual salary drawn by the person on death or occurrence of the accident
The High Court held that the sum of RS 68400 was therefore liable to estate duty but held also that the sum received under the provisions of the Indian Carriage by Air Act was not liable to duty under the Act
The learned judges referred to the two decisions under appeal
The real question which fell for consideration in the case before the Bombay High Court was whether question No l in that case was what the right the deceased had in the personal accident policy
The question No 1 in that case was whether on the facts and in the circumstances of the case the sum of RS 68400 payable on the death of the deceased in pursuance of the insurance policy was liable to duty on estate
It would thus appear that each case is decided in the peculiar facts in terms of the policy
Reliance was also placed on certain observations in the case of P Indrasena Reddy  Pingle Madhusudhan Reddy vs Controller of Estate Duty There the Court was dealing with the test of disclaimer
The Court observed that the test of disclaimer has to H 340 be adopted to determine whether the deceased had any interest in insurance policies
If the facts showed that the beneficiaries disclaimed the resulting interest would be in favour of the deceased and the policy amount would pass to the legal representative
It was condition precedent for the application of the Act that the estate holder must have possessed or enjoyed the property or interest in property the interest in property might be either vested or contingent but interest should be that with regard to which either immovable property or movable property or an interest in immovable or movable which was capable of being ascertained during the lifetime or at the time of the death of the estate holder
The property vested or contingent must be one which was capable of being ascertained
Even if the above tests were satisfied then there has to be a passing of that property or interest as contemplated under section 216 of the Act
Even if a person might have power to dispose of a property or interest in property he cannot or his estate cannot be brought within the purview of the Act solely because of that factor
In order for an estate to be liable to estate duty the power of disposition must be with regard to a property capable of being ascertainable during the lifetime of the deceased ceased or at the time of his death
It was next urged that property or interest in property had necessarily to change hands in order to be liable to estate duty under the Act
There had to be a change in the beneficial possession and enjoyment of the property or the interest in that property
In other words the property or interest which is liable to estate duty has to pass through the estate of the deceased
It is important to bear in mind that though the deceased might have a right of disposition as and when the property would be available in case the contingency happens namely the death of the deceased in an accident but that right is different from the right to the money accruing or arising because of the death due to accident
See in this connection the case of Shri H Anraj etc
vs Government of Tamil Nadu etc
  So in this case the property is really born on the death of the deceased in an accident
Property in the sense the sum of RS two lakhs was non existence before the death
There might have been some right of disposition in respect of the property which might accrue on the death of the deceased
That right is different from the right to the movable property of RS 2 lakhs that is taking place
An accident insurance policy cannot be construed as movable property unlike a life insurance policy or an annuity because as laid down in section 215 of the Act it is not only necessary for the person 341 to have property or interest in property but that interest must be in A regard to a movable property and his interest should also be capable of being ascertainable during his lifetime or at the time of his death in that movable property
Secondly an accident insurance policy could not be construed as a property or an interest in property since a person who possessed it cannot also be said to have a contingent interest because there was every possibility of the accident policy getting extinguished or rendered worthless during his lifetime on the other hand in the case of a life insurance policy there was always a tangible continuing interest only that the value of that interest might be subjected to change at the time of passing of the property
A contingent interest which did not get crystalised during the lifetime of the deceased hut which interest would with certainty accrue after the demise of the estate holder will be caught by section 6 of the Act
A property passed from the deceased to the beneficiary
Though only a future interest that crystallised after the death of the estate holder would be deemed as a property of the estate holder
The accident policy could only accrue after the death of the estate holder
It became property for the first time after the demise of the estate holder
There was no element of property during the lifetime of the estate holder The interest in an accident insurance policy did not pass through the estate of the deceased as in the case of a life insurance policy or annuity and here the interest directly went to the beneficiaries in the case of death by accident of the estate holder
This Court had to deal with nomination under the Insurance Act in the case of Smt
Sarabati Devi  Anr
vs Smt
Ushal Devi  In that case the effect of nomination under the Insurance Act was analysed
The meaning of the expression property passes came up for consideration in the observations of Viscount Simonds in the case of Public Trustee vs Inland Revenue Commissioners  where at page 407 of the report Viscount Simonds dealing with section 1 of the Finance Act
1894 of UK observed that the word passes familiar as it has now become to us was not in 1894 a term of art in the law relating to death duties and that it would appear to have been a matter of H 342 sheer necessity for the Act to proceed to a definition of the area of charge
It was natural that the draftman should do so by the use of the word deem a word which has been described by Lord Radcliffe is apt to include the obvious the uncertain and the impossible
 Section 6 of the Act which makes property which the deceased at the time of his death competent to dispose of deemed to pass on his death makes as in the words of Lord Radcliffe inter alia to include impossible 
But the question here in the instant case is whether the expression impossible  also include the possibility of including something which is not property as yet of the deceased to pass on the death of the deceased
The fact that a person can nominate a beneficiary will not tantamount to disposition
In view of the discussions above we are of the opinion that insurance money became property only on happening of a specified contingency
That property arose on the death of the deceased during the subsistence of the policy in accident
We are dealing with the passing of property or situation where property can be deemed to have passed
The property in this case is the sum of RS 2 lakhs which became receivable by the nominee or the legal representative of the deceased because of the death of the deceased in air accident during the subsistence of the policy
That right to the sum arose because a the deceased died b in air accident c during the subsistence of the policy that property was not there before
Therefore property came into being on that contingency after death
In our opinion therefore no property can be deemed to pass on the death of the deceased
In any event during the lifetime of the deceased an interest was vested totally and irretrievably in the hands of the beneficiary or the legatee or the nominee
The death did not cause property to change hands
The fact that a person can nominate a beneficiary will not tantamount to a disposition of the property
In any event that disposition vested in the nominee or the legal representative a right in the property
It did not pass on the death of the deceased
In the premises we are unable to accept the High Court s conclusion on the first question and we are in agreement with the views of the High Court of Jammu and Kashmir in Controller of Estate Duty vs Kasturi Lal Jain supra 
The first appeal No 2086 of 1974 is allowed and question No 1 is answered in the negative
In that view of the matter question No 2 which is the subject 343 matter of Civil Appeal No 67NT of 1975 need not be dealt with
However we are of the opinion on the construction of section 343 and the views expressed by the High Court on this point that had it been necessary to answer this question we would have treated this as a separate estate from the other estate of the deceased and the value of this could not be aggregated
B The third question which is also the subject matter of appeal No 67 of 1975 relates to the adoption under the custom of Chettiar Community
Now whether a particular custom prevails in a particular community or not is a matter of evidence
Mayne s Treatise on Hindu Law and Usage 10th Edn
edited by section Srinivasa Iyengar from page 280 described the peculiar form of Dwyamushyayana adoption thus 208
An exception to the rule that adoption severs a son from his natural family exists in the case of what is called a dwyamushyayana or son of two fathers
This term has a two fold acceptation
Originally it appears to have been applied to a son who was begotten by one man upon the 1 wife of another but for and on behalf of that other
He was held to be entitled to inherit in both families and was bound to perform the funeral obligations both of his actual and his fictitious father
This is the meaning in which the term is used in the Mitakshara but sons of this class are now obsolete
Another meaning is that of a son who has been adopted with an express or implied under seems to take place in different circumstances
One is what seems to take place in different circumstances
One is what is called the Anitya or temporary adoption where the boy is taken from a different gotra after the tonsure has been performed in his natural family
He performs the ceremonies of both fathers and inherits in both families but his son returns to his original gotra
This form of adoption is now obsolete
The only form of dwyamushyayana adoption that is not obsolete is the nitya or absolute dwyamushyayana in which a son is taken in adoption under an agreement that he should be the son of both the natural and adoptive fathers
It appears to be obsolete in Madras on the East Coast
But in the West Coast among the Nambudri Brahamana it is the ordinary form
In Bombay and the United Provinces its existence is fully recognised
It has H 344 been recognised by the Judicial Committee in two cases from Bengal
 In Mulla s Principles on Hindu Law 3rd Edition p 393 Dvyamushyayana the effect of partition has been described
These have been set out in the judgment of the High Court
It is not necessary to reiterate them again
In any event we accept the reasoning of the High Court that if the adoption was not valid as contended for by the revenue then Muthiah continued to be a member of the natural family and as such his share in the joint family would have passed on the death of the deceased
In this background it is however difficult to appreciate the stand of the revenue that the adoption was valid but no effect could be given to the ter ns of Muri
Muri according to revenue stood by itself
The High Court found it not possible to accept this argument
We are of the same view
The agreement properly read could not be taken as a post adoption agreement
In that view of the matter certain factual aspects were urged before the High Court for contending that the accountable person was not free to urge that there was no valid adoption and Muthiah continued to be a member of the natural family
We do not find much merit in such contentions and these need not be dealt with
These have been dealt with by the High Court and we accept them
Not much serious arguments in support of the appeal on this aspect by the revenue was advanced before us
In the premises we uphold the decision of the High Court in two questions involved in appeal No 67 of 1975 and therefore the second question in that appeal is answered by saying that amount of Rs2 lakhs if assessable would have been assessed as a separate estate and on the third question the share of the deceased in the property of the joint family at the time of death was one third and not one half
In the premises this appeal fails and is dismissed
In view of the divided success parties will pay and bear their costs in both the appeals
APJ Appeal dismissed


Summary:
The deceased was the Karta of a Hindu undivided family
He had two sons
He gave his first son in adoption to his divided paternal uncle
He was joint with his second son throughout his life
He took out a personal accident insurance policy with the Insurance Company and effected a nomination in favour of his first son
During the currency of the policy the deceased died following the crash of the airliner in which he had travelled and the Insurance Company paid the nominee a sum of Rs2 lakhs the benefit stipulated under the terms of the policy
At the time of his death the deceased had other properties and interests
one was his interest as an undivided copartner in his joint family which consisted of himself and his second son
In the assessment proceedings under the  the accountable persons urged before the Deputy Controller of Estate Duty i that the amount of Rs2 lakhs could not be aggregated with the rest of the properties but must be brought to charge independently as a separate estate in itself because the deceased had no interest at all in the insurance money and ii that the adoption in 1931 was on the basis that notwithstanding adoption into another family the adoptee must continue to retain his interest in the properties belonging to the family of his birth and therefore he was entitled as on the date of the de 316 ceased s death to an equal interest in the deceased s family properties so that the quantum of the deceased s coparcenary interest was not one half but only one third of the total value of the family properties
A Muri deed of adoption that was executed was produced in this regard
The Deputy Controller rejected these contentions and held i that the personal accident insurance money of Rs2 lakhs paid by the Insurance Company should be charged to estate duty and it had to be aggregated with the rest of the properties passing on the deceased s death ii that the insurance money of Rs2 lakhs was property which the deceased was competent to dispose of by will iii that the deceased did have an interest in the insurance money iv that the deceased s interest in the coparcenary property which had to be included in the dutiable estate extended to one half share of the joint properties on the basis that the deceased and his second son were alone entitled as coparceners to the said properties v that the document produced in support of the plea of adoption was not genuine and even otherwise it had no legal effect on the continued rights of the adopted son in the family of his birth subsequent to his adoption
He therefore included in the dutiable estate one half of the joint family properties as being the measure of the deceased s coparcenary interest
The accountable persons appealed against the above assessment to the Central Board of Revenue
The Board held i that the insurance money of Rs2 lakhs was chargeable to estate duty under section 6 ii that the deceased had interest in the insurance money iii that the deceased did have the power of disposition over the insurance money both by the exercise of power of nomination under the policy and also independently by the exercise of any testamentary power iv that the Hindu law of adoption makes the adopted son lose his property interests in the family of his birth and that the dwyamanushyana form of adoption had become obsolete in Madras and no such custom was prevailing in the Nattukottai Chettiar community under which the adopted son never loses his property rights in the family of his birth and therefore upheld the assessment of one half of the value of the whole of the joint family property as the measure of the deceased s dutiable interest
On reference the High Court held that as the deceased was competent to dispose of the monies payable under the accident policy the sum of Rs2 lakhs was includible in the principal value of the estate but the same was not liable to be aggregated with the other properties and 317 had to be assessed as an estate by itself and that the type of adoption pleaded by the accountable person was recognised by the custom of the Nattukottai Chettiar community the terms of the muri  formed part of the adoption and the adoption could not be considered de hors the agreement and hence the deceased had only one third share in the joint family properties at the time of his death
R In the appeal to this Court on behalf of the accountable persons it was contended i that it was a condition precedent for the attraction of the duty that a the estate holder must have had possessed or enjoyed a property or an interest in property b the interest in a property might be either vested or contingent c but that interest should be with regard to either an immovable property or a movable property which was capable of being ascertained during the lifetime or at the time of the death of the estate holder d a contingent interest could fall within the purview of the Act only if the interest of a tangible nature and was capable of being ascertained ii that there had to be a passing of property or interest as contemplated by section 216
There has also to be a change in the beneficial possession and enjoyment of property of the interest in that property iii that an accident insurance policy could not be construed as a movable property unlike a life insurance policy or an annuity since a person who possessed it could not also be said to have a contingent interest because there was every possibility of the accident policy getting extinguished or rendered worthless during his lifetime iv that in the case of a life insurance policy there is always a tangible continuing interest only that the value of that interest might be subjected to a change at the time of passing of the property v that it was not necessary that during the lifetime of the deceased the property in question should have attained  the full value eg Annuity 
Only a future interest that crystalised after the death of the estate holder vi that since the benefit in accident policy could only accrue after the death of the estate holder it became property for the first time after the demise of the estate holder
Allowing the appeal by the accountable persons and dismissing the appeal of the Revenue the Court G  HELD 11
Under the personal accident insurance policy in question the insurance money became property only on happening of a specified contingency
That property arose on the death of the deceased during the subsistence of the accident policy
The property is the sum of Rs2 lakhs which became receivable by the nominee or the legal rep 318 resentative of the deceased because of the death of the deceased in the air accident during the subsistence of the policy
That right to the sum arose because a the deceased died b in air accident c during the subsistence of the policy
The property came into being on that contingency after death
No property can therefore be deemed to pass on the R death of the deceased
342D F 12 During the lifetime of the deceased an interest was vested totally and irretrievably in the hands of the beneficiary or the legatee or the nominee
The death did not cause property to change hands
The fact that a person can nominate a beneficiary will not tantamount to a disposition of the property
342F G 13 Whether a particular custom prevails in a particular community or not is a matter of evidence
343C 21 Section 5 of the provides that there shall be levied and paid upon the principal value ascertained in the manner provided of all properties which passes on the death of a person
Three factors are important 1 there must be passing 2 of such property and 3 such passing on must be on the death of a person
326F 22 Section 31a b  c provides for certain situations in which a person is deemed competent to dispose of property
Section 6 deals with property within disposing capacity and provides that property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death
327A B 31 It was a condition precedent for the application of the Act that the estate holder must have possessed or enjoyed the property or interest in property the interest in property might be either vested or contingent but interest should be that with regard to which either immovable property or movable which was capable of being ascertained during the lifetime or at the time of the death of the estate holder
The property vested or contingent must be one which was capable of being ascertained
Even if these tests were satisfied then there has to be a passing of that property or interest as contemplated under section 216 of the Act
Even if a person might have power to dispose of a property or interest in property he cannot or his estate cannot be brought within the purview of the Act solely because of that factor
In order for an estate to be liable to estate duty the power of disposition must be with regard to a property capable of being ascertainable during the lifetime 319 of the deceased or at the time of his death
There had to be a change in A the beneficial possession and enjoyment of the property or the interest in that property
In other words the property or interest which is liable to estate duty has to pass through the estate of the deceased
340B E 32 Though the deceased might have a right of disposition as and when the property would be available in case the contingency happens namely the death of the deceased in an accident but that right is different from the right to the money accruing or arising because of the death due to accident
340E F 33 An accident insurance policy cannot be construed as a movable property unlike a life insurance policy or an annuity because as laid down in section 215 of the Act it is not only necessary for the person to have property or interest in property but that interest must be in regard to a movable property and his interest should also be capable of being ascertainable during his lifetime or at the time of his death in that f movable property
Secondly an accident insurance policy could not be construed as a property or an interest in property since a person who possessed it cannot also be said to have a contingent interest because there was every possibility of the accident policy getting extinguished or rendered worthless during his lifetime on the other hand in the case of a life insurance policy there was always a tangible continuing interest only that the value of that interest might be subjected to change at the time of passing of the property
340H 341A C 34 A contingent interest which did not get crystalised during the lifetime of the deceased but which interest would with certainty accrue after the demise of the estate holder will be caught by section 6 of the Act
The accident policy could only accrue after the death of the estate holder
It became property for the first time after the demise of the estate holder
There was no element of property during the lifetime of the estate holder
341C D 35 The interest in an accident insurance policy did not pass through the estate of the deceased as in the case of a life insurance policy or annuity and in the instant case the interest directly went to the beneficiaries in the case of death by accident of the estate holder
341E 36 In the instant case the property is really born on the death of the deceased in an accident
The sum of Rs2 lakhs was non existent before the death
There might have been some right of disposition in 320 respect of the property which might accrue on the death of the deceased
That right is different from the right to the movable property of Rs2 lakhs that is taking place
340F G Attorney General vs Quixley 1929 All England Reports Reprint 636 and Controller of Estate Duty vs AT Sohani New Delhi  distinguished
Controller of Estate Duty vs Kasturi Lal Jain and Controller of Estate Duty Patiala vs Smt
Motia Rani Malhotra ITR 42 approved
Bharatkumar Manilal Dalal vs Controller of Estate Duty Gujarat  over ruled
Westminster Bank Ltd vs Inland Revenue Commissioners  16 ITR ED 3 Smit
Amy F Anti vs Assistant Controller of Estate Duty Bombay  P Indrasena Reddy  Pingle Madhusudhan Reddy vs Controller of Estate Duty  Shri H Anraj etc
vs Government of Tamil Nadu etc  Smt
Sarabati Devi  Anr
vs Smt
Usha Devi 19841 SCR 992 and Public Trustee vs Inland Revenue Commissioners 1960 AC398 referred to