Case: Controller of Estate Duty, Gujarat Vs. H. H. Iqbal Mohomed Khan, Nawab of Palanpur

reference, and so interpreted the sentence means " you will be able to do what you like with your Rs. 9, 00, 000 and, I shall have no worry to discuss your investments ". Having analysed the language of the letter dated May 3, 1955, in its entirety and in its context we are of the opinion that there was merely a proposal or expression of the intention of the deceased to make the gift of the sum of Rs. 9, 00, 000 to the respondent and there was no transfer in praesenti of that amount to the respondent carried out and effected by means of that letter within the meaning of section 130 of the Transfer of Property Act. It follows, therefore, that the transfer of the actionable claim was not completed on May 3, 1955, but the transfer became effective on September 19, 1955, when the deceased signed the draft letter to the Bombay Government requesting it to arrange for the payment of the said sum of Rs. 9, 00, 000 directly to the respondent. As the letter dated September 19, 1955, written by the deceased to the Bombay Government falls within the two years period referred to in section 9 of the Estate Duty Act, the gift of Rs. 9, 00, 000 should be regarded as being chargeable to estate duty and the question of law referred to the High Court must be answered against the respondent and in favour of the Controller of Estate Duty, GujaratOn behalf of the respondent Mr. Bhaba referred to an affidavit of Mr. J. P. Thacker of Messrs. Mulla and Mulla dated December 23, 1959, in which he stated that " some time in May, 1955, I was called by His Late Highness at his residence in Bombay and he told me that he had made a gift to his son Iqbal, the present Nawab of Palanpur, of a sum of Rs. 9 lakhs, out of the sum of Rs. 10 lakhs, being the balance of the purchase price of the said Joravar Palace which was due and payable by the State of Bombay. Learned counsel also referred to the draft of two letters dated May 13, 1955, produced along with the affidavit of Mr. Thacker. But it is admitted for the respondent that the deceased did not sign either of these draft letters on May 13, 1955, but that the letter to the Bombay Government was signed only on September 19, 1955. Mr. Bhaba stressed the argument that the alleged declaration of the deceased made to Mr. Thacker early in May, 1955, was admissible in evidence in the matter of construction of the letter of the deceased dated May 3, 1955. To put it differently, the argument of the respondent was that the alleged declaration of the deceased to Mr. Thacker was made soon after the letter of May 3, 1955, and constituted part of the same transaction and was, therefore, admissible in evidence. In support of this argument learned counsel referred to the decision of the House of Lords in Shephard v. Cartwright , but that decision has no bearing on the question presented for determination in the present case. It was held in that case that subsequent acts of the parties are, in general, inadmissible with regard to the rebuttal of the presumption of advancement but there was an exception that evidence may be add uced in rebuttal in regard to acts, circumstances and declarations leading to or forming part of the transaction or so immediately following or connected with it as in effect to be contemporaneous with or forming part of it. It was pointed out in that case that, as advancement is a question of intention, facts antecedent to or contemporaneous with the purchase, or so immediately after it as to constitute part of the same transaction may be put in evidence for the purpose of rebutting the presumption. The doctrine enunciated in this case has manifestly no application to the question to be decided in the present case. It was then contended by Mr. Bhaba that, if the language of the letter dated May 3, 1955, is ambiguous, evidence is admissible of surrounding circumstances in order to enquire what is the meaning of the language used by the deceased in the doucment. We do not, however, agree that there is any ambiguity in the letter dated May 3, 1955. The question of construing the letter is somewhat difficult, but the problem in this case does not go beyond the sphere of difficult construction into the sphere of ambiguity. The difficulty is purely one of construction and which can and should be overcome. We are, therefore, of the opinion that the subsequent declaration alleged to have been made by the deceased to Mr. Thacker as mentioned in the draft letters and the affidavit is not admissible in the matter of interpretation of the letter dated May 3, 1955. We accordingly reject the argum ent of the respondent on this aspect of the caseAs regards the question whether a part of an actionable claim can be the subject-matter of a gift or not, the view taken by the Central Board of Revenue is that the debt was capable of partition and there was no valid transfer of the sum of Rs. 9, 00, 000 prior to September 19, 1955, when the debt wa s actually partitioned. The High Court, however, has overruled the view of the Central Board of Revenue and held that there is nothing in section 130 of the Transfer of Property Act or any other portion of that Act which prohibits the transfer or gift of a part of an actionable claim and, therefore, such transfer of a part of an actionable claim was permissible in law. It is not, however, necessary for us, in the present appeal, to express any opinion on this aspect of the case or to examine whether the view taken by the High Court on this point is correct

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]4. It is manifest that this section contains a special scheme which has some of the features both of the English common law and of the principles of equity and it is analogous to the provisions which are contained in section 25(b) of the Judicature Act of 1873, which are now enacted in section 126 of the Law of Property Act of 1925. In other words, the section has some of the features of the statutory and some of the equitable modes of assignment. It resembles an equitable assignment in that it applies to assignments by way of charge as well as to absolute assignments and takes effect as between the assignor and the assignee from the date of the assignment. On the other hand it resembles a statutory assignment in that it must be in writing and that it enables the assignee to sue in his own name and to give a valid discharge7. It isd that an instrument in writing under section 130 of the Transfer of Property Act is not required to be in any particular form. It is not necessary that any particular words should be used to effect the transfer of a debt or any beneficial interest in movable property if the intention to transfer in praesenti is clear from the language usedIt is apparent that the first part of the letter refers to a promise previously made by the deceased to the respondent that he would pay the whole of the unpaid balance, i. e., Rs. 10, 00, 000 in such a way that the income thereof would serve as allowance which was being paid to the respondent by the deceasedIn the present appeal, therefore, the question at issue depends upon the proper interpretation of the letter of the deceased dated May 3, 1955.It is apparent that the first part of the letter refers to a promise previously made by the deceased to the respondent that he would pay the whole of the unpaid balance, i. e., Rs. 10, 00, 000 in such a way that the income thereof would serve as allowance which was being paid to the respondent by the deceasedHaving analysed the language of the letter dated May 3, 1955, in its entirety and in its context we are of the opinion that there was merely a proposal or expression of the intention of the deceased to make the gift of the sum of Rs. 9, 00, 000 to the respondent and there was no transfer in praesenti of that amount to the respondent carried out and effected by means of that letter within the meaning of section 130 of the Transfer of Property Act. It follows, therefore, that the transfer of the actionable claim was not completed on May 3, 1955, but the transfer became effective on September 19, 1955, when the deceased signed the draft letter to the Bombay Government requesting it to arrange for the payment of the said sum of Rs. 9, 00, 000 directly to the respondentIt was then contended by Mr. Bhaba that, if the language of the letter dated May 3, 1955, is ambiguous, evidence is admissible of surrounding circumstances in order to enquire what is the meaning of the language used by the deceased in the doucment. We do not, however, agree that there is any ambiguity in the letter dated May 3,1955.The questionof construing the letter is somewhat difficult, but the problem in this case does not go beyond the sphere of difficult construction into the sphere of ambiguity. The difficulty is purely one of construction and which can and should be overcome. We are, therefore, of the opinion that the subsequent declaration alleged to have been made by the deceased to Mr. Thacker as mentioned in the draft letters and the affidavit is not admissible in the matter of interpretation of the letter dated May 3,1955.We accordingly reject the argum ent of the respondent on this aspect of the caseAs regards the question whether a part of an actionable claim can be ther of a gift or not, the view taken by the Central Board of Revenue is that the debt was capable of partition and there was no valid transfer of the sum of Rs. 9, 00, 000 prior to September 19, 1955, when the debt wa s actually partitionedIt is not, however, necessary for us, in the present appeal, to express any opinion on this aspect of the case or to examine whether the view taken by the High Court on this point is correct