Case: The Controller Of Estate Duty, Mysore,Bangalore Vs. Haji Abdul Sattar Sait &amp; Ors

The said property comprised shares and securities of the value of Rs. 25, 778, and immovable properties at Bangalore and Madras respectively valued at Rs. 5, 42, 500 and Rs. 6, 10, 1002. The assessment in question pertained to the estate of Hajee Mahomed Hussain Sait, the father of the two respondents, who died at Bangalore on March 22, 1955, leaving the said properties. The said Hajee Mahomed Hussain and the respondents belonged to Cutchi Memon sect amongst the Muslims. The respondents claimed that Cutchi Memons at one time were Hindus residing in Sind, that some four or five hundred years ago they were converted to Islam like the members of another such sect, the Khojas, that they migrated thence to Cutch and from there spread themselves to Bombay, Madras and other places. Their case was that despite their conversion, the Cutchi Memons retained a large part of Hindu law as their customary law, including its concepts of joint family property, the right of a son by birth in such property and its devolution by survivorship. Further, neither the Cutchi Memons Act, 1920 (XLVI of 1920), nor the Muslim Personal Law (Shariat) Application Act, 1937 (XXVI of 1937), nor the Cutchi Memons Act, 1938 (X of 1938), applied to them. That being the position, there was no question of the passing of the said properties to them on the death of their father as envisaged by section 3 of the Act or its being applicable to them on the said properties, the said properties having come to them under the Hindu Law rule of devolution of joint family property by survivorship. Their cage was that only one-third of the said properties, that is, the undivided share of their deceased father, could be properly said to have passed to them on his death and to be assessable under the ActThe Deputy Controller rejected these contentions as also the evidence led by the respondents in support thereof and assessed duty at Rs. 2, 05, 996.41 on the basis that the entire estate valued by him at Rs. 12, 23, 794 was assessable. The respondents filed two separate appeals, both of which were rejected by the Central Board of Revenue by its order dated December 30, 1961, and as aforesaid, at the instance of the respondents, referred to the High Court the aforesaid question3. In support of their contentions, the respondents had produced before the Deputy Controller the following documents as evidence of the Hindu law being their customary law(i) O.P. No. 47 of 1909 .... A petition before the High Courtof Madras and the HighCourts order thereon(ii) O.P. No. 188 of 1927 ... do(iii) O.P. No. 79 of 1928 ... do(iv) O.P. No. 1 of 1930 .... do(v) The judgment of the High Court of Madras in Civil Revision Petition No. 1727 of 1930(vi) The judgments of the same High Court in Siddick Hajee Aboo Bucker Sait v. Ebrahim Hajee Aboo Bucker Sait, and Abdul Sattar Ismail v. Abdul Hamid Sait4. These were produced to show that the rules of Hindu law were consistently acquiesced in and applied to their family and other Cutchi Memons settled in Madras. They also relied on the fact that the High Court had issued letters of administration to them although they had paid succession duty only on one-third of the said estate. The Deputy Controller held that neither the said evidence, nor the fact of their having paid succession duty on one-third of the said estate only concluded the issue before him, viz., that the rules of Hindu law, including the rules as to joint family property and its devolution by survivorship, constituted the customary law of Cutchi Memons in Madras and at Bangalore. He rejected their contention that as they had settled down first in Madras and then in Bangalore sometime between 1928 and 1930, and as a large part of the estate was situate in Madras, he should prefer the Madras, as against the Bombay view, namely, that the rules of Hindu law applicable to Cutchi Memons governed matters of succession and inheritance only. His view was that as there was only one solitary decision of the High Court of Madras in favour of the respondents contentions as against a large number of decisions of the Bombay High Court which limited the application of Hindu law to matters of succession and inheritance, the Bombay view was the correct one. As regards the orders and decisions produced by the respondents, he held that they would not assist the respondents as in none of them the question raised by them was specifically dealt with by the High CourtIn support of their appeals the respondents, in addition to the aforesaid evidence, also produced a partition deed of 1906 between one Hussain Hajee Ouseph Sait and his two sons, which inter alia recited that the said Hajee Hussain Sait and his six brothers had formed a joint family governed by Hindu law. The different petitions and the orders thereon set out earlier, and ranging from 1909 to 1930 showed: (1) that the respondents family was in Madras till about 1930 when its members partly shifted their activities to Bangalore, and (2) that in all those petitions the stand taken by the members of the respondents family was that the family properties were treated as joint family properties. The Board, however, rejected this evidence stating that no weight could be given to it, since a custom followed by one particular family would not "convert that family into a coparcenary governed by the Hindu law of survivorship", and dismissed the appeals. As aforesaid, the High Court upheld the respondents contentions and answered the question referred to it against the revenue

Court's reasoning:
6. It is a rule of Mahomedan law, the correctness of which is not capable of any doubt, that it applies not only to persons who are Mahomedans by birth but by religion also. Accordingly, a person converting to Mahomedanism changes not only his religion but also his personal law. (Mitar Sen Singh v. Maqbul Hasan Khan). Such a rigid rule, however, applies to cases of individual conversions, for, in cases of wholesale conversion of a caste or a community, it is recognised that the converts might retain a part of their original personal law according to their hitherto held habits, traditions and the surroundings. This principle was laid down in Fidahusein v. Monghibai, where the question arose whether a Khoja of the Shia Ishna Ashari sect could dispose of the whole of his property by testamentary disposition. Tracing the history and the conversion of Khojas from its previous decisions, the High Court held that the conversion of Khojas to the Shia Imami Ismaili sect was not a case of individual conversions but of a mass or community conversion, and that in such a case it could be properly presumed that such converts might retain a portion of their original personal law according to their social habits and surroundings. They, therefore, retain their personal law unless they consciously adopt another7. The High Court deduced the following principle" A Hindu convert residing in India is governed by his personal law unless he renounces the old law and accepts the new one, except where a statutory provision is made. His intention to renounce the old law is to be inferred(a) if he attaches himself to a class which follows a particular law, or(b) if he observes some family usage or custom derogatory to the old law."17. That being the position, there is no question of our having to decide whether the Bombay view, as reflected in the decisions since Beaman J., threw doubts on the dicta in the earlier decisions and the Madras view, as reflected in S. Hajee Aboo Bucker Saits case, or of having to prefer one against the other. We do not do so not only because it is not necessary but also because were we to do so at this date, it might perhaps have the result of upsetting a number of titles settled on the basis of the decisions of each of the two High Courts and perhaps elsewhere too. The conclusion which we arrive at on consideration of the decisions referred to above is that the Cutchi Memons who proceeded either from Cutch or from Bombay to Madras and who, it appears, settled down amongst Hindus, Hindu surroundings and traditions there, regulated their affairs as regards their property, succession and inhentance according to the Hindu law which they had retained while in Cutch and to which they were already accustomedIt is true that some of the Cutchi Memons went over to the then State of Mysore either from Cutch or from Western India or Madras. As aforesaid, the family members of the deceased, Haji Mahomed Hussain Sait, settled down in Bangalore Civil Station some time between 1928 and 1930. On the basis of that fact, reliance was placed on the decision of the then High Court of Mysore in Elia Sait v. Dharayya where the question for consideration was whether the custom of adoption recognised in the Hindu law prevailed also among the Cutchi Memons there. The High Court, it appears, had both the Bombay view and the Madras view as expressed in S. Hajee Aboo Buckers case but preferred the Bombay view as stated in Haji Oosmans cases. The High Court, however, gave no reasoning for that preference nor did it have before it, as it appears from the decision itself, any evidence as to the customary law which the Cutchi Memons settled in Bangalore followed. That being so, that decision cannot be treated as a well-considered judgment reflecting the position of the customary law applicable to Cutchi Memons who had settled down in the then Mysore State nor was it consequently binding on the High Court18. The Cutchi Memons Act, 1920 (XLVI of 1920), was an enabling Act as its long title and preamble indicate. Its second section provided that any Cutchi Memon, who had attained the age of majority and was at the time a resident in British India, could declare in the prescribed manner and before the prescribed authority that he desired to obtain the benefit of the Act, and thereafter, such a declarant, his minor children and their descendants would, in matters of succession and inheritance, be governed by the Mahomedan law. It is nobodys case that any such declaration was ever made to get the benefit of the Act. The Act, therefore, would have no operation upon the respondents. Then came the Cutchi Memons Act, 1938 (X of 1938), which was passed, inter alia, to facilitate administration of justice by the civil courts under a uniform established code for all Cutchi Memons in various parts of the country instead of "a wide field of custom and usage" which "has to be traversed for a proper determination of the case". The Act came into force as from November 1, 1938. Section 2 provided that all Cutchi Memons, subject, however, to the provisions of section 3, shall in matters of succession and inheritance be governed by the Mahomedan law. Section 3, subject to which the foregoing section applied, is a saving provision and 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". In between the two Acts was enacted the Muslim Personal Law (Shariat) Application Act (XXVI of 1937). We do not have to consider the effect of this Act in view of Mr. Desai having in express terms stated that he was not relying upon itThe Cutchi Memons Act (X of 1938) was not extended at first to the Civil Station area in Bangalore where the deceased and the members of his family had settled down and carried on business. Until 1947, that area was administered by the Viceroy in his capacity as the Crown representative. A number of Acts passed by the Central, Legislature were extended by him to this area with or without modifications but not the Cutchi Memons Act, 1938. In 1948, after the said area was retroceded to Mysore, the Mysore Legislature passed the Retroceded Areas (Application of Laws) Act, 1948, extending to the Civil Station area certain laws and enactments in force in the princely State of Mysore. One of them was the Mysore Cutchi Memons Act (1 of 1943), which was verbatim the same as the Central Act (X of 1938), and contained only three sections. The first section gave the title of the Act. The second section provided that, subject to section 3, all Cutchi Memons shall in matters of succession and inheritance be governed by the Mahomedan law. Thus, the option of being governed by the Mahomedan law contained in the 1920 Act was replaced by a uniform and mandatory provision. But, the third section, which is a saving provision, inter alia, provided that, nothing in this Act shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of such right or liability and any such proceeding or remedy may be continued or enforced as if this Act had not been passed."19. If the parties as aforesaid 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 a son in it by birth, the High Court would be right in its view that the accountable persons, having been born long before 1948, had already acquired a right by birth in the property held by their father, a right expressly saved by section 3 of the Act. There was, therefore, no question of that interest passing to them on the death of their father as envisaged by section 5 of the Estate Duty Act8. The question as to which personal law, sects among the Muslims, such as the Khojas and the Memons, would be subject to in matters of property, succession and inheritance arose in Bombay as early as 1847. In Hirbai v. Sonabae, commonly called the Khoja and Memos cases, the Supreme Court of Bombay was called upon to determine the claim of two sisters in the estate left by their father, who had died intestate without leaving any male issue. The claim was resisted on the ground that in the Khoja community the custom was that females were excluded from any share in their fathers estate, and were entitled only to maintenance and marriage expenses. A suit raising precisely the same question was also before the court between members of Cutchi Memons sect. Both the suits were tried together and disposed of by Sir Erskine Perry C. J. by a common judgment in which he held the custom put forward before him as proved11. Moosa Haji Joonas Noorani v. Haji Abdul Rahim Haji Hamed is yet another instance where the High Court held that in the absence of a special custom as to succession the Hindu law of inheritance would apply to Cutchi Memons, and, therefore, when a Cutchi Memon widow dies issueless, her property would be governed by the Hindu law as to stridhan. A year later, in Haji Noor Mahomed v. MacLeod the rule of devolution of property by survivorship was applied to parties who were Cutchi Memons in the matter of a family firm, save that somewhat contrary to it, the principle of relationship between the manager and the members of the family was held not to applyThe above analysis shows that, barring one or two stray decisions, the general trend of judicial opinion in Bombay was that both the Khojas and the Cutchi Memons retained, despite their conversion, considerable portion of their personal law and that the rules of Hindu law were accepted by them as customary law in matters of property, inheritance and succession, including rules as to joint family property, the right of a son therein by birth and the devolution thereof by survivorship12. In Jan Mahomed Abdulla Datu v. Datu Jaffer Beaman J., after an elaborate analysis of the previous decisions dealing with both Khojas and Cutchi Memons, struck for the first time a note of dissent and laid down two propositions(1) that the invariable and general presumption was that Mahomedans were governed by the Mahomedan law and usage and that it lay upon a party setting up a custom in derogation of that law to prove it strictly, and(2) that in matters of simple succession and inheritance, it was to be taken as established that these two matters among Khojas and Cutchi Memons were governed by Hindu law "as applied to separate and self-acquired property"In Siddick Hajee Aboo Bucker Sait v. Ebrahim Hajee Aboo Bucker Sait, Kumaraswamy Sastri J., after an analysis of the case law in Bombay, come to the conclusion that since the Khojas and the Cutchi Memons spread themselves from Cutch and Kathiawar, where they had originally settled down and where they had lived in Hindu kingdoms with Hindu surroundings and traditions, there was nothing surprising that they retained the rules of Hindu law in general not only in matters of succession and inheritance but also concepts such as the joint family property and its devolution by survivorship. According to him, at the time of their conversion, the Cutchi Memons were Hindus governed by the Mitakshara system of joint and undivided family together with its rule of survivorship. "I find it difficult", he said, "to assume that the Cutchi Memons on their conversion were go enamoured of the Hindu law of inheritance that they adopted it, but were so dissatified with the laws of the joint family that they discarded the rules as to coparcenary and the sons interest in the property of his grandfather". Since there were no reported decisions on the position of the Cutchi Memons who had settled down in Madras, the learned judge had the High Courts record searched. As a result of that search, he found several suits filed by and against the Cutchi Memons wherein they were consistently treated as members of an undivided family governed by the rules applicable to the members of the Hindu joint families and decrees had been passed in those suits on that footing. Even as regards the parties before him, he found that till the filing of the suit, which he was trying, they had regulated their affairs upon the basis that the Hindu law of the joint family applied. On the premise that the Cutchi Memons in Madras had regulated succession and inheritance according to Hindu law, including its principle of devolution of property by survivorship, he held that the Hindu law of coparcenary and joint family applied to the Cutchi Memons settled in MadrasIn the light of this reasoning it would appear from the view taken in S. Hajee Aboo Bucker Saits case against which no other Madras view was shown to us, and especially as that view was supported also by the records of several other cases in that High Court, that Cutchi Memons, who had settled down in Madras, had regulated their affairs, since they had settled down amidst Hindus, according to Hindu law not only in matters of succession and inheritance, but also in matters of their property including the Hindu concept of coparcenary and survivorship