Actionable claim gifts are governed by section 130, and the transfer was completed before estate duty could arise.

A transfer of an actionable claim is governed by section 130 of the Transfer of Property Act, not by Mahomedan law requirements of acceptance and delivery, once the statutory formalities of a signed written instrument are satisfied. Section 129 preserves Mahomedan law only for gifts within Chapter VII, while section 130 in Chapter VIII specifically makes transfers of actionable claims complete and effectual on execution. Reading the donor's letter of 3 May 1955 with the contemporaneous draft letter and affidavit, the Court treated the gift of the sale-proceeds claim as having been made on that date and rejected the objection that part of an actionable claim could not be gifted. The gift was therefore completed more than two years before death and was not liable to estate duty.

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Issues: Whether the gift of Rs. 9,00,000 out of the balance sale proceeds was completed within two years of the donor's death so as to attract estate duty, and whether section 130 of the Transfer of Property Act governed the transfer of the actionable claim in preference to Mahomedan law.

Analysis: Section 122 of the Transfer of Property Act defines a gift as a voluntary transfer accepted by or on behalf of the donee, but section 129 saves Mahomedan law only for gifts falling within Chapter VII. A transfer of an actionable claim is dealt with specifically by section 130 in Chapter VIII, which provides that such transfer, whether with or without consideration, is complete and effectual upon execution of a signed instrument in writing. The Court held that a gift of an actionable claim is governed by section 130 and that the requirements of Mahomedan law as to acceptance and delivery do not control such a transfer once the statutory requirements are satisfied. Reading the donor's letter of 3 May 1955 as a whole, and aided by the contemporaneous draft letter and affidavit, the Court found that the donor had already made the gift by that date and intended the Government to pay Rs. 9,00,000 directly to the donee. The objection that a part of an actionable claim could not be gifted was also rejected.

Conclusion: The gift was completed on 3 May 1955, more than two years before the donor's death, and it was not liable to estate duty.

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