Unconditional cheque payment relates back to delivery date, so estate duty inclusion failed outside the statutory period.

An unconditional cheque issued in discharge of a binding obligation is treated as payment from the date of delivery, not the later date of encashment. Applying that principle, the sums paid by cheques delivered more than six months before death were outside the statutory period for property deemed to pass on death under section 9 of the Estate Duty Act, 1953. The amount was therefore not includible in the deceased's estate, and the assessee succeeded.

---

---

Issues: Whether the sum of Rs. 50,111 paid by cheques issued more than six months before the deceased's death, but encashed within six months of death, was includible in the estate as property deemed to pass on death under section 9 of the Estate Duty Act, 1953.

Analysis: The deceased had made a binding promise to donate the amount for construction of a hospital, and the Government had altered its position by acting on that promise. The cheques were delivered unconditionally and were honoured. In such circumstances, the legal effect of payment by cheque relates back to the date of delivery of the cheques, not the later date of encashment. Since the issue of the cheques was beyond six months before the death, the amount could not be treated as property passing on death within the statutory period.

Conclusion: The amount of Rs. 50,111 was not liable to be included in the estate of the deceased as property deemed to pass on his death under section 9 of the Estate Duty Act, 1953, and the answer was in favour of the assessee.

Ratio Decidendi: Where an unconditional cheque is issued in discharge of a binding obligation and is honoured, payment relates back to the date of delivery of the cheque for determining the legal date of payment.

---