TaxTMI 
TaxTMI 
1986 (1) TMI 98
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....Deceased Kamlashankar Gopalshankar died on October 25, 1964. The deceased had a wife named Mahendraba Kamlashankar Bhachech. The deceased and his wife each possessed certain properties which were of their own individual ownership. They were also jointly possessed of certain properties including a bungalow known as "Dilhar Dwar" situated in the Ellis Bridge area of Ahmedabad. The dispute in the reference out of which this appeal arose was with regard to estate duty leviable on 1/2 share of the wife of the deceased in the said bungalow and the land appertaining thereto. 3. On December 24, 1950, the deceased and his wife had made a joint will in respect of the said bungalow. They also made separate wills with regard to their individually owned properties on the same date with which this appeal is not concerned. 4. The aforesaid bungalow is situated on Plot No. 825 and appertaining to its main structure there are blocks bearing Nos. 48/2 to 48/6. In addition to the blocks, there is a garage, a bathroom and two latrines as also some open compound land appertaining to the main structure. All these properties were disposed of by the joint will executed by the deceased and his wife. The ....
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....tion and that he had filed his wealth-tax returns accordingly. The case of the appellant-accountable person was that since the property in question was settled by the joint will in favour of the grandsons and since duty had been paid on the death of one of the joint executants to the will, duty on the second death of the deceased was not payable on the whole estate by virtue of the provisions of section 29 of the Act. It was further contended that on a true construction of the will, the deceased was neither at the time of his death nor any time during the continuance of the settlement, the full owner of the share of the property of Mahendraba because he had only a life interest therein to receive rents and profits from that share and, therefore, exemption contemplated by section 29 of the Act came into force and the Revenue was not entitled to levy any estate duty with regard to the share of Mahendraba on the death of the deceased, Kamlashankar Gopalshankar. The question, therefore, that arose before the Revenue authorities as well as the High Court was, whether the appellant herein was liable to pay estate duty on 1/2 share which the deceased possessed or on the whole including th....
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....t for, any persons, natural or juridical, by way of succession, whether the settlement took effect before or after the commencement of this, Act; and 'settlement' means any disposition, including a dedication or endowment, whereby property is settled." Section 2(15) states "property' includes 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. Section 2(16) states : "property passing on the death' includes 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'. 11. Section 5 provides for levy of estate duty in the case of every person dying after the commencement of the Act upon the principal value ascertained in the manner stipulated therein. Section 6 states that the property of which the deceased was at the time of his death competent to dispose shall be deemed to pass on ....
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....ce the date of the settlement on the death of one of the parties to the marriage, then the estate duty shall not be payable in respect thereof on the death of the other party to the marriage. This argument was, however, not accepted by the High Court. The High Court observed that looking at the language and spirit of the section, it was clear that the expression "if the estate duty has already been paid... since the date of the settlement" meant "if the estate duty has become payable or has been paid either simultaneously with the creation of the settlement or at any time thereafter". So the High Court emphasised that the dictionary meaning of the word "since" is wide and the fact is that that section comes into operation only on the death of the surviving spouse and the obvious intention of the Legislature in framing the section was to avoid double duty. That intention, the court observed, would be frustrated if the word "since" was interpreted narrowly as contended for by the Revenue. Even if the word "paid" was used in wider context and not in the literal sense, it could not be interpreted as excluding its literal meaning, namely, the actual fact of payment having already been m....
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....lf of the accountable person, it was contended that the will in question was not merely a joint will but a will which was joint as well as mutual containing reciprocal agreements between the parties making the will and, therefore, the deceased, Kamlashankar Gopalshankar, had no power in his life time to revoke or alter the disposition made in the will or to do anything inter vivos after the death of Mahendraba which would have gone against the ultimate disposition indicated in the will. It was submitted that there was an implicit agreement between the deceased and his wife, that on the consideration of each other agreeing to bequeath his or her share in the property in favour of the survivors each undertook not to do anything which would render the subsequent and ultimate bequest in favour of the grandsons ineffective. And if such was the agreement, it must follow that what the deceased received as a legatee was not the full ownership right of disposal but only a limited interest in the share of the wife and this would be so even when both executants arid the survivor were described in the will as "owner". 18. It was submitted that if this construction of the will was accepted, th....
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....ve been referred to hereinbefore, is, whether it was merely a joint will or it was a joint and mutual will or, in other words, there was an agreement implied between the parties, namely, the executants of the will not to revoke the will after the death of one of the executants. It is, therefore, appropriate to refer to the relevant provision of the will. The will was jointly executed by Kamlashankar Gopalshankar and Mahendraba on December 24, 1950, and described as "last joint will and testament". They appointed the accountable person, the appellant herein, as "our executor The will thereafter goes on to say : "We are the joint owners of a bungalow known as 'Dilhar Dwar' situate at Ellis Bridge, Pritam Nagar, bearing Plot No. 825, Bungalow No. 48/A. In addition to the main bungalow, there are certain other blocks bearing Nos. 48/2 to 48/6 and one garage bearing No. 48/1 which is below Block No. 48/2 and a common bathroom and two privies for Blocks Nos. 48/2 to 48/6. We have been in possession of the land, the bungalow and the blocks for many years past. We are in actual occupation of the main bungalow. The other blocks except the garage bearing No. 48/1 and Block No. 48/5....
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....on that fails, the joint will is not revoked even though the subsequent separate will contains revocation clause. Mutual wills.-The term 'mutual wills' is used to describe separate documents of a testamentary character made as the result of an agreement between the parties to create irrevocable interests in favour of ascertainable beneficiaries. The revocable nature of the wills under which the interests are created is fully recognised by the court of probate ; but, in certain circumstances, the court of equity will protect and enforce the interests created by the agreement despite the revocation of the will by one party after the death of the other without having revoked his will. The court of equity will not protect the beneficiary under mutual wills merely because they have been made in almost identical terms. There must be evidence of an agreement to create interests under the mutual wills which are intended to be irrevocable after the death of the first to die. Where there is no such evidence, the fact that the survivor takes an absolute interest is a factor against the implication of such agreement. Where, however, the evidence is clear, as, for example, where it ....
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....his property does not prevent the survivor from revoking the disposition which he has made notwithstanding that he has received benefits out of the estate of the deceased party. Even when there is such an agreement and one party has died after departing from it by revoking or altering the will, the survivor having notice of the breach cannot claim to have the later will set aside since the notice gives him the chance of altering the will as regards his own property, and the death of the deceased party is itself sufficient notice for this purpose. If, however, the deceased has stood by the agreement and not revoked or altered his will, the survivor is bound by it, and although probate will be granted of a later will made by him in breach of the agreement, since a court of probate is only concerned with the last will, the personal representatives of the survivor nevertheless hold his estate in trust to give effect to the provisions of the joint will or mutual wills." 29. Jarman on Wills in 8th edn., at pages 42, states the position of mutual wills thus: "The fact that a husband and wife have simultaneously made mutual wills, giving each to the other a life interest with similar pr....
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....he benefit under the mutual agreements became thereby subject to alternative trusts mentioned in the mutual wills. Reliance was placed on Dufour v. Pereira [1769] 21 ER 332. Reference was made to the observations of Astbury J. in that case [1925] 1 Ch 75, where the learned judge observed that in order to enforce the trust, the judge must be satisfied that there was a term "irrevocable" and, in such circumstances, he was to give effect to the same. But the learned judge was unable, having read the will, to find any mutuality in that form in the will in question. This decision found favour with the Gujarat High Court. In the instant case before us, it has to be noted that the will in question was in one document and furthermore the desire to give properties in specie to the grandsons was mainfest from the entirety of the will. 32. It would be evident from the said will that the joint properties of the deceased husband and the wife were delineated into three parts and each of the parts was bequeathed to the three grandsons in species, i. e., in specific demarcated areas. One other significant fact to be borne in mind, in view of the contentions involved in this appeal, is the fact th....
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....roperty in species, i.e., in specific proportion, was intended to be preserved and enjoyed by the ultimate legatees on the death of the survivor. 38. In Kuppuswami Raja v. Perumal Raja, AIR 1964 Mad 291, it was observed that a joint will is a single testamentary instrument containing the wills of two or more persons and jointly executed by them; while mutual wills are the separate wills of two or more persons which are reciprocal in their provisions and executed in pursuance of the contract or agreement between two or more persons to dispose of their property to each other or to third persons in a particular mode or manner. Mutual wills as distinguished from joint wills are sometimes described as reciprocal wills. In describing a will, the adjective "mutual" or "reciprocal" is used to denote the contractual element which distinguished it from a joint will. It was stated therein by the Division Bench of the Madras High Court that a joint mutual will would become irrevocable on the death of one of the testators if the survivor received benefits under the mutual will. The court emphasised referring to certain decisions of this court that a joint will would become irrevocable on the d....
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....fited from the will of the husband would not destroy her power of revoking her will because her will was quite an independent transaction. The deed of gift could not be taken to have revoked the will of the husband but only the will of the wife. The case was really decided in terms of the facts and circumstances of that case and wordings of the will. 41. In the case of lit re Parsons: Parsons v. Attorney-General [1942] 2 All ER 496, the testatrix gave a legacy of pounds10,000 to her husband absolutely and she also gave the income of her residuary estate on trust for her husband for life and after his death on trust for her son absolutely. The husband disclaimed the legacy by a formal deed of disclaimer and the legacy fell into residue. On the husband's death, the revenue authorities claimed estate duty in respect of the legacy on the ground that although the husband had disclaimed the legacy, be was competent to dispose of it and the liability to duty was not, therefore, excluded by the Finance Act, 1894. It was held that during the period between the death of the testatrix and the date of the disclaimer, the husband was "competent to dispose of" the legacy within the meaning ....
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....kar Gopalshankar, had disposing power over the share of the property of Mahendraba, his wife, acquired by him would depend not on how he has treated it but the true effect of the will. Furthermore, there is no question of contemporaneous conduct because the conduct of one of the parties subsequent to the death of one of the executants long after the execution of the will cannot be described as "contemporaneous conduct". We need not, therefore, detain ourselves on the question of "contemporaneous exposition" by conduct of the parties in the facts of this case. 47. Therefore, the will must be construed in its proper light and there must be definite agreement found from the tenor of the will or aliunde that either of the joint executants would not revoke the will after receiving the benefit under the will. Such definite agreement need not be express, it can be implied. The terms of the will have been set out exhaustively. It was undoubtedly a joint will. The property in question has been described as "our property". The expression "owner" has also been used in the manner indicated in the sentence: "During our lifetime we shall continue to be the joint owners of the land, bungalow and....
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....to be able to be succeeded to by the, ultimate legatees. The dominant intention of the testators is evidenced from the language used. This must be judged on the facts and circumstances of each case. It was not only that on certain basis that the will was made but it was intended to remain intact to be enjoyed by the grandchildren. The fact that both the executants have described themselves "joint owners" is not by itself conclusive on this point nor is the use of the expression "that the survivor shall become the owner" conclusive. On the other hand, the detailed provisions in specie to be effective after the death of the survivor in different portions to be given to the different grandsons without any provision as to what was to happen in the case of diminution of the property within the lifetime of either of the survivors make the will "mutual wills". 50. In our opinion, the dominant intention is clear, i.e., the will may be revoked during the lifetime of both the executants but after the death of one of the executants and after benefit had been received by the survivor, the property in question must remain intact to be enjoyed by the grandchildren by the terms of the will which....