STATE OF KERALA

P. P. HASSAN KOYA

March 19, 1968

fJ. C. SHAH AND G. K. MITTER, JJ.)

Land Acquisition Act (I of 1894)-Compensation-Jenmi holder not objecting to qucntunt of con1Pensation-Principle1 of dtermination.

On the acquisition of several units of land with buildino. the Land Acquisition Officer detmnined the compensation payable to - tho persons interested at the rate of Rs. 10,000 per acre for the land, and for houses standing thereon "at their break up value".

The respondent, who held Kanam rights in one of tho units of the land and te> whom the building standing thereon belonged, raised objections to the quantum of the oom pensation. The Receiver of the Estate holding Jenmi rights in the land did not object. The trial co.urt disapproved the method adopted by the Land Acquisition Officer for determining the compensation and held that each unit had to be valued as a com!""ite property. He determined the market value by capitalising the net rent received from the unit and taking into consideration tho return fcom gilt-<ldged securities at 3!% awarded compensation fdr the respondent's unit at 35 times the net annual rental. The High Court upheld the order of the trial court but reduced the multiple to 33-1/3. Dismissing the appeal, this Court:

HELD : By the compulsory acquisition of land. all outstanding inter~ ests not vested in the Government are extinguished. It is. therefore. the duty of the Land Acquisition Officer to determine in the first instance compensation v.rhich is to be paid for extinction of those interests, and then to apportion the compensation among the persons known or bc1ieved to be interested in the land. The rule could not be departed from merely because the Receiver in whom the Je111ni rights \ve'rc vested failed to raise an objection to the quantum of compensation awarded to him. The respondent being a Kane<mdar has an interest in the land and was entitled to appaintment of compensation even in respect of the land. f461 H-462 Bl

The method adopted by the Land Acquisition Officer for determining compensation payable for extinction of the interest of the holder of the land and of the buildings separately was unwananted. In determining compensation payable in respect of land with buildings compensation c.an not be determined by ascertaining the value of the land and the "break up value• of the building separately. The land and the building constitute one unit, and the value of the entire unit must be determined with all its advantages and its potentialities. When the property sold is land with building, it is often difficult to secure reliable evidence of instances of sale. of similar lands with buildings proximate in time to the date of the noti fication under s. 4.

Therefore the method which is generally resorted to in dcto:rmining the value of the land 'vith buildings especially thOCie used for business purposes, is the method of capitalization of return actually received or which might reasonably be received from the land and the buildings. [462 C; 462 H-463 CJ

Rr.ja Vyricherla Narayana Gajapatira}11 v, The Revenue Di1isior:al Officer, Vitagapatnam, L.R, 66 I.A. 104, referred to.

L7 Sup.C.J/68-5

SUPREME COURT REPORTS

[1968] 3 S CR.

It cannot be laid down as a general hlle applicable to all situations and circumstances that a multiple approximately equal to the return fro1n gilt-edged securities prevail, ng at the relevant time forms an adequate basis for finding out the market value of the land.

But in this case the trial court and the High Court were of the view that a multiple based on a return from the gilt-edged securities was the appropriate multiple for determining the V<tlue of the property under acquisition. and no ground has been suggesNd fdr not accepting the basis and the rate of capitalization adopted by them. [463 E-F]

CIVIL APPELLATE JURISDICTION : Civil Appeal No, 588 of 1965.

Appeal from the judgment and decree dated June 21, 1962 of the Kerala High Court in Appeal Suit No. 602 of 1958.

B. R. L. Iyengar and M. R. K. Pillai, for the appellant.

5. V. Gupte, Vishnu 8. Saharya, Yougindra Khushala11i, Sardar Baizadur Saharya and T. L. Viswanatha Iyer, for the respondent.

The Judgment of the Court was delivered by Shah, J. On December 8, 1954, the Government of Madras issued a notification under s. 4 of the Land Acquisition Act notifying for acquisition for a public purpose, viz. widening the Madras-Calicut Road at Palyam, seven units of land with buildings. One of the units was T.S. No. 298/2 admeasuring 3911 sq. ft. together with a building standing thereon used for business purposes. No!ification under s. 6 of the Act was issued on December 12, 1954, and possession of the land was taken soon thereafter.

The Receiver of Patinhare Kovilakam Estate held T.S. No. 298/2 in Jenmi right.

The respondent in this appeal held in that land the rights of a Kanamdar under a deed dated March 27, 1954.

The buildings constructed on the land belonged to the respondent and were let out to tenants at an aggregate monthly rent of Rs. 332.50.

The Land Acquisition Officer determined the compensation payable to the persons interested at the rate of Rs. 10,000/- per acre for the land, and for the houses standing thereon "at their break-up value". In a reference at the instance of the respondent under s. 18 of the Land Acquisition Act (in which the Receiver of Patinhare Kovilakam Estate did not join) the Subordinate Judge, Kozhikode, was of the view that the method adopted by the Land Acquisition Officer for determining compensation by separately valuing the lands as garden lands and the break-up value of the houses was "manifestly unjust and improper". In his view, each unit had tt be valued as a composite property. He then procee.:!ed to adopt the method of determining the market value by capitalizing the net rent received from the unit, and taking into consideration the retnrn from gilt-edged

securities at 3-112 per cent. at the relevant date, the learned Judge awarded compensation for the unit in which the respondent was interested at 35 times the net annual rental.

Against the award of the Subordinate Judge, the State of Kerala appealed to the High Court of Kerala at Ernakulam. The High Court determined compensation by multiplying e net ent

33-1/3 times that being in their view the true multiple denved from the return based on the current return from gilt-edged securities. Against the award made by the High Court, this appeal has been preferred by the State of Kerala with certificate under Art. 133(l)(a) of the Constitution.

Two questions were urged in support of the appeal :

(1) that the Receiver having accepted the award of the Land Acquisition Officer, the respondent could Claim compensation only for the right which he had in the land and the buildings and the method adopted by the Land Acquisition Officer was in the circumstances the only appropriate method; and

(2) that the rate of capitalization was unduly high.

In our judgment, there is no force in either of the contentions.

When land-which expression includes by s. 3(a) of the Act benefits to arise out of land and things attached to the earth or fastened to anything attached to the earth-is notified for acquisition, it is notified as a single unit whatever may be the .interests which the owners thereof may have therein. The purpose of acquisition is to acquire all interests which clog the right of the Government to fuU ownership of the land, i.e. when land is notified for acquisition, the Government expresses its desire to acquire all outstanding interest collectively.

That is clear from the scheme of the und Acquisition Act. Under s. 11 of the Land Acquisition Act, the Collector is required to enquire into the objections raised by the persons interested in the land anp into the value of the land at the date of the publication of the notification under s. 4, subs. (1), and into the respective interests of the persons claiming the compensation, and then to make an award determining-(i) The true area of the land; (ii) the compensation which in his opinion should be allowed for the land; and (iii) the apportionment of the compensation among all the persons known or believed t? be interested in the .land, whether or not they have respectively appeared before him. By the compulsory acquisition of land, all outstanding interests not vested in the Government are extinguished. It is therefore the duty of the Land Acquisition Officer . to determine in the first instance compensation which is to be paid for extinction of those interests, and then to apportion the compensation among the persons known or believed to be interest-

462 StJPUJOI. cooaT uroan

(1968) 3 S.C.R.

eel in the land. The Subordioate Judge had also, when a refer- A encc was made to him, to assess the value of the unit and then to apportion the compensation amoag pcnons entitled tba'eeo.

The rule could not be departed from merely because the ReceiYer in whom the lenmi rights in T.S. No. 298/2 were veatcd failed to. raise an objection to the quantum of compcnsatioll awarded

to him. Again the respondent was the holder of kanam rights in B the land, and the bui!dingi; on the land belonged to him. The respondent being Kanamdar, ho had an interest in T.S. No. 298/ 2, and as Kanamdar the respondent was .entitled to apportionment of compensation even in respect of the land.

We agree with the trial coun and the High Court that the method adopted by the- Land Acquisition Officer for determining C compensation payable for extinction of the interest of the holder of 'the land and the buildings •rate wu unwarranted. In determining compensation payable m respect of land with buildings, compensation cannot be determined by ascertaining the value of the land and the "break-up value" of the building separately.

The land and the building constitute one unit, .and the value of D the entire unit must be determined with all its advantages and its potentialities. Under s. 23 of the Land Acquisition Act compensation has to be determined by taking into consideration the market value of the land at the date of the publication of the notifi• cation under s. 4(1) and the damage, if any, sustained by the persons interested under any of the heads mentioned in secondly to sixthly in s. 23(1) of the Land Acquisition Act.

As observed by the Judicial Committee in Raia Yyriclier/a Narayana GujapatirajtJ, v. The Revenue Divisional Officer, Vizagapatnam(') at p. 114:

"There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. The value of any such article at any particular time can readily be ascertained by the prices being obtained for similar articles in the market. In the case of land, its value in general can also be measured by a consideration of the prices that have been obtained in the past for land of similar quality and in similar position, and this is what must .be meant in general by "the market Vall, IC" in s. 23."

An instance of a sale which is proximate in time to the date of the notification under s. 4(1) of the Land Acquisition Act in res- H peel of land similarly situate and with similar advantages and which is proved to be a transaction between a willing vendor and

(!) L.R. 66 I.A. 1~.

A a willing purchaser would . form a reliable guide for determining the market value. The value which a willing vendor might reasoaably expect to receive from a willing purchaser in respect of a house generally depends upon a yariety of circumstances including the nature of the consll'llction; 'its age, situation, .the amenities available, its special advantages and a tiost of other circumstances. When the property sold is land with building, it is tiften difficult to secure reliable evidence of instances of sale of B

siniilar lands with buildings proximate in time to the date of the notification under s. 4. Therefore the method which is generally resorted to in detenniliing the value of the lan<, i with buildings especially those used for biisiness purposes, is the method of capitalization of return actually received or which might rea5onably be received from the land and the buildings.

That method was rightly adopted by the trial court and the High Court. The unit under acquisition is used for business purposes and has a prominent situation in the town of Calicut.

~ There was clear evidence about the rental of the building, . and D the trial court proceeded to capitalize the net annual rental, having regard to the rate of return of 3t per cent from gilt-edged securities, by multiplying it by 35 timCll. The High Court has slightly reduced the multiple.

It cannot be laid down as a general rule applicable to all situations and circumstances that a multiple approximately equal E to the return from gilt-edged securities prevailing at the relevant time forms an adequate basis for finding out the market value of the land.

But in this case the trial court and the High Court were of the view that a multiple based on a return from the giltedged securities was the aJipropriate multiple for determining the value of the property under acquisition, and no ground has been F suggested for not accepting the basis and the rate of capitalization adopted by them. It is relevant to note that the same multiple which has been adopted in other cases relating to lands and buildings acquired under the same notification under which the

land of the respondent was acquired has not been challenged by the State.

G The appeal therefore fails and is dismissed with costs.

Y.P.

Appeal dJsmiS#tl.

STATE OF KERALA

P. P. HASSAN KOYA

March 19, 1968

fJ. C. SHAH

G. K. MITTER, JJ.

Land Acquisition Act

s. 4

CIVIL APPELLATE JURISDICTION

Kerala High Court

B. R. L. Iyengar

M. R. K. Pillai

V. Gupte

Saharya

Yougindra Khushala11i

Sardar Baizadur Saharya

T. L. Viswanatha Iyer

Shah

Government of Madras

s. 4

s. 6

December 12, 1954

Patinhare Kovilakam Estate

Jenmi

March 27, 1954

s. 18

Subordinate Judge, Kozhikode

Kerala

High Court of Kerala at Ernakulam

State of Kerala

Art. 133(l)(a)

s. 3(a)

s. 11

s. 4

s. 23

s. 4(1)

s. 23(1)

s. 23

s. 4(1)

L.R. 66 I.A. 1

s. 4

Calicut


G. NARAYANA RAJU

G. CHAMARAJU & OTHERS

March 19, 1968

[J. C. SHAH, V. !lAMASWAMI AND G. K. MITTER, JJ.)

Hindu joint fami/y-Hotch Potch-Self acquisition when acquires characteristics of joint family property-concurrent finding that business is separate--SnprenJe Court lvill not interfere under Art. 133.

There is no presumption under Hindu lw that a business standing in the name of any member of the joint family is a joint family business everi if that member is the manager of the joint family.

Unless it could be shown that the business in the hands of the coparcener grew up with the assistance of the joint family property or joint family funds or that the earnings of the business were blended with the joint family estate, the business remains free and separate. [466 F-Hl

Bhuru Mal v. Jagannath. A.I.R. 1943 P.C. 40, Pearey Lal v. Nanak Chand, A.I.R. 19'48 P.C. 108, Chattanatha Karayalar v. Ramachandra Iyer, A.I.R. 1955 S.C. 799, referred to.

The separate property of a Hindu coparcener ceases to be his separate property and acquires the characteristics of his joint family or ancestral property, not by mere act of physical mixing with . his joint family or ancestral property but by his own volition and intention, by his waiving or surrendering his special right in it as separat•e property, Mei-e recitals in deeds dealing w:th self acquisitions as ancestral joint family property is not by itself u.rfficient; but it must be established that there \Vas a clear intention on the part of the coparcener to waive his separate property.

[470 B-CJ

lfurourshad v. S!ieo Dyal, 3 I.A. 259. Lal Bahadur v. Kanhaiya Lal, 34 l:A. 65. Leh Mddun Go, al v. Khikhinda Kaer, 18 I.A. 9, Naina Pillai v. Daiyanai Ammal, A.J.R. 1936 Mad. 177, referred to.

\\ihete there is a concurrnt find'ng of both the lower courts that the bur, iness is a scp:irate business and it is neithr a ?oint family business nor

reated as joint family business, it is not open to further scrutiny by ths F Court under Art. 133 of the Constitution. [467 A-Bl

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 613 of 1965.

Appeal from the judgment and decree dated March 25, 1960 of the Mysore High Court in Regular Appeal No. 155 of 1953.

V. Krishnamurthy and R. Gopalakrishnan, for the appellant.

H. R. Gokhale, B. Subbiah and R. Thiagarajan, for respondents Nos. 2 and 4.

The Judgment of the Court was delivered by Ramaswami, J". The plaintiff G. Narayana Raju filed O.S. 34 of 1951-52 in the Court of District Judge, Mysore for partition and separate possession of suit properties mentioned in the various schedules of the plaint.

The first defendant is the brother

NARAYANA RA.TU v. CHAMARA.ru' (Ramaswami, J.) 465,,

A: of the plaintiff. The second defendant is the widow of Mami Raju, tho eldest brother of the plaintiff. The third defc; ndant. is the legal representative of the plaintiff's mother: She is now. the a_Ppellant having been brought bn record as the legal representative of the deceased plaintiff. The case of the original plaintiff was that he, the first defendant and Muniswamj Raju (husband of the second defendant) were the sons. of oneGopala Raju.and were all members of the joint faniily.

Gopalaraju died in May B

1931 and after. his death the plaintiff and his brothers continued to be mel!lbers of the joint faniily. The joint status of the faniily was severed by the issue of a registered notice by the first defendant to the' pJ.aintiff in July 1951. An ancestral house in Nazarbad belonging to the family was acquired 'by the , City Improvement Trust Board in or about the year 1909 .. Out of the compensation paid for that house and supplemented by the earnings of the

members of the joint family, the house item , No. 1 of Schedule 'A' to th, e plaint was pµrchase!l by Gopalaraju in or about the year 1910. Subsequently item No. 2 of Schedule 'A'. was also purchased by Go11alaraju from the income of item No. 1 suppl1>- mented by the earr1ings_ of the. members of the family. All the other items of properties mentioned in Schedule 'A' and other Schedules attached to the plaint were acquired out of the income from items 1 and 2 of Schedule 'A'. It was further , alleged that the business'known as "Arnbika Stores~ was also the joint family business and all the properties mentioned in the Schedules except items 1 and 2 of Schedule 'A' were acquired out of the incorneof the members of the family including the iricome fn;)m the b:.loine:s of Ambika Stores. The plaintiff accordingly claimed that he and the first defendant woul:I each be entitled to get 5/14ts share and the second and third defendants would 'each be ent'tl<Y.! to get 2/14tl1s share. In the alternative the plaintiff pleaded that if for any reason the Court held" that the properties stand in the name o~ Muniswami Raju and were 'not acquired with the aid of the joint family nucleus, he and the second 4efendant were entitled to equal shares as co-owners of the joint family business.

The suit was mainly contested by the second defendant who asserted that the properties mentioned in all the Schedules of the plaint were self-acquisitions of Mnniswami Raju and constituted his •eparate propertis, It was alleged that Muniswami Raju was the only earning member of the family at the time of the acquisition of items 1and 2 of Schedule 'A' properties and the plaintiff and the fi'8t defendant were employed in petty jobs in Wesley Press.

Munisami Raju later on employed the plaintiff in his shop as a salaried servant and the latter had no proprietary right in the business of Ambika Stores. After consideration of the oral and documentary evidence the District Judge held that the plaintiff, first defendant and Muniswami Raju were not divided and that the only property which was divisible, was item No. 1 of Schedule

466 SUPIU!MB cOVlT llllPO&Ts

(1968) 3.s.c.R.

'A' and there was not sufficient ancestral nucleus for acquisition A of the. other properties and that all properties eJtcept item No. 1 of Schedule 'A' were the self acquisitions of Muniswami Raju, that Muniswlimi Raju never blended his properties with that of the joint family' that the plaintiff was only an employee under . Muniswami Raju and thetefore he was not entitled to the alternative relief claimed by him. Accordingly, the District Judge grant- B ed a preliminary decree holding that the plaintiff was entitled to 2/7ths share in item No. 1 of Schedule 'A'. 'Th: plaintiff took the matter in appeal to the Mysore High Court. By its judgment dated March 25, 1960 the High Court affirmed the decree of the trial court with the modification that besides item No. 1 of Schedule 'A' item No. 2 also should be held to be joint family property c and the plaintiff was entitled to partition of his share in this item also. The High Court cancelled the direction of the District. Judge that the plaintiff should account for the moneys and properties of Muniswami Raju in his hands before he is given possession of his share.

This appeal is brought by certificate on behalf of the plaintiff D from the judgment of the Mysore High Court dated March 25, 1960 in R.A. No. 155 of 1953.

The first question to be considered in this appeal if whether the business of Atnbika Stores was really the business of the joint family and whether the plaintiff was entitled to a partition of his share in the assets of that . business. It was contended on behalf of the appellant that the business of Atnbika Stores grew out of a nucleus of the joint family funds or at least by the efforts of the members of the joint family including the appellant. The contention of the appellant has been negatived by both the lower courts

and there is a concurrent finding that the Atnbika Stores was the separate business of Muniswami Raju and it was neither the joint J family business nor treated as joint family business. It is wellesta]>lished that there is no presumption under Hindu law that a business standing in the name of any member of the joint family is a joirit family business even if that member is the manager of the joint \family. Unless it could be shown that the business in the hands of the coparcener grew up with the assistance of the G. joint family property or joint family funds or that the earnings of the business were blended with the joint family estate, the business remains free and separate. The question therefore whether the business was begun or carried on with the assistance of joint family property or joint family funds or as a family business is a question of fact.-{See the decisions of the Judicial Committee in

Bhuru Mal V; Jagannath( 1 ) and in Pearey Lal v. Nanak Chand(') lllld of .this Court in Chattanatha Karayalar v. Ramachandra

(I) A.I.R. 19431".C. 40. (ll A.J.R. 19481".C. 108.

Iyer}('). In the present cas(I there is a concurrent finding of both the lower courts that the business of Ambika Stores was a separate business of Muniswami Raju and it was neither a joint family business nor treated as joint family business. The concurrent finding ot the lower courts on this issue is upon a finding of fact and following the usual practice of this Court, it is not now open to further scrutiny by thi~ Court under Art. 133 of the Constitution.

It was, however, contended on behalf of the appellant that the find, ing of the lower .. courts is vitiated in law because of the circumstance that they have not taken into accoUJit three important documents, Ex. D, Ex. E and Ex. DDD. We are unable to accept this argument as correct. It is manifest on a pcr.:sal of tile judgment of the High Court that all the documents have been examined regarding the issue whether the business of Ambika Stores was a joint family business or whether it was a separate business of Muniswami Raju. As regards Ex. D, th" High Court has, after e11:amining the evidence adduced, remarked that the mere fact that item No. 2 of Schedule 'A' was given as a security by Muniswami Raju did not result in any detriment to the joint family property and it cannot therefore be held that the business of Ambika Stores grew out of the joint family funds or with the aid of the joint family funds. . On behalf of the appellant reliance was placed on the recitals in Ex. E, a deed of mortgage dated July 26, 1928 executed by Gopalaraju, Muniswamiraju and the appellant in favour of the Mysore Bank. The property that had been mortgaged under this document is item No. 2 of Schedule 'A'. The recital is that the borrowing from the Bank was for the business and trade of the executants and for the benefit and use of their family. There is also a recital in an earlier portion of thedocument that the business was being carried on for the benefit of the family, but it is not quite clear as to whether this related to the business carried on by Narayana Raju or whether it was intended to relate to some business carried on by all the three executants. It is possible that the appellant had other business of his own carried on on his own account at that time and it cannot be assumed that the borrowing under Ex. E must have been for the purpose of Ambika Stores. It should be noticed that Muniswami Raju has been described in the document as the proprietor of Ambika Stores which description is not consistent with the contention of the appellant that the business was a joint family business. The High Court has, in this connection, referred to Ex. I an application dated February 14, 1929 by the appellant to the City Co-operative Bank, Mysore wherein the appellant has said that he was getting a decent earning by doing out-of-door commercial bu.~'ness with Ambika Stores. There is also the recital in Ex. I that Muniswami Raju was the proprietor of Ambika Stores. Having regard to this recital in Ex. I i• is not

en A.I.R.1953 !f.C. 799.

i •

SUPREME COUJ.T REPORTS

(1968] 3 S.C.R.

.unlikely that the appellant had some business of his own at the material time and it cannot be assumed that borrowing under Ex.

E, was for the purpose of Ambika Stores business only. The High Court has also dealt with the effect of Ex. DDD, mortgage d~ produced .on behalf of the appellant. It is true that in this document the appellant and Muniswami Raju have been described as proprietors of Ambika Stores. The finding of the High Court is that this recital was made in the document for the purposes of borrowing from the Bank. Reference was made in this context to a J.etter dated May 5, 1931, Ex. 75 written by-Muniswami Raju as proprietor of Ambika Stores to the Bank of Mysore. In this lett:Gr, he has requested the Bank to take note of the fact that he has! authorised the appellant to accept drafts, and sign letters etc. on behalf of the firm. There is another J.etter, Ex. 76, dated April 14, 1934 written by Muniswami Raju to the Bank of Mysore wherein Muniswami Raju has been described as the proprietor of Ambika Stores and there ls an intimation to the Bank that .the appellant Narayana Raju was authorised to sign for the firm.

In the context and background of these circumstances it is evident that though both the appellant and Muniswami Raju were described as proprietors of Ambika Stores the description was only for the purpose of borrowing money from the Bank, as contended for by the respondents. In this connection the High Court has also taken into account Ex. 7 5 (b), a Jetter written by Muniswami Raju. In this letter Muniswami Raju has described himself as the proprietor of Ambika sores and has instructed the Bank that he. has cancelled the authority given to the appellant to operate on his Current Account. with the Bank.

It is therefore not possible for us to accept the contention of the appellant that the finding -0f •he High Court' that the bus'ness of Ambilca Stores was the exclusive business of Muniswaml Raju is vitiated in law.

On the other hand, it was contended on behalf of the respondents that the finding of the High Court is supported by proper evidence. The business of Ambika Stores was started by Muniswamiraju as the proprietor thereof at a time when Muniswamiraju himself was comparatively well-off as a result of bis partnership with Krishnaswamy Chetty & Co. In the year 1925 the partnership of Krishnaswailly Chetty & Co. was dissolved by a document Ex. D.

The enire business with all the assets ad liabilities was taken over by Muniswami Raju while the widow and son of Krishnaswari1y Chetty were given a house estimated by the appellant himself at Rs. 3,000/- and furniture worth Rs. 400/-. Mliniswami Raju changed the name of the shop after taking it over into Ambika Stores and continued the business as is apparent from Bxs.

XVTII, XXVI and XXVI(A). There is also evidence that at the, time when Ambika Stores was started other members of the family were not in a financia:I llosition to make any oontributioµ to purchase such a business. The appellant joined Wesley Press in 1912 on a salary of Rs. 8 or Rs. 9 p.m. and he was drawing Rs. 27 p.m. in 1927 when he resigned from the Press. The first defendant joined Wesle Press in 1910 on a salary of Rs. 10 p.m. and he was continuing to work there till the institution of the present suit. The income of the property item No. 2 of Schedule 'A' was Rs. 15 p.m. and the income from pounding rice for which there is no satisfactory evidi:nce as also negligible. Therefore, the earnings of the members of the family other than Muniswami Raju were hardly sufficiently to maintain the family at the time when the business of Ambika Stores was started. The High Court has found that the family did not have sufficient nucleus and that Muniswami Raju was not a partner of Krishnaswamy Chetty & Co. on behalf of the family but that he was a partner in his own right. The High Court has observed that there is no evidence to show that the family supplied the money or that the family had enough means or that Muniswami Raju was representing the family when he started the business of Ambika Stores. As we have already said, the finding of the High Court and of the District Judge is a concurrent finding on a question of fact and Counsel on behalf of the appellant ha~ been unable to make good his argument that the finding is vitiated in law on any account.

We pass on to consider the alternative argument put forward on behalf of the appellant, namely, that even if the business of Ambika Stores was started. as a separate business of Muniswami Raju, it became converted at a subsequent stage into joint family business. It was argued on behalf of the appellant that the business of Ambika Stores was thrown by Muniswami Raju into the common stock with the intention of abandoning all separate cla'ms to it and therefore the business of Ambika Stores lost its character of a separate property and was impressed with the character of joint family property. It is a well-established doctrine of Hindu law that property which was originally self-acquired may become joint property if it has been voluntarily thrown by the coparcener into the joint stock with the intention of abandoning all separate claims upon it. The doctrine has been repeatedly recognized by the Judicial Committee [See Hurpurshad v. Sheo Dyal(') and Lal Bahadur v. Kanhaiya Lall (2). But the question whether the coparcener has done so or not is entirely a question of fact to be decided in the light of all the circumstances of the case. It must be established that there was a clear intention on the part of the coparcener to waive his separate rights and such an intention will not be inferred merely from acts which may have been done from kindness or affection [See the decision in Lala Muddun Gopa/ v.

Kltikhinda Koer]( 3 ). For instance, in Naina Pillai v. Daiyanai

fl) 3 I.A. 259.

(2) 34 I.A. 65. <3l 18 l.A. 9.

470 SUPREMB COURT UJOllTS

(19611] 3 S.CJL

mmal,{ 1 J where in a series of documents, self-ae<Juired property Wl!S _described and dealt with as ancestral joint family property, it Wl!S held by the Madras High Court that the mere dealing with self acquisitions as joint family property was not sufficient but an intention .of the coparcener must be shown to waive liis claims with full knowledge of his right to it as his separate property. .The ini; portant. point to keep in mind is that the separate property of a Hindu coparcener ceases to be his separate property and acqu~

the characteristics of his .joint family or ancestral property, not by mere act of physical mixing with his joint family or aricestral property, but by his own volition and intention, by his waiving or surrendering his special right in it as separate property. A man's intention can be discovered only from his words or from his .acts and conduct. When his intention with regard to his sepa• rate property is not expressed in words, we must seek for it in his acts and conduct. But it is the intention that we must .seek in every case, the acts and conduct being no more than evidence of the intention. In the present case, the High Court has examined the evidence adduced by the parties and has reached the conclu sion that there was no intention on the part of Muniswami Raju to throw the separate business of Ambika Stores into the common stock, nor was it his intention to treat it as a joint family business. Counsel on behalf of the appellant referred to the recital in Ex. E describing the properties being those of the executants and that the borrowings was for trade and benefit of the family

and it was argued that there was a clear intention on the part of J: Muniswami Raju to treat the business as joint family business.

We have already referred to this document and indicated that the recitals were probably made for the purpose of securing a loan and cannot be construed as consent on the part of the members of the joint family to treat the business as the joint family business. Further, there is ample evidence to show that in all succeeding yean before his death Muniswami Raju had always described himself and conducted himself as the sole proprietor of Ambika Stores.

Such an attitude on the part of Muniswami Raju was not consistent with any intention on his part either to abandon his exclusive right to the business or to allow the business to be treated as joint family business. Exhibits XXXV to XL VT are all documents ex&- cuted by third parties in favour of Muniswami Raju in which Muniswami Raju has been. described as the oroprietor of Amblka Stores. Exhi1Jits ill, XXill, XXJV, 51, 52, 56, 58, ZZ. AAA series and BBB are all communications addressed by institutions likeBanks etc., in which Muniswami Raju has been described as the proprietor of Ambika Stores. It may be stated that the appellant himself has admitted in his evidence that he was not drawing any moneys from the business of Ambika Stores and that whenever he wanted any_money, he would ask Mun1•·dllll Raj11 and obtain

(I) A.l.R.1936 Mad. 177.

NARAYANA RA.JU v. CllAMARAJU (Ramaswaml, /.) 471

A it from him. If really the appellant had considered himself to be a co-oWner equally with Muniswami Raju, such conduct on his part ill not explicable. It was urged on behalf of. the appellant that there was no documentary evidence to show that the appel Jant WIS being paid any saJanr by Muniswami Raju, and that prior to Mlllliswaml Raju's death, it was the appellant who was in the B entire management of Amblka Stores when Muniswami Raju was ill and after the death of Muniswami Raju also it was the appeJ.. !ant who had been in mt. AJl the books C?f account and other documents pertaining to the business of Amblka Stores had been admittedly entrusted to the appellant. But it is not explained Oil behalf of the appellant as to why the documents were not C produced on his behalf tp disprove the case of the respondenb that he was a salaried servant. It is therefore not unreasonable to draw an inference from the conduct of the appellant that th!l Account Books0 .if produced in court, would not have supported his case.

We accordingly reject the argument of the appellant that the busi ness of Ambika Stores became converted into joint family business at any subsequent stage by the conduct of M uniswami Raju in D throwing the business into the common stock or in blendinl! theearnings of the business with the joint family income.

It was finally contended on behalf of the appellant that, in any event, the appellant became a c<>-owner of the business along with Muniswami Raju by reason of contribution of his own labour towards the development of the business. In our opinion, there is I: no substance in this argument. It is evident that the appellant gave up his job in Wesley Press and joined An)bika Stores about 9 or 10 months after it was started by Muniswami Raju. The appellant does not state in his evidence that he was a co-owner when he. joined Amblka Stores. On the other hand, in Ex. 68 which is an application dated March 20, 1928 by the appellant r to the City Co-operative Bank, the appellant has described him self as a clerk in Amblka Stores and Muniswami Raju has been described as his proprietor. There is no satisfactory evidence on behalf of the appellant to show as to when and under which cir cumstances his status of a clerk changed to that of a c<>-owner. In another application, Ex. 'I.which is of the year 1929 the appellant has dc.9cribed Muniswami Raju as the proprietor of Ambika Stores C and he has. described himself as doing out-door commercial busi with bika Stores. Again, in Ex. C which is a loan appli catiOll made m 1932 by both the brothers, Muniswami Raju has been dcacn'bed as the proprietor of Amblka Stores while the appellut ha,, been dc.9cribed . as a General Merchant of Mysore.

Reference was made on behalf of the appellant io recitals in. Ex. l1I Dl>:P, a mortgage deed dated June 20, 1934 in which Muniswami Raju ll!ld the appellant have been descn'bed as proprietors of Ambit& Stores. We have already dealt with this document and for .the reasons already mentioned we hold that the description of the

SUPREME COURT REPORTS [1968 J 3 S.C.ll.

executants was only given for the purpose of borrowing from the Bank and it had not the legal effect of making the appellant a co-owner of the partnership business .. The.re is no vidence of any assenion by the appellant during Muniswami Raju's life-time of his being a co-owner of the partnership business, nor is there any evidence of recognition by Muniswami Raju of any such right of the appellant. On the other hand, there is sufficient evidence to show that whatever the appellant did in connection with the business was only done with the au¢.ority conferred by Muniswami Raju. In our opinion the High Court has rightly rejected the claim of the appellant that he was a co-owner of the pannership business; For the reasons expressed we hold that this appeal has no merit and it must be dismissed with costs.

R.K.P.S.

Appeal dismissed.

G. NARAYANA RAJU

G. CHAMARAJU & OTHERS

March 19, 1968

C. SHAH

G. K. MITTER, JJ.

Art. 133

Art. 133

Mysore High Court

V. Krishnamurthy

R. Gopalakrishnan

H. R. Gokhale

B. Subbiah

R. Thiagarajan

Ramaswami

G. Narayana Raju

S. 34

Court of District Judge, Mysore

Mami Raju

Muniswamj Raju

oneGopala Raju.and

Gopalaraju

Nazarbad

Ambika Stores

Mnniswami Raju

Muniswami Raju

Wesley Press

Munisami Raju

Muniswami Raju

Schedule

466

Muniswlimi Raju

March 25, 1960

Atnbika Stores

Art. 133

July 26, 1928

Muniswamiraju

Mysore Bank

Narayana Raju

February 14, 1929

City Co-operative Bank, Mysore

May 5, 1931

Bank of Mysore

April 14, 1934

Narayana Raju

Muniswami Raju

Ambilca Stores

Muniswaml Raju

Krishnaswamy Chetty & Co.

Krishnaswailly Chetty & Co.

Krishnaswari1y Chetty

Mliniswami Raju

Wesle Press

Madras High Court

NARAYANA RA.JU

Mlllliswaml Raju

Amblka Stores

M uniswami Raju

An)bika Stores

March 20, 1928

City Co-operative Bank

June 20, 1934

SUPREME COURT REPORTS [1968 J 3 S.C.ll


GORANTLA THATAIAH v.

THOTAKURA VENKATA SUBBAJAH & ORS.

March 19, 1968

[1. C. SHAH, V. RAMASWAMI AND G. K. MITTER, 1J.]

Will-Propounder taking prominent part in xecutlon of and receiving benefif under-Principles regarding scrutiny of evidence of execution .and sound disposing state of mind of testator.

One V lost his father when he was only 10 years old and thereafter lived al<!ng with his mother; i• the hous., of the first defendant who was his maternal uncle.

The first defendant had considerable influence over V as he was slow witted and below the average level of intelligence and understanding. V died when he was 24 years old. A few days before his death he executed a will by which he bequeathed his entire property

to the first defendant absolutely with a direction that his mother should be maintained, and that, even if his mother lived separately from the first defendant, she was to have only a life. interest in certain items which were also to be taken absolutely by the first defendant after her death. At the time of the execution of the will V was physically in a weak condition.

The first defendant took a prominent part in summonin~ the attesting witnesses and the scribe and in procuring writing materials for the execution Of the will. Evidence was given on behalf the first defendant tliat though V was delirious on Ibo day previous to the execution of the will and also subsequent to that date, V was in a pormal condition on the date> of the execution of the will.

On the question of the validity of ihe will,

HELD : The will was not executed in a sound disposing state of mind and was therefore not legally valid. (480 A-BJ In a case in which a will is prepared. under circum'Stano-..s which raise the suspicion of the court that it does not express the mind of the .testatOr it is for those who propound the will -to remove that suspicion. What are suspicious circumstances mint be judged on the facts and circumstances of each particular case. If, however, the propounder takes a prominent part in the execution of the wjll which eonfcrs substantial benefits on him that itself is a suspicious circumstance attending the execution of the will and in appreciating the evidence in such a case the coun should prooeed in a vigilant and cautious manner. (477 H; 478 A-BJ

Ba"Y v. But/in, (1838) 2 Moo. P.C. 480, 482, Fulton v. Andrew, (187S) L.R. 7 H.L. 448, Ty"ell v. Painton, (1894) P. 151, 157, 159 and Surat Kumari Bibi v. Sakhi Chand & Ors., 56 I.A. 62, applied.

CML APPELLATE JURISDICTION : Civil Appeal No. 43'1 of 1965.

Appeal from the judgment and decree dated August 22, J 963 of the Andhra Pradesh High Court in Appeal No. 554 of 1959.

ff H. R. Gokhale and K. R. Chaudhuri, for the appellant.

D. Narsa Raju, S. T. Desai, A. Vedavalli and A. V. Rangan for the respondents.

.474 $UPlll!MB OOtlaT UPOl.TS

(1968) 3 S.c.R.

The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by certificate on be- .half of the plaintiff from the judgment of the High Court of Andhra .Pradesh in Appeal Suit No. 554 of 1959 dated August 22, 1963.

One Gorantla Tathiah, as the sole plaintiff, filed O.S. No. 2 of 1957 in the Court of the Subordinate Judge, Bapatla for pos- B session of certain properties which had been left by Gorantla Veeriah when he died issueless on June 24, 1939. Originall)I. there were ten defendants in the suit. Defendant no. 1 is the maternal uncle of V eeriah and Defendant no. 2 and Defendant .no. 3 arc the sons of Defendant no. 1. Defendants nos. 4 to 8 were the alienees froin Defendant no. l's family. Defendants nos. 7, 9 and 10 did not contest the suit. Defendant no. 8 died in the course of the suit and his legal representatives were added as De fendants 11 to 14. Defendants l to 3 contested the suit on the , ground that Defendant no. 1 became entitled to the properties of

Veeriah under the will, Ex. B-4 dated June 17, 1939 which Veeriah executed in his favour. It was contended in the alternative 1hat at the time when the reversion opened on the death of Veeriah's mother, Rattamma on October l, 1956, Defendant no. 1 was the nearest heir and not the plaintiff, under the Hi:ld'.: Succession Act (XXX of 1956) which had come into force Oil October 17, 1956. The Additional Subordinate Judge, Bapatla held that the will was tru~ and genuine but it was not legally valid as it was executed by V eeriah at a time when he had no testamentary capacity. It was also held that the Hindu Succession Act did not apply to the facts of the case. The Additional Subordinate Judge accordingly granted a decree for possession of properties except item no. 4 in favour of the plaintiff as against Defendants nos. t to 3, 6, 7 and 11 to 14. Defendants 1 to 3, 7, 11 and 13 took the matter in appeal to the High Court of Andhra Pradesh. The plaintiff also preferred a Memorandum of Cross Objections to the extent the trial Court's decree was against him. By its judgment <lated August 22, 1963, the High Court allowed the appeal, holding that the will, Ex. B4 was executed by Veeriah in a sound and disposing state of mind and that the will was not only true but was valid and t>inding upon the plaintiff. The High Court accordingly diSll)issed the suit. 'The Memorandum of Cross Objections was also dismissed.

The first question to be considered in this appeal is whether 1he will, Ex. B4 was true and genuine and was executed by Veeriah in a sound and disposing state of mind.

It is not disputed that one Gangiah died leaving bis widow H Rattamma and his only son through her called Veeriah and a young daughter. The girl died 'without leaving any issue in the year 1932. Veeriah was a little boy and it is not disputed that

o. TILl, TAIAH v. T. v. SUBBAIAH (Ramaswami, J.) 475

be was below average in intelligence and understanding. Rattanuna alongwith her son took up residence with her brother, Defendant no. I who was a man of great wealth and influence in the village, owning fifty acres of land and outstanding' credits to the extent of Rs. 20,000/-. Rattamma's husband had left properties to the extent of 13 acres of land. In spite of owning so much property Veeriah was engaged as a cow-boy in tending cattle. In June 1939, he had an attack of typhoid, became bed-ridden and ultimately died of the disease on June 24, 1939. The case of tire contesting defendants was that Veeriah executed the will, Ex. B-4 on June 17, 1939, that D.W. 4 wrote it and nine witnesses attested it but the will was not registered in Veeriah's life-time. On October 15, 1939, defendant no. I and Rattamma presented the will, Ex. B-4 before the Sub-Registrar, Chirala for registration. The Sub-Registrar, however, refused to register the will by his order, Ex. A-45 in W.C. 4 of 1939. Defendant no. 1 preferred an appeal before the District Registrar, Guntur but the appeal-was dismissed. Defendant no. 1 then filed O.S. no. 111 of 1940 in the court of District Munsif, Bapatla against Ramayya (father of defendants 9 and 10), the plaintiff and jlattamma for a direction for registration of the will. The District Munsif returned the will .to defendant no. 1 for want of pecuniary jurisdiction. Defendant no. 1 presented it to the Subordinate Judge, Bapatla and got it numbered as O.S. no. 6 of 1941. The suit was ultimately dismissed by the Subordinate Judge on the question of limitation. Defendant no. 1 and Rattamma filed O.S. no. 13 of 1942 in the Subordinate Judge's court, Bapatla for a declaration that the will was genuine and valid. Ramayya filed a written statement and the suit was ultimately decreed in favour of Defendant no. 1. and Rattamma. The present plaintiff, Gorantla Tatbaiah was, however, not a party to that suit.

In the will, Ex. B-4 it is stated by the testator as follows :

" .... Typhoid condition has set in.

As no treatment has been effective in curing this condition I have lost confidence that I will survive. Therefore I have wholeheartedly made the following disposition regarding my movable and immovable properties in order that there may be no obstruction in future from any source whatsoever.

That my mother Rattamma should be maintained comfortably for her life-time and that in case there is disagreement between her and my material uncle.

Venkatasubbayya and they decide to live separately, my mother, Rattamma. should enjoy the income of the property mentioned in 'B' Schedule for her life-time '-".ithout exercising any powers of disposition by way of gift, sale etc., over the property and that after her life.

L7 Sup. C.1.168-6

476 SUPRl!Mll COURT UPOJl.TS [1968] 3 s.c.R.

time the entire property mentioned in 'B' schedule A should devolve in my maternal uncle, V enkatasubbayya.

My maternal uncle, Venkatasubbayya shall enjoy the entire properties mentioned in 'A' and 'B' Schedules with absolute powers of disposition by way of gift, sale etc." In the will it is mentioned that V eeriah had sold his land on May

30, 1939 to defendant no. 4 and received an advance of Rs. 165/- with the stipulation that the balance of sale price should be paid at the time of registration. Veeriah also said that in case he did not live long enough, defendant no. 1 should complete the sale transaction and receive 'the balance of price fro.!ll defendant no. 4.

The will was wri)ten by one Ammanamanchi Sambiah, D.W. 4 the karnam of tl'ie village. 'There are 9 attesting witnesses of whom three are dead. On behalf of the plaintiff two of the attestors P.Ws. 8 and 9 were examined and two attesting witnesses were examine<! as Court witnesses 1 and 2. On behalf of defendants two attesting witnesses D.Ws. l and 6 besides the scribe D.W. 4 gave evidence. P.W. 8 deposed that the testator did not give any instructions or particulars for drafting the will. The testator was very weak and in a delirious state and he was not in a position to put his thumb impression to the will. P.W. 9 is stonedeaf and he could not give proper evidence. He did not remember if Veeriah was raving and was tearing his clothes. D.Ws. 1, 4, 6 and 14 and C.Ws. 1 and 2 say that the testator was in a sound and disposing state of mind. It was the testator who gave instructions regarding the disposition of the properties. D.W. 4 wrote the will and read it over to V eeriah who approved of it and put his thumb impression thereon. The evidence of P.Ws. 8 and 9 is therefore clearly in conflict with the evidence of C.Ws. 1 and 2 and D.Ws. 1, 4, 6 and 14. The evidence of C.Ws. 1 and 2 is interested. It is admitted that C. W. 1 is related to defendant no. 1 and C.W. 2 is indebted to the first defendant to the extent of Rs. 1,400/-. As regards D.Ws. 1, 4 and 6, the trial court bas remarked that their testimony is not impartial and we see no reason to take a different view as regards the effect of their testimony.

So far as D.W. 1 is concerned, be appears to have kbatha dealings with the first defendant. D.W. 4 admitted that be and Venkataswamy were good friends and worked as karnam and Village Munsif for 30 years.

There was . a case of misappropriation against Venkataswamy and D.W. 4 deposed in his favour in that case. It is in evidence that D.W. 6 is related to Ambati Veeriah who is married to the first defendant's niece. With regard to P.Ws. 8 and 9 the High Court has remarked that they bad attested the will without any protest or adding any note of protest though the testator, Veeriah was not in a sound state of mind at the time of the execution of the will. In our opinion, this circumstance is of no consequence nnd the High Court was noi justified in reject-

....

G, THATAIAH v. T. v. SUBBAIAH (Rattulswami, J.) 477

A ing the evidence of P. Ws. 8 and 9 on this ground alone. On the other hand, there are two important features in the present case which throw a great deal of doubt as to whether the testator was in a sound and disposing state of mind at the time of the execution of the will. It is the admitted position that the first defendant took a prominent role at the time of the execution of the will by sumnioning the scribe and the attesting witnesses. It is stated by D.W. 1 that the first defendant also procured the writing materials B

and the black ink for affixing the thum~ impressions of the witnesses. It is also admitted that the will preferred the first defendant to the mother. Normally, the testator would have bequeathed all his property to the mother and would have also given her power to adopt a boy to perpetuate the lineage of the family.

Instead the mother was given, in the will, a life interest in items 1 and 6 and the rest of the properties were given absolutely to <!efendant no. 1. It is undisputed that the testator was 24 years of age at the time of the execution of the will and that he was far below the average level of intelligence and understanding and nobody was prepared to oiler a girl in marriage to him. There is evidence D that Veeriah was "laC1dng in wits" and that he was employed for tending cattle.

Further more, the testator was suffering from typhoid fever at the time of the execution of the will and he died a week thereafter i.e., on June 24, 1939. In Ex. B-4 it is recited that the testator was ailing for about 15 days and had become delirious.

According to D.W. 4 when he arrived Veeriah was

lying on a cot and he was not in a position to sit up by himself.

Both D.Ws. 1 and 4 admit that the attesting witnesses and the scribe had all assembled and waited for nearly an hour.

Both P.Ws. 8 and 9 say that at the time of the execution of the will Veeriah was in a delirious state. D.Ws. 1, 4, 6, 14 and C.W. 1 all admit that the. testator was delirious on the day previous to the execution of the will and also subsequent to the day of the exei:ution of the will.

These witnesses, however, state that the testator was quite all right and in normal condition on the date of the execuon of the wm.

It is difficult to accept this part of the defence evidence.

Considering that the condition of the testator became worse and he died a week thereafter it is difficult to accept the vidence of defence w!tnesses and of C.W. 1 that the testator was m a sound state of mind on , the date of the exeeution of the will but he s in a delirious state the day before and the day after the e:io:ecuon ?f the will: In our opinion, the Subordinate Judge was !1ght in .1!is conclusion that the testator was physically weak

Rl!d m a deli_nous men.ta! state at the time of the execution of. the will. , We think the High Curt had no justification for reversing the view taken by the Subordmate Judge.on this point.

It is :-veil-established that in a case in which a will is prepared der circumstances whch raise the suspicion of the court that It does not express the mmd of the testator it is for those who pro-

SUP~ME COURT REPORTS

(1968) 3 S.C.R.

pound the will to remove that suspicion.

What are suspicious circumstances must be judged in the facts and circumstances of each particular case.. If, however, the propounder takes a prominent part in the execution of the will which confers substantial benefits on him that itself is a suspicious circumstance attending the execution of the will and in appreciating the evidence in such a case, the court should proceed ill. a vigilant and cautious manner.

It is observed in Williams on "Executors and Administrators", Vol. I, 13th Ed., p. 92 :

"Although the rule of Roman Law that 'Qui se scripsit haeredem' could take no benefit under a will does not prevail in the Jaw of England, yet, where the person who prepares the instrument, or conducts its execution, is himself benefited by its dispositions, that is a circumstance which ought generally to excite the suspicion of the court, and calls on it to be vigilant and zealous in examining the evidence in support of the instrument in favour of which it ought not to pronounce, unless the suspicion is removed, and it is judicially satisfied that the paper does express the true wUI of the deceased."

According to the decision in Fulton v. Andrew('), "those who take a benefit under a will, and have been instrumental in preparing or obtaining it, have thrown upon them the onus of showing the righteousness of the transaction". "There is however no unyielding rule of law (especially where the ingredient of fraud en ters into the case) that, when it has been proved that a testator, competent in mind, has had a Will read over to him, and hail thereupon executed it, all further enquiry is shut out". In this case, the Lord Chancellor, Lord Cairns, has cited with approval the well-known observations of Baron Parke in the case of Barry v.

But/in(').

The two rules of law set out by Baron Parke are: "first, that the onus probandi lies in every case upon the party propounding a will; and he must satisfy the conscience of the court that the instrument so propounded is the last will of a free and capable testator"; "the second is, that, if a party writes or prepares a will under which he takes a benefit, that is a circumstance that ought generally to excite the suspicion of the court and calls upon it to be vigilant and zealous in examining the evidence in support of the instrument in favour of which it ought not to pronounce unless the suspicion is removed, and it is .iudicially satisfied that the paper propounded does express the true will of the deceased." In Sarat Kumari Bibi v. Sakhi Chand & Ors.,('} the Judicial Committee made it clear that "the principle which requires the propounder to remove suspicions from the mind of the Court is not confined only to cases where the propounder takes part in the

(I) (1875) LR, 7 H.L 448.

(2) (183R) 2 Moo. P.C. 4RO, 482.

I)) 561.A. 62.

G. THATAIAH v. T. v. SUBBAJAH (Ramaswami, J.) 479

execution of the will and receives benefit under it. There may be other suspicious circumstances attending on the eXecution of. the will and even in such cases it is the duty of the propounder to remove all clouds and satisfy the conscience of the court that the instrument propounded is the last will of the testator." This view is supported by the following observations made by Lindley and Davey, L. JJ., in Tyrrell v. Painton('):

"The ru1e in Barry v. But/in (2 Moo. P.C. 480); Fulton v. Andrew [(1375) L.R. 7 H.L. 448]; and Brown

v. Fisher [ (1890) 63 L.T. 465] is not, in my opinion, confined to the single case in which a will is prepared by or on the instructions of the person taking large benefits under it, but extends to all cases in which circumstances exist which excite the. suspicion of the Court; and wherever such circumstances exist, and whatever their nature mai be, it is for those who propound the will to remove such suspicion and to prove affirmatively that the testator knew and approved of the contents of the document, and it is only where this is done that the onus is thrown on those who oppose the will to prove fraud or undue influence, or whatever else they rely on to displace the case made for proving the wilt"

(Lindley, L.J.).

"it must not be supposed the principle in Barry v.

But/in (2 Moo. P.C. 480) is confined to cases where the person who prepares the will is the person who takes the benefit under it-that is one state of things which raises a suspicion; but the principle is that wherever a will is prepared under circumstances which raise a wellgrounded suspicion that it does not express the mind of the testator the Court ought not to pronounce in favour of it unless that suspicion is removed." (Davey, L.J.).

It is in the light of these principles that the evidence adduced in this case will have to be considered. As we have already pointed out, there is abundant testimony in this case which proves beyond doubt that the testator was physically in a weak condition and that he was in a delirious State of mind at the time of the execution of the will.

It is admitted that the first defendant took a prominent part in summoning the attesting witnesses and the scribe and in procuring the writing materials for the execution of the will.

There is also evidence that Veeriah Jost his father, Gangiah when he was hardly 10 years of age and after Gangiah's death the first defendant brought Rattamma and Veeriah to his house and was looking after them.

The first defendant had therefore considerable }nfluence over Veeriah and his mother Rattamma.

(I) (1894) P. 151, 157, 159.

r{ --

480 SUPIU!M'.B COURT IU!POllTS [1968] 3 s.c.R.

There is also the circumstance that V eeriah was only 24 years of age at the time of the execution of the will and he was slow witted and below the average level of intelligence and understanding.

Having regard to the cumulative effect of all the circumstances we are of opinion that the will, Ex. B-4 was not executed by V eeriah in a sound and disposing state of mind, and was not legally valid and binding upon the plaintiff. We accordingly set aside the finding of the High Court on this issue.

It is, however, not possible for us to finally dispose of this a, Ppeal because the High Court has not examined the second question arising in this case, namely, whether the Hindu Succession Act (Act XXX of 1956) is applicable to the case and whether defendant no. 1 was the nearest heir to succeed to the estate of the deceased V eeriah in preference to all others including the appellant, defendants 9 and 10. We therefore consider it necessary that the case should go back to the High Court for hearing the parties afresh and recording a finding on this question and to submit it to this Court within three months from the . date of receipt of the record by the High Court. The parties will not be allowed to give additional evidence in the case and the High Ci>urt will submit a finding on the evidence already adduced by the parties.

The appeal will be placed for further hearing before this Ci>urt after the finding is submitted by the High Court in accordance with. the directions we have given.

V.P.S.

Appeal remanded.

GORANTLA THATAIAH

THOTAKURA VENKATA SUBBAJAH & ORS

March 19, 1968

1. C. SHAH

V. RAMASWAMI

G. K. MITTER

ff H. R. Gokhale

K. R. Chaudhuri

D. Narsa Raju

S. T. Desai

A. Vedavalli

A. V. Rangan

Ramaswami

Gorantla Tathiah

V eeriah

Veeriah

June 17, 1939

Rattamma

October l, 1956

October 17, 1956

Additional Subordinate Judge, Bapatla

Hindu Succession Act

High Court of Andhra Pradesh

August 22, 1963

Gangiah

H Rattamma

be

Rattanuna

June 24, 1939

October 15, 1939

Chirala

District Registrar, Guntur

District Munsif, Bapatla

Ramayya

jlattamma

Subordinate Judge, Bapatla

Subordinate Judge's court, Bapatla

Gorantla Tatbaiah

Venkatasubbayya

May

30, 1939

Ammanamanchi Sambiah

Venkataswamy

Munsif

Ambati Veeriah

Veeriah

Williams

England

Cairns

Parke

Lindley

Davey

Veeriah Jost

Hindu Succession Act


GODHRA BOROUGH MUNICIPALITY v.

GODHRA ELECTRICITY CO. LTD.

March 20, 1968

[J. C. SHAH AND G. K. MITTER, JJ.]

The Bombay Municipal Boroughs Act, 1925, s. 13-Rules 4 and 5- 'Rate' /eviable 11nder s. 13 on lands and buildings-Certain lands and buildings to be taxed under r. 4(1) on capital basis-Method of evaJUQo tion of capital value-E'nglish. laW relating to 'rates'. relevance . of-Con tractors' method of evaluation recommended-Data in company's balance sheet whether 'reliable data' for purpose of r, S.

Unde'r s. 73 of the Bombay Municipal Boroughs Act, 1925 read with rr. 4( 1) and 5 made thereunder a rate on non-residential buildings belonging to factories and mills was leviable on a capital basis, and the capital value for this purpose was to be work<!d out, if 'reliable data' were furnished by the assessee, on the basis of such data. The respondent company owned certain buildings on which rate was leviable under r. 4(1) on the basis of capital value. The respondent company claimed that the actual cost of construction of the buildings in 1920 ought to be taken as the capital value. The Municipality of Godhra however made its own estimate of the capital value. Thereafter the Judicial Magistrate and the Sessions Judge made va1uaions taking into account the rise in the cost of building materials since 1920. The High Court In revision upheld the view that the actual cost minus depreciation thereon should be tho capital value; it observed that the English law and practice as to levy of rates was not relevant in the Indian context. The Municipality appealed.

HELD : (i) When legislaturea in this country enact statutes which clooely resemble statutes in England and have the same purpose and object in view, then unless tho expressions used in the Indian Statutes are defined courts of law cannot go wrong in interpreting them in the way English judges have done.

Further, the words which have acquired a particular shade of meaning in England may be given the same meaning unless there is anything in the statute itself which would be contraindicative. [486-F-OJ

(ii) Section 73 empowered the municipality to impose a rate on buildings or lands. The word 'rate' had not been defined in the Act but . it has a well known meaning. In Patti Gordhandar's case this . Court examined various statutes bearing on the English rating law and held that the word 'rate' was used .with respect to a tax whichwas levied on the net annual value or rateable value of lands and buildings and not on their capital value, but capital value could be adopted as the basis for working out the annual value. [4850486E]

(iii) Rule 4 of the Godhra Municipal Rules shows what properties are to be valued on capital basis. What the capital. basis is not defined.

The capital value however can be determined in the way laid down in Patel Gordhandas'• case by adopting the contractor'& method. (487B].

(iv) The figures given in the balance sheet of the company could not be regarded as 'reliable data' for the purpose of r. 5. The figures given in tho balance sheet are merely statements in .terms of the form given in

Schedule VI. They have no relevance in determining tbe capital value of A property for the purpose of B&'eSsment to a rate. [488 B.q

[Case remanded to District Judge for determining capital value by adopting contractors' method in the light of the observations made by this Court.]

Patel Gordhandas Haraovindas v. hfunicipal Cornn11"ssioner1 Ah1nedav bad, [1964] 2 S.C.R. 608, relied on.

R. v. School Board for London, (1885) SS L.J.M.C, 33, referred to.

CIVIL APPELLATE JUIUSDICTION: Civil Appeals Nos. 631 and 632 of 1965.

Appeals by special leave from the judgment and order dated January 7, 8, 1963 of the Gujarat High Court in Civil Revision C Applicntions Nos. 116, 117, 173 and 174 of 1961.

Purshottam Trikamadas and I. N. Shroff, for the appellant (in both the appeals).

S. S. Shukla, for the respondent (in both the appeals),

The Judgment of the Court was delivered by

Mitter, J.

These are two appeals by special leave against the judgment and order dated January 8, 1963 of the Gujarat High Court dismissing Civil Revision Applications 116 and 117 of 1961 filed by the appe!Jant and allowing similar applications Nos.

173. and 174 of l 961 filed by the respondent against the com mon judgment dated December 1, 1960 passed by the District and Sessions Judge of Panchmahals.

The. matter arises out of assessments made by the appellant constituted under the Bombay Municipal Boroughs Act, 1925 on the respondent under section 73 of the Act. The respondents are an electricity company ownini inter alia properties bearing several numbers in the municipal borough of Godhra.

For the years 1956-57 and 1957-58 the appellan_t had fixed the Yaluation of the properties belonging to the respondent at Rs. 3,25,000/ -.

On appeal by t])e respoµdent, the Judicial Magistrate fixed the valuation of the properties at Rs. 90,000/-. On the appellant going in revision, the Sessions Judge fixed the valuation at Rs. 1.25,000/-.

As a result of the High Court's decision the valuation stood reduced to Rs. 90,000/-. The present appeals are by the Municipality.

Under s. 73(1) of the Bombay Municipal Boroughs Act, 1925 (hereinafter referred to as the 'Act') :

"Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a municipality may impose for the purposes of this Act any of the following taxes, namely-

GODHP.t. MUNIC. v. GODHRA ELEC. co. (Mitter, J.) 483

(i) a rate on buildings or lands or both situate with- . in the municipal borough."

The procedure preliminary to imposing tax is laid down in s . . 15

B and s. 78 deals with the preparation of an assessment list. Section 5 8 empowers the municipality to make rules prescribing the taxes to be levied in a municipal borough for municipal purposes etc.

Rules 4, 5 and 7 relevant for our purpose read as follows :

 "4. Modes of valuation : (1) For the purpose of determining tax the following properties shall be valued c on the capital basis :-

(a) All open lands, buildings and yards belonging to the Railway Administration.

(b) All buildings and lands other than those which are actually used for residential purposes belonging to Mills and Factories to which the Indian Factories Act, D is applied.

(Z) All properties other than those mentioned above shall be valuesJ on the basis of the annual letting value as defined in section 3(1) of the Act.

5. Mode of determining capital value : The capi- E tal value of properties mentioned in rule 4(1) shall, in each case, be determined on such reliable data as the Railway Authorities and the Agents of the mills and the factories may furnish when called upon from thne io time to do so and in the absence of any such trustworthy reliable data, it shall be determined by the Chief

F Officer or by expert valuers employed by the municipality for that purpose.

7. Amount of tax: (1) in case of properties which as stated above, are valued on the .capital basis the tax G to be levied shall be assessed at Rs. 0-8-0 per cent of the capital value and it shall be a direct tax thereon provided however that any fraction of hundred in excess of fifty rupees shall be taken as the next higher hundred and any fraction of fifty rupees or less be taken as the lower hundred.

(2) In case of properties which, as stated above, 1 are. valued on the annual letting value the tax to be levied shall be assessed as shown in the appendix an- .i nexed hereto."

Under rule 4(1) (b) above, the buildings of the respondent had to be valued on the capital basis. Under r. 5 the capital value of

propt:rti~• had tc be determined on such reliable data as the respondent might furnish and in the absence thereof, it would be the duty of the Chief Officer to determine the same.

Before the Judicial Magistrate, one R. R._ Tewari, an Assistant Secretary of the respondent who had affirmed an affidavit showing that the approximate value of the seven items of property on which tax was sought to be imposed as per the books of the company was Rs. 41,541-12-9.

He sought to rely on the balance sheets and accounts of the company audited under the Companies Act for the purpose. The Judicial Magistrate observed that the properties were 40 years old and according to Tewari the life of the office buildings was 50 years while that of others was only 30 _years. Acting on the admission of Tewari that the price of building materials had increased three times the original figures in 1956- 57 and taking into consideration the properties were over 40 years old, the Magistrate assessed the capital value at Rs. 90,000/-.

The Sessions Judge dealt with the matter in greater detail and noted that neither party had given him real assistance in determining what should be the proper assessment. According to him the assessment papers preceding the bills had not been produced and neither party had led any evidence as to how the capital value was to be arrived at. He however felt that the capital value could not mean merely the book value shown in the books of account oi the assesste. He noted that according to the balance sheet for 1955-56 the property and assets under the head "buildings" was shown as below :

Buildings.

Cost up to 31st March 1955

Additions during the year

Rs. 1,72,866-5-11

12,398-10- 3

Total Rs. 1,85,265-0-2

The said figure included the value of all the buildings of the company but those which were to be assessed were only seven out of which two residential bungalows and servants quarters were to be assessed on the rental value. . The Sessions Judge therefore inferred from the above figures that Rs. 1,85,265/- inch1ded at !east Rs. l,00.000/- as the cost up to 31st March, 1955 of the factory buildiitgi in question. The Sessions 1 udge found himself unable to accept the contention that the depreciated selling value of the property was the capital value for the purpose of assessment of house tax. He also did nof accept the municipality's contention that the cost of construction of buildings had gone up

H r

GODHRA MUNIC. v. GODHRA ELEC. co. (Mitter, 1.) 485

five times since 1920. Considering the rival contentions he fixed the capital value at three times the figure shown by the company, viz., Rs. 41,541/· and rounded the same off to Rs. 1,25,000/·.

Taking the view that it was not open to "a Judge in India to base his judgment as a whole or in part or his conclusion upon either Halsbury's Laws of England or Bean and Lockwood's book on Rating Valuation Practice" on the ground that these books were irrelevant under the Indian Evidence Act, the learned Judge of the High Court held that "capital value" might possibly bear four different meanings but the meaning given to the expression in Halsbury's Laws of England was '.'not appropriate in the context of the Indian enactment and the Indian Rules". Referring to the rules made by Godhra Municipality he observed that it could not be said that the municipality had adopted the capital value as one of the methods of ascertaining the rental value or that the municipality had adopted the rental value as one of the methods of ascertaining the capital value.

According to the learned Judge,

" 'capital value' has to be treated as meaning the value of the building treated as capital at the time of the assessment; in other words, the original cost of construction minus the depreciation or at the most the original cost of construction without depreciation." Accepting the figure of Rs. 41,541-12-9 as the cost of construction of the building in 1920 as found by the courts below, he observed that the capital value should be "either Rs. 41,541-12-9 or something less after deducting depreciation." According to him "the assessee has not c. ome in revision against the order of the Magistrate fixing the value at Rs. 90,000/-. Both the courts have erred in considering the probable cost of construction of a new building." He therefore held that the courts below had committed a material mistake in the exercise of jurisdiction in relying upon the probable cost of constructing a new building of a similar type in order to estimate the capital value as contemplated by Godhra Municipality and accordingly reduced the capital value fixed by the Sessions Judge to Rs. 90,000/-.

We find ourselves unable to accept the views expressed or the reasoning given in the judgment of the High Court. Section 73 empowered the municipality to impose a rate on buildings or lands.

Now the word 'rate' had not been defined in the Act but it has a. well known meaning:-As observed in Patel Gordhandas Har.' govindas v. Municipal Commissioner, Ahmedabad(') the word "has come to our country for the purpose of local taxation from England." In that case this Court examined various statutes bearing on the English Rating Law and held that the word " 'rate' was

(I) (196412 S.C.R. 608 at 616 ..

,. .

486 SUPllEMB COUllT llEPOllTS [1968] 3 s.c.R.

used with respect . to a tax which was levied on the net annual value or rateable value of lands and buildings and not on !hair capital value; It would therefore not be wrong to say that in the legislative history and practice in England up to 1925, 'rate' for the purpose of local taxation meant a tax on the . annual value of lands and buildings liable to such taxation."

The Court werit on to examine the methods in use for the purpose of ascertaining the rateable value which were generally three. It was said :

"Where the land or building was actually let, the valuation was based on the rent at which it was let.

Where, however, the .land or building was not let, two methods were evolved for the purpose of finding out the rateable value. The first was to assume a hypothetical tenancy (such as where the same person is the owner and occupier) and find out the rent at which the premises would be let. The second was based on the capital value of the premises. But the tax was not levied on the capital value itself; the capital value was determined on the structural value of the building to bci assessed by what was known to be contractor's method or contractor's .test in addition to the market value of the land.

Sometimes the words "effective capital value" were also used since in. most cases the actual capital cost of the building plus the market value of land might for some reason or the other be ineffective IA., it might not be rent producing. Having arrived at the effective capital value it was necessary to apply percentages thereto in order to arrive at the annual value." When legislatures in this country enact statutes which closely resemble statutes in England and have the same purpose and object in view, then unless .the expressions used in the Indian Statutes are defined, courts of law cannot go \\TOng in interpreting them in the way English Judges have done. Further, the words which have acquired a particular shade of meaning in England may be given the same meaning unless there is anything in the statute itself which would be contra indicative.

In Patel Gordhandas' s case(') the statute which this Court had to interpret was the same Act which is before us in this case. Consequently, that decision affords us a good guide in forming our own conclustons in this case. Section 7 5 of the Act has an Explanation introduced in 1966 which reads as follows :

"Explanation-For the purposes of a rate on buildings .or lands, the basis of valuafion may be-

(i) the annual letting value;

(I) [196412 S.C.Jl. 608.

30DHRA MUNIC. v. GODHRA ELEC. co. (Mitter, J.) 487

(ii) the annual value;

(iii) the floor area, in the case of Mills, Factories and buildings and lands connected therewith;

(iv) the capital value, in the case of vacant lands."

9 The Explanation is deei, ned always to have been substituted for the original by Maharashtra Act 3 of 1966, s. 3(b).

Rule 4 of Godhra Municipal Rules shows what properties are to be valued on the capital basis. What the capital basis is is not defined.

The capital value however can be determined in the way laid down iri Patel Gordhandas's case(') by adopting the c contractor's method. What that method is has been explained in Ryde on Rating (Eleventh Edition) Chapter 20. In R. v. School Board for London(') Cave, J. applied the contractors test to schools. Ryde points out that it was tacitly rognised as applicable in various other cases. The principle on which the contractor's basis rests lire given by the author at page 439 and the method of its application •is given at page 442. The learned author notes D that in. "applying the contractor's basis it is possible to discern five stages.

The first stage is the estimation of the cost. of construction of the building." There is a difference of view as to whether it is better to take the cost of replacing the actual building as it is, or the cost of a substitute building on the same plan as the actual building but otherwise in ari up-to-date form. The second stage is IE "to make deductions from the cost of construction to allow for age, obsolescence and any other factors necessary to. arrive at the 'effective capital value'. ''The third stage is to estimate the cost of the ll)lld. The fourth stage is to apply the market rate or rates at which money can be 1l9rrowed or invested to the effective capi• tal value of the building and the land. The fifth stage is to. con- F shider whether the result of the fourth stage really reprsents what t e hypothetical tenant would pay for the annual tenancy on the statutory terms, and to make any adjustments necessary to ensure that no higher rent is fixed as the basis of assessments than that which it is believed the owner would really be willing to pay for the occupation of the premises.

G Rule S of the Godhra Municipal Rules lays down that the capital value is to be determined in each case on reliable data furnished by the Mills and the Factories when called upon to do so and in the absence thereof js to be determined by the Chief Officer or expert valuer.. The learned counsel for the respondent contended that here there were reliable data in that the balance sheet of the H company showing the value of these properties for the purpose of the Companies Act and there was no reason why the same figures should not be adopted as the capital value of the lands

11)(1964) 2 S.C.R. lioll. (2) {18~S) 55 L.J.M.C. 33; 17 Q.ll.D. 738 C.A.

488 SUPJU!llB COURT lU!POllTS

[1968) 3 S.C.R.

and buildings within the jurisdiction of Godhra municipality. This clearly is fallacious as under section 211 of the Companies Act, 1956 the balance sheet of a company has to be drawn up in the form prescribed by Schedule VI.

Under the said SChedule, Part

I, the value of fixed assets has to be shown "distinguishing as far as possible between expenditure upon (a) go<id-will, (b) land, (c) buildings, (d) leaseholds, (e) railway sidings, (f) plant and machi- B nery, (g) furniture and fittings, (h) development of property etc. The fourth column of the form which gives the instructions in accordance with which assets should be made out shows under each head "the original cost and the additions thereto and deductions therefrom during the year, and the total depreciation written off or provided up to the eQd of the year is to be stated." It will therefore be noticed that the. figures given in the balance sheet are merely statements in terms of the form given in SChedule

VI.

They have no relevance in determining the capital value of property for the purpose of assessment to a rate.

It appears to us therefore that the true method of determination of the capital value was not adopted in the courts below. We D therefore set aside the judgment and order of the High Court and remand the matter back to the District Judge for him to determine the capital value in the light of the observations made by us after giving an opportunity to the parties to adduce evidence on the subject. The costs will abide by the decision of the Disrtict Judge.

G.C.

Appeal allowed and case remanded.

GODHRA BOROUGH MUNICIPALITY

GODHRA ELECTRICITY CO. LTD

March 20, 1968

C. SHAH

G. K. MITTER, JJ.

Bombay Municipal Boroughs Act, 1925

s. 13

s. 13

s. 73

Bombay Municipal Boroughs Act, 1925

Municipality of Godhra

England

Section 73

Patti Gordhandar

Patel Gordhandas'•

Schedule VI

[1964] 2 S.C.R. 608

Purshottam Trikamadas

I. N. Shroff

S. S. Shukla

Mitter

Bombay Municipal Boroughs Act, 1925

section 73

Godhra

s. 73(1)

Bombay Municipal Boroughs Act, 1925

sections 75 and 76

s. 78

Section 5

Factories Act

section 3(1)

R. R._ Tewari

Tewari

India

Bean

Lockwood

Indian Evidence Act

Godhra Municipality

Section 73

Patel Gordhandas

Section 7

s. 3(b)

Godhra Municipal Rules

Ryde

Cave

Rule S of the Godhra Municipal Rules

Companies Act

Godhra municipality

section 211

Companies Act, 1956

Schedule VI