Patna High Court
The Deputy Commissioner Of Singhbhum vs Jagadish Chandra Deo Dhabal Deb on 25 May, 1921
Equivalent citations: 62IND. CAS.513, AIR 1921 PATNA 206
JUDGMENT Das, J.
1. The material facts are as follows:--Raja Satrughan Deo Dhabal Deb, who was possessed of considerable property both in the District of Midnapore in the Presidency of Bengal and in the District of Singhbhum in the Province of Bihar and Orissa died on the 1st March 1916, having prior thereto made and published his last Will and Testament, whereof he appointed the petitioner his sole executor. In due course the petitioner applied for Probate of the Will of the testator in the Court of the District Judge of Midnapore and on the 11th April 1916 filed an affidavit of valuation of the properties lying within the jurisdiction of that Court, It is necessary to state that though the fact was disclosed that there were assets belonging to the testator which were situate in a district other than the Midnapore District, he was not required to file, and did not file, an affidavit in the form set forth in Schedule III of the Court Fees Act. The Court fixed the value of the properties situate within the jurisdiction of that Court at Rs. 45,879.1-1 1/2 and directed the petitioner to pay Probate duty on the value so found.
2. On the 15th March 1919, the petitioner applied, under Section 5 of the Probate and Administration Act, to the District Delegate, Singhbhum, for Letters of Administration in respect of the properties within the jurisdiction of that Court and valued the properties at about seven lacs of rupees. The District Delegate called for a valuation from the officer-in charge of the estate, as the estate was under the management under the Chota Nagpur Encumbered Estates Act. The officer valued the estate at about 98 lacs of rupees and the applicant was directed to prove his case as to the true value of the estate. The applicant thereupon withdrew his application and on the 16th August 1919 presented an application in this Court for Letters of Administration under Section 5 of the Probate and Administration Act. This application was not supported by an affidavit by the petitioner himself as required by the form set out in Schedule III of the Court Fees Act, He was required to file an affidavit in the form required by law and be filed that affidavit on the 7th January 1920. According to this affidavit the net value of the estate is Rs. 6,82,334. This Court granted Letters of Administration to the petitioner on the 28th January 1920, and under the provision of Section 19H (4) of the Court Fees Act, gave notice of the application to the Board of Revenue as the Chief Controlling Revenue Authority for Bihar and Orissa. The Board of Revenue apparently asked the Deputy Commissioner of Singhbhum to hold an enquiry into the matter. The Deputy Commissioner, having held an enquiry, asked the petitioner to amend the valuation. The petitioner having refused to do so, the Collector, under Section 19H (4) of the Act, reported to this Court that the proper value of the property, in respect of which the grant of Administration was sought, was Rs. 35,29,255 and moved this Court "to hold an enquiry into the true value of the property." This Court on the 17th November 1920 under Section 19H (4) authorised the Registrar of the High Court to hold the enquiry under Section 19H (c). The learned Registrar of this Court has held an elaborate enquiry into the matter and has come to the conclusion that the net true value of the estate is Rs. 64,87,085. In his opinion the Court fee payable by the petitioner is Rs. 1,94,612-8 0. The Court-fee or duty already paid being Rs. 19,323 4 0, he has come to the conclusion that the deficit for which the grantee of the Letters of Administration is liable is Rs. 1,75,289-4-0. We have now to consider the report of the learned Registrar.
3. The first question which we have to consider is, what is the date contemplated by the Court Fees Act as to the point of time at which the value is to be assessed? The extreme contention on the part of the petitioner is that the date contemplated by the Act for the assessment is the date of the death of the testator, that is to say, the 1st March 1916. The extreme contention on behalf of the Crown is that that date must be the date when the petitioner filed his affidavit of valuation in this Court, that is to say 3rd January 1920. If both these contentions fail, then there are two other dates which may be considered in this connection, namely, the 11th April 1916, when the petitioner filed his affidavit of valuation in the Midnapore District Court, and the 16th August 1919, when the petitioner filed his application in this Court without the affidavit of valuation by the petitioner.
4. We are of opinion that the date cannot be the date of the death of the testator. There is very little doubt that the provisions in the Court Fees Act relating to Probate duties are founded on 55 Geo. Ill, C. 184, which was the Statute in force in England before the Finance Act, 1894, came into operation, It was held in the case of Doe d. Richards v. Evans (1847) 10 Q.B.D. 476 : 116 E.R. 181 : 16 L.J.Q.B. 305 : 11 Jur. 606 : 74 R.R. 401 that where land has been improved in value by building, between the owner's death and the grant of administration to his estate, stamp duty on the Letters of Administration is payable for the improved value. In the argument before the Court reliance was placed on the following passage from Gwynne on the Law Relating to the Duties on Probate and Letters of Administration: "The Commissioners of Stamps required all rents, interest and dividends from the death of the testator or intestate to the date of the Probate or Letters of Adminstration to be included in the estimate upon which duty is paid; but it is to be observed that there has been no judicial decision upon the point, and that Counsel of great eminence have held a different opinion." The Court rejected the contention and held that the improvement is inseparably part of that which the deceased had, and of which administration was granted, and that the Court cannot enter into the consideration of the value at the time of his decease." Now looking to the form of valuation as set out in Schedule III of the Court Fees Act, it is remarkable what a striking resemblance there is between the affidavit as required by the Commissioner of Stamps under 55 Geo. III, C. 184. and the affidavit as required under the Court Fees Act. The third paragraph of the affidavit as set out in Schedule III is as follows: "I further say that the said assets, exclusive only of such last-mentioned items, but inclusive of all rents, interest, dividends, and increased values, since the date of the death of the said deceased, are under the value of.... " The words "rents, interest and dividends" are obviously taken from the form as was followed in England under 55 Geo, III, C. 184, and the words "increased values" seem to have been taken directly from the case just cited. In the case of Bell V The Master in Equity of the Supreme Court of Victoria (1876) 2 A.C. 560 : 36 L.T. 936 the essential distinction between a Probate duty and a succession duty was pointed out. It was held that Probate duty is a stamp duty payable on what is supposed to be the value of the property the subject of the Probate at the time it is granted. An examination of the form of affidavit as set out in Schedule III of the Court Fees Act makes the position of the Grown on this point unassailable. I have already referred to the third paragraph of the affidavit, which makes it perfectly clear that the value of the estate must be the value at the time of the affidavit. A close examination of Annexure A leads to the same conclusion. For instance, as regards property in Government securities transferable at the Public Debt Office the petitioner is asked to state description and value at the price of the day, which means the prise at the date of the application. So with regard to property in public companies. I have no doubt whatever that the true value of the estate must be its value at the date of the application for Probate or Letters of Administration.
5. I have next to consider whether the stamp in this case is to be regulated by the value of the property at the time whan the application was first made in the Court of the District Judge of Midnapore. The solution of this problem must depend on two questions: first, on the question whether the petitioner making an application under Section 5 of the Probate and Administration Act was required under the law to file an affidavit of valuation in the form set forth in Schedule III of the Court Fees Act: and secondly, on the question whether the petitioner applying for Probate in the Court of the District Judge of Midnapore was bound to pay Probate duty in respect of all the assets that were likely to come into his hand, and not merely in respect of those assets which were affected by the grant of the Probate. If it appears on a construction of the relevant sections of the Probate and Administration Act and the Court Fees Act that the petitioner was bound to pay Court-fees on his application for Probate for all the assets that were likely to come into his hand, that is to say, assets for and in respect of which the Probate was granted, then there is all the less reason for thinking that the Legislature intended the petitioner to pay Probate duty again on his application under Section 5 of the Probate and Administration Act.
6. The provisions relating to the grant of Probate or Letters of Administration are to be found in the Probate and Administration Act, but the provisions relating to Probate duty are to be found in the Court Fees Act. An application for Probate is made under Section 62 of the Act and the applicant applying for Probate is required, by the express provision of the Statute, to state, amongst other things, first, the amount of assets which are likely to come to his hand, and secondly, when the application is to the District Judge and any portion of the assets likely to come to the petitioner's hand is situate in another province, the amount of such assets in each province and the District Judges within whose jurisdiction such assets are. The District Judge has power to grant Probate under Section 76 of the Act, and by the express provision of Section 76 the grant is of the "administration of the property and credits of the said deceased, and in any way concerning his Will," and the executor is required to give an undertaking to administer the same and to make a full and true inventory of the said property and credits and exhibit the same in the Court of the District Judge within six months from the date of the grant or within such further time as the Court may from time to time appoint and to render to the same Court a true account of the said property and credits within one year from the same date or within such further time as the Court may from time to time appoint. It will be noticed, therefore, that the grant is in form an unlimited one, though it is quite clear from Section 59 that the Probate has effect only over the property, moveable or immoveable, of the deceased in the province in which the same is granted, It follows, therefore, on a construction of Sections 62, 76 and 59 of the Probate and Administration Act that though the grant is in respect of all the assets which are likely to come into the executor's hands, still it has effect over the property situate in the province in which the grant is made, Section 5 of the Act provides that when a Will has been proved and deposited in a Court of competent jurisdiction, situated beyond the limits of the province, whether in the British Dominions, or in a foreign country, and a properly authenticated copy of the Will is produced, Letters of Administration may be granted with a copy of such copy annexed. In my view, the grant made under Section 5 is only an ancillary grant in order to give efficacy to the grant already made by another Court of competent jurisdiction and the procedure laid down in Section 5 is analogous to the procedure in England which enables the Probate Court in England to reseal Scotch, Irish or Colonial grants. Grant under Section 5 is in no sense a grant of Probate or Litters of Administration either with or without Will annexed.
7. I now come to the Court Pees Act, Article II, Schedule I of the Court Fees Act, provides for fees payable on Probate of a Will or Letters of Administration with or without Will annexed, and it expressly states that such fee is payable on the amount or value of the property in respect of which the grant of Probate or Letters of Administration is made. It will appear, therefore, on a literal construction of Article 11 that Probate duty is payable on the amount or value of the property in respect of which the grant of Probate or Letters of Administration is made, and not on the amount or value of the property affected by the grant of Probate or Letters of Administration. The distinction is important. As I have shown before, the District Judge is competent to grant Probate or Letters of Administration in respect of all the properties wherever situate that are likely to come into the hand of the executor or administration, as the case may be, though the grant by its own force only affects properties situate in the province in which the grant is made. On a literal construction of Article 1, Schedule I of the Court Fees Act, one is entitled to come to the conclusion that Court-fee was payable on the amount or value of all the properties that were dealt with by the Will of the testator, and not on the amount or value of the property affected by the grant of Probate. If that construction be adopted, then clearly Court-fee is not payable in respect of the grant made under Section 5 of the Probate and Administration Act.
8. But although this result would follow on a literal construction of Article 11, it will be necessary to see, before giving effect to the constriction, how the Courts of Law have construed the sweeping words to be found in the English Statute. The English Statute is 55 Geo. III, C. 184, and that Statute made duty payable on property in respect of which Probate was granted. The identical words have been used in Article 11, Schedule I of the Court Fees Act. The two Statutes are therefore, in pari materia and it is permissible to consider the cases decided under the English Statute in dealing with a case under the Indian Statute.
9. The first case which I shall consider is Attorney General v. Dimond (1831) 1 C. & J. 356 : 148 E R 145 : 1 Tyr 243 : 9 L.J. Ex. O.S. 90 : 35 R.R. 732. The question in this case wag whether the executor was bound to pay Probate duty on the amount of certain assets belonging to the estate of the testator which at the time of the death of the testator were lying in France. The executor proved the Will of the testator in the Prerogative Court of Canterbury and paid Probate duty on the properties in England. But it appears that by virtue of the Probate granted to him by the Prerogative Court of Canterbury he succeeded in recovering the assets which were lying in France. It was argued on behalf of the Crown that as the executor got possession of the assets lying in France under the Probate granted in England and was actually administering those assets in England, Probate duty was by virtue of 55 Geo. III, C. 184, payable in respect of those foreign assets. The contention was negatived by the Court. It was pointed out by Lord Lyndhurst, delivering the judgment of the Court, that the only question in the case was, for or in respect of what estates and effects was the Probate granted in the case before him. He showed that the Probata was granted in respect of the effects which were within the jurisdiction of the spiritual Judge at the death of the testator and that the spiritual Judge never exercised any jurisdiction in respect of the assets outside his jurisdiction. As in the opinion of the learned Judge Probate was -not granted for and in respect of the foreign assets, he held that Probate duty was not payable in respect of those assets.
10. The next case is Attorney General v. Hope (1834) 8 Bli (N.S.) 44 : 5 E R 863 : 2 Cl & F. 84 : 37 R.R. 29 in this case the testator died in England, leaving assets situate both in England and in America. The executor upon obtaining Probate paid duty to the Crown limited to the value of the effects in England, but proceeded to collect and administer all the personal estate of the testator both in England and in America. The question arose whether the executor was bound to pay Probate duty on the American assets.
11. The case is interesting, because the extent of ecclesiastical jurisdiction in former times in testamentary matters was carefully examined by the Lord Chancellor. He pointed out that the ancient practice of granting Probate by the Ecclesiastical Courts arose from the interest that the ordinary had in the personalty of individuals to be applied to pious uses for the safety of the souls of those individuals. He showed that the necessity of Probate arose from the fact that there came a time when the ordinary had to relinquish the right to the property and vest it in the executor or administrator by ganting Probate or Administration. This was, according to the Lord Chancellor, probably the origin of the Probate duty which gave a great interest in the personalty to the clergy. That being so, and the Probate duty being payable by the express provision of the Statute upon "the estate and effects for or in respect of which such Probate, Letters of Administration, etc., respectively shall be granted," the question which the Lord Chancellor had to investi gate was this. Did the ordinary ever lay claim to anything beyond the goods of the deceased in his jurisdiction at the time of his death? Having regard to the history of these matters it was quite clear that his right to grant administration was co-extensive with, but not more extensive than, his right to lay claim to the goods of the deceased dying within his jurisdiction. If he could lay alarm to anything beyond the goods in his jurisdiction at the time of the death of the testator, clearly he had power to grant Probate in respect of such goods beyond his jurisdiction and accordingly Probate duty by the express provision of the Statute would attach to such goods. If, on the other hand, the ordinary never did lay claim to anything beyond the goods in his jurisdiction, then his power to grant administration in respect of goods beyond his jurisdiction never did exist and accordingly Probate duty would not attach to such goods. Having examined the matter with very great care, the Lord Chancellor came to the conclusion that the ordinary never did lay any claim to goods outside his jurisdiction. That being so, his conclusion was that as he could not grant administration in respect of goods outside his jurisdiction, Probate duty could not attach to such goods.
12. The point established by this decision is that Probate duty is payable in respect of the property as to which a Probate is granted; not in respect of the property which may be ultimately administered by the executor. But it is well to guard ourselves against a possible misconception that may arise from this statement of the law. When it is said that Probate duty is not payable in respect of properties which are not the subject matter of the grant, but are ultimately administered by the executor, all that is meant is this; that such properties are not taxable because in respect of them Probate was not granted. You may ultimately administer the assets either by virtue of the Probate, or in spite of the Probate; because the foreign Bank has not closely scrutinised the grant. Where the grant covers the assets, Probate duty is always payable. But to take the assets out of the Statute it must appear that the assets which are ultimately administered by the executor were altogether outside the grant. As the Lord Chancellor in the case cited said, the whole question is whether in respect of the foreign assets a Probate was granted. If it was, then clearly Probate duty was payable; if it was not, then equally clearly Probate duty was not payable.
13. It will appear, therefore, that the test adopted both in this case and in the preceding case was this. Was there a grant of Probate in respect of the assets which you are seeking to tax? The test was not whether the grant affected those assets. If the same test be applied to the present case (and the words in the English Statute are identical with those employed in the Indian Statute), it would appear that as there was a grant of Probate by the District Judge of Midnapore in respect of the properties as to which administration under Section 5 of the Probate and Administration Act has now been granted, Probate duty was payable in respect of these properties before the grant of Probate was made by the District Judge of Midnapore. It is quite clear that, so far as these cases are concerned, the only test which they lay down is this: Was there a grant in respect of the assets outside jurisdiction.?
14. In the case of Attorney General v. Bouwens (1838) 4 M. & W. 171 : 150 E.R. 1390 : 1 H. & H. 319 : 7 L.J. (N.S.) Ex. 297 : 51 R.R. 517 both the above oases were fully considered. Lord Abinger, C.B., delivering the judgment of the Court, took the oases of Attorney General v. Dimond (1831) 1 C. & J. 356 : 148 E R 145 : 1 Tyr 243 : 9 L.J. Ex. O.S. 90 : 35 R.R. 732 and Attorney-General v. Hope (1834) 8 Bli (N.S.) 44 : 5 E R. 363 : 2 Cl & F. 84 : 37 R.R. 29 as settling the law that Probate duty is to be regulated, not by the value of all the assets which an executor or administrator may ultimately administer by virtue of the Will or Letters of Administration, but by the value of such part as is at the death of the deceased within the jurisdiction of the spiritual Judge by whom the Probate or Letters of Administration are granted. Now it may be pointed out at once that in the cases cited by Lord Abinger the foreign assets which were ultimately administered by the executor were so administered, not by virtue of the Probate at all, but because the French Bank in the first case and the American Authorities in the second case made over the assets to the executor on the production of the Probate. Those cases undoubtedly proceeded on the view that Probate duty was not payable in respect of the foreign assets because there was no grant of Probate in respect of them; not because the grant did not affect those assets.
15. The case of Blackwood v. Reg, (1883) 8 A.C. 82 : 52 L.J.P.C. 10 : 48 L.T. 441 : 31 W.R. 645, however, raises some difficulty. It suggests that the English Courts confined Probate duty to the property directly affected by the Probate, notwithstanding the sweeping general words of the Statutes which imposed it, the reason being that it was thought that the Legislature could not intend to levy a tax on the grant of an instrument in respect of the property which that instrument did not affect, This case clearly makes a distinction between properties which are the subject-matter of the grant and properties which are affected by the grant, and lays down that as the Legislature could not have intended to tax properties which could not be reached by the Probate, the perfectly general words used in the Statute must be read as limited to such estate as was affected by the grant of Probate. This case was followed in Commissioner of Stamps v. Hope (1891) A.C. 476 : 60 L.J.P.C. 44 : 65 L.T. 268.
16. Speaking entirely for myself, I have very grave doubt whether Blackwood v. The Queen (1883) 8 A.C. 82 : 52 L.J.P.C. 10 : 48 L.T. 441 : 31 W.R. 645 intended to decide anything more than this, that as a subordinate Legislature is not competent by legislation to authorise a Court to grant Probate in respect of assets situate outside the jurisdiction of the Legislature, the grant made by the Court under the authority of the Legislature, though it may be expressed in perfectly general words, must be deemed to be a grant in respect of assets within the jurisdiction of the Legislature. The question involved in the case was this; whether personal estate belonging to a person who died domiciled in the Colony of Victoria was liable to duty under the Statute passed by the Victorian Legislature, though that estate was situate in New South Wales and New Zealand. The Supreme Court of Victoria had directed judgment to be entered for the Grown for the amount found to be due on so much of the property as was of a moveable nature so as to fall within the maxim "mobilia sequuntar personam." Its judgment was based on the view that though prima facte the expressions "personal estate" and "real estate" refer to estates in Victoria, still the Legislature must be deemed to have intended that the duty shall be paid upon all real and personal estates whatsoever which are in contemplation of law situate in Victoria. As Lord Hobhouse, delivering the judgment of the Privy Council, pointed out, in their strict and literal meaning the words clearly included all personal estate, wherever it might be, and not personal estate in Victoria; and, by their prima facie meaning, the learned Judges of the Supreme Court intended to indicate the meaning they are calculated to bear after the subject-matter of the Statute is ascertained, and before legal rules and maxims are applied to it. Lord Hobhouse rejected the contention based on the maxim "mobilia sequuntur personam," and proceeded to find a basis for a substantial modification of the general words used in the Statute. Having examined all the relevant provisions of the Statute he came to the conclusion that by the terms "personal" and "real" estate were meant personal and real estate in Victoria. He made no distinction whatever between personalty and realty, for, as he pointed out, personalty in England was as far beyond the direct power of the Victorian Legislature as realty in England. The conclusion at which he arrived was expressed in these words: "Their Lordships think that in imposing a duty of this nature, the Victorian Legislature also was contemplating the property which was under its own hand, and did not intend to levy a tax in respect of property beyond its jurisdiction. And they hold that the general expressions which import the contrary ought to receive the qualification for which the appellant contends, and that the statement of personal property to be made by the executor under Section 7, Sub-section 2, of the Act, should be confined to that property which the Probate enables him to administer," In my judgment, this case is not an authority for the view that Probate duty is payable only in respect of assets affected by the grant, but it is an authority for the view that Probate duty is payable in respect of the assets which, having regard to the power of the Legislature, the Probate is intended to affect. The distinction is an important one and ought not to be ignored. The Victorian Legislature has no power to affect properties situate outside Victoria; therefore, Probate granted by the Victorian Court under authority conferred on it by the Victorian Legislature can only be in respect of properties in Victoria, But there is no doubt that the Indian Legislature can give authority to any Court in India, as it. has given under Section 76, Probate and Administration Act, to grant Probate in respect of the properties situate in India, This case is an authority for the view that, notwithstanding the sweeping general words of the Statute, Probate duty can be imposed only in respect of property under the hand of the Indian Legislature, and not in respect of property beyond its jurisdiction. The proposition, as stated in this form, does not touch the present case. I am inclined to think that Probate duty was payable in respect of the entire assets of the testator, including those situate in Singhbhum, on the Probate granted by the District Judge of Midnapore.
17. Now let me deal with the same question from another aspect. Is the petitioner making an application under Section 5 of the Probate and Administration Act required, under the law, to file an affidavit of valuation in the form set forth in Schedule III of the Court Fees Act? If he is so required, then there is no escape from the conclusion that the point of time at which the value of the estate is to be assessed is the date when the petitioner filed bis affidavit of valuation in this Court, that is to say, the 3rd January 1920. But if be is not so required, then clearly we must look to another point of time at which the value of the estate ought to be assessed.
18. The provision as to Probate duty in India is to be found in Article 11, Schedule I of the Court Fees Act. By the express provision of that Article Probate duty is payable on "Probate of a Will or Letters of Administration with or without Will annexed." The problem accordingly narrows down to this. Is the grant made by the Court under Section 5 of the Probate and Administration Act a grant of a Probate of a Will or Letters of Administration with or without Will annexed? If it be such a grant, then Probate duty is clearly payable on it and the Court fee must be regulated by the value of the property at the time when the application was made to this Court under Section 5 of the Act. If, however, the grant under Section 5 is not a grant of Probate of a Will or Letters of Administration with or without Will annexed, then clearly no duty is payable on such a grant and we must consequently seek for another principle on which to assess the properties which were not assessed at the time of the grant of Probate by the District Judge of Midnapore.
19. Section 5 of the Probate and Administration Act provides as follows;--"When a Will has been proved and deposited in a Court of competent jurisdiction, situated beyond the limits of the Province, whether in the British dominions, or in a foreign country, and a properly authenticated copy of the Will is produced, Letters of Administration may be granted with a copy of such copy annexed." Clearly the grant under Section 5 is not a grant of Probate or Letters of Administration with or without Will annexed, but it is a grant of Letters of Administration with a copy of a properly authenticated copy of the Will annexed. If the argument rested on nothing more than a mere technicality, still the petitioner would be entitled to argue that Probate duty is not payable on a grant made under Section 5 of the Probate and Administration Act.
20. The principle on which fiscal legislation ought to be construed was considered in the case of Partington v. Attorney-General (1869) 4 H.L. 100 at p. 122 : 38 L.J. Ex. 205 : 21 L.T. 370. The facts were as follows:--In 1819 one Mrs. Shard died in England intestate, leaving a considerable estate in England and leaving as her next-of kin Mrs. Isabel Cook, the wife of Mr. Ellis Cook, both of whom had always been domiciled in the United States Mrs. Cook made no attempt to take out Letters of Administration to the estate of Mrs. Shard and as no one applied for a grant of Letters of Administration, the Solicitors to the Treasury took out Letters of Administration for the purpose of administering her estate. Mrs. Cook died in 1825, without having red used into possession the properties which were of Mrs. Shard, Her husband Mr. Ellis Cook died in 1830, also without having taken any steps to reduce into possession the properties to which his wife became entitled upon Mrs. Shard's death. After the death of Ellis Cook his children gave Partington a power of attorney to recover from the Solicitors to the Treasury the properties which had belonged to Mrs. Shard and which they claimed under their mother. Partington then took out separate Letters of Administration to the estate, first, of Ellis Cook and then of Isabel Cook. He then instituted an administration suit in Chancery against the Solicitors to the Treasury, and the Court made the Solicitors chargeable with the principal sums of the assets of Mrs. Shard and also with the accretions at 4 per cent. interest on such principal sum since they had come into the hand of the Solicitors to the Treasury. The Letters of Administration had been at first obtained as upon assets of a nominal amount, but when the principal sums and the accretions had been ascertained, Partington applied to the Commissioners of Inland Revenue to put ad valorem stamp duty on the Letters of Administration, The Commissioners claimed that stamp duty should be calculated on a value in clouding all accretions from the death of Isabel Cook to the date of the administration. With this question we are not at present concerned. The Commissioners also claimed that the grant of administration for the effects of the late Ellis Cook, who survived his wife, should be stamped at the same rate. In other words, they claimed that a double duty was payable. 20. It was forcibly contended before the House of Lords that although on the letter of the law the Commissioners were entitled to a double duty, still there should be an equitable construction in favour of the subject, inasmuch as the Legislature could never have intended to levy double duty on the same death. To this argument Lord Cairns replied as follows: "I am not at all sure that, in a case of this kind--a fiscal case--form is not amply sufficient; because, as I understand the principle of all fiscal legislation, it is this: If the person sought to be taxed comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be. In other words, if there be admissible, in any Statute, what is called an equitable construction, certainly such a construction is not admissible in a taxing Statute, where you can simply adhere to the words of the Statute." The same rule was followed in Attorney-General v. Selborne (1902) 1 K.B. 388 : 71 L.J.K.B. 280 : 85 L.T. 714 : 50 W.R. 210 : 66 J.P. 132 : 18 T.L.R 111. Collins, M.R., delivering the judgment of the Court after quoting the passage from the judgment of Lord Cairns, said as follows:--"Therefore, the Crown fails if the case is not brought within the words of the Statute, interpreted according to their natural meaning; and if there is a case which is not covered by the Statute so interpreted, that can only be cured by legislation, and not by an attempt to construe the Statute benevolently in favour of the Grown."
21. Now interpreting the words used in Section 5 in their natural meaning, can we say that the grant of Letters of Administration with a copy of a properly authenticated copy of the Will is the same as a grant of Probate or Letters of Administration with or without Will annexed? In my view the question is not one of technicality but of sub-stance. The grant contemplated in Article 11, Schedule I of the Court Fees Act, is a grant made on an application under Section 62 and Section 64 of the Probate and Administration Act, that is to say, a grant made on an application to establish the Will or the representative character of the applicant, The grant under Section 5 does not pretend to establish either the Will or the representative character of the applicant. It is merely an ancillary grant, giving efficacy to a grant already made by the Court on an application under Section 62 of the Act. If we apply certain tests which are ordinarily applied to grants of Probate or Letters of Administration, it will be seen that a grant made under Section 5 of the Probate and Administration Act does not partake of the character of a grant made on an application under Section 62 and Section 64 of the Act. In the first place, an application for Probate or for Letters of Administration must state certain necessary facts which are not required to be stated in an application under Section 5 of the Act. For instance, the applicant under Section 62 must state the amount of assets which are likely to come to his hand, and when the application is to the District Judge and any portion of the assets likely to come to his hand is situate in another province, the amount of such assets in each province and the District Judge within whose jurisdiction such assets are. It will be noticed that these facts are not required to be stated in an application under Section 5 In my view the necessity for stating these facts in an application under Sections 62 or Section 64 of the Act is this, that without these facts it is impossible to assess the proper Court-fees payable on the grant. I am aware that Strachey, J., has taken a different view in Ezeivel Joshua Abraham, In re 21 B. 139 11 Ind. Dec. (N.S.) 95. His view is that the object of the section, in requiring the executor to state in his application for Probate the assets that are likely to come into his hand, was to furnish a basis for testing the accuracy of the subsequent inventory and accounts. Now he concedes that under Statute 55 Geo, III, C. 184, such a statement is required in order that the proper and full stamp duty may be paid on such Probate." I can see no reason whatever for assuming that the Legislature in this country had another object in view in requiring the executor to make a statement of the nature which I have stated. I cannot understand how a statement of this kind can be a check upon the accuracy of the subsequent inventory and accounts, unless it was intended by the Legislature that the grant of Probate should be in respect of the assets stated in the petition as likely to some into the petitioner's hand, I think Section 19(1) of the Court Fees Act makes the matter perfectly clear. That Section provides that no order entitling the petitioner to the grant of Probate or Letters of Administration shall be made upon an application for such grant, until the petitioner has filed in Court a valuation of the property in the form set forth in the Third Schedule, and the Court is satisfied that the fee mentioned in No. 11 of the First Schedule has been paid on such valuation. It is not unreasonable to assume that the affidavit of valuation should correspond with the statement in the application for Probate as to the assets likely to come into the petitioner's hand. It is not necessary, however, to determine this point, except to say that whereas an application under Section 62 and Section 64 for Probate does require the petitioner to make certain statements as to assets, an application under Section 5 of the Act does not require the petitioner so to do. In the next place, a petition for Probate or Letters of Administration must be subscribed by the petitioner and bis Pleader and must be verified by the petitioner in a particular manner and where the application is for Probate or for Letters of Administration with the Will annexed, the petition must in addition be verified by at least one of the witnesses to the Will when procurable, in a particular manner mentioned in Section 67 of the Act. There is nothing whatever to indicate that these provisions apply to an application under Section 5 of the Act. In the third place, the person obtaining a grant of Probate or of Letters of Administration is required by the express provision of the Legislature to give an undertaking to the Court making the grant to administer the property and credits of the deceased and exhibit the same in the Court within six months from the date of the grant and also to render to the same Court a true account of the said property and credits within one year from the same date. There is no such undertaking required in a grant under Section 5 of the Act, The distinction is important. Its effect is to vest the District Judge with complete jurisdiction over the executor in all matters relating to inventory and accounts even in respect of properties situate outside jurisdiction. Lastly, the person to whom any grant of Letters of Administration is committed and, if the Judge so direct, any person to whom Probate is granted is required by Section 78 of the Act to give a bond to the Judge of the District Court with one or more surety or sureties, engaging for the due collection, getting in, and administering the estate of the deceased. This again vests the District Judge with jurisdiction over the administrator or, if the Judge so direct, the executor. The Court making a grant under Section 5 of the Act has no power whatever to require a person to give a bond as required by Section 78 of the Act.
22. What then is the character of the grant made under Section 5 of the Act? It will be interesting in this connection to deal with the English procedure as to re-sealing grants under Statutes which may conveniently be called Re-sealing Statutes. I shall presently show that the procedure under Section 5 of the Probate and Administration Act is analogous to the English procedure under the Re-sealing Statutes.
23. I will take the case of English grants in respect of properties situate both in England and in Ireland. Before the Statutes to which I shall presently refer, a grant made in England was ineffectual so as to affect any assets in Ireland or Scotland. It was necessary for the grantee to take out another grant of administration in Ireland or Scotland, if the testator or the intestate left assets in Ireland or Scotland. By 20 and 21 Vict., C. 79, Section 94, it was provided that "from and after the period at which the Act shall come into operation, when any Probate or Letters of Administration to be granted by the Court of Probate in England shall be produced and a copy thereof deposited with the Registrar of the Court of Probate in Ireland, such Probate or Letters of Administration shall be sealed with the seal of the said last-mentioned Court and being duly stamped shall be of the like force and effect and have the same operation in Ireland as if it had been originally granted by the Court of Probate in Ireland." By 22 and 23 Vict., C. 31, Section 25, it was enacted that "Letters of Administration granted by the Court of Probate in England shall not be re-sealed, under Section 94 of 20 and 21 Vict., C. 79, until a certificate has been filed under the hand of the Registrar of the Court of Probate in England, that bond has been given to the Judge of the Court of Probate in England in a sum sufficient in amount to cover the property in Ireland as well as in England in respect of which snob administration is required to be re-sealed." Order LXXIX, Rule 74 of the Rules of the Supreme Court (Ireland), 1905, directs that the "seal is not to be affixed to any Probate or Letters of Administration granted in England, so as to give operation thereto as if the grant had been made in Ireland, unless it appear from a certificate of the Commissioners of Inland Revenue, or their proper officer, that estate duty has been paid in respect of the personal estate and effects of which the deceased died possessed in Ireland." This certificate is obtainable on application made by letter to the Secretary, Estate Duty Office, Somerset House, London, petting out the Irish property and asking for a certificate that the duty thereon has been paid. It will appear, therefore, that the procedure for petting an English grant re-sealed in Ireland is this; the applicant arms himself with a properly authenticated copy of the Will "or an exemplification," as it is technically called, and proof of two important tacts, first, that he has given security to cover the estate of the deceased in Ireland as well as in England, and, secondly, that he has paid the duty in respect of the estate of the deceased in Ireland as well as in England and then he applies to have the English grant re-sealed in Ireland. The duty of the Irish Court then becomes "ministerial merely, to grant ancillary Probate or Letters of Administration," It will be observed that there is no power in the Irish Court, in circumstances such as these, to hold an enquiry into the valuation of the estate of the deceased in Ireland. Exactly the same procedure is laid down by various Statutes for having an Irish grant re sealed in England or Scotland or a Scotch grant re-sealed either in England or Ireland or an English grant re-sealed in Scotland or a Colonial grant re sealed in England, Scotland or Ireland.
24. It seems to me that the jurisdiction conferred on a Court in India under Section 5 of the Probate and Administration Act is analogous to that conferred on the Courts in England, Scotland or Ireland by the Re-sealing Statutes to which I have referred. The Court has no power, under Section 5, either to grant Probate or Letters of Administration with or without Will annexed. It has power only to grant Letters of Administration with a copy of a properly authenticated copy of the Will annexed. The language employed by the Legislature under Section 5 is not accidental but is deliberate, and enables the Court, "following the English Law" as Farran, C.J., said in Bhaurao Dadajirao v. Lakshmibai 20 B. 607 at p. 610 : 10 Ind. Dec. (N.S.) 971, "to dispense with the necessity of proof of the original Will."
25. Is a Court then bound to giant administration under Section 5 when an application is made for it? The word "may" indicates that there is some discretion in the Court to refuse the grant. What then are the considerations which must weigh with the Court in either granting or refusing to grant Administration under Section 5 of the Act? It seem to me that the limitations are exactly those which have by various Statutes been imposed on the Re-sealing Courts in England, Scotland or Ireland, The word "may" has exactly the same operation as Section 94 of 20 & 21 Vict, C. 79, and Order LXXIX, Rule 74 of the Rules of the Supreme Court (Ireland), 1905, and the analogous provisions in the other Statutes which have been passed in England. In other words, the Court must he satisfied, first, that the executor or the administrator has given security to cover the estate of the deceased within the jurisdiction of the Court which granted Probate or Letters of Administration as well as that within the jurisdiction of the Court asked to make a grant under Section 5 and, secondly, that he has paid the duty in respect of the estate of the defeased within the jurisdiction of the Court that granted the Probate or Letters of Administration as well as that within the jurisdiction of the Court asked to make a (11) 20 b, 007 at p, 610; 10 Irid. Deo. (N.G.) 971, grant under Section 5 When the Court is satisfied as to these facts, and it has been shown that the Will has been proved and deposited in a Court of competent jurisdiction situate beyond the limits of the province, there is no further discretion left in the Court to refuse to make grant under Section 5.
26. Now, as I have shown before, Probate duty is not payable in re peat of a grant made under Section 5 of the Act and yet the Court making a grant under Section 5 must be satisfied that Probate duty has been paid in respect of the estate of the deceased within the jurisdiction of that Court, It must follow, therefore, that either the entire Probate duly is payable on the application made under Section 62 or Section 61 of the Act, or that the applicant making the application under Section 5 must pay such portion of the Probate duty as was not paid at the time of his application under Section 62 or Section 64 of the Act.
27. The question whether the entire Probate duty was payable at the time when the application for Probate was made to the District Judge of Midnapore is a question of some difficulty and I do not intend to decide it. But there can be no possible room for controversy, having regard to the construction of Section 5, Sections 62 and 64 of the Probate and Administration Act and Article 11, Schedule 1 of the Court Fees Act, that Probate duty on the entire estate likely to come into the hand of the executor was payable on the grant of Probate made by the District Judge of Midnapore. It may be that the time for payment is postponed, but it is one thing to say that the time for payment is postponed and another thing to say that no payment was necessary in respect of the properties outside jurisdiction on the grant of Probate made by the District Judge of Midnapore. in this case Probate was granted for or in respect of the properties not only situate within the jurisdiction of the Midnapore Court but also in respect of properties situate outside the jurisdiction of that Court but within British India; but the grant by its own force did not affect the assets outside the jurisdiction until this Court under Section 5 gave it efficacy. The grant made by this Court under Section 5 was not a grant of Probate or Letters of Administration with or without Will annexed, but an ancillary grant in order to give efficacy to the grant made by the District Judge of Midnapore But although the payment of the duty in respect of the properties outside the jurisdiction was postponed, still the duty was payable not on the ancillary grant but on the original grant. Whether the duty on the whole estate was either exigible or payable on the original application at the time of the grant of Probate is a difficult question on which much might be said, and the law is far from clear, But it is unnecessary to answer this question explicitly in that form, because it is conceded that duty is payable now on the property on which it has not yet been paid and the only question arising on this part of the case is as to the period of the valuation. Now in view of these two considerations, (1) that the original application is required to be accompanied by a valuation of the whole estate, and (2) that the grant under Section 5 is merely ah ancillary grant giving efficacy to the original grant over the estate in this province, it seems to me that the effective date must be the date of the original application. And I am fortified in this view by the general consideration that a taxing Statute must in case of doubt be construed in favour of the subject. I hold that the Court-fees must be regulated by the value of the estate, not at the date of the application to this Court, but at the date of the original grant, that is to say, the 11th April 1916.
28. I now come to the actual valuation made by the learned Registrar. It will be convenient to set out in a tabular form the properties which are required to be valued and to give the valuation made by the applicant, the Collector and the learned Registrar respectively:
______________________________________________________________________________________________________________________ | | | Value | Valuation | Valuation | found Properties. | by the | by the | by the | applicant. | Collector. | learned | | | Registrar.
______________________________________________________________________________________________________________________ | | | | Rs. | Rs. | Rs.
1. Rental in ijara | 5,66,580 | 9,61,456 | 9,61,486 portion. | | |
2. Khas ... | 1,17,820 | 2,12,687 | 2,00,394
3. Government Se- | 2,049 | 2,049 | 2,049 curities. | | |
4. Raj-Sultanat ... | 3,000 | 4,000 | 4,000
5. House property | 28,400 | 2,75,300 | 2,77,300
6. Income from | 42,760 | 1,38,125 | 1,38, 25 the mines | | |
7. Ballast, etc ... | Included | 6,715 | 6,715 | in item | | | No. 14 | |
8. Income from | ... | 10,200 | 10,200 hats and | | | fisheries. | | |
9. Valuation of | ... | 2,86,369 | 2,85,369 Midnap ore | | | Zeminda r y | | | Compa n y's | | | profits | | |
10. Value of re- | ... | 67,942 | 67,942 s u m a b l e | | | Kho r po s h | ... | ... | ...
tenure. | | |
11. Service ten- | | |
ures. | | |
12. Land acquisi- | ... | 5,22,778 | 5,06771
13. Waste lands | ... | 2,80,000 | 6,78,000
14. Forests ... | 90,000 | 9,13,770 | 36,00,000
_________________________________________________________________________________________________ | 8,49,559 | 36,80,421 | 66,38,251.
_______________________________________________________________________________________________________________________ From the sum of Rs. 66,38,251, found by the learned Registrar to be the gross value of the estate left by the testator, the learned Registrar deducted two items: Rs. 45,879, which represents the value of the Midnapore area for which Probate duty has already been paid and Rs. 1,05,287, which represents the total sum set out in Annexure B. The learned Registrar has accordingly come to the conclusion that the true net value of the estate for and in respect of which Probate duty is payable in this Court is Rs. 64,87,085.
29. Mr, Manuk appearing en behalf of the executor does not contest the valuation of the Registrar in regard to Items Nos. 1, 2, 3, 4, 7 and 8, So far as Item No. 11 is concerned, there is no contention before us as the learned Registrar has not attached any value to it.
30. It will be convenient to take the forests first, the last item in the tabular statement. The Deputy Commissioner in his report valued the forest at Rs. 9,13,770, but his evidence before the Registrar advances this estimate to Rs. 48,00,000. The learned Registrar says that there is this to be said in favour of Mr. Scott's evidence that he has traversed the Dhalbhum forest from end to end and has had large experience of forests in Assam, Mayurbhunj and as manager of the vast Government reserved and protected forests in Kolhan and Porahat. Bat the advance from 9 lacs to 48 lacs requires explanation, and it is difficult to regard seriously an estimate which has varied to this extent. The last estimate is apparently a guess at the sum of the values of the trees in a jungle extending over 467 square miles. Apart from the fact that the value of a forest cannot possibly be the sum of the value of the trees; it is admitted by the Deputy Commissioner "that the jungle is worth his valuation as workable, though not as hitherto worked." But to be workable in the sense in which the Deputy Commissioner has used the term, it would require an expenditure of capital which is no part of the property. The evidence of an expert valuer would have been of much assistance, but the Deputy Commissioner of Singhbhum, on whose evidence the learned Registrar has in the main acted in making his valuation, is not in any sense an expert valuer. He has undoubtedly had very great experience of forest in the course of his duties in the administration of various districts, including Singhbhum, but such experience is casual and unsystematic and opinions based upon it are not entitled to be treated as expert. Mr. Scott's method of valuation is as follows:--There are, he says, 559 square miles of forest. He would deduct 5 per cent. for deforestation and 64 square miles for tenure holders, etc, leaving 467 square miles to be valued. He divides this 467 square miles into two Classes: 200 square miles first class and 250 square miles second class, neglecting, for the purpose of valuation, the remaining 17 square miles. He takes the first class forest at Rs. 30 per acre and accordingly values the 200 square miles at Rs. 38,40,000. He takes the second cess at Rs. 6-6-0 per acre and accordingly values it at Rs. 9,60 000. His total figure, therefore, comes to Rs. 48,00,000.
31. In his evidence Mr. Scott says that the entire forest is under the management of the Midnapore Zemindary Company, who get 25 per cent. of the income for management. He admits that he could secure figures of forest income from the returns supplied by the Midnapore Zemindary Company quarterly or half yearly. He explains that with proper management the jungle was worth his valuation, that is to say, that it was worth that amount as workable, though not as hitherto worked. His point is that the Midnapore Zemindary Company has never properly worked the forest. He absolutely declines to capitalize incapacity and thinks that if properly worked, the forest would be worth bis valuation.
32. As I have said before, the value of a forest cannot possibly be the sum of the value of the trees and it is quite impossible to work the forest in the sense in which the Deputy Commissioner has used the term, without an expenditure of capital which forms no part of the testator's estate. In the case of Attorney-General v. Sefton (1865) 11 H.L.C. 257 : 11 E.R. 1331 : 5 N.R. 436 : 12 L.T. (N.S.) 242 : 145 R.R. 162 the question was discussed whether possible increase or diminution in the value of the property, subsequent to the date when the value of the property is to be ascertained, could be taken into consideration in assessing the property. The material facts were as follows:--At the date when the value of the estate was to be assessed and for ten years previously the land in question was unoccupied and unproductive. It did not, therefore, form part of the return made to the Inland Revenue Office for the purpose of settling the amount of succession duty payable in res pact of the property. But shortly after the return was made, the land increased enormously in value and the Attorney-General thereupon filed his information against the Earl of Sefton asking for a declaration that the Earl of Sefton was chargeable with duty in respect of his succession to the land mentioned in the schedule.
33. Now the question in the case cited arose in connection with the succession duty payable by the Earl of Sefton to the Crown on his succession to the property, and by Section 10 of the Statute every successor was mads liable to pay a tax "in respect of every such succession according to the value thereof." Under the Court Fees Act, the duty is payable on the amount or value of the property in respect of which the grant of Probate or Letters of Administration is made." There is this difference between a succession duty in England and Probate duty in India that whereas the succession duty is a duty on the value of the succession, Probate duty in India is a duty on the value of the properties in respect of which the grant is made. But in either case the duty is a duty on the value of a benefit scoured by, or conferred on, the applicant.
34. It was boldly argued by the Crown in Attorney General v. Sefton (1863) 2 H. & C. 362 : 159 E.R. 150 : 32 L.J. Ex. 230 : 9 Jur. (N.S.) 1296 : 8 L.T. (N.S.) 794 : 145 R.R. 162 that the successor was bound to pay not only for the actual benefit received by him, but for a prospective and future benefit which, having regard to what had actually happened, was bound to accrue to the successor at no distant date. To this, the answer of Wilde, B., was as follows:--"Any system of charge, therefore, which draws into the calculation a prospective and future benefit, uncertain as to the time of its incidence, has the vice of making a tenant for life or a shorter period pay upon the footing of an event which may not occur in his time, and for a benefit which may not accrue during his tenancy."
Now, it is urged that if some system is not adopted, which takes account of a value which, though future and uncertain, may, as in the present case, be some thing more than probable, and near at hand, the result would be that the successor would obtain a benefit in respect of which he would pay no duty. And this is undoubtedly true. And it is the strength of the argument on the part of the Crown. But it is by no means plain that the Legislature intended to prevent such a result.
If the question lay between a system which should make a successor pay for a benefit he might never receive, and one under which a successor might possibly receive a benefit for which he never paid, I can well understand that the latter might be the alternative chosen." And he dealt with the question of justice as between the Grown and the subjects in a passage which has often been cited and will bear repetition. That passage is as follow:--"The truth is, that anything like exact justice between the Crown and the successor, forcing him on the one hand to pay to the last farthing for all that he receives, and protecting him on the other from paying for anything more than he actually enjoys, can only be obtained by some system which should provide for the incidence of the tax at the time when the increase or decrease in value takes place. So that, instead of the succession being dealt with, and its value, for the purpose of taxation, ascertained once for all at the time of the successor becoming entitled, the account would be kept ever open, and the tax would be increased or reduced pari passu, with the rise and fall in the annual value of the succession. This would attain perfect adjustment of taxation to benefit, but it would be in practice perfectly intolerable." When the case went up to the House of Lords, Lord Wensleydale put this question to the Attorney General, " Suppose I have a mine running under my ground, but I prefer to leave it unused, are you to charge me for what I do not use?" It will be noticed that Lord Wensleydale to some extent anticipated the argument of Mr. Scott, that he was not prepared to capitalize incapacity. The speech delivered by Lord Wensleydale shows that you can only tax that which you find, and that yon are not entitled to take into consideration the increase in value due to the industry or the expenditure of the capital by the successor. "If the property is then of no annual value whatever," said His Lordship, "there is no basis whereon to make any calculations. If the land increased afterwards in value by the exertion and employment of the capital of the successor in improving his own property, it is out of the question to suppose that such increase of value should be taxed. That never came in any degree from the predecessor." It seems to me that the reasoning employed by Lord Wensleydale in the case cited applies with equal force to this case. Under the Court Fees Act, it is the value of the property in respect of which the grant of Probate or Letters of Administration is made that is taxed. Surely we cannot take into consideration what the value of the property is likely to be. if it passed into the hands of the most efficient of managers who had not only sufficient energy but also sufficient capital to work the forest as Mr. Scott would like it to be worked. I am of opinion, therefore, that the evidence given in this case by Mr. Scott is entirely irrelevant.
35. If the Deputy Commissioner's method of calculation is discarded, the only other basis is the value of the property as leased to the Midnapore Zemindary Company. The fixed rent of the forest is included in the general rent of the lease-hold property and will be valued under that head. Besides this the estate is entitled to a royalty on the timber actually cut, of which the Company retains 25 per cent. It is admitted that the income derived from royalties is Rs. 10,877. This figure, therefore, represents three fourths of the profit on timber out every year. This at 17 years' purchase gives us Rs. 2,30,886 as the value of the forest. This is the only basis for ascertaining the value of the forest. I would value the forest at Rs. 2,30,886.
36. I now come to the waste lands, These consist of 1400 bighas, 300 bighas in Jugsalai and 1100 bighas elsewhere. In his letter to this Court the Collector valued these lands at Rs. 2,80,000, In his evidence before the learned Registrar his figure went up to Rs. 5,78,000. The learned Registrar has, however, fixed the value of these lands at Rs. 5,28,000, but has added the sum of Rs. 50,000 So the valuation on account of some building sites which Mr. Scott preferred to neglect.
37. So far as the Jugsalai lands are concerned, there can be no doubt that they are becoming more valuable every day owing to their close proximity to Tatanagar. But the difficulty is that it is a Pradhani village and the Pradhan claims the right to settle lands in this village. We read in Mr. Reid's Settlement Report of Dhalbhum that the ancient system of land tenure in Dhalbhum was the headman's tenure and that the development and reclamation of the cultivable lands from jungle and waste have taken place almost entirely under that system. It is certain that this system could not exist without giving certain important privileges to the Pradhan, and one of his privileges is that he is the only person who can settle ryots in the cultivable waste lands. Mr. Reid says that the landlord can, under no circumstances, settle ryots in an area which has been leased to a headman, during the continuance of the headman's tenure. I understand the learned Government Advocate to concede this proposition, but he urges, first, that these lands have been recorded as the khas lands in which the Pradhan has no right, and secondly, that if they are Pradhani lands, the landlord can settle these lands provided they are waste lands. On the first point, it is sufficient to say that there is no evidence that these lands have been recorded as the khas lands of the proprietor. On the second point, all that I can say is that it is open to grave doubt whether the landlord can settle waste lands lying within the ambit of the area leased out to a Pradhan. All that Mr. Reid says is that the Pradhan cannot clear valuable forest lands without the consent of the landlord. But these lands are not forest lands, and it has not been shown that they are not cultivable waste lands. The point may be a debatable one whether the Pradhan can settle these lands without the consent of the landlord, but it is quite clear that "the landlord can, under no circumstances, settle ryots in an area which has been leased to a headman, during the continuance. of his lease."
38. The argument, however, is wholly irrelevant in view of my finding that we must regard the 11th April 1916 as the critical date for this enquiry. Had the enquiry taken place in the Court of the District Judge of Midnapore on the application for grant of Probate filed in that Court, it could not have been urged for a single moment that there was any value attached to these lands. Undoubtedly there has been a rapid rise in the market value of these lands, but it has not been shown that there was the slightest demand for these lands in April 1916. The case of Attorney General v. Sefton (1865) 11 H.L.C. 257 : 11 E.R. 1331 : 5 N.R. 436 : 12 L.T. (N.S.) 242 : 145 R.R. 162 is directly in point and in accordance therewith I must hold that these lands are not assessable.
39. I will now deal with the land acquisition money. It appears that in 1919-1920 a sum of Rs. 5,21,731-2-5 was received by the testator's estate in cash, in respect of certain lands acquired on behalf of the Tatas under a declaration of 23rd October 1919. In my view this sum is not assessable, inasmuch as it did not form part of the testator's estate on the 11th April 1916. Nor can it be urged that the property which was acquired and which undoubtedly formed part of the estate of the testator on the 11th April 1916 was, on the 11th April 1916, worth the sum of Rs. 5,21,731-2-5. There is not the slightest evidence that there was any rise in the value of the properties in April 1916. I hold that this sum is not assessable.
40. I will now deal with the value of the house properties. They consist of (1) a bungalow at Jugsalai, (2) buildings at Narsinghur, (3) buildings at Ghatsila.
41. There is no dispute in regard to the bungalow at Jugsalai, Mr. Manuk accepts the Registrar's valuation, namely, Rs. 2,000, for the bungalow and Rs. 300 for the old Kutchery--altogether Rs. 2,300.
42. In regard to the buildings at Narsinghur, Mr. Manuk's first contention is that they are legacies on trust and are, therefore, not assessable. I do not agree with this contention. "Property held in trust" within the meaning of Annexure B is property held in trust by the testator, not property as to which the testator has created a trust. If these properties are assessable, the next question is--what is the method of valuation? Mr. Scott's method is as follows:These buildings cost the testator Rs. 2,30,000 in 1906. In 1919 they could not be built for less than Rs. 4,60,000. Therefore, the true value of these buildings is Rs. 4,60,000 less depreciation, for which Mr. Scott would allow Rs. 2,30,000. According to Mr. Scott the value of these buildings is Rs. 2,30,000. In my view this is not a correct method of valuation. No one purchasing house property in the open market would enter into the transaction on a nice calculation as to what the house would cost in bricks, labour, wood and iron works, etc. In my judgment the value of these buildings is Rs. 2,30,000, less half that amount for depreciation, that is to say, Rs. 1,15,000.
43. As regards the Ghatsila properties we accept the learned Registrar's valuation, namely, Rs. 45,000, The true value of the house property would then be Rs. 1,62,000.
44. The next item is as to the income from mines. These mines were demised to Prince Buktyar Shah in 1905, and his D23estate, which is in charge of the Official Receiver, pays royalty to the testator's estate, The question under this head comes to this, what was the value of these royalties to the estate of the testator on the 11th April 1916? The learned Registrar has taken the average of the four years from 1916 to 1920 at seventeen years' purchase. He is of opinion that the last four years' profit of an improving property gives a reasonable valuation. The income of the last four years is as follows:
Rs.
1916-17 ... 6,687
1917-18 ... Nil.
1918-19 ... 4,932
1919 20 ... 21,250.
45. The jump from Rs. 4,932 in 1919 to Rs. 21,250 in 1920 requires explanation and the drop from Rs. 6,687 in 1917 to nil in 1918 does not improve matters. It is, however, unnecessary to pursue this subject, because in my opinion we must altogether ignore the income from 1916 to 1920. The material date is the 11th April 1916 and in order to arrive at a correct valuation of the income as at the 11th April 1916 we must take the average from 1906 to 1915 at seventeen years' purchase. The income from 1906 to 1915 was as follows:
Rs. 625 in 1906.
" 1,450 in 1907.
" 583 in 1908.
" 1,232 in 1909.
" Nil in 1910.
" 1,630 in 1911.
" 3,220 in 1912.
Nil in each of the years 1913, 1914 and 1915.
46. This gives an average of Rs. 874, which at seventeen years' purchase brings the figure to Rs. 14,858. I would accordingly value the income from the mines at Rs. 14,858.
47. I will now deal with the valuation of the Midnapore Zemindary Company's profits. As the vara is to run up to 1930, Mr. Scott has taken the average income derived by the company at seven years' purchase (seventeen years minus ten years still to run). This is incorrect. If the material date be the 11th April 1916, then, in order to arrive at a correct valuation of these profits, we ought to take the average income on the 11th April 1916 at three years' purchase, as there would be fourteen years still to run from 11th April 1916, The evidence as to the average income is most unsatisfactory, and there is all the more reason to complain since the Crown was in a position to call for the books of the company. The statements of profits (Exhibit 3A and 3B) are of the years which we must exclude from our consideration and Exhitit 20, apart from being inadmissible in evidence, stands on no better footing than Exhibits 3A and 3B. But still the Collector says that Rs. 36,000 is the average income and we are compelled to accept this figure for want of better evidence. But we must exclude from our consideration the prospective increase of Rs. 4,767 after the Settlement of 1924. It is sufficient to refer to the case of Attorney General v. Sefton (1865) 11 H.L.C. 257 : 11 E.R. 1331 : 5 N.R. 436 : 12 L.T. (N.S.) 242 : 145 R.R. 162. The value of these profits accordingly is Rs. 36,000 at three years' purchase, that is to say, Rs. 1,08,000.
48. I will deal with resumable khorpoth tenure. The annnal net income from these khorpoth properties, whioh are held by ladies whose average age at the time of the learned Registrar's report was fifty, is Rs. 9,706. According to the learned Registrar their probability of life, at the time when he was writing the report, did not exceed ten years on the average and he accordingly Valued these tennres at seven years' purohase, deducting ten years from seventeen years. In my view, we ought to value these tennres at three years' purchase, since the relevant date for the basis of calculation is the 11th April 1916, at whioh date the probability of life of these ladies was fourteen years and not ten years. I would value these khorpoeh tennres at Rs. 29,118. In my judgment the true value of the various items mentioned in the report of the learned Registrar is as follows:
Rs.
1. Rental in ijara portion ... 9,61,486
2. Rental in khas ... ... 2,00,294
3. Government security ... 2,049
4. Raj Sultanat ... ... 4,000
5. House property ... ... 1,62,300
6. Income from mines ... ... 14,858
7. Income from bricks, etc. ... 6,715
8. Income from hats and fisheries 10,200
9. Valuation of Midnapore Zemindary Company's profits ... 1,08,000
10. Value of khorposh tenures ... 29,118
11. Service tenures ... ... Nil.
12. Land Acquisition (cash) ... Nil.
13. Waste lands ... ... Nil.
14. Forest ... 2,30,886 _____________ 17,29,906 Deduct in respect of Midnapore area ... 45,879 ______________ 16,84,027 Deduct Annexure B ... ... 1,05,287 ______________ True next value ... ... 15,78,740.
49. The Court-fee is, therefore, payable on the net value of Rs. 15,78,740. From the Court-fee so calculated must be deducted the sum of Rs. 19,323-4-0, which has already been paid. Let the excess fee found to be payable be calculated by the office and let it be declared that the excess fee so found to be payable is recoverable from the executor by the Chief Controlling Revenue Authority.
Ross, J,
50. I entirely agree both to the valuation and to the reasoning upon which it has been arrived at.