PETITIONER: PREM CHAND GARG Vs. RESPONDENT: EXCISE COMMISSIONER, U. P., ALLAHABAD DATE OF JUDGMENT: 06/11/1962 BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. SINHA, BHUVNESHWAR P.(CJ) WANCHOO, K.N. GUPTA, K.C. DAS SHAH, J.C. CITATION: 1963 AIR 996 1963 SCR Supl. (1) 885 CITATOR INFO : D 1967 SC 1 (49,50,51,81,100) R 1967 SC 847 (5) RF 1968 SC 888 (12) E 1972 SC 963 (35) RF 1976 SC1750 (3) R 1978 SC 68 (89) E 1980 SC 808 (4) D 1988 SC1531 (184) D 1991 SC2176 (51) O 1992 SC 248 (40,41,42,43) ACT: <ORG>-Writ Petition Security for costs of res- pondent-Rule, validity of-<ORG> Rules, O.XXXV, r.12- Constitution of India, Arts. 32 and 145. HEADNOTE: Rule 12 of O.XXXV <ORG> Rules empowers the <ORG> in writ petitions under Art. 32 to require the petitioner to furnish security for the costs of the respondent. The petitioner contended that the rule was invalid as it placed obstructions on the fundamental right guaranteed under Art. 32 , to move the <ORG> for the enforcement of fundamental rights. Held, (per <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, <NAME>., <NAME>, J., contra), that r. 12 of O.XXXV <ORG> Rules is invalid in so far as it relates to the furnishing of security. The right to move the <ORG> under Art. 32 is an absolute right and the content of this right cannot be circumscribed or impaired on any ground. An order for furnishing security for the respondent's costs retards the assertion or vindication of the fundamental right under Art. 32 and contravenes the said right. The fact that the rule is discretionary does not alter the position. Though Art. 142(1) empowers the <ORG> to pass any order to do complete justice between the parties, the <ORG> cannot make an order inconsistent with the fundamental rights guaranteed by Part III of the Constitution. No question of inconsistency between Art. 142.(1) and Art. 32 arises as Art. 142(1) does not confer any power on the <ORG> to contravene the provisions of Art. 32. Nor does Art. 145 which confers power, upon the <ORG> to make rules, empower it to contravene the provisions of Art. 32. Ramesh Thapper v. State of.Madras, [19501 S. C. R. 394, <CITATION> ,  S. C. R. 597 and <CITATION> .,  1 S. C. R. 574, relied on, 886 <CITATION>  Supp. 2 S. C. R. 316, explained. <CITATION> ,  Supp. 1 S.C.R. 806, <CITATION> ,  1 S. C. R. 497, distinguished. <NAME>,J.-The impugned rules is not void. The rule does not directly place any restriction upon the right of a litigant to move the <ORG>. It merely recognises the jurisdiction of the <ORG>, in appropriate cases, to make an order demanding security. It is not, in substance, a rule relating to practice and procedure but it deals primarily with the jurisdiction of the <ORG>, which has its source in Art. 142 of the Constitution, No question of conflict arises between the rule which merely declares the jurisdiction of the <ORG> defined by Art. 142 and the right guaranteed under Art. 32. The provisions of Art. 142 and Art. 32(1) must be read harmoniously. Both being provisions in the Constitution, one cannot prevail over the other. Pandit <NAME> v. Shri sri Krihhna <NAME>,  Supp. 1 S. C. R. 806, relied on. JUDGMENT:

ORIGINAL JURISDICTION : Petition No. 52 of 1962. Petition under Art. 32 of the Constitution of India for enforcement of fundamental rights.

<NAME>, <NAME> and <NAME>, for the petitioners.

<NAME> and <NAME>, for the respondents Nos. 1 & 2. <NAME>, Solicitor-General of India, <NAME> and <NAME>, for respondent No. 3. 1962. November, 6. The Judgment of <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, <NAME>., was delivered by <NAME>, <NAME>, J., delivered a separate judgment. <NAME>, J.-This is a petition under Art. 32 and it raises an interesting and important question about the validity of one of the Rules made by this <ORG> in exercise of its powers under Art. 145 of the Constitution. The impugned Rule is Rule 12 in Order XXXV. It provides that the <ORG> may, in the proceedings to which the said Order applies, impose such terms as to costs and as to the giving of security as it thinks fit. One of the proceedings covered by Order XXXV is a petition under Art.

32. The petitioners <NAME>, 8 Anr., partners of <ORG>, Ghaziabad, have filed under Art. 32 petition No. 348 of 1961 impeaching the validity of the order passed by the Excise Commissioner refusing permission to the <ORG> to supply power alcohol to the petitioners. This petition was admitted on December 12, 1961 and a Rule was ordered to be issued to the respondents, the Excise Commissioner of U.P., Allahabad, and the State of U. P. At the time when the rule was thus issued, this <ORG> directed under the impugned Rule that the petitioners should deposit a security of Rs. 2,500/- in cash within six weeks. According to the practice of this <ORG> prevailing since 1959, this order is treated as a condition precedent for issuing rule <NAME> to the impleaded respon- dents. The petitioners found it difficult to raise this amount and so, on January 24, 1962, they moved this <ORG> for a modification of the said order as to security. This application was dismissed, but the petitioners were given further time to deposit the said amount by March 26, 1962. This order was passed on March 15, 1962. The petitioners then tried to collect the requisite fund, but failed in their efforts, and that has led to the present petition filed on March 24, 1962. By this petition, the petitioners contend that the impugned Rule, in so far as it relates to the giving of security, is ultra vires, because it contravenes the fundamental right guranteed to the petitioners under Art. 32 of the Constitution. That is how the question about the validity of the said Rule falls to be determined on the present application,  Article 32 (1) provides that the. right to move the Supreme <ORG> by the appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed, and sub- Art. (4) lays down that this right shall not be suspended except as otherwise provided for by this Constitution. There is no doubt that the right to move this <ORG> conferred on the citizens of this country by Art. 32 is itself a guaranteed right-and it holds the same place of pride in the Constitution as do the other provisions in respect of the citizens' fundamental rights. The fundamental rights guaranteed by Part III which have been made justiciable, form the most outstanding and distinguishing feature of the Indian Constitution. It is true that the said rights arc not absolute and they have to be adjusted in relation to the interests of the general public. But as the scheme of Art. 19 illustrates the difficult task of determining the propriety or the validity of adjustments made either legislatively or by executive action between the fundamental rights and the demands of socioeconomic welfare has been ultimately left in charge of the High <ORG>s and the Supreme <ORG> by the Constitution. It is in the light of this position that the Constitution- makers thought it advisable to treat the citizens' right to move this <ORG> for the enforcement of their fundamental rights as being a fundamental right by itself. The fundamental right to move this <ORG> can, therefore be appropriately described as the comer-stone of the democratic edifice raised by the Constitution. That is why it is natural that this <ORG> should, in the words of <NAME>, J., regard itself "as the protector and guarantor of fundamental rights, "and should declare that "it cannot, consistently with the responsibility laid upon it, refuse to entertain applications seeking protection against infringements of such rights" (Vide Ramesh Tlappar Y. The State of Madras). (1) In discharging the duties assigned to it, this <ORG> has to play (1)  S.C.R. 594, 597.

the role "'of a sentinel on the qui vive" ( <CITATION> ) (1), and it must always regard it as its solemn duty to protect the said fundamental rights zealously and vigilantly (<NAME> v. The State of U. P.) (2). Mr. <NAME> for the petitioners contends that the right guaranteed under Art. 32 (1) is not subject to any exceptions as are the rights guaranteed by Art. 19. The right to move this <ORG> is an absolute right and the content of this right cannot be circumscribed or impaired on any ground, such as the interests of the general public. It is in this connection that Mr. <NAME> preferred to describe the guaranteed right under Art. 32 as "absolutely absolute". The key role assigned to the right guaranteed by Art. 32 and the width of its content are writ large on the face of its provisions, and so, it is, in our opinion unnecessary and even inappropriate to employ hyperboles or use superlatives to emphasise its significance or importance. Mr. <NAME> however, conceded that the right to move this <ORG> can be validly regulated by rules of procedure and regulations made with a view to aid the assertion and vindication of the right and to provide for a fair trial of the points raised by the petitioners. For instance, he agrees that a rule can be made that the petition proposed to be filed under Art. 32 should be legibly written, or typed, before it is filed, or that the relevant paper book should be prepared in the prescribed manner in order to facilitate the reference in <ORG>, or that a notice should be issued to the respondent, or for the making of the affidavit in the prescribed manner. These rules, he argues, can be legitimately made because they serve to aid and facilitate a fair disposal of the petition made by the petitioner on the merits. If, however, a rule is made which retards or obstructs the petitioner's .attempt to assert his fundamental right under Art. 32 , that rule must be struck down as being violative of Art. 32. His argument is that the impugned rule imposes upon the petitioners an obligation to deposit (1)  S.C.R.597,605. (2)  1 S.C.R. 574, 582.

a certain amount in <ORG> as security for the respondents costs, and far from siding or assisting the petitioners' assertion of fundamental right, it has the effect of retarding or obstructing the same. If, as in this case the petitioners are unable to deposit the security, their petition is liable to be dismissed for non-prosecution. That clearly illustrates the hardship that the rule will work, and thus brings out how it contravenes Art. 32. On the other hand, the learned Solicitor-General who has appeared for the Registrar of this <ORG>, has argued that the rule cannot be said to contravene Art. 32 because it is a discretionary rule and it vests discretion in this <ORG> either to make an order as to the giving of the security or not to make it, as it may deem fit according to the circumstances of each case. He conceded that for some time past., it has been the practice of this <ORG> generally to make ,in order as to security in Art. 32 petitions, though in some cases, on the motion of the petitioner, the amount of security has been reduced and sometimes security has even been dispensed with. But he argues that if the prevailing practice is found to be unsatisfactory or inconsistent with the spirit of the rule itself, the remedy is to change the practice; there is, however, no vice in the rule. In a proper case, security can be demanded from the petitioner because that is the normal rule of procedure recognised by the Civil Procedure Code. In this connection' he relied on the provisions of 0.25 r. 1 & 2 and 0.41 r. 10. Like all judicial trials, even in respect of the trial of the petition filed under Art. 32 , the <ORG> must act fairly by both the parties, and so, if it appears to the <ORG> that it is in the interest of justice that the costs of the respondent should be secured, it would be open to the <ORG> to make an order of security in that behalf and a rule which permits such an order to be made in a proper case, cannot be said to be inconsistent with Art. 32. In support of this argument, the Solicitor-General relied upon the provisions of Art. 145(1)(f) and more particularly on the wide power conferred on this <ORG> under Art. 142(1) of the Constitution. He also suggested that in determining the effect of the wide provisions of Art. 142 , we ought to adopt the rule of harmonious construction so as to reconcile the said powers with Art. 32.

If the present dispute had been confined to the narrow question about the construction of the impugned rule and the propriety or otherwise of the prevailing practice, it would have become necessary for us to consider whether the rule can be said to be valid and the practice prevailing irregular inasmuch as in some cases security may perhaps have been demanded from the petitioner without full examina- tion as to the special features of the case. In that case, it would have become necessary also to consider whether the rule cannot be sustained in so far as it vests the discretion in the highest <ORG> of this country and can be used only in cases where for reasons like those contemplated by Order 25 r. 1 & 2 and 0.41 r. 10 an order of security is made. In this connection, two rival contentions have been urged before us. Mr. <NAME> argues that the rule is very wide and would justify the making of an order for security even in cases which do not satisfy the tests laid down, for instance, by 0.25 r. 1 and 0.41 r. 10 of the Code and he argues that in such a case, the rule must be struck down as a whole. In support of his contention Mr. <NAME> has relied on the decision of this <ORG> in <CITATION> (1), <CITATION> () , and <CITATION> (3). On the other hand, the Solicitor-General contends that the rule should be so construed as to enable this <ORG> to make orders of security only in proper cases and on that narrow construction its validity should be upheld. if, in some cases, orders have been passe without a full examination of the merits of the question, that (1)  S.C.R. 594, 597. (2)  S.C.R. 759. (3)  Supp. 3 S.C.R. 369.

may only mean that the said orders may not have been properly passed under the rule. The exercise 'of the power conferred on the <ORG> in such cases will not, however, invalidate the rule itself. In support of this argument, reliance has been placed on the decisions of this <ORG> in the cases of )?. <CITATION> (1) and <CITATION> (2). As we have just indicated, it would have become necessary for us to examine these contentions if the power to make an order for security in appropriate cases had been conceded by the petitioners. But since the existence of the power is disputed, we have to decide the larger issue raised by Mr. <NAME>. Mr. <NAME> argues that even in cases to which the relevant provisions of 0.25 and 0.41 may ordinarily apply, this <ORG> has no power to make an order of' security in a petition under Art. 32. The only test, says Mr. <NAME>, which can be legitimately applied in dealing with the matter is : does the rule aid or assist the assertion or vindication of the fundamental right, or does it retard or obstruct it ? If the answer to the question is that the rule retards or obstructs the assertion or vindication of the fundamental right by imposing a pecuniary obligation on the petitioner, the rule is bad and there is no authority in this <ORG> to make such a rule under Art. 145 and there is no jurisdiction in the <ORG> to make such an order under Art. 142. It is this larger question which calls for our decision in the present petition.

In support of his argument that this <ORG> has no power to make such a rule, Mr. <NAME> has relied on the decision of this <ORG> in the Cape of Kavalappara <NAME> The State of Madras(3). In that case, <NAME>, C.J has examined the scope and effect of the provisions of Art. 32 and has observed that an application made under Art. 32 cannot be rejected on the simple ground that the peti- tioner has an alternative remedy open to him., Then (1)  S.C.R. 930. (2)  Supp.2 S.C.R. 769, (3)  2 S.C,R. 316, 335.

the learned <NAME> addressed himself to the question as to whether such an application could be dismissed on the ground that it involves the determination of disputed questions of fact, and in answering this question in the negative, he has stated his conclusion in these words : 'But we do not countenance the proposition that, on an application under Art. 32 , this <ORG> may decline to entertain the same on the simple ground that it involves the determination of disputed questions of fact or on any other ground." It is on the last clause of the sentence that Mr. <NAME> relics. He contends that the statement of the learned C. J., is categorical that a petition under Art. 32 cannot be dismissed on the ground that it involves the decision of disputed questions of fact or on any other ground, and that excludes the ground of nonpayment of security. We do not think that this argument is well-founded. The words "or on any other ground" on which the argument rests, cannot be torn from their context. The context shows that "any other ground', which the learned C. J., had in mind must be similar to the ground which he had enumerated before using the said clause. Take, for instance, the case of a petition which is barred by res judicata. This <ORG> has held that the principles of res judicata apply to petitions under Art. 32 (<NAME> v. The State of U. P.) (1). Take also the case where a petition under Art. 32 would be liable to be dismissed on the preliminary ground that it purports to challenge an order of assessment made by an authority under a taxing statute which is intra vires, on the sole ground that it is based on a misconstruction of a provision of the Act or of a notification issued thereunder, <CITATION> (2). If the words "or on any other ground" used by <NAME>, C. J., are literally construed, they would have to be treated as inconsistent with these subs- equent decisions. That, however, is plainly not the true position and so, the argument based on the said words used by <NAME>, C. J., cannot, in our opinion, be (1)  1 S.C.R. 574,582.

(2) [1963] 1 S.C.R. 778, accepted. It would, we think, be unfair to assume that in using the words "or on any other ground" this <ORG> wanted to imply, as Mr. <NAME> seems to assume, that once a petition is made under Art. 32 , there is no alternative but to consider its merits apart from considerations Like res judicata or the competence of the petition itself. Therefore, the argument that the rule is inconsistent with the decision in <NAME> case must be rejected.

The next question to consider is whether an order for security can be said to retard or obstruct the assertion or vindication of a fundamental right under Art. 32. For anology, we may refer to 0. 25 r. 1 and 0. 41 r. 10. These rules give us an idea as to the circumstances in which orders of security are made under the Code of Civil Procedure. 0, 25 r. 1 provides, inter alia, that if the plaintiffs reside out of India and do not possess any sufficient immovable property within India other than the property in suit, the <ORG> may, on its own motion or on the application of any defendant, order security to be deposited by them. A similar order can be passed where any party to the suit leaves India under circumstances which would show that in all probability he will not be forthcoming to pay the costs of his opponent when called upon to do so. Such an order can also be passed if the plaintiff happens to be a woman and the <ORG> is satisfied that she does not possess sufficient immovable property within India. 0.41 r. 10 confers on the appellate <ORG> discretion to demand from the appellant security for the costs of the appeal or of the original suit or of both in somewhat similar circumstances. Now if an order is made calling upon the petitioner to furnish security in cases similar to those covered by 0. 25 r. 1 and 0. 41 r. 10, would it not be reasonable to say that the order of security would retard the assertion or vindication of the fundamental right ? The order imposes on the petitioner a financial obligation and if he is not able to comply (1)  2 S.C.R. 316, 335, with the order, his petition would fail. In our opinion there is no doubt that an order of security for the respondent's costs would, in some cases effectively bar' and in all cases amount to a hindrance in, the further progress of the petition. It cannot be said that the said order aids a fair hearing of the petition like the order prescribing the manner in which the paper books have to be prepared, or other steps in connection with the petition have to be taken. It. may be conceded that the order is intended to protect the interest of the respondent and in that sense, may be treated as fair; but the fairness of the order or of the object intended to be achieved by it will not disguise the fact that its effect is not to aid the petition but to retard it to some extent. In considering the constitutionality of the order or the rule which permits the order to be made, the fact that the object intended to be achieved is good, just or unexceptionable would be immaterial, vide the <CITATION> (1), and <CITATION> (2). Therefore, we do not see how it is possible to escape the conclusion that the order for security retards the assertion or vindication of the fundamental right under Art. 32 and in that sense, must be held to contravene the said right. It is true that the statistics of the Art. 32 petitions filed in this <ORG> during the last decade may show that the majority of the petitions are filed by citizens who complain about the contravention of their fundamental right under Art. 19(1)(f) and (g) and in that sense, the validity of the impact of the welfare policies of the <ORG> or <ORG> on the property rights of the citizens has more frequently fallen to be considered by this <ORG>. Contravention of fundamental rights in respect of the freedom of speech and expression, and the freedom to form assemblies, associations or <ORG>, which some jurists describe as "preferred freedoms"

(1) [1955) 1 S.C.R. 568, 583, (2) (1946) L.R. 73 I.A. 59, 7-, has not given rise to as many petitions as the contravention of property rights has, and in that sense; it may be permissible to assume that the petitioners who complain against the infringement of their property rights may be able to comply with the orders of security passed by the <ORG> under the impugned rule; but that, in our opinion, is hardly relevant. If the right under Art. 32 is circumscribed or impaired by such in order, the fact that the petitioner may be able to comply with the order would not help to make the order or the rule valid. Therefore, the practical considerations to which reference was made during the course of the arguments have no material bearing in deciding the validity or the constitutionality of the rule or the existence of the relevant power in this <ORG> under Art. 142.

It is, however, urged by the learned Solicitor-General that the powers of this <ORG> under Art. 142 are very wide and cannot be controlled by Art. 32. He has put his argument in two ways. He urges that the words used in Art. 142 are very wide and since they constitute the constitutional charter of this <ORG>'s powers, theyu must be very liberally construed. This contention is undoubtedly well founded. Article 142(1) provides that in exercise of its jurisdiction, this <ORG> may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it; and it adds that a decree or order so made shall be enforceable throughout the territory of India in the manner prescribed by any law made by <ORG> and, until provision in that behalf is so made, in such manner as the President may by order prescribe. The Solicitor-General wants us to compare Art. 142(1) with Art. 194(3) and he suggests that just as the powers, privileges and immunities specified by the latter Article are not subject to the provisions in respect of fundamental rights, so is the power specified by Art. 142 (1) not subject to the said rights In support of this argument, <NAME> has relied on the decision of this <ORG> in the case of <CITATION> (1). It may be recalled that Art. 194 deals with the powers, privileges and immunities of State <ORG>s and their members and Art. 194(3) provides that in other respects, the powers, privileges and immunities shall be such as may from time to time be defined by the <ORG> by law, and until so defined shall' be those of <ORG> of the <ORG> of the United Kingdom, and of its members and committees, at the commencement of this Constitution. The effect of this provision is that until law is made in that behalf, the powers enjoyed by the members of <ORG> and its Committees at the commencement of this Constitution shall continue to be enjoyed by the members of the State <ORG>s and their committees. One of the points which fell to be considered by this <ORG> in the case of <NAME> was whether the rights, powers and privileges of the members of <ORG> which could be claimed by the members of the State <ORG>s had to stand the scrutiny of the test prescribed by Art. 19. In other words, if it appears that the said rights were inconsistent with the provisions of Art. 19(1 ), had the said rights to yield before the fundamental rights guaranteed by Art.19(1); and this <ORG> held that Art. 19(1)(a) and Art. 194(3) have to be reconciled and the only way of reconciling the same is to read Art. 19(1)(a) as subject to the latter part of Art. 194(3) just as Art. 31 has been read as subject to Art. 265 in the earlier decisions of this <ORG>. In other words, the effect of this decision is that if there is a conflict between the rights claimed under the latter part of Art. 194(3) and the fundamental rights of citizens under Art. 19 , the validity of the said rights cannot be impeached on the ground that they are inconsistent with the provisions of Art. 19(1)(a).

(1) [1959] 1 S.C.R. 806, Basing himself on this decision, the SolicitorGeneral argues that the power conferred on this <ORG> under Art. .142(1) is comparable to the privileges claimed by the members of <ORG>s under the latter part of Art. 194(3 ), and so, there can be no question of striking down an order passed by this <ORG> under Art. 142(1) on the ground that it is inconsistent with Art. 32. It would be noticed that this argument proceeds on the basis that the order for security infringes the fundamental right guaranteed by Art. 32 and it suggests that under Art. 142(1) this <ORG> has jurisdiction to pass such an order. In our opinion, the argument thus presented is misconceived. In this connection, it is necessary to appreciate the actual decision in the case of <NAME> and its effect. The actual decision was that the rights claimable under the latter part of Art. 194(3) were not subject to Art. 19(1)(a ), because the said rights had been expressly provided for by a Constitutional provision, viz., Art. 194(3 ), and it would be impossible to hold that one part of the Constitution is inconsistent with another part. The position would, however, be entirely different if <ORG> was to pass a law in regard to the privileges of its members. Such a law would obviously have to be consistent with Art. 19(1)(a). If any of the provisions of such a law were to contravene any of the fundamental rights guaranteed by Part III, they would be struck down as being unconstitutional. Similarly, there can be no doubt that if in respect of petitions under Art. 32 a law is made by <ORG> as contemplated by Art. 145(1 ), and such a law, in substance, corresponds to the provisions of 0.25 r. 1 or 0.41 r. 10, it would be struck down on the ground that it purports to restrict the fundamental right guaranteed by Art. 32. The position of an order made either under the rules framed by this <ORG> or under the jurisdiction of this <ORG> under Art. 142(1) can be no different. If this aspect of the matter is borne in mind,, there would be no difficulty in rejecting (1)  1 S.C.R. 806,859-860.

the Solicitor-General's argument based on Art. 142(1). The powers of this <ORG> are no doubt very wide and they are intended to be and will always be exercised in the interest of justice. But that is not to say that an order can be made by this <ORG> which is inconsistent with the fundamental rights guaranteed by Part III of the Constitution. An order which this <ORG> can make in order to do complete justice between the parties, must not only be consistent with the fundamental rights guaranteed by the Constitution, but it cannot even be inconsistent with the substantive provisions of the relevant statutory laws. Therefore, we do not think it would be possible to hold that Art. 142(1) confers upon this <ORG> powers which can contravene the provisions of Article 32.

In this connection, it may be pertinent to point out that the wide powers which are given to this <ORG> for doing complete justice between the parties, can be used by this court for instance, in adding parties to the proceedings pending before it, or in admitting additional evidence, or in remanding the case, or in allowing a new point to be taken for the first time. It is plain that in exercising these and similar other powers, this <ORG> would not be bound by the relevant provisions of procedure if it is satisfied that a departure from the said procedure is necessary to do complete justice between the parties. That takes us to the second argument urged by the Solicitor- General that Art. 142 and Art. 32 should be reconciled by the adoption of the rule of harmonious construction. In this connection, we ought to bear in mind that though the powers conferred on this <ORG> by Art. 142(1) are very wide, and the same can be exercised for doing complete justice in any case, as we have already observed, this <ORG> cannot even under Art. 142(1) make an order plainly inconsistent with the express statutory provisions of substantive law, much less, inconsistent with any Constitutional provisions. There can, therefore, be no conflict between Art. 142(1) and Art. 32. In the case of <CITATION> (1) on which the Solicitor-General relies, it was conceded, and rightly, that under Art. 142(1) this <ORG> had the power to grant bail in cases brought before it, and so, there was obviously a conflict between the power vested in this <ORG> under the said Article and that vested in the Governor of the State under Art. 161. The possibility of a conflict between these powers necessitated the application of the rule of harmonious construction. The said rule can have no application to the present case, because on a fair construction of Art. 142(1). This <ORG> has no power to circumscribe the fundamental right guaranteed under Art. 32. The existence of the said power is itself in dispute, and so, the present case is clearly distinguishable from the case of <NAME>). Let us now consider whether a rule can be made under Art. 145(1) providing for the making of an order for furnishing security in cases of petitions under Art. 32 where the <ORG> is satisfied that in case the petition fails, the petitioner may not be able to pay the costs of the respondent. The impugned rule is presumably based upon the provisions of Art. 145(1) (f). It may be assumed that the expression "costs of and incidental to any proceedings in the <ORG>" used in clause (f) may cover in order of security ; but if an order for security amounts to a contravention of Art. 32 , there would be no power to make such a rule under Art. 145(1)(f). After all, rules framed under Art. 145 are in exercise of the delegated power of legislation, and the said power cannot be exercised so as to affect the fundamental rights. If the wide words used in Art. 142 cannot justify an order of security, in an Art. 32 petition, it follows that a rule made under Art. 145 cannot authorise the making of such an order. We ought to add that cases of frivolous petitions filed (1)  1 S.C.R. 497.

<NAME>

under Art. 32 can be eliminated at the preliminary hearing of such petitions. Since 1959, petitions filed under Art. 32 are set down for a preliminary hearing and it is only after the <ORG> is satisfied that a prima facie case has been made out by the petitioner that a rule <ORG> is ordered to be issued against the respondent. In order to decide this question, sometimes notice is issued to the respondent even at the preliminary hearing and it is after hearing the respondent that a rule is issued on the petition. It may be that in some cases, the respondent may not be able to re- cover its costs from the petitioner even if the petition is dismissed on the merits. But that, in our opinion, cannot justify the making of an order for security, because even impecunious citizens, or citizens living abroad, must be entitled to move this <ORG> if they feel that their fundamental rights have been contravened. Similarly, women who own no property would be entitled to move this <ORG> in case their fundamental rights are contravened, and following the anology of 0.25 r. 1(3), no order for security can be made against them, because that would make their right illusory. That obviously is the content of the fundamental right guaranteed under Art. 32 , and since the impugned rule, in so far as it relates to security for costs, impairs the content of that right, it must be struck down as being unconstitutional. Rules framed under Art. 145 which govern the practice and procedure in respect of the petitions under Art. 32 with the object of aiding and facilitating the orderly course of their presentation and further progress until their decision, cannot be said to contravene Art. 32. All proceedings in <ORG> must be orderly and must follow the well recognised pattern usually adopted for a fair and satisfactory hearing; petitions under Art. 32 are no exception in that behalf. Besides, orders can be passed on the merits of the petitions either at an interlocutory stage or after their final decision., and no objection can be taken against such orders on the ground that they contravene Art. 32. In a proper case, proceedings threatened against the petitioners' may be stayed unconditionally or on condition or may not be stayed, or a Receiver may be appointed in respect of the property in dispute, or at the end of the final hearing if the petition fails, the petitioner may be ordered to pay the costs of the respondent. All these are matters whose validity cannot be challenged on the ground that they contravene Art. 32. But if a rule or an order imposes a financial liability on the petitioner at the thresh-hold of his petition and that too for the benefit of the respondent, and non-compliance with the said rule or order brings to an end the career of the said petition, that must be held to constitute an infringement of the fundamental right guaranteed to the citizens to move this <ORG> under Art. 32. That is why we think Rule 12 in respect of the imposing of security is invalid.

There is another aspect of the matter to which reference must incidentally be made. The rule is obviously intended to secure the costs of the respondent in a proper case. Let us see how this rule will work if it is interpreted and acted upon in the manner suggested by the learned Solicitor- General. In practice, at present, an order of security is normally made unless a request is made by the petitioner either for the reduction of the amount or for dispensing with the security altogether. If the petitioner is not impecunious, an order for security will not serve any essential purpose, because if the costs are awarded against him after the final hearing, the respondent may be able to secure his costs. If, however, the petitioner is impecunious, the <ORG> may not, after granting a rule on the petition, in its discretion, pass an order of security and in that sense, the very object of securing the respondent's costs would not be served. It is true that if the discretion is exercised by the <ORG> in favour of impecunious petitioners and orders for security are not passed in their cases, no hardship will be caused to them. But it seems to us that what would be left to the discretion of the <ORG> on this construction of the rule, is really a matter of the right of impecunious petitioners under Art. 32. That is why we think that the impugned rule in so far as it relates to the giving of security cannot be sustained. In the result, the petition is allowed and the order passed against the petitioners on December 12, 1961, calling upon them to furnish security of Rs. 2,500/- is set aside. There would be no order as to costs.

<NAME>, J.-The petitioner filed petition No. 348 of 1961 invoking jurisdiction of this <ORG> to issue a writ under Art. 32 of the Constitution on the plea that certain orders passed by the Excise Commissioner, U.P. were invalid. The petitioner was directed on December 12, 1961 when rule was ordered to issue to the respondents-Excise Commissioner, U.P. Allahabad, and the State of Uttar Pradesh to "furnish security in the sum of Rs. 2,500/- in cash within six weeks for the costs of the respondents". The petitioner failed to comply with the order, and moved this <ORG> for modification thereof. This application was dismissed, but at the request of the petitioner time for furnishing security was extended till March 26, 1962. Stating that his efforts to collect the requisite amount were unsuccessful, the petitioner presented this petition and prayed that the order requiring him to furnish security in the sum of Rs. 2,500/- be vacated because R. 12 0. XXXV of the Supreme <ORG> Rules under which presumably the order was made, contravened the fundamental right guranteed by Art. 32(1) of the Constitution. The petitioner contends that the rule infringes the fundamental right to move this <ORG> guaranteed by Art. 32 (1) of the Constitution. Prima facie, by the rule no restriction is placed directly upon the right of a litigant to move this <ORG> for relief against infringement of fundamental rights. The rule merely envisages exercise of jurisdiction of this <ORG> in appropriate cases to impose upon a party under an order- final or interlocutory-such terms as to costs, and to security for costs or for other purposes, as the <ORG> thinks fit. Undoubtedly an order directing the petitioner to furnish security for the costs of the respondent raises some obstacle to the prosecution of a petition for relief against infringement of fundamental rights claimed by the petitioner. Are the order, and the authority in exercise of which the order is made on that account void ? Article 32 substantially makes two provisions. By the first clause it guarantees the right to move the Supreme <ORG> by appropriate proceedings. As a corollary thereof by cl. (4) it is provided that the guarantee under cl. (1) shall not be suspended except as provided by the Constitution. Clause (2) declares the jurisdiction of the <ORG> to issue directions, orders or writs including certain specified writs for enforcement of any of the rights conferred by Part

111. A truly democratic Constitution recognizes not only certain important natural rights which are the attributes of a free citizen, but also sets up adequate machinery for protection against invasion of those rights. Our Constitution has in Ch. III enumerated certain fundamental rights such as equality before the law, with the concomitant guarantee against discrimination, right of freedom of speech, assembly, association, movement and residence, right to acquire, hold and dispose of property and to practice any profession or to carry on occupation, trade or business, freedom of conscience and the right to practice and propagate religion, freedom to manage religious affairs and cultural and educational 'rights. After enunci- ating the rights some in terms positive, some in negative, exercisable absolutely or subject to reasonable restrictions the Constitution has rendered all laws inconsistent therewith if preexisting, or made in con- travention, thereof if enacted after the commencement of the Constitution, void to the extent of the inconsistency or contravention. For relief against infringement of these rights by action legislative or executive by the <ORG>, recourse may undoubtedly be had to the ordinary <ORG> by institution of civil proceedings for appropriate relief. But the Constitution has conferred upon the High <ORG> and <ORG> power to issue writs for the protection of those fundamental rights, and the Constitution has guaranteed by Art. 32(1) the right to move this <ORG> for enforcement of those rights. The right to move this <ORG> for enforcement of the fundamental rights is therefore itself made a fundamental right. Law which is repugnant to the effective exercise of the right to move this <ORG> in enforcement of the rights described in Ch. III therefore to the extent of inconsistency or contravention would be void. Is it that the exercise of the right is to be so unfettered, that any law which imposes any restriction in any form whatever against the exercise of that right direct or indirect must be regarded as void ? Counsel for the petitioner using the language of hyperbole submitted that the right was "absolutely absolute", and even a law which by itself does not place any restriction upon the exercise of the right but which contemplates the exercise of the jurisdiction of this <ORG> to impose restriction upon the exercise of the right, must be regarded. as void. But the right guaranteed is not wholly unfettered or unrestricted as claimed. Art. 32(1) guarantees a right to move by "'appropriate proceedings" : there is therefore in the Article itself limitation upon the exercise of the right. Appropriate proceedings would include the procedure relating to form, conditions of lodgement of petitions, and compliance with a reasonable directions imposed which would conduce to the smooth conduct of proceeding in this <ORG>, Power to make rules for practice and procedure of this <ORG> read with the guarantee under Art. 32(1) to move by appropriate proceedings implies the power to impose procedural restrictions conducive to the orderly progress of the petition for relief for breach of a fundamental right. The argument of counsel of the petitioner that the right to move this <ORG> for enforcement of a fundamental right is absolute, may involve the plea that rules of the <ORG> which require a petition to be filed, legibly written, typewritten or lithographed, submission of translation of documents not in the English language, presentation of affidavits, payment of court-fee on the petition and process fee for service of notice upon the parties concerned and similar rules would be invalid, for all these rules in a sense obstruct, the exercise of the right, and impose financial obligations which are not insignificant. But this rather extravagant view of the absolute character of the right to move this <ORG> was very properly not attempted to be sustained. It was conceded that the right conferred by- Art. 32(1) to move this <ORG> may be regulated by all such directions general or ad hoc which serve to aid and facilitate a fair disposal of the case, according to an orderly procedure. What the Constitution has guaranteed is the right to move this <ORG> i.e. the right to claim redress against an alleged infringement of a fundamental right. This <ORG> is doubtless made the custodian of the fundamental rights guaranteed by the Constitution and we would be failing in our duty if we were to refuse to entertain a petition for enforcement of a fundamental right or to decline to adjudicate upon the same. We cannot direct, the litigant to seek relief by recourse to a Civil <ORG> or other remedy where prima .,facie an infringement of the fundamental right is made out, but that is not to say that, after the petition is entertained the <ORG>, is not bound to hold the scales even between the litigating parties. The party complaining of infringement of a fundamental right has undoubtedly the right to demand that his petition shall be entertained and heard and disposed of according to. law, but in the investigation of the claim to relief the petitioner is not entitled to any higher privileges than any other litigant would be entitled to in respect of a lis which is brought up for adjudicating before this <ORG>. The claim of the parties must be supported by evidence, witnesses in support must be brought before the <ORG> or examined on commission; if the party dies or ceases legally, to exist representative of the party should be brought on record, if the pleadings arc not proper they. may be struck off or amended and if the claim sought to be litigated has been previously adjudicated upon the rule of res judicata would apply. The procedure for trial and adjudication of a claim which does not involve enforcement of a fundamental right is in substance the same as in the case of a petition for enforcement of a right under Ch. III. An order for security for costs of the respondent or for other purposes is a procedural order, and unless imposition of an order for furnishing security may be regarded as amounting substantially to a denial of the right to move, this <ORG>, the insistence of a special rule warranting an exception in proceedings for enforcement of fundamental rights cannot be appreciated. It may be observed that the impugned rule does not contemplate that the order is to be made as a matter of course. It merely recognises the jurisdiction of the <ORG> in appropriate cases to demand security; it does not prescribe or even indicate the stage at which this order has to be made. The jurisdiction of the <ORG> is declared in the most general terms and is to be exercised only when the <ORG> thinks it necessary in order to do justice in the proceeding.

Undoubtedly a practice has grown up lately that when rule is issued in petition for enforcement of a fundamental right, the <ORG> is requested to consider whether the petitioner should furnish security for the costs of the respondent. The matter is then judicially considered and an order requiring the petitioner to furnish security if the <ORG> is satisfied about the necessity of passing such an order is made. But even orders so passed are often recalled and modified having regard to the justice of the case. The practice of considering the question at the initial stage-of issuing the rule may require to be altered, but there is nothing in the rule which requires that practice to be followed. In an appropriate case the <ORG> may make an order suo motu at the threshold of the proceeding, or at any time in another, on the request made by the respondent. All such orders are in the exercise of the jurisdiction of the <ORG>, having regard to the circumstances and for doing complete justice between the parties.

In considering the nature of the jurisdiction exercise by the <ORG> reference must be made to Art. 142 of the Constitution which in so far as it is material in this case provides by the first clause that "the Supreme <ORG> in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it x x x x x x ". The jurisdiction of the <ORG> so described undoubtedly embraces power to make an order requiring security in appropriate cases, and the impugned rule does no more than enunciate a facet of the jurisdiction of this <ORG> which is conferred by Art. 142. The expression "as it thinks fit' must in the context in which it occurs mean that where the <ORG> deems it necessary for doing complete justice in the cause or matter pending before it, the <ORG> may make the order as to giving of security.

It is not necessary to consider whether in exercise of the delegated power of legislation conferred by Art. 145 (1) it is open to this <ORG> to make a rule requiring security for costs from a litigating party which may apparently place a restriction upon 'the exercise of the fundamental right under Art. 32. The impugned rule is not in substance a rule relating to practice and procedure, but deals primarily with the jurisdiction of the <ORG>, which has its source in Art. 142.

Can the petitioner claim immunity from an order for furnishing security for costs or for other purposes merely because he has commenced a proceeding tinder Art. 32 (1) of the Constitution, even if the <ORG> is of the opinion that it is necessary in doing complete justice to make the order? The impugned rule does not contemplate that the order is to be made as a matter of course. It merely recognises the jurisdiction of the <ORG> in appropriate cases to make. an order demanding security. It also does not prescribe the stage at which the order is to be made.

Assuming that an order made in a given case may be erroneous the jurisdiction of the <ORG> conferred by the Constitution under Art. 142 to make such orders as may be necessary for doing complete justice is not on that account affected. I am unable to countenance the proposition that in dealing with a claim for relief for infringement of a fundamental right in a petition under Art. 32 the power which is inherent in its constitution to demand security for costs of the respondent cannot be exercised, even if the <ORG> is satisfied that such an order is preeminently called for. It frequently happens that mixed up with pleas of constitutional invalidity of statutes or executive acts having an impact upon fundamental rights, allegations of bad faith, arbitrariness, exercise of power for ulterior purposes and similar allegations are made by litigants resorting to this <ORG>, and there is no recognised procedure by which investigation of such allegations of improper conduct may be disentangled from those to be dealt with on a strictly interpretational plane. The <ORG> has, therefore, to hear the entire case dealing both with the validity of the statutes or executive acts and the allegations of improper- conduct before it can finally, adjudicate upon the claim made by the petitioner. If because of the nature of the proceeding brought before it, the <ORG> is precluded from ordering even in appropriate cases an applicant for redress to furnish security before exercising his privilege of prosecuting his claim, the <ORG> would be acting not as a <ORG> of justice but as an instrument of oppression. The impugned rule being merely declaratory of the jurisdiction which is defined by Art. 142 of the Constitution no question of conflict between law made by the <ORG>, and the guarantee of right to move this <ORG> under Art. 32(1) by appropriate proceedings for enforcement of fundamental rights arises. The provisions of the Constitution contained in Art. 142 and Art. 32(1) must be read harmoniously. On the one hand there is the guaranteed right in favour of the litigant by an appropriate proceeding to move this <ORG> for enforcement of a fundamental right, on the other there is the jurisdiction vested in this <ORG> to pass all such orders as may be necessary in the interests of justice such orders including inappropriate cases an order for payment of costs by the petitioner. There is no warrant for assuming that the exercise of this jurisdiction has to be subordinated to the exercise of the right to move this <ORG>. Article 32(1) is included in Ch. III and the right to move this <ORG> is itself made a fundamental right, whereas Art. 142 falls in Part V dealing with <ORG>. But these being parts of a Constitutional document no special sanctity attaches to the provisions contained in Ch. III so as to prevail over the other provisions. <CITATION> this <ORG> had to consider whether Art. 194 dealing with the powers, privileges and immunities of (1)  1 S.C.R. 806.

<ORG> and of their members was subordinate to fundamental right of speech under Art. 19(1)(a) of the Constitution. The petitioner in that case urged that rights, powers and privileges of the members of <ORG> in England which could be claimed by the members of <ORG> by virtue of Art. 194 had still to stand the test of reasonableness prescribed by Art. 19(2 ), and to the extent of inconsistency the right had to yield before the fundamental right guaranteed by Art. 19(1). It was held by the <ORG> that Art. 19(1)(a) and Art. 194 have to be harmoniously interpreted and the only method of reconciling the two is to read the general provision of Art. 19(1)(a) as subject to Art. 194 just as Art. 31 is read as subject to Art. 265. Generality of the provision is not however the sole criterion. Clause (1) and (2) of Art. 13 render laws either preexisting or enacted since the Constitution, void if they are inconsistent with or take away or abridge any fundamental rights. Exercise of legislative authority under powers derived from the Constitution is undoubtedly hit by Art. 13(2). But one part of the Constitution cannot render nugatory another part : the two must be read together and harmonized. So read, the gurantee of the right to move this <ORG> by appropriate proceedings, for enforcement of fundamental rights cannot be permitted to encroach upon the jurisdiction of the <ORG>, where exercise thereof is necessary for doing complete justice. Therefore even in a proceeding under Art. 32(1 ), this <ORG> is competent to make all such orders as it deems proper including an order for security for costs of the respondent.

The impugned rule which enunciates the jurisdiction of the <ORG> to impose terms as to giving of-' security is not therefore void.

By COURT : In accordance with the opinion of the majority the writ petition is allowed and the order calling upon the petitioners to furnish security of Rs. 2,500/- is set aside. There will be no order as to costs.


PETITIONER: GEORGE DA COSTA Vs. RESPONDENT: CONTROLLER OF ESTATE DUTY IN MYSORE,BANGALORE DATE OF JUDGMENT: 28/10/1966 BENCH: RAMASWAMI, V. BENCH: RAMASWAMI, V. SHAH, J.C. BHARGAVA, VISHISHTHA CITATION: 1967 AIR 849 1967 SCR (1)1004 CITATOR INFO : R 1973 SC1170 (4) F 1973 SC1214 (10,11) RF 1975 SC 435 (11,12,23) F 1977 SC 463 (11,15,17) E 1980 SC 142 (9) RF 1986 SC 631 (5,7) R 1988 SC1426 (10) ACT: Estate Duty Act , 1953 (Act 34 of 1953), s. 10-Donor continuing to reside in house after making gift of it to his sons--Residence-based only on filial affection-Donor whether 'entirely excluded from possession and enjoyment' within meaning of section-'By contract or otherwise', meaning of. HEADNOTE: The appellant's father purchased a house in the joint names of himself and his wife. In 1954 the parents made a gift of the said property to their two sons including the appellant. The document recited that the donees had accepted the gift and they had been put in possession. Thereafter, the sons paid the municipal tax but the parents continued to reside. in the house and the father continued to look after its affairs as head of the family. The father died in 1959, more than four years after the gift and the question arose in Estate Duty proceedings whether the said house was to be included in the estate of the deceased for the purpose of the duty or not. The Assistant Controller of Estate Duty and <ORG> decided against the appellant (who was the accountable per,son) and thereafter a 'reference was made to <ORG>. That Court also having given an adverse verdict the appellant came to this Court. It was contended on his behalf that the deceased had no enforceable right against his sons and therefore s, 10 of the Estate Duty Act was not attracted to the case. HELD : The crux of s. 10 lies in two parts : (1) the donee must bona fide have assumed possession and enjoyment of the property which is, the subject-matter of the gift to the exclusion of the donor, immediately upon the gift, and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or any benefit to him by contract or otherwise. Both these conditions are cumulative. Unless each of them is satisfied the property would be liable to estate duty under s. 10 of the Act. [1007 G] Attorney-General v. Earl Grey,  2 Q.B.D. 534, relied on. (ii)The second part of s. 10 has two limbs : the deceased must be entirely excluded (i) from the property and (ii) from any benefit by contract or otherwise. The word 'otherwise' must be construed ejusdem generis and must be interpreted to mean some kind of legal obligation or some transaction enforceable at law or equity which though not in the form of a contract may confer a benefit on the owner. [1008 B] But the words by contract or otherwise in the second limb of the section will not control the words 'to the exclusion of the donor' in the first limb. In other words to attract the section it is not necessary that the possession of the donor of the gift must be referable to some contractual or other arrangement enforceable in law or in equity. Even if the donor is content to rely upon the mere filial affection of his sons with a view to enable him to continue to reside in the house it cannot be said that he was 'entirely excluded from possession and enjoyment' within the 1005 meaning of the first limb of the section, and therefore the property will he deemed to have passed on the death of the donor and will be subject to the levy of estate duty. [1008 E-G] <NAME> v. Commissioner of Stamp Duties of New South Wales, 1958 A.C. 435 and Commissioner of Stamp Duties of New South Wales v. <NAME>, 88 C.L.R. 67, relied on. Attorney-General v. <NAME>,  2 K.B. 688, referred to. (iii)The appellant could not take advantage of the amendment made by the Finance Act , 1965 in s. 10 of the Estate Duty Act, 1963. The said amendment was effective only from April 1, 1965 and was not retrospective.[1010 F] (iv)It was the <ORG>'s finding that though the property stood in the joint names of the deceased and his wife she was only a name-lender and the entire property belonged to the deceased. In view of this finding it was not possible to accept the argument of the appellant that only half share of the property should be taken for the purpose of estate duty assistant. [1011 B] JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1098 of 1965 Appeal by special leave from the judgment and order dated November 17, 1964 of <ORG> in Tax Referred Case No. 1 of 1964.

<NAME> and <NAME>, for the appellant. <NAME>, <NAME> and <NAME>, for the respondent.

The Judgment of the Court was delivered by <NAME>, J. This appeal is brought, by special leave, from the judgment of <ORG> dated November 17, 1964 in Tax Referred Case No. 1 of 1964.

The property in question is house No. 34, Mahatma Gandhi Road, Bangalore. It had been purchased by the appellant's father Dr. <NAME> (hereinafter called the 'deceased') in the joint names of himself and his wife on February 14, 1940. They made a gift of the house to their two sons on October 20, 1954. The document recites that the donees had accepted the gift and they had been put in possession. But the parents continued to be in possession of the house though the municipal tax was paid thereafter in the names of the sons. The deceased died on September 30, 1959 more than 4 years after the gift. The appellant, the accountable person, then filed a return showing the value of the estate left by his father at Rs. 93,750/- excluding the value of the house No. 34, Mahatma Gandhi Road, Bangalore. The Assistant Controller of Estate Duty however included the sum of Rs. 1,50,000/- as the value thereof and determined the aggregate value of the estate at Rs. 2,57,249/- and assessed the estate duty payable at Rs 15,751.54 P by his order dated November 30, 1959. The appellant thereupon preferred an appeal to <ORG> (hereinafter referred to as the '<ORG>') which dismissed the appeal and affirmed the view taken by the Assistant Controller of Estate Duty. At the instance of the appellant the <ORG> referred the following question of law for the determination of <ORG>.

"Whether on the facts and in the circumstances of the case, the property at No. 34, Mahatma Gandhi Road, Bangalore, was correctly included in the estate of the deceased as property passing or deemed to pass on his death under section 10 of the Act?"

<ORG> answered the question in the affirmative, holding that the appellant was liable to pay estate duty with regard to the house.

Under s. 5 of the Estate Duty Act, 1953 (Act No. 34 of 1953) (hereinafter called the 'Act'), estate duty is payable on the principal value of the estate of every person dying after the commencement of the Act. Section 2(16) of the Act defines the expression "property passing on death" and is to the following effect :

"2. In this Act, unless the context otherwise requires,-

(16)"property passing on the death" includes property passing either immediately on the death or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation, and 'on the death' includes 'at a period ascertainable only by reference to the death";

Section 10 of the Act included in the expression "passing on death" even gifts made by a deceased in certain circumstances. The section reads as follows :

"Gifts whenever made where donor not entirely excluded. Property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bone fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise :

Provided that the property shall not be deemed to pass by reason only that it was, not, as from the date of the gift, exclusively retained as aforesaid, if, by means of the surrender of the reserved benefit or otherwise, it is subsequently enjoyed to the entire exclusion of the donor or of any benefit to him for at least two years before the death".

In the present case, the <ORG> has found that though the deceased had gifted the house in question to his children four years before the date of his death, he still continued to stay in the house till his death as the head of the family and also was looking after the affairs of the house. It was contended on behalf of the appellant that upon these facts <ORG> erred in holding that s. 10 of the Act was attracted to the case and there was no exclusion of the donor from the bona fide possession and enjoyment of the gifted property. It was said that the appellant's father did not have any right of possession or enjoyment of the gifted property either in law or in equity and as the deceased had no enforceable right <ORG> should have held that estate duty was not leviable under s. 10 of the Act and there was "entire exclusion of the donor" within the meaning of that section. In support of his submission Counsel for the appellant relied upon the decision of <NAME>, J. in Attorney General v. <NAME>) The question involved in this appeal depends upon the proper interpretation of S. 10 of the Act. The intention of the legislature in enacting s. 10 of the Act was to exclude from liability to estate duty certain categories of gifts. A gift of immovable property under s. 10 will, however, be dutiable unless the donee assumes immediately exclusive and bona fide possession and enjoyment of the subject-matter of the gift, and there is no beneficial interest reserved to the donor by contract or otherwise. The section must be grammatically construed as follows : "Property taken under any gift, whenever made, of which property bona fide possession and enjoyment shall not have been assumed by the donee immediately upon the gift, and of which property bona fide possession and enjoyment shall not have been thenceforward retained by the donee to the entire exclusion of the donor from such possession and enjoyment, or of any benefit to him by contract or otherwise". The crux of the section lies in two parts : (1) the donee must bona fide have assumed possession and enjoyment of the property, which is the subject matter of the gift to the exclusion of the donor, immediately upon the gift, and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him by contract or otherwise. As a matter of construction we are of opinion that both these conditions are cumulative. Unless each of these conditions is satisfied, the property would be liable to estate duty under S. 10 of the Act. This view is borne out by the decision of <ORG> in Attorney General v. <NAME>) with regard to an analogous provision under s. 38(2) of the Customs and Inland Revenue (1)  2 K.B. 688.

(2) [1898] 2 Q.B.D. 534, 541.

<NAME>

Act, 1881, as amended by s. 1  1 of the Customs and Inland Revenue Act, 1889.

The second part of the section has two limbs :. the deceased must be entirely excluded (i) from the property and (ii) from any benefit by contract or otherwise. It was argued for the appellant that the expression, "by contract or otherwise" should be construed ejusdem generis and reference was made to the decision of <NAME>, J. in Attorney General v. <NAME>) On this aspect of the case we think that the argument of the appellant is justified. In the context of the section the word "otherwise" should, in our opinion, be construed ejusdem generis and it must be interpreted to mean some kind of legal obligation or some transaction en- forceable at law or in equity which, though not in the form of a contract, may confer a benefit on the donor. But it was contended by Mr. <NAME> for the respondent that the case of the <ORG> does not rest upon the second limb of the section but upon the first limb which requires that the donor must have been entirely excluded from possession and enjoyment of the property. It was pointed out that there was no such exclusion in the present case and the finding of the <ORG> is that the deceased continued to stay in the house till his death as the head of the family and was looking after the affairs of the household. It was conten- ded therefore that the first limb of the section is not satisfied in this case and the property must be held to pass on the death of the deceased under that section. In our opinion, the contention of the respondent must be accepted as correct. As a matter of construction we hold that the words "by contract or otherwise" in the second limb of the section will not control the words "to the entire exclusion of the donor" in the first limb. In other words, in order to attract the section it is not necessary that the possession of the donor of the gift must be referable to some contractual or other arrangement enforcement in law or in equity. Even if the donor is content to rely upon the mere filial affection of his sons with a view to enable him to continue to reside in the house, it cannot be said that he was "entirely excluded from possession and enjoyment" within the meaning of the first limb of the section, and therefore the property will be deemed to have passed on the death of the donor and will be subject to levy of estate duty.

On behalf of the appellant strong reliance was placed upon the decision of <ORG> in Attorney General v. Seccombe(1) which has already been referred to. In that case, the deceased made an absolute gift of a house and furniture to a relative, without any stipulation, but continued to live there as the donee's guest until his death more than five years later. Upon the death of the donor the <ORG> claimed estate duty upon the value of the property upon (1) [1911] 2 K.B. 688.

the ground that bona fide possession and enjoyment of the property were not assumed by the donor and thenceforward retained 'to the entire exclusion of the donor, or of any benefit to him by contract or otherwise'. It was observed by <ORG> that there was no legally enforceable arrangement permitting the deceased to reside in the house and the deceased was simply the guest of the donee and was fully content to rely upon the affection which the donee bore towards him. It was therefore held in that case that estate duty was not payable. It was stated by <ORG> in the course of his judgment that the exclusion of the deceased from the property itself (the first limb of the condition) would, like his exclusion "from any benefit by contract or otherwise" (the second limb), be achieved unless he had "some enforceable right". The view taken by <ORG> on this particular point is, however, not

-consistent with the opinion of <ORG> in <NAME> v. Commissioner of Stamp Duties of New South Wales(1) which is a decision on a similarly worded clause of a New South Wales Statute. In that case, the deceased gave his son a farming property, "Mia Mia," in 1934; in 1935 the deceased, the son and another soil entered into a partnership agreement as graziers and stock dealers, on the terms, inter alia, that the deceased should be the manager and that his decision should be final in all matters relating to the conduct of the business; that the capital should consist of the livestock and plant owned by the partners: that the business should be conducted on their respective holdings (including "Mia Mia"); and that the land held by each partner should be his sole property and he should have the sole and free right to deal with it as he might "think fit. The partnership continued till the death of the deceased in 1952, and the property "Mia Mia" was held dutiable as a gift not to his entire exclusion. There is a decision to a similar effect in Commissioner of Stamp Duties of New South Wales v. Owens(2) which was a case under the New South Wales statute. It appears that there was a verbal partnership between the deceased and his son under which they farmed two properties, owned by the deceased, the profits being shared as to two-thirds to the deceased and one-third to the son. Some years later the deceased transferred one of the properties to the son expressly free of all conditions, so that the son could have farmed it independently; in fact they farmed it and shared the profits equally for some eleven years up to the date of death. <ORG> found that "there was a gift of an estate in fee simple, carrying the fullest right known to the law of exclusive possession and enjoyment"; but that the farming and profit sharing were inconsistent with the deceased's "exclusion", and that duty was therefore chargeable. In an earlier case-O' Connor v. Commissioner of Stamp Duties (South A stralia)(3) (1) [1958] A.C 435.

(3) 47 C.L.R. 601.

(2) 88 C.L. R. 67.

which was a decision under a South Australian enactment couched in a similar language, the deceased was given a power of attorney by the donee and continued to farm the donated lands and was not in fact required to account for the profits, though he could evidently have been required to do so. But it was again held that duty was chargeable on the donated lands. It appears from all these cases that the first limb of the section may be infringed if the donor occupies or enjoys the property or its income, even though be has no right to do so which he could legally enforce against the donee. "Where the question is whether the donor has been entirely excluded from the subject-matter of the gift, that is the single fact to be determined. If he has not been so excluded, the eye need look no further to see whether his non-exclusion has been advantageous or otherwise to the donee".(Viscount <NAME> in <NAME> v. Commissioner of Stamp Duties of New South Wales.(1) It was then pointed out on behalf of the appellant that the Finance Act of 1965 has amended s. 10 of the Estate Duty Act, 1953 by introducing the following proviso "Provided further that a house or part thereof taken under any gift made to the spouse, son, daughter, brother or sister, shall not be deemed to pass on the donor's death by reason only of the residence therein of the donor except where a right of residence therein is reserved or secured directly or indirectly to the donor under the relevant disposition or under any collateral disposition."

It was argued that this proviso must be taken as legislative interpretation of the section as it stood previous to the amendment and since no right of residence was reserved or secured to the donor under the deed of gift or under any collateral disposition, the imposition of estate duty was not justified,. We are unable to accept this argument as correct. The amendment brought about by the Finance Act , 1965 was effective only from April 1, 1965 and was not retrospective. We think that the insertion of the second proviso to the section must be taken to have been made deliberately by <ORG> to be effective from the date of the amendment. We therefore see no reason for holding that the earlier provision in s. 10 should be interpreted with reference to the language of the amendment brought about by the Finance Act of 1965. We accordingly reject the argument of Mr. <NAME> on this point.

It was lastly contended for the appellant that in any event the property in question belonged jointly to the mother and father of the appellant and the whole property could not be deemed to have passed upon the death of the father under s. 5 of the Act. The question was examined by the Board which found that the (1)  A.C. 435.

property was purchased entirely out of the funds of the deceased that for the purpose of income tax the deceased had declared the entire property as his own, and that the income therefrom was exclusively assessed in his hands. On these facts the Board held that though the property stood in the joint names of the deceased and his wife, she was merely a name-lender and the entire property belonged to the deceased and was rightly included in his estate for the purpose of estate duty. In view of this finding of fact it is not possible to accept the argument of the appellant that only half the share of the property should be taken for the purpose of estate duty assessment.

For the reasons expressed, we hold that the decision of <ORG> is correct and this appeal must be dismissed with, costs.

<NAME>

Appeal dismissed


PETITIONER: CONTROLLER OF ESTATE DUTY, <NAME> Vs. RESPONDENT: C. R. RAMACHANDRA GOUNDER DATE OF JUDGMENT27/02/1973 BENCH: <NAME>, P. JAGANMOHAN BENCH: <NAME>, P. JAGANMOHAN HEGDE, K.S. KHANNA, HANS RAJ CITATION: 1973 AIR 1170 1973 SCR (3) 554 1973 SCC (4) 102 CITATOR INFO : F 1973 SC2598 (2) E 1975 SC 435 (10,17,18) F 1977 SC 463 (20,23) APL 1980 SC 142 (10,13) RF 1986 SC 631 (5) F 1988 SC1426 (11) ACT: Estate Duty Act , s. 10-Scope of. HEADNOTE: The father of the respondent Was a partner in a firm. He owned property which the firm was occupying as a tenant at will. In 1953 he executed a deed of settlement under which he transferred that property to two of his sons absolutely and irrevocably. After the transfer the firm continued as tenant paying rent to the two donees by crediting each of their accounts in the account books of the firm in equal shares. The father also wrote, to the firm to transfer from his account five sums of Rs. 20,000 each with effect from April, 1953, to the credit of his five sons in the firms books. The sons did not withdraw any amount from their accounts in the firm and the amounts continued to be invested in the firm for which interest at 7 1/22% per annum was paid to them. The father continued to, be a partner of the firm even after the transfer fill 1957. when the firm was dissolved. On his death thereafter the property leased out to the firm which was transferred to two of his son,-, as well as Rupees one lakh gifted to the five sons, were sought to be included in the estate of the deceased on the ground that the donees bad not been. in possession and enjoyment of the subject matter of the gifts to the entire exclusion of the donor within the meaning of s. 10 of the Estate Duty Act, 1953. <ORG>, on reference, held against the <ORG>. Dismissing the appeal to this Court. HELD : Neither the property gifted to the donees nor the amount of Rs. 1 lakh, gifted to the five sons could be included in the estate of the deceased. [81A-B] Section 10 consists of two conditions, namely, (1) the donee must bona fide have assumed possession 'and enjoyment of the property which is the subject matter of the gift to the exclusion of the donor immediately upon the gift and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him by contract or otherwise; and unless both are satisfied the property would be liable to Estate duty. The second part of the section has two limbs, namely, the deceased must be entirely excluded,, (a) from the property, and (b) from any benefit by contract or otherwise. The word "otherwise" must be construed ejusdem generis and it must be interpreted to mean some kind of legal obligation or some transaction enforceable at law. or in equity, which, though not in the form of a contract, may confer a benefit on the donor. [557 F-H. 558A-C] In the present case, the first two conditions are satisfied because of the unequivocal transfer of the properties and the last limb of the condition relating to any benefit to the donor by contract or otherwise is inapplicable. The donor, on the date when he gifted the property which was leased out to the firm, had two rights, namely, ownership in the property and right to terminate the tenancy and obtain posses- 555 (<NAME>) sign thereof. He has transferred the ownership and has given such possession as the circumstances and the nature of the property admit. It could not be said that since the donor was a partner in the firm which had taken the property on lease, he derived benefit therefrom and was therefore not entirely excluded from the possession and enjoyment thereof The benefit the donor had as a member of the partnership was not a benefit referable in any way to the gift but is unconnected therewith. [558C- <CITATION> , 63 I.T.R 497, followed. Munro and Others v. Commissioner of Stamp Duties,  A.C. 61, <NAME> and Another v. Commissioner of Stamp Duties, 37 I.T.R. (E.D.) 89 and Commissioner of Stamp Duties of New South Wales v. <ORG>,  A.C. 425, referred to. <CITATION> , 72 I.T.R. 29, approved. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1391 of 1970.

Appeal by certificate from the judgment and order dated November 25, 1968 of <ORG> in Tax Case No. 103 of 1965.

<NAME>, <NAME> and <NAME>, for the Appellant.

<NAME>, for the respondent.

The Judgment of the Court was delivered by <NAME>, J.-This appeal is by certificate against the judgment of <ORG>, which has answered the following two questions referred to it, in favour of the assessee and against the <ORG> :

(1) Whether on the facts and in the circumstances of the case the <ORG> was right in law in holding that the house property in Avanashi Road, Coimbatore, is not liable to estate duty as property deemed to pass on the death of the deceased under section 10 of the Estate Duty Act, 1953 ?

(2) Whether on the facts and in the circu mstances of the case, the <ORG> was right in law in holding that the sum of Rs. 1 lakh gifted by the deceased to his sons in 1953 is not liable to estate duty as property deemed to pass on the death of the deceased under section 10 of the Estate Duty Act, 1953 ?

These questions arose on the facts set out in the statement of the case which are : one <NAME> was a partner in the firm called <ORG>, Coimbatore. He owned property which. the firm was occupying as tenant-at- will. In August 1953. he executed a deed of settlement under which he transferred the property leased out to the firm to his two sons <NAME> and <NAME>, absolutely and irrevocably. After this transfer, the firm continued to be in occupation of the premises paying rent thereof at Rs. 300/- p.m. to the two donees by crediting each of their accounts in the account books of the firm in equal shares. lit may be mentioned that <NAME> the father continued to be a partner of the firm even after the transfer till April 13, 1957, when the firm was dissolved. He had also an account with the firm <ORG>, and on March 30, 1953, he requested the firm by a letter to transfer from his account five sums of Rs. 20,000/- each with effect from April 1, 1953 to the credit of his five sons in the firm's books. He also wrote to the live sons informing them of the transfer. Though the sons did not withdraw any amount from their accounts in the firm, the amounts continued to be invested in the firm for which interest at 7 1/2% per annum was paid to them.

On the death of <NAME> on May 5, 1957, the Assis- tant Controller of Estate Duty, included in the estate of the deceased, the property leased out to the firm which was transferred to his two sons. According to him, possession and enjoyment of the subject-matter of the gift had not been assumed by the <NAME> nor had they retained possession thereof to the 'entire exclusion of the donor, inasmuch as the partnership in which the donor was a partner with other parties, continued to be in possession and enjoyment of the gifted property as tenants at will of the <NAME>. With respect to the gift of Rs. 1 lakh to the five sons of the, deceased, the Assistant Controller held that the <NAME> had not been. in possession and enjoyment. of the subject-matter of the gift to the entire exclusion of the donor within the meaning of S. 10 of the Estate Duty Act. He, therefore, included this sum of Rs. 1 lakh in the principal value of the estate of the deceased.

The accountable persons appealed to the Appellate Controller who confirmed the said inclusion. The <ORG> on a further appeal, however, disagreed with the findings of the Assistant Controller and the Appellate Controller. It held that the firm, of which the deceased was a partner occupied the property but that such interest was not as owner of the property, and therefore, the gift had been made without the donor retaining any interest, as much it could not be included in the estate of the deceased under S. 10 of the Estate Duty Act. It further held that the sum of Rs. 1 lakh gifted to the sons was given by the sons to the firm which had benefit of the money and that the father could not be said to have enjoyed the benefit of the money as partner of the firm. In this view, the <ORG> excluded the sum of Rs. 3 lakh from the estate of the deceased. <ORG> agreed with these findings.

It is contended before us by the learned Advocate for the Revenue that both the <ORG> and <ORG> were in err-or in holding that the property as well as the sum of Rs. 1 lakh were enjoyed by the donees to the exclusion of the donor or that the deceased did not derive 'benefit therefrom within the meaning of s. 10 of the Estate Duty Act, because, firstly, the donor was ;a partner in the firm which had occupied the property as tenants-at-will even after the gift, and secondly, the amount of Rs. 1 lakh, though entered in each of the accounts of the donor's five sons in the books 'of the firm, was not utilised or enjoyed by them in any manner. Section 10 of the Estate Duty Act, as, in force on the date of the death of the deceased, was as follows "10. Property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of-the donor of any benefit to him by contract or otherwise;

"Provided that the property shall not be deemed to pass by reason only that it was not, as from the date of the gift, exclusively retained as; aforesaid, if, 'by means of the surrender of the reserved benefit or otherwise, it is subsequently enjoyed to the entire exclusion of the donor or of any benefit to him for at least two years before the death :............

The crux of the above section as pointed out by this Court, in <NAME>. <CITATION> ,(1) lies'. in two parts : (1) the donee must bona fide have assumed possession and enjoyment of the property which is the subject-matter of the gift to the exclusion of the donor, immediately upon the gift; and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him by contract or otherwise. Both these conditions are cumulative. Unless each of these conditions is satisfied, the property would be liable to estate duty under s. 10 of the Act. The second part of the section has two limbs: the deceased must be entirely excluded (i) from the property, and (ii) from any benefit by contract or otherwise. The words "by contract or otherwise" in the second limb of the section will not control the words "to (1) 63 I.T.R. 497, at p. 501.

the entire exclusion of the donor" in the first limb. The first limb may be infringed if the donor occupies or enjoys the property or its income, even though he has no right to do so which he could legally enforce against the donee. In other words, in order to attract the section, it is not necessary that the possession of the donor of the gift must be referable to some contractual or other arrangement enforceable in law or in equity. In the context of the section, the word "otherwise" should be construed ejusdem generis and it must be interpreted to mean some kind of legal obligation or some transaction enforceable at law or in equity, which, though not in the form of a contract, may confer a benefit on the donor.

There is no doubt on the facts of this case, the first two conditions are satisfied because there is an unequivocal transfer of the property and also of the money, in the one case by a settlement deed. and in the other by crediting the amount of Rs. 20,000/- in each of the sons' account with the firm which thenceforward became liable to the sons for the payment of the said amount and. the interest at 7 1/2% per annum thereon. In these circumstances, the <ORG> has failed to establish that the <NAME> had not retained possession and enjoyment of the property or the amount and that the deceased was not entirely excluded from the possession and enjoyment thereof. The last limb of the condition relating to any benefit to the donor by contract or otherwise is inapplicable in this case. The donor on the date when he gifted the property to his sons which was leased out to the firm, had two rights, namely, of ownership in the property and the right to terminate the tenancy and obtain the possession thereof. There is no dispute that the ownership has been transferred subject to the tenancy at will granted to the firm, to the donor's two sons because the firm from thenceforward had attorned to the <NAME> as, their tenant by crediting the rent of Rs. 300/- to the respective accounts in equal moity. The donor could, therefore, only transfer possession of the property which the nature of that property was capable of, which in this case is subject to the tenancy. He could do nothing else to trans fer the possession in any other manner unless he was required to effectuate the gift for the purpose of S. 10 of the Act by getting the firm to vacate the premises and handing-over possession of the same to the <NAME> leaving the <NAME> thereafter to lease it out to the firm. Even then the objection of the learned Advocate that since the donor was a partner in the firm which had taken the property on lease, he derived benefit therefrom and was, therefore, not entirely excluded from the possession and enjoyment thereof, will nevertheless remain unsatisfied. To get over such an objection, the <NAME> will have to lease out the property after getting possession from the firm to some other person ;totally unconnected with the donor. Such an unreasonable requirement the law does not postulate. The possession which the donor can give is the legal possession which the circumstances and, the nature of the property would admit. This he has given. The benefit the donor had as a member of the partnership was not a benefit referable in any way to the gift but is unconnected therewith. <ORG> in <NAME> and others v. Commissioner of Stamp Duties(1) was dealing with a case of a similar nature. The donor in that case by six registered transfers in the form prescribed, transferred by way of gift all his right, title and interest in portions of the land to each of his four sons and to trustees for each of his two, daughters and their children. The four sons and the two daughters were, prior to this transfer, on a verbal agreement with the donor, treated as partners of the business carried on by him as grazier of the land owned by him. The evidence showed that the transfers were taken subject to the partnership agreement and on the understanding that any partner could withdraw and work his land separately. On an analogous provision of the law, <ORG> thought it unnecessary to determine the precise nature of the right of the partnership at the time of the transfers because it was either a tenancy during the term of the partnership or a licence coupled with an interests Lord <NAME>, giving his opinion, observed at p. 67, that "the benefit which the donor had as a member of the partnership in the right to which the gift was subject was not in their Lordships' opinion a benefit referable in any way to the gift'. This decision was referred to and distinguished in <NAME> and another v. Commissioner of Stamp Duties(2), and though it was. considered to have no application to the case at point,_ Viscount <NAME> ' observed at p. 97 : "It must often be a matter of fine distinction what is the subject-matter of gift. It as in <NAME>'s case, the gift is of a property shorn of certain of the rights which appertain to complete ownership, the donor cannot, merely because the remains in possession and enjoyment of those rights, be said within the meaning of the section not to be excluded from possession and enjoyment of that which he has given." In the Commissioner of Stamp Duties of New South Wales v. <ORG>) <ORG> further elaborated the concept of the nature of possession required to be given to the donee as not to attract the analogous provisions of the Commonwealth Act. Lord Russel of Killowen observed at p. 440 "The linking of possession with enjoyment as a composite object which has to be assumed by the donee indicate that the possession and enjoyment contemplated is beneficial possession and enjoyment by the object of the donor's bounty................ because the son was (through the medium of the trustees) immediately put (1) [1934] A.C. 61. (2) 37 I.T.R. [E.D.] 89-

in such bona fide beneficial possession and enjoyment of the property comprised in the gift as the nature of the gift and the circumstances permitted. Did he assume it, and thenceforth retain it to the-entire exclusion of the donor ? The answer, their Lordships think, must be in the affirmative, and for two reasons : (1) the settlor had no enjoyment and possession and enjoyment as he had from the fact that the legal ownership of the shares vested in him and his co-trustees as joint tenants, was had by him solely on behalf of the donee. In his capacity as donor he was entirely excluded from possession and enjoyment of what he had given to his son. Did the donee retain possession and enjoyment to the entire exclusion of any benefit to the settlor of whatever kind or in any way whatsoever ? Clearly yes."

The views expressed by <ORG> are in complete accord with our views already expressed. This was also the view held in <CITATION> (1), where a Bench of <ORG> considered both the case of <NAME> and of <NAME> above referred to. In that case, on June 30, 1954, the deceased transferred to his two sons Rs. 57,594 being half of the share standing to his credit as on that date: in the books of a firm in which he was a partner and from July 1, 1954, the sons were also taken as partners in the firm. On the death of the deceased on November 16, 1957, the Assistant Controller held that the amount transferred to the sons must be deemed to pass as per the provisions of s. 10 of the Estate Duty Act, which decision was confirmed by the Appellate Controller. The <ORG>, however, held that the sum which subsequently was rectified to be Rs. 73,695 Was not so includible. One of us (<NAME>, J., as he then was), speaking for +the Bench, observed at p.

On the facts of the case, it cannot be said that, after the gifts, the donees did not retain, the property gifted ,to the entire exclusion of the donor or that the donor had any benefit either by contract or otherwise in the property gifted. That in order that the property could deem to pass and estate duty could be leviable in such cases, the benefit of the donor must be a benefit referable to his own property. The view, that if it is once found ,that the deceased had some benefit in the property, that in itself was sufficient to bring the case within the ambit of section 10 irrespective of the question whether that benefit was referable or not referable to the gift, in our opinion, is erroneous."

(1) 72 I.T.R. 29.

In our view, neither the property gifted to the donees, nor the amount of Rs. 1 lakh gifted to the five sons, could be included in the estate of the. deceased. The, appeal is accordingly dismissed with costs.

<ORG> dismissed.