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(1979) 2 SCC 213

(BEFORE N.L. UNTWALIA AND R.S. PATHAK,JJ.)

COMMISSIONER Cr WEALTH TAX, MYSORE

Apellant

Versus

HER HIGHNESS VIJAYABA, DOWGER MAHARANI SAHEB OF BHAVNAGAR PALACE,BHAVNAGAR

AND OTHERS RESPONDANTS

Civil Appeal Nos. 2170-2172 of 1972, decided on March 9,1979

Submitted by:-

Section A Group 1

Aditya Kagliwal 12P001

Akhil Mathews 12P002

Akshat Sardana 12P003

Akshay Balooni 12P004

Akshayjit Singh 12P005

Amit Gupta 12P006

1. Facts: Parties involved in the case:

I. Dowger Maharani of Gondel: AssesseeII. Late Bhojjrajji Maharaja Saheb of Gondal: Maharanis HusbandIII. Maharaja Vikramsinghji: Elder son of MaharajaIV. Shivaraj Singhji: Younger son of MaharajaV. Mr. Ahuja: Appearing in support of appeal (means from Wealth tax

department)

A letter from Dowger Maharani of Gondel to Shivaraj Singhji(son) that his latefather had expressed in the presence of many people that Maharaja Vikramsinghji

(eder brother) will give him Rs. 50 lakhs. And, if he does not give him the full

amount then Shivraj Singhji must get the balance of amount from the Maharani.

Vikramsinghji paid only Rs. 20 lakhs to Shivraj Singhji, therefore Shivaraj Singhjiclaimed rest of the amount from assessee on the basis of letter written by her to

him. Maharani gave Shivaraj Singhji Rs. 11 lakhs and also agreed to hand over certain

ornaments in full settlement before the evaluation of the wealth under the wealth

tax act.

The ornaments were however not given to Shivaraj Singhji which led to a disputebut it was settled on 22 February, 1962 by paying Rs. 10 lakhs by the assessee to

Shivaraj Singhji. But this amount is paid after the three assessment years of

assessees wealth.

2. Legal Issue:While calculating the net wealth of assessee, Dowger Maharani of Gondel, the said

amount of Rs. 19 lakhs which she has to pay(claimed as debt) to his son, ShivarajSinghji, is deductible under wealth tax act or not

3. Laws applicable: Clause (m) of section 2 of the wealth tax act: According to this, the debt should be

deducted from the net wealth of the assessee.

Having successfully thwarted the attempts of the decree-holders to proceed against

the Government securities and the income arising therefrom, the assessee cannot

subsequently say that the decretal dues are his debts which are personally payable

by him; Commissioner of Wealth-tax, Lucknow v. Raja Vishwanath Pratap Singh, JT

1996(4) SC 62

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Section 31 of Contract act:Contigent Contract definedA "contingent contract" is a contract to do or not to do something, if some event,

collateral to such contract, does or does not happen.

Section 32 of contract act:Enforcement of Contracts contingent on an eventhappening

Contingent contracts to do or not to do anything in an uncertain future event

happens, cannot be enforced by law unless and until that event has happened. If theevent becomes impossible, such contracts become void.

4. Similar cases:I. Kesoram Industries and Cotton Mills ltd. v. CWT

II. Standard Milk Co. Ltd. v. CWTIII. Bombay Dyeing and Manufacturing Co. Ltd. v. CWT

5. Conclusion:The contingency of the contingent liability did happen and the assessee became

liable to pay the amount as a debt before 12 September, 1959 so the sum of Rs. 19

lakhs was a substituting debt on the said valuation dates.