(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: Assessee
II. Late Bhojjrajji Maharaja Saheb of Gondal: Maharanis Husband
III. Maharaja Vikramsinghji: Elder son of Maharaja
IV. Shivaraj Singhji: Younger son of Maharaja
V. 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 late
father 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 Singhji
claimed 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 dispute
but 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, Shivaraj
Singhji, 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

Section 31 of Contract act:Contigent Contract defined
A "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 event
happening
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 the
event becomes impossible, such contracts become void.

4. Similar cases:
I. Kesoram Industries and Cotton Mills ltd. v. CWT
II. Standard Milk Co. Ltd. v. CWT
III. 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.