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TMI Blog1966 (3) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion of this amount in the total wealth of the assessee. One-half of this disputed amount, viz., 2,20,200, paid to the assessee in the shape of debentures of the Andhra Land Mortgage Bank Ltd., represented the advance payment on account of compensation under section 54A of the Madras Estates (Abolition and Conversion into Ryotwari) Act (XXVI of 1948). The other half was the probable amount of balance compensation which was yet to be ascertained and paid to the assessee-landholder under section 39 of the Act XXVI of 1948. Regarding the advance payment on account of compensation under section 54A of Act XXVI of 1948, the assessee contended that as the Chemudu estate taken over by the Government under the Act consisted of agricultural lands, the amount paid as part compensation must be held to represent agricultural property which was to be excluded in computing the taxable wealth. The other contention was that as the Chemudu estate which was taken over by the Government was an impartible estate, the advance compensation paid in respect of it under section 54A must be deemed to be impressed with the character of impartibility. On this reasoning, the assessee claimed that only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and Conversion into Ryotwari) Act (XXVI of 1948) and another sum of Rs. 2,20,200 being the probable amount of balance compensation to be ascertained and paid in the future ? " Mr. Kuppuswamy, the learned counsel for the assessee, has not contended before us that the advance amount of Rs. 2,20,200 already paid to the assessee should not be included in the total wealth of the assessee. Nor has he pressed the contention that the amount of compensation paid or payable to the assessee under the Act XXVI of 1948 must be treated as representing agricultural land and therefore excluded from consideration. He also stated that it is unnecessary in this reference to advance the argument that the amount of compensation already received or yet to be received by the assessee will be impressed with the character of impartibility because the Chemudu estate which was taken over by the Government under Act XXVI of 1948 was an impartible estate. According to him, whatever might be the dispute between the landholder and the other members of her family regarding the absolute ownership or powers of disposal over the compensation amount, it need not be projected into the present case which is concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment-debtor in two half-yearly instalments in February and August. The garnishee order was issued in November. The trustees contended that in November there was no money in their hands which can be said to be due to the judgment-debtor and that therefore the garnishee order served on them was unsustainable. The question that arose for consideration was whether there was a " debt " owing or accruing to the judgment-debtor at the time of the garnishee order. Lindley L. J. said : " A debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation, debitum in praesenti, solvendum in futuro. " Fry L. J. observed at page 528 : " I have further no doubt that the word 'indebted' describes the condition of a person when there is a present debt, Whether it be payable in praesenti or in futuro and I think that the words 'all debts owing or accruing' mean the same thing. They describe all debita in praesenti, whether solvenda in futuro, or solvenda in praesenti. " Brett, Master of the Rolls, also agreed with this view. A Full Bench of the Calcutta High Court in Banchharam Majumdar v. Adyanath Bhattacharjee had to consider the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquired a right to receive the income. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in praesenti, solvendum in futuro : see W. S. Try Ltd. v. Johnson and Webb v. Stenton. " It is needless to cite more decisions on this point which appears to us to be well settled. The contention of Mr. Kuppuswamy that it is only debitum in praesenti, solvendum in praesenti that can be regarded in the eye of law as a debt cannot therefore be accepted. A payment to be made in the future on account of an existing obligation is as much a debt as a payment to be made in praesenti on account of a liability in praesenti. We shall now deal with the other argument of Mr. Kuppuswamy that it is only a present liability to pay an ascertained sum of money that can constitute a debt and not a liability to pay a sum of money which is only ascertainable or is yet to be ascertained. But authorities on this point also appear to be against Mr. Kuppuswamy. In O'Driscoll v. Manchester Insurance Committee, the Court of Appeal had to consider whether an amount which was not ascertained but was ascertainable only in the future would satisfy the legal concept of " debt ". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson has to serve for a fixed period before being entitled to any salary, and he has served part of that period at the time the garnishee order nisi is served . . . " Phillimore L.J., dealing with the argument that the amount was not ascertained at the time the garnishee order nisi was served, observed : " No doubt these debts were not presently payable, and the amounts were not, on April 9, 1914, ascertained in the sense that no one could say what the result of the calculations would be, but it was certain on that date that a payment would become due from the committee to the doctors out of the balance of the moneys in the hands of the committee for 1913 . . . " Lord Justice Bankes in his concurring judgment said : " It is well established that 'debts owing or accruing' include debts debita in praesenti solvenda in futuro. The matter is well put in the Annual Practice, 1915, page 808 : 'But the distinction must be borne in mind between the case where there is an existing debt, payment whereof is deferred, and the case where both the debt and its payment rest in the future. In the former case there is an attachable debt, in the latter case there is not. If, for instance, a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deduct further sums from that money in exercise of some charge which they may have arising from the regulation, but that is merely a question of ascertaining the debt which has to be paid over to the assisted person and does not prevent that debt from being an existing debt at the material date. " These decisions are sufficient to show that if there is an existing liability, the mere circumstance that the amount payable can be ascertained or quantified only at a future date after taking certain proceedings and following certain procedures, cannot rob the existing liability of the character of " debt ". A present liability to pay a sum of money which is ascertainable only in the future constitutes a " debt " in law. It follows from the above that the balance amount of compensation which is to be ascertained in future under section 39 of Act XXVI of 1948 and paid to the assessee is a debt owing to the assessee. That being so, it is an asset of the assessee which has to be reckoned in assessing the total wealth of the assessee for purposes of the Wealth-tax Act. We may add that the direction given by the Appellate Tribunal to the effect that in case the amount finally ascertained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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