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TMI Blog1969 (7) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... three months in the joint names of "Purnabai Sagarmal Mody and/or Surya Kant S. Mody--payable to either or survivor," and that the renewed fixed deposit receipts be sent to Satyanarayana at Bombay. Pursuant to this letter two fresh receipts were issued on August 3, 1953, for Rs. 5,00,000 and Rs. 45,793-4-0. It appears that a receipt for Rs. 80,931-10-0 was previously obtained in the joint names of Purnabai and Suryakant on July 4, 1953. On August 16, 1953, Purnabai executed a deed of gift in favour of Suryakant in respect of three receipts containing the following recitals : "Out of natural love and affection I have towards the said Suryakant son of Satyanarayana I hand over to the said Satyanarayana as the father and natural guardian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -0 was encashed and out of the amount of Rs. 86,732 realized, Rs. 5,000 were invested in the name of Suryakant in national savings certificates. The balance was also deposited with a firm in Bombay also in the name of Suryakant alone. The other two receipts were renewed in the joint names of Purnabai and Suryakant. After the death of Purnabai on February 15, 1956, the two receipts were encashed by Suryakant. The Assistant Controller of Estate Duty, in proceedings for assessment of estate duty, held inter alia that possession and enjoyment of the gifted property was not assumed by the donee to the entire exclusion of the donor, and on that account the amount of the two receipts and interest thereon formed part of the estate of Purnabai and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter August 16, 1953, in the joint names of Purnabai and Suryakant. Till August 25, 1955, under their terms the receipts could be encased by either or the survivor. Even after Purnabai made a gift of the amount represented by the three receipts, she continued to obtain the receipts in the joint names, pre sumably with the object of not parting with control over those receipts. Counsel for the appellant however contended that the fixed deposit receipts were held by Purnabai in her name as benamidar for Suryakant. Counsel placed strong reliance upon the letters dated July 22, 1953, and August 17, 1953, and the terms of the deed of gift dated August 16, 1953. By the letter dated July 22, 1953, the manager of the bank was informed that in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he receipts in the joint names of herself and of Suryakant, she was merely a benamidar and in any event was acting on behalf of Suryakant. Counsel further contends that the bank having notice of the gift could not have parted with the money except only for the benefit of the minor and by obtaining renewal of the receipt in favour of the minor, Suryakant, and Purnabai, the latter retained no possession or enjoyment of the money represented by the receipts. Counsel invited our attention to a decision of the Madras High Court in Imperial Bank of India v. S. Krishnamurthi in which Beasely C.J., speaking for the Court, observed that when a bank having notice that the administrators of the estate of the depositor intended to commit a breach of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the duty not to part with them, even at the mandate of his customer, for purposes which lie knows are inconsistent with the customer's fiduciary character and duty", and upheld the claim of Krishnamurthi. It is necessary to consider whether in the present case the investment was made by renewal of fixed deposit receipts after August 16, 1953, for a purpose which the bank knew was inconsistent with Purnabai's fiduciary character and duty. We are not concerned in this case to decide whether the bank could have refused to pay the amount of the renewed deposit receipts if demanded by Purnabai. Whether the amount of deposit receipts was liable to estate duty must by determined on the true effect of section 10 of the Estate Duty Act, 1953 (34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conduct of Purnabai clearly indicates that she had no intention to part with control over the property : the deposit receipts were obtained in joint names, and Purnabai had authority to with draw the amount from the bank, without consulting the guardian of Suryakant. The deposit receipts were renewed on several occasions even after the execution of the deed of gift in the joint names of Purnabai and Suryakant. Purnabai alone presented the fixed deposit receipts for renewal. She could under the terms of the receipts receive the moneys to the entire exclusion Suryakant. We are unable to hold, in the circumstances, that bona fide possession and enjoyment of the property gifted was immediately assumed by Suryakant and thenceforward retained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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