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Gift Tax Act, 1958/Indian Succession Act, 1925: Section 5(1)(xi)/Section 191-Gift in contemplation of death- Essential requirements of-Gift of movable property-Donor seriously ill at the time of execution of deed and died shortly thereafter-Delivery of possession of gifted property effected-No indication in the document specifically or impliedly that gift would be effective only if donor died or liable to be revoked in case donor recovered-Whether gift valid-Whether entitled to exemption. Mohammedan Law: Marz-ul-maut (death-bed illness)-What is-Gift made during marz-ul-maut-Whether entitled to exemption under Gift Tax Act-Section 191, Indian Succession Act-Applicability of. =Gift to certain movable assets was made to the respondent assessee by a Muslim businessman, when he was seriously ill, and died of the illness after six weeks of the execution of the document. In gift-tax assessment proceedings, the assessee claimed exemption for this gift under Section 5(1)(xi) of the Gift Tax Act, 1958, on the ground that the gift was made in contemplation of death. The Gift Tax Officer rejected the claim. But, on appeal, the Appellate Assistant Commissioner allowed the exemption relying on the circumstances under which the gift was made and the events followed thereafter and the evidence of the Sub-Registrar, who was brought to residence for effecting registration, and the doctor, who was treating the donor. On appeal by the Gift-Tax Officer, the Tribunal affirmed the finding of the Appellate Assistant Commissioner regarding the donor’s illness but did not allow the exemption on the ground that, though there was delivery of possession of the gifted movables, the gift was unconditional and absolute, since it had not been specifically expressed or impliedly present in the deed that the gift must revert back in the event of the donor recovering from illness and that the gifted property had to be kept as a gift in case the donor died of his illness. However, on a reference made at the instance of the assessee for opinion, the High Court held that such a condition need not be mentioned in the deed and 847 it could be inferred from the attending circumstances of the gift, and since the donor was actually sick at the time of execution of the deed and died of the same illness without recovery, after a short period, the gift in question was made in contemplation of death and therefore, entitled to exemption from tax under Section 5(1)(xi) of the Act. In the appeal before this Court, on behalf of the Department it was contended that the gift in contemplation of death should be conditional, and in the absence of indications in the document to the effect that if the donor did not die, he should be entitled to remain in complete domination of the gifted property, the gift would become inter vivos and absolute, and that the exemption under Section 5(1)(xi) of the Gift Tax Act was not available to the assessee, since Section 191 of the Indian Succession Act was not applicable to marz-ul-maut gift. Dismissing the appeal by the Department, this Court HELD: 1.1 Explanation (d) to sub-section (2) of Section 5 of the Gift Tax Act, 1958 states that a gift made in contemplation of death has the same meaning as in Section 191 of the Indian Succession Act, 1925. The requirements of a gift in contemplation of death as laid down by Section 191 are: (i) the gift must be of movable property; (ii) it must be made in contemplation of death; (iii) the donor must be ill and he expects to die shortly of the illness; (iv) possession of the property should be delivered to the done; and (v) the gift does not effect if the donor recovers from the illness or the donee predeceases the donor. These requirements are similar to the constituent elements of a valid donatio martis causa. [853C-E] Cain v. Moon, [1893] 2 Q.B. 283 @ 286, referred to. 1.2. In the instant case, all the conditions prescribed, except perhaps the last one are found present by the fact finding authorities. [853G] 1.3. The recitals in the deed of gift are not conclusive to determine the nature and validity of the gift. The party may produce evidence aliunde to prove that the donor gifted the property when he was seriously ill and contemplating his death with no hope of recovery. These factors in conjunction with the factum of death of the donor may be sufficient to infer that the gift was made in contemplation of death. It is implicit in such circumstances that the donee becomes the owner of the gifted property only if the donor dies of the illness and if the donor recovers from the illness, the recovery itself operates as a revocation of the gift. [854B-C] 848 1.4 It is not necessary to state in the gift deed that donee becomes owner of the property only upon the death of the donor. Nor it is necessary to specify that the gift is liable to be revoked upon the donor’s recovery from the illness. The law acknowledges these conditions from the circumstances under which the gift is made. [854C-D] Halsbury’s Laws of England, 4th Edn. Vol. 20 p. 41 para 67; Jerman on Wills, 8th Edn. Vol, 1 p. 46-47; Williams on “Executors and Administrators”, 14th Edn. p. 315, and Corpus Juris Secundum, vol. 38 p. 782 and p. 917 para 110, referred to. 1.5 In the light of this and in view of the findings recorded by the Tribunal about the serious sickness of the donor and his state of mind at the time of making the gift in question, it can be reasonably concluded that the gift was not absolute and irrevocable. On the contrary, it would be legitimate to infer that the gift was in contemplation of death. any other view would be inappropriate. [856A-B] 2.1 Marz-ul-maut is also entitled to exemption from gift tax under Section 5(1)(xi) of the Gift Tax Act, 1958. [856B] 2.2 The exemption to gift in contemplation of death is provided under Section 5(1)(xi) of the Gift Tax Act, and not under Section 191 of the Indian Succession Act, Section 191 furnishes only the meaning or requirements of gift in contemplation of death. It a gift in contemplation of death is recognised by the personal law of parties satisfying the conditions contemplated under Section 191 of the Indian Succession Act, cannot be denied exemption under Section 5(1)(xi) of the Act, Even assuming that Section 191 as such will not be applicable to the parties. [856C-D] 2.3 Under Mohammedan Law gift made during marz-ul-maut (death-bed-illness) is subject to very strict scrutiny and subject to all other conditions necessary for the validity of a hiba or gift, including delivery of possession of the donor to the donee. [856D] Mulla’s Mohammedan Law, pp. 111 Sections 135 & 136, referred to. 2.4 Marz-ul-maut is a malady which induces an apprehension of death inthe person suffering from it and which eventually results in his death. There are three tests laid down to determine whether illness is to be regarded as marz-ul-maut. They are; (i) Proximate danger of death 849 so that there is preponderance of khauf or apprehension that at the given time death must be more probable than life. (2) There must be some degree of subjective apprehension of death in the mind of the sick person. (3) There must be external indicia chief among which would be the inability to attend to ordinary avocations. [856E-F] Rashid Karmalli and anr. v. Sherbanoo, [1907] 31 ILR Bombay 2641, referred to. 2.5 Therefore, under the Principles of Mohammedan Law, the gift made in marz-ul-maut could be regarded as gift made in contemplation of death, since it has all the requisites prescribed under Section 191 of the Indian Succession Act, 1925. The only limitation is that the disposition is restricted to a third on account of the right of the heirs. [857C-D] Syed Ameer Ali: Mohammedan Law, Vol. 1, 4th Edn. 1985 p. 59-60, referred to. =1991 AIR 1847, 1991( 2 )SCR 846, 1991( 3 )SCC 520, 1991( 2 )SCALE11 , 1991( 3 )JT 67

PETITIONER:

Deutsch: Orpheus

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COMMISSIONER OF GIFT TAX, ERNAKULAM

Vs.

RESPONDENT:
ABDUL KARIM MOHD. (DEAD) BY LRS.

DATE OF JUDGMENT10/07/1991

BENCH:
SHETTY, K.J. (J)
BENCH:
SHETTY, K.J. (J)
YOGESHWAR DAYAL (J)

CITATION:
1991 AIR 1847 1991 SCR (2) 846
1991 SCC (3) 520 JT 1991 (3) 67
1991 SCALE (2)11

ACT:
Gift Tax Act, 1958/Indian Succession Act, 1925: Section
5(1)(xi)/Section 191-Gift in contemplation of death
Essential requirements of-Gift of movable property-Donor
seriously ill at the time of execution of deed and died
shortly thereafter-Delivery of possession of gifted property
effected-No indication in the document specifically or
impliedly that gift would be effective only if donor died or
liable to be revoked in case donor recovered-Whether gift
valid-Whether entitled to exemption.
Mohammedan Law: Marz-ul-maut (death-bed illness)-What
is-Gift made during marz-ul-maut-Whether entitled to
exemption under Gift Tax Act-Section 191, Indian Succession
Act-Applicability of.

HEADNOTE:
Gift to certain movable assets was made to the
respondent assessee by a Muslim businessman, when he was
seriously ill, and died of the illness after six weeks of
the execution of the document. In gift-tax assessment
proceedings, the assessee claimed exemption for this gift
under Section 5(1)(xi) of the Gift Tax Act, 1958, on the
ground that the gift was made in contemplation of death.
The Gift Tax Officer rejected the claim. But, on appeal,
the Appellate Assistant Commissioner allowed the exemption
relying on the circumstances under which the gift was made
and the events followed thereafter and the evidence of the
Sub-Registrar, who was brought to residence for effecting
registration, and the doctor, who was treating the donor.
On appeal by the Gift-Tax Officer, the Tribunal
affirmed the finding of the Appellate Assistant Commissioner
regarding the donor’s illness but did not allow the
exemption on the ground that, though there was delivery of
possession of the gifted movables, the gift was
unconditional and absolute, since it had not been
specifically expressed or impliedly present in the deed
that the gift must revert back in the event of the donor
recovering from illness and that the gifted property had to
be kept as a gift in case the donor died of his illness.
However, on a reference made at the instance of the assessee
for opinion, the High Court held that such a condition need
not be mentioned in the deed and
847
it could be inferred from the attending circumstances of the
gift, and since the donor was actually sick at the time of
execution of the deed and died of the same illness without
recovery, after a short period, the gift in question was
made in contemplation of death and therefore, entitled to
exemption from tax under Section 5(1)(xi) of the Act.
In the appeal before this Court, on behalf of the
Department it was contended that the gift in contemplation
of death should be conditional, and in the absence of
indications in the document to the effect that if the donor
did not die, he should be entitled to remain in complete
domination of the gifted property, the gift would become
inter vivos and absolute, and that the exemption under
Section 5(1)(xi) of the Gift Tax Act was not available to
the assessee, since Section 191 of the Indian Succession Act
was not applicable to marz-ul-maut gift.
Dismissing the appeal by the Department, this Court
HELD: 1.1 Explanation (d) to sub-section (2) of Section
5 of the Gift Tax Act, 1958 states that a gift made in
contemplation of death has the same meaning as in Section
191 of the Indian Succession Act, 1925. The requirements of
a gift in contemplation of death as laid down by Section 191
are: (i) the gift must be of movable property; (ii) it must
be made in contemplation of death; (iii) the donor must be
ill and he expects to die shortly of the illness; (iv)
possession of the property should be delivered to the done;
and (v) the gift does not effect if the donor recovers from
the illness or the donee predeceases the donor. These
requirements are similar to the constituent elements of a
valid donatio martis causa. [853C-E]
Cain v. Moon, [1893] 2 Q.B. 283 @ 286, referred to.
1.2. In the instant case, all the conditions
prescribed, except perhaps the last one are found present by
the fact finding authorities. [853G]
1.3. The recitals in the deed of gift are not
conclusive to determine the nature and validity of the gift.
The party may produce evidence aliunde to prove that the
donor gifted the property when he was seriously ill and
contemplating his death with no hope of recovery. These
factors in conjunction with the factum of death of the donor
may be sufficient to infer that the gift was made in
contemplation of death. It is implicit in such
circumstances that the donee becomes the owner of the gifted
property only if the donor dies of the illness and if the
donor recovers from the illness, the recovery itself
operates as a revocation of the gift. [854B-C]
848
1.4 It is not necessary to state in the gift deed that
donee becomes owner of the property only upon the death of
the donor. Nor it is necessary to specify that the gift is
liable to be revoked upon the donor’s recovery from the
illness. The law acknowledges these conditions from the
circumstances under which the gift is made. [854C-D]
Halsbury’s Laws of England, 4th Edn. Vol. 20 p. 41 para
67; Jerman on Wills, 8th Edn. Vol, 1 p. 46-47; Williams on
“Executors and Administrators”, 14th Edn. p. 315, and Corpus
Juris Secundum, vol. 38 p. 782 and p. 917 para 110, referred
to.
1.5 In the light of this and in view of the findings
recorded by the Tribunal about the serious sickness of the
donor and his state of mind at the time of making the gift
in question, it can be reasonably concluded that the gift
was not absolute and irrevocable. On the contrary, it would
be legitimate to infer that the gift was in contemplation of
death. any other view would be inappropriate. [856A-B]
2.1 Marz-ul-maut is also entitled to exemption from
gift tax under Section 5(1)(xi) of the Gift Tax Act, 1958.
[856B]
2.2 The exemption to gift in contemplation of death is
provided under Section 5(1)(xi) of the Gift Tax Act, and not
under Section 191 of the Indian Succession Act, Section 191
furnishes only the meaning or requirements of gift in
contemplation of death. It a gift in contemplation of death
is recognised by the personal law of parties satisfying the
conditions contemplated under Section 191 of the Indian
Succession Act, cannot be denied exemption under Section
5(1)(xi) of the Act, Even assuming that Section 191 as such
will not be applicable to the parties. [856C-D]
2.3 Under Mohammedan Law gift made during marz-ul-maut
(death-bed-illness) is subject to very strict scrutiny and
subject to all other conditions necessary for the validity
of a hiba or gift, including delivery of possession of the
donor to the donee. [856D]
Mulla’s Mohammedan Law, pp. 111 Sections 135 & 136,
referred to.
2.4 Marz-ul-maut is a malady which induces an
apprehension of death inthe person suffering from it and
which eventually results in his death. There are three
tests laid down to determine whether illness is to be
regarded as marz-ul-maut. They are; (i) Proximate danger of
death
849
so that there is preponderance of khauf or apprehension that
at the given time death must be more probable than life.
(2) There must be some degree of subjective apprehension of
death in the mind of the sick person. (3) There must be
external indicia chief among which would be the inability to
attend to ordinary avocations. [856E-F]
Rashid Karmalli and anr. v. Sherbanoo, [1907] 31 ILR
Bombay 2641, referred to.
2.5 Therefore, under the Principles of Mohammedan Law,
the gift made in marz-ul-maut could be regarded as gift made
in contemplation of death, since it has all the requisites
prescribed under Section 191 of the Indian Succession Act,
1925. The only limitation is that the disposition is
restricted to a third on account of the right of the heirs.
[857C-D]
Syed Ameer Ali: Mohammedan Law, Vol. 1, 4th Edn. 1985
p. 59-60, referred to.

JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 526 (NT)
of 1979.
From the Judgment dated 16.12.1976 of the Kerala High
Court in I.T.R. No. 101 of 1974.
Dr. V. Gauri Shankar, S. Rajappa and Ms. A. Subhashini
for the Appellant.
Santosh N. Hegde, E.M.S. Anam and K.L. Mehta for the
Respondents.
The Judgment of the Court was delivered by
K. JAGANNATHA SHETTY, J. This appeal by special leave
is against the decision of the High Court of Kerala in
Income-Tax Reference No. 101/1974 and it raises an important
issue concerning the requirements of a gift made “in
contemplation of death” within the meaning of Section
5(1)(xi) of Gift Tax Act, 1958 (`The Act’). That reference
was made under Section 26(1) of the Gift Tax Act, 1958 by
the Income-Tax Appellate Tribunal Cochin Bench. The
Tribunal referred to the High Court two questions for its
opinion, out of which we are concerned only with the first
question which reads:
“Whether on the facts and circumstances of the case
the
850
Tribunal was right in holding that the gift of
movables valued at Rs.67,578 is not a gift made in
contemplation of death within the meaning of
section 5(1)(xi) of Gift-Tax Act, 1958?”
The facts of the case as found by the Tribunal are
simple and not unusual. Abdul Karim Mohammed a businessman
in Cochin executed a document styled as “settlement will”
gifting certain movables to the assessee respondent inthe
shape of business assets valued by the Gift-Tax Officer at
Rs.67,578. The document was executed on 4 April 1964 and at
the time of execution, the donor was seriously ill. He died
of the illness after about six weeks. In gift-tax
assessment proceedings the assessee claimed exemption for
this gift under section 5(1)(xi) of the Act which provides
that a gift shall not be charged under the Gift-Tax Act in
respect of a gift made by any person in contemplation of
death.
The Gift-Tax Officer rejected the claim of the assessee
and brought the said amount to tax. But on appeal the
Appellate Assistant Commissioner held to the contrary. He
allowed the exemption sought for on the ground that the gift
was in contemplation of death. He has relied upon the
circumstances under which the gift was made and the events
followed thereafter to reach his conclusion. He has
described the facts and circumstances as follows: “Now I
agree with Sri Karunakaran, that the absence of any
reference in the deed of settlement to the illness from
which the donor was suffering does not lead to the
conclusion that there was no illness, or that the donor was
nor apprehensive of death resulting from the same. There is
ample evidence to show that he was seriously ill at the time
when he made the gift. He was aged about 72 at the time and
he was also suffering from paralysis, diabetes, hernia etc.
In fact, in view of the seriousness of the condition he
could not proceed to the Sub-Registrar’s office for
registration of the document; on the other hand the sub-
registrar ws brought to his residence for the purpose of
effecting the registration. In an affidavit filed by him
before the Gift-Tax Officer on the 3rd August, 1969, the
sub-registrar has affirmed that at the time of execution of
the document the settler was in sick bed and was unable to
move out of the same. He has also stated that the settler
as well as his children showed anxiety and haste in the
matter of registration on account of the serious nature of
the illness. At that time, according to the sub-registrar
the settler was in his proper sense, but soon after the
execution of the deed, further complications set in and his
power of speech and movements became impaired. Dr. V.B.
Mohammed who was treating him has certified that
851
on 4th June 1964 patient was unable to recognise the
surroundings properly, and that his mental condition was
impaired to a great degree. On 9th June, 1964 i.e. within
about six weeks from the date of the settlement he died. In
these circumstances, I am satisfied that the donor, an aged
gentleman who seriously ill at the time of the settlement
entertained no hope of recovery, and that it was in such a
state of mind, that he made the settlement. Hence the gifts
must be taken to have been made in contemplation of death.”
The Gift-Tax Officer appealed to the Tribunal against
the decision of the Appellate Assistant Commissioner. The
Tribunal has affirmed the finding of the Appellate Assistant
Commissioner that the donor at the time of gift was ill and
expected to die shortly of his illness. The Tribunal
observed “But we are satisfied that the Appellate Assistant
Commissioner was on the facts and circumstances of the case
right in his conclusion that the donor, an aged gentleman,
who was seriously ill at the time of the settlement
entertained no hope of recovery and that it was in such a
state of mind that he made the settlement. The materials
referred, relied on and discussed by the Appellate
Assistant Commissioner in the appellate order are sufficient
enough to lead to a reasonable conclusion that the donor
was, at the time of execution of the document, ill and that
he expected to die shortly of his illness.” The Tribunal
however, did not agree with the exemption allowed to the
assessee. It has stated that the finding recorded by the
Assistant Commissioner that the donor was ill at the time of
gift and he died thereafter out of the illness alone is not
sufficient to hold that the gift was made in contemplation
of gift death. In order to satisfy the requirements of gift
in contemplation of death there must be two other conditions
to be satisfied; (i) There must be delivery of possession of
the gifted movables to the donee; (ii) that a gift is
entitled to take effect only in the event of the donor’s
death and that if the donor recovers from the illness the
property should revert back. On the first condition the
Tribunal found on facts that there was delivery of
possession of the gifted movables. On the second condition,
the Tribunal observed that the gift was unconditional and it
was in nature of settlement deed, pure and simple. It was
executed to settle absolutely forever the property of the
donor without any condition. It is just like any other
settlement executed by a person without the contemplation of
death. It has not been expressly specified or impliedly
present in the deed that the gift must revert back in the
event of the donor recovering from illness. The gifted
property has to be kept as a gift in case the donor shall
die of his illness has also not been satisfied in the case.
With these findings, the Tribunal allowed the appeal of the
Gift-Tax Officer.
852
Thereafter, at the instance of the assessee the
question set out earlier was referred to the High Court for
its opinion. The High Court has answered the question in
the negative and in favour of the assessee. The High Court
expressed the view that it is not necessary that there must
be recital in the deed stating that the property would
revert to the donor in the event of his recovery from the
illness, or the donor surviving the donee. Such a condition
could be inferred from the attending circumstances of the
gift. The High Court has referred to the affidavits filed
by the sub-registrar who registered the document and the
Doctor who treated the donor to come to the conclusion that
the donor was seriously ill at the time of execution of the
deed and expected to die shortly of that illness. The
factum of delivery of the gifted assets to the donee at a
time when the donor was seriously sick and the donor’s death
shortly thereafter were also relied upon. It was then
stated that in as much as the donor was actually sick at the
time of execution of the deed and died of the same illness
without recovery, after a short period, the gift in question
was made in contemplation of death and therefore, entitled
to exemption from tax under Section 5(1)(xi) of the Act.
The legality of the view expressed by the High Court is
under challenge in this appeal. First, we may refer to the
relevant statutory provisions bearing on the question.
Section 3 of the Act is the charging section and it provides
that in respect of gifts there shall be charged tax referred
to as the gift-tax at the rate specified in the schedule.
Section 5 provides exemption in respect of certain gifts.
Section 5 sub-section (1)(xi) provides that gift tax shall
not be charged under the Act in respect of gifts made by any
person in contemplation of death. Explanation (d) to sub-
section (2) of Section 5 states “that gifts made in
contemplation of death” has the same meaning as in Section
191 of the Indian Succession Act, 1925. Section 191 of the
Indian Succession Act deals with the requirements of gifts
made in contemplation of death. It reads as follows:
“191. Property transferable by gift made in
contemplation of death.
(1) A man may dispose, by gift made in
contemplation of death, of any movable property
which he could dispose of by will.
(2) A gift said to be made in contemplation of
death where a man, who is ill and expects to die
shortly his illness,
853
delivers to another the possession of any movable
property to keep as a gift in case the donor shall
die of that illness.
(3) Such a gift may be resumed by the giver; and
shall not take effect if he recovers from the
illness during which it was made; nor if e survives
the person to whom it was made.
The requirements of a gift in contemplation of death as
laid down by Section 191 of the Indian Succession Act are:
(i) the gift must be of movable property; (ii) it must be
made in contemplation of death; (iii) the donor must be ill
and he expects to die shortly of the illness; (iv)
possession of the property should be delivered to the donee;
and (v) the gift does not take effect if the donor recovers
from the illness or the donee predeceases the donor.
There is nothing new in the requirements provided under
Section 191 of the Succession Act. They are similar to the
constituent elements of a valid donatio mortis causa. The
essential conditions of a donatio mortis causa may be
summarised thus: “For an effectual donatio mortis causa
three things must combine: firs, the gift or donation must
have been made in contemplation, though not necessarily in
expectation of death; secondly, there must have been
delivery to the donee of the subject matter of the gift; and
thirdly. the gift must be made under such circumstances as
shew that the thing is to revert to the donor in case he
should recover. This last requirement is sometimes put
some-what differently, and it is said that the gift must be
made under circumstances shewing that it is to take effect
only if the death of donor follows; it is not necessary to
say which way of putting it is the better.” (See Cain v.
Moon, [1896] 2 Q.B. 283 at 286).
Now, all the conditions of a valid gift in
contemplation of death except perhaps the last condition
prescribed under section 191 of the Indian Succession Act
are found present in this case by the fact finding
authorities. The gift was made when the donor was seriously
ill and apprehending his death. The donor died within six
weeks after the execution of the deed. The possession of
the property gifted has been delivered to the donee before
the death. But it is said that there is nothing to show in
the document expressly or impliedly that the gift was made
under such circumstances that the thing was to revert to the
donor in case he should recover. Dr. Gauri Shankar learned
counsel for the Revenue contends that the gift in
contemplation of death should be conditional that is, on the
term that if the donor would not
854
die he should be entitled to remain complete dominion of the
property, the subject matter of the gift. There should be
indications in the document to that effect without which,
counsel states that the gift becomes inter-vivos and
absolute.
It seems to us that the recitals in the deed of gift
are not conclusive to determine the nature and validity of
the gift. The party may produce evidence aliunde to prove
that the donor gifted the property when he was seriously
ill and contemplating his death with no hope of recovery.
These factors in conjunction with the factum of death of the
donor may be sufficient to infer that the gift was made in
contemplation of death. It is implicit in such
circumstances that the donee becomes the owner of the gifted
property only if the donor dies of the illness and if the
donor recovers from the illness, the recovery itself
operates as a revocation of the gift. It is not necessary
to state that in the gift deed that the donee becomes the
owner of the property only upon the death of the donor. Nor
it is necessary to specify that the gift is liable to be
revoked upon the donor’s recovery from the illness. The law
acknowledges these conditions from the circumstances under
which the gift is made. Reference may be made to the
following passage from Halsbury’s Laws of England (4th ed.
vol. 20 p. 41 para 67):
“There is an implied condition that the gift is to
be retained only in the event of death, even though
the donor does not expressly say so. The death may
take place some time afterwards, or the donor may
actually die from some other illness, but if the
donor recovers from illness, during which the gift
is made the donee has no title, and can only hold
what was delivered to him in trust for the donor.”
Jerman on Wills (8th ed. vol. 1 p. 46-47) also lends
light on this aspect:
“The conditional nature of the gift need not be
expressed: It is implied in the absence of evidence
to the contrary. And even if the transaction is
such as would in the case of a gift inter vivos
confers a complete legal title, if the
circumstances authorise the supposition that the
gift was made in contemplation of death, mortis
causa is presumed. It is immaterial that the donor
in that dies from some disorder not contemplated by
him at the time he made the gift.”
Similar is the statement of law in Williams on
“Executors and
855
Administrators” (14 ed. p. 315):
“542. Conditional on death:
“The gift must be conditioned to take effect
only on the death of the donor. But it is not
essential that the donor should expressly attach
this condition to the gift; for if a gift is made
during the donor’s last illness and in
contemplation of death, the law infers the
condition that the donee is to hold the donation
only in case the donor dies.”
The principles in the Corpus Juris Secundum (vol. 38 p.
782) are not quite different:
“……A gift causa mortis differs from a gift
inter vivos in that it is made in view of expected
or impending death, as appears infra $$ 75,78. The
vital distinction between a gift inter vivos and a
gift causa mortis is that the former is
irrevocable, while the latter may be revoked at any
time before the donor’s death, and may be defeated
by the recovery or survival of the donor. More
fully, a gift causa mortis is liable to revocation
by the donor and does not pass an irrevocable title
until the death of the donor, while a gift inter
vivos vests an irrevocable title on delivery; in
the case of a gift inter vivos the title is not
only transferred and vested in the donee at once,
but the gift is immediately completed and is
absolute and irrevocable, while in the case of a
gift causa mortis the transfer is subject to be
defeated by the happening of any one of the
conditions implied by the law.”
It is further stated (at p. 917 para 110):
“A gift causa mortis is revoked by the recovery of
the donor, from the particular illness, or his
survival of the peril, which existed at the time of
the gift and in contemplation of which the gift was
made.
The recovery of the donor from the particular
illness, or his survival of the peril, which
existed at the time of the gift and in
contemplation of which the gift was made will of
itself operate as a revocation of the gift.”
856
In the light of these principles and in view of the
findings recorded by the Tribunal about the serious sickness
of the donor and his state of mind at the time of making the
gift in question, it can be reasonably concluded that the
gift was not absolute and irrevocable. On the contrary, it
will be legitimate to infer that the gift was in
contemplation of death. Any other view in this case would
be inappropriate.
No account in this regard would be complete unless it
is held that marz-ul-maut gift with which we are concerned
is also entitled to exemption from gift tax under Section
5(1)(xi) of the Act. Counsel for the Revenue argues that
the exemption provided under Section 5(1)(xi) of the Act is
not available to the assessee since Section 191 of the
Indian Succession Act is not applicable to marz-ul-maut
gift. We do not find much substance in this submission.
The exemption to gift in contemplation of death is provided
under Section 5(1)(xi) of the Act and not under Section 191
of the Indian Succession Act. Section 191 furnishes only
the meaning or requirements of gift in contemplation of
death. If a gift in contemplation of death is recognised by
the personal law of parties satisfying the conditions
contemplated under Section 191 of the Indian Succession Act,
it cannot be denied exemption under Section 5(1)(xi) of the
act even assuming that Section 191 as such will not be
applicable to the parties. Under Mohammedan Law gift made
during marz-ul-maut (death-bed illness) is subject to very
strict scrutiny for its validity. Marz-ul-maut is a malady
which induces an apprehension of death in the person
suffering from it and which eventually results in his death.
There are three tests laid down to determine whether illness
is to be regarded as marz-ul-maut. They are: (1) Proximate
danger of death so that there is a preponderance of Khauf or
apprehension that at the given time death must be more
probable than life. (2) There must be some degree of
subjective apprehension of death in the mind of the sick
person. (3) There must be external indicia chief among which
would be the inability to attend to ordinary avocations.
(See: Rashid Karmalli and Anr. v. sherbanoo, [1907] 31 ILR
Bom 264. The gift made during marz-ul-maut is subject to
all other conditions necessary for the validity of a hiba or
gift, including delivery of possession by the donor to the
donee. (See: Mulla’s Mohammedan Law pp. 109, 111 Section
135 & 136). Syed Ameer Ali in his book on “Mohammedan Law”
throws some more light on the principles of `gift of the
sick’. It is stated: “In the chapter in the “Fatawai
Alamgiri” dealing with “the gift of the sick” the principles
are set forth at some length. In the first place it is
stated from the Asal that neither a gift nor a sadakah by a
mariz a person suffering from
857
marz-ul-maut of which the definition is given later on is
effective without possession: and if possession is taken, it
is valid inrespect of a third. If the donor were to die
before delivery (taslim) the whole disposition would be
invalid. It is, therefore, necessary to understand that a
gift by a mariz is a contract and not a wasiat, and the
right of disposition is restricted to a third on account of
the right of the heirs which attaches to the property of the
mariz. And as it is an act of bounty it is effective so far
only as the law allows and that is a third. And being a
contractual disposition it is subject to the
conditions relating to gifts, among them the taking of
possession by the donee before the death f the donor.” (Vol.
14th ed. 1985 p. 59-60).
From these principles of Mohammedan Law it will be
clear that the gift made in marz-ul-maut could be regarded
as gift made in contemplation of death since it has all the
requisites prescribed under Section 191 of the Indian
Succession Act. The only limitation under Mohammedan Law is
that the disposition is restricted to a third on account of
the right of the heirs. Marz-ul-maut gift cannot therefore
take effect beyond a third of the estate of the donor after
payment of funeral expenses and debt unless heirs give their
consent after the death of the donor, to the excess taking
effect. Whether there is any such consent given in this
case by his heirs is the subject matter of enquiry to be
made by the Tribunal. It may be stated that the second
question refered to the High Court relates to the validity
of the gift beyond a third of the estates of the donor. On
that question the High Court has not expressed any view and
it has directed the Tribunal to consider that issue afresh.
We, therefore, refrain from expressing any views on that
matter.
From the foregoing discussion, the view taken by the
High Court is correct and it does not call for interference.
We accordingly dismiss the appeal with costs.
N.P.V. Appeal dismissed.
858

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