JUDGMENT

SABYASACHI MUKHARJI, J.:— These two appeals are from the judgment and order of the Madras High Court dated 20th September, 1973 by certificates of fitness granted by the High Court, under S. 65 of the Estate Duty Act, 1953, hereinafter called the Act.

2. Civil Appeal No. 2086 of 1974 is by accountable persons and Civil Appeal No. 67 of 1975 is by the revenue. The judgment under appeal is reported in 94 ITR at page 323.

3. The accountable persons are the sons of one fate M. Chindambaram Chettiar hereinafter called the deceased. The deceased was the karta of a Hindu undivided family. He gave his first son Muthiah, in adoption to his divided paternal uncle Pethachi Chettiar, and adoption ceremony was held on 7th June, 1931. Subsequently his second son, also called Pethachi, was born in 1933. with whom the deceased was joint throughout his life.

4. On 21st February, 1954, prior to proceeding to Malaya by air, the deceased took out a personal accident insurance policy with the United India Fire and General Insurance Company Ltd. (hereinafter called the Insurance Company). Under the terms of the said policy which was to be in force for one month, the Insurance Company had agreed that if at any time during the currency of the said policy, the deceased should sustain any accident resulting in any injury or injury leading to his death, then, the Insurance Company undertook to pay to the assured or to the legal representative of the assured in case of the assureds death, such sum as might be appropriate in the Table of Benefits appended to the Policy. The Table of Benefits mentioned that in case of death or total disablement the benefit payable was Rs. 2 lakhs, in case of partial disablement, Rs. 1 lakh, in case of temporary disablement, a weekly payment of Rs. 1200/- or Rs. 300/- according to the nature of the disablement. The policy, inter alia, provided that "the policy is unassignable and the company shall not be affected by notice of any trust or purported to be imposed upon assignment of or of any charge or lien imposed or purported or any dealing with the policy and the receipt of the insured or the executors or administrators of the insured for any moneys payable thereunder shall in all cases be an effectual discharge to the company". A sum of Rs. 250/- was paid or credited as paid by the deceased as and towards the premium and other charges for the aforesaid personal accident insurance policy. It also appeared that in the proposal Form dated 20th February, 1954 filed by the deceased with the Insurance Company, the deceased had effected a nomination in favour of his son M. Ct. Muthiah. On the 13th March, 1954, the deceased died following the crash of the airliner in which he had travelled. On his death the Insurance Company paid the nominee, the appellant No. 1 herein a sum of Rs. 2 lakhs which was the benefit stipulated to be paid, in such an event, under the terms of the policy. At the time of his death the deceased had other properties and interests. One was his interest as an undivided coparcener in his joint family which consisted (after the adoption away of his first son A, Muthiah) of the deceased and his second son Pethachi.

5. In the assessment under the Estate Duty Act, 1953, (hereinafter called the Act), the Deputy Controller of Estate Duty was of the view that the personal accident insurance money of Rs. 2 lakhs paid by the Insurance Company should be charged to estate duty and further that it had to be aggregated with the rest of the properties passing on the deceaseds death. He held further that the insurance money of Rs. 2 lakhs was property which the deceased was competent to dispose of by will. Before the Deputy Controller, it was urged that the amount of Rs. 2 lakhs could not, in any case, be aggregated with the rest of the properties, but must be brought to charge independently as a separate ,state in itself, the contention being that the deceased had no interest at all in the said insurance money. The D