Thatha Seetharama Chetty vs The Administrator-General of Madras

Krishnan, J.—The question for decision in this appeal relates to the commission payable to the Administrator-General. The estate he was

administering in the present case consisted in part of Immovable properties. Administration having been completed he has been directed by the

Court to hand over the two shops in question here to the heir. He claims a 5 per cent commission on their estimated value u/s 52 of Act II of 1874,

that Act being admittedly the governing Statute. The heir-at-law, the appellant, denied the claim and has appealed to us against the order of the

learned Judge on the Original Side allowing it.

On obtaining letters of administration vesting the estate of the deceased in him, the Administrator-General took possession of all the properties

belonging to the estate and has been administering them for over 10 years now. He sold some of them and paid off debts and claims. He leased

out the two shops now in question from time to time to tenants and collected the rents and paid the revenue and taxes, and kept them in proper

repair and generally managed them as an owner would. The properties were entirely under his control during the period of administration and he is

now prepared to hand over the shops to the heir-at-law. The question is whether in these circumstances the shops can be held to be ""assets

collected and distributed in due course of administration"" by the Administrtor-General within the meaning of Section 52, Clause (2) of Act II of

1874 and whether the Administrator-General is entitled to a 5 per cent commission on their estimated value.

Assets may consist of both moveable and Immovable properties. The definition of the word in Section 3 of the Act, last clause, makes this quite

clear. Assets have been defined as ""the property of a deceased person chargeable with and applicable to the payment of debts and legacies"" by

sale in In the goods of Courjon ILR (1897) C 65 . The properties in question here are certainly assets of the deceased as they belonged to him.

Section 52 refers to all kinds of assets including Immovable assets for there is no restriction in it as there is in Section 18 which speaks of

moveable assets"". The shops are, therefore, assets within the meaning of Section 52.

The question then is, have they been ""collected and distributed"" by the Administrator-General. There is no difficulty about the word ""distributed

for they will be distributed when the Administrator-General hands them over to the heir-at-law. But it is contended that they cannot be said to have

been ""collected"" by the Administrator-General. In fact the argument is that the term ""collected"" cannot properly be applied to Immovable property;

it is said you cannot properly speak of collecting lands and houses. But the expression in the Act is ""collecting assets"". It is not very clear what the

expression connotes when such assets are immovables; there is no clue in the Act to its exact meaning. Some authorities have however been cited

to us which I shall now consider.

The first case cited is In the goods of Simpson (1863) I M H C R 171. It was ruled in it by Scotland, C.J., that u/s 27 of Act VIII of

1855(corresponding to Section 52 of Act II of 1874) the word ""assets"" included leaseholds as well as cash and Government promissory notes and

that ""collection"" did not necessarily imply realisation by sale or by actual receipt or possession. The learned Chief Justice held that the Government

promissory notes were collected as soon as they were taken possession of just like Bank notes, as they could be sold in the market and readily

converted into cash. Bittleston, J. expressed a doubt on this point but nevertheless agreed to the order. As regards leaseholds which were the only

immovables in the case the learned judges held that though the Administrator-General had got the title deeds in his possession, he had not brought

himself fairly within Section 27 and they disallowed commission to him in the exercise of their discretion u/s 22 as he had done nothing further.

This case was quoted and followed by Sale, J., in In the goods of Courjon ILR (1897) C 65 already cited above. The learned Judge points out

that in the Madras case it was implied that to apply the term ''collection'' ""the doing of some act in connection with the assets whereby the

Administrator-General incurred trouble or expense or responsibility"" was necessary and as in the case before him the property was in possession

of a patnidar and all that the Administrator-General did was to collect the rents he could not be given a commission on the value of the property

but only on the rents collected.

The question arose again in Watkins v. Sarat Chunder Ghose Moulick ILR (1904) C 572 where commission calculated on the value of the

corpus of the testator''s estate was claimed but refused to the Administrator-General on the ground that possession was with a Receiver appointed

by Court and not with the Administrator-General who only received such sums as the Receiver paid. Their Lordships held that though the estate

vested in him the Administrator-General could not be said to have ""collected"" the estate.

These authorities show that the Administrator-General does not earn a commission by merely taking out letters of administration and thereby

getting the legal right to deal with the properties, if he does not do anything more. It seems to me that in each case the question whether assets have

been ""collected"" or not has to be decided on its own particular facts. It is not possible to lay down general rules. On the facts of the present case 1

am inclined to think that there has been ""collection"" of the assets including the two shops and there will be distribution on the delivery over of the

shops to the heir-at-law. The Administrator-General is therefore in my opinion entitled to his 5 per cent commission on their market value as well.

The appeal is dismissed with costs.

Venkatasubba Rao, J.

The point to be decided in this appeal is: What constitutes u/s 52 of the Administrator-General''s Act (II of 1874) collecting of assets with

reference to Immovable property? It has been contended by the Administrator-General that under the Act commission is payable to him when he

gets legal control over the estate. To take a concrete case: a man dies possessed of Immovable property of great value; the Administrator-General

obtains Letters of Administration and does nothing more and finds himself in a position to exercise without question acts of ownership over that

property: in such a case he contends he is entitled to his 5 per cent commission. This argument is clearly opposed to authority. ""Assets"" includes

Immovable as well as moveable property (see Section 3). When it is intended to confine assets to moveable property only, the expression that is

used in the Act is ""moveable assets"" (see Section 18). It is therefore clear beyond doubt that the word ""assets"" in Section 52 includes both

moveable and Immovable property. What constitutes collecting of Immovable assets has been the subject of some decisions. In In the goods of

Simpson (1863) I M H C R 171 dealing with leaseholds, Scotland, C.J., observed:

With regard to the leaseholds I think the claim to commission is not brought fairly within the provisions of the 27th section. What ''expense'' or

''trouble'' has the Administrator-General incurred in reference to these leaseholds? The evidence shows that all he did was to take the title-deeds

which were handed over to him. He incurred no ''responsibility'' by so doing.

It may be observed that Section 27 of Act VIII of 1886 which was then under consideration corresponds to Section 52 of Act II of 1874.

In the goods of Courjon (1897) L.R. 25 C 65 the testator was entitled to a certain Zemindari property which he had leased in perpetuity, the

lessee or patnidar being in possession subject to payment of a fixed rent. Sale, J., accepted the test laid down by Scotland, C.J., in the Madras

case and held:

But as regards the rest or corpus of the Zeraindari property the Administrator-General has not, it would appear, done any act which would

constitute it an asset collected by him.

The Administrator-General was not allowed commission in respect of this portion of the estate.

In Watkins v. Sarat Chunder Ghose ILR (1904) C 572 commission was claimed on the value of the corpus of the testator''s share in a joint

estate of which the Receiver was in possession. It was decided by a Bench of three Judges that the Administrator-General was not entitled to

commission. Maclean, C.J., observed:

It would, I consider, be straining the language of the section to say that he had ''collected'' this asset. I do not see how he can successfully say sol

The language of the section is unhappy and is calculated to create much difficulty. However that may be, there is, as I have shown,

considerable authority for the position that the Administrator-General''s argument is untenable.

The point whether assets have been collected within the meaning of the section is treated in each case, as a question of fact, in the rulings to

which I have referred.

I am free to confess that I find it difficult to accept some of the reasoning adopted in these cases, but I am not willing to treat these authorities

as not binding. On the facts of the present case, 1 am not satisfied that the learned Judge is wrong in his view that there has been ""collection"" under

the section. In the result, the appeal fails and is dismissed with costs.