.1853. UDNEY V. The HonouraBLE EAST INDIA COMPANY. June 6. THE following case was, by consent, under a judge's The Bengal order, stated for the opinion of the court : The action, which was for money had and received and upon an account stated, with pleas of never indebted, and payment, was brought to recover 26l. 9s. 3d., being an amount deducted for income-tax alleged by the defendants to be payable by the plaintiff in respect of an annuity to which he was entitled out of the Bengal Civil Service Annuity Fund, which sum the defendants had since paid over to government, and in respect of which the plaintiff, under the circumstances hereinafter set forth, contended that such income-tax was not charge able. The Bengal Civil Service Annuity Fund is a fund formed in India, under the sanction of the East India Company, by subscriptions of such of their civil servants upon the Bengal establishment in India, including such as may be in England, as are desirous of partaking of the benefits; and a civil servant who has regularly subscribed to the fund, and retires after having gone through the regular period of service, becomes entitled, by the rules of the fund, to receive thereout the yearly sum of 10,000 rupees, or 1000l., payable quarterly. Civil Service Annuity Fund, is a fund form ed in India, under the sanc tion of the East India Company, by the subscriptions of their civil servants upon the Bengal establishment, aug mented by contributions from the company; and a civil ser vant who has regularly sub scribed to the fund, and re. tires after the regular period of service, be comes enti tled to receive thereout an annuity of 10,000 rupees. The fund is in vested in India, and managed there by a com mittee of nine, four of whom are officially connected with the govern ment. By an arrangement with the company, the annuitants have the option of receiving their annuity in India, from the managers of the fund, or of being paid at the East India House in London, at the rate of 2s. per sicca rupee,―the company being in that case provided out of the fund with moneys for the purpose of making the payments. The plaintiff, a retired civil servant, entitled to a pension of 1000l. a year, whose permanent residence was in France, elected to receive his annuity in London : Held, that the annuity was not subject to income-tax, under the 5 & 6 Vict. c. 35, not being payable out of any fund in England; and that he might maintain an action for money had and received against the company, to recover sums deducted and retained by them in respect of such tax, and paid over to the commissioners. 1853: UDNEY ย. THE EAST INDIA COMPANY. The fund is composed of the moneys subscribed by the civil servants as aforesaid, and of moneys contributed thereto by the East India Company, and is invested in India, and managed there by a committee of nine, of whom four are, ex officio, the chief secretary to government, the accountant-general, the sub-treasurer, and the chief auditor: the other five are subscribers, and elected at a general meeting. The members of the committee are also trustees for the funds of the institution. By an arrangement with the East India Company, the annuitants have the option either of receiving their annuity in India from the managers of the fund, or of being paid at the East India House in London, the company being in that case provided out of the fund with moneys for the purpose of making the payments. The rules of the fund were to be referred to by either party, and were to be taken as forming part of the case. The plaintiff became a subscriber to the fund in the year 1825; and, having gone through the regular course to entitle himself to become an annuitant, he, on the 6th of March, 1851, retired from the service, and, having elected to receive payment at the East India House in London, applied to the managers of the fund for, and obtained, a certificate, the contents of which were true, and were as follows: "No. 6. of 1848-9. "We, the undersigned managers of the Bengal Civil Service Annuity Fund, do hereby certify that George Udney, Esq., lately a civil servant in the Honourable East India Company's Bengal establishment, subscribing to the said fund, and qualified by service and residence in India to retire on an annuity, having received credit in account with the said annuity fund for the full sum required under the rules of the said fund, to entitle him to an annuity continued to the date of his decease, at the rate of 1000l. sterling a year, commencing from "Calcutta, 6th March, 1851." After a service of twenty-three years in India, the plaintiff came to England on the 21st of April, 1851, and, after a temporary stay for the purpose of settling his affairs, he, on the 20th of June, in the same year, went with his family to Boulogne, in France, where he fixed his permanent residence, and has ever since resided. Before leaving England, the plaintiff, by power of attorney, authorised Messrs. Willis, Percival, & Co., bankers in Lombard Street, jointly and severally to receive the amount of his annuity, and it has ever since been paid to them, with the deductions hereinafter mentioned. The course of receiving payment, was, that the plaintiff's bankers filed at the East India House, in London, the before-mentioned certificate of the managers of the fund, and, upon delivering in a certificate that the 1853. UDNEY v. THE EAST INDIA COMPANY. 1853. UDNEY v. THE EAST INDIA annuitant was alive, received a cheque for each instalment of the annuity (commonly called a warrant), signed by three of the directors of the East India Company, and addressed to the cashiers of the Bank of England. The case then set out the warrants, the form of which was as follows: "East India Company. "No. 38. To the cashiers of the Bank of England. "By order of the Finance and Home Committee, "(Signed by three directors)." The following correspondence has taken place between the plaintiff and the defendants: "Boulogne, 27 November, 1851. "To the Secretary to the Hon. Court of Directors of the East India Company. Sir,-The Bengal Civil Service Annuity Fund pay into the treasury of the East India Company in Calcutta, certain rupees on my account, on the 1st May, 1st August, 1st November, and 1st February in each year, on an understanding with the East India Company that they give me in London the equivalent of the said rupees, at an exchange of 2s. the sicca rupee. The East India Company, on the faith that the said rupees are paid to them by the fund in Calcutta on my account, on the dates mentioned, profess to give me in London, on those dates, the equivalents accordingly, that is to say, at the exchange of 2s. the sicca rupee. The transaction is in fact an exchange operation between the East India Company and myself. They receive my rupees in Calcutta, and pay me for them in pounds sterling in London. For the payments understood to have been made by the fund to the East India Company in Calcutta on my account, on the 1st May, 1st August, and 1st November of this year, I have, through my attorney, received in London from the East India Company the equivalents at the exchange mentioned, less 3 per cent. And I write now to request that this balance may be paid by the East India Company to me in London, through my attorney. You will observe that this is not the case of an annuity paid in England, and by the East India Company, but of an annuity paid in India, and by the Bengal Civil Service Annuity Fund there. (Signed) "G. Udney. "P. S. As late sub-treasurer in Calcutta to the East India Company, I know that they receive there from the Bengal Civil Service Annuity Fund, also there, payment in rupees on account of the annuitants in Europe, of their annuities from the fund, the rupees being re-payable in London by the East India Company to the parties, at the exchange of 28. the sicca rupee. The entries in the public accounts will, on reference, prove this at once. See further the 77th paragraph of the Court's letter, dated the 8th of December, 1824 (a), in the public department, to the Governor General in council, at Fort William, in Bengal." To this letter the plaintiff received the following reply : (a) "Although we cannot acquiesce in this request, so far as respects the rate of exchange, yet, from a desire to meet the convenience of the retired servants, we have determined that every annuity, as it shall become due, be paid over by the mana- 1853. UDNEY v. THE EAST INDIA COMPANY. |