JUDGMENT-The petitioners are the executors of a Will left by the deceased Chhotubhai Ranchhodji Desai who died in Bombay on or about 1st October 1976. The deceased has left a Will dated 16th August 1976. The petitioners have applied for a probate of this Will. 2. The relevant clauses of the Will which have constrained the Prothonotary and Senior Master to make a report are clauses 3 and 7. These are as follows ~ "3. I direct my Executors to pay from my estate all my debts and liabilities including Property Taxes if any and other taxes if any, which may be due and payable by me and for my estate including those payable by reason of my death or gift or settlement made by me during my life time except my debit balance in Sion Garage Private Ltd. and in the firm of Desai & Associates and amount due to Shri Khandubhai Rambhai Vashee and his son Shri Kishorebhai Khandubhai Vashee of Messrs K. R. Textiles, Vijalpur, Navsari, District Val sad, I also direct my Executors to incur reasonable general and other expenses as they think fit in accordance with my status." "7. I bequeath all my right, title and interest in Amba Bhuvan Property as also all my right, title and interest in Plot No. 112, of Sion Matunga Scheme and building thereon to Messrs Sian Garage Pvt. Ltd. on condition that Messrs Sion Garage Pvt. Ltd., relinquish all their claims against me and for my estate including their claim to recover from me the amounts standing to the debit of account with them and further take over my and my estate's liability to repay to the firm of Desai & Associates and to Shri Khandubhai Rambhai Vashee and his son Shri Kishorebhai Khandubhai Vashee of Messrs K. R. Textiles Vijalpur, Navsari, District Valsad all amounts borrowed by me from them and interest thereon. I am making this provision because originally I had borrowed about Rs. 1,75,000 from Messrs Sion Garage for constructing the building on Amba Bhuvan property and this borrowing along with interest thereon was subsequently transferred to Sion Garage Pvt. Ltd. and now amounts to about Rs. 6,47,000. Similarly the amount of Rs. 3,50,672-58 standing to my debit with Messrs. I am making this provision because originally I had borrowed about Rs. 1,75,000 from Messrs Sion Garage for constructing the building on Amba Bhuvan property and this borrowing along with interest thereon was subsequently transferred to Sion Garage Pvt. Ltd. and now amounts to about Rs. 6,47,000. Similarly the amount of Rs. 3,50,672-58 standing to my debit with Messrs. Desai and Associates mainly represents the amounts borrowed by me from Messrs Sion Garage Pvt. Ltd. for constructing the building standing on Plot No. 112 of Sion Matunga Scheme. If for any reason Sion Garage Private Ltd. do not accept the above conditions, I direct my Executors to sell all my right title and interest in the Amba Bhuvan property and in Plot No. 111 along with the building of Sion Matunga Scheme and pay all my liabilities to Sion Garage Private Ltd. Messrs. Desai & Associates and Shri Khandubhai Rambhai Vashee and his son, out of the net sale proceeds thereof and divide and pay the balance remaining thereafter to my sons Harshadrai and Rameshbhai in equal 'shares." In the Schedule which the Executors have filed along with the application for probate the properties referred to in clause (7) of the Will are shown at items 19(i) and 20 of the First Schedule. The total value of these properties is shown at Rs. 10,72,759. The debts which are referred to in clause (7) of the Will have been shown by the Executors in Schedule II at items 2, 3 and 5 (1). The total amount of debts which are shown in these items is Rs. 11,47,817. The difficulty in the present case arises by virtue of the provisions of clause (7) of the Will. Under clause (7) it has been provided that Messrs. Sion Garage Pvt. Ltd. are given a legacy of two· properties namely, Amba Bhuvan and Plot No. 112 of Sion Matunga Scheme and building thereon on condition that they relinqui8h all their claims against the estate as also on condition that they take over the liability of the estate of repaying to the firm of Desai & Associates and Shri Kbandubhai Rambhai Vashee and his son Shri Kishorbhai Khandubhai Vashee of M/s. K. R. Textiles, Vijalpur, Navsary all amounts borrowed by the deceased from them together with interest. The question which has been referred to me for consideration by the Prothonotary and Senior Master by way of a Report is: Whether in view of clause (7) of the Will debts shown as items 2, 3 and 5 (1) of Schedule II to the petition should or should not be allowed as deductions from the total estate for the purpose of calculation of probate, duty. It has been pointed out that if M/s. Sion Garage Pvt. Ltd. accept the legacy, then, under the conditions which are enforceable under clause (7) of the Will the estate of the deceased ceases to be liable to repay the debts, which are mentioned in clause (7) and the liability to pay these debts would be taken over by M/s. Sion Garage Pvt. Ltd. Therefore it has been argued that in order to ascertain whether the debts in question should be allowed as deductions or not, M/s. Sion Garage Pvt. Ltd. should be called upon to elect whether they wish to accept the legacy or not. The correct valuation for the purpose of probate can only be made after such an election is made by M/s. Sion Garage Pvt. Ltd. 3. In order to ascertain what is the correct valuation of the estate for the purpose of probate duty it should first be borne in mind that what is required to be ascertained is the valuation of the property on tile date of application for probate. In this connection under section 29 of the Bombay Court Fees Act, 1959 it is provided as follows: "29. (1) No order entitling the petitioner to the grant of probate or letters of administration shall be made upon an application for such grant until the petitioner has filed in the Court a valuation of the property in the form set forth in the third Schedule, and the Court is satisfied that the fee mentioned in item No. 10 of the first Schedule has been paid on such valuation." The quantum of probate fee is to be calculated as mentioned in Schedule I at item 10. Under this Schedule I item 10 probate fee is to be charged on 'the amount or value of the property in respect of which the grant of probate or letters is made'. The manner in which the valuation of the property of the deceased is to be made is given in Schedule III. Under this Schedule I item 10 probate fee is to be charged on 'the amount or value of the property in respect of which the grant of probate or letters is made'. The manner in which the valuation of the property of the deceased is to be made is given in Schedule III. Under Schedule III, what the E1lecutor is required to set forth is as follows: " ... I have set forth in Annexure "A" ... under the value of...". A perusal of the items enumerated in Annexure " A" makes it clear that the valuation of the property which has come to the hands of the executor or which is likely to come in his hand has to be made as on the date of the application for probate and not as on the date of death. This is a well established position in law and there is no controversy on this point. Under Annexure "B" the executor is required to mention inter alia the amount of debts due and owing from the deceased, payable by law out of the estate. These are the items he is permitted to deduct. Here again there is no dispute that the debts in question are due and owing from the deceased. But itis to be considered whether these are debts payable by law out of the estate. The Testamentary Office is of the view that if M/s. Sion Garage Pvt. Ltd. agree to accept the legacy, then it is they who would be liable to pay the debts in question and not the estate of the deceased. Hence until M Is. Sion Garage Pvt. Ltd. decide whether they would accept the legacy or not, it cannot be said that these are debts which are payable by Jaw out of the estate of the deceased. Hence these debts should not be allowed as deductions and the legatees should be directed by the Court to make a statement whether they agree to accept the legacy or not. In my view, this is not the correct interpretation -of the first item in Annexure 'B' to Sch. III. What has to be ascertained under this item is the amount of debts which are due and owing by the deceased. This has been done in the present case and it has been found that the debts in question are due and owing by the deceased. III. What has to be ascertained under this item is the amount of debts which are due and owing by the deceased. This has been done in the present case and it has been found that the debts in question are due and owing by the deceased. If these debts are due and owing by the deceased, they are recoverable in law by the creditors out of the estate. Hence on the date of the application for probate there can be no doubt that those are debts which are payable by law out of the estate. The question of a legatee being called upon to accept or reject the legacy will arise only after the executors have obtained a probate of the Will. It would not be proper to ask a legatee under the will today whether he agrees to accept the legacy or not. The legatee is entitled to make his choice on the date on which he is offered his legacy after taking into account the circumstances which prevail on that date. He cannot be compelled by the Court at an earlier point of time to make such a choice. It would not be proper to do so. 4. Mr. Dilip Dalal who appears on behalf of the Superintendent of Stamps has drawn my attention to section 336 of the Indian Succession Act, 1925, where it is stated that the assent of the executor or administrator to a legacy gives effect to it from the death of the testator. But this section does not state that if a creditor is given a legacy in lieu of his claim, then there is no debt due and payable by the estate of the deceased. If and when a creditor accepts such a legacy the debt may be wiped out. But till that point of time the debt subsists. And if the debt subsists at the time when a petition for probate is made, then the executors are entitled to set forth this debt in Sch. II and claim a deduction in respect thereof. My attention has also been drawn to a decision in A. P. Mariappa Mudaliar v. The State of Madras1, wherein the meaning of the word 'payable' has been discussed in the context of the Sales Tax Act. It has been stated in the judgment that the word 'payable' signifies an obligation to pay at a future time. My attention has also been drawn to a decision in A. P. Mariappa Mudaliar v. The State of Madras1, wherein the meaning of the word 'payable' has been discussed in the context of the Sales Tax Act. It has been stated in the judgment that the word 'payable' signifies an obligation to pay at a future time. 11 has been argued therefore that since at a future date there may be no obligation to pay this debt out of the estate of the deceased, this debt is not payable and it should not be allowed as a deduction. The discussion in that case must be read in the context of the question which was before the Court in that case, namely, the provision of the Sales Tax Act. The word 'payable', does not necessarily imply that it should be payable only in future. There may be debts which are payable in presentee also. I do not see why the meaning of the word 'payable' in item 1 of Sch. II should be restricted to "payable in future". What is required to be ascertained is whether the debt is payable by law out of the estate. 5. The probate duty is in the nature of a Court fee and has to be calculated as on the date of the application for probate. In this connection a reference may be made to (1876) 2A. C. 560 at p. 563, where it is stated that, "Probate duty in England is a stamp duty payable upon the value of the property the subject of the probate at the time it is granted." In that Judgment the case of Attorney-General v. Partington is quoted with approval. In Partington's case it is stated that probate or administration duty is a duty which attaches upon the estate and effects of the testator or intestate at the time of his death, but is to be calculated upon the value of the estate at the time when probate or administration is granted. In (In re Jerbai B. Kapadia2) however our Court has laid down that the point of time when probate duty becomes leviable is when the petition for probate is taken on file. At this stage, namely the date when the petition for probate is taken on file there is no question of the legatee electing or not electing to take a legacy. At this stage, namely the date when the petition for probate is taken on file there is no question of the legatee electing or not electing to take a legacy. At this date it is quite clear that there are debts which are owing by the deceased and which are payable out of the estate. It may be that at a future date the liability of the estate to pay these debts may cease. But such a contingency cannot be taken into account when valuing the estate for the ascertainment of probate duty. 6. Accordingly these debts, in my view, have been rightly shown in Sch. II as deductible. 7. In this Report the Prothonotary has also raised an objection to item 5 (iii) in the Second Schedule. This item relates to the liability of the estate to pay interest on a mortgage' debt of the deceased from the date of his death till the date of application, that is to say, the liability has arisen after the death of the deceased. Mr. Setalwad who appears for the petitioners has very fairly stated that such an item cannot form a part of the Second Schedule. Under the Court Fees Act Sch. III Annexure 'A' clearly mentions that the assets have to be valued as on the date of the application. But as far as the liabilities are concerned, only those debts which are due and ·"owing by the deceased can be shown in Annexure 'B'. Hence he does not press for the inclusion of item 5 (iii) in Sch. II of the Probate Petition and does not claim any deduction in respect of it. Order accordingly. No order as to costs. Order accordingly.